HomeMy WebLinkAbout20193994.tiffLIBERTY RANCH METROPOLITAN DISTRICT
Weld County, Colorado
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31, 2018
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LIBERTY RANCH METROPOLITAN DISTRICT
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2018
INDEPENDENT AUDITOR'S REPORT
BASIC FINANCIAL STATEMENTS
GOVERNMENT -WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION
STATEMENT OF ACTIVITIES
FUND FINANCIAL STATEMENTS
BALANCE SHEET - GOVERNMENTAL FUNDS
I
1
2
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
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
GENERAL FUND - STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
NOTES TO BASIC FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DEBT SERVICE FUND - SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECTS FUND - SCHEDULE OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND
ACTUAL
5
6
7
22
23
SUMMARY OF ASSESSED VALUATION, MILL LEVY, AND PROPERTY
TAXES COLLECTED
24
strataqem
CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Liberty Ranch Metropolitan District
Weld County, Colorado
Independent Auditors' Report
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and each
major fund of Liberty Ranch Metropolitan District (the "District") as of and for the year ended
December 31, 2018, and the related notes to the financial statements, which collectively comprise
the District's basic financial statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due
to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards general 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.
14143 Denver West Parkway, Suite 450 Lakewood, Colorado 80401 303.988.1900 StratagemCPA.com
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 Liberty Ranch
Metropolitan District as of December 31, 2018, and the respective changes in financial position and
the respective budgetary comparison for the general fund for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
Other Matters
Management has omitted the management's discussion and analysis that accounting principles
general 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.
Stratagem PC
Certified - Public Accountants
Lakewood, Colorado
August 20, 2019
I I
BASIC FINANCIAL STATEMENTS
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF NET POSITION
DECEMBER 31, 2018
Governmental
Activities
ASSETS
Cash and Investments
Cash and Investments Restricted
Cost of Refunding
Receivable - County Treasurer
Prepaid Expense
Property Taxes Receivable
Total Assets
LIABILITIES
Accounts Payable
Accrued Bond Interest
Noncurrent Liabilities:
Due Within One Year
Due in More Than One Year
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue
Total Deferred Inflows of Resources
NET POSITION
Restricted for:
Emergency Reserve
Capital Projects
Unrestricted
$ 84,009
235,971
39,442
3,878
2,858
566,645
932,803
3,098
29,377
25,000
11, 844, 084
11, 901, 559
566,645
566,645
2,800
44
(11, 538, 245)
Total Net Position $ (11,535,401)
See accompanying Notes to Basic Financial Statements.
(1)
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2018
FUNCTIONS/PROGRAMS
Primary Government:
Governmental Activities:
General Government
Interest and Related Costs on
Long -Term Debt
Total Governmental Activities
See accompanying Notes to Basic Financial Statements.
Expenses
Program Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Charges Operating Capital
for Grants and Grants and Governmental
Services Contributions Contributions Activities
$ 40,902 $
793,347
$ $
$ 834,249 $ $
GENERAL REVENUES
Property Taxes
Property Taxes - URA
Specific Ownership Taxes
Net Investment Income
Total General Revenues
CHANGES IN NET POSITION
Net Position - Beginning of Year - Restated
NET POSITION - END OF YEAR
(2)
$ (40,902)
(793,347)
$ (834,249)
585,645
74,441
50,404
10,674
721,164
(113,085)
(11,422,316)
$ (11,535,401)
LIBERTY RANCH METROPOLITAN DISTRICT
BALANCE SHEET
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2018
ASSETS
Cash and Investments
Cash and Investments - Restricted
Receivable - County Treasurer
Prepaid Expense
Property Taxes Receivable
Total Assets
LIABILITIES, DEFERRED INFLOWS OF
OF RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts Payable
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue
Total Deferred Inflows of Resources
FUND BALANCES
Nonspendable:
Prepaid Expenditures
Restricted for:
Debt Service
Capital Projects
Emergency Reserves
Committed for:
Capital Projects
Assigned for:
Subsequent year expenditures
Unrestricted
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
Amounts reported for governmental activities in the statement
of net position are different because:
General
Total
Debt Capital Governmental
Service Projects Funds
$ 84,009 $ - $
2,800 231,774
490 3,388
2,858 -
71,640 495,005
1,397
$ 84,009
235,971
3,878
2,858
566,645
$ 161,797 $ 730,167 $ 1,397 $ 893,361
$ 3,098 $ - $ $ 3,098
3,098 - - 3,098
71,640 495,005 - 566,645
71,640 495,005 - 566,645
2,858 - 2,858
235,162 - 235,162
44 44
2,800 - - 2,800
11,249
70,152
87,059 235,162
1,353 1,353
11,249
70,152
1,397 323,618
$ 161,797 $ 730,167 $ 1,397
Long-term liabilities, including bonds payable and Developer
advances, are not due and payable in the current period and,
therefore, are not reported in the funds.
