I concluded Part Three, yesterday, with a question that we might not be able to answer fully. The question was related to the email I received from journalist David Migoya, wherein he mentioned “sharks”. I had included a link to a fascinating 2020 Denver Post article by Mr. Migoya about metro districts, debts, conflicts of interest, and what one might call “authoritarian local governments”.
His email had included this comment:
Metro Districts are a ridiculously complex area, so I’d be pleased to share any of the snake pits or traps I had to manage because, rest assured, the sharks are circling.
I concluded Part Three, yesterday, with a question… related to ongoing discussion at Town Hall about allowing — or not allowing — developers to create ‘metro districts’ to facilitate suburban or urban developments:
“Who, exactly, are the sharks, who are circling?”
I’ve been writing about government decisions in Pagosa Springs for 20 years now, and I’ve had the occasional unsettling experience of watching talented ‘salesmen’ — salesmen selling government policies, for instance, or government investments — use various techniques to sway our elected officials.
One technique might be called “blinding them with details.” The salesperson, who might be a business owner, or developer, or architect, or attorney, encourages a board or committee to start making choices about various policy details, before the board members have had a chance to fully understand the overall issue…
…thereby leading the decision-makers to unconsciously adopt the salesperson’s perspective.
I saw this often-effective technique at work, over the past four months, during Archuleta School District’s Master Plan Advisory Committee (MPAC) meetings. In that situation, the salesmen were architects with consulting firm RTA Architects.
Disclosure: I was a participant in the MPAC meetings, but this editorial reflects only my own opinion and not necessarily the opinions of other participants in the MPAC process.
The same technique seemed to be at work on Tuesday evening, during a joint meeting of the Pagosa Springs Town Council and Planning Commission. The three-hour discussion was led by Town Attorney Bob Cole and Development Director James Dickhoff, and I watched as the board members and commission members were asked to vote on the miscellaneous and sometimes highly technical details to include in a future metro district policy — before they had decided that a metro district policy was even a good idea.
For example.
Attorney Cole told the gathered officials that the Town’s metro district policy could establish a limit on the mill levy to be placed on future property owners within the district — a limit on the total amount of the bonded debt, the duration of the bonds, and the maximum mill levy that could be placed on the future property owners.
Mr. Cole:
“There will be some [property tax] revenue that will be required to just operate the district, because remember, they’ve got to have an auditor, they’ve got to prepare a budget, they’ve got to have an attorney…They need some operating revenue if they are going to exist. And then they need debt service coverage. And the standard here is to kind of cap that at 50 mills for debt service, and 10 mills for operating the district…”
So, a recommendation of 60 mills of additional property taxes, laid on the shoulders of the future property owners, which would be on top of the other property taxes they would pay to the school district, county, town, fire district, three water districts, medical center, library district…
I don’t know how many of the officials listening to Mr. Cole’s advice have a clear grasp of what “60 mills” actually means in Archuleta County? But attorney Cole asked them to vote on this detail anyway, which they dutifully did.
My downtown home, purchased in 1994 for $129,000, was recently appraised by the Archuleta County Assessor at nearly $700,000. Based on the various government districts I live within, my property taxes this year were $2,800.
That obligation was calculated based on a total of 58 mills. 58 mills covers schools, county, town, fire district, medical center, etc.
If my home were inside the future metro district attorney Cole was sketching out, and I were paying an additional 60 mills to my metro district, that suggests that my property tax bill would be about $6,000 a year.
Let’s hold that amount in our minds. Because later in the discussion about a potential metro district policy, the joint Council and Planning Commission members started talking about affordable housing. How, exactly, a property tax bill of $6,000 fits into the budget of a working household earning $40,000 a year, I cannot imagine.
This same problem was discussed in an informative Colorado Sun article about property taxes, which included a discussion about three adjacent neighborhoods in Aurora, Colorado. The article included this map:
Prices for the homes in all three of these adjacent neighborhoods average around $610,000, and all three neighborhoods pay the same mill levies to the school district, the county, the fire district, the water district, etc.
But the purple subdivision, and the dark blue subdivision, were financed with metro district schemes, and so they pay an additional mill levy.
The orange neighborhood is not within a metro district. Average property tax bill? $3,472 per year.
The dark blue neighborhood pays its additional mill levy to the Sterling Hills West Metro District. Total property tax? $5,104 per year.
The purple neighborhood pays its additional mill levy to the Iliff Commons Metro District. Total property tax? $6,143 per year.
It appears, from my research, that metro district schemes are now being used to finance nearly all new subdivision developments in Colorado, at great expense to the property owners within those districts. Who is getting the benefit from those financing advantages?
Does metro district financing lower the price of the homes in a new neighborhood? Or do metro district provide windfall profits for developers?
If we were to look to the three Aurora neighborhoods illustrated above — all with homes selling for the same approximate price — it would appear that the party benefiting from this quasi-government scheme was the developer, not the homeowners.
During the Tuesday joint meeting, Planning Commission member Mark Weiler referred to the language in the sample Town Resolution provided by attorney Cole:
WHEREAS, the Town wishes to adopt a policy for the consideration and approval of metropolitan district service plans when the development project for which metropolitan district formation is sought is consistent with the Town’s strategic priorities, will result in a demonstrated extraordinary public benefit, and formation of the metropolitan district to provide public services and facilities is needed for the development project to provide the extraordinary public benefit…
What “extraordinary public benefits” could be created by yet another mostly-vacant suburban subdivision in Pagosa Springs?
Read Part Five, on Monday…