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Community Budget and Mill Levy Update
Posted on Dec 9th, 2022
Community Budget and Mill Levy Update
Thank you to everyone who has called, written, and participated in the 2023 Vauxmont Metro district budget discussion. As a community, we have faced several unexpected and challenging issues this year as we look to complete the transition from the developer (Cimarron Metro District) to become an independent, fully resident run community.
As you may be aware, for many years, our largest issue has been generating enough revenue to allow the district to maintain and improve our common spaces, six parks, and provide the recreation amenities that we all moved here to enjoy. Candelas, as a Metropolitan District is funded by property tax revenue. Our Operations and Maintenance, as well as our debt service, is funded by a current mill levy of 77.930 mills. Out of that mill levy 55.664 mills are used to pay scheduled payments on the bonds used to build the infrastructure and amenities for our community. The other 22.66 mills are designated as the operations and maintenance budget for the entire community. Every year, in August, the County provides the district with an estimated assessed value (AV) for all the property within our district boundaries. Just like each of our individual homes, the mill levy is applied to the assessed value to come up with the taxes we pay for our properties, and this estimated AV from the County identifies the revenue the district can expect to receive for the following year. The district uses this information to create an annual budget for maintaining and operating the community. Based on the assessed value (AV) received from Jefferson County in August 2021 the metro district budgeted based on the expected revenue number provided by the County and were cautiously optimistic that we would come out ahead even though it was going to be very tight.
Earlier this year, the district was told by Jefferson County that they have changed the way that they are calculating taxes for our district, and that the expected revenue they provided to the Board in August 2021 was going to be lower by about $130,000. Through this process we have learned of other Metropolitan Districts who are also facing this “new math” and are fighting for their tax dollars. The board and its legal counsel disagree with the new calculation methodology being employed by Jefferson County (this issue began at the beginning of the first term of the current Assessor) and have been working for over six months to address the discrepancy with the County and will continue to do so.
In 2022, aside from lower-than-expected revenue from the County, updating covenants for enforcement, and beginning the legal work necessary to transition all remaining functions and ownerships in the community from Cimarron Metro District to Vauxmont, maintenance issues also increased in 2022. Our community is now ten (10) years old with the first homes being built in around 2012. With age and lean budgets, the community is now faced with aging facilities and deferred maintenance and replacements coming due. When you combine the County’s “new math” and the additional monies that have been spent this year to transition the community and chase the County for our actual tax dollars, the District’s Accountant (CLA) anticipates that we are looking at a budget shortfall of approx. $260,000 as we enter 2023.
Prior to 2020 (which was the first year residents were elected to the majority on the Vauxmont district board) the community ran a negative operations balance yearly, this “gap” was filled in by the developer, Arvada Residential Partners (ARP), wherein they provided advance dollars as a “loan”. This gap was created because ARP chose to complete all infrastructure and amenities in advance of having enough rooftops (and their corresponding property tax value) to meet the operations and maintenance needs. In 2020, with the election three resident board members (creating a majority of the board) the developer elected to stop funding that “gap”. This decision began a negative balance trend to the districts budget, which has, this year, been further compounded by increased operations and maintenance costs due to inflation, and the County’s decision to change the way in which mill levy is applied to assessed value. In looking forward to 2023, the Board also has to consider that in 2023 the County will be lowering the residential property tax rate from 7.16% to 6.95%.
The Board has been working on a 2023 budget since August and over the last few months have provided several opportunities for the community to meet with Board members to discuss options for next years budget. The Board has, in addition to discussions with interested community members, spoken with the City of Arvada and Jefferson County about these issues and how to recoup the funds that we believe we are owed, how we can further cut costs and how we can use the funds available more strategically. Additionally we need to establish a reserve fund for the community, which we currently do not have. Reserve funds are emergency funds that can cover unanticipated costs to the community throughout the year, that were unforeseen. These funds also assist the District in making its 1st quarter payments for operations and maintenance. The County does not disperse tax dollars until received, which means that the District does not receive any revenue from the County until at least late March or early April each year.
After many discussions, and with great input from community members, the board made the tough decision to increase the community’s operations mill levy by 10 mills to 32 mills for 2023. Total mills tax for the community for 2023 will be set at 88.897 mills, with 56.897 mills set aside for the debt service payments. The mill levy for debt service will automatically fluctuate annually to adjust for changes in property tax assessment rates. This is required under our bond notes to ensure we receive enough revenue to make required debt service payments. This was not a decision that was lightly taken, and the Board appreciated the input of the community in making this decision. The Board feels that this decision will improve community standards and set us up for future success. The increase in the mill levy will cost a median priced home in Candelas approx. $506.00 more on their property taxes for the year. This money will be used to take on deferred maintenance within the community, continue to maintain our improvements and begin a reserve fund. When possible, please take a moment to review the budget and a recording of the budget meeting (available on the community website). The discussion around this issue was active and participatory and lasted over 5 hours.
Board meetings for January and February 2023 are to going to be hosted as non-business meetings to allow for the Board to more freely discuss issues and opportunities directly with the community. We are revising and growing our resident led committees as well and will be putting out information on how you can volunteer to get more involved.
The last two and a half years have been a considerable challenge for our community. We have ‘peeled back the layers’ to expose our challenges and opportunities, learning a lot in the process. We have identified several ways we can save money while also investing in our community. It is the board’s goal for this mill levy increase to be temporary, allowing the community to get through the end of build out and on its way to financial freedom.
