Election results show that the Ken-Caryl Ranch Metropolitan District Ballot Issue 6G mill levy increase was defeated by voters. The Metro District and Master Association Boards discussed the budget effects of the mill levy failure at the Joint Study Session on Wednesday, Nov. 7 and the Metropolitan District discussed it further at its Nov. 13 meeting. The Metro District Board will further discuss budget impacts at its meeting on Tuesday, Dec. 4 at 7 p.m. at the Ranch House. See the Proposed Budget Cuts article for more information.
Frequently Asked Questions
Click on the plus sign next to each question to see the answer.
What is the Approximate Increase in Taxes Per Home?
The 8 mill increase is equivalent to an increase of approximately $4.75/month per $100,000 of property value. Here are a few examples:
$400,000 Residence = $19 per month
$600,000 Residence = $29 per month
$800,000 Residence = $38 per month
I live in the Mountain Gate condos. Do I get to vote on the 6G mill levy?
What does the actual tax history for KCR properties look like?
Below is the actual 10-year property tax history for a home in the community. The mill increase from 2008 to 2009 was the last operating mill increase for the District. The mill increase from 2014 to 2015 was the bond projects, which is funding that can only be used to repay the bonds that funded the capital improvement projects. The mills tied to the bond will go away in 2024.
How much has the operational tax revenue for the District increased over the last decade?
Operational property tax revenue for the District was $2,351,652 in 2008. Operational property tax revenue for the District is estimated to be $2,982,000 in 2018. That is a 26.8 percent increase over the last 10 years. Below is a table showing the mills levied for operations and the amount collected in each year.
What is the Difference Between a Mill Levy and a Bond?
A mill levy is the tax rate that is applied to the assessed value of a property to determine the property taxes due from property owners to state and local governments. Operational mill levy dollars fund operations for things like parks and greenbelts maintenance, facility maintenance, supplies, capital repairs, equipment, administrative costs, etc. Bonds are issued by state and local governments to fund major capital projects like renovating existing buildings/parks, new buildings, etc. Debt service mill levy dollars fund the government’s repayment of the bonds issued.
When was the Last Time a Mill Levy or Bond Issue was Passed?
Voters in the Ken-Caryl Ranch Metropolitan District last passed an operational mill levy increase in 2009. On May 6, 2014, voters in the Ken-Caryl Ranch Metropolitan District passed Bond Issue 5A, authorizing $7.9 million in municipal bonds to finance facility, park and recreation improvements for the community. The bond projects are now complete. The current property tax mill levy is 15.209 mills for operations and 5.46 mills for repayment of the general obligation bonds approved by voters in 2014. The mill levy associated with the general obligation bonds can only be used for the payments on the bonds. These bonds will be paid off by the end of 2024 at which time the mill levy associated with these bonds will go away. Operational mill levy dollars fund operations for things like parks and greenbelts maintenance, facility maintenance, supplies, capital repairs, equipment, administrative costs, etc. Bonds are issued by state and local governments to fund major capital projects like renovating existing buildings/parks, new buildings, etc. Debt service mill levy dollars fund the government’s repayment of the bonds issued.
What is the Difference Between the Metropolitan District and the Master Association?
Ken-Caryl Ranch operates as a partnership of two entities, the Master Association and the Metropolitan District. These two entities work together to ensure sustainable success for the entire community.
The Metropolitan District is organized as a Special District under Title 32 of the Constitution of the State of Colorado. This system of local government combines the political leadership of elected officials (in the form of a five-member Board of Directors) with the managerial experience of a professional manager and staff. The Metropolitan District was formed in 1988 by a vote of Ken-Caryl Ranch residents, thereby creating a mill levy (property tax) as a means to enhance recreational activities for the community. Having a Metropolitan District saves residents money because of the tax-exempt status. It has enabled additional funding from the state lottery dollars and Jefferson County Local Park and Recreation grants. The Metropolitan District’s revenues are derived from property taxes, grants and user fees. Property tax revenue the Metropolitan District receives helps cover the maintenance of the paths, greenbelts, parks, playgrounds, and facilities and supports some areas of programming.
The Master Association is the homeowners’ association for KCR. It is a group of property owners bound together by a Master Declaration of Covenants, Conditions, and Restrictions for the purpose of operating and maintaining Master Association-owned property and preserving community standards. Master Association revenue comes from residential and commercial dues, advertising, and Equestrian Center revenue. Monthly dues support covenant and architectural control, Master Association-owned open space, weekly trash and recycling service, the Equestrian Center, and communications. The direct operating costs of the Equestrian Center are paid by user fees, and Life at Ken-Caryl newspaper production and distribution costs are covered by advertising revenue.
What are TABOR and the Gallagher Amendment?
TABOR is the “Taxpayer Bill of Rights,” which was passed by a vote of the people in 1992. TABOR imposes some of the strictest revenue and spending limits in the nation by prohibiting any tax increase without a vote of the people, limiting how much revenue the state can keep and spend, and requiring any revenue collected in excess of set limits to be refunded to the taxpayers. While these restrictions may sound great for the average taxpayer, they made it difficult for many local governments to function well. As a result, many municipalities and special districts, including the Ken-Caryl Ranch Metropolitan District, “de-bruced” by a vote of the people. “De-brucing” lifts some of these restrictions, in turn allowing the Metropolitan District to retain revenue from year-to-year in the form of reserves.
