HomeMy WebLinkAbout20183067.tiffPIONEER METROPOLITAN DISTRICT NO. 5
Weld County, Colorado
FINANCIAL STATEMENTS
December 31, 2017
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2018-3067
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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
General Fund - Statement of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 5
Notes to Financial Statements 6
SUPPLEMENTARY INFORMATION 16
Debt Service Fund - Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual 17
Schedule of Assessed Valuation, Mill Levy and Property Taxes Collected 18
SIMMONS & WHEELER, P.C. Certified Public Accountants
304 Inverness Way South, Suite 490, Englewood, CO 80111 (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, 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 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 3 I, 2017, and the respective changes in financial position and the respective
budgetary comparison for the General Fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Other -Matters
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.
11A. . PC
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Englewood, CO
August 16, 2018
II
BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF NET POSITION
December 31, 2017
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
$ 9,689
1,182,222
1,191,911
9,689
9,689
1,182,222
1,182,222
$
These financial statements should be read only in connection with
the accompanying notes to financial statements.
1
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF ACTIVITIES
Year Ended December 31, 2017
Functions/Programs
Government activities:
General government
Intergovernmental transfers to Pioneer
Metro District No. 3
Operations
Debt service
Program Revenues
Net (Expenses)
Revenues and
Changes in
Net Position
Charges Operating Capital
for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
$ 27,838 $
455,015
1,516,751
$
$ 1,999,604 $ - $
General revenues:
Property taxes
Specific ownership taxes
Total general revenues
Change in net position
Net position - Beginning
Net position - Ending
These financial statements should be read only in connection with
the accompanying notes to financial statements.
2
$ - $ (27,838)
(455,015)
(1,516,751)
$ (1,999,604)
1,855,881
143,723
1,999,604
$
PIONEER METROPOLITAN DISTRICT NO. 5
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2017
General
Total
Debt Governmental
Service Funds
ASSETS
Receivable from County Treasurer $ 2,236 $ 7,453 $ 9,689
Property taxes receivable 272,820 909,402 1,182,222
Total assets $ 275,056 $ 916,855 $ 1,191,911
LIABILITIES
Payable to Pioneer Metro No. 3 $ 2,236 $ 7,453 $ 9,689
Total liabilities 2,236 7,453 9,689
DEFERRED INFLOWS OF
RESOURCES
Property tax revenue 272,820 909,402 1,182,222
Total deferred inflows of resources 272,820 909,402 1,182,222
FUND BALANCES
Unassigned
Total fund balances
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
$ 275,056 $ 916,855 $ 1,191,911
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended December 31, 2017
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
General
Total
Debt Governmental
Service Funds
$ 428,273 $ 1,427,608 $ 1,855,881
33,166 110,557 143,723
461,439 1,538,165
6,424
455,015
461,439
FUND BALANCES - END OF YEAR $
21,414
1,516,751
1,538,165 1,999,604
1,999,604
27,838
1,971,766
$ $
These financial statements should be read only in connection with
the accompanying notes to financial statements.
4
PIONEER METROPOLITAN DISTRICT NO. 5
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
December 31, 2017
Variance with
Final Budget
Budget Actual Positive
Original Final Amounts (Negative)
REVENUES
Property taxes
Specific ownership taxes
Other income
Total revenues
EXPENDITURES
County Treasurer's fees
Transfer to Pioneer Metro No. 3
Contingency
Total expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCES -
BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
$ 428,280 $ 428,280 $ 428,273 $ (7)
21,414 33,167 33,166 (1)
5,000 3,553 (3,553)
454,694 465,000 461,439 (3,561)
6,424
443,270
5,000
454,694 465,000
6,424 6,424
455,023 455,015
3,553 -
$ - $
8
3,553
461,439 3,561
$ - $
These financial statements should be read only in connection with
the accompanying notes to financial statements.
5
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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 and intergovernmental revenues.
The statement of net position reports all financial and capital resources of the District. The
difference between the sum of assets and deferred outflows and the sum of liabilities and
deferred inflows is reported as net position.
6
PIONEER METROPOLITAN DISTRICT NO. 5
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.
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 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 of each year to approve the budget and appropriate the funds for the ensuing year.
The appropriation is at the total fund expenditures and other financing uses level and lapses at
year end. The District's Board of Directors can modify the budget by line item within the total
appropriation without notification. The appropriation can only be modified upon completion of
notification and publication requirements. The budget includes each fund on its basis of
accounting unless otherwise indicated.
The District has amended its annual budget for the year ended December 31, 2017.
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 FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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.
NOTE 3 — LONG-TERM OBLIGATIONS
Capital Pledge Agreements
Each of Pioneer Metropolitan District Nos. 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 District Nos. 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.
