HomeMy WebLinkAbout20213274.tiffWELD COUNTY FEDERAL MINERAL LEASE DISTRICT
July 12, 2021
Members present:
Mike Freeman, President
Travis DePorter (Present by phone conference)
Members absent:
Bruce White
Others Present:
Curtis Hall, Public Works
Barb Connolly, Controller
Chris D'Ovidio, Assistant Controller
Jennifer Oftelie, Budget Manager
Donald Warden, Weld County Director of Finance and Administration
CALL TO ORDER:
Mike Freeman, President, called the meeting to order at 3:05 p.m.
APPROVE MINUTES OF APRIL 5, 2021:
By motion duly made and seconded, the minutes of April 5, 2021, were approved
unanimously.
REVIEW STATUS OF WELD COUNTY FOR ROAD PROJECTS: Curtis Hall from Public Works
provided an update detailing the status of the HARP road projects. Public Works is on schedule
and staff believes that they will complete all the projects on the 2021 HARP list in the IGA by
year end.
REVIEW 2020 AUDIT: Chris D'Ovidio, Assistant Controller, stated McGee, Hearne & Paiz,
LLP, Certified Public Accountants, conducted the audit as of December 31, 2020, and no
exceptions were found. By motion duly made and seconded, the audit was approved
unanimously.
There was no other business to come before the Board.
NEXT MEETING DATE: The next meeting date is October 18, 2021, at 3:00 p.m.
ADJOURN: Mike Freeman, President, adjourned the meeting at 3:18 p.m.
The above and foregoing minutes were presented for approval on the 18th day of
October, 2021.
Mike Freeman, President
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2021-3274
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
FINANCIAL STATEMENTS
AND
SUPPLEMENTARY INFORMATION
Years Ended December 31, 2020 and 2019
CONTENTS
Independent Auditor's Report 1
Management's Discussion and Analysis 3
Financial Statements
Balance Sheet (Statement of Net Position) 5
Statement of Revenues, Expenditures and Changes in
Fund Balance (Statement of Activities) 6
Notes to Financial Statements 7
Required Supplementary Information 9
Budgetary Comparison Schedule 10
Note to Required Supplementary Information 11
Independent Auditor's Report on Internal Control Over
Financial Reporting on Compliance and Other Matters 12
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
MHP
CPAs I TRUSTS I CONSULTING
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Weld County Federal Mineral Lease Act District
Greeley, Colorado
Report on the Financial Statements
We have audited the accompanying financial statements of the Weld County Federal Mineral Lease Act
District (the District), a fiduciary fund of Weld County, Colorado, as of and for the years ended December
31, 2020 and 2019, and the related notes to the financial statements, which comprise the District's basic
financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
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 and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the District as of December 31, 2020 and 2019, and the respective changes
in its financial position for the years then ended in accordance with accounting principles generally accepted
in the United States of America.
Page 1
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 3 through 4 and the required supplementary information (Budgetary
information and related note on page 11) be presented to supplement the basic financial statements. Such
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. We have applied
certain limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit
of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide
any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2021,
on our consideration of the District's internal control over financial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the District's internal control
over financial reporting and compliance.
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Fort Collins, Colorado
June 29, 2021
Page 2
WELD COUNTY FEDERAL MINERAL LEASE ACT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
The discussion and analysis of the Weld County Federal Mineral Lease Act District's (the "District")
financial performance provides an overall review of the District's financial activities as of December
31, 2020 and for the period from January 1, 2020 to December 31, 2020. The intent of this
discussion and analysis is to look at the District's financial performance as a whole. Readers should
also review the financial statements and the notes to the financial statements to broaden their
understanding of the District's financial performance.
The Management's Discussion and Analysis (MD&A) is an element of the reporting model adopted
by the Governmental Accounting Standards Board (GASB) in the Statement No. 34, Basic Financial
Statements and Management's Discussion and Analysis for State and Local Governments, issued June
1999. Normally, certain comparative information between the current year and the prior year is
required to be presented in the MD&A.
Financial Highlights
The District was created in accordance with Colorado Revised Statute Sections 30-20-1301 through
1306 for the purpose of receiving monies distributed by the Colorado State Department of Local
Affairs from the Local Government Mineral Impact Fund to mitigate the social and economic impacts
of the areas of unincorporated Weld County (County) impacted by the development, processing, or
energy conversion of fuels and minerals leased under the Federal Mineral Leasing Act. The District
was created August 17, 2011, nunc pro tunc, June 29, 2011. The District's assets exceeded its
liabilities at the close of 2020 by $1,069,936 (fund balance). As of December 31, 2020, except as
expended for administrative expenses as permitted by Colorado Revised Statutes, the fund balance
of the District is restricted for use on areas within the unincorporated areas of the County that are
impacted by the development, processing, or energy conversion of fuels and minerals leased under
the Federal "Mineral Lands Leasing Act" of February 25, 1920, as amended.
