What is a Metro District?
Metropolitan districts (“Metro Districts”) are local governments authorized by Colorado’s Special District Act to fund public improvements for a particular neighborhood or community.
The Special District Act requires Metro Districts to operate within its approved Service Plan. The Service Plan is the Metro District’s specific governing document. Southshore’s Service Plan can be located on the website under Documents.
The Southshore Metro District owns both community centers, parks, common areas and open space on 160 acres.
How does a Metro District operate?
Metro Districts are local governments, and their Boards of Directors (each a “Board”) operate similarly to a city council or Board of County Commissioners.
The Board of the Metro District is its governing body. Southshore’s Board has 5 members who are elected to staggered four-year terms of office.
Southshore had two Metro Districts. The Southshore Metropolitan District No. 1 was the operating district used by the developer to contract, manage, and pay contractors. Southshore’s developer ceded control in late 2021. The operating district will be dissolved before end of year, 2023.
The Southshore Metropolitan District No. 2 (which is to be renamed “Southshore Metropolitan District”) is the taxing district which borrowed funds used for construction. The taxing district collects ad valorem property taxes to repay the debt and interest. Southshore residents have served on the Board of this district since 2016 and have had a majority of seats on the taxing district Board since May 2020.
How is the Board elected?
Metro District elections are held in May of odd years. Anyone who is an eligible elector as defined in the Colorado Special District Act is eligible to vote for and serve on the Board of the Metro District. Ballots are mailed to all eligible electors.
Is the City of Aurora involved with Southshore Metro District?
No, as long Southshore Metro District stays within the parameters of its Service Plan, it operates as an independent government unit. The City Council of the City of Aurora approved the creation of the Southshore Metro District and its Service Plan.
Through the Service Plan, the City of Aurora created protections to homeowners by limiting the maximum mill levy (adjusted for changes to how assessed valuations are calculated), maximum term of debt repayment, and limitation on total amount of debt issuance.
Can you attend a Metro District meeting?
Metro Districts are required to follow Colorado’s Open Meetings (Sunshine) Law. The Board must post notice in the community. Currently meeting notices are posted at both community centers and on the Southshore Metro District’s website home page.
Southshore regular meetings are held the second Tuesday of each month. Currently the meetings are held via Zoom starting at 3pm.
How to obtain Metro District meeting minutes?
The Board must keep minutes of meetings and those minutes are open to public inspection upon request. Recent meeting minutes are available on the website under Documents.
If unable to locate the meeting minutes, please contact the Southshore Metro District principal business office at 303.218.7200. (Please note that minutes are not available for prior meetings until formally approved by the Board at a subsequent meeting.)
What services can a Metro District offer?
Metro Districts can provide a variety of services including:
Water facilities and services
Park and recreation facilities
Traffic-related safety protection improvements
Mosquito control facilities and services
Covenant enforcement services
How are Metro Districts funded?
Metro Districts can raise revenue to fund public improvements within a community through ad valorem property taxes, fees, and the issuance of bonds. Metro Districts’ bonds are issued as “municipal bonds” and have favorable rates because the interest paid to investors is not subject to federal or Colorado income taxes.
Ad valorem property taxes are tax deductible to residents* and can be collected through the County Treasurer at a low cost. (1.5% collection fee.)
*Currently subject to the State and Local Tax (SALT) deduction limit of $10,000 per household, which is set to expire after 2025.
Unlike HoAs which have to enforce collection of dues against owners individually, Metro Districts do not have to enforce collection of unpaid taxes. In fact, Metro Districts often achieve 100% collection rates because the County Treasurer has the power to impose a tax lien for unpaid taxes.
Do Metro Districts have debt?
Metro Districts have the ability to finance public improvements over long period of time which presents a savings to residents who can pay for public improvements over time instead of upfront in the purchase price of their home.
Metro Districts issue tax-exempt bonds with a lower interest rate than private funding or taxable bonds.
Southshore’s current bonds were issued in 2020. The proceeds were used to refund all outstanding debt and paid for the construction of the Lighthouse, and public improvements (i.e. roads, water and sewer lines, and landscaping). The 2020 bonds were approved by Southshore voters in May 2018 by a vote of 270 (yes) to 70 (no).
What other benefits do Metro Districts offer?
Metro Districts offers public accountability (public meetings, open records, elected Board) very similar to cities and counties. As mentioned above, Metro Districts must conduct open public meetings under the Sunshine Law and are subject to a number of other laws.
