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1/22/2020 Denver Post investigation into Colorado's metro districts reveals billions in debt paid by homeowners <br />Rau said boards make it that high because getting voter approval at a later <br />date to levy additional taxes - such as after homeowners move in - could <br />be problematic. <br />"Once you've completed the (initial) election, it's very difficult to do <br />something different," he said. "These districts have very long lives with <br />many twists and turns." <br />Proponents say the arrangement actually benefits both developer and <br />homeowner by spreading the cost of millions of dollars in infrastructure <br />improvements over several years and paying it with property taxes rather <br />than charging it up -front, divvied up per house, in a one -lump sum at the <br />time of purchase. <br />"The structure provides for the vital infrastructure needed to <br />accommodate our growing population and planned communities, which <br />people want," said Ann Terry, executive director of the statewide Special <br />District Association in Denver. "They don't want communities with roads <br />that don't connect, or no green space or good schools. They want a nice <br />place to live:' <br />Critics of special districts contend bond interest rates are far higher than <br />today's 30-year mortgages, which remain at a fixed level rather than <br />fluctuate, as the property tax assessments have done. <br />"Most mortgages today are at 4% or 5% over 30 years, so the up -front <br />expense can be spread out just like the bonds," Wolfersberger said. "And <br />the bonds are at a far higher percentage rate. That math doesn't really hold <br />up anymore." <br />How a $1.8 million investment balloons to $22 million <br />payday <br />When developers create a metro district, there is often a reimbursement <br />agreement they sign - they typically are on both sides of that agreement, <br />as the developer and as a member of the metro district board of directors - <br />guaranteeing the district will repay any money the developer has spent <br />during infrastructure construction. <br />This agreement frequently calls for bonds to be sold to investors to cover <br />the repayment. The developer -controlled board generally agrees to sell the <br />tax-free bonds in chunks; the largest amounts are known as senior bonds, <br />and the smaller ones are known as iunior or subordinate bonds. <br />https://www.denverpost.com/2019/12/05/metro-districts-debt-democracy-colorado-housing-development/ 35 9/19 <br />