We love our community and are committed to improving not only the districts process and procedures, but also to transparency. There is a light at the end of the tunnel and our community’s best days are still ahead.
As you may be aware, for many years, our largest issue has been generating enough revenue to allow the district to maintain and improve our common spaces, six parks, and provide the recreation amenities that we all moved here to enjoy. Candelas, as a Metropolitan District is funded by property tax revenue. Our Operations and Maintenance, as well as our debt service, is funded by a current mill levy of 77.930 mills. Out of that mill levy 55.664 mills are used to pay scheduled payments on the bonds used to build the infrastructure and amenities for our community. The other 22.66 mills are designated as the operations and maintenance budget for the entire community. Every year, in August, the County provides the district with an estimated assessed value (AV) for all the property within our district boundaries. Just like each of our individual homes, the mill levy is applied to the assessed value to come up with the taxes we pay for our properties, and this estimated AV from the County identifies the revenue the district can expect to receive for the following year. The district uses this information to create an annual budget for maintaining and operating the community. Based on the assessed value (AV) received from Jefferson County in August 2021 the metro district budgeted based on the expected revenue number provided by the County and were cautiously optimistic that we would come out ahead even though it was going to be very tight.
Earlier this year, the district was told by Jefferson County that they have changed the way that they are calculating taxes for our district, and that the expected revenue they provided to the Board in August 2021 was going to be lower by about $130,000. Through this process we have learned of other Metropolitan Districts who are also facing this “new math” and are fighting for their tax dollars. The board and its legal counsel disagree with the new calculation methodology being employed by Jefferson County (this issue began at the beginning of the first term of the current Assessor) and have been working for over six months to address the discrepancy with the County and will continue to do so.
In 2022, aside from lower-than-expected revenue from the County, updating covenants for enforcement, and beginning the legal work necessary to transition all remaining functions and ownerships in the community from Cimarron Metro District to Vauxmont, maintenance issues also increased in 2022. Our community is now ten (10) years old with the first homes being built in around 2012. With age and lean budgets, the community is now faced with aging facilities and deferred maintenance and replacements coming due. When you combine the County’s “new math” and the additional monies that have been spent this year to transition the community and chase the County for our actual tax dollars, the District’s Accountant (CLA) anticipates that we are looking at a budget shortfall of approx. $260,000 as we enter 2023.
Prior to 2020 (which was the first year residents were elected to the majority on the Vauxmont district board) the community ran a negative operations balance yearly, this “gap” was filled in by the developer, Arvada Residential Partners (ARP), wherein they provided advance dollars as a “loan”. This gap was created because ARP chose to complete all infrastructure and amenities in advance of having enough rooftops (and their corresponding property tax value) to meet the operations and maintenance needs. In 2020, with the election three resident board members (creating a majority of the board) the developer elected to stop funding that “gap”. This decision began a negative balance trend to the districts budget, which has, this year, been further compounded by increased operations and maintenance costs due to inflation, and the County’s decision to change the way in which mill levy is applied to assessed value. In looking forward to 2023, the Board also has to consider that in 2023 the County will be lowering the residential property tax rate from 7.16% to 6.95%.
The Board has been working on a 2023 budget since August and over the last few months have provided several opportunities for the community to meet with Board members to discuss options for next years budget. The Board has, in addition to discussions with interested community members, spoken with the City of Arvada and Jefferson County about these issues and how to recoup the funds that we believe we are owed, how we can further cut costs and how we can use the funds available more strategically. Additionally we need to establish a reserve fund for the community, which we currently do not have. Reserve funds are emergency funds that can cover unanticipated costs to the community throughout the year, that were unforeseen. These funds also assist the District in making its 1st quarter payments for operations and maintenance. The County does not disperse tax dollars until received, which means that the District does not receive any revenue from the County until at least late March or early April each year.
After many discussions, and with great input from community members, the board made the tough decision to increase the community’s operations mill levy by 10 mills to 32 mills for 2023. Total mills tax for the community for 2023 will be set at 88.897 mills, with 56.897 mills set aside for the debt service payments. The mill levy for debt service will automatically fluctuate annually to adjust for changes in property tax assessment rates. This is required under our bond notes to ensure we receive enough revenue to make required debt service payments. This was not a decision that was lightly taken, and the Board appreciated the input of the community in making this decision. The Board feels that this decision will improve community standards and set us up for future success. The increase in the mill levy will cost a median priced home in Candelas approx. $506.00 more on their property taxes for the year. This money will be used to take on deferred maintenance within the community, continue to maintain our improvements and begin a reserve fund. When possible, please take a moment to review the budget and a recording of the budget meeting (available on the community website). The discussion around this issue was active and participatory and lasted over 5 hours.
Board meetings for January and February 2023 are to going to be hosted as non-business meetings to allow for the Board to more freely discuss issues and opportunities directly with the community. We are revising and growing our resident led committees as well and will be putting out information on how you can volunteer to get more involved.
The last two and a half years have been a considerable challenge for our community. We have ‘peeled back the layers’ to expose our challenges and opportunities, learning a lot in the process. We have identified several ways we can save money while also investing in our community. It is the board’s goal for this mill levy increase to be temporary, allowing the community to get through the end of build out and on its way to financial freedom.
We love our community and are committed to improving not only the districts process and procedures, but also to transparency. There is a light at the end of the tunnel and our community’s best days are still ahead.
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