HomeMy WebLinkAbout20111904.tiff EAST 1.25 SANITATION DISTRICT
Weld County, Colorado
FINANCIAL STATEMENTS
December 31, 2010
2011-1904
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TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 1
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Assets l
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 18
Debt Service Fund- Schedule of Revenues,Expenditures and Changes in
Fund Balances - Budget and Actual 19
Capital Projects Fund- Schedule of Revenues,Expenditures and Changes in
Fund Balances - Budget and Actual 20
Summary of Assessed Valuation, Mill Levy and Property
Taxes Collected 21
EMIWAGNER
BARNES, Pc
Certified Public Accountants&Business Consultants
Independent Auditors'Report
To the Board of Directors
East I-25 Sanitation District
Weld County,Colorado
We have audited the accompanying financial statements of the governmental activities and each major
fund of East I-25 Sanitation District, as of and for the year ended December 31,2010, 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 misstatements. 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.
The District has not presented management's discussion and analysis that the Governmental Accounting
Standards Board had determined is necessary to supplement,although not required to be part of,the basic
financial statements.
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, 2010, 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.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the District's basic financial statements. The accompanying financial information
listed as supplementary information in the table of contents is presented for purposes of additional
analysis and is not a required part of the financial statements of the District. Such information has been
subjected to the auditing procedures applied in the audit of the governmental activities and each major
fund financial statements and, in our opinion, is fairly stated in all material respects in relation to the
financial statements of each of the respective governmental activities and each major fund, taken as a
whole.
Lakewood,Colorado
July 20,2011 Zia', tu/ k.
I
Wagner Barnes, PC
735 South Xenon Ct.,Suite 200• Lakewood,Colorado 80228
303.202..1800 Office•303,237.0155 Fax •www.wbcpaco.com
BASIC FINANCIAL STATEMENTS
EAST I-25 SANITATION DISTRICT
STATEMENT OF NET ASSETS
December 31,2010
Governmental
Activities
ASSETS
Cash $ 61,544
Cash-Restricted 664,175
Receivable- County Treasurer 2,478
Property taxes receivable 315,709
Capital assets,net 347,125
Bond issue costs, net 25,000
Total assets 1,416,031
LIABILITIES
Accounts payable 224,371
Accrued interest payable 5,365
Retainage payable 19,686
Deferred property tax revenue 315,709
Noncurrent liabilities
Due within one year 185,000
Due in more than one year 535,000
Total liabilities 1,285,131
NET ASSETS
Restricted for:
Emergency reserve 4,600
Unrestricted 126,300
Total net assets $ 130,900
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 31,2010
Total
Debt Capital Governmental
General Service Projects Funds
ASSETS
Cash and investments $ 61,544 $ - $ - $ 61,544
Restricted cash and investments 4,600 - 659,575 664,175
Receivable-County Treasurer 2,478 - 2,478
Property taxes receivable 63,142 252,567 - 315,709
TOTAL ASSETS $ 131,764 $ 252,567 $ 659,575 $ 1,043,906
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable $ 26,390 $ - $ 197,981 $ 224,371
Retainage payable - 19,686 19,686
Deferred property tax revenue 63,142 252,567 - 315,709
Total liabilities 89,532 252,567 217,667 559,766
FUND BALANCES
Reserved for:
Emergency reserve 4,600 - - 4,600
Capital expenditures - - 441,908 441,908
Designated for subsequent year's
expenditures 37,632 - - 37,632
Total fund balances 42,232 - 441,908 484,140
TOTAL LIABILITIES AND
FUND BALANCES $ 131,764 $ 252,567 $ 659,575
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and,
therefore,are not recorded in the funds. 347,125
Other long-term assets are not available to pay for current period expenditures and,
therefore,are not recorded in the funds.
