CARRIAGE HILLS METROPOLITAN DISTRICT SUMMARY DESCRIPTION AND FREQUENTLY ASKED QUESTIONS AS OF NOVEMBER 2015

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1 CARRIAGE HILLS METROPOLITAN DISTRICT SUMMARY DESCRIPTION AND FREQUENTLY ASKED QUESTIONS AS OF NOVEMBER 2015 WHAT IS THE CARRIAGE HILLS METROPOLITAN DISTRICT? The Carriage Hills Metropolitan District (the District ) is a special district organized on June 21, 2006, by an Order and Decree issued by the Weld County District Court after an election of the eligible electors of the District authorizing its organization. The area within the District encompasses the Carriage Hills Subdivision (the Subdivision ). Additional properties may be included into the District s boundaries by petitioning the District and processing the request through the procedures outlined by Colorado law. WHAT IS THE PURPOSE OF THE DISTRICT? The District was created in response to the need for the design, construction, acquisition and installation of public improvements serving the Subdivision. At the time of the District s creation, it was not economically feasible for the Town of Frederick to provide these services and facilities. The District has the power to finance and construct streets, traffic safety controls, street lighting, sanitary sewer, water, landscaping, storm drainage, mosquito control and parks and recreation improvements and facilities for the benefit of residents and taxpayers within the District s boundaries. When the District was originally organized, it was not intended to provide ongoing operation and maintenance of any public improvements and the Intergovernmental Agreement between the District and the Town of Frederick (the Town ) prohibited the District from providing these services. However, in 2013, the Town requested that the District maintain common landscaping throughout the Subdivision when the Town discovered that a homeowners association intended to be formed to provide these services was not validly organized and could not provide these services. As a result, in January 2014, the Town amended its agreement with the District to permit the District to provide ongoing operation and maintenance services for the common landscaping throughout the Subdivision. Therefore, the District owns (or will own), operates and maintains common landscaping and streetscape improvements throughout the District. A map showing these areas is attached as Exhibit A. HOW ARE THE PUBLIC IMPROVEMENTS FINANCED? The construction of the streets, street lights, sanitary sewer, water, storm drainage and park and recreation improvements currently within Filing No. 1 of the community were financed by the original Developer of the Subdivision and will be reimbursed by the District when the District has sufficient tax revenues. Similarly, the construction of the streets, street lights, sanitary sewer, water, storm drainage and park and recreation improvements within Filing No. 2 of the community are being financed by the builder of Filing No. 2 and a portion of those costs will be reimbursed by the District when the District has sufficient tax revenues ; P a g e 1

2 HOW DOES THE DISTRICT RELATE TO THE DEVELOPER? Over the years, the Developer has advanced money to the District in order to finance the construction of public improvements and to pay its ongoing administrative and maintenance costs that are/were not otherwise paid by the property tax revenues generated by the District s mill levy. These costs are eligible to be reimbursed to the Developer when the District has sufficient funds available. Representatives of the Developer currently serve on the Board of Directors of the District. No other formal relationship exists between the Developer and the District. WHAT ARE THE DISTRICT S TAXES USED FOR? The District s property tax mill levy is limited to a maximum of mills. The property tax mill levy may be allocated between the debt service and general funds as the District s Board of Directors deems necessary for the District in any given year. For the 2015 fiscal year, the District imposed mills on property for the purpose of paying general fund expenses of the District (i.e. administrative, annual reporting and compliance, legal, accounting, etc.). In 2015, the mills imposed by the District is anticipated to generate $55,143 in revenues. The mill levy imposed by the District may vary from year to year based upon the actual taxable values of the properties within the District and the operational needs of the District. Because development has not occurred as quickly as anticipated, the revenues generated from the property taxes have not been sufficient to cover the administrative expenses of the District on an annual basis and the Developer has advanced funds to make up the shortfall. In 2015, it is anticipated that the Developer will be required to advance approximately $6,239. WHAT ARE THE DISTRICT S FEES USED FOR? In addition to property taxes, the District imposes a one-time system development fee in the amount of $2,625 (as of January 1, 2015) per lot to defray the capital costs of the District. This fee is due upon purchase of the lot by a resident and is used to reimburse the Developer for the revenues advanced to the District for the construction of the original public infrastructure throughout the Subdivision (i.e. streets, water, sanitary sewer, etc.). The development fee increases annually on January 1. When the District agreed to assume the operation and maintenance responsibilities for the landscaping throughout the community, it was necessary to determine the costs associated with these responsibilities and how they would be paid. Because these services would originally be provided by a homeowners association, which would impose a monthly fee, and because the District s mill levy cannot be increased, it was determined that a monthly fee was necessary in order to cover these expenses. As a result, the District imposed a monthly fee in the amount of $ ; P a g e 2

