HomeMy WebLinkAbout20200021.tiff PIONEER METROPOLITAN DISTRICT NO. 3
Weld County, Colorado
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31, 2018
RECEIVED
JAN 0 3 2020
WELD COUNTY
COMMISSIONERS
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PIONEER METROPOLITAN DISTRICT NO. 3
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2018
INDEPENDENT AUDITOR'S REPORT I
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 1
STATEMENT OF ACTIVITIES 2
FUND FINANCIAL STATEMENTS
BALANCE SHEET-GOVERNMENTAL FUNDS 3
STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN
FUND BALANCES-GOVERNMENTAL FUNDS 4
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF THE
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 5
GENERAL FUND-STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE- BUDGET AND ACTUAL 6
NOTES TO BASIC FINANCIAL STATEMENTS 7
SUPPLEMENTARY INFORMATION
DEBT SERVICE FUND-SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL 26
CAPITAL PROJECTS FUND-SCHEDULE OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE- BUDGET AND
ACTUAL 27
CONTINUING DISCLOSURE (UNAUDITED)
HISTORY OF THE PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND
5 ASSESSED VALUATION 29
HISTORICAL ASSESSED AND ACTUAL VALUATION OF OIL AND GAS
PROPERTIES IN WELD COUNTY 30
TOTAL TAXES LEVIED AND COLLECTED IN THE PIONEER
METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5 30
2018 TAXPAYERS AND ASSESSED VALUATION WITHIN THE PIONEER
METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5 31
ASSESSED VALUATION OF CLASSES OF PROPERTY IN THE PIONEER
METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5 32
SIMMONS &WHEELER, P.C. Certified Public Accountants
304 Inverness Way South,Suite 490,Englewood,CO 80112 (303)689-0833
Board of Directors
Pioneer Metropolitan District No. 3
Weld County,Colorado
Independent Auditors'Report
We have audited the accompanying financial statements of the governmental activities and each major fund
of the Pioneer Metropolitan District No.3,as of and for the year ended December 31,2018,and the related
notes to the financial statements, which collectively comprise the District's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America;this includes the
design,implementation,and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement,whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of 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 District'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 District's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting principles used and the reasonableness of significant accounting estimates made by
management,as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the Pioneer Metropolitan
District No.3 as of December 31,2018,and the respective changes in financial position and the respective
budgetary comparison for the General Fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Other-Matters
Required Supplementary Information
Management has omitted the management's discussion and analysis that accounting principles generally
accepted in the United States of America require to be presented to supplement the basic financial
statements. Such missing information, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. Our opinion on the basic financial statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise Pioneer Metropolitan District No.3's basic financial statements. The supplementary information
as listed in the table of contents is presented for purposes of additional analysis and is not a required part
of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information is fairly stated,in all material respects, in relation to the basic financial statements as a whole.
The continuing disclosure, as listed in the table of contents, has not been subjected to the auditing
procedures applied in the audit of the basic financial statements and, accordingly, we do not express an
opinion or provide any assurance on them.
•
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Englewood,CO
October 21,2019
II
BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF NET POSITION
DECEMBER 31, 2018
Governmental
Activities
ASSETS
Cash and Investments $ 666,668
Cash and Investments- Restricted 41,020
Taxes Receivable- County Treasurer 79
Property Taxes Receivable 14,021
Receivable from Pioneer Regional 10,005
Receivable from Resource 6,849
Due from District No. 2 244
Due from District No. 4 307
Due from District No. 5 6,943
Due from Developer 9,520
Prepaid Expense 6,257
Capital Assets 6,042,037
Total Assets 6,803,950
LIABILITIES
Accounts Payable 102,934
Retainage Payable 11,648
Accrued Interest Payable 24,500
Noncurrent Liabilities:
Due in More Than One Year 4,522,000
Total Liabilities 4,661,082
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue 14,021
Total Deferred Inflows of Resources 14,021
NET POSITION
Net Investment in Capital Assets 3,887,037
Restricted for:
Emergency Reserves 10,200
Debt Service 12,146
Capital Projects 408,674
Unrestricted (2,189,210)
Total Net Position $ 2,128,847
See accompanying Notes to Basic Financial Statements.
(1)
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2018
Net Revenues
(Expenses) and
Changes in
Program Revenues Net Position
Charges Operating Capital
for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
FUNCTIONS/PROGRAMS
Primary Government:
Governmental Activities:
General Government $ 211,845 $ - $ 312,395 $ - $ 100,550
Interest and Related Costs on
Long-Term Debt 339,978 - 1,041,317 701,339
Total Governmental Activities $ 551,823 $ - $ 1,353,712 $ - 801,889
GENERAL REVENUES
Property Tax 13,588
Specific Ownership Tax 1,054
Other Revenue 406
Net Investment Income 30,115
Total General Revenues 45,163
CHANGE IN NET POSITION 847,052
Net Position-Beginning of Year 1,281,795
NET POSITION -END OF YEAR $ 2,128,847
See accompanying Notes to Basic Financial Statements.
(2)
PIONEER METROPOLITAN DISTRICT NO. 3
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2018
Total
Debt Capital Governmental
General Service Projects Funds
ASSETS
Cash and Investments $ 164,366 $ - $ 502,302 $ 666,668
Cash and Investments-Restricted 10,200 30,820 - 41,020
Receivable From County Treasurer 18 61 79
Property Taxes Receivable 3,236 10,785 - 14,021
Receivable from Pioneer Regional 10,005 - - 10,005
Receivable from Resources 6,849 - - 6,849
Due from District No.2 56 188 - 244
Due from District No.4 71 236 307
Due from District No.5 1,602 5,341 - 6,943
Due from Developer - - 9,520 9,520
Prepaid Expense 6,207 - 50 6,257
Total Assets $ 202,610 $ 47,431 $ 511,872 $ 761,913
LIABILITIES,DEFERRED INFLOWS OF
RESOURCES,AND FUND BALANCES
LIABILITIES
Accounts Payable 11,384 - 91,550 102,934
Retainage Payable - - 11,648 11,648
Total Liabilities 11,384 - 103,198 114,582
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue 3,236 10,785 - 14,021
Total Deferred Inflows of Resources 3,236 10,785 - 14,021
FUND BALANCES
Nonspendable for:
Prepaid Expenses 6,207 - 50 6,257
Restricted for:
Emergency Reserves 10,200 - - 10,200
Debt Service - 36,646 - 36,646
Assigned for:
Capital Projects - 408,624 408,624
Unassigned 171,583 - - 171,583
Total Fund Balances 187,990 36,646 408,674 633,310
TOTAL LIABILITIES,DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 202,610 $ 47,431 $ 511,872
Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets are recorded as assets on the statement of
net position,but are recorded as expenditures in the funds.
