Eight metropolitan districts in Firestone will hand over an estimated $11 million to the town this year, money that will likely be used to build parks and pave roads.
“That’s real money that we can use for projects that we would not otherwise be able to afford,” said Bruce Nickerson, town planner of Firestone.
Many developers push to form metropolitan districts — quasi-governmental entities that levy property taxes for a specific area not necessarily inside the bounds of a town or city to pay for infrastructure.
Metro districts are the same type of taxing mechanisms that help pay for fire services, libraries and water and sewer, but most often they are used to build roads and parks. Metro districts collect property taxes to pay off 30- to 40-year bonds, which allow developers to get money for their projects up front.
Nickerson said Firestone trustees were once leery of letting developers set up a virtual town, complete with an elected board, to oversee financing development projects.
But when planners hammered out a deal to have the town collect a one-time payment from each district, basically getting a small percentage from developers when they assume debt, trustees began welcoming the districts with open arms.
It’s a unique plan, Nickerson believes.
Metro districts typically result in municipalities getting money for parks and open space, but those improvements usually have to stay within the district.
Firestone’s plan allows the town to collect the money and use it anywhere in town. At least $4 million of the money will go to a large town park, Nickerson said.
“It’s really a complex issue,” Nickerson said of metro districts. “The citizen will understand the park when they see it, but they don’t understand this.”
But as growth continues in southwest Weld County, residents may want to study how metro districts work because more developers are relying on them to build infrastructure for subdivisions.
Nearly 32,000 people live in southwest Weld County, including the Tri-Towns, Erie and Mead.
By 2025, that number could rise to 180,000, according to the Weld Library District growth projections for the area.
It’s likely that many, if not most of the new residents, will be living in a metro district.
Along with Firestone’s eight districts, Dacono has six planned, Erie has six and Frederick has one.
In fact, Weld County leaders expect metro districts to pay for roads and possibly other services for new developments in unincorporated parts of the county. The cost is then passed to future residents through higher property taxes.
Most governing agencies cap taxes in these types of metro districts at between 30 and 50 mills, said Dee Wisor, an attorney who helps municipalities work with developers seeking to form metro districts.
That equates to an annual residential property tax of between $600 and $1,000 for a $250,000 home, in addition to any other property taxes.
The taxes are likely to stick around for at least 40 years, unless they are used to cover sustaining maintenance costs, Wisor said. If a community approves a metro district to provide services, such as law enforcement, the property taxes will be collected indefinitely.
“I think they serve a purpose,” Wisor said. “In this day and age, cities and counties are not likely going to provide those services.”
Weld County leaders in recent years have approved several housing developments in a 15,000-acre swath of unincorporated land zoned for mixed-use development, sandwiched between Mead, Longmont and the Tri-Towns.
In the next year, Weld County officials will consider several more urban-scale development proposals in that unincorporated chunk of the county — commonly called the MUD — including one from developer CARMA Colorado for the proposed St. Vrain Lakes subdivision.
CARMA envisions St. Vrain Lakes as a new “hometown,” with 5,100 homes, schools, businesses and open-space corridors on a 1,313-acre parcel of land bordered by Colo. Highway 66 and Weld County roads 91/2, 13 and 28.
That community will need law enforcement and road maintenance and other urban services that Weld County leaders say they can’t provide.
“We maintain county roads, but not subdivisions,” Weld County Commissioner Bruce Barker said at a county work session two weeks ago.
Weld County leaders expect the people who will live in future subdivisions, such as St. Vrain Lakes, to take on the financial responsibility of maintaining roads with gutters and sidewalks.
They look to Highlands Ranch, which is governed by five metro districts, as a model for how to make residents pay their own way.
Commissioner David Long said it isn’t fair to make someone living near rural Ault pay for services in southwest Weld County. Metro districts put the burden on people living in a subdivision using services and infrastructure rather than spreading it around through a countywide property tax.
“They’re the ones who should be bearing the costs,” Long said.
Mead Mayor Richard Kraemer said he would prefer urban development to happen inside municipalities.
But, he said, if development is going to happen in incorporated areas, metropolitan districts are the only equitable way to provide services for future residents.
“There’s no other choice,” Kraemer said. “Otherwise, the people in Ault have to pay for the services in Del Camino.”
But not everyone thinks metro districts, especially those approved in the MUD, are a good idea.
Weld County Planning Commissioner John Folsom said by asking metro districts and special districts to provide services in unincorporated areas, Weld County is ducking its responsibility.
“Basically, a metropolitan district is a device used by developers to avoid up-front development costs to themselves by issuing low-interest bonds,” he wrote to the commissioners on Feb. 27.
He agrees with Kraemer that urban development should happen within cities and towns, which would be responsible for building roads, maintaining them and hiring police officers.
Towns provide ongoing services but are becoming increasingly reliant on developers to build infrastructure.
And developers say they depend on metro districts to build their projects, as well as pay for ongoing costs, such as law enforcement, parks and even public swimming pools.
Municipalities have good intentions but are often far behind the curve in providing roads and even parks in new developments, purely for financial reasons, said John Lee, executive vice president of the Community Development Group.
His company has formed five metro districts — including one that serves Frederick’s Wyndham Hill project on Colo. Highway 52 — to build those roads and parks.
“If you didn’t use a metro district, it would be economically impossible to do this kind of project,” he said.
Without the district, the only development you would get are tiny piecemeal projects, added Mike Burns, director of land planning for Community Development Group.
“We’ll see what happens when some of these subdivisions begin building out,” said Karen Cumbo, city administrator in Dacono.
She said the city sees the districts as a financing tool for developers. In Dacono, there will be houses in and out of metro district, and that it will be interesting to see how the homes sell in comparison.
Douglas Crowl can be reached at 303-684-5253, or by e-mail at firstname.lastname@example.org.
Jenn Ooton can be reached at 303-684-5295, or by e-mail at email@example.com.