Summerfield Metropolitan District No. 1 (“District No. 1”) is a quasi-municipal corporation and political subdivision of the State of Colorado located within the Town of Erie, Colorado created by election in 2013. The District and Erie have entered into an Intergovernmental Agreement as required by Erie Municipal Code, which implemented the District Service Plan and limited certain District statutory powers. The District is governed pursuant to provisions of the Colorado Special District Act to construct and finance public infrastructure serving the Summerfield community.
A Metro District is a local unit of government formed to provide necessary public services that the county or municipality cannot otherwise provide. It is essentially a tax-exempt financing mechanism used for the installation of public infrastructure. The Metro Districts issue debt to pay for the public infrastructure, which debt is repaid by property taxes levied within the Metro Districts’ boundaries. Public infrastructure includes streets, water, sewer, storm drainage, parks, trails, and other similar improvements.
Initially, growing cities and towns financed and installed public infrastructure serving their municipalities, literally “paving the way” for new homes and businesses. However, cities and towns began to struggle to pay for the public infrastructure needed to grow. In the late 70’s and early 80’s a change to “Growth pays its own way” occurred. This shift by municipalities put the cost burden of growth on the shoulders of future property owners. To facilitate continued growth, the State of Colorado passed reenactment of Title 32 in 1981, the Special District Act, to allow Metropolitan Districts to satisfy the public need for infrastructure and allow the Districts to use tax exempt financing to pay for the public infrastructure. There are now approximately 2,000 Metro Districts operating throughout Colorado and the majority of States across the country having their own versions of the Special District Act using similar structures as Colorado’s special districts.
District No. 1 is an operating district. The operating District in a multi-district configuration typically covers a very small portion of the community where there will be no homes or commercial properties built. The area is so small that the operating District rarely collects property taxes and instead relies on the property taxes and debt proceeds from the financing districts to cover its operational costs. An operating district is used to consolidate public infrastructure construction, financing and administrative management of all districts within a community. This structure mitigates cost redundancies and allows for a more efficient management of the districts’ financial obligations. Over time, as the community is built out and the financing is in place, the need for an operating district diminishes and eventually this district will be dissolved.