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Special District Transparency

The Colorado Legislature recently passed Senate Bill 21-262 concerning special district transparency. The Governor signed the bill on June 28, 2021 with an effective date of October 28, 2021. The following is an overview of the changes affecting Special Districts.

District Notice of Call for Nomination

Previously, the notice of a call for nominations for a regular local government election was given by publication. Under the new requirements, the designated election official must provide notice of a call for nominations for a regular local government election by (1) mailing; (2) publishing the notice on the special districts’ website; (3) including the notice as a prominent part of informational mailing sent to the eligible electors; or (4) if the district is smaller than 1,000 eligible electors and in a county of less than 30,000, by posting the notice in three public places within the territorial boundaries in addition to posting a notice in the office of the clerk and recorder of the county in which the local government is located.

This notice requirement is in addition to the previous requirement that notice be given by publication. Inactive special districts are now exempt from certain filing and notice requirements.

District Annual Report Information and Requirements

The bill also adds requirements for the special districts’ annual reports including additional information that the special district must disclose. The annual report now must be filed electronically with the governing body that approved the local government’s service plan or, if the jurisdiction has changed due to annexation into a municipality, the current governing body with jurisdiction over the special district.

For any district created after July 1, 2000, beginning in 2023 for the 2022 calendar year, the requirement to file the annual report by October 1 of each year may be waived or made earlier by the board of County Commissions or the governing body of the municipality in which a special district is wholly or partially located.

            Specifics of Annual Report Information

The following information, only as applicable for the reporting year, must now be included in the annual report:

  1. Boundary changes made;
  2. Intergovernmental agreements entered into or terminated with other governmental entities;
  3. Access information to obtain a copy of rules and regulations adopted by the board;
  4. A summary of litigation involving public improvements owned by the special district;
  5. The status of the construction of public improvements by the special district;
  6. A list of facilities or improvements constructed by the special district that were conveyed or dedicated to the county or municipality;
  7. The final assessed valuation of the special district as of December 31 of the reporting year;
  8. A copy of the current year’s budget;
  9. A copy of the audited financial statements, if required by the “Colorado local government audit law”, part 6 of article 1 of title 29, or the application for exemption from audit, as applicable;
  10. Notice of any uncured defaults existing for more than ninety days under any debt instrument of the special district; and
  11. Any inability of the special district to pay its obligations as they come due under any obligation which continues beyond a ninety-day period.

Special Districts operating under a consolidated service plan or serving the same community may choose to file a consolidated report for each of the special districts. Additionally, any special district inactive for the year need not file an annual report. The bill, and its changes, will take effect September 7, 2021.

Actions for Districts to Take

In order to comply with the new requirements under Senate Bill 21-262, districts will need to change their procedures for giving notice of a call for nominations for a regular local government election to include publication as well as one of the additional three options for notification.  Additionally, the district will want to be in contact with the governing body that approves their service plan or the governing body with jurisdiction over it to ensure that their annual report is filed electronically and by the correct or agreed upon date.

Special attention should also be given to the information included in the annual report (items 1-11 above.)

Please contact us as soon as possible if you have any questions or need further information regarding compliance with the updated transparency notice requirements.