HomeMy WebLinkAbout20193066.tiffPIONEER METROPOLITAN DISTRICT NO. 5
Weld County, Colorado
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31, 2018
2019-3066
500 I Cr,
PIONEER METROPOLITAN DISTRICT NO. 5
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
GENERAL FUND - STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
NOTES TO BASIC FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DEBT SERVICE FUND - SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SCHEDULE OF ASSESSED VALUATION, MILL LEVY, AND PROPERTY
TAXES COLLECTED
5
6
17
18
SIMMONS & WHEELER, P.C. Certified Public Accountants
304 Inverness Way South, Suite 490, Englewood, CO 80112 (303) 689-0833
Board of Directors
Pioneer Metropolitan District NO. 5
Weld County, Colorado
Independent Auditors' Report
We have audited the accompanying financial statements of the governmental activities and each major fund
of the Pioneer Metropolitan District No. 5, as of and for the year ended December 31, 2018, and the related
notes to the financial statements, which collectively comprise the District's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the District's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting principles used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the Pioneer Metropolitan
District No. 5 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.
I
Other -Matters
Required Supplementary Information
Management has omitted the management's discussion and analysis that accounting principles generally
accepted in the United States of America require to be presented to supplement the basic financial
statements. Such missing information, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. Our opinion on the basic financial statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise Pioneer Metropolitan District No. 5's basic financial statements. The supplementary information
as listed in the table of contents is presented for purposes of additional analysis and is not a required part
of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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Englewood, CO
May 31, 2019
I I
BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF NET POSITION
DECEMBER 31, 2018
Governmental
Activities
ASSETS
Receivable from County Treasurer
Property Taxes Receivable
Total Assets
LIABILITIES
Payable to Pioneer Metro No. 3
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue
Total Deferred Inflows of Resources
NET POSITION
Unrestricted
Total Net Position
See accompanying Notes to Basic Financial Statements.
$ 6,943
1,134, 904
1,141,847
6,943
6,943
1,134, 904
1,134, 904
(1)
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2018
FUNCTIONS/PROGRAMS
Government Activities:
General Government
Intergovernmental Transfers to Pioneer
Metro District No. 3:
Operations
Debt Service
Total Government Activities
See accompanying Notes to Basic Financial Statements.
Expenses
Program Revenues
Net Revenues
(Expenses) and
Changes in
Net Position
Charges Operating Capital
for Grants and Grants and Governmental
Services Contributions Contributions Activities
$ 17,733 $
289,429
964,765
$ $
$ 1,271,927 $ $
GENERAL REVENUES
Property Taxes
Specific Ownership Taxes
Total General Revenues
CHANGE IN NET POSITION
Net Position - Beginning of Year
NET POSITION - END OF YEAR
(2)
$ (17,733)
(289,429)
(964,765)
$ (1,271,927)
1,182,222
89,705
1,271,927
$
PIONEER METROPOLITAN DISTRICT NO. 5
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2018
ASSETS
Receivable from County Treasurer
Property Taxes Receivable
Total Assets
LIABILITIES
Payable to Pioneer Metro No. 3
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Property Tax Revenue
Total Deferred Inflows of Resources
FUND BALANCES
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
General
Total
Debt Governmental
Service Funds
$ 1,602 $ 5,341 $ 6,943
261,901 873,003 1,134,904
$ 263,503 $ 878,344 $ 1,141,847
$ 1,602 $ 5,341 $ 6,943
1,602 5,341 6,943
261,901
261,901
873,003 1,134,904
873,003 1,134,904
$ 263,503 $ 878,344 $ 1,141,847
Amounts reported for governmental activities in the Statement of Net Position are the same as above.
See accompanying Notes to Basic Financial Statements.
