HomeMy WebLinkAbout20132240.tiffRECEIVED
AUG 082013
WELD COUNTY
COMMISSIONERS
EAST I.25 SANITATION DISTRICT
Weld County, Colorado
FINANCIAL STATEMENTS
December 31, 2012
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TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT
BASIC FINANCIAL STATEMENTS
Government -wide Financial Statements:
Statement of Net Position 1
Statement of Activities 2
Fund Financial Statements:
Balance Sheet - Governmental Funds 3
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 4
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 5
General Fund - Statement of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual 6
Notes to Financial Statements ,7
SUPPLEMENTARY INFORMATION 19
Debt Service Fund - Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 20
Capital Projects Fund - Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 21
Summary of Assessed Valuation, Mill Levy and Property
Taxes Collected 22
I
i WAGNER BARNES
& GRIGGS,PC
Certified Public Accountants and Business Consultants
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
East 1-25 Sanitation District
Weld County, Colorado
We have audited the accompanying financial statements of the governmental activities and each major
fund of East 1-25 Sanitation District (the District) as of and for the year ended December 31, 2012, and
the related notes to the financial statements, which collectively comprise the District's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatements, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of East I-25 Sanitation
District, as of December 31, 2012, and the respective changes in financial position thereof, and the
budgetary comparison for the general fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Wagner Barnes & Griggs, PC
12136 West Bayaud Ave„ Suite 300 • Lakewood, Colorado 80228
303 202 1800 Office • 303.237 0155 Fax • www wbcpaco,com
r.
Other Matters
District Dissolution
As discussed in Note 12 to the financial statements, the District held an election on May 8, 2012 and
the voters approved a ballot initiative that ordered the dissolution of the District. On May 23, 2012, the
Order Decree Dissolving the District was signed by the court. The District will continue in existence for
the sole purpose of securing payment in full of the principal and interest of outstanding bonded
indebtedness.
Required Supplementary Information
Management has omitted management's discussion and analysis that accounting principles generally
accepted in the United States of America require to be presented to supplement the basic financial
statements. Such missing information, although not a part of the basic financial statements, is required
by the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. Our opinion on the basic financial statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District's basic financial statements. The supplementary information as listed
in the table of contents is presented for purposes of legal compliance and additional analysis and is not
a required part of the basic financial statements. The supplementary information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the information is fairly stated in all material respects in relation to the
basic financial statements as a whole.
0 s-rdic,
Lakewood, Colorado
July 31, 2013
II
BASIC FINANCIAL STATEMENTS
EAST I-25 SANITATION DISTRICT
STATEMENT OF NET POSITION
December 31, 2012
Governmental
Activities
ASSETS
Cash
Cash - Restricted
Receivable - County Treasurer
Property taxes receivable
Total assets
LIABILITIES
Accounts payable
Accrued interest payable
Noncurrent liabilities
Due within one year
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Property tax revenue
Total deferred inflows of resources
NET POSITION
Restricted for:
Emergencies (TABOR)
Debt service
Unrestricted
Total net position
$ 1,235
51,001
2,003
486,985
541,224
6,038
8,762
413,994
428.794
486,985
486,985
2,800
48,201
(425,556)
$ (374,555)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
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EAST I-25 SANITATION DISTRICT
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2012
ASSETS
Cash
Restricted cash
Receivable - County Treasurer
Property taxes receivable
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
LIABILITIES
Accounts payable
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Property tax revenue
Total deferred inflows of resources
FUND BALANCES
Restricted for:
Emergencies (TABOR)
Unassigned:
General government
Debt service
Total fund balances
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND
FUND BALANCES
General
Total
Debt Capital Governmental
Service Projects Funds
$ 1,235 $
2,800
2,003
48,201
486,985
$ 1,235
51,001
2,003
486,985
$ 6,038 $ 535,186 $ $ 541,224
$ 6,038 $ -
$ 6,038
6,038 - - 6,038
486,985 - 486,985
486,985 - 486,985
2,800 - - 2,800
(2,800)
48,201
48,201 48,201
(2,800)
48,201
$ 6,038 $ 535,186
Long-term liabilities, including bonds payable, are not due and payable
in the current period and, therefore, are not recorded as liabilities
in the funds.
