Centerra Metropolitan District Nos. 1-5

In accordance with Section 32-104.5(3)(X), C.R.S., the following general explanation in plain, nontechnical language, is provided.  This information is intended to be read in conjunction with all applicable legal requirements, governing documents, agreements, resolutions, and determinations of the Boards of Directors of the Districts. 

A metropolitan district is a special district that provides any two or more of the following services: 

• Fire protection; 
• Mosquito control; 
• Parks and recreation; 
• Safety protection; 
• Sanitation; 
• Solid waste disposal facilities or collection and transportation of solid waste; 
• Street improvement; 
• Television relay and translation; 
• Transportation; and 
•  Water. 

In accordance with the Consolidated Service Plan for Centerra Metropolitan District Nos. 1 – 4 (“Consolidated Service Plan”) and the Amended and Restated Service Plan for Centerra Metropolitan District No. 5 (“District 5 Service Plan,” together with the Consolidated Service Plan, the “Service Plans”), the Districts may each provide the following public improvements and services: 

• Sanitation and Storm Drainage 
• Water 
• Streets 
• Traffic and Safety Controls 
• Parks and Recreation 
• Transportation 
• Television Relay and Translator  
• Mosquito and Pest Control  
• Fire Protection and Emergency Medical Services, except District No. 1 shall not provide fire protection and emergency medical services, but may contract with the City and with the Thompson Valley Health Services District as necessary for the provision of such services. 

District No. 5 may also provide covenant enforcement and security services. 

As provided by separate agreements, District No. 1 provides for the construction and operation of facilities and improvements needed for the development in and/or for the benefit of the Districts.  No facilities or improvements are provided within the boundaries of District No. 3 by District No. 1 or District No. 3. However, District No. 3 benefits from certain improvements constructed outside of its boundaries by District No. 1.  Kinston Metropolitan District No. 1 is responsible for constructing, operating and maintaining public improvements within the boundaries of District No. 3. 

District No. 2, No. 3 and No. 5 provide funding for facilities, improvements and services provided by District No. 1.  Except for 0.584 acres, the boundaries of District No. 2 and No. 4 overlap.  Therefore, District No. 4 does not currently provide funding to District No. 1 for improvements and services. 

District No. 1 provides the following ongoing services:  operation and maintenance services of public improvements, owned by District No. 1 and located within and outside the boundaries of District No. 1, No. 2, and No. 5, which includes, but is not limited to, the Sculpture Park located within District No. 2 and No. 4.  

The provision of public improvements and services by District No. 1 are further limited by the Master Financing and Intergovernmental Agreement, as amended (the “MFA”). 

In accordance with the Districts’ Service Plans and as may be further limited by the MFA, the total amount of debt each District can incur to provide and pay for public infrastructure is: 

District No. 1:  The Consolidated Service Plan and MFA do not cap the amount of debt that may be issued by District No. 1.  The MFA provides that upon the issuance of bonds producing net proceeds of up to $100,000,000, and thereafter, the issuance of bonds producing net proceeds up to $30,000,000, each of which amounts are adjusted for inflation, the Regional Allocation (as defined in the MFA) is triggered and District No. 1 is obligated to pay the Regional Allocation (as defined in the MFA) to the Urban Renewal Authority.   

District No. 2:  The Consolidated Service Plan and MFA do not cap the amount of debt that may be issued by District No. 2. 

District No. 3:  $25,000,000 net available for construction, in 2003 dollars that are exclusive of costs of issuance, organizational costs and inflation. 

District No. 4:  The Consolidated Service Plan and MFA do not cap the amount of debt that may be issued by District No. 4. 

District No. 5:  The District 5 Service Plan and MFA do not cap the amount of debt that may be issued by District No. 5. 

• In accordance with the Districts’ Service Plans, the following revenue may be used to pay for the Districts’ debt:  The Districts may assess a mill levy on all taxable property within their respective boundaries as a primary source of revenue for repayment of debt service.  The imposition of rates, tolls, fees, and charges may also be necessary to retire indebtedness.  In addition, District No. 1 shall use tax increment financing revenues and public improvements fees to pay for debt as provided in the MFA. 