(3)
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2018
REVENUES
Property Taxes
Specific Ownership Taxes
Total Revenues
EXPENDITURES
General:
County Treasurer's Fees
Transfer to Pioneer Metro No. 3
Total Expenditures
NET CHANGE IN FUND BALANCES
Fund Balances - Beginning of Year
FUND BALANCES - END OF YEAR
General
Total
Debt Governmental
Service Funds
$ 272,820 $ 909,402 $ 1,182,222
20,701 69,004 89,705
293,521
978,406 1,271,927
4,092 13,641
289,429 964,765
293,521
17,733
1,254,194
978,406 1,271,927
$ $
Amounts reported for governmental activities in the Statement of Activities are the same as above.
See accompanying Notes to Basic Financial Statements.
(4)
PIONEER METROPOLITAN DISTRICT NO. 5
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Property Taxes
Specific Ownership Taxes
Other Income
Total Revenues
EXPENDITURES
County Treasurer's Fees
Transfer to District No. 3
Contingency
Total Expenditures
NET CHANGE IN FUND BALANCE
Fund Balance - Beginning of Year
FUND BALANCE - END OF YEAR
See accompanying Notes to Basic Financial Statements.
$ 272,820 $ 272,820 $
16,369 20,701
7,811
297,000
4,092
285,097
7,811
297,000
$
4,332
(7,811)
293,521 (3,479)
4,092
289,429
(4,332)
7,811
293,521 3,479
$ $
(5)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 1 DEFINITION OF REPORTING ENTITY
Pioneer Metropolitan District No. 5 (District), a quasi -municipal corporation and political
subdivision of the State of Colorado, was organized by court order and recorded with the
Weld County Clerk and Recorder on August 29, 2006, and is governed pursuant to
provisions of the Colorado Special District Act (Title 32, Article 1, Colorado Revised
Statutes). The District's service area is located in Weld County, Colorado. The District was
organized to provide financing for the design, acquisition, construction and installation and
maintenance of essential public -purpose facilities, such as water, sanitation, storm drainage,
streets, safety protection, park and recreation, transportation, television relay and
translation, mosquito control, and limited fire protection.
The District follows the Governmental Accounting Standards Board (GASB) accounting
pronouncements, which provide guidance for determining which governmental activities,
organizations and functions should be included within the financial reporting entity. GASB
pronouncements set forth the financial accountability of a governmental organization's
elected governing body as the basic criterion for including a possible component
governmental organization in a primary government's legal entity. Financial accountability
includes, but is not limited to, appointment of a voting majority of the organization's
governing body, ability to impose its will on the organization, a potential for the organization
to provide specific financial benefits or burdens and fiscal dependency.
The District is not financially accountable for any other organization, nor is the District a
component unit of any other primary governmental entity.
The District has no employees and all operations and administrative functions are
contracted.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The more significant accounting policies of the District are described as follows:
Government -Wide and Fund Financial Statements
The government -wide financial statements include the statement of net position and the
statement of activities. These financial statements include all of the activities of the District.
The effect of interfund activity has been removed from these statements. Governmental
activities are normally supported by taxes.
The statement of net position reports all financial and capital resources of the District. The
difference between the sum of assets and deferred outflows and the sum of liabilities and
deferred inflows is reported as net position.
(6)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Government -Wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct and indirect
expenses of a given function or segment are offset by program revenues. Direct expenses
are those that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services, or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized
as soon as they are both measurable and available. Revenues are considered to be
available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the District considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period. The
major sources of revenue susceptible to accrual are District property taxes, specific
ownership taxes, and interest. All other revenue items are considered to be measurable and
available only when cash is received by the District. The District determined that Developer
advances are not considered as revenue susceptible to accrual. Expenditures, other than
interest on long-term obligations, are recorded when the liability is incurred or the long-term
obligation is due.
The District reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in
another fund.
The Debt Service Fund accounts for the resources accumulated and payments made for
principal and interest on long-term debt of the governmental funds.
