HomeMy WebLinkAbout20182459.tiffPIONEER METROPOLITAN DISTRICT NO. 3
Weld County, Colorado
FINANCIAL STATEMENTS
December 31, 2017
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TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT
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
Net Activities 5
General Fund - Statement of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 6
Notes to Financial Statements 7
SUPPLEMENTAL INFORMATION 23
Debt Service Fund - Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual 24
Capital Projects Fund - Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual 25
CONTINUING DISCLOSURE (UNAUDITED) 26
History of the Pioneer Metropolitan District Nos. 2, 3, 4 and 5
Assessed Valuation 27
Assessed Valuation of Classes of Property in the Pioneer
Metropolitan District Nos. 2, 3, 4 and 5 28
Historical Assessed and Actual Valuation of Oil and Gas Properties
in Weld County 29
Total Taxes Levied and Collected in the Pioneer Metropolitan
District Nos. 2, 3, 4 and 5 29
2017 Taxpayers and Assessed Valuation within the Pioneer
Metropolitan District Nos. 2, 3, 4 and 5 30
SIMMONS & WHEELER, P.C. Certified Public Accountants
304 Inverness Way South, Suite 490, Englewood, CO 80112 (303) 689-0833
Board of Directors
Pioneer Metropolitan District No. 3
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. 3, 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. 3 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 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. 3'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.
The continuing disclosure annual financial information, as listed in the table of contents, has not been
subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly,
we do not express an opinion or provide any assurance on them.
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Englewood, CO
July 10, 2018
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BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF NET POSITION
December 31, 2017
Governmental
Activities
ASSETS
Cash and investments
Cash and investments - Restricted
Property taxes receivable
Receivable from Pioneer Regional
Receivable from Resource
Due from District No. 2
Due from District No. 4
Due from District No. 5
Prepaid expense
Capital assets
Total assets
LIABILITIES
Accounts payable
Retainage payable
Accrued interest payable
Noncurrent liabilities
Due in more than one year
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Property tax revenue
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for:
Emergency reserves
Debt service
Capital projects
Unrestricted
Total net position
$ 1,952,600
603,030
13,587
10,005
6,849
217
410
9,689
12,491
4,596,952
7,205,830
630,159
7,595
28,362
5,244,332
5,910,448
13,587
13,587
2,370,038
15,400
4,107
988,865
(2,096,615)
$ 1,281,795
These financial statements should be read only in connection with
the accompanying notes to financial statements.
1
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF ACTIVITIES
Year Ended December 31, 2017
Functions/Programs
Government activities:
General government
Interest and related costs
on long-term debt
Program Revenues
Charges
for
Expenses Services
$ 383,809 $
414,029
Operating
Grants and
Contributions
- $ 483,261
$ 797,838 $
1,610,905
Net (Expenses)
Revenues and
Changes in
Net Position
Capital
Grants and Governmental
Contributions Activities
$
- $ 2,094,166 $
General revenues:
Property tax
Other revenue
Net investment income
Proceeds from sale of water rights
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
$ 99,452
1,196, 876
1,296,328
1
7,500
37,456
2,232,500
2,277,457
3,573,785
(2,291,990)
$ 1,281,795
PIONEER METROPOLITAN DISTRICT NO. 3
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2017
ASSETS
Cash and investments
Cash and investments - Restricted
Property taxes receivable
Receivable from Pioneer Regional
Receivable from Resource
Due from District No. 2
Due from District No. 4
Due from District No. 5
Prepaid expense
Total assets
LIABILITIES
Accounts payable
Retainage payable
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Property tax revenue
Total deferred inflows of resources
FUND BALANCES
Nonspendable for:
Prepaid expenses
Restricted for:
Emergency reserves
Debt service
Assigned for:
Subsequent year's expenditures
Capital projects
Unassigned
Total fund balances
General
Total
Debt Capital Governmental
Service Projects Funds
$ 329,294 $ $ 1,623,306 $ 1,952,600
15,400 24,534 563,096 603,030
3,135 10,452 - 13,587
10,005 10,005
6,849 - 6,849
50 167 217
95 315 - 410
2,236 7,453 9,689
12,491 - 12,491
$ 379,555 $ 42,921 $ 2,186,402 $ 2,608,878
$ 3,313 $ $ 626,846 $ 630,159
7,595 7,595
3,313
634,441 637,754
3,135 10,452 13,587
3,135
12,491
15,400
322,645
22,571
10,452 13,587
32,469
1,551,961
12,491
15,400
32,469
322,645
1,551,961
22,571
373,107 32,469 1,551,961 1,957,537
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 379,555 $ 42,921 $ 2,186,402
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets are recorded as assets on the statement of net position, but are recorded as
expenditures in the funds.
Capital assets
Long-term liabilities, including bonds payable, are not due and payable in the
current period and, therefore, are not reported in the funds.
