HomeMy WebLinkAbout20182606.tiffLIBERTY RANCH METROPOLITAN DISTRICT
Weld County, Colorado
FINANCIAL STATEMENTS
December 31, 2017
Comm tunic a'Ravt9
I-.-O-►S
2018-2606
51O0119
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT I
BASIC FINANCIAL STATEMENTS
Government -wide Financial Statements:
Statement of Net Position 1
Statement of Activities 2
Fund Financial Statements:
Balance Sheet - Governmental Funds 3
Statement of Revenues, Expenditures and Changes in Fund Balances
- Governmental Funds 4
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement
of Activities 5
General Fund - Statement of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 6
Notes to Financial Statements 7
SUPPLEMENTARY INFORMATION 21
Debt Service Fund - Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 22
Capital Projects Fund - Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 23
Summary of Assessed Valuation, Mill Levy and Property
Taxes Collected 24
L. PAUL GOEDEC'KE P.C.
CERTIFIED PUBLIC ACCOUNTANTS
950 Wadsworth Blvd., Suite 204
LAKEWOOD, COLORADO 80214
TELEPHONE (303) 232 2866
FAX (303) 232 9452
logcpa@qwestoffice.net
Independent Auditor's Report
Board of Directors
Liberty Ranch Metropolitan District
Weld County, Colorado
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 as of and for the year ended December 31, 2017, 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 arc 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.
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND COLORADO SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
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 the Liberty Ranch
Metropolitan District as of December 31, 2017. and the respective changes in financial position and the
respective budgetary comparison for the general fund for the year then ended in conformity 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 opinions on the basic financial statements are not affected by this missing information.
Our audit was conducted for the purpose of forming opinions 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 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.
gic40461..
L. Paul Goedecke, P.C.
July 23, 2018
BASIC FINANCIAL STATEMENTS
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF NET POSITION
December 31, 2017
Governmental
Activities
ASSETS
Cash and investments
Cash and investments - Restricted
Cost of refunding
Receivable - County Treasurer
Property taxes receivable
Prepaid expense
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
Debt service
Unrestricted
Total net position
$ 69,113
220,013
41,545
4,133
584,757
2,731
922,292
1,788
37,912
25,000
11,552,334
11,617,034
584,757
584,757
3,400
180,867
(11,463,766)
$ (11,279,499)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
1
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF ACTIVITIES
Year Ended December 31, 2017
Functions/Programs
Primary government:
Government activities:
General government
Interest and related costs on
long-term debt
Program Revenues
Charges
for
Expenses Services
$ 48,489 $
1,011,989
$ 1,060,478 $
General revenues:
Property taxes
Property taxes - URA
Specific ownership taxes
Net investment income
Total general revenues
Change in net position
Net position - Beginning
Net position - Ending
Operating
Grants and
Contributions
Net (Expense)
Revenue and
Changes in
Net Position
Capital
Grants and Governmental
Contributions Activities
$ $
$ - $
These financial statements should be read only in connection with
the accompanying notes to financial statements.
2
$ (48,489)
(1,011,989)
(1,060,478)
645,881
112,788
55,046
5,338
819,053
(241,425)
(11,038,074)
$(11,279,499)
LIBERTY RANCH METROPOLITAN DISTRICT
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2017
ASSETS
Cash and investments
Cash and investments - Restricted
Receivable - County Treasurer
Property taxes receivable
Prepaid expense
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
Emergency reserves
Committed for:
Capital projects
Unrestricted
Total fund balances
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES
General
Total
Debt Capital Governmental
Service Projects Funds
$ 69,113 $ - $ - $ 69,113
3,400 215,216 1,397 220,013
570 3,563 - 4,133
73,930 510,827 584,757
2,731 - - 2,731
$ 149,744 $ 729,606 $ 1,397 $ 880,747
$ 1,788 $
$ 1,788
1,788 - 1,788
73,930 510,827 584,757
73,930 510,827 - 584,757
2,731 - 2,731
3,400
67,895
74,026 218,779 1,397 294,202
218,779
218,779
3,400
1,397 1,397
67,895
$ 149,744 $ 729,606 $ 1,397
Amounts reported for governmental activities in the statement of net position are different because:
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
Net position of governmental activities
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
(215,211)
(160,123)
(37,912)