Developer Advance Payable
Accrued Interest on Developer Advances
Accrued Bond Interest Payable
Bonds Payable
Cost of Refunding
(215,211)
(137,374)
(577, 876)
(10,968,000)
39,442
Net Position of Governmental Activities $ (11,535,401)
See accompanying Notes to Basic Financial Statements.
(3)
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2018
Total
Debt Capital Governmental
General Service Projects Funds
REVENUES
Property taxes
Property tax - URA
Specific ownership tax
Net investment income
Total Revenues
EXPENDITURES
Accounting
Auditing
County Treasurer's fee
Dues and licenses
Insurance and bonds
District management
Legal services
Miscellaneous
Election expense
Paying agent fees
Bond interest - Series 2017A
Bond interest - Series 2017B
Bond principal - Series 2017A
Bond principal - Series 2017B
Total Expenditures
EXCESS OF REVENUES OVER
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Repay Developer Advance
Total Other Financing Uses
NET CHANGE IN FUND BALANCES
Fund Balances - Beginning of Year
FUND BALANCES - END OF YEAR
$ 74,042 $ 511,603 $
9,409 65,032
6,372 44,032
2,009 8,665
91,832 629,332
15,547 -
3,850 -
1,111 7,674
330 -
2,731
8,648
5,317 -
209 1,056 -
4,081
260,000
197,194
25,000
119,000
$ 585,645
74,441
50,404
10,674
721,164
15,547
3,850
8,785
330
2,731
8,648
5,317
209
1,056
4,081
260,000
197,194
25,000
119,000
38,799 612,949 - 651,748
53,033 16,383 - 69,416
(40,000) - (40,000)
(40,000) - (40,000)
13,033 16,383 - 29,416
74,026 218,779 1,397 294,202
$ 87,059 $ 235,162 $ 1,397 $ 323,618
See accompanying Notes to Basic Financial Statements.
(4)
LIBERTY RANCH METROPOLITAN DISTRICT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2018
Net Change in Fund Balances - Total Governmental Funds
Amounts reported for governmental activities in the statement of activities are different
because:
The issuance of 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.
Bond Principal Payment
Amortization of Cost of Refunding
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
Accrued Interest on Developer Advance - Change in Liability
$ 29,416
144,000
(2,103)
(307,147)
22,749
Changes in Net Position of Governmental Activities $ (113,085)
See accompanying Notes to Basic Financial Statements.
(5)
LIBERTY RANCH METROPOLITAN DISTRICT
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
REVENUES
Property taxes
Property tax - URA
Specific ownership tax
Net investment income
Total Revenues
EXPENDITURES
Accounting
Auditing
County Treasurer's fee
Dues and licenses
Insurance and bonds
District management
Legal services
Miscellaneous
Election expense
Total Expenditures
Original
and Final
Budget
Actual
Amounts
$ 73,930 $ 74,042
9,411 9,409
5,000 6,372
385 2,009
88,726 91,832
25,000
4,000
1,109
500
2,900
20,000
30,000
1,485
1,000
85,994
EXCESS OF REVENUES OVER
EXPENDITURES 2,732
OTHER FINANCING SOURCES (USES)
Repay developer advance
Total Other Financing Uses
NET CHANGE IN FUND BALANCE
Fund Balance - Beginning of Year
FUND BALANCE - END OF YEAR
See accompanying Notes to Basic Financial Statements.
