Metro districts play a vital role in financing, building and maintaining public infrastructure in growing communities across Colorado. As an essential unit of local government, metro districts provide a sustainable way to fund roads, utilities, parks, and other public amenities without requiring cities and counties to raise taxes on all residents. However, with this responsibility comes an essential obligation: fiduciary duty.
Fiduciary responsibility ensures that metro district funds are managed ethically, transparently, and in the best interest of the residents. This duty extends to metro district board members, financial administrators, and developers who are involved in district decision-making. To maintain public trust and legal compliance, metro districts must adhere to strict financial and governance regulations, ensuring responsible management of taxpayer dollars.
Transparency and public oversight are key responsibilities of a metro district. Because metro districts are governed by elected boards, they must operate under Colorado’s Open Meetings Act and Open Records Act (CORA). This ensures that all financial decisions and expenditures by this district are publicly accessible; residents have the right to attend meetings, review budgets and voice concerns; board meetings, financial reports and tax allocations are recorded and available to the public. This level of transparency, was strengthened in Senate Bill 21-262 and advocated for by Metro District Education Coalition helps to ensure that financial decisions align with the best interests of the district’s residents.
Metro districts are a financial tool that let new developments borrow money through tax-exempt municipal bonds to fund critical infrastructure. These bonds must be repaid, and are funded through property taxes on homeowners within the district. These bonds directly impact residents’ financial obligations, so metro district boards must prioritize debt repayment to avoid defaulting on financial obligations. Funds must also be allocated appropriately. Revenue designated for debt service must not be misused for other purposes. Boards and the people working for the district must follow strict accounting and financial laws to maintain the district’s fiscal health.
To avoid improper use of funds, metro district boards must follow strict reporting guidelines to ensure money is used for its intended purposes, while conducting regular audits and avoiding conflicts of interest.
Because metro districts exist to serve their residents, board members must act in good faith for homeowners. They need to provide clear and consistent communication about financial obligations and district operations. Metro districts also need to encourage homeowner participation in board elections and decision-making. This also includes addressing concerns about tax rates, infrastructure funding and long-term planning.
Fiduciary duty is more than just a legal requirement—it is the foundation of ethical governance in metro districts. Proper financial management protects homeowners from unexpected costs, ensures infrastructure projects are completed efficiently, and preserves public trust in metro districts as a sustainable financing model.
As metro districts continue to play a vital role in Colorado’s housing and infrastructure development, upholding fiduciary responsibility is essential for their long-term success and credibility.
Would you like to learn more about how metro districts are managed? Explore our resources at metrodistricteducation.com/knowledge-center.