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DAB 106 - Special Taxing Districts

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Many properties in Colorado Springs are included in unique special financing districts of different types, especially in newer or redeveloping areas of the City. Maps showing most, but not all, special district boundaries in the City can be found here

A City Special Districts White Paper can also be found at this location. It further describes City districts and related issues as of 2009. The City’s 2006 Special District Policy is also available at this site. It sets forth general policies and limitations applicable to many of these districts. 

Altogether, there are about eighty (80) of these districts, although some are inactive. They are ordinarily initiated by the developer of a property, but are approved by City Council. 

The purposes of these districts may include financing of public improvements, ongoing maintenance and operations, or a combination. In general, these districts either serve to reimburse the developer for public improvements they are required to provide or to augment public facilities and services which might not otherwise be available to most City residents.

Most districts obtain their revenue via a property tax, although some may also charge fees or collect assessments. Residential districts have an eventual time limit for debt service, but in some cases they may operate more or less in perpetuity to provide maintenance and/or services. Under current City policy, City Council must determine whether proposed district bond issues are compliant with approved district plans, prior to issuance.

Types of Districts

There are a wide variety of types of existing and potentially available district types. Some are set up under Colorado Statute while others are organized under City Code. The most common district types include the following:

Metropolitan Districts

These Statutorily-created districts are independent entities with potentially broad powers to issue bonds for public improvement costs and, in some cases, maintain and operate facilities. All of Banning Lewis Ranch and many major developments approved within the last decade are included in metropolitan districts.

These districts have independently elected boards of directors. In some cases, they are organized as multiple separate districts to coincide with phases of a project and/or differentiate between residential and commercial areas.

In some cases the multiple districts are managed by a small developer-controlled master district. Metropolitan districts are essentially chartered by a service plan which must be approved by City Council. The City uses a Model Service Plan approach to standardize the content of these plans and their limitations.

These can be found here. A key limitation involves mill levy caps. Ordinarily these are 30 mills for debt service in residential districts and 50 mills in commercial districts.

In either case an additional operational mill levy of not more than 10 mills, may also be imposed. City Council has approved an exceedance of these caps in a few situations.

Business Improvement Districts (BIDs)

BIDs are fairly similar to metropolitan districts, but are limited to non-residential areas. They are subject to an operating plan and budget that must be annually approved by Council. A BID has been established for much of Downtown as well as a number of newer commercial centers mostly in northeast Colorado Springs. BID’s are generally subject to the same mill levy caps as metropolitan districts.

General Improvement Districts (GIDs)

A limited number of GIDs were established in the City mostly in the 1980s. Unlike metropolitan districts and BIDs, City Council acts as their board of directors. Historically, GIDs were established for the sole purpose of financing public improvements. GIDs now technically have the authority to provide ongoing services. However, at this time none provide this function.

Special Improvement Maintenance Districts (SIMDs)

SIMDs are established under City Code for the purpose of providing ongoing maintenance mostly for arterial street landscaping and entry features. All existing SIMDs were established between 1979 and 1989. Most impose an ongoing mill levy for this purpose, and unlike metropolitan districts, BIDs or GIDs, they do not issue debt. Currently, SIMDs are managed by the Parks Department. SIMDs cannot issue bonds and the City Council sits as their de- facto, board.

Local Improvement District (LIDs)

LIDs are authorized in City Code, and are typically created to provide some or all the financing needed to address unique physical infrastructure needs in developed areas of the City. Bonds are paid off via property assessments versus a property tax. LIDs ordinarily have a life of 10 years during which Council sits as their de facto board.

Disclosure, Notice and Protections

Because individual districts have the potential for unique features and circumstances, it is advisable to contact either the district representative or the Comprehensive Planning Division for detailed information. Metropolitan districts, BIDs or GIDs should have an approved service or operating plan available.

The service plans include a disclosure form. Annual reports are required to be submitted for metropolitan districts. A County Assessor’s Parcel Search will identify any existing mill levy being assessed for a district, along with contact information for that entity.

However, there are limited cases where a mill levy has yet to be certified, or there is a potential for an increase authorized by a prior vote. In these circumstance the owner or prospective owner should undertake due diligence including being attentive to documents and notices recorded against the property and required to be provided at the closings for property sales.

Additional Information

For further information on existing special financing districts or about the process of creating new districts or amending their plans, please contact the Comprehensive Planning Division at (719) 385-5905.