The District had total revenues of $852,709 in 2020. The total operating revenues were $849,742
and investment earnings were $2,967 for the tenth year of operation. The total expenses were
$1,503,700.
Using the Basic Financial Statements
The Basic Financial Statements consist of Management's Discussion and Analysis (this section) and
financial statements and notes to those statements. These statements are organized so that the
reader can understand the District as an entire operating entity.
Page 3
Since the District has no differences between the modified -accrual and full -accrual basis of
accounting, the presentation of the District -wide financial statements is essentially the same as the
presentation of funds. Therefore, only one set of financial statements is presented.
The Balance Sheet presents information on the District's assets and liabilities, with the difference
between the two reported as fund balance. Over time, increases or decreases in fund balance may
serve as a useful indicator of whether the financial position of the District is improving or
deteriorating.
The Statement of Revenues, Expenditures, and Changes in Fund Balance presents information
showing how the District's fund balance changed during 2020. This statement tells how general
District services were financed in the short term as well as what remains for future spending.
The District has only one fund, which is a governmental fund. The financial statements also include
notes that explain some of the information in the financial statements.
Financial Analysis of the District as a Whole
Reporting the District's Fund
Fund financial reports provide detailed information about the District's single fund. Federal
mineral lease revenues for 2020 were $849,742. Net non -operating revenues for 2020 were $2,967
from investment earnings.
Budget and Actual Comparisons
For 2020, actual Federal mineral lease revenue was less than budgeted revenue by ($157,291).
Actual expenditures were equal to budgeted expenditures.
The Future of the District
The District has adopted policies for the distribution of grants to mitigate the social and economic
impacts of the areas of unincorporated County impacted by the development, processing, or energy
conversion of fuels and minerals leased under the Federal Mineral Leasing Act. Since 2013, the
District has granted funds to mitigate traffic impacts from oil and gas drilling activities on County
roads and funding a water quality testing program for landowners with oil and gas wells near their
water wells in the County, and plans to continue this in the future.
Request for Information
The financial report is designed to provide information for regulatory reporting to state agencies
and those with an interest in the District's finances. Questions concerning this or any additional
information should be addressed to Don Warden, District Secretary, PO Box 758, Greeley, Colorado
80632.
Page 4
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
BALANCE SHEET (Statement of Net Position)
Assets
Deposits with County Treasurer (Note 2)
Total Assets
Liabilities
Fund Balance, restricted (Note 1)
Total Liabilities and Fund Balance
See Notes to Financial Statements.
2020
$ 1,069.936
1,069,936
1.069,936
$ 1,069,936
2019
$ 1.720.927
1,720,927
1,720,927
$ 1,720,927
Page 5
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (Statement of Activities)
2020 2019
Revenues
Intergovernmental revenue - federal mineral lease revenue $ 849,742 $ 1,535,229
Investment income 2.967 15.527
Total Revenue 852,709 1,550,756
Expenditures
Current:
General Government
Total Expenditures
1.503.700 1,103.700
1,503,700 1,103,700
Net Change in Fund Balance $ (650,991) $ 447,056
See Notes to Financial Statements
Page 6
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 1: Nature of Business and Summary of Significant Accounting Policies
Basis of presentation: The accompanying financial statements of the Weld County Federal Mineral
Lease Act District (the "District") have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) applicable to governmental entities.
Since the District has no differences in accounting between modified -accrual and full -accrual, the
presentation of the District -wide financial statements is essentially the same as the presentation of
funds. Therefore, only one set of financial statements is presented.
Financial reporting entity: In the 2011 Colorado Legislative Session, House Bill 11-1218 was passed
which allowed counties to create a "Federal Mineral Lease Act District" to receive direct distribution
Federal mineral lease payments from the Colorado Department of Local Affairs. The District was
established for the purpose of transferring these payments to the District to streamline the
mitigation of impacts according to the guidance in the Mineral Lands Leasing Act 30 U.S.C. 191 and
provisions of Colorado Revised Statutes.
The District is administered by Weld County, Colorado (the "County"), which provides meeting
space, maintenance of financial records, treasury services, payroll services, and other
administrative services as may be requested by the District Board of Directors and agreed upon by
the County for a small monthly fee.
Basis of accounting: The District uses the modified accrual basis of accounting. Under the modified
accrual basis of accounting, revenues are recognized when susceptible to accrual; that is when they
become both measurable and available. "Measurable" means the amount of the transaction can be
determined and "available" means collectible within the current period or soon enough thereafter
to be used to pay liabilities of the current period. Expenditures are recorded when the related fund
liability is incurred.