(7)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Budgets
In accordance with the State Budget Law, the District's Board of Directors holds public
hearings in the fall of each year to approve the budget and appropriate the funds for the
ensuing year. The appropriation is at the total fund expenditures and other financing uses
level and lapses at year end. The District's Board of Directors can modify the budget by line
item within the total appropriation without notification. The appropriation can only be
modified upon completion of notification and publication requirements. The budget includes
each fund on its basis of accounting unless otherwise indicated.
Property Taxes
Property taxes are levied by the District's Board of Directors. The levy is based on assessed
valuations determined by the County Assessor generally as of January 1 of each year. The
levy is normally set by December 15 by certification to the County Commissioners to put the
tax lien on the individual properties as of January 1 of the following year. The County
Treasurer collects the determined taxes during the ensuing calendar year. The taxes are
payable by April or if in equal installments, at the taxpayer's election, in February and June.
Delinquent taxpayers are notified in August and generally sales of the tax liens on
delinquent properties are held in November or December. The County Treasurer remits the
taxes collected monthly to the District.
Property taxes, net of estimated uncollectible taxes, are recorded initially as deferred inflows
of resources in the year they are levied and measurable. The unearned property tax
revenues are recorded as revenue in the year they are available or collected.
Deferred Inflows of Resources
In addition to liabilities, the statement of net position reports a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period and so will
not be recognized as an inflow of resources (revenue) until that time. The District has one
item that qualifies for reporting in this category. Accordingly, the item, deferred property tax
revenue, is deferred and recognized as an inflow of resources in the period that the amount
becomes available.
Equity
Net Position
For government -wide presentation purposes, when both restricted and unrestricted
resources are available for use, it is the District's practice to use restricted resources first,
then unrestricted resources as they are needed.
(8)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equity (Continued)
Fund Balance
Fund balance for governmental funds should be reported in classifications that comprise a
hierarchy based on the extent to which the government is bound to honor constraints on the
specific purposes for which spending can occur. Governmental funds report up to five
classifications of fund balance: nonspendable, restricted, committed, assigned, and
unassigned.
Because circumstances differ among governments, not every government or every
governmental fund will present all of these components. The following classifications
describe the relative strength of the spending constraints:
Nonspendable Fund Balance — The portion of fund balance that cannot be spent
because it is either not in spendable form (such as prepaid amounts or inventory) or
legally or contractually required to be maintained intact.
Restricted Fund Balance — The portion of fund balance that is constrained to being used
for a specific purpose by external parties (such as bondholders), constitutional
provisions, or enabling legislation.
Committed Fund Balance — The portion of fund balance that can only be used for
specific purposes pursuant to constraints imposed by formal action of the government's
highest level of decision -making authority, the Board of Directors. The constraint may be
removed or changed only through formal action of the Board of Directors.
Assigned Fund Balance — The portion of fund balance that is constrained by the
government's intent to be used for specific purposes, but is neither restricted nor
committed. Intent is expressed by the Board of Directors to be used for a specific
purpose. Constraints imposed on the use of assigned amounts are more easily removed
or modified than those imposed on amounts that are classified as committed.
Unassigned Fund Balance — The residual portion of fund balance that does not meet any
of the criteria described above.
If more than one classification of fund balance is available for use when an expenditure is
incurred, it is the District's practice to use the most restrictive classification first.
(9)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 3 LONG-TERM OBLIGATIONS
Capital Pledge Agreements
Each of Pioneer Metropolitan Districts No. 2, 4, and 5 entered into Capital Pledge
Agreements with Pioneer Metropolitan District No. 3 (collectively, the Capital Pledge
Agreements). Under such Capital Pledge Agreements, each of Districts No. 2, 4, and 5
covenant to levy an ad valorem mill levy each year upon all taxable property of each of such
Districts in the amount of 50 mills. The Districts will transfer all ad valorem tax revenue
derived from such levy and all Specific Ownership Tax revenue allocable to such levy to
Pioneer Metropolitan District No. 3 for payment on the Series 2016 Bonds.
