HomeMy WebLinkAbout20202632.tiff RECEIVED
JUL 2 9 2020
WELD COUNTY
COMMISSIONERS
PIONEER METROPOLITAN DISTRICT NO . 5
Weld County, Colorado
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31 , 2019
2020 -2632
( orMun ; co. + ; ons Spoi26
IFS / 31 /2O
PIONEER METROPOLITAN DISTRICT NO. 5
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2019
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
GENERAL FUND-STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL 5
NOTES TO BASIC FINANCIAL STATEMENTS 6
SUPPLEMENTARY INFORMATION
DEBT SERVICE FUND-SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL 17
SCHEDULE OF ASSESSED VALUATION, MILL LEVY, AND PROPERTY
TAXES COLLECTED 18
WIPFLI14143 Denver W Parkway #450 303 988 1900
Lakewood, CO 80401 wipfli.com
Independent Auditor's Report
Board of Directors
Pioneer Metropolitan District No. 5
Weld County, Colorado
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and each
major fund of Pioneer Metropolitan District No. 5 (the "District") as of and for the year ended
December 31, 2019, 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 an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free 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 the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
(I)
Opinion
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 Pioneer
Metropolitan District No. 5 as of December 31, 2019, 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
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.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the District's financial statements as a whole. The supplementary information
as listed in the table of contents is presented for the purposes of legal compliance and additional
analysis and is not a required part of the financial statements. The supplementary information is the
responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the financial statements. The information has been
subjected to the auditing procedures applied in the audit of the financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the financial statements or to the financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the information is fairly stated in
all material respects in relation to the financial statements as a whole.
Wipfli LLcP
Lakewood, Colorado
July 24, 2020
(II)
BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF NET POSITION
DECEMBER 31, 2019
Governmental
Activities
ASSETS
Receivable from County Treasurer $ 6,476
Property Taxes Receivable 940,288
Total Assets 946,764
LIABILITIES
Payable to District No. 3 6,476
Total Liabilities 6,476
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue 940,288
Total Deferred Inflows of Resources 940,288
NET POSITION
Unrestricted -
Total Net Position $ -
See accompanying Notes to Basic Financial Statements.
(1)
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2019
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
Government Activities:
General Government $ 17,006 $ - $ - $ - $ (17,006)
Intergovernmental Transfers to Pioneer
Metro District No. 3:
Operations 275,286 - - - (275,286)
Debt Service 917,681 - - - (917,681)
Total Government Activities $ 1,209,973 $ - $ - $ - (1,209,973)
GENERAL REVENUES
Property Taxes 1,133,782
Specific Ownership Taxes 76,191
Total General Revenues 1,209,973
CHANGE IN NET POSITION -
Net Position- Beginning of Year -
NET POSITION -END OF YEAR $ -
See accompanying Notes to Basic Financial Statements.
(2)
PIONEER METROPOLITAN DISTRICT NO. 5
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2019
Total
Debt Governmental
General Service Funds
ASSETS
Receivable from County Treasurer $ 1,494 $ 4,982 $ 6,476
Property Taxes Receivable 216,990 723,298 940,288
Total Assets $ 218,484 $ 728,280 $ 946,764
LIABILITIES
Payable to District No. 3 $ 1,494 $ 4,982 $ 6,476
Total Liabilities 1,494 4,982 6,476
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue 216,990 723,298 940,288
Total Deferred Inflows of Resources 216,990 723,298 940,288
FUND BALANCES
Unassigned - - -
Total Fund Balances - - -
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 218,484 $ 728,280 $ 946,764
Amounts reported for governmental activities in the Statement of Net Position are the same as above.
See accompanying Notes to Basic Financial Statements.
