Colorado Metro District

A metro district is a type of local government formed under Title 32 of the Colorado state statute.  Their ultimate purpose is to fund, oversee, and sometimes operate critical public infrastructure necessary for new residential and commercial developments. Metro districts gained wider appeal statewide after the passage of the Taxpayer’s Bill of Rights amendment in 1992 (TABOR), which meant that municipalities were less likely to be able to raise taxes to pay for public infrastructure.

A metro district will provide needed services that often fill unmet needs in a particular city, town, or rural area. Some infrastructure examples that commonly fall under a metro district’s purview include the construction of sewer, water, fire services, and street infrastructure as well as recreational amenities (parks, pools, trails and event spaces, for example). A metro district has the authority to finance, design, develop, and maintain these various features, structures, and service (source: A Guide to Colorado Metro Districts - What You Need to Know )

A metro district is often formed at the earliest stages of development. A detailed metro district service plan is submitted to a jurisdiction’s city council or county commission office for approval. The service plan is the metro district’s governing document and is similar to a town charter or constitution.  The service plan contains limitations on the amount of debt that can be issued, the maximum level of taxation, and the maximum time period over which the tax can be imposed, among other things. 

After the service plan is approved, the property owners within the proposed metro district file a petition for organization with the district court.  If the petition meets the statutory requirements, the court will hold a public hearing and order an election on behalf of the proposed metro district.  If the majority of the votes cast are in favor of the organization of the metro district, the court issues an order and decree organizing the metro district (recorded against the real property within the metro district). (source: A Guide to Colorado Metro Districts - What You Need to Know )

A metro district pays for its construction projects by issuing bonds, a common form of financing for governmental entities. Bond investors shoulder the upfront infrastructure costs so that a community can better accommodate the new homes in the community. Homeowners repay these costs primarily in the form of ad valorem property taxes on their homes.

Local authorities approve metro district taxation in its service plan, limit mill levies, and provide financial oversight. Bond repayment terms and maturity maximums are set by the municipality to spread out and minimize the financial burden among homeowners and protect residents from high rates of taxation. Metro districts often refinance their debt to reduce taxpayer burden over time, resulting in lower taxes for residents as the credit quality of a project improves. (source: A Guide to Colorado Metro Districts - What You Need to Know )

If you’re a homeowner, finding out if you live in a metro district is as easy as looking at your annual property tax bill which is available from the county treasurer. Your metro district taxes appear as a line item on the bill along with the total amount.

By law, homebuyers must receive metro district tax information as part of their disclosures when they go under contract to buy a new home. That notice outlines the amount of property taxes that will be owed annually given the contracted price of the home and the level of taxation. For existing homes, there are multiple disclosures that are mandated by law before a home sale closes. In a new residential development, some metro districts will even provide a good faith estimate of future taxes prior to or at the point of sale.

For reference and for metro district boundary information, DOLA provides metro district maps to the public. (source: A Guide to Colorado Metro Districts - What You Need to Know )