2,732
54,538
15,547
3,850
1,111
330
2,731
8,648
5,317
209
1,056
38,799
53,033
(40,000)
40,000)
13,033
74,026
$ 57,270 $
(6)
Variance with
Final Budget
Positive
(Negative)
$
112
(2)
1,372
1,624
3,106
9,453
150
(2)
170
169
11,352
24,683
1,276
(56)
47,195
50,301
(40,000)
(40,000)
10,301
19,488
87,059 $ 29,789
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 1 DEFINITION OF REPORTING ENTITY
Liberty Ranch Metropolitan District (District), a quasi -municipal corporation located entirely
in Weld County, Colorado, was organized by order and decree of the District Court for Weld
County on December 23, 2005, and is governed pursuant to provisions of the Colorado
Special District Act (Title 32, Article 1, Colorado Revised Statutes). The District was
established to provide for construction and financing for street, safety protection, water,
sanitation and mosquito control facilities and improvements. The street and safety control
improvements have been dedicated to and are maintained by the Town of Mead. Water and
sanitation improvements have been dedicated to and are maintained by the Longs Peak
Water District and St. Vrain Sanitation District, respectively.
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 has no employees and all operations and administrative functions are
contracted.
The District is not financially accountable for any other organization, nor is the District a
component unit of any other primary governmental entity.
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 property 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.
(7)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Government -Wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct and indirect
expenses of a given function or segment are offset by program revenues. Direct expenses
are those that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services, or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Expenditures for property, plant, and equipment are shown as increases in assets
and redemption of bonds and notes are recorded as a reduction in liabilities.
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 government 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 property taxes and specific ownership
taxes. 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)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Budgets
In accordance with the State Budget Law, the District's Board of Directors holds public
hearings in the fall each year to approve the budget and appropriate the funds for the
ensuing year. The appropriation is at the total fund expenditures 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, 2018.
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 inflow
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.
Facility Fees
On July 26, 2006, the Board of Directors of the District adopted resolutions imposing certain
Facilities Fees upon the property in the District. Pursuant to the Resolutions, the District
imposes a Residential Facilities Fee in the amount of $2,000 per unit for each single-family
detached or attached residential unit, and a Commercial Facilities Fee per building in the
amount of $0.50 per square foot of commercial space within the District, both payable upon
the issuance of a building permit for the subject property. Any unpaid Facilities Fees
constitute a statutory and perpetual lien upon the property until paid.
(9)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred Inflow/Outflow 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.
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.
(10)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 3 CASH AND INVESTMENTS
Cash and investments as of December 31, 2018 are classified in the accompanying
financial statements as follows:
Statement of Net Position:
Cash and Investments
Cash and Investments Restricted
Total
$ 84,009
235,971
$ 319,980
Cash and investments as of December 31, 2018 consist of the following:
Deposits with Financial Institutions
Investments
Total Cash and Investments
$ 13,420
306,560
$ 319,980
Cash Deposits
The Colorado Public Deposit Protection Act (PDPA) requires that all units of local
government deposit cash in eligible public depositories. Eligibility is determined by state
regulators. Amounts on deposit in excess of federal insurance levels must be collateralized.
The eligible collateral is determined by the PDPA. PDPA allows the institution to create a
single collateral pool for all public funds. The pool for all the uninsured public deposits as a
group is to be maintained by another institution or held in trust. The market value of the
collateral must be at least 102% of the aggregate uninsured deposits.
The State Commissioners for banks and financial services are required by statute to monitor
the naming of eligible depositories and reporting of the uninsured deposits and assets
maintained in the collateral pools.
At December 31, 2018, the District's cash deposits had a bank balance of $15,134 and a
carrying balance of $13,420.
Investments
The District's formal investment 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.
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Investments (Continued)
Colorado statutes specify investment instruments meeting defined rating and risk criteria in
which local governments may invest which include:
Obligations of the United States, certain U.S. government agency securities, and
securities of the World Bank
General obligation and revenue bonds of U.S. local government entities
Certain certificates of participation
Certain securities lending agreements
Bankers' acceptances of certain banks
Commercial paper
Written repurchase agreements and certain reverse repurchase agreements
collateralized by certain authorized securities
Certain money market funds
Guaranteed investment contracts
Local government investment pools
As of December 31, 2018, the District had the following investments:
Investment
Colorado Surplus Asset Fund Trust
(CSAFE)
Maturity Amount
Weighted Average
Under 60 Days $ 306,560
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.