Bonds payable
Accrued interest on bonds payable
Developer advance payable
Net position of governmental activities
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
4,596,952
(5,236,000)
(28,362)
(8,332)
$ 1,281,795
PIONEER METROPOLITAN DISTRICT NO. 3
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended December 31, 2017
REVENUES
Property taxes
Net investment income
Other income
Transfer from Pioneer Metro No. 2
Transfer from Pioneer Metro No. 4
Transfer from Pioneer Metro No. 5
Proceeds from sale of water rights
Total revenues
EXPENDITURES
Accounting
Audit
Dues and licenses
Insurance and dues
Legal services
Miscellaneous
Pioneer Regional - Insurance
Pioneer Regional - Legal
Resource - Insurance
Water Conservation Program
Debt Service
Bond principal
Interest expense
Paying agent/trustee fees
Capital Projects
Capital outlay
Wilson Detention Pond
Huwa Detention Pond
Total expenditures
General
Total
Debt Capital Governmental
Service Projects Funds
$ $ 1 $
2,828 9,434
9,756 32,521
18,490 61,633
455,015 1,516,751
486,089 1,620,340
$ 1
25,194 37,456
7,500 7,500
42,277
80,123
1,971,766
2,232,500 2,232,500
2,265,194 4,371,623
43,567 - 9,103 52,670
4,000 - 4,000
1,645 1,645
12,767 - 12,767
52,795 114,729 167,524
34 174 275 483
300 - 300
360 - 360
300 - 300
- 143,760 143,760
1,178, 000
416,910
3,500
1,178, 000
416,910
3,500
1,170,079 1,170,079
58,000 58,000
532,332 532,332
115,768 1,598,584 2,028,278 3,742,630
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 370,321 21,756 236,916 628,993
OTHER FINANCING SOURCES (USES)
Transfers to other funds
Transfers from other funds
Total other financing sources (uses)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES
AND OTHER FINANCING USES
FUND BALANCES - BEGINNING OF YEAR
(210,006) - (210,006)
210,006 210,006
(210,006) 210,006
370,321 (188,250) 446,922 628,993
2,786 220,719
1,105, 039 1,328,544
FUND BALANCES - END OF YEAR $ 373,107 $ 32,469 $ 1,551,961 $ 1,957,537
These financial statements should be read only in connection with
the accompanying notes to financial statements.
4
PIONEER METROPOLITAN DISTRICT NO. 3
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ACTIVITIES
Year Ended December 31, 2017
Net changes in fund balances - Total governmental funds $ 628,993
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures. In the
statement of activities, capital outlay is not reported as an
expenditure. However, the statement of activities will report as
depreciation expense the allocation of the cost of any depreciable
asset over the estimated useful life of the asset.
Capital outlay
Long-term debt (e.g., bonds, Developer advances) provides
current financial resources to governmental funds, while the
repayment of the principal of long-term debt consumes the current
financial resources of governmental funds. Neither transaction,
however, has any effect on net position. Also, governmental
funds report the effect of premiums, discounts, and similar items
when debt is first issued, whereas these amounts are deferred
and amortized in the statement of activities. The net effect of
these differences in the treatment of long-term debt and related
items is as follows:
Bond principal payment
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
1,760,411
1,178, 000
6,381
Change in net position of governmental activities $ 3,573,785
These financial statements should be read only in connection with
the accompanying notes to financial statements.
5
PIONEER METROPOLITAN DISTRICT NO. 3
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
December 31, 2017
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Net investment income
Transfer from Pioneer Metro No. 2
Transfer from Pioneer Metro No. 4
Transfer from Pioneer Metro No. 5
Total revenues
EXPENDITURES
Accounting
Audit
Contingency
Dues and licenses
Insurance and bonds
Legal services
Miscellaneous
Pioneer Regional - Insurance
Pioneer Regional - Legal
Resource - Insurance
Resource - Legal
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers to other fund
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
$ 100 $ 2,828 $ 2,728
9,502 9,756 254
18,009 18,490 481
443,270 455,015 11,745
470,881 486,089 15,208
35,000 43,567 (8,567)
5,000 4,000 1,000
16,141 - 16,141
- 1,645 (1,645)
7,700 12,767 (5,067)
20,000 52,795 (32,795)
- 34 (34)
1,300 300 1,000
1,000 360 640
1,000 300 700
1,000 - 1,000
88,141 115,768 (27,627)
382,740 370,321 (12,419)
(206,859) - 206,859
(206,859) - 206,859
175,881 370,321 194,440
27,824
2,786 (25,038)
$ 203,705 $ 373,107 $ 169,402
These financial statements should be read only in connection with
the accompanying notes to financial statements.
6
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 1 - DEFINITION OF REPORTING ENTITY
Pioneer Metropolitan District No. 3 (District), a quasi -municipal corporation and political
subdivision of the State of Colorado, was organized by court order and recorded with the Weld
County Clerk and Recorder on August 29, 2006, and is governed pursuant to provisions of the
Colorado Special District Act (Title 32, Article 1, Colorado Revised Statutes). The District's
service area is located in Weld County, Colorado. The District was organized to provide
financing for the design, acquisition, construction 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.
