Taxpayers in The Meadows, Castle Rock, Colorado will pay over $1b over 100+ years to pay off the infrastructure cost, which cost $57m between 1986-1991. This tax is approximately 1/3 of the property tax bill annually to all owners.
Property owners have been paying the metro bond tax for 35 years. They are currently paying approximately $20m per year (to pay off a $57m expense) and they continue to pay the maximum tax rate allowed by law, or they are subject to fines, penalties, liens, or even worse, property seizure.
On 10/1/1993 due to tax revenue shortages, the debt was reorganized to $86m and approved with the Town of Castle Rock which included a “Bond Sinking Fund”. The purpose of this fund was to retain up to $10m in tax revenue, in case extra taxes were collected for the non-prepayable bonds. Funds could also be diverted away from paying down the indebtedness to the fund, since the bonds have options for no, partial, or full payments when due.
On 12/1/1993 Metro District Boards 1-7 entered into an agreement with the Bond Holders to materially change the structure of the agreed upon terms with the Town of Castle Rock. Those changes turned a 30-40 year pay off into a 100+ year payoff by reallocating the bond amounts, districts responsible, and bond terms. The bond terms in 1991 were originally 15-30 year terms to be fully paid off between 2006-2021.
As of 12/31/2023, the original bond amount ($70m) and accrued interest ($16m) from 1993 remain on the financials in full (i.e., none of the principal has been paid off from the 1993 amount of $86m). With compounding interest growing, the amount owed as of 12/31/2023 was $449,406,749. Compounding interest will continue to grow and accrue through 6/1/2029.
On 6/1/2029 (at the end of paying 40 years on these bonds), interest will stop accruing. All principal and accrued interest at that time must be paid in full to the bondholders for them to discharge the indebtedness. There are 5 more years of $500m accruing interest until that final figure will be known.
No financial statements are publicly available between 1993 and 2009.
Per the 1991 Agreement, 312-1-103(12) C.R.S. states the net effective interest rate shall not exceed 140%.
Metro Bond Tax Condensed History:
In November 1991, “CONSOLIDATED SERVICE PLAN NOVEMBER 1991” between the Town of Castle Rock, Developer, and Metro Bond Tax Holder states, $70m in bonds were approved to pay for the project. 15, 20, and 30 year bond terms.
It also states the net effective interest rate as defined by 312-1-103(12) C.R.S. shall not exceed 140%.
On October 1, 1993, “CONSOLIDATED SERVICE PLAN AS AMENDED AND RESTATED OCTOBER 1, 1993” for $88m as follows:
$10m – District 1 40 year bonds, fully discharged at 40 years
$32.5m – Districts 2,3,4,6,7 30 year bonds, interest stops accruing at 30, bonds to be paid in full
$42.5m – District 5 30 year bonds, interest stops accruing at 30, bonds to be paid in full
$3m – Cash on Hand
$88m – Total
On December 1, 1993, ”AMENDED AND RESTATED INDENTURE OF TRUST, dated as of December 1993”, which materially changes the agreed up plan with Castle Rock as listed below:
$30,730,000 – District 1 40 year bonds, non-dischargeable, will take 100+ years to pay off
$23,830,000 – District 2 40 year bonds, non-dischargeable, will take 100+ years to pay off
$15,440,000 – District 7 40 year bonds, non-dischargeable, will take 100+ years to pay off
$15,659,228 Accrued Interest to remain on financials, will take 100+ years to pay off
$3m – Cash on Hand Paid to the bond holders
$0. – District 3, 4, 5, 6
$88,659,228 - Total
Questions:
Why did the Metro Board for District 1 agree to increase their debt from $10m to $31m on December 1, 1993, which is more than ½ of the cost of the entire infrastructure project when there are 6 other Districts?
Why did the Board for District 1 agree to change the metro bond tax terms from a 40 year fully dischargeable bond to a non-dischargeable bond (i.e., 100+ year pay off bond) on December 1, 1993?
Why did the Board for Districts 2-7 agree to change the metro bond tax terms from 30 years to a 40 years non-dischargeable bond (i.e., 100+ year pay off bonds) on December 1, 1993?
Why did Districts 3,4,5,6 end up with no debt, which includes the commercial areas on December 1, 1993?
Why did both boards agree on December 1, 1993 to materially change the terms of the October 1, 1993 Consolidated Service Plan without Castle Rock?
Why were the metro bond tax terms modified without the knowledge or approval of the property owners on December 1, 1993?
Why did Castle Rock not get involved when there was a significant material change to the October 1, 1993 metro bond tax plan effective December 1, 1993?
What impact did the Cost Sharing Agreement have with the approval of the metro bond tax changes on December 1, 1993?
After 35 years, why aren't the homeowners of Metro Districts 2-7 in control of that metro board which distributes the money to the bond holders?
Why were the October 1, 1993 and November 1, 1993 Revised and Consolidated Service Plans not filed with the State of Colorado, Department of Legal Affairs?
Why are there no financial reports available between 1993 and 2009?
After 35 years of tax payers paying mill levy taxes for this project, why has not one dollar been applied toward the principal amount? Original bonds were to be paid off between 2006-2021. Tax collection to pay off this project is estimated through 2090.
How can a private company run an enterprise with government help to collect $1b in metro bond tax revenue to fund a $57m project?
Why is 312-1-103(12) C.R.S. not being enforced?
Why is Metro Board 1 not getting involved?
Why is Metro Board 2-7 not getting involved?
Why is the Town of Castle Rock not getting involved?
Why is the Douglas County government not getting involved?
Additional information can be found on these websites: The Meadows Metropolitan District 1, The Meadows Metropolitan District 2-7, and the Colorado Department of Legal Affairs.
Jim Garcia
Realtor
(720) 385-4497
About: Jim Garcia has been a resident of The Meadows, Castle Rock, CO since 2006. For 18 years, Jim has been a Real Estate Agent in Castle Rock Colorado, specializing in residential transactions in Castle Rock, Castle Pines, Parker, Elizabeth, Douglas County, Elbert County and other nearby regions.
With over 25 years of experience as a senior business executive, serving as CEO/COO, he brings expertise in construction, contract negotiations, intricate real estate transactions, fix & flips/holds, 1031 exchanges, short sales, foreclosures, and investment properties. Whether you are looking for homes for sale in Castle Rock Colorado, homes for sale in Elizabeth Colorado or any of the surrounding areas, Jim Garcia, a top Real Estate Agent in Castle Rock Colorado, can be a great resource for your real estate needs.
In 2022 and 2023 Jim was awarded one of the Best Real Estate Agents in America and one of the Best Real Estate Agents in Colorado by Realtrends. He is also one of the top 1.5% of all Agents in the USA. Jim is also a Master Certified Negotiation Expert in Real Estate.
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