Metro Districts: Modeling Cash Flow With Extra Mills

If you are eyeing a home or investment in Littleton, the metro district line on the tax bill can make or break your cash flow. Those extra mills are not a footnote. They add to your annual property taxes and can compress your cap rate in a real way. You want clarity upfront so you can price, negotiate, and hold with confidence.

In this guide, you will learn what metro districts are, how to convert mills into dollars, how extra mills affect NOI and cap rates, and exactly where to find the mill levies for any Littleton property before you underwrite. You will also get a checklist and red flags to watch. Let’s dive in.

Metro districts in Littleton: What to know

Metro districts in Colorado are local special districts that finance and deliver infrastructure like roads, water, sewer, and parks. They often issue bonds and repay them with property tax mill levies and sometimes fees. You can learn more about local context on the City of Littleton website.

Why it matters for you: metro district mills are added on top of county, city, school, and other taxes. In Littleton and across Arapahoe County, that means your annual tax expense can be higher than you expect, and your net operating income can be lower. If you plan to rent, refi, or resell, you should model this impact before you make an offer.

For statewide background on special districts and assessment rates, explore the Colorado Department of Local Affairs. For general education on special districts, the Colorado Special Districts Association is a helpful resource.

How mills become annual taxes

A mill equals 1 dollar of tax per 1,000 dollars of assessed value. In Colorado, residential assessed value is calculated using the statutory assessment rate. The current residential assessment rate is 7.15 percent of market value. Always confirm the rate for the year you are modeling.

Here is the step-by-step:

1. Estimate market value (MV). That could be your purchase price.

2. Calculate assessed value (AV): AV = MV × 0.0715 for residential.

3. Add up total mills: county + city + school + metro district(s).

4. Annual tax = AV × (Total mills ÷ 1,000).

Example: $500,000 home

• Market value: $500,000
• Assessed value: $500,000 × 0.0715 = $35,750
• Suppose base mills are 70 and a metro district adds 30. Total is 100 mills.
• Annual tax = $35,750 × (100 ÷ 1,000) = $3,575
• Without the metro district (70 mills), tax would be $2,502.50
• Incremental tax due to the district = $1,072.50

Quick shortcut

• Effective tax rate ≈ assessment rate × total mills ÷ 1,000.
• In the example above, 0.0715 × 0.100 = 0.00715, or about 0.715 percent of market value.

Notes:

• Mill levies are adopted each year and can change. Some districts also charge fees.
• Non-residential properties use different assessment rates. Confirm the correct rate for your property type.

How extra mills compress cap rates

Cap rate equals NOI divided by purchase price. Extra district mills reduce NOI by the incremental annual tax. That pushes your cap rate down unless you buy at a lower price or raise income.

The math:

• New NOI = Original NOI − Annual district tax
• New cap rate = New NOI ÷ Purchase price
• Each 1 mill reduces a residential cap rate by roughly 0.0715 percentage points at the same price, using the 7.15 percent assessment rate.

Scenarios

• Scenario A: $500,000 purchase, $30,000 NOI before district tax (6.0 percent cap).

  • 0 mills: cap rate stays 6.0 percent.
  • 20 mills: annual district tax ≈ $7,150; new NOI ≈ $22,850; new cap ≈ 4.57 percent. That is about 1.43 percentage points lower.

• Scenario B: $1,000,000 purchase, $60,000 NOI (6.0 percent cap).

  • 30 mills: cap rate compresses by about 2.145 percentage points to roughly 3.855 percent.

Practical takeaway: even 10 to 30 mills can move your cap rate a lot, especially in low-cap markets. Build a sensitivity case with higher mills so you are not surprised later.

Where to find mills for a Littleton address

Use these steps before you price or underwrite:

1. Start with the county assessor record. Use the Arapahoe County Assessor and Treasurer pages to search the parcel. Note the parcel number, current assessed value, and list of taxing districts.

2. Review mill levy tables and any tax calculator. On the treasurer pages, look for current mill levy breakdowns and a tax estimator. Confirm total mills and see the share that comes from any metro district.

3. Confirm district service plans and budgets. If the parcel sits inside a metro district, review service plans, budgets, and bond disclosures. Check the City of Littleton website for local filings and the Colorado Department of Local Affairs for statewide district data and contacts.

4. Use association and state directories. The Colorado Special Districts Association and DOLA list district contacts so you can request budgets or ask the district manager about current and planned levies.

5. Cross-check title materials. Title commitments and plat maps often list all taxing districts touching the parcel. Verify they match the assessor listing.

6. Call to clarify timing. Ask county or district staff whether any temporary or additional mills are in place, if levies are scheduled to change, and how mills split between operations and debt service.

Pro tip: save PDFs or screenshots of the assessor page, treasurer mill table, and district budget in your underwriting file.

Underwriting checklist

Gather these before final numbers:

• Parcel number and assessor record PDF.
• Property class and current assessed value.
• Total mill levy and a breakdown by jurisdiction.
• Service plans and mill schedules for each metro district.
• District budgets, audited financials, and bond or debt schedules.
• Title commitment or plat with district boundaries.
• District manager or treasurer contact info.
• Sensitivity model: 0, current, +10, +20 mills.
• Any special assessments, fees, or agreements that add to annual costs.

Red flags that need a closer look

• A recent jump in district mills or a high levy compared to nearby areas.
• Large outstanding bond debt with a small current tax base.
• Temporary or graduated levies that are set to increase.
• Missing service plans or budgets that make future obligations unclear.
• Multiple overlapping districts that together create a heavy tax burden.
• Seller or developer disclosures about pending bond issuances or levy changes.

Simple modeling workflow

Use this three-part flow for fast, clear underwriting:

1. Baseline. Model taxes with 0 district mills to see base performance.
2. Current reality. Add the parcel’s actual district mills from the assessor or treasurer pages.
3. Sensitivity. Add +10 and +20 mills to see how debt service or future changes could affect NOI and cap rate.

Keep the math consistent and easy to audit. Use the latest adopted mill levy and note the year.

Local tips for Littleton buyers and investors

• Newer projects in and around Littleton often use metro districts to fund infrastructure. Older neighborhoods may still have district debt. Always verify district membership by parcel.
• Mill levies are set annually. If a district issues new bonds or adjusts for debt service, your tax line can change year to year.
• Some districts charge fees in addition to mills. Include all recurring charges in your annual carry.

Ready to put the numbers to work on a specific Littleton property? If you want a practical walkthrough, market context, and a sensitivity model that fits your goals, reach out. Connect with Unknown Company to Request Your Home Valuation and next steps.

FAQs

What is a metro district in Littleton?

• A metro district is a special district that funds local infrastructure and services, often repaid through property tax mill levies and sometimes fees.

How do I calculate property tax with mills in Arapahoe County?

• Multiply market value by the residential assessment rate (currently 7.15 percent) to get assessed value, then multiply by total mills divided by 1,000.

How do extra metro district mills affect my cap rate on a rental?

• Extra mills reduce NOI by the incremental tax, which lowers your cap rate at the same price by roughly 0.0715 percentage points per mill for residential.

Where can I find mill levies for a Littleton address?

• Start with the Arapahoe County Assessor and Treasurer pages for the parcel’s district list, mill breakdown, and tax estimator tools.

Can metro district mill levies change after I buy?

• Yes, districts adopt mill levies annually and they can change with budgets, debt service needs, or new bond issues, so model sensitivity and verify each year.