Your Metro District's Mill Levy Cap Is Not a Number
Everyone tells you to check the metro district's authorized maximum in the service plan. Nobody tells you that maximum moves. In Colorado it is written as a formula that rises whenever the state cuts the residential assessment rate — which is how a 50-mill cap ends up charging 63.6.
You did the diligence. You found the metro district, pulled its service plan, and read the line everyone tells you to read: the maximum mill levy the district is allowed to charge. It says 50 mills. Then you look at what the district actually levies, on a neighbour's tax bill or on the parcel itself once it has been built on long enough to have one, and it is 63.6. (A mill is $1 of tax per $1,000 of assessed value.)
Nobody made a mistake. The cap is not a number.
The short answer: Colorado service plans commonly cap the levy with a formula, not a figure. A Gallagher Adjustment clause says that if the state changes the residential assessment rate, the district's cap is raised or lowered so its revenue stays flat. Rates have fallen for forty years, so caps have climbed. The number you want is the adjusted maximum, not the one printed in the plan.
The clause that moves the mill levy cap
Here is the mechanism in the Berthoud-Heritage district's own service plan, the one covering Heron Lakes and TPC Colorado:
"In the event of legislation implementing changes in the assessment ratio of actual valuation to assessed valuation … the mill levy limitations provided herein will be increased or decreased … so that, to the extent possible, the actual tax revenues generated by the mill levy, as adjusted, are neither diminished nor enhanced as a result of such changes."
From the district's side that is reasonable: it borrowed against a revenue stream and cannot let a change in state tax policy default its bonds. From yours, the plain version is this. More mills applied to a smaller assessed base is not automatically a bigger bill. The cap moved because the thing it multiplies got smaller. So if you read 63.6 against 50 and assumed you had been quietly overcharged, that is not what happened. What happened is that the district's revenue was held roughly flat while your relief was routed away.
The plan even shows its work: a 2008 cap of 50 mills becomes 55.664 mills once the residential rate falls from 7.96% to 7.15%. Same authority, bigger number.
None of that is a footnote about tax history. Colorado law is ahead of you here, and it is worth knowing exactly how far. This particular duty runs in districts organized on or after January 1, 2000, where the seller must disclose the maximum debt-service mill levy the district is permitted to impose under its service plan, which is the 50, and, since 2022, must also state whether that cap can be adjusted when the state changes the assessment ratio. So the law does hand you the warning. What no disclosure requires is the number the warning is about. Nothing obliges the seller to hand you that number: the disclosure is the plan's figure plus a yes-or-no. The district's website must explain the maximum it may assess, but the statute does not say whether that means the nominal cap or this year's adjusted one. You get a stale figure and a yes. You have to go get the live one yourself. You can do everything the law requires, read exactly what you are given, and still be off by more than thirteen mills.
The clause is not a Berthoud quirk. The residential assessment rate has fallen steadily since the Gallagher Amendment took effect, from 30% before 1983 to 6.25% for local-government levies today, and each step raised the adjusted cap for plans carrying the clause. Voters repealed Gallagher in 2020, and the cuts since have been legislative rather than constitutional; the clauses written under the amendment kept running either way.
What does a district at its adjusted cap actually levy?
Berthoud-Heritage runs seventeen numbered districts, and Heron Lakes parcels sit across several of them at 2025 levies running roughly 62.8 to 82.7 mills. Everything below is District No. 6, the top of that range: the clearest illustration of the mechanism, not a picture of what every parcel pays. Which numbered district your lot sits in is the whole question.
Berthoud-Heritage Metropolitan District No. 6, for collection in 2026:
| What the plan caps | Nominal cap | District's certified levy | Headroom left |
|---|---|---|---|
| Debt service | 50 mills | 63.614 | none. The budget states 63.614 is the adjusted maximum |
| General operations | 15 mills | 19.084 | the same 1.272× multiple |
| Aggregate | 65 mills | 82.698 | the sum of the two above |
Nominal caps and the debt-service adjusted maximum are the district's own. The multiple is True North Boulder's reconciliation of the certified levy against the plan's nominal caps: the budget states an adjusted maximum for debt service only, and the two multiples agree to four figures.