(12)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 4 LONG-TERM OBLIGATIONS
The following is a summary of long-term obligations as of December 31, 2018:
Balance at Balance at Due
December 31, December 31, Within
2017 Additions Reductions 2018 One Year
Governmental Activities:
G.O. Refunding and
Improvement 2017A
Bonds $ 5,200,000 $ - $ 25,000 $ 5,175,000 $ 25,000
G.O. Subordinate Limited
Tax 2017B Bonds -
Restated 2,427,000 119,000 2,308,000 -
Junior Subordinate Cash
Flow 2017C Bonds 3,485,000 - 3,485,000
Accrued and Unpaid
Interest - Cash Flow
2017C Bonds -
Restated 232,817 315,682 - 548,499 -
Developer Advance 215,211 - 215,211 -
Developer Advance
Interest 160,123 17,251 40,000 137,374 -
Total Payable $ 11,720,151 $ 332,933 $ 184,000 $ 11,869,084 $ 25,000
$5,225,000 General Obligation Refunding and Improvement Bonds, Series 2017A,
$2,517,000 Subordinate Limited Tax General Obligation Improvement Bonds, Series
2017B and $3,485,000 Junior Subordinate Cash Flow Bonds, Series 2017C
On February 22, 2017, the District issued its $5,225,000 General Obligation Refunding and
Improvement Bonds, Series 2017A (2017A Bonds), its $2,517,000 Subordinate Limited Tax
General Obligation Improvement Bonds, Series 2017B (2017B Bonds) and its $3,485,000
Junior Subordinate Cash Flow Bonds (2017C Bonds, and collectively with the 2017A Bonds
and 2017B Bonds, the 2017 Bonds). The proceeds from the sale of the 2017A Bonds were
used to refund the District's 2006 General Obligation Bonds, reimburse Developer advances
related to public improvements for the District, and to pay the costs of issuing the 2017
Bonds. The proceeds from the sale of the 2017B Bonds will be applied to reimburse
Developer advances related to public improvements for the District and to pay certain costs
of issuing the 2017B Bonds. The proceeds from the sale of the 2017C Bonds were used to
reimburse Developer advances related to public improvements for the District and to pay
certain costs of issuing the 2017C Bonds.
The 2017A Bonds bear interest at 5.00%, payable semi-annually on June 1 and
December 1, beginning on June 1, 2017. Annual mandatory sinking fund principal payments
are due on December 1, beginning on December 1, 2017. The 2017A Bonds mature on
December 1, 2046.
(13)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 4 LONG-TERM OBLIGATIONS (CONTINUED)
$5,225,000 General Obligation Refunding and Improvement Bonds, Series 2017A,
$2,517,000 Subordinate Limited Tax General Obligation Improvement Bonds, Series
2017B and $3,485,000 Junior Subordinate Cash Flow Bonds, Series 2017C
(Continued)
The 2017B Bonds bear interest at 8.125% per annum, are payable annually from
Subordinate Pledged Revenue, if any, on December 15, beginning on December 15, 2017,
and mature on December 15, 2046. The 2017B Bonds are structured as cash flow bonds
meaning that there are no scheduled payments of principal prior to the final maturity date.
Unpaid interest on the 2017B Bonds compounds annually on each December 15. All of the
2017B Bonds and interest thereon will be deemed to be paid, satisfied, and discharged on
December 16, 2054, regardless of the amount of principal and interest paid on the 2017B
Bonds prior to such Subordinate Termination Date.
The 2017C Bonds bear interest at the rate of 8.125% per annum, and are payable annually
from Junior Subordinate Pledged Revenue, if any available, on each December 15,
commencing on the first December 15 occurring after the 2017B Bonds have been paid in
full or are no longer outstanding, and mature on December 15, 2056. The 2017C Bonds are
structured as cash flow bonds meaning that there are no scheduled payments of principal
prior to the final maturity date. Unpaid interest on the 2017C Bonds compounds annually on
each December 15. All of the 2017C Bonds and interest thereon will be deemed to be paid,
satisfied, and discharged on December 16, 2057, regardless of the amount of principal and
interest paid on the 2017C Bonds prior to such Termination Date.
