Pay off the Metropolitan District Bonds, like a second mortgage, on a thirty year amortization as started in the annual disclosure to the City and County Treasurer setting the Mill Levy

I purchased my home in 2009 and the MD bond was in repayment on a straight line, 30 year, amortization schedule, ending in 2034. In 2012, the first homeowner, joined four developer friendly board members and they decided to Refinance the existing bonds. Replacing straight line amortization, with back-end, step bond repayment terms (68% of total P+I) repayable in last eight years before the 2034 termination date. Before the refinancing was initiate, the law firm submitted a report to DORAs website, referencing a new Intergovernmental Agreement (IGA) the termination date was now “Undetermined.“


At the annual Master HOA meeting, a MD#2 Board member stood up, announced the MD#2 debt had been refinanced, in order to take advantage of reduced interest rates and the homeowners would see a reduction in the MD#2 taxes in 2014. However, several salient facts were omitted:

1. $2,000,000 would be added to the outstanding debt, by using Investment Bankers, instead of Community Bankers,

2. Over $950,000 would be used unjustly enrich the prior developer bond holders due to early pay out,

3. In order to meet the reported 2034 bond payoff date, the Mill Levy for the last seven years would exceed 20 percent, (these payments would almost triple the MD related tax payments required in 2012,

4. Future Board members would find these high mill levy’s unacceptable and the MD would run back to the Investment Bankers for a third refinancing, possibly adding an additional $1,000,000 price tag to bring those bonds to market,

5. MD#2 debt expiration date would be pushed back from 2034 to possibly 2065,

6. Early Homeowners, who make huge profits from living in our neighborhood and sell quickly, will not have to pay their “fair share” of the cost needed to build the community infrastructure

7. A real deal for long term homeowners? Not much of a total cost savings, reaching new lower interest rates

In my opinion, if the MD#2 had representation by independent General Counsel, and the Board was held accountable to the Prudent Businessman Rule, The Duty to Care Standard and the Duty of Loyalty Standard to the MD#2, this refinancing of initiated bond debt would NOT have occurred.

In my opinion, there is a simple solution to this inequality in debt repayment. County Treasurer Departments need to reprogram their tax tracking systems to show three additional columns:

1. Total MD#2 debt earned

2. Total MD#2 levied and collected

3. MD#2 debt earned, uncollected **

** when a house is sold or refinanced (funds available to pay off MD#2 debt earned,, uncollected) or when the ownership of the property changes in any manner, the Earned, uncollected amount will be Zeroed out, and funds placed in a Bond Sinking fund. At this point in time, the reconciliation begins for new owners, until the MD#2 debt is paid in full.

Once MD#2 is paid, City and County officials should have an easier time convincing town residents to approve additional General Obligation debt. If corrective action is NOT taken by City and County officials, forever refinancing MD#2 debt will suck the revenue out of the Town Council meeting rooms.



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Thank you for visiting the community engagement tool for the Metropolitan District Homeowners’ Rights Task Force. 

Pursuant to HB23-1105, this project has now concluded.  On behalf of the Department of Regulatory Agencies and the Division of Real Estate, we want to thank you for your interest and participation.