Bonds payable - Series 2008
Bonds payable - Series 2012
Accrued interest on bonds payable
Net position of governmental activities
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
(327,986)
(86,008)
(8,762)
$ (374,555)
EAST I-25 SANITATION DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended December 31, 2012
REVENUES
Property taxes
Specific ownership taxes
Net investment income
Other income
Total revenues
EXPENDITURES
Current
Accounting
Audit
Treasurer's fees
Insurance and bonds
Dues and subscriptions
Legal services
District management
Miscellaneous
Debt service
Bond principal
Bond interest
Total expenditures
General
Total
Debt Capital Governmental
Service Projects Funds
$ 65,557 $ 262,228 $ - $ 327,785
24,561 24,561
92 370 462
1,060 - 1,060
91,270 262,598 353,868
17,563
3,900
985
2,066
1,558
46,421
2,498
220
3,939
17,563
3,900
4,924
2,066
1,558
46,421
2,498
220
209,651 209,651
45,824 45,824
75,211 259,414 - 334,625
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 16,059 3,184 - 19,243
OTHER FINANCING SOURCES (USES)
Transfers to other funds
Transfers from other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
(42,483)
(1,614) (44,097)
1,614 42,483 - 44,097
(40,869) 42,483 (1,614)
(24,810) 45,667 (1,614) 19,243
24,810
2,534 1,614 28,958
$ 48,201 $ $ 48,201
These financial statements should be read only in connection with
the accompanying notes to financial statements.
4
EAST I-25 SANITATION DISTRICT
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL
FUNDS TO THE STATEMENT OF ACTIVITIES
Year Ended December 31, 2012
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - Total governmental funds $ 19,243
The issuance of long-term debt (e.g., bonds, leases) provides current
financial resources to governmental funds, while the repayment of
the principal of long-term debt consumes the current financial
resources of governmental funds. Neither transaction, however, has
any effect on net position. The net effect of these differences in the
treatment of long-term debt and related items is as follows:
Current year bond principal payment
Developer advance - Bonds 2012
Developer advance converted to bonds
Accrued interest on Developer advance - Change in liability
Accrued interest on bonds payable - Change in liability
209,651
86,008
(86,008)
(990)
(8,762)
Changes in net position of governmental activities $ 219,142
These financial statements should be read only in connection with
the accompanying notes to financial statements.
5
EAST I-25 SANITATION DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
Year Ended December 31, 2012
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Property taxes
Specific ownership taxes
Net investment income
Other income
Total revenues
EXPENDITURES
Accounting
Audit
County Treasurer's fees
Insurance and bonds
Dues and subscriptions
Legal services
District management
Miscellaneous
Contingency
Total expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers from other fund
Transfers to other funds
Total other financing sources
NET CHANGE IN FUND BALANCES
FUND BALANCES -
BEGINNING OF YEAR
$ 65,557 $ 65,557 $ -
26,220 24,561 (1,659)
92 92
1,060 1,060
91,777 91,270 (507)
25,000 17,563 7,437
4,500 3,900 600
983 985 (2)
3,000 2,066 934
1,500 1,558 (58)
30,000 46,421 (16,421)
15,000 2,498 12,502
100 220 (120)
4,917 4,917
85,000 75,211 9,789
6,777 16,059 9,282
1,614 1,614
(42,483) (42,483)
(40,869) (40,869)
6,777 (24,810) (31,587)
2,671 24,810 22,139
FUND BALANCES - END OF YEAR $ 9,448 $ $ (9,448)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
6
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 1 - DEFINITION OF REPORTING ENTITY
East I-25 Sanitation District (District), a quasi -municipal corporation and political subdivision of
the State of Colorado, was organized by order and decree of the District Court of Weld County
on November 1, 2007, and is governed pursuant to provisions of the Colorado Special District
Act (Title 32, Article 1, Colorado Revised Statutes). The District was organized to provide
construction, installation, financing and operation of public improvements, including sanitary
sewer. The District's service area is located entirely within Weld County, Colorado.
The District follows the Governmental Accounting Standards Board (GASB) accounting
pronouncements which provide guidance for determining which governmental activities,
organizations and functions should be included within the financial reporting entity. GASB
pronouncements set forth the financial accountability of a governmental organization's elected
governing body as the basic criterion for including a possible component governmental
organization in a primary government's legal entity. Financial accountability includes, but is not
limited to, appointment of a voting majority of the organization's governing body, ability to
impose its will on the organization, a potential for the organization to provide specific financial
benefits or burdens and fiscal dependency.