• In accordance with the Districts’ Service Plans and as may be further limited by the MFA and separate agreements, the maximum mill levy that each District may assess to pay for its debt is set forth below.  The Service Plans, MFA and separate agreements provide mill levy limitations as a combined mill levy limitation for debt and operation and maintenance. 

District No. 1: No mill levy may imposed for the payment of debt.   

District No. 2:  The maximum mill levy (debt service and operations and maintenance mill levy combined) that can be levied by any of Districts in combination cannot result in a mill levy burden greater than 72 mills for any of the property within the boundaries of District No. 2.  In the event the statutory and/or constitutional method of calculating assessed valuation is changed after January 20, 2004, maximum mill levy provided herein will be automatically increased or decreased to reflect such changes, so that to the extent possible, the actual tax revenues generated by the mill levy, as adjusted, are neither diminished nor enhanced as a result of such changes. For purposes of the foregoing, a change in the ratio of actual valuation to assessed valuation shall be deemed to be a change in the method of calculating assessed valuation. 

District No. 3:  The maximum mill levy District No. 3 may impose for the payment of general obligation debt and for operations and maintenance is 50 mills (the “Residential Mill Levy Cap”).  The Residential Mill Levy Cap may be eliminated only as to that portion of the outstanding debt of the Residential District the principal amount of which does not exceed 50% of the assessed valuation of the Residential District.  The Residential Mill Levy Cap will also be subject to adjustment if, after the date of approval of this Service Plan, the laws of the State change with respect to the assessment of property for taxation purposes, the ratio for determining assessed valuation changes, or other similar changes occur.  In these events, the foregoing thresholds and limits shall be automatically adjusted so that the tax liability of individual property owners neither increases nor decreases as a result of any such changes thereby.  However, the maximum mill levy District No. 3 may impose is further limited by separate agreements and District No. 3 may only impose five (5) mills, subject to adjustment, until January 20, 2029, which funds are paid over to District No. 1 for payment of District No. 1 debt.  Thereafter, District No. 3 will be required to amend the Service Plan prior to imposing any further mill levies. 

District No. 4:  It is anticipated that District No. 4 will certify and collect ad valorem taxes from all properties within its boundaries at a rate not to exceed ten (10) mills (for debt service and operations and maintenance mill levy combined).  The maximum mill levy (debt service and operations and maintenance mill levy combined) that can be levied by any of the Districts in combination cannot result in a mill levy burden greater than 72 mills for any of the property within the boundaries of District No. 2.  In the event the statutory and/or constitutional method of calculating assessed valuation is changed after January 20, 2004, maximum mill levy provided herein will be automatically increased or decreased to reflect such changes, so that to the extent possible, the actual tax revenues generated by the mill levy, as adjusted, are neither diminished nor enhanced as a result of such changes. For purposes of the foregoing, a change in the ratio of actual valuation to assessed valuation shall be deemed to be a change in the method of calculating assessed valuation.  By separate agreement with District No. 1 and District No. 2, District No. 4 shall be permitted to certify a mill levy up to 10 mills so long as the combined mill levies certified by District No. 2 and District No. 4 do not exceed 72  mills.  If District No. 2 imposes 72 mills, District No. 4 is not permitted to impose any mill levy.  District No. 4 has never imposed a mill levy and is not required to do so or expected to do so in the foreseeable future. 

District No. 5.  The maximum mill levy the District may impose for the payment of debt and operations and maintenance shall be 25 mills.  This mill levy cap is subject to adjustment if the laws of the State change with respect to the assessment of property for taxation purposes, the ration for determining assessed valuation changes, or other similar changes occur.   In any of these events, the mill levy cap shall be automatically adjusted so that the collective tax liability of property owners within the District neither increases nor decreases as a result of any such changes, thereby maintaining a constant level of tax receipts of the District and overall tax payments from property owners.  In addition, the District may adjust  the amount of its mill levy by an additional amount which does not exceed the proportional share of the total amount of abatements and refunds made pursuant to the provisions of Sec. 39-10-114(1)(B), C.R.S. 

Residents within each District may serve on the Board of Directors of the District if they are eligible electors of the District. A resident is an eligible elector of the District if the resident lives within the boundaries of the District and is registered to vote in Colorado.