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Special Districts and HOAs - Totally the Same and Completely Different

02/01/2020 3:11 PM | CAI Rocky Mountain Chapter (Administrator)

By Peggy Ripko

I began my career in Community Management in 2004, and spent the next years learning all of the intricacies of homeowners associations and how to effectively manage them. I became adept at helping people understand why the rules exist and how associations protect property values. Over the years, I would hear about metropolitan districts without really knowing what they were or how they differed from associations. And I figured that I could manage a metropolitan district as well as I managed associations. 

Then, I joined Special District Management Services, Inc. One of the first things I discovered during my tenure as an association manager gave me little insight into how a metropolitan district operates or what is needed to manage it. The first Board meeting I went to left me with questions about statutory compliance requirements, how elections work, why we were talking about bonds, and what cost certifications are. 

Luckily, that was not my role in the company- I was hired as a Community Manager. Many developers are now having metropolitan districts provide community management in their communities, and I was hired to coordinate this. Basically, I was hired to do what is typically associated with associations. I am often asked if I like my new position (Yes!) and what it’s like. That’s when I say that it’s totally the same from what I did before….and completely different. 

Totally the Same

As a metropolitan district Community Manager, I coordinate inspections, send out violations, and process and approve architectural forms. I draft and send out RFPs for landscaping, pools, and trash, and work with the contractors once approved. I get phone calls about dog poop and barking, deal with angry homeowners who don’t like the rules, and welcome new homeowners to the community. 

Most metropolitan districts that have community management also have CC&Rs as well as Design Guidelines and Rules & Regulations. Just like for associations, the CC&Rs lay out what we do; how long the architectural review process is, how many people are on the committee, and if the form is denied if there is no response. The Design Guidelines/Rules & Regulations give specifics that are needed to govern a community well; what are the landscaping requirements and when can you put up holiday lights, etc. 

Metropolitan districts are also governed by a Board of Directors, who make the decisions for the Districts while the management company carries out those decisions.

Completely Different

Metropolitan districts are quasi-municipal corporations and political subdivisions organized under Title 32 of the Colorado Revised Statutes. Not all metropolitan districts have community management as a part of their responsibilities, but most of those that do are not bound by CCIOA. A part of the income for metropolitan districts is received from property taxes. Some districts have Operations & Maintenance Fees in addition to that but, they are usually minimal. 

In most cases, metropolitan districts are organized for the purpose of financing public infrastructure in the community. This is done through the issuance of bonds, with independent engineers providing cost certifications to show that the improvements are eligible for reimbursement. Simply put, the developer gets paid back from a loan after the engineers and the Board approve it. 

Metropolitan districts also have statutory requirements that HOAs do not. For instance, any gathering (district related or social) that has a quorum of the directors in attendance is considered a special meeting. Notice must be posted, and it must be open to everyone. For that matter, e-mails sent from one director to the rest of the Board also constitutes a special meeting. Meetings must be posted pursuant to statute and any conflicts of interest must be filed with the Secretary of State. There are also filings required throughout the year that the District Managers must ensure occur in order to be in compliance.

There is no set timeline for transition to homeowner control in a metropolitan district, instead the elections are every two years. At that time, anyone who is a registered voter in Colorado and either owns property in a District or is a resident can run for the Board. Yes, this means that renters can potentially be on the Board.

Working Together

There are some communities that have both associations and metropolitan district involved. In a lot of these instances, the association involved is a condominium community. There are also the districts that do have a Community Management component to them- this is what I do. Over the past two years we have found the best way for this to occur; for each entity to stay in our lanes.

I stay in the Community Management lane- working with contractors for the common areas, answering questions about the rules, architectural inquiries, and discussing what we can do about dog poop and snow removal. If I get questions about the mill levy, the bonds, budgets, or statutory compliance, I send that to the District Manager.

The District Managers stay in their lanes- they do the budgets, ensure bills are paid, certify the mill levy, and ensure statutory compliance. If they get questions about why a homeowner received a violation or how to make a dog stop barking, they send it my way. 

The best way to figure out what belongs in which lane is strong communication. Even though I work in the same office as the District Managers, we have meetings on a regular basis to make sure we all know who is responsible for which aspect of the community. We have also set these meetings up if the Community Management is provided by a different company; our goal is always providing the best service we can to the communities we serve.

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