(11,202,000)
41,545
$ (11, 279,499)
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended December 31, 2017
REVENUES
Property taxes
Specific ownership taxes
Net investment income
Property taxes - URA
Total revenues
General
Total
Debt Capital Governmental
Service Projects Funds
$ 89,087 $ 556,794 $ - $ 645,881
7,593 47,453 - 55,046
509 4,736 93 5,338
15,790 96,998 - 112,788
112,979 705,981 93 819,053
EXPENDITURES
Accounting 17,559 - 17,559
Audit 3,850 - - 3,850
County Treasurer's fees 1,337 8,355 9,692
District management 11,217 - 11,217
Dues and memberships 338 - - 338
Insurance 2,738 - 2,738
Legal 11,142 - - 11,142
Miscellaneous 287 - 21 308
Paying agent fees 1,433 1,433
Bond interest - Series 2017A 202,469 202,469
Bond interest - Series 2017B 256,445 - 256,445
Bond issue costs - 433,821 433,821
Bond principal - Series 2017A 25,000 - 25,000
Contingency - -
Total expenditures 48,468 493,702 433,842 976,012
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES 64,511 212,279 (433,749) (156,959)
OTHER FINANCING SOURCES (USES)
Transfer from other fund (59,680) - 59,680
Bond issuance 4,170,136 7,056,864 11,227,000
Refunding bond payment (4,595,139) (4,595,139)
Repay Developer advance - (6,602,199) (6,602,199)
Total other financing sources (uses) (59,680) (425,003) 514,345 29,662
NET CHANGE IN FUND BALANCES 4,831 (212,724) 80,596 (127,297)
FUND BALANCES -
BEGINNING OF YEAR 69,195 431,503 (79,199) 421,499
FUND BALANCES -
END OF YEAR $ 74,026 $ 218,779 $ 1,397 $ 294,202
These financial statements should be read only in connection with
the accompanying notes to 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, 2017
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - Total governmental funds $ (127,297)
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.
Refunding of bonds payable
Bond issuance
Bond principal payment
Cost of refunding
Repayment of Developer advances
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
4,530,000
(11,227,000)
25,000
41,545
4,638,055
(14,318)
1,892,590
Changes in net position of governmental activities $ (241,425)
These financial statements should be read only in connection with
the accompanying notes to 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, 2017
Variance with
Final Budget
Budget Actual Positive
Original Final Amounts (Negative)
REVENUES
Property taxes
Specific ownership tax
Net investment income
Property taxes - URA
Total revenues
EXPENDITURES
Accounting
Audit
County Treasurer's fees
District management
Dues and memberships
Insurance
Legal
Miscellaneous
Total expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfer to other fund
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES -
BEGINNING OF YEAR
FUND BALANCES -
END OF YEAR
$ 89,078 $ 89,078 $ 89,087 $ 9
5,232 5,232 7,593 2,361
385 385 509 124
15,557 15,557 15,790 233
110,252 110,252 112,979 2,727
25,000 20,000 17,559 2,441
4,000 4,000 3,850 150
1,336 1,337 1,337 -
25,000 20,000 11,217 8,783
500 500 338 162
2,950 2,950 2,738 212
30,000 30,000 11,142 18,858
1,214 1,213 287 926
90,000 80,000 48,468 31,532
20,252 30,252 64,511 34,259
(50,000) (59,680) (9,680)
(50,000) (59,680) (9,680)
20,252 (19,748) 4,831 24,579
64,669 64,669 69,195 4,526
$ 84,921 $ 44,921 $ 74,026 $ 29,105
These financial statements should be read only in connection with
the accompanying notes to financial statements.
6
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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 FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 FINANCIAL STATEMENTS
December 31, 2017
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 amended its annual budget for the year ended December 31, 2017.
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 FINANCIAL STATEMENTS
December 31, 2017
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.
10
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• Unassigned fund balance — The residual portion of fund balance that does not meet any
of the criteria described above.
If more than one classification of fund balance is available for use when an expenditure is
incurred, it is the District's practice to use the most restrictive classification first.
NOTE 3 - CASH AND INVESTMENTS
Cash and investments as of December 31, 2017, are classified in the accompanying financial
statements as follows:
Statement of net position:
Cash and investments
Cash and investments - Restricted
Cash and investments as of December 31, 2017, consist of the following:
Deposits with financial institutions
Investments
Total cash and investments
Cash Deposits
$ 69,113
220,013
$ 289,126
$ 4,549
284,577
$ 289,126
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, 2017, the District's cash deposits had a bank balance of $28,843 and a
carrying balance of $4,549.
