NOTE: This story has been modified from its original version to clarify that the tax jump in question is the Metro District’s levy. It does not take into account other taxes from across the community, and it should be assumed that final tax bills would be substantially higher than the figures highlighted below.
When Bonnie Carlson and her husband purchased their home in 2009 among the lush lawns in Windsor’s Water Valley, the housing market was on the cusp of collapse.
And after assessed values across the country plummeted, Carlson held onto hope that Windsor would be the place to be for the recovery — that the town would weather the changes, come out on top and eventually emerge as a thriving Colorado community.
That’s what she has witnessed. In the years since, she found a dream home in the posh resort-style community, and the decision to move to the region worked out after all.
But when she opened her property tax bill three weeks ago, she again found herself in a worrisome and confusing situation, along with others in the 1,600-address community. Carlson was stunned to see the Water Valley Metropolitan District portion of the bill on her $270,000 home almost doubled what it was two years prior — a jump from her 2011 amount of $430 to $840. More concerning, she said, was a dearth of information about what justified the hike and just how that rate was calculated by a governing board and special tax district she admittedly knew little, if anything, about.
“At a time when people’s jobs are still iffy, raising taxes that much can actually mean the difference between someone keeping their house and losing their house,” Carlson said, adding that many in the community felt uninformed about what was happening and where the money was going. “It’s not something as a homeowner you expect to happen.”
Water Valley Metro Districts 1 and 2 in a nutshell
Water Valley Metropolitan Districts No. 1 and 2 are among more than 700 special tax districts scattered across Weld County.
Some entities are more familiar, like school or fire districts, while others are more community or development-based taxing groups, including those in Windsor and Greeley.
Though technically two separate entities, Water Valley’s districts are run by a five-member elected board and a manager in much the same way as communities, including Windsor. Each member lives in the area he or she represents, and elections are held every two years. The next is slated for 2014.
As a basis for just how hefty a property tax bill will be each year, mill levies work in conjunction with assessed value. When combined, those funds are often used for infrastructure, improvements or, in the case of Water Valley in recent years, debt service for its expansive water resources.
When the community was planned for and the district was created, bonds were issued for a slew of infrastructure and water projects. The districts are currently responsible for about $29 million in debt — money that was borrowed to finance irrigation water infrastructure for neighborhoods, distribution systems and the common areas in the community including the vast network of ponds, lakes and waterfalls, all of which act as storage vessels for the districts non-potable water.
Gary Kerr is the interim district manager and ensures state filings and financials are adequately filed while overseeing many of the operations. He also works with the board, which ultimately sets the mill levies after weighing economic conditions and loan obligations. The mill levy hike was necessary, he said, because of two factors that simultaneously worked against developers and homeowners alike.
When the national markets plummeted, the overall assessed value of the community tanked, most recently by about 18 percent during the past three years in Water Valley, he said. In 2011, the certified assessed value of the Metro 2 district was about $20 million before dropping in 2012 to just under $17 million. Communities across Weld County and Colorado saw similar levels of depreciation.
At the same time, construction in Water Valley slowed to a virtual standstill, although the district may add upward of 100 new homes in the near future, Kerr said. With fewer-than-expected residents footing the bill and the overall assessed values surprisingly low, he said something had to give. In the world of property tax, that meant mill levy hikes to offset the costs.
“There’s nothing unusual about this,” Kerr said. “I don’t believe the district is overcommitted in its debt. It’s reasonable in light of the assets the districts own and in light of the thriving community that’s growing.”
“This is just good business. The district is being operating in a way that’s fiscally sound,” he added.
Weld County Assessor Chris Woodruff said his office fielded complaints from residents in the region and explained the hike more broadly.
“I don’t think anybody anticipated when a lot of these districts were created and bonds were let that we would go through what we went through from 2008 forward with reduction in value in real estate all over the place,” Woodruff said. “I think that was kind of an extraordinary event.”
And while many residents immediately grew concerned about just how high those rates could go, past levy rates across the region indicate that Water Valley, with a current rate of 39 mills, remains at average or below many other districts in the region, some of which have property tax rates pushing 60 mills.
Not without limits
Legal filings including budgets must be kept on file with the state’s Department of Local Affairs, and records of public notices and board votes are accessible through the state’s website.
Though it’s easy to become bogged down in details, each budget provides an indication of just how well districts are doing. As for the debt service obligations regarding Water Valley’s bonds that were let to fund the extensive water infrastructure, that’s something that ebbs and flows with the changing markets.
“It really depends on each one’s unique debt situation usually or contractual obligation situation,” said Scott Olene, manager of local government services with the state. “There’s a lot of moving parts and a lot of things that are unique to each district.”
In extreme cases, he said, districts have pushed the limits to just how high levies could go, though he said he only remembered a few cases of districts going bankrupt.
Colorado State statute 32-1-1402 also places a limit on how much can happen during public meetings before a more formal hearing is required to at least discuss the merits of bankruptcy as an option.
It’s about more than money — it’s about transparency
Though the district ultimately files everything necessary with the state, public knowledge of just what the five-member Water Valley board does or when it meets can be difficult to find — something even Kerr acknowledged.
“I think that the district could be more proactive in its communication,” he said, hinting that community newsletters, email blasts or even a potential district website could help bridge the informational gap. “It’s certainly something I would commit to look at, but what that looks like, I don’t know.”
The next board meeting is slated for 9 a.m. March 21 at the Water Valley Land offices at 1625 Pelican Lakes Point, Suite 201. It is open for public comment and participation, which Kerr and even Water Valley developer Martin Lind said often is lacking.
Lind said the lack of interest could likely be attributed to people being content with the way the development and district is being operated. He stressed it has strived to keep costs down — evident by what he called minimal homeowners association fees and robust water resources.
“When something like this happens, there’s a spike in interest and there’s no question about it,” he said, highlighting the “enormous value” the district makes for its residents across the spectrum.
“They are doing exactly what they are supposed to do,” he added of the districts. “Nobody cares more or is concerned more about Water Valley and Windsor than I am — I can assure you of that.”