HomeMy WebLinkAbout20122002.tiff WELD COUNTY
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2011 JUT. 25 P 2= 13
RECEIVED
EAST I.25 SANITATION DISTRICT
Weld County,Colorado
FINANCIAL STATEMENTS
December 31,2011
2012-2002
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT I
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Assets
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
NVT) WAGNER
w� BARNES, Pc
Certified Public Accountants and Business Consultants
INDEPENDENT AUDITORS' 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, 2011, which collectively
comprise the District's basic financial statements as listed in the table of contents. These financial statements are
the responsibility of the District's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation.We believe that our audit provides a reasonable basis for our 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 1-25 Sanitation District, as of
December 31, 2011, and the respective changes in financial position thereof, and the budgetary comparison for
the general fund for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
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.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the District's financial statements as a whole. 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 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 financial statements. The information
has been subjected to the auditing procedures applied in the audit of the financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the financial statements or to the 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 financial statements as a
whole.
Wa.raA. 4a4..w.., Pe
Lakewood, Colorado
July 19, 2012
Wagner Barnes, PC
735 South Xenon Ct.,Suite 200•Lakewood,Colorado 80228
303.202.1800 Office•303.237.0155 Far•www.wbcpaco.com
BASIC FINANCIAL STATEMENTS
EAST I-25 SANITATION DISTRICT
STATEMENT OF NET ASSETS
December 31,2011
Governmental
Activities
ASSETS
Cash $ 35,547
Cash -Restricted 8,040
Receivable- County Treasurer 1,906
Property taxes receivable 327,785
Bond issue costs, net 22,387
Total assets 395,665
LIABILITIES
Accounts payable 16,535
Accrued interest payable 5,415
Deferred property tax revenue 327,785
Noncurrent liabilities
Due within one year 210,000
Due in more than one year 407,240
Total liabilities 966,975
NET ASSETS
Restricted for:
Emergency reserve 2,700
Debt service 2,533
Unrestricted (576,543)
Total net assets $ (571,310)
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 31,2011
Total
Debt Capital Governmental
General Service Projects Funds
ASSETS
Cash $ 35,547 $ - $ - $ 35,547
Restricted cash 2,700 2,533 2,807 8,040
Receivable- County Treasurer 1,906 - - 1,906
Property taxes receivable 65,557 262,228 - 327,785
TOTAL ASSETS $ 105,710 $ 264,761 $ 2,807 $ 373,278
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable $ 15,343 $ - $ 1,192 $ 16,535
Deferred property tax revenue 65,557 262,228 - 327,785
Total liabilities 80,900 262,228 1,192 344,320
FUND BALANCES
Restricted for:
Emergency reserve 2,700 - - 2,700
Debt service - 2,533 - 2,533
Assigned to:
Capital projects - - 1,615 1,615
Unassigned:
General government 22,110 - - 22,110
Total fund balances 24,810 2,533 1,615 28,958
TOTAL LIABILITIES AND
FUND BALANCES $ 105,710 $ 264,761 $ 2,807
Amounts reported for governmental activities in the statement of net assets are different because:
Bond issue cost, net 22,387
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.
Accrued interest on Developer advance (5,415)
Developer advance payable (79,603)
Bonds payable (537,637)
Net assets of governmental activities $ (571,310)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
EAST I-25 SANITATION DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended December 31,2011
Total
Debt Capital Governmental
General Service Projects Funds
REVENUES
Property taxes $ 63,142 $ 252,567 $ - $ 315,709
Specific ownership taxes 22,713 - - 22,713
Other income 1,000 - - 1,000
Total revenues 86,855 252,567 - 339,422
EXPENDITURES
Current
Accounting 20,656 - - 20,656
Audit 4,210 - - 4,210
Treasurer's fees 947 3,788 - 4,735
Insurance and bonds 2,092 - - 2,092
Dues and subscriptions 1,474 - - 1,474
Legal services 19,609 - - 19,609
District management 5,096 - - 5,096
Miscellaneous 193 - - 193
Capital expenditures
Capital outlay - - 569,896 569,896
Debt service
Bond interest - 63,883 - 63,883
Bond principal - 182,363 - 182,363
Total expenditures 54,277 250,034 569,896 874,207
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 32,578 2,533 (569,896) (534,785)
OTHER FINANCING SOURCES (USES)
Developer advance - - 79,603 79,603
Transfers to other funds (50,000) - - (50,000)
Transfers from other funds - - 50,000 50,000
Total other financing sources(uses) (50,000) - 129,603 79,603
NET CHANGE IN FUND BALANCES (17,422) 2,533 (440,293) (455,182)
FUND BALANCES-BEGINNING OF YEAR 42,232 - 441,908 484,140
FUND BALANCES-END OF YEAR $ 24,810 $ 2,533 $ 1,615 $ 28,958
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, 2011
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances -Total governmental funds $ (455,182)
Governmental funds report capital outlays as expenditures. In the
statement of activities, capital outlay is not reported as an
expenditure. However,the statement of activities will report as
depreciation expense the allocation of the cost of any depreciable
assets over the estimated useful life of the asset. During the current
period, this is the net amount of capital outlay:
Capital outlay 569,896
Conveyance of capital assets to other governments (917,021)