Capital Assets $ 6,042,037
Long-term liabilities,including bonds payable,are not due
and payable in the current period and,therefore,are not
reported in the funds.
Bonds Payable (4,522,000)
Accrued Interest on Bonds Payable (24,500)
Net Position of Governmental Activities $ 2,128,847
See accompanying Notes to Basic Financial Statements.
(3)
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2018
Total
Debt Capital Governmental
General Service Projects Funds
REVENUES
Property Taxes $ 3,136 $ 10,452 $ - $ 13,588
Specific Ownership Tax 243 811 - 1,054
Net Investment Income 9,056 9,274 11,785 30,115
Other Income 94 312 - 406
Transfer from Pioneer Metro No.2 10,178 33,927 - 44,105
Transfer from Pioneer Metro No.4 12,788 42,625 - 55,413
Transfer from Pioneer Metro No.5 289,429 964,765 - 1,254,194
Total Revenues 324,924 1,062,166 11,785 1,398,875
EXPENDITURES
Current:
Accounting 45,583 - 17,105 62,688
Audit 8,400 - - 8,400
County Treasurer's Fee 47 157 - 204
Dues and Licenses 1,560 - - 1,560
Elections 481 - - 481
Insurance and Dues 10,205 - - 10,205
Legal Services 41,262 - 82,766 124,028
Miscellaneous 129 - 1,776 1,905
Pioneer Regional-Insurance 700 - - 700
Pioneer Regional-Legal 781 - - 781
Resource-Insurance 700 - - 700
Resource-Legal 193 - - 193
Debt Service:
Bond Principal-Series 2016 - 714,000 - 714,000
Bond Interest-Series 2016 - 340,340 - 340,340
Paying Agent Fees - 3,500 - 3,500
Capital Projects:
Capital Outlay - - 563,204 563,204
Engineering - - 20,030 20,030
Repay Developer Advances - - 8,332 8,332
Water Conservation Program - - 122,016 122,016
Huwa Detention Pond - - 76,835 76,835
Wilson Detention Pond - - 663,000 663,000
Total Expenditures 110,041 1,057,997 1,555,064 2,723,102
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 214,883 4,169 (1,543,279) (1,324,227)
OTHER FINANCING SOURCES(USES)
Transfers to Other Funds (400,000) - (8) (400,008)
Transfers from Other Funds - 8 400,000 400,008
Total Other Financing Sources(Uses) (400,000) 8 399,992 -
EXCESS(DEFICIENCY)OF REVENUES
AND OTHER FINANCING SOURCES
OVER(UNDER)EXPENDITURES
AND OTHER FINANCING SOURCES (185,117) 4,177 (1,143,287) (1,324,227)
Fund Balances-Beginning of Year 373,107 32,469 1,551,961 1,957,537
FUND BALANCES-END OF YEAR $ 187,990 $ 36,646 $ 408,674 $ 633,310
See accompanying Notes to Basic Financial Statements.
(4)
PIONEER METROPOLITAN DISTRICT NO. 3
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2018
Net Change in Fund Balances-Governmental Funds $ (1,324,227)
Amounts reported for governmental activities in the statement of activities
are different because:
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 asset over the estimated useful life of the asset.
Capital Outlay 1,445,085
Long-term debt(e.g., bonds, Developer advances) provides current financial
resources to governmental funds,while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net position. Also, governmental funds
report the effect of premiums, discounts, and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the statement of activities.
The net effect of these differences in the treatment of long-term debt and related
items is as follows:
Bond Principal Payment 714,000
Repay Developer Advances 8,332
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 Bonds-Change in Liability 3,862
Change in Net Position of Governmental Activities $ 847,052
See accompanying Notes to Basic Financial Statements.
(5)
PIONEER METROPOLITAN DISTRICT NO. 3
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Property Taxes $ 3,135 $ 3,136 $ 1
Specific Ownership Tax 190 243 53
Net Investment Income 1,320 9,056 7,736
Other Income - 94 94
Carriage Fees 5,000 - (5,000)
Transfer from Pioneer Metro No. 2 10,019 10,178 159
Transfer from Pioneer Metro No.4 12,594 12,788 194
Transfer from Pioneer Metro No. 5 285,097 289,429 4,332
Total Revenues 317,355 324,924 7,569
EXPENDITURES
Current:
Accounting 50,000 45,583 4,417
Audit 8,000 8,400 (400)
Contingency 22,853 - 22,853
County Treasurer's Fees 47 47 -
Dues and Licenses 1,700 1,560 140
Election 2,000 481 1,519
Insurance 14,000 10,205 3,795
Legal Services 60,000 41,262 18,738
Miscellaneous 100 129 (29)
Pond Maintenance 75,000 - 75,000
Pioneer Regional-Accounting 1,000 - 1,000
Pioneer Regional-Insurance 1,300 700 600
Pioneer Regional-Legal 1,000 781 219
Resource-Accounting 1,000 - 1,000
Resource-Insurance 1,000 700 300
Resource-Legal 1,000 193 807
Total Expenditures 240,000 110,041 129,959
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 77,355 214,883 137,528
OTHER FINANCING SOURCES(USES)
Transfers to Other Fund (400,000) (400,000) -
Total Other Financing Sources(Uses) (400,000) (400,000) -
NET CHANGE IN FUND BALANCES (322,645) (185,117) 137,528
Fund Balances-Beginning of Year 368,143 373,107 4,964
FUND BALANCES-END OF YEAR $ 45,498 $ 187,990 $ 142,492
•
See accompanying Notes to Basic Financial Statements.
(6)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 1 DEFINITION OF REPORTING ENTITY
Pioneer Metropolitan District No. 3 (District), a quasi-municipal corporation and political
subdivision of the State of Colorado, was organized by court order and recorded with the
Weld County Clerk and Recorder on August 29, 2006, and is governed pursuant to
provisions of the Colorado Special District Act (Title 32, Article 1, Colorado Revised
Statutes). The District's service area is located in Weld County, Colorado. The District was
organized to provide financing for the design, acquisition, construction, installation, and
maintenance of essential public-purpose facilities, such as water, sanitation, storm drainage,
streets, safety protection, parks and recreation, transportation, television relay and
translation, mosquito control, and limited fire protection.