The District is not financially accountable for any other District organization, nor is the District a
component unit of any other primary governmental entity.
The District has no employees and all operations and administrative functions are contracted.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The more significant accounting policies of the District are described as follows:
Government -wide and Fund Financial Statements
The government -wide financial statements include the statement of net position and the
statement of activities. These financial statements include all of the activities of the District. For
the most part, the effect of interfund activity has been removed from these statements.
Governmental activities are normally supported by taxes and intergovernmental revenues.
The statement of net position reports all financial and capital reserves of the District. The
difference between the assets and deferred outflows of resources and liabilities and deferred
inflows of resources of the District is reported as net position.
7
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The statement of activities demonstrates the degree to which the direct and indirect expenses of a
given function or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment, and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
Separate financial statements are provided for the governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the District considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. The material sources of revenue
subject to accrual are property taxes and interest. Expenditures, other than interest on long-term
obligations, are recorded when the liability is incurred or the long-term obligation is due.
The government reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial resources
to the general government, except those required to be accounted for in another fund.
The Debt Service Fund accounts for the resources accumulated and payments made for principal
and interest on long-term general obligation debt of the governmental funds.
The Capital Projects Fund is used to account for financial resources to be used for the acquisition
and construction of capital equipment and facilities.
8
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Budgets
In accordance with the State Budget Law, the District's Board of Directors holds public hearings
in the fall each year to approve the budget and appropriate the funds for the ensuing year. The
appropriation is at the total fund expenditures level and lapses at year end. The Board can
modify the budget by line item within the total appropriation without notification. The
appropriation can only be modified upon completion of notification and publication
requirements. The budget includes each fund on its basis of accounting unless otherwise
indicated.
The District incurred expenditures in excess of appropriation for the year ended December 31,
2012 in the General Fund and Capital Projects Fund, which may be in violation of the Local
Government Budget Law.
Pooled Cash and Investments
The District follows the practice of pooling cash and investments of all funds to maximize
interest earnings. Except when required by trust or other agreements, all cash is deposited to and
disbursed from a single account. Cash in excess of immediate operating requirements is pooled
for deposit and investment flexibility. Investment earnings are allocated to the participating
funds based upon each fund's average equity balance in the total cash.
Investments are carried at fair value.
Property Taxes
Property taxes are levied by the District's Board of Directors. The levy is based on assessed
valuations determined by the County Assessor generally as of January 1 of each year. The levy
is normally set by December 15 by certification to the County Commissioners to put the tax lien
on the individual properties as of January 1 of the following year. The County Treasurer collects
the determined taxes during the ensuing calendar year. The taxes are payable by April or, if in
equal installments, at the taxpayer's election in February and June. Delinquent taxpayers are
notified in August and generally sales of the tax liens on delinquent properties are held in
November or December. The County Treasurer remits the taxes collected monthly to the
District.
Property taxes, net of estimated uncollectible taxes, are recorded initially as deferred inflows of
resources in the year they are levied and measurable. The unearned property tax revenue is
recorded as revenue in the year it is available or collected.
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Amortization
Original Issue Discount/Premium
In the government -wide financial statements, bond premiums and discounts are deferred and
amortized over the life of the bonds using the straight-line method.
In the fund financial statements, governmental fund types recognized bond premiums and
discounts during the current period. The face amount of debt issued is reported as other financial
sources. Premium received on debt issuance are reported as other financing sources while
discounts on debt issuance are reported as other financial uses.
Fund Equity
Fund balance for governmental funds should be reported in classifications that comprise a
hierarchy based on the extent to which the government is bound to honor constraints on the
specific purposes for which spending can occur. Governmental funds report up to five
classifications of fund balance: nonspendable, restricted, committed, assigned, and unassigned.
Because circumstances differ among governments, not every government or every governmental
fund will present all of these components. The following classifications describe the relative
strength of the spending constraints:
• Nonspendable fund balance — The portion of fund balance that cannot be spent because it
is either not in spendable form (such as prepaid amounts or inventory) or legally or
contractually required to be maintained intact.
