AURORA | If you live along the Front Range, there’s a good chance you or someone you know lives in a metro district. Similarly, they’ve got problems with it.
That’s the take from a recent state Senate interim committee review and report, which found and outlined a variety of problems linked to special government districts created to offer homeowner services often provided by cities or counties.
The audit, released in October, identified dozens of special districts that assessed sometimes large property taxes, equaling or even surpassing other property taxes on homes, condos and townhomes, according to the state report.
The assessment also identified regularly occurring issues with unfilled metro-district board director seats or lack of transparency and records available to district residents and taxpayers.
These districts have the ability to levy taxes and take on debt to provide for services like road maintenance or water.
Aurora, as well as Arapahoe and Adams counties, have a large number of these districts, created when cities or counties hand off development and services needed for homeowners to special governments, such as raising street lights, paving streets, and more, at the expense of district homeowners, not the city or county.
Aurora began extensively creating the districts in the 1990s as city lawmakers then decided that growth “must pay for itself” in the city, according to previous Sentinel reports.
Metro districts provide at least two public services to their residents, according to state regulations. These services can include water, sanitation, fire protection, safety measures, transportation services, and waste disposal. Created by real estate development companies, local governments grant these districts the ability to “develop housing and public infrastructure, levy taxes, and provide urban services.”
Districts can take on debt and levy property taxes and fees to pay for the types of services and improvements they provide. The State Auditor’s report detailed that there were “about 2,500 metro districts” in Colorado that planned to collect roughly “$1.2 billion in property tax revenue in 2026.”
Residents in Aurora and across the state have raised questions around these property taxes, debt accrual, and who actually calls the shots for these districts, according to state Senate officials.
The audit concludes that Colorado needs to improve accountability, oversight, accountability, and transparency of metro districts that finance and operate some public services in their communities.
These districts are usually created and set up prior to these developments even having residents, so the boards usually consist of people linked to developers. These boards formalize how much debt each district can incur; this debt lacks a concrete backing that would have to be paid off by the homeowners that eventually move into the district.
Homeowners in these areas are often sent into a cycle of debt originating from the developers who created the district where they live, critics say.
In particular, auditors looked at the role of the Colorado Department of Local Affairs, sometimes called DOLA, which supports local governments, receives district filings, and initiates the consolidation and dissolution process of districts when necessary.
The audit found that DOLA could do more to ensure metro districts follow through on submitting required documents, such as annual reports, budgets, service plans, election information, and oaths and bonds for board members.
As it currently stands, districts’ issues with vacant board seats, missing records, and inactive districts that have yet to be dissolved have persisted.
According to the audit, 10% of metro districts have been inactive and have not provided their stated services for at least two years. There were even cases where they were inactive for up to 20 years. Currently, Colorado lacks a law that would limit the amount of time a district can exist without providing its services.
According to some members of Aurora’s city council, metro districts owe the people in their communities access to information as to how they operate.
“That’s the responsibility of the metro district to provide information to their residents,” Aurora City Councilmember Amy Wiles told the Sentinel. “I do see an opportunity for additional education on how metro districts work, their financial accountability, and how residents participate.”
Wiles said that, speaking from her own experience as a resident of one of these districts, she was given “very vague” information when she purchased her home and had to educate herself on what it all meant.
The issue of metro districts comes with big numbers. The state’s approximately 2,500 metro districts will collect an estimated $1.2 billion in property taxes this year, according to the audit report.
The audit concludes that the Department of Local Affairs needs to do more to require better transparency and reporting by special districts, including reporting of budgets, service plans, state requirements and board meeting details.
More than 30 districts did not comply with state filing regulations during the past two years, yet state agencies apparently took no action to correct it, according to the audit report.
The audit focused on 16 metro districts, two of which are in Aurora and caused consternation among state lawmakers and others.
The Aurora Wheatlands Metro District, on the city’s east side and created in 2015, exceeded its approved debt limit but did not file the changes with state regulators as of earlier this year.
One Aurora metro district at the Gardens on Havana charged a 0.5% levy on groceries, despite the city not having a grocery tax by design. The levy is called a “public improvement fee” and appears to be a tool prolifically used by special districts across the metro area, according to the report.
Auditors found that a resident of a $500,000 home in the Wheatlands paid more in metro district property taxes than they did for all other property assessments, essentially having to turn their $2,690 property tax bill into a $6,000 assessment.
One in five Coloradans live in a metro district
The report found that the number of these districts has doubled from about 1,000 to 2,509 over the past two decades. The east and south parts of the Denver metro area have a particularly high concentration of these districts. For example, 70% of Douglas County’s housing units fall under a metro district. The report identifies Douglas County and Arapahoe County as the top two counties for housing units in metro districts.
Democratic Aurora state Sen. Mike Weissman, vice chairperson of the Legislative Audit Committee that worked on the audit, told the Sentinel the explosion of metro districts correlates to the lack of funding for public resources resulting from TABOR, the Taxpayer’s Bill of Rights.
The vast majority of these new districts popped up in areas that were being developed post the passage of TABOR. Areas like Southeast and Far East Aurora, Douglas County’s various municipalities, and Weld County developments relied on the metro district structure to provide some basic services to attract residents.
“The basis of the audit report… was the kind of developer-connected metro district where the Title 32 legal mechanism is used… to constitute effectively a governing board,” Weissman said, adding that typically these boards consist of five people involved with the development.
These types of governments take on things like debt and impose taxes on future homeowners to pay off those debts. Weissman stressed that the majority of these districts that cropped up were established before these units even had residents.
“Nobody can be a resident of the community because [at the point it’s created] it hasn’t been built yet,” Weissman continued.
Weissman clarified that he has yet to run into someone who disputes the idea that the services these districts take on, like sewer or road maintenance, “need to be paid for”, but that the lack of accountability and input solicited from residents is “staggering.”
“What makes the Colorado metropolitan district structure a bit unique compared to other states is the closeness of individuals connected to the development effort to the [district] government itself. I think that residents of some of the newer metro district communities around the Front Range are shocked sometimes by the debt that they face.”
Weissman encouraged everyone linked to a special metro district to read the 150-page audit.
According to the Aurora senator, the audit identified “a number of areas for better oversight” on the part of local governments.
“The report points out there’s a part of the state government called the Division of Local Government… they have about as many staff as they did 20 years ago, and the number of metro districts has radically increased in that time,” Weissman said. “The state has limited financial resources, and we struggle to do everything that people want us to do, but I think the reality is that the state oversight capacity needs to be beefed up.”
Weissman added that recent elections that saw the passage of reforms to TABOR, like Amendment 87 and Proposition NN, will allow the state to better balance its budget, which could allow for more wiggle room for oversight of these districts.
Weissman wants to see some sort of easily accessible resource, like a website, so Coloradans can easily find that basic information.
He said he and others will push for reforms outlined in the audit report and when the state legislature reconvenes in January.
In terms of what average citizens could do, Weissman encouraged people to stay engaged in their communities.
“Keep an eye on what your metro district is doing. Find out where the meetings are. Go to meetings. Find out who the directors are. Ask questions. If you are a tax-paying resident of a metro district, you have the right to information,” Weissman said.