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 organization, nor is the District a
component unit of any other primary governmental entity.
The District has no employees and all operations and administrative functions are
contracted.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The more significant accounting policies of the District are described as follows:
Government-wide and Fund Financial Statements
The government-wide financial statements include the statement of net position and the
statement of activities. These financial statements include all of the activities of the District.
The effect of interfund activity has been removed from these statements. Governmental
activities are normally supported by taxes and intergovernmental revenues.
The statement of net position reports all financial and capital resources of the District. The
difference between the sum of assets and deferred outflows and the sum of liabilities and
deferred inflows is reported as net position.
(7)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Government-wide and Fund Financial Statements (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 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.
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
major sources of revenue susceptible to accrual are District property taxes, specific
ownership taxes, and interest. All other revenue items are considered to be measurable and
available only when cash is received by the District. The District determined that Developer
advances are not considered as revenue susceptible to accrual. Expenditures, other than
interest on long-term obligations, are recorded when the liability is incurred or the long-term
obligation is due.
The District reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial
resources of 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 debt of the governmental funds.
The Capital Projects Fund is used to account for financial resources to be used for the
acquisition and construction of capital equipment and facilities.
(8)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
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 of each year to approve the budget and appropriate the funds for the
ensuing year. The appropriation is at the total fund expenditures and other financing uses
level and lapses at year-end. The District's Board of Directors 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
investment earnings. Except when required by trust or other agreements, all cash is
deposited to and disbursed from a single bank account. Cash in excess of immediate
operating requirements is pooled for deposit and investment flexibility. Investment earnings
are allocated periodically to the participating funds based upon each fund's average equity
balance in the total cash.
Property Taxes
Property taxes are levied by the District's Board of Directors. The levy is based on assessed
valuations determined by the County Assessor generally as of January 1 of each year. The
levy is normally set by December 15 by certification to the County Commissioners to put the
tax lien on the individual properties as of January 1 of the following year. The County
Treasurer collects the determined taxes during the ensuing calendar year. The taxes are
payable by April or if in equal installments, at the taxpayer's election, in February and June.
Delinquent taxpayers are notified in August and generally sales of the tax liens on
delinquent properties are held in November or December. The County Treasurer remits the
taxes collected monthly to the District.
Property taxes, net of estimated uncollectible taxes, are recorded initially as deferred inflows
of resources in the year they are levied and measurable. The unearned property tax
revenues are recorded as revenue in the year they are available or collected.
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 column in the government-wide financial statements. Capital assets are defined by
the District as assets with an initial, individual cost of more than $5,000. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at acquisition value at the date of donation.
Capital assets which are anticipated to be conveyed to other governmental entities are
recorded as construction in progress, and are not included in the calculation of net
investment in capital assets.
(9)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capital Assets (Continued)
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially 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.
Water Rights
The cost of water rights includes acquisition cost, legal and engineering costs related to the
development and augmentation of those rights. Since the rights have a perpetual life, they
are not amortized. All other costs, including costs incurred for the protection of those rights,
are expensed.
Deferred Inflows of Resources
In addition to liabilities, the statement of net position reports a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period and so will
not be recognized as an inflow of resources (revenue) until that time. The District has one
item that qualifies for reporting in this category. Accordingly, the item, deferred property tax
revenue, is deferred and recognized as an inflow of resources in the period that the amount
becomes available.
E uit
Net Position
For government-wide presentation purposes when both restricted and unrestricted
resources are available for use, it is the District's practice to use restricted resources first,
then unrestricted resources as they are needed.
Fund Balance
Fund balance for governmental funds should be reported in classifications that comprise a
hierarchy based on the extent to which the government is bound to honor constraints on the
specific purposes for which spending can occur. Governmental funds report up to five
classifications of fund balance: nonspendable, restricted, committed, assigned, and
unassigned.
Because circumstances differ among governments, not every government or every
governmental fund will present all of these components. The following classifications
describe the relative strength of the spending constraints:
Nonspendable Fund Balance — The portion of fund balance that cannot be spent
because it is either not in spendable form (such as prepaid amounts or inventory) or
legally or contractually required to be maintained intact.
Restricted Fund Balance—The portion of fund balance that is constrained to being used
for a specific purpose by external parties (such as bondholders), constitutional
provisions, or enabling legislation.
(10)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equity(Continued)
Fund Balance (Continued)
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 practice to use the most restrictive classification first.
NOTE 3 CASH AND INVESTMENTS
Cash and investments as of December 31, 2018, are classified in the accompanying
financial statements as follows:
Statement of Net Position:
Cash and Investments $ 666,668
Cash and Investments- Restricted 41,020
Total Cash and Investments $ 707,688
Cash and investments as of December 31, 2018, consist of the following:
Deposits with Financial Institutions $ 56,078
Investments 651,610
Total Cash and Investments $ 707,688
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.
(11)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Deposits with Financial Institutions (Continued)
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, 2018, the District's cash deposits had a bank balance of $56,078 and a
carrying balance of$56,078.
Investments
The District's policy is to follow state statutes regarding investments.
The District generally limits its concentration of investments to those noted with an asterisk
(*) below, which are believed to have minimal credit risk, minimal interest rate risk and no
foreign currency risk. Additionally, the District is not subject to concentration risk or
investment custodial risk disclosure requirements for investments that are in the possession
of another party.
Colorado revised statutes limit investment maturities to five years or less unless formally
approved by the Board of Directors. Such actions are generally associated with a debt
service reserve or sinking fund requirements.
Colorado statutes specify investment instruments meeting defined rating and risk criteria in
which local governments may invest which include:
Obligations of the United States, certain U.S. government agency securities and
securities of the World Bank
General obligation and revenue bonds of U.S. local government entities
Certain certificates of participation
Certain securities lending agreements
Bankers' acceptances of certain banks
Commercial paper
Written repurchase agreements and certain reverse repurchase agreements
collateralized by certain authorized securities
Certain money market funds
Guaranteed investment contracts
* Local government investment pools
As of December 31, 2018, the District had the following investments:
Investment Maturity Amount
Colorado Surplus Asset Fund Trust Weighted average
(CSAFE) under 60 days $ 651,610
(12)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
CSAFE
The District invested in the Colorado Surplus Asset Fund Trust (CSAFE) (the Trust), which
is an investment vehicle established by state statute for local government entities to pool
surplus assets. The State Securities Commissioner administers and enforces all State
statutes governing the Trust. The Trust is similar to a money market fund, with each share
valued at $1.00. CSAFE may invest in U.S. Treasury securities, repurchase agreements
collateralized by U.S. Treasury securities, certain money market funds and highest rated
commercial paper. A designated custodial bank serves as custodian for CSAFE's portfolio
pursuant to a custodian agreement. The custodian acts as safekeeping agent for CSAFE's
investment portfolio and provides services as the depository in connection with direct
investments and withdrawals. The custodian's internal records segregate investments
owned by CSAFE. CSAFE is rated AAAm by Standard & Poor's. CSAFE records its
investments at amortized cost and the District records its investments in CSAFE at net asset
value as determined by amortized cost. There are no unfunded commitments, the
redemption frequency is daily and there is no redemption notice period.
