Who’s watching Colorado’s metro districts? Audit flags debt, fees and oversight concerns

Who is watching Colorado's metropolitan districts? Denver7 Investigates has heard the questions about Colorados metropolitan districts for years: Questions about property taxes, questions about debt and questions about who is making decisions.

Now, a sweeping state audit is raising some of those same concerns.

The newly-released audit found Colorado needs to improve oversight, accountability and transparency involving the metro districts that help finance and operate public services in communities across the state.

The audit examined the Colorado Department of Local Affairs, known as DOLA, and its role in receiving district filings, supporting local governments and initiating the dissolution or consolidation process when districts fail to meet certain requirements.

This scale is significant about one in five Coloradans lives in a metro district.

As of October 2025, the state had roughly 2,500 of them, up from about 1,000 in 2006. Together, they are expected to collect an estimated $1.2 billion in property taxes in 2026.

Metro districts are local governments that provide at least two public services, which can include water, sanitation, fire protection and health services. They are frequently used to finance infrastructure needed for new developments, including roads, curbs and utilities. To pay for those improvements and services, districts can levy property taxes and fees and carry debt.

Auditors found that DOLA could do more to ensure metro districts submit required documents, including service plans, annual reports, budgets, election information, and oaths and bonds for board members.

Those are not merely administrative documents, according to auditors. Service plans lay out foundational information about how districts operate, what services they provide and how they may finance development.

The audit also identified problems involving vacant board seats and public access to information about district leaders and finances.

At least 32 districts failed to submit certain required filings in 2024 and 2025, yet DOLA had not initiated the dissolution or consolidation process required by state law, according to the audit.

Auditors also found about 10% of metro districts had been inactive and had not provided services for at least two years. Some had been inactive for six to 20 years. Current law does not establish an explicit limit on how long a district may exist without providing services.

The audit included detailed profiles of 16 metro districts to show how they are structured, provide services and finance improvements.

In Auroras Wheatlands Metropolitan District, auditors found a 2015 service-plan amendment on the districts website that expanded its authorized debt and changed a debt-service mill levy restriction. Auditors reported that the amendment had not been filed with DOLA as of May 2026.

Denver7 Investigates reached out to Wheatlands and have not received a response as of publication.

The audit also raised questions about public improvement fees, commonly called PIFs.

Some metro districts use the fees to help pay for public improvements. They can be charged when consumers buy goods or services and may appear similar to a sales tax at checkout.

Unlike sales taxes, however, the audit found PIFs do not have to be approved by voters, counties or municipalities, and businesses are not required by state law to disclose them to consumers in the same manner as taxes.

At Gardens on Havana Metropolitan District No. 2 in Aurora, auditors made a grocery purchase and were charged a 0.5% PIF, even though Aurora does not impose its municipal sales tax on groceries. Auditors used the example to illustrate how consumers may pay an added fee without fully understanding what it is or where the money goes.

PIFs arent always transparent so consumers may not realize theyre paying the extra fee plus sales taxes on that fee, Senior Legislative Auditor Annalisa Triola said in the audit offices news release.

The audit found that, as of 2024, Colorado metro districts had received voter authorization to incur at least $3.2 trillion in new debt, excluding interest.

That number represents debt voters have authorized districts to issue. It does not mean districts have actually borrowed or currently owe $3.2 trillion.

Auditors also noted that state law does not broadly require metro districts to obtain or follow advice from independent municipal financial advisers before issuing bonds.

Sen. Mike Weissman (D-Aurora), the vice chair of the legislative audit committee, said taxpayer protection should be a central theme of any reforms that follow.

The audit indicated a lot of places for improvement both at the state and local government level, but I think one important unifying theme is protection of taxpayers by making sure that when debt is issued, it is done in an appropriate way free of conflict of interest, Weissman said in a statement to Denver7. The audit established that there are trillions of dollars of theoretically authorized, but unissued debt by metro districts statewide, which is an absurd number.

State Sen. Lisa Frizell, a Republican who represents Parker and Castle Rock, chaired the Legislative Audit Committee. She also lives in a metro district herself, in The Meadows in Castle Rock.

Frizell told Denver7 that residents there have raised concerns about bond debt and transparency.

Our bond debt will never be paid off, and so people are paying property taxes for that purpose, and its not going to be paid off, Frizell said. And further, the metropolitan district has been anything but transparent in how theyve conducted themselves, to the point where citizens have had to engage legal counsel.

Frizell said she expects the audit to lead to legislation, although the details remain unsettled. She said some possible changes could carry a price tag at a time when Colorado faces serious budget constraints.

She also said the issue should not fall along party lines.

I dont think that this is a Republican or Democrat issue, Frizell said. I think that this is an issue for Colorado citizens because it impacts everyone the same.

Weissman agreed bipartisan participation on the audit committee could improve the chances of action.

Both Democratic and Republican legislators serve constituents who are facing cost-of-living burdens, Weissman said. Both Democratic and Republican legislators serve constituents who want to make sure that the taxes they are paying for government services are reasonable.

The audit issued 17 recommendations to DOLA, including calls to improve guidance for the local governments that approve district service plans, strengthen follow-up on required filings and improve the process used to dissolve or consolidate districts when appropriate. The department agreed with the recommendations.

Auditors also presented lawmakers with 15 policy considerations involving district debt practices, PIFs, updated oversight laws and the resources DOLA would need to provide more oversight.

Frizell said she hopes the audit ultimately pushes metro districts to operate with greater transparency and fiscal responsibility.

With Colorado metro districts expected to collect approximately $1.2 billion in property taxes in 2026, lawmakers now face the question at the heart of the audit: whether existing oversight is enough to help residents understand the local governments with the power to tax them.