The hidden life of special districts
Municipalities create special districts as quasi-governmental entities for a variety of purposes — and there are a lot of them.
In the grand scheme of life, who cares about an extra $20 or $30 of taxes collected by another taxing authority? I do and you should.
Local maintenance districts (LMD) are created to operate, maintain, repair and replace streetscape improvements. Local improvement districts (LID) are created to construct neighborhood improvements. Business improvement districts (BID) provide services unique to the commercial nature of districts.
Once these districts are created, the city has very little to do with the day-to-day operation. The responsibility for the district shifts to an appointed board of directors who controls the tax revenue and the ongoing operation. Some of these districts continue to exist long after their period of usefulness or could benefit from having more eyes on them.
Are special districts really hidden? Not if you look for them. They are out in the open and listed in the detail of your property tax statement. You probably receive a public notice in the mail of a budget meeting. However, they might as well be hidden, because most people pay no attention to them. Why? The special district tax assessment does not represent a significant percentage of the total property tax bill.
In my own Union Station neighborhood, I discovered the Delgany Street Local Maintenance District, and the Cherry Creek Subarea Business Improvement District. The infrastructure in my neighborhood was deteriorating. The trees and sidewalks needed attention. I wondered if either of these entities had any work plan or funds to address some of these issues. I discovered the answer was “Yes!”
Who decides how much money to collect from taxpayers? How is the money spent? Who decides what projects have priority? Each district has a board of directors appointed by the Denver mayor empowered to make all those decisions. In my case, both boards curiously were made up of the same people who had served on these boards for decades. Digging deeper, I discovered that both boards had vacancies, so I applied and was appointed by the mayor. As a money manager, fiduciary and treasurer of our Master Homeowners Association, I just wanted someone to “show me the money.” Here is what I learned:
Between the two districts, more than $35,000 in tax revenue was budgeted for 2017.
The BID had legal overhead expenses of $3,500 per year on $15,000 of revenue and had suspended its “work plan” for multiple years due to construction in the neighborhood.
The budgeted line items for the LMD had very little to do with actual expenses of prior years.
The LMD had no conflict-of-interest policy regarding payments made to directors or their businesses.
The districts were not coordinating or communicating with an overlapping HOA Master Association on infrastructure issues.
There was only one scheduled meeting per year and it was held outside the district boundaries.
Between the two districts there was $100,000 available for operation, maintenance and capital improvements.
The LMD paid for watering of planters that were not within the district — whoops!
My purpose in sharing this information is not to question the value of special districts or to diminish the thankless job of serving as a board member, but rather to create a call to action for the taxpayers to get involved in their special districts.
In my case, my LMD replaced demolished curbing, repaired aging benches, arranged regular trash removal, contracted arbor maintenance, coordinated overlapping districts, recruited a new board member, relocated the annual meeting to the neighborhood, and engaged the taxpaying residents. The BID has a work plan to maintain and manage the 15th Street streetscape from Wewatta to Little Raven and is also considering a special project to create historical markers that document key locations of past significance. The hidden life of districts has become a hidden gem.
Robert Grey is a member of two special district boards, a community activist, and a resident of Denver’s Union Station neighborhood.