El Paso County approves amended service plan for Larson Ranch Metropolitan District No. 6

The El Paso County Board of County Commissioners on March 26 approved an amended and restated special district service plan for Larson Ranch Metropolitan District No. 6, voting 5-0 to authorize changes the applicant said will bring the district into alignment with current county policy. The board's action covers a ~291.9-acre portion of the Lawson Ranch planned unit development east of Mark Sheffel Road and Fontaine Boulevard.

County planner Carrie Parsons told the board the amendment reduces the district's maximum debt authorization from $80 million to $58 million, retains a proposed debt-service mill levy cap of 50 mills and an operations-and-maintenance cap of 10 mills (a combined maximum of 60 mills), removes a previously authorized 13-mill special-purpose levy for fire protection, and requests a longer maximum bond term than the county standard. "With this amendment, again, we are with the applicant is increasing to go from the existing 35 year bond term to a 40 year bond term which is outside of our service policies," Parsons said during her presentation.

District counsel David O'Leary, representing the Lawson Ranch metropolitan districts, told commissioners most public improvements are substantially complete and that about $47,000,210 of the improvements were certified as eligible for reimbursement. He said the total public improvements constructed for the project are about $58,049,412 and that the district is proposing to issue limited-tax, cash-flow developer bonds to reimburse those costs. "The public improvements are substantially complete," O'Leary said. "Those $58,000,000 will finance $47,000,000 with a bond issuance that's proposed to be issued this year if we get the approval."

O'Leary explained the 13-mill special-purpose levy initially included in the service plan was intended to pay for fire protection until the area was incorporated into a fire district; because the land now lies within the Security Fire Protection District, the applicant is removing the special-purpose mill levy from the service plan. He added the district must follow transparency requirements, including annual town-hall meetings and mailed notice to eligible electors for director nominations.

Commissioner Nelson pressed the applicant on why earlier planning-commission discussion had raised concerns that residents could end up paying more under the amendment despite a lower mill-levy cap. Jonathan Heroux of Piper Sandler, the applicant's financial adviser, responded that a metro district is a limited-mill entity and that cash-flow bonds place revenue risk on the bond purchaser if assessed valuation underperforms. He added that changes in assessed valuation and state assessment-ratio adjustments can produce outcomes in which a resident's tax bill does not fall in lockstep with a reduced mill-levy cap. "If for some reason the assessed valuation was to drop and the mill levy was not able to generate enough revenue to service the bonds... that's really the risk of the bondholder," Heroux said.

The applicant clarified statutory limitations on mill-levy assessment terms: the debt-service mill levy cannot be assessed for more than 40 years from its first assessment date. Because the debt-service levy has been assessed since 2022, the applicant noted that any new issuance would functionally operate within the remaining allowable assessment period under state law.

After questions and brief comments from commissioners, including a statement that the application met the county's criteria for sufficient existing and projected need and the ability to provide economical and sufficient service to the area, the board approved the amended and restated service plan by roll call vote. The motion passed 5-0.

Next steps: the amendment approval allows the district to issue bonds consistent with the service plan and state statute; the applicant said it expects to seek bond issuance in the coming months and must follow statutory notice, transparency and election procedures before district governance transitions to resident-elected directors.