Use of estimates: The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Page 7
Deposits with State Treasurer: The District's cash is pooled with the County's cash in an account
managed by the Weld County Treasurer. The account is reported at the fair market value of the cash
and securities underlying the investment pool.
Fund equity: The Governmental Accounting Standards Board (GASB) has issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54). As prescribed by GASB
54, governmental funds report fund balance in classifications based primarily on the extent to which
the District is bound to honor constraints on specific purposes for which amounts in the funds can
be spent.
Restricted fund balance includes amounts that can be spent only for specific purposes stipulated by
constitution, external resource providers, or through enabling legislation. Restrictions may
effectively be changed or lifted only with consent of the resource providers.
Except as expended for administrative expenses as permitted by Colorado Revised Statutes, the
fund balance of the District is restricted for use on areas within the unincorporated areas of the
County that are impacted by the development, processing, or energy conversion of fuels and
minerals leased under the Federal Mineral Lands Leasing Act of February 25, 1920, as amended.
Note 2: Contingencies and Commitments:
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; errors and omissions; injuries; and natural disasters. The District does not have specific
insurance coverage beyond the insurance policies and risk management of Weld County.
In 1992, Colorado voters approved the Taxpayer's Bill of Rights (TABOR). The District believes that
it is exempt from TABOR since it does not have the authority to levy taxes
Note 3: Deposits
Deposits for the District are invested in the pooled cash and investments account managed by the
Weld County Treasurer. State Statutes authorize the Treasurer to invest in obligations of the United
States and certain U.S. agency securities, certain international agency securities, general obligation
and revenue bonds of U.S. local government entities, banker's acceptance of certain banks,
commercial paper, written repurchase agreements collateralized by certain authorized securities,
certain money market funds, and guaranteed investment contracts. The County has no provisions
in its investment policy that would further limit investment choices. Detailed information on the
County Treasurer's pooled cash and investments is available from the County Treasurer.
Page 8
REQUIRED SUPPLEMENTARY INFORMATION
The District's required supplementary information includes the budgetary
comparison schedule as described in the accompanying Note to Required
Supplementary Information following the schedule.
WELD COUNTY
Page 9
FEDERAL MINERAL LEASE ACT DISTRICT
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
2020
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
Revenues
Intergovernmental Revenue
Federal Mineral Lease Revenue $ 1,000,000 $ 1,000,000 $ 849,742 $ (150,258)
Investment income 10.000 10.000 2,967 (7,033)
Total Revenue $ 1,010,000 $ 1,010,000 $ 852,709 $ (157,291)
Expenditures
General government
Net Change in Fund Balance
Revenues
Intergovernmental Revenue
Federal Mineral Lease Revenue
Investment income
Total Revenue
Expenditures
General government
Net Change in Fund Balance
$ 1,503.700 $ 1,503.700 $ 1,503.700 $ 0
$ (493,700) $ (493,700) $ (650,991) $ (157,291)
2019
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 1,100,000 $ 1,100,000 $ 1,535,229 $ 435,229
10.000 10.000 15,527 5.527
$ 1,110,000 $ 1,110,000 $ 1,550,756 $ 440,756
$ 1,103.700 $ 1.103.700 $ 1,103.700 $ 0
$ 6,300 $ 6,300 $ 447,056 $ 440,756
See Note to Required Supplementary Information
Page 10
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
Budget
The budgetary comparison schedule presents a comparison of the legally adopted budget with
actual data. The District prepares its budget on a cash basis, and the revenues and expenditures
presented in the aforementioned schedule are on the modified accrual basis. Any differences in
revenues and expenditures as a result of the difference in accounting basis are considered
immaterial. Appropriations lapse at fiscal year end. All budget amendments are approved by the
Board of Directors and are presented within the final budget figures.
Colorado State Statutes require the preparation of an annual budget which provides documentation
that all sources and uses of District resources are properly planned, budgeted, and approved. The
budget, upon adoption, is the legal document which places restrictions and limitation on the
purposes and amounts for which District monies may be expended.
Financial Reporting on Compliance and Other Matters - Page 1
Page 11
MHP
CPAs I TRUSTS I CONSULTING
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Board of Directors
Weld County Federal Mineral Lease Act District
Greeley, Colorado
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the Weld County Federal
Mineral Lease Act District (the District) as of and for the year ended December 31, 2020, and the related
notes to the financial statements, which comprise the District's basic financial statements, and have issued
our report thereon dated June 29, 2021.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District's internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of the District's internal control.
Accordingly, we do not express an opinion on the effectiveness of the District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's
financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Page 12
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the District's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
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Fort Collins, Colorado
June 29, 2021
Page 13
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