NOTE 4 CAPITAL ASSETS
The following is an analysis of the changes in capital assets for the year ended
December 31, 2018:
Balance at Balance at
December 31, December 31,
2017 Increases Decreases 2018
Capital Assets, not Being
Depreciated:
Water Rights $ 2,836,541 $ - $ - $ 2,836,541
Construction in Progress 1,760,411 1,445,085 - 3,205,496
Governmental Activities
Capital Assets $ 4,596,952 $ 1,445,085 $ - $ 6,042,037
The balance shown above consists of certain water rights in the Larimer Fox Hill Aquifer and
the Arapahoe Aquifer. It also includes expenses related to Lost Creek Well and project
management related acquisition of water rights.
(13)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 5 LONG-TERM OBLIGATIONS
The following is an analysis of the changes in the District's long-term obligations for the year
ended December 31, 2018.
Balance- Balance- Due
December31, December31, Within
2017 Additions Reductions 2018 One Year
General Obligation Bonds:
Series 2016 $ 5,236,000 $ - $ 714,000 $ 4,522,000 $ -
Developer Advance 8,332 - 8,332 - -
$ 5,244,332 $ - $ 722,332 $ 4,522,000 $ -
The details of the District's long-term obligations are as follows:
$6,414,000 Limited Tax General Obligation Refunding and Improvement Bonds, Series
2016 (the Series 2016 Bonds), were issued on September 30, 2016. The proceeds from the
sale of the Series 2016 Bonds were used to finance the costs of certain water related public
improvements, currently refund the District's outstanding Limited Tax General Obligation
Bonds, Taxable Series 2012, and pay the costs of issuance of the Series 2016 Bonds.
The Series 2016 Bonds bear interest at 6.50% payable semi-annually on June 1 and
December 1, beginning on December 1, 2016. The Series 2016 Bonds are structured as
cash flow bonds, meaning that there are no scheduled payments of principal prior to the
final maturity date. The Series 2016 Bonds mature on December 1, 2046. The flow of funds
directs the Trustee to credit the interest account with the amounts necessary to fund current
interest for the Bond Year and additional pledged revenues are deposited to the
Redemption Account. On October 15th of each year the Trustee will determine how many
bonds can be redeemed (in integral multiples of$1,000) on December 1 and any additional
funds on hand will be transferred to the Interest Account to go towards the funding of the
following year's interest payments. Any accrued unpaid interest on the Series 2016 Bonds
will compound semi-annually on June 1 and December 1. The Series 2016 Bonds are
secured by and payable solely from and to the extent of Pledged Revenue consisting of
monies derived by the District, net of any costs of collection, from: (i) the District's Required
Mill Levy; (ii) all Capital Pledge Agreement Revenues; and (iii) Specific Ownership Tax
which is collected as a result of the imposition of the District's Required Mill Levy.
The Indenture provides a Required Mill Levy be imposed upon all taxable property in the
District in the amount of 50 mills, subject to adjustment for changes in the method of
calculating assessed valuation after January 1, 2006. The Capital Pledge Agreements
require Pioneer Metropolitan Districts No. 2, 4, and 5 to also impose 50 mills, subject to
adjustment for changes in the method of calculating assessed valuation after January 1,
2006, upon all taxable property in the respective Districts.
(14)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 5 LONG-TERM OBLIGATIONS (CONTINUED)
The Series 2016 Bonds are subject to optional redemption prior to maturity, at the option of
the District, as a whole or in integral multiples of$1,000, on December 1, 2021, and on any
date thereafter, upon payment of par and accrued interest, and a redemption premium equal
to a percentage of the principal amount so redeemed, as follows.
Redemption
Date of Redemption Premium
December 1, 2021, to November 30, 2022 3.00 %
December 1, 2022, to November 30, 2023 2.00
December 1, 2023, to November 30, 2024 1.00
December 1, 2024, and thereafter 0.00
Capital Pledge Agreements
Each of Pioneer Metropolitan Districts No. 2, 4, and 5 entered into Capital Pledge
Agreements with the District (collectively, the Capital Pledge Agreements). Under such
Capital Pledge Agreements, each of Districts No. 2, 4, and 5 covenant to levy an ad valorem
mill levy each year upon all taxable property of each of such Districts in the amount of 50
mills. The Districts will transfer all ad valorem tax revenue derived from such levy and all
Specific Ownership Tax revenue allocable to such levy to the District for payment on the
Series 2016 Bonds.
Developer Advance
The Developer advanced $8,332 to the District in 2014 to pay for operating costs of the
District. There is not currently an agreement in place documenting the District's obligation to
repay the advance. However, the advance is an obligation of the District that may only be
repaid if, and when, funds are available. Such repayment is subject to budget and
appropriation. In 2018, the District repaid the full amount due.
(15)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 5 LONG-TERM OBLIGATIONS (CONTINUED)
Authorized Debt
On May 2, 2006, a majority of the qualified electors of the District who voted in the election
authorized the issuance of indebtedness in an amount not to exceed $3,680,000,000. On
May 4, 2010, and on May 6, 2014, a majority of the qualified electors of the District who
voted in the election authorized the issuance of indebtedness in an amount not to exceed
$3,680,000,000 and $4,010,000,000, respectively. At December 31, 2018, the District had
authorized but unissued indebtedness in the following amounts allocated for the following
purposes:
Authorization Authorization
Used for Used for Authorized
Debt Series 2012 Series 2016 But
Authorized Bonds Bonds Unissued
Streets $ 990,000,000 $ - $ - $ 990,000,000
Water 990,000,000 3,695,000 2,671,000 983,634,000
Sanitary Sewer 990,000,000 145,000 - 989,855,000
Parks and Recreation 990,000,000 - - 990,000,000
Traffic and Safety 990,000,000 - - 990,000,000
Mosquito Control 990,000,000 - - 990,000,000
Public Transportation 990,000,000 - - 990,000,000
Fire Protection 990,000,000 - - 990,000,000
Television Relay and Translation 990,000,000 - - 990,000,000
Security Service 330,000,000 330,000,000
Operations and Maintenance 150,000,000 310,000 - 149,690,000
Debt Refunding 990,000,000 - 3,743,000 986,257,000
Intergovernmental Contracts 990,000,000 - - 990,000,000
$ 11,370,000,000 $ 4,150,000 $ 6,414,000 $ 11,359,436,000
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. However, as of the date of this
audit, the amount and timing of any debt issuance is not determinable.