• Restricted fund balance — The portion of fund balance that is constrained to being used
for a specific purpose by external parties (such as bondholders), constitutional provisions,
or enabling legislation.
• Committed fund balance — The portion of fund balance that can only be used for specific
purposes pursuant to constraints imposed by formal action of the government's highest
level of decision -making authority, the Board of Directors. The constraint may be
removed or changed only through formal action of the Board of Directors.
• Assigned fund balance — The portion of fund balance that is constrained by the
government's intent to be used for specific purposes, but is neither restricted nor
committed. Intent is expressed by the Board of Directors to be used for a specific
purpose. Constraints imposed on the use of assigned amounts are more easily removed
or modified than those imposed on amounts that are classified as committed.
10
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• Unassigned fund balance — The residual portion of fund balance that does not meet any
of the criteria described above.
If more than one classification of fund balance is available for use when an expenditure is
incurred, it is the District's policy to use the most restrictive classification first.
New Accounting Pronouncements
Effective January 1, 2012, the District implemented the provisions of GASB No. 63, "Financial
Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position"
(GASB No. 63) and early implemented the provisions of GASB No. 65, "Items Previously
Reported as Assets and Liabilities" (GASB No. 65).
GASB No. 63 provides guidance for reporting deferred outflows and deferred inflows of
resources as introduced and defined in GASB Concepts Statement No. 4 "Elements of Financial
Statements" (Concepts Statement No. 4). Concepts Statement No. 4 defines a deferred outflow
of resources as a consumption of net assets that is applicable to a future reporting period. A
deferred inflow of resources is defined as an acquisition of net assets applicable to a future
reporting period. The impact on the District's financial statements has been to replace the term
"net assets" with "net position".
GASB No. 65 establishes accounting and financial reporting standards that reclassify, as deferred
outflows of resources or deferred inflows of resources, certain items that were previously
reported as assets or liabilities. Some assets previously reported as assets are now reported as an
outflow of resources/expenses. One of these assets is debt issuance costs. The District's
beginning net position has been restated to reflect expensing all debt issuance costs that had been
previously capitalized. The effect of this treatment is as follows:
Net position — December 31, 2011, as originally stated
Restatement related to debt issuance costs
Net position — December 31, 2011, as restated
$ (571,310)
(22,387)
1593,697)
Additionally, the District's receivable related to property taxes to be collected in 2013 is treated
as a deferred inflow of resources.
11
EAST 1-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 3 -CASH
Cash and investments as of December 31, 2012 are classified in the accompanying financial
statements as follows:
Statement of net position:
Cash
Cash - Restricted
Total cash
Deposits with Financial Institutions
$ 1,235
51,001
$ 52.236
The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government
deposit cash in eligible public depositories. Eligibility is determined by state regulators.
Amounts on deposit in excess of federal insurance levels must be collateralized. The eligible
collateral is determined by the PDPA. PDPA allows the institution to create a single collateral
pool for all public funds. The pool for all the uninsured public deposits as a group is to be
maintained by another institution or held in trust. The market value of the collateral must be at
least 102% of the aggregate uninsured deposits.
The State Commissioners for banks and financial services are required by statute to monitor the
naming of eligible depositories and reporting of the uninsured deposits and assets maintained in
the collateral pools.
At December 31, 2012, the District's cash deposits had a bank balance of $52,236 and a carrying
balance of $52,236.
NOTE 4 - INTERFUND TRANSFER
The transfer of $42,483 from the General Fund to Debt Service Fund was done for the purpose of
closing the General Fund operations in conformance with the resolution dissolving the District,
and the transfer of $1,614 from Capital Project Fund to General Fund was done for the purpose
of providing funds for the General Fund expenditures.
12
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 5 - INTERGOVERNMENTAL AGREEMENT
On November 14, 2008, the District entered into an Intergovernmental Agreement with St. Vrain
Sanitation District (St. Vrain). Pursuant to this agreement the District shall construct, at its sole
cost and expense, a Collection System and new line for connection from St. Vrain's
Interconnection Point in accordance with the specifications set forth by St. Vrain. Additionally,
upon conveyance of the constructed Collection System to St. Vrain by the District, St. Vrain
shall assume all responsibility for maintenance of the Collection System. All users within the
District shall purchase a connection directly from St. Vrain. The connection fee will consist of
St. Vrain's then current tap fee, a reimbursement charge as determined by both parties, and any
additional District fees as established by its Board of Directors. St. Vrain shall act only as the
collection agent for the District's fees and shall remit all collected District fees back to the
District.
