HomeMy WebLinkAbout20202616.tiff RECEIVED
JUL 2 9 2020
WELD COUNTY
COMMISSIONERS
PIONEER METROPOLITAN DISTRICT NO . 3
Weld County , Colorado
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31 , 2019
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PIONEER METROPOLITAN DISTRICT NO. 3
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2019
INDEPENDENT AUDITOR'S REPORT I
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT cilF 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
2019 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
WIPFLI14143 Denver W Parkway #450 303 998 1900
Lakewood, CO 80401 wipfli.com
Independent Auditor's Report
Board of Directors
Pioneer Metropolitan District No. 3
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. 3 (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. 3 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.
The continuing disclosure information, as listed in the table of contents, has not been subject 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.
Wipflfi LLcP
Lakewood, Colorado
July 24, 2020
(II)
BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF NET POSITION
DECEMBER 31, 2019
Governmental
Activities
ASSETS
Cash and Investments $ 153,693
Cash and Investments-Restricted 21,535
Taxes Receivable-County Treasurer 80
Property Taxes Receivable 13,422
Receivable from Pioneer Regional 10,005
Receivable from Resource 6,849
Due from District No. 2 190
Due from District No. 4 383
Due from District No. 5 6,476
Due from Developer 9,520
Prepaid Expense 2,580
Capital Assets 6,618,523
Total Assets 6,843,256
LIABILITIES
Accounts Payable 46,363
Accrued Interest Payable 20,480
Noncurrent Liabilities:
Due in More Than One Year 3,781,000
Total Liabilities 3,847,843
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue 13,422
Total Deferred Inflows of Resources 13,422
NET POSITION
Net Investment in Capital Assets 4,816,653
Restricted for:
Emergency Reserves 9,400
Unrestricted (1,844,062)
Total Net Position $ 2,981,991
See accompanying Notes to Basic Financial Statements.
(1)
PIONEER METROPOLITAN DISTRICT NO. 3
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
Primary Government:
Governmental Activities:
General Government $ 185,998 $ - $ 299,615 $ - $ 113,617
Interest and Related Costs on
Long-Term Debt 293,410 - 998,782 705,372
Total Governmental Activities $ 479,408 $ - $ 1,298,397 $ - 818,989
GENERAL REVENUES
• Property Tax 14,020
Specific Ownership Tax 941
Net Investment Income 19,194
Total General Revenues 34,155
CHANGE IN NET POSITION 853,144
Net Position-Beginning of Year 2,128,847
NET POSITION-END OF YEAR $ 2,981,991
See accompanying Notes to Basic Financial Statements.
(2)
PIONEER METROPOLITAN DISTRICT NO. 3
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2019
Total
Debt Capital Governmental
General Service Projects Funds
ASSETS
Cash and Investments $ 153,690 $ - $ 3 $ 153,693
Cash and Investments-Restricted 9,400 12,135 - 21,535
Receivable From County Treasurer 18 62 , 80
Property Taxes Receivable 3,097 10,325 - 13,422
Receivable from Pioneer Regional 10,005 - - 10,005
Receivable from Resources 6,849 - - 6,849
Due from Other Fund 45,766 - - 45,766
Due from District No.2 44 146 - 190
Due from District No.4 88 295 - 383
Due from District No.5 1,494 4,982 - 6,476
Due from Developer - - 9,520 9,520
Prepaid Expense 2,580 - - 2,580
Total Assets $ 233,031 $ 27,945 $ 9,523 $ 270,499
LIABILITIES,DEFERRED INFLOWS OF
RESOURCES,AND FUND BALANCES
LIABILITIES
Accounts Payable $ 8,538 $ - $ 37,825 $ 46,363
Due to Other Fund - - 45,766 45,766
Total Liabilities 8,536 - 83,591 92,129
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue 3,097 10,325 - 13,422
Total Deferred Inflows of Resources 3,097 10,325 - 13,422
FUND BALANCES
Nonspendable for:
Prepaid Expenses 2,580 - - 2,580
Restricted for:
Emergency Reserves 9,400 - - 9,400
Debt Service - 17,620 - 17,620
Assigned for:
Capital Projects - - (74,068) (74,068)
Unassigned 209,416 - - 209,416
