Castle Rock metro districts almost $1B in debt

Residents in Castle Rock’s various metro districts are on the hook for almost $1 billion in debt taken on to build public infrastructure.

At the Dec. 20 town council meeting, Pete Manger, assistant director of finance for the town, presented a summary on the 37 active metro districts in Castle Rock, which have a combined debt of $943 million as of 2021. 

Metro districts are a special taxing entity that can issue bonds to fund infrastructure, such as roads and water and sewer lines. The districts then tax property owners to pay off the debt.

Manger said the metro districts added around $58 million to their debt between 2020 and 2021. He also noted that 48% of the $943 million debt is accrued interest.

Last year, Castle Rock’s metro districts collected around $32 million in property taxes, compared to the town collecting around $1.4 million in property taxes. 

Though the town is not responsible for the metro districts’ debt, Town Manager David Corliss said it does impact the town’s ability to raise property taxes.

“When we get the comment about ‘wouldn’t we like to be able to raise the town’s property tax mill levy,’ when you see what the metro districts impose, that just serves as an artificial buffer on our ability to ask voters for a higher property tax,” Corliss said.

Corliss said the town is taking steps to ensure that debt taken out by metro districts will not outlast the life of the funded asset, especially since the town is financially responsible for ongoing maintenance of public infrastructure.

The town’s metro district policy caps the property tax rate to 50 mills and limits the debt service term for loans to 35 years. Debt can also only be issued for 95% of the public improvement costs.

“I think one of the biggest guardrails is the mill levy term of 35 years,” he said. “You don’t want to have a car loan way past how long the car is going to last. Similarly, we think most of that infrastructure is in that 35-40 year time frame.” 

Council members urged the town to continue tracking the impact of the metro districts, and raised concerns outside of the town’s control.

“Not that we can do anything about this because it’s metro districts, but I find it very concerning that almost half of the money that’s outstanding is interest,” council member Laura Cavey said.