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Why a Metropolitan District?
You might expect cities to pay for the costs of new roads, utilities, and other infrastructure, and up until the 1980s, they did. Since then however, they’ve expected developers to cover the costs of their new communities. Metro districts were created in the 1980s with cities and developers utilizing them to provide an alternative, and increasingly common, method for paying infrastructure costs.
Metro districts are governmental entities that operate much like a city government. They have board members elected through an election process and who operate like a city council. Their meetings are open to the public and they are required to make regular statutory filings that provide transparency.
In a metro district neighborhood, infrastructure costs are paid over time like a home mortgage. The development costs are typically consolidated into long-term bond debt and paid off over 30 or 40 years through a property tax mill levy. Homeowners in metro district communities contribute to their share of this debt in proportion to how long they own their property.
Without a metro district, the developer will recoup the cost of infrastructure when they sell the lots or homes in a subdivision. This reimbursement through property sales means that home prices in these neighborhoods are typically higher than in metro district communities. It’s the first homeowner that pays these costs in their purchase price and they may not be able to recoup that investment when selling the home.
Colorado law allows the creation of metro districts through the Special Districts Act. But it’s just one of several types of special districts allowed under Colorado law—others include ambulance, fire protection, health, parks and recreation, sanitation, and water. Currently, there are more than 3,000 special districts in Colorado (about 2,000 are metro districts). Districts are created to fill the gaps that may exist in the services counties and cities would like to provide and the services the residents may desire.
The requirements of the Special District Act, in addition to ongoing compliance and disclosures, set forth a rigorous process for organizing a district. That includes the review and approval of the district’s service plan during public hearings before the applicable county/municipality.
This service plan is the contract between the city and the special district explaining what the special district is expected to do and settings limits on such things as mill levies, debt, terms of bonds, and other powers otherwise allowed under state law.
To bring this back to the Geos Neighborhood specifically, our Service Plan (available on the Library page) creates a metro district for the “planning, design, acquisition, construction, installation, relocation and redevelopment of the Public Improvements from the proceeds of Debt to be issued by the District.”
To protect future residents, it requires the developer’s costs be reimbursed only after they are certified by a third-party engineer for fair bidding, cost, and verification of installation. It also caps total debt at $5 million plus $500k specifically for TV/Internet service, which must be repaid within 40 years of the debt first being issued. Further, if mill levy revenue is insufficient to repay the debt after 40 years, any remaining debt is forgiven.
The maximum mill levy that can be set by the district is 40 mills but it can be adjusted for legislative changes to how tax are calculated. The 2023 mill levy is 45.813 for the Geos Neighborhood due to reductions in tax calculations caused by the previous Gallagher Amendment and the recently approved 2023-24 tax ‘holiday’—in other words, owners pay the same taxes at 45.813 mills as they would have at 40 mills without the Gallagher Amendment and tax holiday.
In 2021, the Geos Neighborhood Metro District issued bond debt totaling $4,911,328.50 to be repaid by 2059 (or forgiven) although projections show it may be repaid up to a decade earlier.
If you're interested in learning more about the operations and financials of the District, you can read the Geos Neighborhood Metro District Annual Report located on the Library page or on the District's website.