The District's general obligation bonds mature as follows:
Year Ending December 31, Principal Interest Total
2019 $ 25,000 $ 258,750 $ 283,750
2020 60,000 257,500 317,500
2021 65,000 254,500 319,500
2022 75,000 251,250 326,250
2023 80,000 247,500 327,500
2024-2028 520,000 1,169,250 1,689,250
2029-2033 745,000 1,018,500 1,763,500
2034-2038 1,050,000 803,000 1,853,000
2039-2043 1,450,000 502,500 1,952,500
2044-2046 1,105,000 112,500 1,217,500
Total $ 5,175,000 $ 4,875,250 $ 10,050,250
(14)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 4 LONG-TERM OBLIGATIONS (CONTINUED)
Authorized Debt
On November 1, 2005, a majority of the qualified electors of the District authorized the
issuance of indebtedness in an amount not to exceed $108,800,000 at an interest rate not to
exceed 18% per annum. At December 31, 2018, the District had the following remaining
authorized but unissued indebtedness:
Streets
Water Facilities
Sanitation Facilities
Mosquito Control
Safety Protection
Operations and Maintenance
Debt Refunding
Intergovermental Agreement
Total
Authorized
November 1, Remaining at
2005 Authorization December 31,
Election Used 2018
$ 9,900,000 $ 5,106,218 $ 4,793,782
14,800,000 4,125,538 10,674,462
10,300,000 2,676,465 7,623,535
100,000 100,000
1,000,000 1,000,000
500,000 500,000
36,100,000 36,100,000
36,100,000 36,100,000
$ 108,800,000 $ 11,908,221 $ 96,891,779
Pursuant to the District's Service Plan, the District is limited to issuing a total of $18,500,000
in bonds. The District is also limited to a maximum debt service mill levy of 50 mills, as
adjusted for changes in the ratio of actual value to assessed value of property within the
District, pursuant to the Service Plan. In 2017, the residential assessment rate changed from
7.96% to 7.20%; therefore, the maximum mill levy for debt service is 55.278 mills as of
December 31, 2017. In December 2018, the District certified an adjusted mill levy of 55.277
mills for collection in budget year 2019.
In the future, the District may issue a portion or all of the remaining authorized but unissued
debt for purposes of providing public improvements to support development as it occurs
within the District's service area.
Developer Advances
Facilities Acquisition Aqreement(s)
The District entered into a Facilities Acquisition Agreement on March 1, 2006, with Centex
Homes (Centex) whereby the Developer will design, construct, complete, and convey to the
District, and the District will accept, certain public infrastructure improvements benefiting the
development within the District. The District agrees to make payment to Centex for costs of
the improvements, including but not limited to, all costs of design, testing, engineering,
acquisition, construction, related consultant fees and construction management up to a
maximum amount of $18,500,000, together with interest thereon, at an annual rate of 8%.
The Facilities Acquisition Agreement was amended on November 29, 2006, to decrease the
maximum amount to be advanced by Centex to $9,000,000. Repayment of the advances is
subject to annual appropriation by the District's Board of Directors.
(15)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 4 LONG-TERM OBLIGATIONS (CONTINUED)
Developer Advances (Continued)
Facilities Acquisition Agreements) (Continued)
On December 1, 2010, the District terminated its Facilities Acquisition Agreement with
Centex and entered into a Facilities Funding and Acquisition Agreement with LR
Investments, LLC (LR), subject to the closing of the sale of property within the District's
boundaries from Centex to LR. Previous advances made by Centex and the accrued
interest on those advances were transferred to LR through the simultaneous execution of
the Termination of Facilities Acquisition Agreement with Centex and the Facilities Funding
and Acquisition Agreement with LR. During 2017, the District repaid the outstanding
principal and interest balance and had no outstanding obligations as of December 31, 2018.
On July 8, 2014, the District entered into a Facilities Acquisition Agreement with Lorson
South Land Corporation (LSLC) whereby the Developer will design, construct, complete,
and convey to the District, and the District will accept, certain public infrastructure
improvements benefitting the development within the District. The District agrees to make
payment to LSLC for costs of the improvements, including but not limited to, all costs of
design, testing, engineering, acquisition, construction, related consultant fees and
construction management, together with interest thereon, at an annual rate of 8%.
Repayment of the advances is subject to annual appropriation by the District's Board of
Directors. During 2014, the District accepted $2,879,630 in improvements. During 2017, the
district repaid the outstanding principal and interest due and had no outstanding obligation
at December 31, 2018.