The debt levy and the operations levy sit at the same 1.272× multiple of their nominal caps. This district is not charging below its ceiling with room to ramp. It is at or very near the ceiling, and the ceiling moved to meet it. That is a different risk from the usual warning (a district below its cap can raise toward it), and it calls for a different question.
Run it on an illustrative $850,000 home: at the 2025 local-government rate of 6.25% that is about $53,125 of assessed value, and 82.698 mills on that is roughly $4,400 a year from this district alone.
Does a Gallagher-adjusted cap ever move down?
The clause runs both directions, and District No. 6's own budget shows it: total levy 85.190 → 84.318 → 82.698 across the last three collection years.
The next scheduled change points the same way: the local-government residential rate is set to rise from 6.25% (tax year 2025) to 6.8% for 2026, which pushes adjusted caps lower. Two things shrink that. The 6.8% arrives with a value reduction of 10% of the first $700,000, so the real change is far smaller than the headline. And a 2026 rate is not billed until 2027, so none of it is in the trend above.
So the number is not a ceiling that only rises. It is indexed to something you are not watching, and it moves both ways.
What to ask for: the adjusted mill levy cap
Ask for the adjusted maximum mill levy, and get it from three public records rather than the builder's sales desk. Its "tax estimate" on a new build is often the land-only first-year figure, not what you pay once the house is assessed. Pull them in this order:
- The county treasurer's parcel tax lookup (Larimer County, for Berthoud). It itemizes every authority and the mills actually levied on that tax area, which is also how you learn which numbered district your lot is in.
- The district's website, which the seller must disclose for any district organized on or after January 1, 2000. Since August 2025 it must carry a plain-language explanation of the maximum mill levy the district may assess to repay its debt — but the statute does not say whether that means the plan's nominal cap or this year's adjusted one. Read it, then check it against the budget.
- The adopted Final Budget's Summary of Significant Assumptions, the one place the adjusted maximum appears.
Timing matters more than any of it. This is a pre-offer question, not an inspection-window one. The lender escrows the full levy, so the district's mill compresses what you qualify for. That is the same arithmetic behind what your money actually buys across the corridor. Get the real figure into your pre-approval before you write. If you are already under contract, it is a title-review question.
Then ask what the printed cap cannot: what is the adjusted maximum this year, and how much of it is the district already using? Headroom measures volatility, not cost. A district at its cap cannot vote itself higher without amending the plan through the town or going to an election. But take only so much comfort from that, because a ceiling that moves is not much of a ceiling.
Clauses of this kind sit in service plans across the corridor, so the question travels with you: TPC Colorado sits inside this same plan, and Centerra in Loveland is worth the same check. If you are weighing a new build in a district, we will pull the budget page and the plan with you before you write. For the rest of the new-build diligence this sits inside, start with buying new construction in Colorado; for what a district mill does to a whole Berthoud purchase in dollars, read the Berthoud move-up guide.
Frequently asked
How can a metro district charge more mills than its service plan cap?+
A Colorado metro district can charge more than its printed cap because that cap is a formula. Colorado service plans commonly include a Gallagher Adjustment clause stating that if legislation changes the ratio of actual value to assessed value, the mill levy limits are increased or decreased so the district's actual tax revenue is neither diminished nor enhanced. When the state cuts the residential assessment rate, the same mills would raise less money, so the cap rises to compensate. Berthoud-Heritage District No. 6 shows it plainly: a 50-mill service-plan debt cap, a stated adjusted maximum of 63.614 mills for collection in 2026, and a certified levy of exactly 63.614.