Authorized Debt
On May 2, 2006, a majority of the qualified electors of the District who voted in the election
authorized the issuance of indebtedness in an amount not to exceed $3,680,000,000. On
May 4, 2010, and on May 6, 2014, a majority of the qualified electors of the District who
voted in the election authorized the issuance of indebtedness in an amount not to exceed
$3,680,000,000 and $4,010,000,000, respectively. The District's pledge under the Capital
Pledge Agreement reduces the District's debt authorization by the amount of the bonds
issued by District No. 3. At December 31, 2018, the District had authorized but unissued
indebtedness in the following amounts allocated for the following purposes:
Streets
Water
Sanitation
Parks and Recreation
Traffic & Safety
Mosquito Control
Public Transportation
Fire Protection
Television Relay and Translation
Security Service
Operations and Maintenance
Debt Refunding
Intergovernmental Agreements
Total
Pledged Under Pledged Under Authorized
Debt Series 2012 Series 2016 But
Authorized Bonds Bonds Unissued
$ 990,000,000 $ - $ $ 990,000,000
990,000,000 3,695,000 2,671,000 983,634,000
990,000,000 145,000 989,855,000
990,000,000 990,000,000
990,000,000 - 990,000,000
990,000,000 - - 990,000,000
990,000,000 - - 990,000,000
990,000,000 - - 990,000,000
990,000,000 - 990,000,000
330,000,000 - 330,000,000
150,000,000 310,000 - 149,690,000
990,000,000 - 3,743,000 986,257,000
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.
(10)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 4 RELATED PARTY
Certain members of the Board of Directors are employees, owners or are otherwise
associated with HP Farms Holdings, LLC and/or Greenleaf Acres LLC (the Property
Owners) and/or Gateway American Resources, LLC (the Developer). The Property Owners
and the Developer may have conflicts of interest in dealing with the District.
NOTE 5 AGREEMENTS
Memorandum of Understanding, dated November 12, 2008 (as amended March 26, 2012)
As contemplated by the Service Plan, Pioneer Regional Metropolitan District (Pioneer
Regional) was designated as the "Service District" and Pioneer Metropolitan Districts No. 1
through 6, inclusive, were designated as the "Financing Districts." The Service Plans for the
Service District and each of the Financing Districts provided that the Service District and the
Financing Districts would enter into a Facilities Funding Construction and Operations
Agreement (the FFCO) in order to establish the rights and obligations of the Service District
and Financing Districts to provide for the financing, construction, operation, and
maintenance of certain public infrastructure required for the planned future development
within the Districts (the Future Development). Prior to completing discussions on the terms
of the FFCO, the Service District and the Financing Districts entered into a Memorandum of
Understanding (the MOU) dated November 12, 2008 (as amended March 26, 2012), by and
among Pioneer Metropolitan Districts No. 1 through 6 and Pioneer Regional, whereby the
Financing Districts agreed to reimburse the Service District for certain expenses incurred by
the Service District for the benefit of each of the Financing Districts.
Such expenses are those incurred by the Service District in connection with the organization
and administration of the Districts, District No. 1 and District No. 6, and in the planning and
designing of improvements to serve the Future Development (the Reimbursable Costs), as
defined therein. The MOU was amended on March 26, 2012, to release the Districts from
their obligations under the MOU and to allow the Districts to enter in to the 2012 FFCO
(defined below) as contemplated by the Service Plans for the Districts. The amendment to
the MOU, however, contemplates that the FFCO will be amended in the future to ensure
transition and/or use of any public improvements constructed thereunder to Pioneer
Regional as the Service District.
Facilities Funding Construction and Operations Agreement
As anticipated by the amendment to the MOU as noted above, on March 26, 2012, the
District entered into a Facilities Funding, Construction, and Operations Agreement with
Pioneer Metropolitan Districts No. 2, 3, and 4, (the 2012 FFCO). Pursuant to the 2012
FFCO, District No. 3 is generally responsible for coordinating the financing, construction,
ownership, operation and maintenance of public improvements, while Districts No. 2, 4, and
5, serving as the "Financing Districts." As such, these Districts are generally responsible for
producing property tax and other revenue sufficient to pay the costs of operations and debt
service expenses incurred for the purpose of providing such improvements and services.