Operations Funding Agreements
On March 1, 2006, the District and Centex entered into an Operations Funding Agreement
(2006 OFA) in which Centex agreed to advance amounts to a maximum stated amount to
fund operations and maintenance expenditures of the District in the event District revenues
are not sufficient. The District agreed to repay Centex for such advances plus accrued
interest at the rate of 8%. Additionally, the District entered into Operation Funding
Agreements (hereinafter referred to as 2007 OFA, 2008 OFA, 2009 OFA and 2010 OFA
and, collectively with the 2006 OFA, the 2006-2010 OFAs) with similar terms and provisions
for 2007, 2008, 2009 and 2010.
On December 1, 2010, the District terminated the 2006-2010 OFAs with Centex and entered
into a 2010-2011 Operation Funding Agreement (2010-2011 OFA) with LR. Pursuant to the
2010-2011 OFA, LR agrees to advance up to $30,000 for operations and maintenance for
the period beginning December 1, 2010, through December 31, 2011. Previous advances
made by Centex and the accrued interest on those advances have been transferred to LR
through the simultaneous execution of the Termination of 2006-2010 OFAs with Centex and
the 2010-2011 OFA with LR.
(16)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 4 LONG-TERM OBLIGATIONS (CONTINUED)
Developer Advances (Continued)
Operations Funding Agreements (Continued)
On November 2, 2011, the District entered into a 2012 Operation Funding Agreement with
LR (2012 OFA). Under the 2012 OFA, LR agreed to advance up to $14,000. No amounts
were advanced under the 2012 OFA.
As of December 31, 2018, the District had outstanding advances of $215,211 and accrued
interest of $137,374.
NOTE 5 NET POSITION
The District has net position consisting of two components — restricted and unrestricted.
Restricted assets include net position that are restricted for use either externally imposed
by creditors, grantors, contributors, or laws and regulations of other governments or
imposed by law through constitutional provisions or enabling legislation. The District
had restricted net position as of December 31, 2018 as follows:
Restricted Net Position:
TABOR Emergency Reserve
Capital Projects
Total Restricted Net Position
$ 2,800
44
$ 2,844
The District has a deficit in unrestricted net position. The deficit was a result of the District
being responsible for the repayment of bonds issued for public improvements which were
conveyed to other governmental entities and which costs were removed from the District's
financial records.
NOTE 6 RELATED PARTY
Certain owners of the majority of the undeveloped property within the District are LR and
LSLC. All of the members of the Board of Directors are associated with LR and/or LSLC
and/or may have conflicts of interest in dealing with the District.
(17)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 7 AGREEMENTS
St. Vrain Intergovernmental Agreement
The District and the St. Vrain Sanitation District (SVSD) entered into an Intergovernmental
Agreement (the St. Vrain IGA) on February 15, 2006, pursuant to which SVSD consented to
the formation of the District and authority of the District to construct and finance certain on
site sanitary sewer system improvements as necessary within the development. Upon
completion and acceptance of the sewer improvements by SVSD, the District dedicated and
conveyed such sewer improvements to SVSD, at which time SVSD was assigned the
responsibility for the operation and maintenance of the sewer improvements. The District
agrees to request a meeting of SVSD to discuss and implement steps to dissolve the District
when all of the financial obligations issued by the District have been repaid or when
adequate provisions for payment in full have been made and there are not further
operational requirements for District improvements which the District is responsible for.
Longs Peak Intergovernmental Agreement
The District and Longs Peak Water District (LPWD) entered into an Intergovernmental
Agreement (the Longs Peak IGA) on April 20, 2006, pursuant to which LPWD consented to
the formation of the District and authority of the District to construct and finance certain
limited water system improvements as may be necessary within the Development. Upon
completion and acceptance of the water improvements by LPWD, the District dedicated and
conveyed such water improvements to LPWD, at which time LPWD assumed the
responsibility for the operation and maintenance of the water improvements.
The District is required to obtain the consent of LPWD prior to including any property into the
boundaries of the District or amending its Service Plan. In addition, the District also agrees
to notify LPWD to request a meeting to discuss and implement steps to dissolve the District
when all of the financial obligations issued by the District have been repaid or when
adequate provisions for payment have been made and there are no further operational
requirements for District improvements for which the District is responsible.
Town of Mead, Colorado and Mead Urban Renewal Authority Intergovernmental
Agreement
The District entered into a Cooperation Agreement on January 30, 2017 with the town of
Mead, Colorado and the Mead Urban Renewal Authority whereby additional property taxes,
in the form of Tax Increment Funds (TIF), will be levied and collected by the District. A
portion of the funds will be allocated to and paid into a special fund of the Mead Urban
Renewal Authority to pay their debt obligations. The three Parties agreed to include parcels
of taxable properties described in the Mead Urban Renewal Plan.