NOTE 6 NET POSITION
The District's net position consists of three components — net investment in capital assets,
restricted, and unrestricted.
Net investment in capital assets consists of capital assets, net of accumulated depreciation
and reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings
that are attributable to the acquisition, construction, or improvement of those assets.
(16)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 6 NET POSITION (CONTINUED)
As of December 31, 2018, the District had net investment in capital assets calculated as
follows:
Governmental
Activities
Net Investment in Capital Assets:
Capital Assets, Net $ 6,042,037
Noncurrent Portion of Outstanding
Long-term Obligations (2,155,000)
Net Investment in Capital Assets $ 3,887,037
Restricted net position includes 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 position as of December 31, 2018, as follows:
Governmental
Activities
Restricted Net Assets:
Emergency Reserves $ 10,200
Debt Service 12,146
Capital Projects 408,674
Total Restricted Net Assets $ 431,020
The District has a deficit in unrestricted net position.
NOTE 7 RELATED PARTY
The members of the Board of Directors are employees, owners or are otherwise associated
with HP Farms Holding, LLC (the Property Owner) and Gateway American Resources, LLC
(the Developer). The Property Owner and the Developer may have conflicts of interest in
dealing with the District. During 2018, the District paid $315,875 to the Developer for the
management of a water delivery project and a water gathering and infrastructure project.
(17)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 8 AGREEMENTS
Memorandum of Understanding, dated November 12, 2008 (as amended March 26,
2012)
As contemplated by the Service Plan, Pioneer Regional Metropolitan District (Pioneer
Regional) was designated as the "Service District" and Pioneer Metropolitan Districts No. 1
through 6, inclusive, were designated as the "Financing Districts." The Service Plans for the
Service District and each of the Financing Districts provided that the Service District and the
Financing Districts would enter into a Facilities Funding Construction and Operations
Agreement (the "FFCO") in order to establish the rights and obligations of the Service
District and Financing Districts to provide for the financing, construction, operation, and
maintenance of certain public infrastructure required for the planned future development
within the Districts (the Future Development). Prior to completing discussions on the terms
of the FFCO, the Service District and the Financing Districts entered into a Memorandum of
Understanding (the "MOU") dated November 12, 2008 (as amended March 26, 2012), by
and among Pioneer Metropolitan Districts No. 1 through 6 and Pioneer Regional, whereby
the Financing Districts agreed to reimburse the Service District for certain expenses incurred
by the Service District for the benefit of each of the Financing Districts.
Such expenses are those incurred by the Service District in connection with the organization
and administration of the Districts, District No. 1 and District No. 6, and in the planning and
designing of improvements to serve the Future Development (the Reimbursable Costs), as
defined therein. The MOU was amended on March 26, 2012, to release the Districts from
their obligations under the MOU and to allow the Districts to enter in to the 2012 FFCO
(defined below) as contemplated by the Service Plans for the Districts. The amendment to
the MOU, however, contemplates that the FFCO will be amended in the future to ensure
transition and/or use of any public improvements constructed thereunder to Pioneer
Regional as the Service District.
Facilities Funding Construction and Operations Agreement
As anticipated by the amendment to the MOU as noted above, on March 26, 2012, the
District entered into a Facilities Funding, Construction and Operations Agreement with
Pioneer Metropolitan Districts No. 2, 4, and 5, (the 2012 FFCO). Pursuant to the 2012
FFCO, the District is generally responsible for coordinating the financing, construction,
ownership, operation and maintenance of public improvements, while Districts No. 2, 4,
and 5, serving as the "Financing Districts," are generally responsible for producing property
tax and other revenue sufficient to pay the costs of operations and debt service expenses
incurred for the purpose of providing such improvements and services.
In addition, the District, in its capacity as the "Coordinating District" under the FFCO has
agreed to pay the Reimbursable Costs.
The 2012 FFCO allows for a future amendment to include Pioneer Regional, District No. 1
and District No. 6 to ensure transition and/or use of any public improvements constructed
thereunder to Pioneer Regional, as the provider of services to end users within the Districts,
and the eventual transition to each of the Districts to provide services to its future residents
and/or commercial users.
(18)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 8 AGREEMENTS (CONTINUED)
Pioneer Community Reimbursement IGA
In accordance with the MOU, Pioneer Regional incurred certain costs on behalf of the
Financing Districts. Pursuant to the Intergovernmental Agreement Regarding Assignment of
Reimbursement Obligations; Consent to Construction; and Collection of Regional Mill Levy
dated as of March 26, 2012, between Pioneer Regional and the District (the Pioneer
Community Reimbursement IGA), Pioneer Regional assigned to the District certain
obligations it had with respect to the Reimbursement Obligations and Organization Costs
and Services (each, as defined therein) which are collectively referred to therein as the
"Pioneer Community Reimbursement Obligations." Pioneer Regional has agreed to adjust
the formula in determining its rates to be charged to end users in the Future Development in
exchange for the District assuming the Pioneer Community Reimbursement Obligations.
Pioneer Regional is obligated to provide water and wastewater service to the future
residents and commercial development of the Districts. As noted above, in exchange for the
District's assumption of the Pioneer Community Reimbursement Obligations, Pioneer
Regional agreed that it will adjust the calculation considered in establishing its rate structure
so that no charges are passed along that would have otherwise been assessed as a result
of Pioneer Regional's former obligations pursuant to the MOU. This is expected to result in a
decrease in the tap fee rates ultimately payable for connection to water and wastewater
systems for service.
Under the Pioneer Community Reimbursement IGA, Pioneer Regional agreed that it will not
object to the District's construction of (or causing the construction of) future water and
wastewater infrastructure that would otherwise be the responsibility of Pioneer Regional
pursuant to its Service Plan. The District agreed to give Pioneer Regional advance written
notice prior to constructing any water and wastewater improvements. In addition, pursuant
to the First Amendment to the MOU and the Pioneer Community Reimbursement IGA,
Pioneer Regional and the District will enter into an agreement prior to the connection of any
resident to water or wastewater service to ensure Pioneer Regional has adequate access to
such infrastructure to provide the services contemplated under its Service Plan and to
establish an orderly transition of the use and ownership of the improvements to each of the
Districts.
