IRESis’ latest system update includes the addition of a new, required field called “In Metro Tax District: Y or N?” We asked IRES MLS Government Affairs Director Barbara Koelzer to provide insight into Metro Districts and their impact on our market.
What Brokers Need to Know about Metro Districts
What is a Metro District?
A metropolitan district is a development financing tool which is growing in popularity across Northern Colorado. Originally intended to provide urban-like services to developments outside municipal limits, they have evolved to be a preferred technique to provide financing for public improvements inside city limits to offset the rising cost of infrastructure such as streets, water and storm drainage, as well as amenities such as swimming pools and trails. Metro districts may finance residential, commercial or mixed-use developments.
Like all special districts, Metropolitan Districts are authorized by Article-1 of Title-32 of the Colorado state statutes. Such districts are defined as units of local government. A special district provides public improvements and services to its property owners and residents. By state statute, a metropolitan district provides two or more types of improvements and services, for example parks and recreation, sewer, street improvements, water or fire protection.
As of 2017 Larimer County had more than 106 metro districts and Weld County had over 231, according to the State’s Department of Local Affairs (DOLA) — and the number is growing every year. Currently there are over 20 metro districts in Loveland, including eight in Centerra alone. Both Greeley and Fort Collins approved multiple metro districts in 2018.
Why should brokers care?
Metro districts finance improvements and services by issuing municipal bonds, which are redeemed by special property taxes. The amount of the additional property tax varies district to district, but the implications to a homeowner can be substantial. For example, property owners in Thompson Crossing (Johnstown) pay an additional 81 mills in property tax. Real estate professionals need to know if a property is located within a metro district so they can educate prospective buyers appropriately.
Colorado statute does not require a specific disclosure for metro districts although there is a general disclosure related to special districts in the Colorado Contract to Buy/Sell Real Estate. Since metro districts are becoming more prevalent, IRES has decided to add a check off “yes or no” where brokers will indicate if a property is in a metro district in the property listing. Metro district information is also included in public records, however homes in new districts may not include complete information unless the property tax assessment has been finalized.
Is there additional information?
Metro districts are required to file various documents with DOLA, including a service plan, annual audits and an annual budget. For more information concerning what a prospective buyer should know about metro districts, DOLA published Special Districts: A Brief Guide for Prospective Homeowners in 2009. Access the guide here: https://tinyurl.com/y5v8ropp