3 HOW ARE TAXES CALCULATED? Property taxes are determined by completing the following calculation for an individual parcel of property: Assessed Valuation x mill levy = Annual Tax Bill. The assessed valuation of a property is determined by the County Assessor. For residential properties, the County Assessor determines the actual (not market) value of a residential property and multiples it by 7.96%, the assessment ratio in For example, if a property is valued by the County Assessor at $250,000, the assessed valuation is $19,900 ($250,000 x 7.96% = $19,900). Once the assessed valuation is determined, the County Treasurer applies the total mill levy of all governmental entities which tax that parcel to the assessed valuation to determine the annual tax bill for that property. For the District alone, the tax on the sample property valued at $250,000 would be $995. WHY DOES THE DISTRICT NEED PROPERTY TAXES? The District was organized to finance, construct, operate and maintain public improvements serving the properties within its boundaries. In order to finance the capital (i.e. construction) costs, the District issues municipal bonds or other financial obligations (aka debt ) which are required to be repaid over a period of time, typically 30 or 40 years. This debt is repaid through the property tax revenues generated by mill levies. The District also provides valuable ongoing services to the residents of the Subdivision, such as landscape maintenance and the operation and maintenance of other facilities. The District s operating costs are also financed, in part, through property taxes. As a public entity, the District must remain in compliance with Colorado law for Title 32 special districts. There are administrative costs associated with maintaining the District and complying with these requirements. The District s administrative costs are also financed by property taxes. GOVERNANCE AND MEETINGS The District is governed by a five-member Boards of Directors. In order to serve on the Board of Directors for a District, a person must be: (1) either an owner, or the spouse or civil union partner of an owner, (in an individual capacity) of taxable property interests within the legal boundaries of the District; a resident of the District; or have an option to purchase property within the District which obligates him/her to pay taxes; and (2) registered to vote in the State of Colorado. Directors on the Board of Directors are assigned to staggered terms so that every two years at least two of the four-year director positions are up for re-election. The next regular election for the District s Board of Directors is May Those interested in running for positions on the Board will be required to submit self-nomination forms to the District s Designated Election Official in February Information regarding the self-nomination forms and submittal deadlines will be published during the early part of 2016 in accordance with Colorado election laws ; P a g e 3

4 The District meets as necessary to conduct business and all meetings are open to the public. The Board s next regular scheduled meetings are Thursday, March 24, 2016 and Thursday, October 20, 2016 at 6:00 P.M. at Carbon Valley Academy, 4040 Coriolis Way, Frederick, Colorado Notices of regular and special meetings are posted at three locations within the District. However, due to unforeseen circumstances, meetings are subject to cancellation. To avoid inconvenience, any interested parties are encouraged to verify the status of an upcoming meeting with the District s Manager (contact information set forth below). NEED MORE INFORMATION? More information regarding the District may be obtained from the District s General Counsel: WHITE BEAR ANKELE TANAKA & WALDRON Attorneys at Law, Attention: Jennifer Gruber Tanaka, 2154 East Commons Avenue, Suite 2000, Centennial, Colorado 80122; (303) ; jtanaka@wbapc.com; or from the District s Manager: Metro District Management, Attention: John Paul Williams, 333 W. Drake Road, Suite 142, Fort Collins, Colorado 80526; (970) (phone); (970) (emergency after-hours phone); carriagehills@mdmoffice.com ; P a g e 4

5 EXHIBIT A Maintenance Map ; P a g e 5

6 Cur r entmai nt enance Fut ur emai nt enance UponDedi cat i on