(3)
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2019
Total
Debt Governmental
General Service Funds
REVENUES
Property Taxes $ 261,629 $ 872,153 $ 1,133,782
Specific Ownership Taxes 17,581 58,610 76,191
Total Revenues 279,210 930,763 1,209,973
• EXPENDITURES
General:
County Treasurer's Fees 3,924 13,082 17,006
Transfer to District No. 3 275,286 917,681 1,192,967
Total Expenditures 279,210 930,763 - 1,209,973
NET CHANGE IN FUND BALANCES - - -
Fund Balances-Beginning of Year - - -
FUND BALANCES-END OF YEAR $ - $ - $ -
Amounts reported for governmental activities in the Statement of Activities are the same as above.
See accompanying Notes to Basic Financial Statements.
(4)
PIONEER METROPOLITAN DISTRICT NO. 5
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE—
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2019
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Property Taxes $ 261,901 $ 261,629 $ (272)
Specific Ownership Taxes 15,714 17,581 1,867
Other Income 7,385 - (7,385)
Total Revenues 285,000 279,210 (5,790)
EXPENDITURES
County Treasurer's Fees 3,929 3,924 5
Transfer to District No. 3 273,686 275,286 (1,600)
Contingency 7,385 - 7,385
Total Expenditures 285,000 279,210 5,790
NET CHANGE IN FUND BALANCE - - -
Fund Balance- Beginning of Year - - -
FUND BALANCE-END OF YEAR $ - $ - $ -
See accompanying Notes to Basic Financial Statements.
(5)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 1 DEFINITION OF REPORTING ENTITY
Pioneer Metropolitan District No. 5 (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 and installation and
maintenance of essential public-purpose facilities, such as water, sanitation, storm drainage,
streets, safety protection, park 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.
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.
(6)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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.
(7)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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.
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.
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.
Equity
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.
(8)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equity (Continued)
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.
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.
(9)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 3 LONG-TERM OBLIGATIONS
Capital Pledge Agreements
Each of Pioneer Metropolitan Districts No. 2, 4, and 5 (the Districts) entered into Capital
Pledge Agreements with Pioneer Metropolitan District No. 3 (District No. 3) (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 District No. 3 for payment on the Series 2016 Bonds issued by District No. 3.
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. The District's pledge under the Capital
Pledge Agreement reduces the District's debt authorization by the amount of the bonds
issued by District No. 3. At December 31, 2019, the District had authorized but unissued
indebtedness in the following amounts allocated for the following purposes:
Pledged Under Pledged Under 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
Sanitation 990,000,000 145,000 - 989,855,000
Parks and Recreation 990,000,000 - - 990,000,000
Traffic&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 Agreements 990,000,000 - - 990,000,000
Total $ 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.
(10)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 4 RELATED PARTY
Certain members of the Board of Directors are employees, owners or are otherwise
associated with Pioneer Holdco, LLC and/or Greenleaf Acres LLC (the Property Owners)
and/or Gateway American Resources, LLC (the Developer). The Property Owners and the
Developer may have conflicts of interest in dealing with the District.
NOTE 5 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 Financing Districts, 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 Pioneer Metropolitan District
Nos. 2-5 (the Districts) from their obligations under the MOU and to allow the Districts to
enter into 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 address the transition of any public improvements constructed
thereunder, and any services provided by 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, 3, and 4, (the 2012 FFCO). Pursuant to the 2012
FFCO, District No. 3 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."As such, these 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.
(11)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 5 AGREEMENTS (CONTINUED)
Facilities Funding Construction and Operations Agreement(Continued)
In addition, District No. 3, 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 use of any public improvements constructed thereunder by
Pioneer Regional, as the provider of services to end users within the Financing Districts, and
the eventual transition to each of the Districts to provide services to its future residents
and/or commercial users.
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 District No. 3 certain
obligations it had with respect to the Reimbursement Obligations and Organizational and
Service Costs (each, as defined therein). These obligations 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 District No. 3 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 Financing Districts. As noted above, in
exchange for District No. 3's assumption of the Pioneer Community Reimbursement
Obligations, Pioneer Regional agreed that it would 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 District No. 3'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. District No. 3 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 District No. 3 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 Financing Districts.