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 5 AGREEMENTS (CONTINUED)
Facilities Funding Construction and Operations Agreement (Continued)
In addition, District No. 3, in its capacity as the "Coordinating District" under the FFCO has
agreed to pay the Reimbursable Costs.
The 2012 FFCO allows for a future amendment to include Pioneer Regional, District No. 1
and District No. 6 to ensure transition and/or use of any public improvements constructed
thereunder to Pioneer Regional, as the provider of services to end users within the Districts,
and the eventual transition to each of the Districts to provide services to its future residents
and/or commercial users.
Pioneer Community Reimbursement IGA
In accordance with the MOU, Pioneer Regional incurred certain costs on behalf of the
Financing Districts. Pursuant to the Intergovernmental Agreement Regarding Assignment of
Reimbursement Obligations; Consent to Construction; and Collection of Regional Mill Levy
dated as of March 26, 2012, between Pioneer Regional and the District (the Pioneer
Community Reimbursement IGA), Pioneer Regional assigned to District No. 3 certain
obligations it had with respect to the Reimbursement Obligations and Organization Costs
and Services (each, as defined therein). These obligations are collectively referred to therein
as the "Pioneer Community Reimbursement Obligations." Pioneer Regional has agreed to
adjust the formula in determining its rates to be charged to end users in the Future
Development in exchange for District No. 3 assuming the Pioneer Community
Reimbursement Obligations.
Pioneer Regional is obligated to provide water and wastewater service to the future
residents and commercial development of the Districts. As noted above, in exchange for
District No. 3's assumption of the Pioneer Community Reimbursement Obligations, Pioneer
Regional agreed that it would adjust the calculation considered in establishing its rate
structure so that no charges are passed along that would have otherwise been assessed as
a result of Pioneer Regional's former obligations pursuant to the MOU. This is expected to
result in a decrease in the tap fee rates ultimately payable for connection to water and
wastewater systems for service.
Under the Pioneer Community Reimbursement IGA, Pioneer Regional agreed that it will not
object to District No. 3's construction of (or causing the construction of) future water and
wastewater infrastructure that would otherwise be the responsibility of Pioneer Regional
pursuant to its Service Plan. District No. 3 agreed to give Pioneer Regional advance written
notice prior to constructing any water and wastewater improvements. In addition, pursuant
to the First Amendment to the MOU and the Pioneer Community Reimbursement IGA,
Pioneer Regional and District No. 3 will enter into an agreement prior to the connection of
any resident to water or wastewater service to ensure Pioneer Regional has adequate
access to such infrastructure to provide the services contemplated under its Service Plan
and to establish an orderly transition of the use and ownership of the improvements to each
of the Districts.
(12)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 5 AGREEMENTS (CONTINUED)
Pioneer Community Reimbursement IGA (Continued)
Finally, each of the Financing Districts will be obligated to impose a regional improvements
mill levy (the Regional Mill Levy), the proceeds of which are to be remitted to Pioneer
Regional to be used for the provision of regional water and wastewater improvements.
Pursuant to the Pioneer Regional Community Reimbursement IGA, District No. 3 will cause
each of the other Financing Districts to impose the Regional Mill Levy and will collect and
remit the revenue derived from such levy to Pioneer Regional. Pioneer Regional is to use
such revenue for payment of its on -going operations expenses and certain reimbursement
obligations that were retained by Pioneer Regional and not assigned to or assumed by
District No. 3 and for any other purpose authorized by its Service Plan. District No. 3 did not
make any payments related to this agreement during 2018.
