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HomeMy WebLinkAbout20011209.tiff NO/ Northwest Parkway Project A Public Highway Authority Val) C I: al555 Eldorado Boulevard, Suite 130 .. „ Broomfield, Colorado 80021 Phone: 303-466-0567 • Fax: 303-404-3049 Lilts V:\Y —3 I:1 o; 011 I Ai;k... t Email: nwp@northwestparkway.org n www.northwestparkway.org RECEIVED May 1, 2001 Board of Commissioners Weld County 915 10th St. Greeley, CO 80632 To Whom It May Concern: As required under state law, and pursuant to motion by the Board of Directors, please find a copy of the 2000 Northwest Parkway Public Highway Authority audit for your records. Sincerely, '77 ' leta-LA-Th.sj-Thic2 Jill Lamoureux Office Manager Cc: Icenogle,Norton, Smith, Blieszner& Miller, P.C. BCOo_ 2001-1209209 5/7/°r NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY BROOMFIELD, COLORADO FINANCIAL STATEMENTS December 31, 2000 and 1999 a a TABLE OF CONTENTS Page REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3 FINANCIAL STATEMENTS BALANCE SHEETS 5 STATEMENTS OF OPERATIONS AND CHANGES IN ACCUMULATED DEFICIT 6 STATEMENTS OF CASH FLOWS 7 NOTES TO FINANCIAL STATEMENTS 8 a' a. Accountants and Grant Thornton T Management Consultants Grant Thornton LLP The US Member Firm of Grant Thornton International REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ^ Board of Directors Northwest Parkway Public Highway Authority We have audited the accompanying balance sheets of the Northwest Parkway Public Highway Authority as of December 31, 2000 and 1999, and the related statements of operations and changes in accumulated deficit and cash flows for the year ended December 31, 2000 and from inception (June 2, 1999) through December 31, 1999. These financial statements are the responsibility of the _ Authority's management. Our responsibility is to•express an opinion 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 audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Northwest Parkway Public Highway Authority as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the year ended December 31, 2000 and from inception (June 2, 1999) through December 31, 1999, in conformity with accounting principles generally accepted in the United States of America. .. Denver,Colorado Match 1,2001 Suite 1800 1600 Broadway Denver,Co 80202 Tel:303 861-5555 Fax:303 831-4646 FINANCIAL STATEMENTS .. .. a. NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY BALANCE SHEETS December 31, 2000 and 1999 ASSETS 2000 1999 CURRENT ASSETS Cash and cash equivalents and investments $ 261,402 $ 756,720 Reimbursable expenditures under program assistance contract 611,325 262,912 Other current assets 4,073 4,731 Total current assets 876,800 1,024,363 PROPERTY AND EQUIPMENT aFurniture and fixtures 17,232 8,237 Computers 19,896 3,955 Automobiles 30,064 30,064 Accumulated depreciation (14,071) (3,971) Contract in progress 430,077 255,241 Total property and equipment 483,198 293,526 TOTAL ASSETS $ 1,359,998 $ 1,317,889 LIABILITIES AND EQUITY LIABILITIES Accounts payable $ 385,250 $ 171,404 ^ Payroll liabilities 3,052 4,580 Total liabilities 388,302 175,984 EQUITY Contributed capital 1,901,700 1,401,700 Accumulated deficit (930,004) (259,795) Total fund equity 971,696 1,141,905 TOTAL LIABILITIES AND EQUITY $ 1,359,998 $ 1,317,889 The accompanying notes are an integral part of these financial statements. a 5 NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY STATEMENTS OF OPERATIONS AND CHANGES IN ACCUMULATED DEFICIT For the Year Ended December 31, 2000 and From Inception (June 2, 1999) Through December 31, 1999 2000 1999 OPERATING REVENUES Membership dues $ - $ 25,000 Total operating revenues - 25,000 OPERATING EXPENSES Salaries and benefits 325,986 120,093 Professional fees 126,441 117,034 Public information 76,756 32,992 General and administrative expenses 153,062 15,354 Depreciation 10,100 3,971 Total operating expenses 692,345 289,444 a Operating loss (692,345) (264,444) NONOPERATING REVENUES Interest income 22,136 3,698 ^ Other miscellaneous income - 951 Total nonoperating revenues 22,136 4,649 NET LOSS (670,209) (259,795) ACCUMULATED DEFICIT, BEGINNING OF PERIOD (259,795) - ACCUMULATED DEFICIT, END OF PERIOD $ (930,004) $ (259,795) ^ ^ The accompanying notes are an integral part of these financial statements. ^ 6 NORTHWEST PUBLIC HIGHWAY AUTHORITY STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2000 and From Inception(June 2, 1999) Through December 31, 1999 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES Operating loss $ (692,345) $ (264,444) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 10,100 3,971 Changes in assets and liabilities: Increase in reimbursable expenditures under program assistance contract (348,413) (262,912) (Increase) decrease in other current assets 658 (4,731) Increase in accounts