Total Fund Balances 221,396 17,620 (74,068) 164,948
TOTAL LIABILITIES,DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 233,031 $ 27,945 $ 9,523
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 $ 6,618,523
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 (3,781,000)
Accrued Interest on Bonds Payable (20,480)
Net Position of Governmental Activities $ 2,981,991
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, 2019
Total
Debt Capital Governmental
General Service Projects Funds
REVENUES
Property Taxes $ 3,235 $ 10,785 $ - $ 14,020
Specific Ownership Tax 217 724 - 941
Net Investment Income 4,662 9,275 5,257 19,194
Transfer from District No.2 8,100 27,002 - 35,102
Transfer from District No.4 16,229 54,099 - 70,328
Transfer from District No.5 275,286 917,681 - 1,192,967
Total Revenues 307,729 1,019,566 5,257 1,332,552
EXPENDITURES
Current:
Accounting 44,909 - 7,783 52,692
Audit 8,400 - - 8,400
County Treasurer's Fee 49 162 - 211
Dues and Licenses 1,790 - - 1,790
Insurance and Dues 12,145 - - 12,145
Legal Services 58,105 - 43,730 101,835
Miscellaneous 1,001 - - 1,001
Pond Maintenance 6,979 - - 6,979
Pioneer Regional-Legal 80 - - 80
Resource-Insurance 225 - 225
Resource-Legal 640 - - 640
Debt Service:
Bond Principal-Series 2016 - 741,000 - 741,000
Bond Interest-Series 2016 - 293,930 - 293,930
Paying Agent Fees - 3,500 - 3,500
Capital Projects:
Capital Outlay - - 458,269 458,269
Water Conservation Program - - 118,217 118,217
Total Expenditures 134,323 1,038,592 627,999 1,800,914
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 173,406 (19,026) (622,742) (468,362)
OTHER FINANCING SOURCES(USES)
Transfers to Other Funds (140,000) - - (140,000)
Transfers from Other Funds - - 140,000 140,000
Total Other Financing Sources(Uses) (140,000) - 140,000 -
EXCESS(DEFICIENCY)OF REVENUES
AND OTHER FINANCING SOURCES
OVER(UNDER)EXPENDITURES
AND OTHER FINANCING SOURCES 33,406 (19,026) (482,742) (468,362)
Fund Balances-Beginning of Year 187,990 36,646 408,674 633,310
FUND BALANCES-END OF YEAR $ 221,396 $ 17,620 $ (74,068) $ 164,948
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, 2019
Net Change in Fund Balances-Governmental Funds $ (468,362)
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 576,486
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 741,000
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 4,020
Change in Net Position of Governmental Activities $ 853,144
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, 2019
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)
REVENUES
Property Taxes $ 3,236 $ 3,236 $ 3,235 $ (1)
Specific Ownership Tax 194 194 217 23
Net Investment Income 4,000 4,700 4,662 (38)
Carriage Fees 5,000 - -Transfer from District No. 2 8,046 8,046 8,100 54
Transfer from District No. 4 16,191 16,194 16,229 35
Transfer from District No. 5 273,686 273,686 275,286 1,600
Total Revenues 310,353 306,056 307,729 1,673
EXPENDITURES
Current:
Accounting 50,000 50,000 44,909 5,091
Audit 8,000 4,400 8,400 (4,000)
Contingency 29,098 - - -
County Treasurer's Fees 49 49 49 -
Dues and Licenses 1,638 1,790 1,790 -
Insurance 10,715 12,145 12,145 -
Legal Services 60,000 60,000 58,105 1,895
Miscellaneous 100 1,311 1,001 310
Pond Maintenance 75,000 45,000 6,979 38,021
Pioneer Regional-Accounting 1,050 - - -
Pioneer Regional-Insurance 1,365 - - -
Pioneer Regional-Legal 1,050 80 80 -
Resource-Accounting 1,050 - - -
Resource-Insurance 735 225 225 -
Resource-Legal 150 - 640 (640)
Total Expenditures 240,000 175,000 134,323 40,677
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 70,353 131,056 173,406 42,350
OTHER FINANCING SOURCES(USES)
Transfers to Other Fund - (100,000) (140,000) (40,000)
Total Other Financing Sources(Uses) - (100,000) (140,000) (40,000)
NET CHANGE IN FUND BALANCE 70,353 31,056 33,406 2,350
Fund Balance- Beginning of Year 173,324 187,991 187,990 (1)
FUND BALANCE-END OF YEAR $ 243,677 $ 219,047 $ 221,396 $ 2,349
See accompanying Notes to Basic Financial Statements.
