Title 32 Special Districts City Council Study Session August 1, 2016 1
Pending Application August 8 th : Request to set the date for a public hearing. August 22 nd : Request to approve the Service Plan. 2
Examples 3
Linear Development 25% 25% 25% 25% 4
Real World Development 5
Special Districts - Purpose & Need Provide necessary infrastructure for development or redevelopment projects. Utilize public financing for infrastructure improvements that pays its own way. Amortize infrastructure costs over time vs. absorbing the cost with initial development. 6
What is a Special District? Any quasi-municipal corporation and political subdivision of the State of Colorado formed pursuant to Sections 32-1-101, et seq., C.R.S. 7
A Title 32 Special District is not A Business Improvement District (BID) A General Improvement District (GID) A Special Improvement District (SID) A Local Improvement District (LID) A Public Improvement District (PID) 8
Types of Title 32 Special Districts Ambulance Fire Protection Health Assurance Health Service Metropolitan Park & Recreation Sanitation Water & Sanitation 9
How Are Special Districts Formed? Service Plan Submittal and Approval Petition for Organization Organizational Election Order and Decree 10
How is a Special District different from a Property Owners Association? Special District is a governmental entity. POA contracts with its members. Special Districts have broader power. Collection mechanism(s) Both can enforce covenants. Often they are used together 11
What is a Service Plan? It is the document that is intended to establish and limit the purpose of the District as well as financial constraints. It is a document that must have City Council approval before the organization of a district can be voted on in an organizational election. 12
What are the Common Powers of Special Districts? Levy and Collect Ad Valorem (Property) Taxes. Issue Debt. Impose and Collect Fees, Rates, Tolls and Charges. Enter into Contracts and Agreements. Acquire, Sell and Lease Property. Create Enterprises. Establish a Special Improvement District. Covenant Enforcement & Design Review Services. Levy Sales Taxes (in limited circumstances). Eminent Domain (in certain circumstances). 13
Special District Governance Governed by a Board of Directors (5 or 7 members). Initial Board is elected at the Organizational Election. Directors elected for staggered four-year terms. To be an elector of a Special District, one must be registered to vote in Colorado and; Reside within the Special District; or Own or have a contract to purchase taxable property within the Special District; or Be the spouse of a person who owns or has a contract to purchase taxable property within a Special District. 14
Special District Governance (continued) Must comply with certain laws applicable to all governments: Open meetings laws Public bidding requirements Public audit and budget requirements Disclosure Requirements Must comply with Service Plan 15
Municipal Oversight This slide was updated 8/2/16 for clarity. At the time of Service Plan review, Cities can limit activities, limit borrowing or limit maximum tax rate. Once formed, Special Districts function as independent quasi-governmental entities, BUT: Cities can require: Annual reports. Review of financial information every 5 years. City approval is required: When there are major modifications to Service Plans. Examples of major modifications are listed in Section 32-1-207 C.R.S. 16
What is a Metropolitan District? Type of Title 32 Special District. Provides any two or more of the services permitted to be provided by a Special District. An entity utilized to fund a wide range of infrastructure improvements necessary to support new commercial or residential developments. 17
What Services Can Metropolitan Districts Provide? Finance, construct, operate and maintain improvements per the Service Plan. Typical improvements include: streets, sanitary sewers, storm sewers and landscaping. Improvements can be on-site or off-site, public or private but must be within the district. 18
What Metropolitan Districts Cannot Do Tax properties outside of the district. Increase taxes without a vote. Levy sales taxes if they are not identified in the Service Plan. 19
Why Use Metropolitan Districts? Generates independent sources of revenue to finance the cost of constructing, owning and maintaining project improvements. Enables communities to address local infrastructure needs while allocating the cost to those who directly benefit. Can provide perpetual operation and maintenance of public improvements. 20
Metropolitan Districts are Authorized to Finance: Improvements Street, safety protection, water, sanitary sewer, transportation, television relay & translation. Mosquito control Fire protection Solid waste disposal facilities/collection & transport 21
How are districts financed? Bonds General Obligation secured by property taxes, through the imposition of a mill levy. Revenue payable from any revenue of the district, such as fees or revenues through revenue sharing arrangements with other jurisdictions or entities. Special Assessment established with a special improvement district. Grants & Loans as available. 22
What are the Sources of Revenue? Sales Tax Special Assessments via SID Service Charges and Fees Property Taxes 23
How Does a Mill Levy Work? A mill levy is the tax rate that is applied to the assessed value of a property. One mill is one dollar per $1,000 dollars of assessed value. 24
Sample Calculation (from Jefferson County) Actual Value: $250,000 Assessment rate: 7.96% Assessed value = $19,900 (250,000 * 7.96%) Tax district mill levy = 90.165 Amount of taxes = $1,794 (19,900 *.090165) 25
Examples in Lakewood West Metro Fire Protection District Water & Sewer Districts (~25) Metropolitan Districts Denver West, Elk Valley, Fossil Ridge, Green Tree, Indiana Valley, Mt. Carbon, One Horse, Springfield Green, The Plaza (Belmar) & Vance Street. 26
City Council Review: C.R.S. Section 32 Council Shall Disapprove unless evidence shows: Sufficient, existing need for Service in the area; Existing service in area is inadequate; Proposed district is capable of providing economical and sufficient service; and Area has financial ability to discharge proposed debt. 27
Questions? 28