payable 189,443 76,685 Increase (decrease)in payroll liabilities (1,528) 4,580 Net cash used by operating activities (842,085) (446,851) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of property and equipment (175,369) (146,389) Interest income 22,136 3,698 Capital contributions 500,000 1,345,311 Net cash provided by capital and related financing activities 346,767 1,202,620 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Miscellaneous income (expense) - 951 Net cash provided by noncapital financing activities - 951 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (495,318) 756,720 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 756,720 - CASH AND CASH EQUIVALENTS, END OF PERIOD $ 261,402 $ 756,720 NONCASH INVESTING AND FINANCING ACTIVITIES The Authority incurred a liability in conjunction with the purchase of $ 24,903 $ 94,719 property and equipment. The Authority accepted the assignment of all of the Northwest Parkway Project Nonprofit Corporation assets on July 6, 1999. Assignment included $40,629 in property and equipment and $15,760 in contracts in progress. The accompanying notes are an integral part of these financial statements. •• 7 a NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS December 31,2000 and 1999 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a The Northwest Parkway Public Highway Authority (the Authority) was formed by intergovernmental agreement on June 2, 1999, among the City of Broomfield; the County of Weld, and the City of Lafayette, (the Governmental Unit(s)). The purpose of the agreement was to finance, construct, operate and/or maintain the Northwest Parkway. It is the Authority's intent to serve as an enterprise, as such term is defined in the Colorado Constitution, Article X, sec. 20(2)(d), and in furtherance thereof, to serve as a government-owned business, engaged in the business venture of providing roadway transportation in exchange for the payment of toll fees. Reporting Entity a The Authority is a separate governmental entity. Each member appoints a representative to the Authority Board of Directors. The State of Colorado may join in the Authority, pursuant to the Colorado Constitution. In the event the State of Colorado joins in the Authority, the State shall have one Director on the Board. The Authority 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 bask 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 Authority is not finanrially accountable fox any other organization, nor is the Authority a component unit of any other primary governmental entity. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Enterprise funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. In addition, enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the Board has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. The Authority applies all applicable GASB pronouncements, as well as Financial Accounting Standards Board (FASB) pronouncements,issued on or before November 30, 1989 unless those pronouncements conflict with or contradict GASB pronouncements. The Authority has elected not to apply FASB pronouncements issued after November 30, 1989. 8 a NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) December 31,2000 and 1999 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) a Fixed Assets Purchased property and equipment are recorded at historical cost. Donated property is recorded at estimated market value at the date of transfer. Furniture and fixtures, computers and automobiles are depreciated using the straight-line method over the estimated useful life of five to seven years. Capitalization of Expenditures The Authority expenses items charged to salaries and benefits;general and administrative;professional services; and debt related expenditures. Other expenditures related to land acquisition and construction are capitalised as incurred. Equity The contributed capital represents assigned assets in the form of cash and equipment received from the Northwest Parkway Project Nonprofit Corporation and cash payments from Interlocken Ltd. and Flatiron Holdings,LLC. Statement of Cash Flows The financial statements include a statement of cash flows showing cash and cash equivalents provided and used by operating, investing, and financing activities. The Authority considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. a Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America involves the use of management's estimates. These estimates are based upon management's best judgments, after considering past and current events and assumptions about a future events. Actual results may differ from estimates. NOTE 2-CASH DEPOSITS AND INVESTMENTS Cash Deposits The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit cash in eligible public depositories. State regulators determine