Finally, each of the Financing Districts will be obligated to impose a regional improvements
mill levy (the Regional Mill Levy), the proceeds of which are to be remitted to Pioneer
Regional to be used for the provision of regional water and wastewater improvements.
Pursuant to the Pioneer Regional Community Reimbursement IGA, the District will cause
each of the other Financing Districts to impose the Regional Mill Levy and will collect and
remit the revenue derived from such levy to Pioneer Regional. Pioneer Regional is to use
such revenue for payment of its on-going operations expenses and certain reimbursement
obligations which were retained by Pioneer Regional and not assigned to or assumed by the
District and for any other purpose authorized by its Service Plan. The District did not make
any payments related to this agreement during 2018.
(19)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 8 AGREEMENTS (CONTINUED)
Pioneer Community Reimbursement IGA (Continued)
The Pioneer Community Reimbursement IGA was amended by that certain First
Amendment to Intergovernmental Agreement Regarding Assignment of Reimbursement
Obligations; Consent to Construction; and Collection of Regional Mill levy dated May 28,
2013 (the First Amendment to Pioneer IGA). Pursuant to the First Amendment to Pioneer
IGA, the District agreed to make funds available to Pioneer Regional for Pioneer Regional's
implementation of the Program (defined below) adopted by the Board of Directors of Pioneer
Regional. Pursuant to the First Amendment to Pioneer IGA, such funds may be used for
payment of any incentive payments, water infrastructure or water as may be necessary for
Pioneer Regional's implementation of the Program. During 2018, the District made an
incentive payment under the Program to Greenleaf Acres, LLC in the amount of$122,016.
Agricultural Water Conservation Pilot Program
Pioneer Regional is intended to provide retail water and wastewater services within the
Pioneer communities, including the service area of the District. A Planned Unit Development
(PUD) was approved for the Pioneer Communities in 2013 which zoning document
approved certain agricultural uses within the Pioneer Communities. Since Pioneer Regional
will be providing water services, it determined that implementation of a water conservation
program by the agricultural users within the Pioneer Communities will benefit all of the
residents and inhabitants in the Pioneer Communities. In May 2013 the Board of Directors of
Pioneer Regional adopted the Pioneer Regional Agricultural Water Conservation Pilot
Program. The Program was created to promote and incentivize on-farm physical
improvements, soils amendment, crop selection, irrigation management practices and water
measurement that promote water conservation and increase crop density and yield
("Conservation Measures"). Pioneer Regional's goal is to ensure water is being used
efficiently and that it is being put to beneficial use. Under the Program, financial incentives
are made available to farmers and ranchers (Growers) for a 12 year period beginning in
2013. In order to participate in the Program, a Grower must meet certain eligibility
requirements, including, but not limited to actively farming or ranching within the Program
Area a total of not less than 500 acres for commercial purposes only. In addition, the
Conservation Measures to be implemented must be located within the taxing boundaries of
one of the Districts No. 2 through 5. As noted above, the First Amendment to the Pioneer
Community Reimbursement IGA was entered into between Pioneer Regional and the
District to evidence the District's agreement to making funding available for the Program. At
this time, one participation agreement under the Program has been executed, as described
below.
(20)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 8 AGREEMENTS (CONTINUED)
Pioneer Regional Metropolitan District Participation Agreement Agricultural Water
Conservation Pilot Program—Greenleaf Acres, LLC
On July 8, 2013, Pioneer Regional entered into its first participation agreement under the
Program with Greenleaf Acres, LLC (Greenleaf) (the Greenleaf Participation Agreement).
Pursuant to the Greenleaf Participation Agreement, Greenleaf has elected to participate in
the Program with respect to 920 acres of its property. The term of the Greenleaf
Participation Agreement is for 12 years. Greenleaf must make an annual election of the
Conservation Measures it intends to implement in any particular growing season (the Plan).
If Greenleaf fulfills its Plan in accordance with the Program requirements, then Greenleaf will
be entitled to certain incentive payments.
Pursuant to the First Amendment to Pioneer IGA, the District is required to make an
incentive payment to Greenleaf consisting of a combination of water delivery and/or cash, as
set forth in the Greenleaf Participation Agreement. In the event the total assessed valuation
of real property located within Pioneer Metropolitan Districts No. 2 —5 decreases in any year
from the total assessed valuation for collection year 2013, the Greenleaf Participation
Agreement provides that the District has the right to decrease the amount of the incentive
payment by an amount that is proportionate to the decrease in total assessed valuation.
The scheduled cash payment for 2018 was $100,000. The total assessed valuation
decreased by 15.12% from 2013 collection year to 2018 collection year. Accordingly, the
cash payment due for 2018 was $84,875.The District did not deliver 200 acre feet of water
to Greenleaf in 2018. The cash value of that water was $37,141. During 2018, the District
paid Greenleaf$122,016 for its obligation.
Resource Colorado Water and Sanitation Metropolitan District Reimbursement IGA
The District, Resource Colorado Water and Sanitation Metropolitan District (Resource),
Resource Colorado Water and Sanitation District acting by and through Resource Colorado
Water and Sanitation District GAR Water Activity Enterprise No. 1 (Enterprise No. 1), and
Resource Colorado Water and Sanitation District acting by and through Resource Colorado
Water and Sanitation District Water Activity Enterprise (the Original Enterprise), entered into
that certain Intergovernmental Agreement Regarding Assignment of Reimbursement
Obligations and Consent to Construction on April 19, 2012 (Resource IGA).
Pursuant to the Resource IGA, Resource, the Original Enterprise, and Enterprise No. 1
agree to assign, and the District agrees to assume, their respective responsibilities for
repayment of those reimbursement obligations pursuant to those certain Gateway American
Resources Operation Funding Agreements, the Quebec Corp. Operation Funding
Agreements, the Gateway American Resources Project Funding Agreement and the
Quebec Corp. Project Funding Agreement (as defined therein) (the Reimbursement
Obligations). In exchange, Resource, the Original Enterprise, and Enterprise No. 1 agree
not to include the costs incurred in any rate structure for service established by Resource,
the Original Enterprise or Enterprise No. 1 for future services provided to the Districts'
service area (the Pioneer Community).