In 1982, Colorado voters passed the Gallagher Amendment. Gallagher is another tax amendment intended to protect residential and commercial tax rates from an imbalance by maintaining a consistent ratio between the revenue from each. The effect of Gallagher is of particular significance for the Metropolitan District because our tax revenue is approximately 80 percent residential. As property values rise, Gallagher reduces the assessment rate to keep residential rates in line with slower growing commercial rates. This, in turn, reduces the amount of tax revenue the Metropolitan District receives, which is a significant funding source for services to the community.
What Will the Additional Tax Money Be Spent On?
Continue service at current levels – $5.4M with an expected 4% ($216,000) increase in operational costs annually.
– Amenities and services funded with taxes (generate little to no revenue):
- Parks – $1.6M (net annual cost)
- Community Events – $46,000 (net annual cost)
- Pools – $250,000 (net annual cost)
Creating Financial Sustainability by Building Reserves:
- $1.2M for operational reserves based on auditor’s request and industry best practices.
- $1M for capital reserves (major and park and facility updates and maintenance on MD owned or leased properties.)
Offset the decline in tax revenue due to the Gallagher Amendment and adjusted Residential Assessment rate – $375,000 annually beginning in 2020.
Don’t My Dues Pay for the Parks and Pools?
The Metro District is responsible for maintaining the parks and pools. The Metro District is funded through property taxes and program fees. HOA dues fund the Master Association. While the Master Association may fund capital improvements to parks (such as replacing irrigation systems) and pools (such as purchasing a new boiler) the daily operational expenses of the parks and pools is not funded by the Master Association, or dues. Because the parks and pools are free for residents to use, they do not generate revenue to offset the costs of operation. As such, taxes are used to fund these amenities for the community.
Why is There No Information on the Cost of Trails, and Couldn’t We Save Money that Way? Will this Money be Used to Build More Trails?
You will not see any information on the cost of trails in the mill levy materials because open space management, including trail building and maintenance on private open space trails, is a function of the Master Association. The Master Association is funded with HOA dues. The mill levy funds the Metro District through property taxes. Cutting trail maintenance or building would not impact the Metro District’s budget. Additionally, the mill levy funding would not go toward Master Association trail maintenance or trail building.
Why is There No Discussion About Cutting Programming or Raising Fees?
The District evaluates program fees each year by comparing fees from other districts and private industries in the area for similar programs. Fees are adjusted to stay competitive and ensure cost recovery as close to 100% as possible. The reason the District has not identified fee-based program areas as part of the potential service cuts is because the programs generate revenue. As a policy, the District avoids running any programming that does not cover direct costs and aims to cover overhead as well. Because of this, cutting fee-based programs would not positively affect the District’s bottom line.
Won’t the District’s Tax Revenue Go Up When Our Property Values Go Up Again?
• While we have seen property values increase, we have also seen the rate at which our residential property is taxed decrease. This is called the Residential Assessment Rate or RAR and it is adjusted per the Gallagher Amendment in the Colorado Constitution. Despite higher property values in Ken-Caryl Ranch, the District will actually see a decline in tax revenue in 2020 because the rate at which the property is taxed will be reduced. The estimated amount of revenue the District will lose is $375,000 each year based on preliminary projections for the new RAR which will be set in 2019 and take effect in 2020.
Take the following property for example:
2018 Property Value: $600,000
2018 RAR: 7.2%
2018 annual MD Taxes: $656
2020 Property Value: $660,000
2020 RAR: 6.11%
2020 annual MD Taxes: $613
Who Do I Contact If I Have Questions?
Ken-Caryl Ranch Metropolitan District Manager Melissa Daruna: email@example.com or 303-979-1876, ext. 136.
Mill Levy and Budget Documents
KCRMD Services and Funding
Without the property taxes provided by the residents of KCRMD, the services and amenities currently offered would not be possible. The 2018 revenue budget for KCRMD is $5.4 million of which $2.9 million is derived from property taxes and $2.5 million from program fees. The property tax mill levy is 15.209 mills for operations and 5.46 mills for the general obligation bonds approved by voters in 2014. The mill levy associated with the general obligation bonds can only be used for the payments on the bonds. These bonds will be paid off by the end of 2024 at which time the mill levy associated with these bonds will go away.
KCRMD is responsible for maintaining and operating three pools, sports fields, parks, greenbelts, the Community Center, Dakota Lodge, Ranch House and tennis courts. In addition, KCRMD provides youth and adult programming and an environmental education program. The 2018 expense budget to provide these services is $5.4 million, of which $2.6 million is allocated to recreation and facilities, $1.8 million to parks and $785,000 on administration and general operations.
In the past five years, the costs of operating KCRMD have exceeded the revenues generated by KCRMD through property taxes and program fees. As the cost of operating KCRMD continues to increase, so must the revenues generated by property taxes and program fees. While property values in KCRMD have increased, the property taxes paid by residential property owners have not been fully realized by KCRMD. The Gallagher Amendment to the Colorado Constitution requires the percentage of property taxes paid by residential property owners in the State to be 45% of the total taxes paid. In 2017, the Colorado Legislature reduced the residential assessment rate from 7.96% to 7.2%. Approximately 75% of the property in KCRMD is residential and KCRMD received $210,000 less property tax revenue in 2018. Preliminary projections indicate the Colorado Legislature will further reduce the residential assessment rate to 6.11% in 2019, which will result in KCRMD losing another $375,000 in property tax revenue.