Council likely to lift moratorium on Commerce City’s metro districts

A majority of the City Council indicated this week it wants to reopen the city to growth funded by metro districts. In a non-binding vote at a study session Monday evening, the council sided 5-4 with a recommendation by City Hall staff to lift a several-year-old moratorium on the self-funded districts.

Metro districts, which assess property taxes to finance their own basic public improvements like roads and parks, have stirred debate in the community and split the council. Critics have eyed the higher tax bills paid by district residents. Supporters have pointed out the only alternative to such special taxation districts when it comes to accommodating new residential and commercial development — long sought in the city — would be to tax the entire city to fund the needed improvements.

Supporters of lifting the moratorium on the council noted at the Monday meeting that leaving it in place would result in development bypassing Commerce City in favor of its neighbors.

“The cities around us — Brighton, Thornton, Aurora — they love this,” said Ward II council member Rocky Teter. “It’s Commerce City going down the tubes while they’re taking all of our…businesses that should be coming here.”

The council’s unofficial vote this week sets the stage for an official vote on lifting the moratorium in coming weeks.

At the center of the discussion were special districts, including metro districts, created when properties are developed. The districts assess a tax, through a mill levy, which is multiplied by the assessed value of a property and bundled with the rest of an owner’s property taxes. The revenue is used to fund basic public improvements in the special district.

The districts fund aspects of development that the city cannot fund through local taxes alone.

These jurisdictions remain in effect unless the district is dissolved. However, most districts continue indefinitely serving ongoing needs like operations and maintenance within the district.

The council imposed a moratorium on metro districts after some residents in the districts had balked at their tax bills and additional assessments.

Those who defended the moratorium, such as council member Susan Noble, see the districts’ financial requirements as unaffordable to homeowners, who are already struggling with rising taxes. 

“When is their obligation over? asked Noble, lamenting that “the city doesn’t have control over district taxes.”

But others, such as Teter and at-large council member Charles Dukes, acknowledged the need to move forward with a financing mechanism for improvements to support new neighborhoods. 

“We have to have amenities,” said Dukes.

Without the districts, Duke said, there will be missed opportunities for Commerce City residents for desirable commercial and residential growth.

“We’re going to be bypassed for our neighboring communities. No action can’t be an option,“ declared Dukes.

The study session, led by city staff, was a more in-depth presentation than a webinar held Feb. 15 as a Q&A for residents as well as council members.