(18)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 8 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, public officials' liability,
and workers' compensation coverage. In the event aggregated losses incurred by the Pool
exceed amounts recoverable from reinsurance contracts and funds accumulated by the
Pool, the Pool may require additional contributions from the Pool members. Any excess
funds which the Pool determines are not needed for purposes of the Pool may be returned
to the members pursuant to a distribution formula.
NOTE 9 TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, commonly known 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.
On November 1, 2005, District voters passed an election question to increase property
taxes $500,000 annually, without limitation of rate, to pay the District's operational and
maintenance costs. The voters also authorized the District to retain and spend all revenue
from sources other than property taxes without regard to any limitations under TABOR.
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.
(19)
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 10 RESTATEMENT OF PRIOR YEAR ITEMS
Certain items have been adjusted in the prior year, impacting beginning Net Position. In the
government -wide financial statements, a principal payment on the bonds had been
mistakenly classified as an interest payment. Additionally, accrued and unpaid interest on
the 2017C Bonds had not been recognized.
Net Position Adjustment
Ending Net Position as Previously Stated
Reclassification of Principal Payment
Restatement of Accrued Interest Payable
Ending Net Position as Restated
(20)
$ (11,279,499)
90,000
(232,817)
$ (11,422,316)
SUPPLEMENTARY INFORMATION
(21)
LIBERTY RANCH METROPOLITAN DISTRICT
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Property taxes
Property tax - URA
Specific ownership tax
Net investment income
Total Revenues
$ 510,827 $ 510,827 $ 511,603 $ 776
65,029 65,029 65,032 3
34,551 34,551 44,032 9,481
4,000 4,000 8,665 4,665
614,407 614,407 629,332 14,925
EXPENDITURES
County Treasurer's fee 7,662 11,865 7,674 4,191
Paying agent fees 3,000 25,000 4,081 20,919
Bond interest - Series 2017A 260,000 260,000 260,000 -
Bond interest - Series 2017B 123,135 123,135 197,194 (74,059)
Bond principal - Series 2017A 25,000 25,000 25,000
Bond principal - Series 2017B 195,000 195,000 119,000 76,000
Total Expenditures 613,797 640,000 612,949 27,051
NET CHANGE IN FUND BALANCE 610 (25,593) 16,383 41,976
Fund Balance - Beginning of year 204,750 218,779 218,779
FUND BALANCE - END OF YEAR $ 205,360 $ 193,186 $ 235,162 $ 41,976
(22)
LIBERTY RANCH METROPOLITAN DISTRICT
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Total Revenues
EXPENDITURES
Total Expenditures
NET CHANGE IN FUND BALANCE
Fund Balance - Beginning of Year
FUND BALANCE - END OF YEAR
$
(23)
1,397 1,397
$ 1,397 $ 1,397
LIBERTY RANCH METROPOLITAN DISTRICT
SUMMARY OF ASSESSED VALUATION, MILL LEVY, AND PROPERTY TAXES COLLECTED
DECEMBER 31, 2018
Prior Year
Assessed
Valuation for Mills Levied for Total Property Taxes
Current Year Refunds Percent
Year Ended Property and Collected to
December 31, Tax Levy General Debt Service Abatements Levied Collected Levied
2014 $ 7,175,849 8.000 50.000 0.000 $ 416,199 $ 416,182 100.00 %
2015 5,119,570 8.000 50.000 4.195 318,413 318,393 99.99
2016 16,610,240 8.000 50.000 0.000 963,394 963,378 100.00
2017 11,134,732 8.000 50.000 0.000 645,815 645,881 100.01
2018 9,241,217 8.000 55.277 0.000 584,757 - -
Estimated for
Calendar Year
Ending
December 31,
2019
$ 8,954,995 8.000 55.277 0.000 $ 566,645
Beginning in collection year 2017, a portion of the District is located in the Mead Urban Renewal Authority and the assessed
valuation is reflective of the net assessed valuation of the District.
NOTE: Property taxes collected in any one year include collection of delinquent property taxes assessed in prior
years, as well as reductions for property tax refunds or abatements. Information received from County Treasurer
does not permit identification of specific year of assessment.
(24)
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