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.
11
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 3 - CASH AND INVESTMENTS (CONTINUED)
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, 2017, the District had the following investments:
Investment
Maturity Amount
Colorado Surplus Asset Weighted average
Fund Trust (CSAFE)
CSAFE
under 60 days $ 284,577
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 using the amortized cost method. There are no unfunded
commitments, the redemption frequency is daily and there is no redemption notice period.
12
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
o NOTE 4 - LONG-TERM OBLIGATIONS
The following is a summary of long-term obligations as of December 31, 2017:
Balance at Balance at Due
December 31, December 31, Within
2016 Additions Reductions 2017 One Year
Governmental Activities:
G.O. Bonds - Series 2006 $ 4,530,000 $ - $ 4,530,000 $ - $ -
G.O. Refunding and Improvement 5,225,000 25,000 5,200,000 25,000
2017A Bonds
G.O. Subordinate Limited Tax 2,517,000 2,517,000
2017B Bonds
Junior Subordinate Cash Flow 3,485,000 - 3,485,000
2017C Bonds
Developer advance 4,853,266 - 4,638,055 215,211
Developer advance interest 2,052,713 71,554 1,964,144 160,123 -
Total payable $ 11,435,979 $ 11,298,554 $11,157,199 $ 11,577,334 $ 25,000
$4,935,000 General Obligation Bonds, dated August 29, 2006 (the 2006 Bonds), with an
interest rate of 6.25%, which are due December 1, 2036. The Bonds are subject to redemption
prior to maturity at the option of the District as a whole or in integral multiples of $1,000 on any
order of maturity and in whole or partial maturities, on December 1, 2016, and on any date
thereafter, upon payment of par and accrued interest, without redemption premium. The 2006
Bonds are also subject to mandatory sinking fund redemption, in part, by lot, on December 1,
2010, and each December 1 thereafter.
The 2006 Bonds are secured by and payable from the Pledged Revenue consisting of monies
derived by the District from the following sources, net of any collection costs: 1) the Required
Mill Levy; 2) the portion of the Specific Ownership Tax which is collected as a result of the
imposition of the Required Mill Levy; 3) the "capital fees" which includes Facilities Fees imposed
by the District; and 4) any other legally available monies which the District determines to be
treated as Pledged Revenue. Required Mill Levy means an ad valorem mill levy imposed upon
all taxable property of the District each year in an amount sufficient to pay the principal,
premium if any, and interest on the Bonds as the same become due/payable. The maximum
Required Mill Levy is 50 mills and the minimum mill levy is 40 mills; both will be adjusted for
changes in the ratio of actual value to assessed value of property within the District. The District
must levy at least the minimum as long as the debt to assessed value ratio is greater than 50%
and the Surplus Fund is less than its maximum amount of $604,000. On February 22, 2017, the
District issued its 2017A Bonds (discussed below), which refunded the 2006 Bonds. A portion of
the proceeds from the 2017A Bonds was used for the repayment and redemption of the 2006
Bonds. As of December 31, 2016, the District certified 50.000 mills for debt service for tax
collection year 2017 as a result of the Surplus Fund balance being less than $604,000. Given
that the 2017A Bonds refunded the 2006 Bonds, as of December 31, 2017, the District certified
55.277 mills for debt service of the 2017 Bonds for collection in 2018 (discussed below).
13
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
On February 22, 2017, the District refunded $4,530,000 of General Obligation Bonds (Series
2006) with an average interest rate of 6.25% by the issuance of $5,225,000 General Obligation
Refunding and Improvement Bonds dated February 22, 2017 with an average interest rate of
5%. The District refunded the bonds to achieve an economic gain of almost $128,062.
$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 2006 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.
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.
14
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
The District's general obligation bonds mature as follows:
Principal Interest Total
2018
2019
2020
2021
2022
2023-2027
2028-2032
2033-2037
2038-2042
2043-2046
Authorized Debt
$ 25,000 $ 260,000 $ 285,000
25,000 258,750 283,750
60,000 257,500 317,500
65,000 254,500 319,500
75,000 251,250 326,250
480,000 1,193,250 1,673,250
695,000 1,053,250 1,748,250
980,000 852,000 1,832,000
1,365,000 570,750 1,935,750
1,430,000 184,000 1,614,000
$ 5,200,000 $ 5,135,250 $ 10,335,250
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, 2017, 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
Authorized Remaining at
November 1, 2005 Authorization December 31,
Election Used 2017
$ 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
15
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
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 2017, the District certified an adjusted mill levy of 55.277 mills for collection in budget
year 2018.