The Pioneer Community Reimbursement IGA was amended by that certain First
Amendment to Intergovernmental Agreement Regarding Assignment of Reimbursement
Obligations; Consent to Construction; and Collection of Regional Mill levy dated May 28,
2013 (the First Amendment to Pioneer IGA). Pursuant to the First Amendment to Pioneer
IGA, District No. 3 agreed to make funds available to Pioneer Regional for Pioneer
Regional's implementation of the Program (defined below) adopted by the Board of
Directors of Pioneer Regional. Pursuant to the First Amendment to Pioneer IGA, such funds
may be used for payment of any incentive payments, water infrastructure, or water as may
be necessary for Pioneer Regional's implementation of the Program. During 2018, District
No. 3 made an incentive payment under the Program to Greenleaf Acres, LLC, in the
amount of $122,016.
Agricultural Water Conservation Pilot Program
Pioneer Regional is intended to provide retail water and wastewater services within the
Pioneer communities, including the service area of the District. A Planned Unit Development
(PUD) was approved for the Pioneer Communities in 2013 which zoning document
approved certain agricultural uses within the Pioneer Communities. Since Pioneer Regional
will be providing water services, it determined that implementation of a water conservation
program by the agricultural users within the Pioneer Communities will benefit all of the
residents and inhabitants in the Pioneer Communities. In May 2013 the Board of Directors of
Pioneer Regional adopted the Pioneer Regional Agricultural Water Conservation Pilot
Program. The Program was created to promote and incentivize on -farm physical
improvements, soils amendment, crop selection, irrigation management practices and water
measurement that promote water conservation and increase crop density and yield
("Conservation Measures"). Pioneer Regional's goal is to ensure water is being used
efficiently and that it is being put to beneficial use.
(13)
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 5 AGREEMENTS (CONTINUED)
Agricultural Water Conservation Pilot Program (Continued)
Under the Program, financial incentives are made available to farmers and ranchers
("Growers") for a 12 year period beginning in 2013. In order to participate in the Program, a
Grower must meet certain eligibility requirements, including, but not limited to actively
farming or ranching within the Program Area a total of not less than 500 acres for
commercial purposes only. In addition, the Conservation Measures to be implemented must
be located within the taxing boundaries of one of the District Nos. 2 through 5. As noted
above, the First Amendment to the Pioneer Community Reimbursement IGA was entered
into between Pioneer Regional and District No. 3 to evidence District No. 3's agreement to
making funding available for the Program. At this time, one participation agreement under
the Program has been executed, as described below.
Pioneer Regional Metropolitan District Participation Agreement Agricultural Water
Conservation Pilot Program — Greenleaf Acres, LLC
On July 8, 2013, Pioneer Regional entered into its first participation agreement under the
Program with Greenleaf Acres, LLC (Greenleaf) (the Greenleaf Participation Agreement).
Pursuant to the Greenleaf Participation Agreement, Greenleaf has elected to participate in
the Program with respect to 920 acres of its property. The term of the Greenleaf
Participation Agreement is for 12 years. Greenleaf must make an annual election of the
Conservation Measures it intends to implement in any particular growing season (the Plan).
If Greenleaf fulfills its Plan in accordance with the Program requirements, Greenleaf will be
entitled to certain incentive payments.
Pursuant to the First Amendment to Pioneer IGA, District No. 3 is required to make an
incentive payment to Greenleaf consisting of a combination of water delivery and/or cash, as
set forth in the Greenleaf Participation Agreement. In the event the total assessed valuation
of real property located within Pioneer Metropolitan Districts No. 2 — 5 decreases in any year
from the total assessed valuation for collection year 2013, the Greenleaf Participation
Agreement provides that District No. 3 has the right to decrease the amount of the incentive
payment by an amount that is proportionate to the decrease in total assessed valuation.
The scheduled cash payment for 2018 was $100,000. The total assessed valuation
decreased by 15.12% from 2013 collection year to 2018 collection year. Accordingly, the
cash payment due for 2018 was $84,875. District No. 3 did not deliver 200 acre feet of water
to Greenleaf in 2018. The cash value of that water was $37,141. During 2018, District No. 3
paid Greenleaf $122,016 for its obligation.