(6)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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, 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.
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, 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.
The District has amended its annual budget for the year ended December 31, 2019.
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, 2019
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.
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.
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, 2019
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.
Deficits
The Capital Projects Fund reported a deficit in the fund financial statements as of
December 31, 2019. The deficit will be eliminated with the receipt of funds advanced by the
Developer in 2020.
NOTE 3 CASH AND INVESTMENTS
Cash and investments as of December 31, 2019, are classified in the accompanying
financial statements as follows:
Statement of Net Position:
Cash and Investments $ 153,693
Cash and Investments-Restricted 21,535
Total Cash and Investments $ 175,228
Cash and investments as of December 31, 2019, consist of the following:
Deposits with Financial Institutions $ 45,763
Investments 129,465
Total Cash and Investments $ 175,228
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.
(11)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Deposits with Financial Institutions (Continued)
The eligible collateral is determined by the PDPA. PDPA allows the institution to create a
single collateral pool for all public funds. The pool for all the uninsured public deposits as a
group is to be maintained by another institution or held in trust. The market value of the
collateral must be at least 102% of the aggregate uninsured deposits.
The State Commissioners for banks and financial services are required by statute to monitor
the naming of eligible depositories and reporting of the uninsured deposits and assets
maintained in the collateral pools.
At December 31, 2019, the District's cash deposits had a bank balance of $53,073 and a
carrying balance of$45,763.
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, 2019, the District had the following investments:
Investment Maturity Amount
Colorado Surplus Asset Fund Trust Weighted average
(CSAFE) under 60 days $ 129,465
(12)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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, 2019:
Balance at Balance at
December 31, December 31,
2018 Increases Decreases 2019
Capital Assets, not Being
Depreciated:
Water Rights $ 2,836,541 $ - $ - $ 2,836,541
Huwa Pond - 736,868 - 736,868
Wilson Pond - 732,025 - 732,025
Construction in Progress 3,205,496 576,486 1,468,893 2,313,089
Governmental Activities
Capital Assets $ 6,042,037 $ 2,045,379 $ 1,468,893 $ 6,618,523
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, 2019
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, 2019.
Balance- Balance- Due
December 31, December 31, Within
2018 Additions Reductions 2019 One Year
General Obligation Bonds:
Series 2016 $ 4,522,000 $ - $ 741,000 $ 3,781,000 $ -
$ 4,522,000 $ - $ 741,000 $ 3,781,000 $ -
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, 2019
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.
(15)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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, 2019, 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, 2019
NOTE 6 NET POSITION (CONTINUED)
As of December 31, 2019, the District had net investment in capital assets calculated as
follows:
Governmental
Activities
Net Investment in Capital Assets:
Capital Assets, Net $ 6,618,523
Noncurrent Portion of Outstanding
Long-term Obligations (1,801,870)
Net Investment in Capital Assets $ 4,816,653
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, 2019, as follows:
Governmental
Activities
Restricted Net Assets:
Emergency Reserves $ 9,400
Total Restricted Net Assets $ 9,400
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 Pioneer Holdco, 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 2019, the District paid $141,313 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, 2019
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 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 to the Financing Districts 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, 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 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 Financing 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, 2019
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 Organizational and
Service Costs (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 Financing 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
Financing Districts.
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, the District 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 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 2019.
(19)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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 2019, the District 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. 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 Pioneer 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, 2019
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 the Pioneer Community Reimbursement 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 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.The District 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, the District
paid Greenleaf$118,217 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 (i.e. the Reimbursement Obligations) 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, 2019
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 2015 MOU) as of
November 2, 2015, with 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
2015 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.