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 Agreements)
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 eight percent (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.
On December 1, 2010, the District terminated the 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 principle and interest balance and had no outstanding
obligations as of December 31, 2017.
16
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
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 eight percent (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, 2017.
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.
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, 2017, the District had outstanding advances of $215,211 and accrued
interest of $160,123.
17
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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; 2017, as follows:
Restricted net position:
TABOR emergency reserve
Debt service
Total restricted net position
$ 3,400
180,867
$ 184,267
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
The 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.
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.
18
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 7 - AGREEMENTS (CONTINUED)
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 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 to which the District is responsible for to request a
meeting to discuss and implement steps to dissolve the District.
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.
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.
19
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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
nat 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.
This information is an integral part of the accompanying financial statements.
20
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, 2017
Variance with
Original and Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Property taxes
Specific ownership tax
Net investment income
Property taxes - URA
Total revenues
EXPENDITURES
County Treasurer's fees
Paying agent fees
Bond interest - Series 2017A
Bond interest - Series 2017B
Bond principal - Series 2017A
Contingency
Total expenditures
$ 556,737 $ 556,794 $ 57
32,698 47,453 14,755
6,250 4,736 (1,514)
97,232 96,998 (234)
692,917
8,351
2,150
663,100
25,449
699,050
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (6,133)
OTHER FINANCING SOURCES (USES)
Bond issuance
Refunding bond payment
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
OF YEAR
5,997,825
(4,821,950)
1,175,875
705,981 13,064
8,355
1,433
202,469
256,445
25,000
(4)
717
460,631
(256,445)
(25, 000)
25,449
493,702 205,348
212,279 205,348
4,170,136
(4,595,139)
(1,827,689)
(226, 811)
(425,003) (2,054,500)
1,169,742 (212,724) (1,382,466)
652,718 431,503 (221,215)
FUND BALANCES - END OF YEAR $ 1,822,460 $ 218,779 $ (1,603,681)
22
LIBERTY RANCH METROPOLITAN DISTRICT
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2017
Variance with
Final Budget
Budget Actual Positive
Original Final Amounts (Negative)
REVENUES
Net investment income
Total revenues
EXPENDITURES
Bond issue costs
Contingency
Miscellaneous
Total expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
$ - $
194,867
433,821
63,959
21
194,867 497,801
$ 93 $ 93
93 93
433,821
21
63,959
433,842 63,959
(194,867) (497,801) (433,749) 64,052
OTHER FINANCING SOURCES (USES)
Transfer from other fund - 59,680 59,680
Bond proceeds 6,692,175 6,692,175 7,056,864 (364,689)
Repay Developer advance (6,420,000) (6,602,199) (6,602,199) -
Total other financing sources (uses) 272,175 149,656 514,345 (364,689)
NET CHANGE IN FUND BALANCES
FUND BALANCES -
BEGINNING OF YEAR
FUND BALANCES -
END OF YEAR
77,308 (348,145)
(77,308)
$
23
80,596 (300,637)
(79,199) (79,199)
$ (427,344) $ 1,397 $ (300,637)
LIBERTY RANCH METROPOLITAN DISTRICT
SUMMARY OF ASSESSED VALUATION,
MILL LEVY AND PROPERTY TAXES COLLECTED
December 31, 2017
Prior Year
Assessed Valuation Total
Year Ended for Current Year Mills Levied for Property Taxes
Refunds Percent
and Collected to
December 31, Property Tax Levy General Debt Service Abatements Levied Collected Levied
2013 $ 5,790,730 8.000 50.000 0.000 $ 335,863 $ 314,937 93.8%
2014 $ 7,175,849 8.000 50.000 0.000 $ 416,199 $ 416,182 99.99%
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 99.99%
2017 $ 11,134,732 * 8.000 50.000 0.000 $ 645,815 $ 645,881 100.01%
Estimated for
calendar year
ending
December 31,
2018 $ 9,241,217 * 8.000 55.277 0.000 $ 584,757
* 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.
24
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