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1/22/2020 Denver Post investigation into Colorado's metro districts reveals billions in debt paid by homeowners <br />By law, property owners must vote on any new tax and metro districts are <br />no different, except that when a district is created, the only voters are the <br />developers, their spouses, and a few business associates. The Post found <br />instances in which as few as two or three people created a metro district, <br />................................................................................................................................................................... <br />then approved millions of dollars of tax obligations for communities of <br />hundreds of homes that didn't yet exist but would be on the hook to pay for <br />decades. <br />The Post also found a recurring practice of developers buying the very <br />public financing bonds they first approved as metro district board <br />members — a conflict of interest they acknowledge by filing statements <br />with the Colorado secretary of state's office. The bonds that developers <br />typically buy, known as junior bonds, are designed to remain unpaid for <br />decades, allowing interest to compound while ballooning their investment <br />returns. <br />The Post found at least a dozen large metro districts in Colorado are <br />dangerously underwater with hundreds of millions of dollars of debt and <br />homeowners swimming in hefty property tax bills. The debt obligations <br />are so much higher than the assessed value of the homes leveraged to <br />repay them - some as much as 200 percent higher - that they are unlikely <br />to ever catch up. A few will never stop paying. <br />The amount of debt that developer -controlled metro districts have <br />authorized statewide already sits at nearly 100 times Colorado's state <br />government debt of $17 billion, according to a Denver Post review of <br />thousands of pages of district filings with state and local government <br />offices detailing that debt. <br />By 2015, those districts had already issued $19 billion of that, according to <br />the most complete public records available, with another $1.2 trillion in <br />borrowing waiting to be sold, The Post found. And the number grows each <br />time a new metro district is formed. <br />The newspaper also found instances where a district's runaway debt stalled <br />only after residents wrestled control of the boards — the Fossil Ridge <br />Metropolitan District in Jefferson County among them — causing <br />developers to resign in the face of recall petitions before they could <br />approve additional funding. <br />"It's like being stuck in the never-ending cycle of a bad credit card," said <br />Charles Wolfersberger, a Thornton accountant whose eponymous firm <br />https://www.denverpost.com/2019/12/05/metro-districts-debt-democracy-colorado-housing-development/ 29 3/19 <br />