eligibility. Amounts on deposit in excess of federal insurance levels must be collateralized by eligible collateral as determined by the PDPA. PDPA allows the financial institution to create a single collateral pool for all public funds held. The pool is to be maintained by another institution or held in trust for all the uninsured a public deposits as a group. The market value of the collateral must be at least equal to 100% of the uninsured deposits. Deposits are categorized by type of credit risk: (1) Insured or collateralized with securities held by the Authority or by its agent in the Authority's name. (2) Collateralized with securities held by the pledging financial institution's trust department or agent in the Authority's name. (3) Uncollateralized, including any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Authority's name. 9 a NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) December 31,2000 and 1999 NOTE 2-CASH DEPOSITS AND INVESTMENTS (CONTINUED) a At December 31,the Authority's cash deposits are categorized as follows: 2000 1999 Bank Carrying Bank Carrying aBalance Balance Balance Balance Insured deposits—Category 1 $ 100,000 $ 94,809 $ 100,000 $ 100,000 Deposits collateralized in single institution pools—Category 2 11.219 - 873.157 656 720 ^ Total $ 111219 3 _ 94_809 $ 973)57 3 756,720 Investments Colorado Statutes specify investments instruments meeting defined rating and risk criteria in which a. local government entities may invest. The allowed investments include participation in investments pools. The Authority participates in the Colorado Government Liquid Assets Trust (COLOTRUST). This investment is not categorized because the investment is not evidenced by securities that exist in physical or book entry form. At December 31, 2000, the authority's investment was $166,593 with a ^ corresponding carrying and fair value balance of$166,593. These investments are included in cash and cash equivalents. NOTE 3-PROPERTY AND EQUIPMENT ^ A Summary of changes in property and equipment at December 31,2000 is as follows: Balance at Balance at January 1, December 31, 2000 Additions Deletions 2000 Furniture and fixtures $ 8,237 $ 8,995 $ - $ 17,232 Accumulated depreciation (569) (1,623) - (2,192) Computers 3,955 15,941 - 19,896 Accumulated depreciation (396) (3,477) - (3,873) Automobiles 30,064 - - 30,064 Accumulated depreciation (3,006) (5,000) - (8,006) a Contracts in process 255,241 174,836 - 430,077 Total $ 293,526 $ 189,672 $ - $ 483,198 a 10 NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) December 31,2000 and 1999 NOTE 3-PROPERTY AND EQUIPMENT (CONTINUED) ^ A summary of changes in property and equipment at December 31, 1999 is as follows: Balance at Balance at June 2, December 31, 1999 Additions Deletions 1999 Furniture and fixtures $ - $ 8,237 $ - $ 8,237 Accumulated depreciation - (569) - (569) Computers - 3,955 - 3,955 Accumulated depreciation - (396) - (396) Automobiles - 30,064 - 30,064 ^ Accumulated depreciation - (3,006) - (3,006) Contracts in process - 255,241 - 255,241 Total $ - $ 293,526 $ - $ 293,526 NOTE 4- CONTRIBUTED CAPITAL The Authority has accepted as of June 2, 1999, the assignment of all of the Northwest Parkway Project Nonprofit Corporation's assets and rights and delegation of all the Corporation's duties and obligations in the amount of $976,700. These assets were valued at the estimated market value at the date of transfer and have been recorded on the Authority's books as cash, furniture and fixtures, computers, and automobiles. The Authority also received $425,000 cash payment directly from Interlocken Ltd. for the year ended December 31, 1999, and $500,000 cash payment directly from Flatiron Holdings, LLC for the year ended December 31, 2000. The Interlocken Ltd. and Flatiron Holdings,LLC funds are subject to repayment by the Authority in the event financing is obtained and there are sufficient proceeds and/or revenues to permit repayment. Any repayments under these provisions will be treated as distributions. NOTE 5—COMMITMENTS ^ The Washington Group International, Inc. (f.k.a. Morrison Knudsen Corporation) — Program Assistance Contract The Northwest Parkway Nonprofit Corporation originally contracted with the Washington Group International, Inc. (WGI) on June 11, 1999. The Authority accepted assignment of the Program Assistance Contract with WGI on November 1, 1999 from Northwest Parkway Nonprofit Corporation. The contract provides plans for the financing, design, acquisition, construction, a 11 NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) December 31,2000 and 1999 NOTE 5-COMMITMENTS (CONTINUED) a The Washington Group International, Inc. (f.k.a. Morrison Knudsen Corporation) — Program Assistance Contract (continued) operation, and maintenance of the Northwest Parkway, a limited-access toll