Tollgate crossing metro district No Tollgate crossing metro district No. 2 town hall meeting on POSSIBLE ballot proposal Prepared by: Brian Matise, Secretary/Treasurer Special meeting February 15, 2018

An opportunity to leverage our excellent financial position to eliminate metro district fees The District is in the best financial position it has been in since inception Our debt – to – assessed value ratio of 40.53% is far better than similar districts Interest on our debt is currently a low 2.25%-2.8% (some resets in 2020) We are on track to be completely debt-free by 2031-2032 Unlike most other districts, once our debt is paid off, we will NOT have to pay Aurora ARI tax for 10 more years ($15,000,000 savings) We are building a capital replacement reserve and making improvements (kiddie pool) from savings Newbridge improvements will be paid off by 2021

Comparison of our debt and taxes to other districts

Idea:. let’s pay owners a dividend by eliminating Idea: let’s pay owners a dividend by eliminating fees and shifting tax revenues to operations

ROADBLOCK: tabor VOTER authorization required The District can collect UNLIMITED property taxes for debt service The District can collect $1,000,000 per year in fees BUT the District can only collect $150,000 per year in property taxes for operations Must get voter approval to shift more tax revenue to operations

Highlights of Proposed ballot question for may 8, 2018 election Would increase property taxes to generate an extra $655,000 annually in operations revenue in 2019 (partially offset by lower debt service requirements) Future years, actual revenue may differ depending on the District’s expenditures Cap the TOTAL property tax mill levy for Tollgate Crossing at 57.556 mills (which is the same % of actual value that Tollgate Crossing Metro District No. 2 was collecting from 2007-2017) 57.556 mill cap will be adjusted up or down if method of calculating assessed value changes in the future

Tollgate crossing property taxes as a percent of actual home value The 57.556 mill cap in 2019 and later years is equal to 0.4144% of home value, the same as the tax rate collected from 2007-2017 This year, Board lowered the rate to 0.36% If we return the property tax rate to the same percentage of home value as 2007-2017, we can generate enough extra revenue to eliminate $576/yr in fees

Typical Savings for OWNER OF $396,472 home Assessor values average home in the District at $396,472 Current owner pays $1,298.84 in debt service tax, $128.46 in operations tax, and $576.00 in fees (TOTAL: $2,003.30) If the proposed ballot question passes, owner would pay $1,015.10 in debt service, $628.01 in operations tax, $0 fees (TOTAL: $1,643.11) Potential savings: $360.19 Savings vary; $420,000 home savings $347.50, $500,000 home savings $275.27

There’s no such thing as free money – how do we offset $576 per home in fees? Extra specific ownership tax (vehicle registration) will yield $42,565 in general fund Bad debt savings estimated at $41,818 (6%) Attorney collection fees will save $20,000 Collection costs (CLA) will save $33,000 offset by 1.5% Treasurer fee ($9,823) Also expect to save up to $5,000 of bank transaction fees

Summary of pros and cons of the ballot question Eliminate $576 per year of fees District will receive more specific ownership tax revenue from the county (approx. 7.5% of taxes) Avoid bad debt write-offs from homeowners who file bankruptcy or are foreclosed Reduced collection costs, attorney fees, bank fees Property taxes may still be deductible for some homeowners who itemize; fees are not Total tax rate is capped at same % of home value as 2007-2017 Higher property taxes overall (57.556 mills versus 50.000 mills) Savings from lower debt service could be used to lower taxes even lower than 50.000 mills No guarantee that future board might re-impose fees Vacant lots/cheaper homes will get bigger savings than more expensive homes Election will cost the district approx. $30,000

PROPOSED ELECTION QUESTION – DRAFT FOR DISCUSSION ONLY! SHALL TOLLGATE CROSSING METROPOLITAN DISTRICT NO. 2 TAXES BE INCREASED $655,000 ANNUALLY (FOR COLLECTION IN CALENDAR YEAR 2019), OR BY SUCH LESSER OR GREATER ANNUAL AMOUNT AS MAY BE NECESSARY TO PAY THE DISTRICT'S ADMINISTRATION, OPERATIONS, MAINTENANCE, CAPITAL REPLACEMENT, AND OTHER SIMILAR EXPENSES; SUCH TAXES TO CONSIST OF A GENERAL FUND AD VALOREM PROPERTY TAX LEVY IMPOSED WITH SUCH LIMITATIONS AS EXIST IN THE DISTRICT’S SERVICE PLAN, AS IT CURRENTLY EXISTS OR MAY BE AMENDED, OR OTHER APPLICABLE LAW, AND AS MAY BE DETERMINED BY THE DISTRICT, AND BY THE FOLLOWING LIMITATION: THE PROPERTY TAX INCREASE SET FORTH ABOVE SHALL BE REDUCED OR ELIMINATED, BUT SHALL NOT BE BELOW ZERO, IF THE TOTAL MILL LEVY IMPOSED BY TOLLGATE CROSSING METROPOLITAN DISTRICT NO. 2 FOR ALL PURPOSES WOULD OTHERWISE EXCEED 57.556 MILLS, PROVIDED THAT IF ON OR AFTER JANUARY 1, 2019, THERE ARE CHANGES IN THE METHOD OF CALCULATING RESIDENTIAL ASSESSED VALUATION, SUCH MILL LEVY LIMIT SHALL BE INCREASED OR DECREASED SO THAT TO THE EXTENT POSSIBLE, THE ACTUAL TAX REVENUES AS ADJUSTED FOR SUCH CHANGES ARE NEITHER DIMINISHED NOR ENHANCED AS A RESULT OF SUCH CHANGES; AND SHALL THE PROCEEDS OF SUCH TAXES AND INVESTMENT INCOME THEREON CONSTITUTE VOTER-APPROVED REVENUE CHANGES AND BE COLLECTED AND SPENT BY THE DISTRICT IN 2019 AND IN EACH YEAR THEREAFTER WITHOUT REGARD TO ANY SPENDING, REVENUE-RAISING, OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION, OR SECTION 29-1-301, COLORADO REVISED STATUTES?