What is a Gallagher Adjustment?+
It is a clause in a Colorado metro district's service plan that indexes the district's mill levy caps to the residential assessment rate. It is named for the Gallagher Amendment, the Colorado constitutional provision that drove the assessment rate down for decades before voters repealed it in 2020. The clause outlived the amendment: it sits in service plans written while Gallagher was in force and keeps operating today. The Berthoud-Heritage plan gives its own example, showing a 2008 cap of 50 mills adjusting to 55.664 as the residential rate fell from 7.96% to 7.15%.
Does the cap ever go down?+
Yes. Berthoud-Heritage District No. 6's own budget shows its total levy stepping down from 85.190 to 84.318 to 82.698 across the last three collection years, so the caps are not a one-way ratchet. Looking forward, Colorado's local-government residential rate is set to rise from 6.25% for tax year 2025 to 6.8% for 2026, which works to push adjusted caps lower — though that rate arrives with a value reduction of 10% of the first $700,000, so the net effect is much smaller than the headline numbers imply, and a tax-year-2026 rate is not billed until 2027. Districts certify each year's levy in December, so 2026's figures are not fixed yet.
Where do I find a district's real current mill levy and its cap?+
The district's adopted Final Budget is the single best document, and every metro district posts one. Its Property Tax Summary Information page gives the current mill levy split into debt service and general operations, the certified assessed value and a three-year trend. The adjusted maximum sits elsewhere in the same document, in the Summary of Significant Assumptions, which is where Berthoud-Heritage No. 6 states its 63.614. The service plan gives the nominal cap and the adjustment clause. The county treasurer's tax bill gives the total you actually pay, itemized by authority. Ask for the budget page first; it answers the most questions at once.
Sources & data notes
- Mill levies, certified assessed value and the three-year trend: Berthoud-Heritage Metropolitan District No. 6, 2026 Adopted Final Budget — Property Tax Summary Information (levy split, AV, trend) and Summary of Significant Assumptions (the stated adjusted maximum for debt service).
- The Gallagher Adjustment clause and the nominal caps: Berthoud-Heritage Metropolitan Districts Nos. 1–17, Amended and Restated Service Plan (2021).
- The statutes behind the disclosure duties, each read at its enacting act: the seller must state the maximum debt-service mill levy permitted under the service plan and, if applicable, whether that cap may be adjusted for changes in the assessment ratio — C.R.S. 38-35.7-110(2)(c)(II) (SB21-262, operative Jan 1, 2022). The seller must provide the district’s official website on the CREC Seller’s Property Disclosure, for districts organized on or after Jan 1, 2000 — C.R.S. 38-35.7-111 (SB23-110, for sales on or after Jan 1, 2024). The website must carry a plain-language explanation including the maximum mill levy the district may assess to repay debt — C.R.S. 32-1-104.5(3)(a)(X) (HB25-1219, effective August 2025). No statute expressly requires disclosure of the current adjusted cap; §32-1-104.5(3)(a)(X) is silent on nominal vs adjusted.
- Independent confirmation of the 50-mill debt cap and the Gallagher mechanism: BHMD No. 1, 2024 audited financial statements (Colorado Office of the State Auditor), Note 5 — which also records a 35-mill debt cap for District No. 4, the reason its total runs materially lower.
- Residential assessment-rate history: Colorado Division of Property Taxation, “Gallagher” History (rates as enacted). The reductions after the 2020 repeal were legislative, not Gallagher-driven.
- Levy range across the numbered districts: Larimer County certified mill levies by tax area and authority, 2025.
True North Boulder is a real-estate team with eXp Realty. This is general information for Boulder and northern Front Range buyers, not legal or tax advice. District figures are from Berthoud-Heritage Metropolitan District No. 6's 2026 adopted budget and the districts' 2021 amended and restated service plan; the levy range across the numbered districts is from Larimer County's certified mill levies by tax area and authority (2025); assessment rates are Colorado's statutory residential rates. For a specific property, confirm the district, its current levy and its adjusted maximum with the district and the county, and if the service plan's language or the seller's disclosure obligations are material to your decision, with a Colorado real-estate attorney.
