SilverStone Metropolitan District No. 3 (“District No. 3”) is a quasi-municipal corporation and political subdivision of the State of Colorado located within the Town of Frederick, Colorado created by election in February 2008. The District and Frederick have entered into an Intergovernmental Agreement as required by the Frederick Municipal Code, which implemented the District Service Plan and limited certain District statutory powers. The District is governed pursuant to provisions of the Colorado Special District Act to construct and finance public infrastructure serving the SilverStone community.
A Metro District is a local unit of government formed to provide necessary public services that the county or municipality cannot otherwise provide. It is essentially a tax-exempt financing mechanism used for the installation of public infrastructure. The Metro Districts issue debt to pay for the public infrastructure, which debt is repaid by property taxes levied within the Metro Districts’ boundaries. Public infrastructure includes streets, water, sewer, storm drainage, parks, trails and other similar improvements.
Initially, growing cities and towns financed and installed public infrastructure serving their municipalities, literally “paving the way” for new homes and businesses. However, cities and towns began to struggle to pay for the public infrastructure needed to grow. In the late 70’s and early 80’s a change to “Growth pays its own way” occurred. This shift by municipalities put the cost burden of growth on the shoulders of future property owners. To facilitate continued growth, the State of Colorado passed reenactment of Title 32 in 1981, the Special District Act, to allow Metropolitan Districts to satisfy the public need for infrastructure and allow the Districts to use tax exempt financing to pay for the public infrastructure. There are now approximately 2,000 Metro Districts operating throughout Colorado and the majority of States across the country having their own versions of the Special District Act using similar structures as Colorado’s special districts.
Metro District taxes work in the same manner as other property taxes in Colorado with a mill levy applied to Assessed Value of property. For commercial property, that calculation is:
Actual Value x Assessment Ratio = Assessed Value
Assessed Value x Mill Levy = Annual Property Tax Cost
Actual Value = the value of your commercial property as determined by the Weld County Assessor’s office and updated every two years by the Assessor.
Assessment Ratio (in 2020) = 29.0%, as determined by the State of Colorado legislature.
Mill Levy (in 2020) = 20.000 Mills (The Mill Levy is set by the Board of Directors, subject to the limitations imposed by TABOR and Colorado statutes. In addition, limitations and requirements are governed by the Districts’ Service Plan and its’ debt covenants, all of which can be found here. Mills are applied per thousand dollars of assessed value
Example for a $1,000,000 commercial property:
- $1,000,000 x 29% = $290,000 (Assessed Value)
- $28,600 x 20.000/1,000 = $5,800.00 (in annual property taxes payable to the Metro District)
Metro District taxes are only one component of your annual property tax payments. For an entire listing of all taxing authorities and the total mill levy applied to your commercial property, you can look up your property here: https://www.weldgov.com/departments/assessor/search_property
Colorado statutes provide for an elected Board of Directors, with the initial electors and Directors to be designees of the developer until new electors move into or buy property within the District and elect new Directors in biennial elections in May of even-numbered years. Your current Board of Directors is listed here. To be an eligible Director, you must satisfy three requirements. You must:
- be a registered voter in the State of Colorado;
- own taxable property within the boundaries of the Metro District or have an option to purchase property within the boundaries of the Metro District; and
- pay property taxes on the property within the boundaries of the District.
The powers of the District and its Board are limited by the provisions of the approved Service Plan. Interested in serving on your District’s Board of Directors? Find out when the next election is scheduled here
Metro Districts allow the costs of public infrastructure, which are initially paid for by the Metro District before all of the homes in a subdivision are built, to be recouped over a 30-40 year timeframe through collection of property taxes rather than attributing these costs to the initial home prices. By allowing these costs to be spread out among all of the homes in the subdivision and repaid over a longer period of time, initial home prices are typically $40,000-$60,000 lower than they would be if Metro Districts were not utilized. Metro District debt is also tax-exempt, meaning that the cost of this debt is less expensive, which results in additional savings to the homeowner. Homeowners who itemize deductions on their tax returns may be able to deduct all or a portion of the property taxes that they pay.