(21)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 8 AGREEMENTS (CONTINUED)
Resource Colorado Water and Sanitation Metropolitan District Reimbursement IGA
(Continued)
In addition, pursuant to the Resource IGA, Resource on behalf of itself and the Pioneer
Community Enterprise consents to and agrees that it will not object to the District's
construction, or causing such construction to be done, in the future, of water infrastructure
that may be construed as a Resource and/or Pioneer Community Enterprise obligation
under Resource's Service Plan provided the District gives Resource advance written notice
together with a copy of the construction plans prior to commencement of such construction.
Further, the Parties agree that if the District undertakes any water or sewer infrastructure
construction, it will enter into an agreement with Pioneer Regional as contemplated in the
First Amendment to MOU between Pioneer Regional and Pioneer prior to the connection of
a resident for water or sewer service to a Pioneer Regional Improvement to ensure both
Pioneer Regional (as the contracting entity with Resource) and Resource have adequate
access to such infrastructure to provide its services under its respective Service Plan and
such that Resource can satisfy the terms and provisions of the Will Serve Letter (defined
therein).
Memorandum of Understanding, dated November 2, 2015
The District entered into a Memorandum of Understanding (the MOU) as of November 2,
2015, by and between Pioneer Regional and Resource. Pioneer Regional and Resource
declared Inactive Status effective January 1, 2016. Pioneer Regional and Resource
anticipate a shortfall in funding necessary to fund Pioneer Regional and Resources' General
Fund expenditures during the period of Inactive Status (the Inactive Period Shortfall). The
District will cause the Pioneer Districts to impose the Regional Mill Levy for budget years
2016 through 2020, the proceeds of which will be retained by the District. Pursuant to the
MOU, the District agrees to directly pay for any operation and maintenance expenses of
Pioneer Regional and Resource which may be required to maintain their corporate
existence and compliance with applicable laws, rules and regulations of the State of
Colorado and Weld County.
NOTE 9 INTERFUND AND OPERATING TRANSFERS
The transfer from the General Fund to the Capital Projects Fund represents an excess of
general funds to be allocated to capital projects. The transfer from the Capital Projects Fund
to the Debt Service Fund represents the transfer of the balance of the Series 2016 Project
Account to the Series 2016 Interest Account.
(22)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 10 RISK MANAGEMENT
The District is 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).
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, and 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 11 TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, referred to as the Taxpayer's Bill of Rights
(TABOR), contains tax, spending, revenue and debt limitations, which apply to the State of
Colorado and all local governments.
Spending and revenue limits are determined based on the prior year's Fiscal Year Spending
adjusted for allowable increases based upon inflation and local growth. Fiscal Year
Spending is generally defined as expenditures plus reserve increases with certain
exceptions. Revenue in excess of the Fiscal Year Spending limit must be refunded unless
the voters approve retention of such revenue.
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, will require judicial
interpretation.
On May 2, 2006, the electorate approved the removal of limitations imposed by the TABOR
Amendment and any other law that purports to limit the District's revenue or expenditures, a
$10,000,000 annual property tax increase for operations, a $330,000,000 annual property
tax increase for intergovernmental agreements, and a $330,000,000 annual property tax
increase for regional improvements.
(23)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 12 COMMITMENTS AND CONTINGENCIES
As of December 31, 2018, the District had unexpended construction related contract
commitments of approximately $332,765.
(24)
SUPPLEMENTARY INFORMATION
(25)
PIONEER METROPOLITAN DISTRICT NO. 3
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Property Taxes $ 10,452 $ 10,452 $ -
Specific Ownership Tax 630 811 181
Net Investment Income 9,500 9,274 (226)
Other Income - 312 312
Transfer from Pioneer Metro No. 2 33,399 33,927 528
Transfer from Pioneer Metro No.4 41,981 42,625 644
Transfer from Pioneer Metro No. 5 950,325 964,765 14,440
Total Revenues 1,046,287 1,062,166 15,879
EXPENDITURES
County Treasurers Fees 160 157 3
Bond Principal-Series 2016 713,000 714,000 (1,000)
Bond Interest-Series 2016 340,340 340,340 -
Paying Agent Fees 7,500 3,500 4,000
Contingency - - -
Total Expenditures 1,061,000 1,057,997 3,003
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES (14,713) 4,169 18,882
OTHER FINANCING SOURCES(USES)
Transfers from Other Fund - 8 8
Total Other Financing Sources(Uses) - 8 8
NET CHANGE IN FUND BALANCE (14,713) 4,177 18,890
Fund Balances-Beginning of Year 21,018 32,469 11,451
FUND BALANCES-END OF YEAR $ 6,305 $ 36,646 $ 30,341
(26)
PIONEER METROPOLITAN DISTRICT NO. 3
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
Variance with
Original Final Budget
and Final Actual Actual Positive
Budget Amounts Amounts (Negative)
REVENUES
Net Investment Income $ 3,000 $ 3,000 $ 11,785 $ 8,785
Total Revenues 3,000 3,000 11,785 8,785
EXPENDITURES
Accounting 30,000 30,000 17,105 12,895
Capital Outlay 2,500,000 2,500,000 563,204 1,936,796
