On April 29, the Pagosa Springs Town Council and Pagosa Springs Planning Commission met jointly to discuss the possibility of allowing metropolitan, or metro, districts within town limits.
The town’s upcoming decision on whether or not to allow metro districts was spurred by a request from the developers of the proposed Pagosa West subdivision — Arena Labs LLC — to begin allowing metro districts within town boundaries.
Metro districts are considered special districts in Colorado and are a type of local government entity that operates within a jurisdiction, such as a town.
They provide specific services, such as building public infrastructure or maintaining public infrastructure, and have authority to collect taxes to pay for such services.
Several metro districts exist within Archuleta County (Alpha Rock Ridge, Aspen Springs and Timber Ridge, for example), but metro districts are not currently allowed within the town’s boundaries.
Both Development Director James Dickhoff and Town Attorney Bob Cole have described the formation of metro districts as a “tool” to help spur development.
An agenda document on the matter states that metro districts “are a valuable tool for development, allowing lower cost financing and governmental authority for construction of public improvements and facilities, and services.”
Cole explained that a metro district’s standing as a government entity allows it to finance a project with “low-interest loans,” which a private developer would not have access to. This debt is paid back through future property taxes on parcels sold within the district.
Property owners within a metro district usually pay higher property taxes than those who own property in non-metro districts, with those taxes going toward the debt incurred by the district to pay for the public infrastructure installation or maintenance, Cole explained.
Planning commissioner Mark Weiler asked “who actually benefits” from a metro district’s ability to “utilize lower-interest rate capacity to fund the improvements.”
He asked if it is the community or the future homeowner who might pay a lower purchase price.
“Or, is this just an alternative funding model to benefit the developer and put the financial liability … on somebody else’s shoulders, as opposed to the developer’s?” Weiler asked.
He added that he is concerned that the “burden” to pay off the debt service of the metro district would be placed on the future property owners in the district.
This concern was shared by the majority of the commissioners and council members, with most expressing that they wanted to see specific protections for homeowners written into the town’s policy on metro districts.
Cole explained that state statute has in place protections for owners in metro districts, but that the town could choose to go further than the state’s regulations to limit the burden on and increase transparency for future property owners.
He explained that the town could carefully “craft a policy” so that all the benefits don’t flow to the “greedy developers.”
Council member Brooks Lindner expressed concern that members of a metro district may become tax-averse voters since they’d be paying more in property taxes, and this could hinder the town’s future chances of raising town taxes to pay for important repairs and improvements.
Cole agreed, saying that one of the cons of metro districts is that you can create “pockets of resistance within metros to new town taxes.”
Cole, who would draft the policy alongside Dickhoff, sought direction about any other specifics on what limitations the council and commission would want to see in the policy.
There was general consensus that the installation of public infrastructure is a priority that the council and commission would want to see from metro districts.
Both entities also reached consensus that they don’t want to see metro districts last in perpetuity, and that once the infrastructure is installed and the debt is paid off, the district should “dissolve” and any public improvements — streets, sidewalks, curbs and gutters — should transfer to the town’s ownership and maintenance.
It was also agreed that there should be a time limit policy on a metro district to get “the ball rolling” on a development.
A five-year limit was agreed upon, so if a district is formed and “it just sits there for five years with no action,” as Cole stated, then it would automatically dissolve.
When discussion moved into the territory of what “strategic goal,” or “extraordinary benefit,” the town would like to see achieved through allowing metro districts, the council and planning commission reached a general consensus that the building of workforce housing should be the top priority.
Both entities also agreed that installing public trail connections and a secondary road network are also major goals that the town would like to see metro districts help achieve.
Planning commissioner Julie Gurule asked if the town “can legally tell the metro district” to build workforce housing, with Cole replying, “I believe so.”
“The powers given to a municipality over these metro districts by statute is a little bit different than in counties, and the additional power that Pagosa Springs has as a home rule municipality that can legislate on any matter regarding local and municipal control, and how development happens in your town, has historically been a matter that the Supreme Court has said is a matter of municipal and local control,” Cole said.
Lindner referred to the county- and town-adopted 2025 Regional Housing Needs Assessment that points to certain area median incomes (AMIs) that any new housing inventory should target.
“Let’s make the ‘extraordinary benefit’ be targeting those specific AMIs that the needs assessment has shown us that we need,” he said.
Weiler suggested that the “extraordinary public benefit” that the town should use metro districts for, as a tool to help address, “is the lack of workforce housing” in the area.
“We do not have a good solution for workforce housing … and if this extraordinary benefit is gonna be workforce housing, [we can say], ‘You can have your gas station, your car wash, your whatever, but we want places where people can afford to live,’” he added.
It was ultimately decided that both the council and planning commission needed another work session to further dive into the details of a potential draft policy regarding metro districts.
The issue will be taken up again at a May 27 work session, which is scheduled for 5 p.m.
Cole noted that he and Dickhoff would prepare a draft policy to bring to the next work session for the council and planning commission to discuss.
Dickhoff added that the draft policy would use the town’s goals and strategic objectives to help guide the policy, referring to adopted documents, such as the Housing Needs Assessment, the Access Control Plan for a secondary road network, the Town-to-Lakes Trail system and the town’s comprehensive plan.
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