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PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
NOTE 6 RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; thefts of, damage to, or
destruction of assets; errors or omissions; injuries to employees; or acts of God.
The District is a member of the Colorado Special Districts Property and Liability Pool (Pool).
The Pool is an organization created by intergovernmental agreement to provide property,
liability, public officials' liability, boiler and machinery and workers compensation coverage to
its members. Settled claims have not exceeded this coverage in any of the past three fiscal
years.
The District pays annual premiums to the Pool for liability, property, and public officials'
liability, and workers compensation coverage. In the event aggregated losses incurred by
the Pool exceed amounts recoverable from reinsurance contracts and funds accumulated by
the Pool, the Pool may require additional contributions from the Pool members. Any excess
funds that the Pool determines are not needed for purposes of the Pool may be returned to
the members pursuant to a distribution formula.
NOTE 7 TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, referred to as the Taxpayer's Bill of Rights
(TABOR), contains tax, spending, revenue and debt limitations which apply to the State of
Colorado and all local governments.
Spending and revenue limits are determined based on the prior year's Fiscal Year Spending
adjusted for allowable increases based upon inflation and local growth. Fiscal Year
Spending is generally defined as expenditures plus reserve increases with certain
exceptions. Revenue in excess of the Fiscal Year Spending limit must be refunded unless
the voters approve retention of such revenue.
TABOR requires local governments to establish Emergency Reserves. These reserves must
be at least 3% of Fiscal Year Spending (excluding bonded debt service). Local governments
are not allowed to use the emergency reserves to compensate for economic conditions,
revenue shortfalls, or salary or benefit increases.
The District's management believes it is in compliance with the provisions of TABOR.
However, TABOR is complex and subject to interpretation. Many of the provisions, including
the interpretation of how to calculate Fiscal Year Spending limits, will require judicial
interpretation.
On May 2, 2006, the electorate approved the removal of limitations imposed by the TABOR
Amendment and any other law that purports to limit the 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.
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SUPPLEMENTARY INFORMATION
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PIONEER METROPOLITAN DISTRICT NO. 5
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2018
REVENUES
Property Taxes
Specific Ownership Taxes
Other Income
Total Revenues
EXPENDITURES
County Treasurer's Fees
Transfer to District No. 3
Contingency
Total Expenditures
NET CHANGE IN FUND BALANCE
Fund Balance - Beginning of Year
FUND BALANCE - END OF YEAR
Original
and Final
Budget
$ 909,402
54,564
41,034
1,005,000
13,641
950,325
41,034
1,005,000
Actual
Amounts
Variance with
Final Budget
Positive
(Negative)
$ 909,402 $
69,004
978,406
13,641
964,765
978,406
14,440
(41,034)
(26,594)
(14,440)
41,034
26,594
$ - $
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PIONEER METROPOLITAN DISTRICT NO. 5
SCHEDULE OF ASSESSED VALUATION, MILL LEVY, AND PROPERTY TAXES COLLECTED
DECEMBER 31, 2018
Prior Year
Assessed
Valuation
for Current Percentage
Year Ended Year Property Mills Levied Total Property Taxes Collected
December 31, Tax Levy General Debt Service Regional Levied Collected to Levied
2014 $ 11,491,391 10.000 50.000 5.000 $ 746,941 $ 746,940 100.00 %
2015 5,328,110 10.000 50.000 5.000 346,327 346,143 99.95
2016 10,693,660 10.000 50.000 5.000 695,088 695,089 100.00
2017 28,552,010 10.000 50.000 5.000 1,855,881 1,855,881 100.00
2018 18,188,040 10.000 50.000 5.000 1,182,222 1,182,222 100.00
Estimated for the Year
Ending December 31,
2019
NOTE:
$ 17,460,060 10.000 50.000 5.000 $ 1,134,904
Property taxes shown as collected in any one year include collection of delinquent property taxes or abatements of property
taxes assessed in prior years. This presentation does not attempt to identify specific years of assessment.
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