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 assets. The net effect of these differences in the
treatment of long-term debt and related items is as follows:
Current year bond principal payment 182,363
Current year amortization of bond issue costs (2,613)
Current year Developer advance (79,603)
Some expenses reported in the statement of activities do not require
the use of current financial resources and, therefore, are not reported
as expenditures in governmental funds:
Accrued interest on Developer advance - Change in liability (5,415)
Accrued interest on bonds payable - Change in liability 5,365
Changes in net assets of governmental activities $ (702,210)
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, 2011
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Property taxes $ 63,142 $ 63,142 $ -
Specific ownership taxes 22,100 22,713 613
Other income - 1,000 1,000
Total revenues 85,242 86,855 1,613
EXPENDITURES
Accounting 25,000 20,656 4,344
Audit 5,000 4,210 790
County Treasurer's fees 947 947 -
Insurance and bonds 500 2,092 (1,592)
Dues and subscriptions 1,225 1,474 (249)
Legal services 35,000 19,609 15,391
District management 32,000 5,096 26,904
Miscellaneous 100 193 (93)
Contingency 12,228 - 12,228
Total expenditures 112,000 54,277 57,723
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (26,758) 32,578 59,336
OTHER FINANCING SOURCES (USES)
Transfers to other funds (100,000) (50,000) 50,000
Total other financing sources (100,000) (50,000) 50,000
NET CHANGE IN FUND BALANCES (126,758) (17,422) 109,336
FUND BALANCES -
BEGINNING OF YEAR 137,079 42,232 (94,847)
FUND BALANCES -END OF YEAR $ 10,321 $ 24,810 $ 14,489
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 31,2011
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 assets 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 assets reports all financial and capital reserves of the District. The
difference between the assets and liabilities of the District is reported as net assets.
7
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
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.
When both restricted and unrestricted resources are available for use, it is the District's policy to
use restricted resources first,then unrestricted resources as they are needed.
8
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
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.
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 as deferred revenue in the year
they are levied and measurable. The deferred property tax revenue is recorded as revenue in the
year it is available or collected.
9
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads,
bridges, sidewalks, and similar items) are reported in the applicable governmental activities
columns in the government-wide financial statements. Such assets are recorded at historical cost
or estimated historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair value at the date of donation.
Capital assets which are anticipated to be conveyed to other governmental entities are recorded
as construction in process and not included in the calculation of invested in capital assets, net of
related debt component of the District's net asset.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materiality extend the life of the asset are not capitalized. Improvements are capitalized and
depreciated over the remaining useful lives of the related fixed assets, as applicable.
Amortization
Bond Issue Cost and 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. Bond issuance costs are
reported as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognized bond premiums and
discounts, as well as bond issuance costs, 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.
Issuance costs, whether or not withheld for the actual debt proceeds received, are reported as
debt service expenditures.
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:
10
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• 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.
• 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.
NOTE 3 - CASH
Cash and investments as of December 31, 2011 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash $ 35,547
Cash-Restricted 8.040
Total cash $ 43,187
11
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
NOTE 3 -CASH (CONTINUED)
Deposits with Financial Institutions
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, 2011, the District's cash deposits had a bank balance of$43,587 and a carrying
balance of$43,587.
NOTE 4 - INTERFUND TRANSFER
The transfer of $50,000 from the General Fund to Capital Projects Fund was done for the
purpose of providing funds for the capital project costs.
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.
12
EAST 1-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011
NOTE 6-CAPITAL ASSETS
An analysis of the changes in capital assets, all of each are considered to be construction in
process for the year ended December 31,2011 follows:
Balance at Balance at
December 31, Transfers and December 31,
2010 Additions Retirements 2011
Capital assets, not being depreciated
Construction in process
Sewer line $ 347,125 $569,896 $ 917,021 $ -
Total capital assets,
not being depreciated 347,125 569,896 917,021 -
Governmental activities-
Capital assets, net $ 347,125 $569,896 $ 917,021 $ -
During 2011, the capital assets constructed by the District were conveyed to St. Vrain Sanitation
District. The costs of all capital assets transferred to other governmental entities were removed
from the District's financial records.