highway. In the event that financing is obtained, a success fee of$7,750,000 will be paid, including a time premium factor based on actual"paid-by"date schedule. If successful project financing is not accomplished, the Authority is not obligated to pay compensation in any form. If the Corporation or any successor ultimately obtains successful project financing within two calendar years after the expiration of the term of the agreement, then WGI is to be reimbursed the actual costs for expenditures related to performance of the agreement As part of this agreement, WGI will reimburse the Authority for costs relating to the following studies: traffic and revenue,environmental assessment, feasibility and land use,in the amount of $1,825,000. In addition, the Authority has awarded preferred contractor status to WGI for the design/build contract On September 26, 2000, the Authority and WGI entered into the "second amendment" to the ,. Program Assistance Contract. This amendment provided for additional costs, in the amount of $546,135, to be reimbursed by WGI. These costs will be subject to the time premium factor previously discussed. On December 19, 2000, the Authority and WGI entered into the "third amendment" to the Program Assistance Contract whereby WGI agreed to reimburse an additional $710,000 in support costs. Support costs under this amendment are not subject to the time premium factor previously discussed above. The Authority has entered into separate agreements with other companies to perform the services previously discussed. Under these separate agreements the Authority has expended $1,791,097 and $849,011 as of December 31, 2000 and 1999,respectively of which WGI has reimbursed $1,179,772 and $586,099 and owes the Authority $611,325 and $262,912 at December 31, 2000 and 1999, respectively. In the event that, for any reason during the term hereof,WGI determines that the essential purposes of this Agreement are frustrated by events beyond the control of WGI, or in the event that circumstances unforeseen by either of the parties at execution of this Agreement render these essential purposes impossible to attain, then WGI shall give written notice of its intent to terminate this Agreement to the Authority, its successors, delegees or assigns. Upon the expiration of 90 days after such notice, WGI shall be entitled to terminate this Agreement In the event,WGI elects termination,WGI shall not be entitled to reimbursement of costs or the success fee. 12 NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) December 31, 2000 and 1999 NOTE 5-COMMITMENTS (CONTINUED) a Leases The Authority is currently obligated under a lease agreement for its office facilities. The lease requires monthly payments of$6,485 increasing 5% per year through December 31, 2004. In addition to this amount, the Authority is required to pay a portion of the lessor's operating costs,which approximates $2,415 per month. In addition to this lease the Authority has two open-ended leases for a copier and a postal machine total monthly payment approximate $225. Following is a schedule of minimum lease payments on these leases as of December 31,2000. Year Ending December 31, 2001 $ 109,504 2002 113,395 2003 117,481 2004 121.771 Total $ 462151 NOTE 6-TABOR In November 1992, the voters of Colorado approved Amendment 1, commonly known as the Taxpayer's Bill of Rights (TABOR), which adds a new Section 20 to Article X of the Colorado Constitution. TABOR contains tax, spending, revenue and debt limitations, which apply to the State of Colorado and all local governments. Enterprises, defined as government-owned businesses authorized to issue revenue bonds and receiving less than 10% of annual revenue in grants from all state and local governments combined,are excluded from the provisions of TABOR. During the January to May 1996 session, the Colorado General Assembly enacted S.B. 96-173, which was signed into law by the Governor on March 18, 1996. The General Assembly declared its intention that public highway authorities be permitted to qualify as enterprises under Section 20 of Article X of the Colorado Constitution, therefore,TABOR is not applicable to the Authority. NOTE 7-RETIREMENT PLANS The Authority has a single employer defined contribution plan in which all employees are eligible to participate upon their first day of employment. The plan is in lieu of Social Security and the Authority contributes 16.5% of each participant's compensation to the plan. Participants are required to contribute 6.5% of their compensation. Participants vest immediately 100% in all contributions. The Authority contributed $36,168 and $14,699 to this plan for the year ended December 31, 2000 and the period ended December 31, 1999, respectively. The Authority's total payroll for the year ended December 31, 2000 