ALPINE MOUNTAIN RANCH METROPOLITAN DISTRICT HIGHLIGHTS
Frequently Asked Questions about Metro Districts
Q: What is a metro district?
A: Metro districts are quasi-governmental entities with taxing authority that are created to fund and administer services for the betterment of a particular neighborhood or community.
Q: What types of communities use metro districts?
A: Many of the finest resort neighborhoods in the West utilize metro districts because they provide more power and flexibility than traditional homeowners associations. See below for examples of metro districts being utilized in resort areas.
Q: Why was Alpine Mountain Ranch Metro District formed?
A: The Alpine Mountain Ranch Metropolitan District (“district”) was formed as a quasi-municipal corporation and political subdivision of the State of Colorado. The primary purpose of the District is to finance, construct and maintain public improvements and to transfer, if and when appropriate, such public improvements to a homeowners association or some other entity for the use and benefit of the District’s taxpayers. The primary benefits of utilizing a Colorado Special District include:
- Limited liability through the Colorado Governmental Immunity Act;
- The ability to use, among other sources of revenue, the power of taxation to collect the cost of service on an equitable basis through income tax-deductible means;
- Exemption of the District from Colorado property, sales, and income taxes; and
- A continuing existence with elected officials.
Q: What services does Alpine Mountain Ranch Metro District provide?
A: The Service Plan of the District, which was approved by the Routt County Board of County Commissioners, provides for the District to implement streets, parks and trails, drainage, water, security and covenant enforcement services to service the needs of Alpine Mountain Ranch.
Q: Who controls Alpine Mountain Ranch Metro District?
A: A five-person board of directors controls the metro district. These members are elected by local property owners for staggered terms of four years. Elections are held in May of even-numbered years by state statute. The District is responsible for producing and filing with the State an independent audit of its financial activities, and they are otherwise subject to many State requirements for filings and reporting.
Q: How is the metro district funded?
A: The District is authorized to issue up to $11 million in General Obligation Bonds or Special Assessments to finance the facilities, to be secured by the taxing authority of the District. The primary source of revenue for the District will be the proceeds from a property tax levied upon all taxable property within the District. A mill levy is added to the annual property tax bill and the resources from that levy are used solely for the benefit of property owners and the neighborhood. Additionally, fees may be imposed for facilities and services. The Alpine Mountain Ranch Metro District has been authorized to assess a mill levy up to 55 mills, although the current mill levy is 5 mills. Routt County then enters this mill levy into its calculations to arrive at individuals’ property taxes. Costs related to assessments or bonds are not included in the mill levy.
Q: What are the funds from the mill levy used for?
A: In the early stages of large developments, most of the funds generated from the mill levy go to operating expenses. Bonds and assessments are created to finance infrastructure such as water, bridges, drainage, roads, ponds and trails. As the community matures and more homes are completed, the mill levy will be adjusted to fund maintenance of amenities. Examples of these types of amenities include recreation centers, enhanced landscaping, walking trails, parks, property protection, common area maintenance and club houses.
Q: Who issues the bonds?
A: The bonds are issued by the underwriter, a major financial institution. They are guaranteed by an independent third party. The bonds are sold to individual and/or institutional investors.
Q: Are homeowners individually liable for the bonds?
A: No, individual homeowners are not liable for the bonds. They are only responsible for their own real estate taxes and any assessments to their property
Q: What happens if all the bonds are not sold?
A: The bonds are issued on an “all or nothing” basis; the underwriter guarantees to the District that all the bonds will be sold. If the underwriter can not sell all the bonds to investors, the underwriter must buy the unsold bonds.
Q: Are the bonds necessary to complete the infrastructure at Alpine Mountain Ranch?
A: In the case of some developments, bonds are issued before completion of infrastructure to help fund those improvements. In the case of Alpine Mountain Ranch & Club no bonds were issued prior to completion and necessary infrastructure is complete.
Q: What are the Advantages of Metro Districts for Homeowners
- Metro Districts can raise more funds through the issuance of bonds to invest in neighborhood appearance and amenities, which ultimately supports higher property values.
- The taxes levied by the metro district are potentially tax deductible from owners’ income taxes. This is not possible with normal HOA dues.
- A metro district keeps HOA dues low because many of the necessary neighborhood services are performed by a more powerful and well-funded metro district.
- Local governments and large organizations such as ski areas are more likely to work with influential metro districts to ensure that access and services are to the benefit of the community. At Alpine Mountain Ranch, the existence of the District allowed the creation of the dedicated entry road and bridge into the property.
- A metro district has limited liability through the Colorado Governmental Immunity Act which is not available to a normal homeowner’s association. This means a possible reduction in collective financial liabilities that might result from a lawsuit.
Q: What are Examples of Metro Districts
- Hundreds of Metro Districts have been formed and are operating in Colorado.
- Catamount Metro District has financed infrastructure through Metro District bonds.
- Aspen Village Metro District has not only created first class public spaces, but also funded numerous private concerts and events.
- Mountain Village Metro District in Telluride, CO has funded an extensive trail and lift system that connects to the ski area and to the town of Telluride.
- Bachelor Gulch Metro District of Beaver Creek, CO first kept initial property prices lower through issuing bonds to fund infrastructure. Now that the major infrastructure has been completed the mill levy has been reduced for homeowners. The metro district has also been able to work with the Bachelor Gulch Village Association to support public safety and public transportation in the village.
- Eagle Ranch Metro District in Eagle, CO has constructed a golf course and other amenities that serve neighborhood interests.
- Beaver Creek Metro District operates the transit system, landscape maintenance and security services under contract with the Beaver Creek Master Homeowners Association.