SPECIAL TAXING DISTRICT aka. METRO DISTRICTS

This information is a compilation of information I gathered from Google searches, The Denver Post https://www.denverpost.com/2019/12/05/metro-districts-debt-democracy-colorado-housing-development/ as well as from a class I took with Lonnie Glessner ([email protected]).

First up, lets find out what a Metro District (aka. Special District) is. Google.com defines a Metro district as a taxing authority created by subdivision developers, with the consent of the local government, for the sole purpose of selling government-like bonds to finance their projects. Repayment of the bonds is tied to future property taxes assessed to the homes that will eventually be built.

Why do subdivison developers and builders create Metro Districts?

In short, it is a way to raise money in the short term and get an additonal influx of cash in the future, without the approval of tax payers. Current tax laws (Gallagher and TABOR) need voter approval to increase or adjust current property tax rates. Special Tax Districts do not need such approval. According to Bruce Rau, Oakwood Homes' president of land acquisition said: “Almost every home that is sold in the metro Denver area that's a new construction falls within a metro district.' WHY? Since the passage of TABOR it has become impossible for local city or county to ask current voters to pay a tax increase to fund a new development or community.

So, what's the problem?

According to the Denver Post, there are nearly 1,800 metro districts in our State that are not overseen by voters. Many times that happens inadvertently, because voters/consumers are not aware that they have input in who and how Metro District are run and handle their finances. Under Colorado law a developer is allowed to elect themselves, or people close to the developer, to serve on a district's board of the directors, who then vote to approve millions of dollars in public financing to repay the developer for their infrastructure costs up front. Having a board that is set up and run by developers and their 'associates' lacks a system of check and balances and are vulnerable to conflict of interest claims.

What is the impact to consumers?

The biggest impact for the consumer is a lack of transparency and knowledge as to how Metro District Taxes could impact them in the future. If you happen to live in a special taxing district you could be subject to additional taxes that you did not know about, where not aware of and did not budget for. You might have to pay additional taxes immediately, or you might have one big 'balloon' payment that becomes due many years or even decades from now. Either way, you, as a consumer and homeowner, would like to know what your financial obligations are as well as why/when/and for what you pay for.

Now what?

It is a consumers right to be informed and to be able to make a well-informed decision AT ALL TIMES! Having all the information and understanding what you consent to will allow you to plan accordingly to make the best choice that fits your wants, needs and desires. When you purchase a new property, the title insurance will usually show if a property is part of a special tax district. However, you can find out before you ever look at or sign a contract to purchase a property to see if the property is in a special taxing district by going to the County Treasurer's tax page. Another very helpful website is www.dola.colorado.gov/lgis which enables you to search for a subdivision by name and determine if there are special assessments you need to be aware of, who sits on the board of, election information and much more.