Master / Servant District Structures

Master / Servant Districts - An Assault on Democracy

Master / Servant District - Overview

As homeowner activism regarding metropolitan districts rises, land developers are attempting to find new ways to protect land developers’ access to governmental taxation powers and the power to issue government debt without interference from the taxpayers. Land developers are aware that every time a home is constructed and sold within the boundaries of a metro district, the voting power of homeowners increases compared to votes controlled by the land developer and the risk increases that homeowners attempt to hold an election to replace directors who are employees/owners of the land developer with independent homeowner directors. Land developers (and the law firms that serve land development corporations) believe the master/servant district structure is the solution to prevent taxpayers from interfering with land developers’ desire to collect taxes from the taxpayers and issue governmental debt to fund the land developer’s operations.


To fund the installation of roads, sidewalks, water/electric and sewer lines, parks, storm drain systems, etc ('Public Infrastructure"), the land developer will obtain permission from the city/town (or county, if the development is not located within a city/town) to create a metropolitan district to (1) issue debt to finance the cost of installing such public infrastructure, (2) assess property taxes on homeowners to fund the repayment of such debt, (3) maintain certain public infrastructure within the district (usually, parks and recreation facilities), and (4) provide certain public services such as covenant enforcement, trash hauling and recreation activities. 

Metro districts are designed to operate autonomously

Regardless of whether the service plan contemplates one metro district or multiple metro districts, each metro district possesses the same powers and authority provided under Title 32 of the Special District Act. Specifically, CRS 32-1-10 and 32-1-11 generally grants all metro districts sufficient powers to operate autonomously. Thus, a metro district does not need to rely on a “master” district for financial or operational support.

Boston Tea Party

The Boston Tea Party was an American political and mercantile protest that occurred on December 16, 1773. The target was the Tea Act of May 10, 1773, which allowed the British East India Company to sell tea from China in American colonies without paying taxes apart from those imposed by the Townshend Acts. American Patriots strongly opposed the taxes in the Townshend Act as a violation of their rights. Demonstrators, some disguised as American Indians, destroyed an entire shipment of tea sent by the East India Company. They boarded the ships and threw the chests of tea into the Boston Harbor. The British government responded harshly and the episode escalated into the American Revolution. The Tea Party became an iconic event of American history. The Tea Party was the culmination of a resistance movement throughout British America against the Tea Act, which had been passed by the British Parliament in 1773. Colonists objected to the Tea Act because they believed that it violated their rights as Englishmen to "no taxation without representation", that is, to be taxed only by their own elected representatives and not by a British parliament in which they were not represented. [Source:]

As homeowner activism regarding metropolitan districts rises, land developers are attempting to find new ways to protect land developers’ access to governmental taxation powers and the power to issue government debt without interference from the taxpayers. As homes begin to be built and sold within the boundaries of a metro district, land developers are aware the risk increases with each home sale that homeowners can out-vote the land developer and elect homeowners to serve on the metro district board.

If land developers want to prevent taxpayers from overseeing the financing and construction of the public infrastructure within the district, the following two legal options are available to such land developers:

  1. form corporate subsidiaries - wholly owned and operated by the land developers - to finance such construction projects; or
  2. request the city create a general improvement district (GID) to help finance the public improvements to be constructed on the land owned by the developers.


The “problem” with a GID – in the eyes of many land developers – is that a GID’s board is comprised of city council members – rather than employees and owners of the land development company. If a developer’s only objective was to obtain government financing to fund the installation of public infrastructure on its land, a GID would accomplish this objective. However, most land developers have a second objective, which is to control the price paid by metro districts for the public infrastructure constructed by the developer. To accomplish this second objective, developers must control the board of the governing entity financing the public infrastructure project.

Aurora, Commerce City, Frederick, Brighton are a few Colorado cities/towns that have approved master/servant district structures. While nobody has yet challenged the legality of master/servant structures, we believe the master/servant district structure will eventually be challenged in court by homeowners affected by these taxing structures.