9
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 3 - LONG-TERM OBLIGATIONS (CONTINUED)
Authorized Debt
On May 2, 2006, a majority of the qualified electors of the District who voted in the election
authorized the issuance of indebtedness in an amount not to exceed $3,680,000,000. On
May 4, 2010, and on May 6, 2014, a majority of the qualified electors of the District who voted in
the election authorized the issuance of indebtedness in an amount not to exceed
$3,680,000,000 and $4,010,000,000, respectively. 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, 2017, 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
Debt
Authorized
$ 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
150,000,000
990,000,000
990,000,000
$11,370,000,000
Pledged
Under
Series 2012
Bonds
Pledged
Under
Series 2016
Bonds
Authorized
But
Unissued
$ $ $ 990,000,000
2,671,000 983,634,000
989,855,000
990,000,000
990,000,000
990,000,000
990,000,000
990,000,000
990,000,000
330,000,000
310,000 149,690,000
3,743,000 986,257,000
990,000,000
3,695,000
145,000
$ 4,150,000 $ 6,414,000 $11,359,436,000
In the future, the District may issue a portion or all of the remaining authorized but unissued
general obligation debt for purposes of providing public improvements to support development
as it occurs within the District's service area. However, as of the date of this audit, the amount
and timing of any debt issuance is not determinable.
NOTE 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.
10
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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 District Nos. 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
District Nos. 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 District Nos. 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 District Nos. 2, 4, and 5, serving as the
"Financing Districts," are generally responsible for producing property tax and other revenue
sufficient to pay the costs of operations and debt service expenses incurred for the purpose of
providing such improvements and services.
In addition, 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.
11
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 5 - AGREEMENTS (CONTINUED)
Pioneer Community Reimbursement IGA
In accordance with the MOU, Pioneer Regional incurred certain costs on behalf of the Financing
Districts. Pursuant to the Intergovernmental Agreement Regarding Assignment of
Reimbursement Obligations; Consent to Construction; and Collection of Regional Mill Levy
dated as of March 26, 2012, between Pioneer Regional and the District (the "Pioneer
Community Reimbursement IGA"), Pioneer Regional assigned to District No. 3 certain
obligations it had with respect to the Reimbursement Obligations and Organization Costs and
Services (each, as defined therein) which are collectively referred to therein as the "Pioneer
Community Reimbursement Obligations." Pioneer Regional has agreed to adjust the formula in
determining its rates to be charged to end users in the Future Development in exchange for
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 will adjust the calculation considered in establishing its rate structure so that no charges
are passed along that would have otherwise been assessed as a result of Pioneer Regional's
former obligations pursuant to the MOU. This is expected to result in a decrease in the tap fee
rates ultimately payable for connection to water and wastewater systems for service.
Under the Pioneer Community Reimbursement IGA, Pioneer Regional agreed that it will not
object to 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.
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 which 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 2017.
12
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 5 - AGREEMENTS (CONTINUED)
The Pioneer Community Reimbursement IGA was amended by that certain First Amendment to
Intergovernmental Agreement Regarding Assignment of Reimbursement Obligations; Consent
to Construction; and Collection of Regional Mill levy dated May 28, 2013 (the "First Amendment
to Pioneer IGA"). Pursuant to the First Amendment to Pioneer IGA, 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 2017, District No. 3 made an incentive payment under the Program to
Greenleaf Acres, LLC in the amount of $143,760.
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. 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, then Greenleaf will be entitled to
certain incentive payments.
13
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 5 - AGREEMENTS (CONTINUED)
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 District Nos. 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 2017 was $100,000. The total assessed valuation did not
decrease from 2013 collection year to 2017 collection year. District No. 3 did not deliver 200
acre feet of water to Greenleaf in 2017. The cash value of that water was $43,760. During 2017,
District No. 3 paid Greenleaf $143,760 for its 2017 obligation.
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 which
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.
14
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 7 - TAX, SPENDING AND DEBT LIMITATIONS (CONTINUED)
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.
This information is an integral part of the accompanying financial statements.
15
SUPPLEMENTARY INFORMATION
PIONEER METROPOLITAN DISTRICT NO. 5
DEBT SERVICE 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
Property taxes
Specific ownership taxes
Other income
Total revenues
EXPENDITURES
County Treasurer's fees
Transfer to Pioneer Metro No. 3
Contingency
Total expenditures
$ 1,427,601 $ 1,427,601 $ 1,427,608 $ 7
71,380 110,556 110,557 1
10,000 6,843 (6,843)
1,508,981 1,545,000 1,538,165 (6,835)
21,414
1,477, 567
10,000
21,414 21,414
1,516,743 1,516,751
6,843 -
1,508,981 1,545,000
(8)
6,843
1,538,165 6,835
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES -
FUND BALANCES -
BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
$ $
17
$ $
PIONEER METROPOLITAN DISTRICT NO. 5
SCHEDULE OF ASSESSED VALUATION,
MILL LEVY AND PROPERTY TAXES COLLECTED
December 31, 2017
Year Ended
December 31
Prior
Year Assessed
Valuation
for Current
Year Property
Tax Levy
Mills Levied Total Property Taxes
General Debt Service Regional Levied Collected
2014 $ 11,491,391 10.000
2015 $ 5,328,110 10.000
2016 $ 10,693,660 10.000
2017 $ 28,552,010 10.000
Estimated for
the year ending
December 31,
2018
NOTE:
$ 18,188,040
50.000 5.000 $ 746,941 $ 746,940
50.000 5.000 $ 346,327 $ 346,143
50.000 5.000 $ 695,088 $ 695,089
50.000 5.000 $ 1,855,881 $ 1,855,881
10.000 50.000 5.000 $ 1,182,222
Property taxes shown as collected in any one year include collection of delinquent property taxes or abatements of
property taxes assessed in prior years. This presentation does not attempt to identify specific years of assessment.
18
Percentage
Collected
to Levied
100.00%
99.95%
100.00%
100.00%
Hello