NOTE 7-LONG-TERM OBLIGATIONS
The following is an analysis of the changes in the District's long-term obligations for the year
ended December 31, 2011:
Balance at Balance at
December 31, Net Issues/ Retirements/ December 31, Current
2010 Additions Refunding 2011 Portion
Limited Tax G.O. Bonds Series 2010 $ 720,000 $ - $ 182,363 $ 537,637 $ 210,000
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 - 5,415 -
$ 720,000 $ 85,018 $ 182,363 $ 622,655 $ 210,000
13
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
NOTE 7 - LONG-TERM OBLIGATIONS (CONTINUED)
The details of the District's long-term obligations are as follows:
Series 2010, S720,000 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 2011, 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 $210,000 of the Series 2010
Bonds as a current obligation since it has budgeted to pay that amount in principal in 2012.
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, 2011, 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 2011
Sanitary sewer $ 30,000,000 $ 1,224,448 $ 28,775,552
Operations and maintenance 30,000,000 - 30,000,000
Refunding financial obligations 30,000,000 - 30,000,000
$ 90,000,000 $ 1,224,448 $ 88,775,552
14
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011
NOTE 7 -LONG-TERM OBLIGATIONS (CONTINUED)
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 8 -NET ASSETS
The District has net assets consisting of two components - restricted and unrestricted.
Restricted assets include net assets that are restricted for use either externally imposed 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 assets as
of December 31, 2011 as follows:
Governmental
Activities
Restricted net assets:
Emergency reserve $ 2,700
Debt service 2,533
Total restricted net assets
The District's unrestricted net assets as of December 31, 2011 totaled $(576,543). 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 9 - 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.
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EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
NOTE 10- 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.
For the year ended December 31, 2011, the District recognized a total of$79,603 in Developer
Advances for capital improvements. In addition, the District has an obligation to the Developer
for$5,415 of accrued but unpaid interest.
NOTE 11 -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 was a member of the Colorado Special Districts Property and Liability Pool (Pool)
as of December 31, 2011. 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.
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EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2011
NOTE 11 -RISK MANAGEMENT (CONTINUED)
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 funds which the Pool
determines are not needed for purposes of the Pool may be returned to the members pursuant to a
distribution formula.
NOTE 12 -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.
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.
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EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011
NOTE 13 -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
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EAST I-25 SANITATION DISTRICT
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2011
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Property taxes $ 252,567 $ 252,567 $ -
Total revenues 252,567 252,567 -
EXPENDITURES
County Treasurer's fees 3,789 3,788 1
Bond interest- Series 2010 61,200 63,883 (2,683)
Bond principal - Series 2010 185,000 182,363 2,637
Contingency 2,578 - 2,578
Total expenditures 252,567 250,034 2,533
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES - 2,533 2,533
NET CHANGE IN FUND
BALANCES - 2,533 2,533
FUND BALANCES - BEGINNING
OF YEAR - - -
FUND BALANCES - END OF YEAR $ - $ 2,533 $ 2,533
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EAST I-25 SANITATION DISTRICT
SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-BUDGET AND ACTUAL
CAPITAL PROJECTS FUND
Year Ended December 31,2011
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Total revenues $ - $ - $ -
EXPENDITURES
Engineering 10,000 15,911 (5,911)
Capital outlay 700,000 553,985 146,015
Total expenditures 710,000 569,896 140,104
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (710,000) (569,896) 140,104
OTHER FINANCING SOURCES (USES)
Developer advance 66,000 79,603 13,603
Transfers from other funds 100,000 50,000 (50,000)
Total other financing sources 166,000 129,603 (36,397)
NET CHANGE IN FUND
BALANCES (544,000) (440,293) 103,707
FUND BALANCES - BEGINNING
OF YEAR 544,000 441,908 (102,092)
FUND BALANCES- END OF YEAR $ - $ 1,615 $ 1,615
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EAST I-25 SANITATION DISTRICT
SUMMARY OF ASSESSED VALUATION,MILL LEVY
AND PROPERTY TAXES COLLECTED
December 31,2011
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%
Estimated for
year ending
December 31,
2012 $ 13,111,380 5.000 20.000 $ 327,785
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