Contingency 83,128 83,128 - 83,128
Engineering 50,000 50,000 20,030 29,970
Huwa Detention Pond 100,000 100,000 76,835 23,165
Legal Services 150,000 150,000 82,766 67,234
Miscellaneous 500 500 1,776 (1,276)
Repay Developer Advances - - 8,332 (8,332)
Water Conservation Program 123,372 123,372 122,016 1,356
Wilson Detention Pond 663,000 663,000 663,000 -
Total Expenditures 3,700,000 3,700,000 1,555,064 2,144,936
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES (3,697,000) (3,697,000) (1,543,279) 2,153,721
OTHER FINANCING SOURCES(USES)
Transfers from Other Fund 400,000 400,000 400,000 -
Transfers to Other Fund - - (8) (8)
Developer Advance 2,000,000 2,000,000 - (2,000,000)
Total Other Financing Sources(Uses) 2,400,000 2,400,000 399,992 (2,000,008)
NET CHANGE IN FUND BALANCE (1,297,000) (1,297,000) (1,143,287) 153,713
Fund Balances-Beginning of Year 1,364,545 1,364,545 1,551,961 187,416
FUND BALANCES-END OF YEAR $ 67,545 $ 67,545 $ 408,674 $ 341,129
(27)
CONTINUING DISCLOSURE
(UNAUDITED)
(28)
PIONEER METROPOLITAN DISTRICT NO. 3
HISTORY OF THE PIONEER METROPOLITAN
DISTRICT NOS. 2, 3, 4 AND 5 ASSESSED VALUATION
DECEMBER 31, 2018
(UNAUDITED)
Levy/ All Percent
Collection Year Districts Change
2007/2008 $ 6,046,880 -
2008/2009 5,815,530 (3.83)
2009/2010 7,455,400 28.20
2010/2011 1,809,098 (75.73)
2011/2012 888,940 (50.86)
2012/2013 23,375,230 2529.56
2013/2014 16,227,776 (30.58)
2014/2015 9,207,560 (43.26)
2015/2016 14,254,810 54.82
2016/2017 30,324,070 112.73
2017/2018 19,839,760 (34.57)
2018/2019 19,221,900 (3.11)
(29)
PIONEER METROPOLITAN DISTRICT NO. 3
HISTORICAL ASSESSED AND ACTUAL VALUATION OF
OIL AND GAS PROPERTIES IN WELD COUNTY
DECEMBER 31, 2018
(UNAUDITED)
Levy/ Actual Percent Assessed Percent
Collection Year Valuation Change Valuation Change
2007/2008 $ 2,219,722,237 $ 1,749,119,710
2008/2009 2,160,997,296 (2.65) 1,709,997,160 (2.24)
2009/2010 3,541,190,356 63.87 2,868,304,890 67.74
2010/2011 2,135,827,100 (39.69) 1,673,838,130 (41.64)
2011/2012 3,114,664,791 45.83 2,439,298,540 45.73
2012/2013 4,393,771,015 41.07 3,282,053,530 34.55
2013/2014 5,135,073,446 16.87 3,900,510,227 18.84
2014/2015 7,530,472,671 46.65 5,738,450,900 47.12
2015/2016 10,068,678,775 33.71 7,669,479,580 33.65
2016/2017 7,114,656,477 (29.34) 4,959,441,120 (35.34)
2017/2018 6,898,968,972 (3.03) 4,611,244,810 (7.02)
2018/2019 9,728,642,565 41.02 6,828,903,860 48.09
PIONEER METROPOLITAN DISTRICT NO. 3
TOTAL TAXES LEVIED AND COLLECTED IN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
DECEMBER 31, 2018
(UNAUDITED)
Total Total Percent Total Mill
Levy/ Taxes Taxes of Levy Levy for Each
Collection Year Levied Collected Collected District
2012/2013 $ 1,519,390 $ 1,517,919 99.90 % 65.00
2013/2014 1,054,815 1,054,805 100.00 65.00
2014/2015 598,493 564,393 94.30 65.00
2015/2016 960,475 960,475 100.00 65.00
2016/2017 1,971,066 1,971,066 100.00 65.00
2017/2018 1,289,583 1,289,585 100.00 65.00
2018/2019 1,249,425 65.00
(30)
PIONEER METROPOLITAN DISTRICT NO. 3
2018 TAXPAYERS AND ASSESSED VALUATION WITHIN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
DECEMBER 31, 2018
(UNAUDITED)
Percent of
Taxable Taxable Taxable Taxable Districts'
Value Value Value Value Total
District District District District Total Assessed
Taxpayer No.2 No.3 No.4 No.5 District Valuation
Kerr McGee Oil&Gas Onshore LP $ - $ - $ - $ 15,457,030 $ 15,457,030 80.4%
Kerr McGee Gathering LLC 102,450 - 125,750 553,430 781,630 4.1
Anadarko Watterberg Oil Complex LLC - - - 624,860 624,860 3.3
DCP Operating Company 228,250 215,690 63,900 - 507,840 2.6
Public Service Co of Cob(Xcel) 145,890 - 199,290 103,130 448,310 2.3
Noble Energy Inc 32,440 - 383,910 - 416,350 2.2
Colorado Interstate Gas Co - - - 274,100 274,100 1.4
Discovery DJ Services LLC - - - 236,060 236,060 1.2
Greenleaf Acres LLC - - - 169,090 169,090 0.9
Green River DevCo - - 128,450 - 128,450 0.7
Crestone Peak Resources,LP - - 102,520 - 102,520 0.5
Pioneer Holdco LLC 4,260 10 19,100 - 23,370 0.1
Rivera Carmelo Jr - - - 18,360 18,360 0.1
Front Range Resources LLC - - - 17,260 17,260 0.1
CSI Compressco Leasing LLC - - 9,930 - 9,930 0.1
Metzger Bradley W - - - 6,740 6,740 0.0
Total Assessed Value
in District $ 513,290 $ 215,700 $ 1,032,850 $ 17,460,060 $ 19,221,900 100.0%
(31)
PIONEER METROPOLITAN DISTRICT NO. 3
ASSESSED VALUATION OF CLASSES OF PROPERTY IN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
DECEMBER 31, 2018
(UNAUDITED)
Percentage Percentage Percentage
2012 of 2012 2013 of2013 2014 of 2014
Property Assessed ' Assessed Assessed Assessed Assessed Assessed
Class Valuation Valuation Valuation Valuation Valuation Valuation
Residential $ 44,910 0.19% $ 19,070 0.12% $ 19,070 0.21%
Agricultural 123,710 0.52% 147,500 0.91% 147,500 1.60%
Oil and Gas 23,012,610 97.28% 15,722,406 96.89% 8,224,440 89.32%
State
Assessed 475,240 2.01% 338,800 2.09% 816,880 8.87%
Total $ 23,656,470 100.00% $ 16,227,776 100.00% $ 9,207,890 100.00%
Percentage Percentage Percentage
2015 of 2015 2016 of2016 2017 of 2017
Property Assessed Assessed Assessed Assessed Assessed Assessed
Class Valuation Valuation Valuation Valuation Valuation Valuation
Residential $ 31,740 0.22% $ 31,740 0.10% $ 14,300 0.07%
Agricultural 183,260 1.29% 187,740 0.62% 203,260 1.02%
Oil and Gas 12,310,350 86.36% 28,175,010 92.91% 18,103,210 91.25%
State
Assessed 1,729,460 12.13% 1,929,580 6.36% 1,518,990 7.66%
Total $ 14,254,810 100.00% $ 30,324,070 100.00% $ 19,839,760 100.00%
Percentage
2018 of2018
Property Assessed Assessed
Class Valuation Valuation
Residential $ 14,300 0.07%
Agricultural 203,260 1.06%
Oil and Gas 17,500,300 91.04%
State
Assessed 1,504,040 7.82%
Total $ 19,221,900 100.00%
(32)
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