NOTE 6 - LONG-TERM OBLIGATIONS
The following is an analysis of the changes in the District's long-term obligations for the year
ended December 31, 2012:
Balance at Balance at
December 31, Net Issues/ Retirements/ December 31, Current
2011 Additions Refunding 2012 Portion
Limited Tax G.O. Bonds Series 2010 $ 537,637 $ - $ 209,651 $ 327,986 $ 327,986
Limited Tax G.O. Bonds Series 2012 - 86,008 - 86,008 86,008
Developer advances
KNS Property Management 33,603 - 33,603
Merlin Maass and Susan Maass 20,000 20,000
Benson Farms LLC 26,000 - 26,000
Developer advance interest 5,415 990 6,405
$ 622,655 $ 86,998 $ 295,659 $ 413,994 $ 413,994
13
EAST 1-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 6 - LONG-TERM OBLIGATIONS (CONTINUED)
The details of the District's long-term obligations are as follows:
Series 2010, $720,000 Limited Tax General Obligation Bonds, Dated November 29, 2010.
The Series 2010 Bonds are due November 28, 2040. Interest of 8.5% is payable annually on
December 15. To the extent interest is not paid when due, interest shall compound annually on
December 15 of each year, commencing December 15, 2010. Any amounts of principal and
interest remaining unpaid on the Bonds on the Maturity Date shall be cancelled and discharged.
The Series 2010 Bonds are being issued to each of the Developers in order to reimburse the
Developers for the Reimbursable Costs, which the District has recognized under the
Reimbursement Agreement.
The Bonds are secured by and payable from the Pledged Revenue consisting of monies derived
by the District from the following sources, net of any collection costs: (1) the Required Mill
Levy, (2) any other legally available monies which the District determines to be treated as
Pledged Revenue. Required Mill Levy means an ad valorem mill levy imposed upon all taxable
property of the District each year in the amount sufficient to pay the principal, premium if any,
and interest on the Bonds as the same become due and payable. The maximum Required Mill
Levy is 20 mills. For collection year 2012, the District levied 20 mills for debt service.
The Series 2010 Bonds are cash flow bonds and, as such, a schedule of debt service payments is
indeterminable and therefore not provided. The District is showing $327,986 of the Series 2010
Bonds as a current obligation since it has budgeted to pay that amount in principal in 2013.
Series 2012, $86,008 General Obligation Limited Tax Improvement Bonds, Dated February
15, 2012. The bonds are payable solely from pledged revenue, which may include general
property taxes. The Bonds are due February 14, 2042, with an interest rate of 10.00%, paid
annually on December 15. To the extent not paid when due, such interest shall compound
annually on each payment date, at the rate born by the Bond. The Bonds are subject to
redemption prior to maturity, at the option of the District, as a whole or in integral multiples of
$1, in any order of maturity and any date, upon payment of par and accrued interest, without
redemption premium.
The Series 2012 Bonds are being issued to each of the Developers in order to reimburse the
Developers for the Reimbursable Costs, which the District has recognized under the
Reimbursement Agreement.
The Series 2012 Bonds are cash flow bonds and, as such, a schedule of debt service payments is
indeterminable and therefore not provided. The District is showing $86,008 of the Series 2012
Bonds as a current obligation since it has budgeted to pay that amount in principal in 2013.
Series 2010 and Series 2012 Bonds were paid in full on June 28, 2013.
14
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 6 - LONG-TERM OBLIGATIONS (CONTINUED)
Debt Authorization
On November 7, 2000, a majority of the qualified electors of the District authorized the issuance
of indebtedness in an amount not to exceed $90,000,000, at an interest rate not to exceed 18%
per annum. At December 31, 2012, the District had authorized but unissued indebtedness from
this election in the following amounts allocated for the following purposes:
Authorized Remaining
November 7, at
2000 Authorization December 31,
Election Used 2012
Sanitary sewer
Operations and maintenance
Refunding financial obligations
$ 30,000,000 $ 1,224,448 $ 28,775,552
30,000,000 - 30,000,000
30,000,000 30,000,000
$ 90,000,000 $ 1,224,448 $ 88,775,552
In the future, the District may issue a portion or all of the remaining authorized but unissued
general obligation debt for purposes of providing public improvements to support development
as it occurs within the District's service area.