(12)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 5 AGREEMENTS (CONTINUED)
Pioneer Community Reimbursement IGA(Continued)
Finally, each of the 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, District No. 3 will cause each of the
other 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 that
were retained by Pioneer Regional and not assigned to or assumed by District No. 3 and for
any other purpose authorized by its Service Plan. District No. 3 did not make any payments
related to this agreement during 2019.
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, District No. 3 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 2019, District
No. 3 made an incentive payment under the Program to Greenleaf Acres, LLC, in the
amount of$118,217.
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). 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.
(13)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 5 AGREEMENTS (CONTINUED)
Agricultural Water Conservation Pilot Program (Continued)
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 District Nos. 2 through 5. As noted
above, the First Amendment to Pioneer IGA was entered into between Pioneer Regional
and District No. 3 to evidence District No. 3's agreement to making funding available for the
Program. At this time, one participation agreement under the Program has been executed,
as described below.
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, Greenleaf will be
entitled to certain incentive payments.
Pursuant to the First Amendment to the Pioneer Community Reimbursement IGA, District
No. 3 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 District No. 3 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 2019 was $100,000. The total assessed valuation
decreased by 17.77% from the 2013 collection year to the 2019 collection year. Accordingly,
the cash payment due for 2019 was $82,232. District No. 3 did not deliver 200 acre feet of
water to Greenleaf in 2019 as described on Exhibit B of the Greenleaf Participation
Agreement. The cash value of that water was $35,985. Therefore, during 2019, District No.
3 paid Greenleaf$118,217 for its obligation.
(14)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 6 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 that the Pool determines are not needed for purposes of the Pool may be returned to
the members pursuant to a distribution formula.
NOTE 7 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 Districts 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.
(15)
SUPPLEMENTARY INFORMATION
(16)
PIONEER METROPOLITAN DISTRICT NO. 5
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2019
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts _ (Negative)
REVENUES
Property Taxes $ 873,003 $ 872,153 $ (850)
Specific Ownership Taxes 52,380 58,610 6,230
Other Income 39,617 - (39,617)
Total Revenues 965,000 930,763 (34,237)
EXPENDITURES
County Treasurer's Fees 13,095 13,082 13
Transfer to District No. 3 912,288 917,681 (5,393)
Contingency 39,617 - 39,617
Total Expenditures 965,000 930,763 34,237
NET CHANGE IN FUND BALANCE - - -
Fund Balance- Beginning of Year - - -
FUND BALANCE-END OF YEAR $ - $ - $ -
(17)
PIONEER METROPOLITAN DISTRICT NO. 5
SCHEDULE OF ASSESSED VALUATION, MILL LEVY, AND PROPERTY TAXES COLLECTED
DECEMBER 31, 2019
Prior Year
Assessed
Valuation
for Current Percentage
Year Ended Year Property Mills Levied Total Property Taxes Collected
December 31, Tax Levy General Debt Service Regional Levied Collected to Levied
2014 $ 11,491,391 10.000 50.000 5.000 $ 746,941 $ 746,940 100.00%
2015 5,328,110 10.000 50.000 5.000 346,327 346,143 99.95
2016 10,693,660 10.000 50.000 5.000 695,088 695,089 100.00
2017 28,552,010 10.000 50.000 5.000 1,855,881 1,855,881 100.00
2018 18,188,040 10.000 50.000 5.000 1,182,222 1,182,223 100.00
2019 17,460,060 10.000 50.000 5.000 1,134,904 1,133,782 99.90
Estimated for the Year
Ending December 31,
2020 $ 14,465,950 10.000 50.000 5.000 $ 940,288
NOTE:
Property taxes shown as collected in any one year include collection of delinquent property taxes or abatements of property
taxes assessed in prior years.This presentation does not attempt to identify specific years of assessment.
(18)
Hello