2019 Operation Funding Agreement
On February 27, 2019, the District entered into an Operations Funding Agreement(the 2019
OFA), effective January 1, 2019, with Pioneer Holdco, LLC pursuant to which Pioneer
Holdco, LLC agrees to advance funds to the District for operations, maintenance and
administrative expenses, up to $100,000. The District agrees to repay these advances
together with accrued simple interest at a rate of 8% per annum accruing from the date any
such advance is made. In the event the District has not paid or reimbursed Pioneer Holdco,
LLC. by December 31, 2058, any amount of principal and accrued interest outstanding on
such date shall be deemed to be forever discharged and satisfied in full.
(22)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 8 AGREEMENTS (CONTINUED)
2019 Facilities Funding and Acquisition Agreement
On February 27, 2019, the District entered into a Facilities Funding and Acquisition
Agreement (the 2019 FFAA), effective January 1, 2019, with Pioneer Holdco, LLC pursuant
to which Pioneer Holdco, LLC agrees to advance funds to the District for the purposes of the
design, testing, engineering, and construction of public improvements. The District agrees to
acquire the public improvements and agrees to repay these advances and reimburse
Pioneer Holdco, LLC for the certified District eligible costs, together with accrued simple
interest at a rate of 8% per annum from the date of payment or the date verified costs were
incurred by Pioneer Holdco, LLC. In the event the District has not paid or reimbursed
Pioneer Holdco, LLC. by December 31, 2058, any amount of principal and accrued interest
outstanding on such date shall be deemed to be forever discharged and satisfied in full.
Annexation Agreement
On December 2, 2019, the District, Pioneer Holdco, LLC and PV LLC entered into an
Annexation Agreement with the Town of Keenesburg (the Town). The Annexation
Agreement sets forth certain conveyances and dedications and agreement to finance and
construct certain public improvements upon annexation of certain property by the Town. The
agreement is null and void if the Town fails to approve the annexation of the Property.
NOTE 9 INTERFUND AND OPERATING TRANSFERS
The General Fund made a transfer to the Capital Projects Fund to pay for capital projects.
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.
(23)
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
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.
NOTE 12 COMMITMENTS AND CONTINGENCIES
As of December 31, 2019, the District had unexpended construction related contract
commitments of approximately $27,664.
(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, 2019
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)
REVENUES
Property Taxes $ 10,785 $ 10,785 $ 10,785 $ -
Specific Ownership Tax 647 647 724 77
Net Investment Income 2,500 2,500 9,275 6,775
Transfer from District No. 2 26,820 26,820 27,002 182
Transfer from District No. 4 53,967 53,967 54,099 132
Transfer from District No. 5 912288 912,288 917,681 5,393
Total Revenues 1,007,007 1,007,007 1,019,566 12,559
EXPENDITURES
County Treasurer's Fees 162 162 162 -
Bond Principal-Series 2016 703,000 741,000 741,000 -
Bond Interest-Series 2016 293,955 293,955 293,930 25
Paying Agent Fees 7,500 3,500 3,500 -
Miscellaneous 269 269 - 269
Contingency 5,114 3,614 - 3,614
Total Expenditures 1,010,000 1,042,500 1,038,592 3,908
NET CHANGE IN FUND BALANCE (2,993) (35,493) (19,026) 16,467
Fund Balance-Beginning of Year 11,750 36,646 36,646 -
FUND BALANCE-END OF YEAR $ 8,757 $ 1,153 $ 17,620 $ 16,467
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PIONEER METROPOLITAN DISTRICT NO. 3
CAPITAL PROJECTS 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
Net Investment Income $ - $ 5,257 $ 5,257
Total Revenues - 5,257 5,257