NOTE 7 - NET POSITION
The District has net position consisting of two components - restricted and unrestricted.
The restricted component of net position consists of assets that are restricted for use either
externally by creditors, grantors, contributors, or laws and regulations of other governments or
imposed by law through constitutional provisions or enabling legislation. The District had
restricted net position as of December 31, 2012 as follows:
Restricted net position:
Emergency reserve
Debt service
Total restricted net position
15
Governmental
Activities
$ 2,800
48,201
$ 51.001
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 7 - NET POSITION (CONTINUED)
The unrestricted component of net position is the net amount of the assets, deferred outflows of
resources, liabilities and deferred inflows of resources that are not included in the determination
of the restricted component of net position.
The District's unrestricted net position as of December 31, 2012 totaled $(425,556). This deficit
amount was a result of the District being responsible for the payment of bonds issued for public
improvements which were conveyed to other governmental entities and which costs were
removed from the District's financial records.
NOTE 8 - RELATED PARTY
The Developers of the property which constitutes the District are Benson Farms, LLC, Zeek
Partnership, LLLP, Sekich Farms, Inc., Reynolds Cattle Company, Postle Properties III, LLC
and Forestar Real Estate Group. The members of the Board of Directors are employees, owners
or are otherwise associated with the Developer and may have conflicts of interest in dealing with
the District.
NOTE 9 - DEVELOPER ADVANCES
The District has entered into Funding and Reimbursement Agreements with the Developer as
follows:
Advance and Reimbursement Agreement
On November 14, 2008, the District entered into an Advance and Reimbursement Agreement
with Benson Farms, LLC (Benson Farms), Zeek Partnership, LLP (Zeek), Sekich Farms, Inc.
(Sekich), Reynolds Cattle Company (Reynolds), Postle Properties III, LLC (Postle) and Forestar
Real Estate Group (Forestar). The agreement was amended on March 19, 2009 to clarify certain
terms and provisions and to add George S. Reynolds Marital Trust (Reynolds Trust) as a party to
the agreement. Benson Farms, Zeek, Sekich Farms, Reynolds, Postle, Forestar, and Reynolds
Trust are collectively the Developer. Under the terms of this agreement the Developer agreed to
provide advances to the District for the purpose of funding construction, operations and
maintenance costs of the District. The District will reimburse the Developer for the advances
subject to annual appropriation, when and if monies become available to do so plus accrued
interest at the rate of 10% per annum. Principal of and interest on advances shall be due
annually on December 15. To the extent interest on advances is not paid when due, such interest
shall compound annually on December 15 at the interest rate set forth above.
16
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 9 - DEVELOPER ADVANCES (CONTINUED)
On February 15, 2012, the outstanding developer advances, along with the accrued interest, were
converted to General Obligation Limited Tax Improvement Bonds, Series 2012.
NOTE 10 - RISK MANAGEMENT
Except as provided in the Colorado Governmental Immunity Act, the District may be exposed to
various risks of loss related to torts, thefts of, damage to, or destruction of assets; errors or
omissions; injuries to employees, or acts of God.
The District is a member of the Colorado Special Districts Property and Liability Pool (Pool) as
of December 31, 2012. The Pool is an organization created by intergovernmental agreement to
provide property, liability, public officials liability, boiler and machinery and workers
compensation coverage to its members. Settled claims have not exceeded this coverage in any of
the past three fiscal years.
The District pays annual premiums to the Pool for liability, property, public officials liability,
and workers compensation coverage. In the event aggregated losses incurred by the Pool exceed
amounts recoverable from reinsurance contracts and funds accumulated by the Pool, the Pool
may require additional contributions from the Pool members. Any excess fluids which the Pool
determines are not needed for purposes of the Pool may be returned to the members pursuant to a
distribution formula.
NOTE 11 - TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, referred to as the Taxpayer's Bill of Rights
(TABOR) contains tax, spending, revenue and debt limitations which apply to the State of
Colorado and all local governments.