Bond issue cost,net 25,000
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 (720,000)
Accrued interest payable-Limited Tax G.O. Bonds (5,365)
Net assets of governmental activities $ 130,900
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 31,2010
Total
Debt Capital Governmental
General Service Projects Funds
REVENUES
Property taxes $ 117,010 $ 468,043 $ - $ 585,053
Specific ownership taxes 36,234 - - 36,234
Total revenues 153,244 468,043 - 621,287
EXPENDITURES
Current
Accounting 25,258 - - 25,258
Audit 4,100 - - 4,100
Treasurer's fees 1,755 7,021 - 8,776
Insurance and bonds 255 - - 255
Dues and subscriptions 1,225 - - 1,225
Legal services 32,217 - - 32,217
District management 12,926 - - 12,926
Miscellaneous 57 - - 57
Banking fees 190 - - 190
Capital expenditures
Capital outlay - - 347,125 347,125
Debt service
Bond issue cost 25,000 - 25,000
Bond interest - 13,904 - 13,904
Bond principal - 226,539 - 226,539
Total expenditures 102,983 247,464 347,125 697,572
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES 50,261 220,579 (347,125) (76,285)
OTHER FINANCING SOURCES(USES)
Repayment of Developer advance-Principal - (192,080) - (192,080)
Repayment of Developer advance-Interest - (37,305) - (37,305)
Bond proceeds - - 720,000 720,000
Transfers to other funds (77,839) - - (77,839)
Transfers from other funds - 8,806 69,033 77,839
Total other financing sources(uses) (77,839) (220,579) 789,033 490,615
NET CHANGE IN FUND BALANCES (27,578) - 441,908 414,330
FUND BALANCES-BEGINNING OF YEAR 69,810 - - 69,810
FUND BALANCES-END OF YEAR $ 42.232 $ - $ 441,908 $ 484,140
ii ,
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, 2010
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - Total governmental funds $ 414,330
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 347,125
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 issuance expenses 25,000
Bond proceeds (720,000)
Current year bond principal payment 226,539
Repayment of Developer advance principal 192,080
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 18,343
Accrued interest on bonds payable - Change in liability (4,471)
Changes in net assets of governmental activities $ 498,946
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 31,2010
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Property taxes $ 117,010 $ 117,010 $ -
Specific ownership taxes 40,950 36,234 (4,716)
Total revenues 157,960 153,244 (4,716)
EXPENDITURES
Accounting 30,000 25,258 4,742
Audit 4,100 4,100 -
County Treasurer's fees 1,755 1,755 -
Insurance and bonds 255 255 -
Dues and subscriptions 1,225 1,225 -
Bond issue cost 25,000 25,000 -
Legal services 70,000 32,217 37.783
District management 12,926 12,926 -
Miscellaneous 100 57 43
Banking fees 190 190 -
Contingency 83,575 - 83,575
Total expenditures 229,126 102,983 126,143
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES (71,166) 50,261 121,427
OTHER FINANCING SOURCES (USES)
Developer advances 72,266 - (72,266)
Transfers to other funds - (77,839) (77,839)
Total other financing sources 72,266 (77,839) (150,105)
NET CHANGE IN FUND BALANCES 1,100 (27,578) (28,678)
FUND BALANCES-
BEGINNING OF YEAR 3,700 69.810 66,110
FUND BALANCES - END OF YEAR $ 4,800 $ 42,232 $ 37,432
These financial statements should he read only in connection with
the accompanying notes to financial statements.
6
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2010
NOTE 1 -DEFINITION OF REPORTING ENTITY
East 1-25 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, 2010
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, hen unrestricted resources as they are needed.
8
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2010
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 31,2010
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
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are legally segregated or are not subject to future appropriation. Designations of
unreserved fund balances indicate management's intention for future utilization of such funds
and are subject to change by management.
The District considers all unreserved fund balances to be "reserves" for future operations or
capital replacement as defined within Article X, Section 20 of the Constitution of the State of
Colorado.
10
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2010
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reserved Fund Balance
Emergency Reserves have been provided for as required by Article X, Section 20 of the
Constitution of the State of Colorado.
The reserved fund balance in the Capital Projects Fund is reserved exclusively for capital
expenditures.
NOTE 3 - CASH
Cash and investments as of December 31, 2010 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash $ 61,544
Cash -Restricted 664,175
Total cash $ 725,719
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, 2010, the District's cash deposits had a bank balance of $738,720 and a
carrying balance of$725,719.
11
EAST 1-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 4 -INTERFUND TRANSFER
The transfer of$8,806 from the General Fund to the Debt Service Fund was done for the purpose
of providing funds for debt service payments, and the transfer of$69,033 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.