EXPENDITURES
Accounting 5,000 7,783 (2,783)
Capital Outlay 2,333,472 458,269 1,875,203
Legal Services 25,000 43,730 (18,730)
Miscellaneous 500 - 500
Water Conservation Program 118,355 118,217 138
Total Expenditures 2,482,327 627,999 1,854,328
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES (2,482,327) (622,742) 1,859,585
OTHER FINANCING SOURCES(USES)
Transfers from Other Fund - 140,000 140,000
Developer Advance 2,000,000 - (2,000,000)
Total Other Financing Sources(Uses) 2,000,000 140,000 (1,860,000)
NET CHANGE IN FUND BALANCE (482,327) (482,742) (415)
Fund Balance-Beginning of Year 482,327 408,674 (73,653)
FUND BALANCE-END OF YEAR $ - $ (74,068) $ (74,068)
(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, 2019
(UNAUDITED)
Levy/ All Percent
Collection Year Districts Change
2007/2008 $ 6,046,880 -
ok
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 2,529.56
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)
2019/2020 16,175,420 (15.85)
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PIONEER METROPOLITAN DISTRICT NO. 3
HISTORICAL ASSESSED AND ACTUAL VALUATION OF
OIL AND GAS PROPERTIES IN WELD COUNTY
DECEMBER 31, 2019
(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
2019/2020 13,539,608,927 39.17 9,924,962,280 45.34
PIONEER METROPOLITAN DISTRICT NO. 3
TOTAL TAXES LEVIED AND COLLECTED IN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
DECEMBER 31, 2019
(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 1,247,968 99.88 65.00
2019/2020 1,051,045 65.00
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PIONEER METROPOLITAN DISTRICT NO. 3
2019 TAXPAYERS AND ASSESSED VALUATION WITHIN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
DECEMBER 31, 2019
(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 $ - $ - $ - $ 11,920,880 $ 11,920,880 73.7%
Kerr McGee Gathering LLC 86,000 - 127,090 559,320 772,410 4.8
Anadarko Watterberg Oil Complex LLC - - - 714,920 714,920 4.4
Rocky Mountain Midstream LLC - - - 620,240 620,240 3.8
DCP Operating Company 217,780 205,810 60,960 - 484,550 3.0
Noble Energy Inc 15,570 - 378,150 - 393,720 2.4
Public Service Co of Colo(Xcel) 81,270 - 121,740 55,720 258,730 1.6
Colorado Interstate Gas Co - - - 291,300 291,300 1.8
Greenleaf Acres LLC - - - 240,160 240,160 1.5
J-W Power Company - - 150,570 - 150,570 0.9
United Power Inc 30,690 670 41,460 31,710 104,530 0.6
Green River DevCo - - 90,660 - 90,660 0.6
Crestone Peak Resources,LP - - 75,400 - 75,400 0.5
RiveraCarmeloJr - - 20,020 24,650 44,670 0.3
Metzger David A - - - 7,050 7,050 0.0
Pioneer Holdco LLC 4,480 10 - - 4,490 0.0
CSI Compressco Leasing LLC - - 1,140 - 1,140 0.0
Total Assessed Value
in District $ 435,790 $ 206,490 $ 1,067,190 $ 14,465,950 $ 16,175,420 100.0%
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PIONEER METROPOLITAN DISTRICT NO. 3
ASSESSED VALUATION OF CLASSES OF PROPERTY IN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
DECEMBER 31, 2019
(UNAUDITED)
Percentage Percentage Percentage
2012 of 2012 2013 of 2013 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 116,300 0.50% 147,500 0.91% 147,500 1.60%
Oil and Gas 22,856,320 97.78% 15,722,406 96.89% 8,224,440 89.32%
State
Assessed 357,700 1.53% 338,800 2.09% 816,550 8.87%
Total $ 23,375,230 100.00% $ 16,227,776 100.00% $ 9,207,560 100.00%
Percentage Percentage Percentage
2015 of 2015 2016 of 2016 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 Percentage
2018 of 2018 2019 of 2019
Property Assessed Assessed Assessed Assessed
Class Valuation Valuation Valuation Valuation
Residential $ 14,300 0.07% $ 53,930 0.33%
Agricultural 203,260 1.06% 242,440 1.50%
Oil and Gas 17,500,300 91.04% 14,452,080 89.35%
State
Assessed 1,504,040 7.82% 1,426,970 8.82%
Total $ 19,221,900 100.00% $ 16,175,420 100.00%
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