Public records of Metro Districts are available under the Colorado Open Records Act (“CORA”), they adopt their budgets under the Local Government Budget Law, prepare annual audited financial statements under the Local Government Audit Law and are limited in their ability to raise taxes and debt by the Taxpayer’s Bill of Rights (“TABOR”).
Metro Districts participate in a sophisticated insurance pool resulting in lower insurance costs.
Metro Districts have Governmental immunity which limits the liability to its residents which also reduces insurance costs.
As local governments, Metro Districts are exempt from city and state sales and use tax when purchasing goods and equipment and facilities owned by Metro Districts (such as the Lighthouse and Lakehouse and essentially all of the ponds and landscaping in Southshore, which are owned by Southshore Metro District) are exempt from property taxes. (In contrast, the taxable value of properties owned by homeowners associations are apportioned to all residential properties within the community.)
How do Southshore’s Metro Districts and Master Association work together?
Southshore’s Metro District assigned the maintenance of all landscaping to the Master Association through a Memorandum of Understanding. Similarly, the Metro Districts assigned operation of both community centers (owned by the Metro Districts) through a Services Agreement.
What is the proposed simplification plan?
Metro Districts and homeowner associations both have administrative expenses including management fee, legal, insurance, and accounting fees.
Since inception, Southshore had three (3) legal entities including two (2) Metro Districts and a homeowner association. The goal is to reduce the number of legal entities to 2, one Metro District and one HOA, which will eliminate some redundant administrative costs.
In 2023, the Southshore Metro Districts and Master Association budgeted $405,000 for administrative expenses. With high inflation and skyrocketing insurance rates, Southshore is looking to offset these higher costs with eliminating the redundant administrative costs.
It’s estimated Southshore could save around $200,000 if fully optimizing the communities administrative expenses. The first step was to dissolve one of two Metro Districts. This is to be completed in the 4th quarter of 2023 as soon as all outstanding checks clear the bank account of the district being dissolved.
What is the Southshore Metro District proposing?
Southshore Metro District is considering assuming operations of the community centers and landscaping, all of which Southshore Metro District owns. To do this, the district’s Board will consider terminating both the Landscape Memorandum of Understanding and the Service Agreement related to the Lighthouse and Lakehouse.
This would allow the Southshore Master Association to recognize savings in management fees, insurance and accounting. These savings will offset increase vendor and labor costs.
Is the Southshore Metro District proposing dissolution of the Southshore Master Association?
No, the Southshore Metro District is not proposing the Master Association be dissolved and has no control or say over the Master Association, which is governed by its own, independent board of directors.
Will services be impacted?
The intention would be for a smooth transition that would not impact operations and services offered. To minimize the impact, this will require total cooperation between the Southshore Metro District and the Master Association.
What happens to Area Representatives and Committees?
It’s the Southshore Metro District Board’s intention that all committees will continue to exist and function in the same capacity. To increase transparency, the district Board may establish a standing finance committee. This would mirror the Area Representative’s budget ratification within the Master Association offering full transparency and collaboration.
The Area Representative would continue to be a part of the Master Association as defined within the Master Association’s governing documents.
How will this impact property taxes and fees?
The Southshore Metro District Board’s goal is to maintain if not decrease each homeowner’s overall financial obligations as compared to 2023. The Southshore Metro District would maintain the current tax rate, with certain adjustments to offset changes to the calculation of assessed value. However, the additional income from property taxes will not fully cover Southshore Metro District’s operating expenses based on the Master Association’s 2023 budget and annualized 2023 actuals for the assets owned by the Southshore Metro District.
Therefore the Southshore Metro District would supplement property taxes with a monthly fee. By assuming the vast majority of the Master Association’s operating budget, the district’s Board will allow the Master Association to significantly decrease the association’s monthly assessment.
The final amount is to be determined as both the Master Association and Southshore Metro District finalize their 2024 budgets.
When will this occur?
All of the following actions are subject to approval by the Board of Southshore Metro District. April 1, 2024 is the proposed date to transition operations.
This is a key date as the current landscaper’s contract expires on March 31, 2024. This would allow the Board of the Metro District to negotiate its own landscape contract.
Similarly, the lifeguard company’s contract begins in April 2024. One year remains on the Master Association’s contract. The Metro District would assume the final year of the contract. This would eliminate any impact to the 2024 summer pool operations.