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 31,2010 follows:
Balance at Balance at
December 31, Transfers and December 31,
2009 Additions Retirements 2010
Capital assets, not being depreciated
Construction in process
Sewer line $ - $ 347,125 $ - $ 347,125
Total capital assets,
not being depreciated - 347,125 - 347,125
Governmental activities -
Capital assets, net $ - $ 347,125 $ - $ 347,125
12
EAST 1-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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, 2010:
Balance at Balance at
December 31, Net Issues/ Retirements/ December 31, Current
2009 Additions Refunding 2010 Portion
Limited Tax G.O. Bonds Series 2008
No. R-1 $ 40,738 $ - $ 40,738 $ - S -
No, R-2 55,372 - 55,372 - -
No. R-3 27,752 - 27,752 - -
No. R-5 8,976 - 8,976 - -
No. R-6 38,050 - 38,050 - -
No. R-7 37,104 - 37,104 - -
No. R-8 18,547 - 18,547 -Developer advances 192,080 - 192,080 - -
Developeradvanceinterest 18,343 18,962 37,305 - -
Limited Tax G.O. Bonds Series 2010 •
720,000 - 720,000 185,000
$ 436,962 $ 738,962 $ 455,924 $ 720,000 $ 185,000
Note: No. R-4 has been cancelled and replaced with No. R-7 and No. R-8.
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.
13
EAST 1-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 7- LONG-TERM OBLIGATIONS (CONTINUED)
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 $185,000 of the Series 2010
Bonds as current Bonds Payable since it has budgeted to pay that amount in principal in 2011.
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, 2010, 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 2010
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
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.
14
EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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, 2010 as follows:
Governmental
Activities
Restricted net assets:
Emergency reserve $ 4,600
Total restricted net assets $ 4600
The District's unrestricted net assets as of December 31, 2010 totalled $126,300.
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.
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 (Forestay). 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
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EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2010
NOTE 10 - DEVELOPER ADVANCES (CONTINUED)
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.
During 2010, the District repaid the total outstanding balance of$229,385 to Developer, which
included $37,305 of previously accrued 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 is a member of the Colorado Special Districts Property and Liability Pool (Pool) as
of December 31, 2010. 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 funds which the Pool
determines arc 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.
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EAST I-25 SANITATION DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31,2010
NOTE 12 -TAX,SPENDING AND DEBT LIMITATIONS (CONTINUED)
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.
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 31,2010
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Property taxes $ 468,040 $ 468.043 5 3
Total revenues 468,040 468,043 3
EXPENDITURES
County Treasurer's fees 7,021 7,021 -
Bond interest- Series 2010 14,000 13,904 96
Bond principal- Series 2008 226,539 226,539 -
Contingency 4,979 - 4,979
Total expenditures 252,539 247.464 5,075
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 215.501 220,579 5,078
OTHER FINANCING SOURCES (USES)
Repayment of Developer advance-Principal (180,000) (192,080) (12,080)
Repayment of Developer advance- Interest (36,000) (37,305) (1,305)
Transfers from other funds - 8,806 8,806
Total other financing sources (216,000) (220,579) (4,579)
NET CHANGE IN FUND
BALANCES (499) - 499
FUND BALANCES - BEGINNING
OF YEAR 499 - (499)
FUND BALANCES - END OF YEAR $ - $ - $ -
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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 31,2010
Budget Variance with
Amounts Final Budget
Original Actual Positive
and Final Amounts (Negative)
REVENUES
Total revenues $ - $ - S -
EXPENDITURES
Engineering 350,000 85,993 264,007
Easement 64,268 64,268 -
Capital outlay 196,864 196,864 -
Contingency 1,388,868 - 1,388,868
Total expenditures 2,000,000 347,125 1,652,875
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES (2,000,000) (347,125) 1,652,875
OTHER FINANCING SOURCES(USES)
Bond proceeds 2,000,000 720,000 (1,280,000)
Transfers from other funds - 69,033 69,033
Total other financing sources 2,000,000 789,033 (1,210,967)
NET CHANGE IN FUND
BALANCES - 441,908 441,908
FUND BALANCES - BEGINNING
OF YEAR - - -
FUND BALANCES - END OF YEAR S - $ 441,908 S 441,908
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EAST I-25 SANITATION DISTRICT
SUMMARY OF ASSESSED VALUATION, MILL LEVY
AND PROPERTY TAXES COLLECTED
December 31,2010
Prior
Year Assessed
Valuation Total Mills Levied
for Current 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%
Estimated for
year ending
December 31,
2011 $ 12,628,370 5.000 20.000 $ 315,709
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