Spending and revenue limits are determined based on the prior year's Fiscal Year Spending
adjusted for allowable increases based upon inflation and local growth. Fiscal Year Spending is
generally defined as expenditures plus reserve increases with certain exceptions. Revenue in
excess of the Fiscal Year Spending limit must be refunded unless the voters approve retention of
such revenue.
17
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
NOTE 11 - TAX, SPENDING AND DEBT LIMITATIONS (CONTINUED)
On May 6, 2008, a majority of the District's electors authorized the District to collect, retain and
spend any and all amounts annually from any revenue sources whatsoever without regard to any
limitations under TABOR.
TABOR requires local governments to establish Emergency Reserves. These reserves must be at
least 3% of Fiscal Year Spending (excluding bonded debt service). Local governments are not
allowed to use the emergency reserves to compensate for economic conditions, revenue
shortfalls, or salary or benefit increases.
The District's management believes it is in compliance with the provisions of TABOR.
However, TABOR is complex and subject to interpretation. Many of the provisions, including
the interpretation of how to calculate Fiscal Year Spending limits may require judicial
interpretation.
NOTE 12 - DISSOLUTION OF THE DISTRICT
On February 15, 2012, the District entered into a Pre -Inclusion and Dissolution Agreement with
St. Vrain Sanitation District. Under the terms of this Agreement, the duties, functions and
liabilities of East I-25 Metropolitan District were transferred to St. Vrain in a manner that
assured the continuation of equivalent service and responsible administration and maintenance of
facilities.
On May 8, 2012, the District held an election and the voters approved a ballot initiative that
ordered the dissolution of the District and on May 23, 2012, the Order Decree Dissolving the
District was signed by the court.
In accordance with Section 32-1-702(3)(c), C.R.S., and the terms of the Pre -Inclusion and
Dissolution Agreement entered into February 12, 2012, between the District and St. Vrain
Sanitation District, the District will continue in existence for the sole purpose of securing
payment in full of the principal and interest of outstanding bonded indebtedness.
This information is an integral part of the accompanying financial statements.
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SUPPLEMENTARY INFORMATION
19
EAST I-25 SANITATION DISTRICT
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2012
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Property taxes
Net investment income
Total revenues
EXPENDITURES
County Treasurer's fees
Bond principal - Series 2010
Bond interest - Series 2010
Contingency
Total expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers from other funds
Total other financing sources
NET CHANGE IN FUND
BALANCES
FUND BALANCES - BEGINNING
OF YEAR
$ 262,228 $ 262,228 $
370 370
262,228 262,598 370
3,933 3,939
210,000 209,651
45,475 45,824
2,820 -
262,228 259,414 2,814
(6)
349
(349)
2,820
FUND BALANCES - END OF YEAR $
3.184 3,184
42,483 42,483
42,483 42,483
45,667 45,667
2,534 2,534
$ 48,201 $ 48,201
20
EAST I-25 SANITATION DISTRICT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECTS FUND
Year Ended December 31, 2012
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Total revenues $
EXPENDITURES
Total expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers to other funds
Total other financing sources
NET CHANGE IN FUND
BALANCES
FUND BALANCES - BEGINNING
OF YEAR
$ $
(1,614) (1,614)
(1,614) (1,614)
(1,614) (1,614)
1,614 1,614.
FUND BALANCES - END OF YEAR
21
EAST 1-25 SANITATION DISTRICT
SUMMARY OF ASSESSED VALUATION, MILL LEVY
AND PROPERTY TAXES COLLECTED
December 31, 2012
Prior
Year Assessed
Valuation
for Current Total Mills Levied Percent
Year Ended Year Property General Debt Total Property Taxes Collected
December 31 Tax Levy Operations Service Levied Collected to Levied
2009 $ 16,294,920 5.000 20.000 $ 407,375 $ 407,311 99.98%
2010 $ 23,402,120 5.000 20.000 $ 585,052 $ 585,053 100.00%
2011 $ 12,628,370 5.000 20.000 $ 315,709 $ 315,709 100.00%
2012 $ 13,111,380 5.000 20.000 $ 327,785 $ 327,785 100.00%
Estimated for
year ending
December 31,
2013 $ 28,068,320 0.000 17.350 $ 486,985
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