City Council Study Session Agenda and Packet 2020 01 28

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1/22/2020 Denver Post investigation into Colorado's metro districts reveals billions in debt paid by homeowners "Originally metro districts were disfavored by municipalities and counties," said attorney Brian Matise, an expert on special districts. "But over time, these counties and municipalities came to see (them) as a way of shifting the costs of public services onto these districts and away from their taxpayers." The watershed moment, Matise said, was the success of the Highlands Ranch Metropolitan District, which was organized in the 1980s and became the largest unincorporated community in the U.S. The Highlands Ranch service plan was eventually amended to allow it to provide most of the services and infrastructure of a municipality. Any thoughts of doing a development "the old way," with cities taking on the infrastructure financing burdens, came to a screeching halt with the passage of the Taxpayer's Bill of Rights (TABOR) in 1992, requiring any tax increase to be put before the electorate. Voters routinely refused to approve increases to pay for someone else's construction because, as one financial expert put it, "growth should pay for itself." "Metro districts in Colorado exist for a specific reason: to finance public infrastructure," said Sam Sharp, managing director of public finance and head of the special district group at D.A. Davidson & Co. in Denver, one of the most prominent underwriters of metro district bonds in the state. "It's mostly because TABOR limits cities from doing it:' RELATED. Even Highlands Ranch metro districts, which are ............................................................................................................................................ considered successful, remain nearly $30 million in debt At about the same time, changes to the Special District Act — the law that was devised for the creation of fire, library and recreational districts — greatly expanded the powers of metropolitan districts by allowing the quasi -government entity to issue unlimited debt as long as the investors were banks or institutions — a group that would eventually include the developers themselves. "Large infrastructure is difficult to finance, and it's most difficult to finance in the private sector. You almost can't get bank financing today for infrastructure," Rau explained. "Metro districts are a very efficient way to do this." https://www.denverpost.com/20l9/l2/O5/metro-districts-debt-democracy-colorado-housing-development/ 33 7/19