and the period ended December 31, 1999 was $244,725 and $89,083, respectively. Compensation of employees covered by this plan for the year ended December 31, 2000 and the period ended December 31, 1999 was $219,200 and $89,083, respectively. a 13 a NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) a December 31, 2000 and 1999 NOTE 8-REIMBURSEMENT AGREEMENTS The Authority has entered into reimbursement agreements with the following entities, Interlocken Ltd., Interlocken Consolidated Metropolitan District (ICMD), Flatiron Holdings, LLC and the City of Broomfield. The Authority will reimburse the following costs at such time as the Authority has funds available, which is contingent upon the Authority obtaining financing for the development of Northwest Parkway (Parkway). Interlocken Ltd. incurred costs with respect to the planning, financing design and/or construction of Interlocken Loop in the amount of$1,995,904. ICMD incurred costs with respect to planning, financing, design and construction of Interlocken Loop in the amount of $5,205,813. If the Authority obtains financing for the development of the Parkway both of these a commitments will bear interest at the rate of 6% per annum from the date of the agreements until they are paid in full. These entities will be reimbursed at such time as the Authority has funds available,which is contingent upon the Authority obtaining financing for the project. The Authority will reimburse the City of Broomfield for the portion of the City expenditures,which a benefit or are incorporated into the Parkway. The City of Broomfield has incurred $4,041,374 in initial expenditures and $48,670,323 in secondary expenditures. The determination of whether any of these amounts can be reimbursed from the initial funding shall be solely the determination of the Authority. For the portion of the initial expenditures which is determined to be right of way expenditures, the Authority is obligated to pay the City "at a closing mutually agreeable to the parties". If reimbursement of the unpaid expenditures is not made from the initial funding, the amounts shall be reimbursed at such time the Authority has funds available from financings or revenues,if any. The reimbursable amounts mentioned above will be recorded as a capital asset and liability when reimbursement by the Authority is assured. NOTE 9—BUDGET The Authority's Board of Directors held a public hearing in December 1999 to approve the budget and appropriate the funds for the period January 1, 2000 to December 31, 2000. The Authority's Board of Directors can modify the budget and appropriations resolutions upon completion of notification and publication requirements. The appropriation is at the total fund expenditures level and lapses at the yen-end. The budget adopted for the Authority is not consistent with accounting principles generally accepted in the United States of America (GAAP), as capital outlay is budgeted as an expenditure and contributions from members are budgeted as revenue. These departures are necessary due to State budget requirements. ^ 14 • ..._..._.. .._. a NORTHWEST PARKWAY PUBLIC HIGHWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) December 31,2000 and 1999 NOTE 9—BUDGET (CONTINUED) a Encumbrance accounting (open purchase order, contracts in process and other commitments for the expenditures of fund in future periods) is currently not used by the Authority for contracts. The Authority is shown as an enterprise fund. This essentially requires the accounting treatment to be the same as a business whereby revenue is recognized as income when a sale occurs and is earned. Expenses are recognized when incurred. Depreciation is recorded on capitalized equipment. For budgetary purposes, contributions from members are shown as revenues. Capital acquisitions and other uses of funds are reflected as expenditures. The following summarizes net income on budgetary basis to net income on GAAP basis for the year ended December 31,2000: Variance Amended Favorable Budget Actual (Unfavorable) a Revenues $ 2,216,135 $ 22,136 $ (2,193,999) Expenditures (2,811,135) (882,017) 1,929,118 Reconciliation to net loss (GAAP Basis) For the year ended December 31, 2000 Depreciation of property and equipment (10,100) Capital outlay expenditures 199.772 Net loss (GAAP Basis) (670 209) The following summarizes net income on budgetary basis to net income on GAAP basis for the year ended December 31, 1999: Variance Amended Favorable Budget Actual (Unfavorable) Revenues $ 2,450,000 $ 1,431,349 $ (1,018,651) Expenditures (1,295,000) (540,714) 754,286 Reconciliation to net loss (GAAP Basis) For the year ended December 31, 1999 Depreciation of property and equipment (3,971) Contributed capital (1,401,700) Capital improvements 255.241 Net loss (GAAP Basis) S____(259,79.5) a 15 Hello