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
7
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
privileges provided by a given function or segment, and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not properly included among program revenues are reported instead as
general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities of
the current period. For this purpose, the District considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. The major sources of revenue
susceptible to accrual are District property taxes, specific ownership taxes, and interest. All
other revenue items are considered to be measurable and available only when cash is received
by the District. The District determined that Developer advances are not considered as revenue
susceptible to accrual. Expenditures, other than interest on long-term obligations, are recorded
when the liability is incurred or the long-term obligation is due.
The District reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in
another fund.
The Debt Service Fund accounts for the resources accumulated and payments made for
principal and interest on long-term debt of the governmental funds.
The Capital Projects Fund is used to account for financial resources to be used for the
acquisition and construction of capital equipment and facilities.
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.
8
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The District has 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 inflows of
resources in the year they are levied and measurable. The unearned property tax revenues are
recorded as revenue in the year they are available or collected.
Capital Assets
Capital assets are reported in the applicable governmental activities column in the government -
wide financial statements. Such assets are recorded at historical cost or estimated historical
cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the
date of donation. Capital assets are defined by the District as assets with an initial, individual
cost of more than $5,000.
Water Rights
The cost of water rights includes acquisition cost, legal and engineering costs related to the
development and augmentation of those rights. Since the rights have a perpetual life, they are
not amortized. All other costs, including costs incurred for the protection of those rights, are
expensed.
9
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred Inflows of Resources
In addition to liabilities, the statement of net position reports a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period and so will not be
recognized as an inflow of resources (revenue) until that time. The District has one item that
qualifies for reporting in this category. Accordingly, the item, deferred property tax revenue, is
deferred and recognized as an inflow of resources in the period that the amount becomes
available.
Equity
Net Position
For government -wide presentation purposes when both restricted and unrestricted resources
are available for use, it is the District's practice to use restricted resources first, then unrestricted
resources as they are needed.
Fund Balance
Fund balance for governmental funds should be reported in classifications that comprise a
hierarchy based on the extent to which the government is bound to honor constraints on the
specific purposes for which spending can occur. Governmental funds report up to five
classifications of fund balance: nonspendable, restricted, committed, assigned, and unassigned.
Because circumstances differ among governments, not every government or every
governmental fund will present all of these components. The following classifications describe
the relative strength of the spending constraints:
• Nonspendable fund balance — The portion of fund balance that cannot be spent because
it is either not in spendable form (such as prepaid amounts or inventory) or legally or
contractually required to be maintained intact.
• Restricted fund balance — The portion of fund balance that is constrained to being used
for a specific purpose by external parties (such as bondholders), constitutional
provisions, or enabling legislation.
• 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.
10
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
Total cash and investments
Cash and investments as of December 31, 2017, consist of the following:
Deposits with financial institutions
Investments
Total cash and investments
Deposits with Financial Institutions
$ 1,952,600
603,030
$ 2,555,630
$ 152,558
2,403,072
$ 2.555.630
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 $177,409 and a
carrying balance of $152,558.
Investments
The District's policy is to follow state statutes regarding investments.
The District generally limits its concentration of investments to those noted with an asterisk (*)
below, which are believed to have minimal credit risk, minimal interest rate risk and no foreign
currency risk. Additionally, the District is not subject to concentration risk or investment custodial
risk disclosure requirements for investments that are in the possession of another party.
11
PIONEER METROPOLITAN DISTRICT NO. 3
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
Colorado Surplus Asset Fund Trust
(CSAFE)
CSAFE
Weighted average
under 60 days
Amount
$ 2.403.072
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
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 4 - CAPITAL ASSETS
The following is an analysis of the changes in capital assets for the year ended December 31,
2017:
Capital assets, not being
depreciated:
Water rights
Construction in progress
Governmental activities
capital assets
Balance at
December 31,
2016
Increases
Decreases
$ 2,836,541 $ - $
- 1,760,411
Balance at
December 31,
2017
- $ 2,836,541
- 1,760,411
$ 2,836,541 $ 1,760,411 $
- $ 4,596,952
The balance shown above consists of certain water rights in the Larimer Fox Hill Aquifer and the
Arapahoe Aquifer. It also includes expenses related to Lost Creek Well and project
management related acquisition of water rights.
NOTE 5 - LONG-TERM OBLIGATIONS
The following is an analysis of the changes in the District's long-term obligations for the year
ended December 31, 2017.
General Obligation Bonds:
Series 2016
Developer advance
Balance at
December 31,
2016 Additions Reductions
$ 6,414,000 $
Balance at Due
December 31, Within
2017 One Year
$ 1,178,000 $ 5,236,000 $
8,332 8,332
$ 6,422, 332 $ - $ 1,178, 000 $ 5,244, 332 $
The details of the District's long-term obligations are as follows:
$6,414,000 Limited Tax General Obligation Refunding and Improvement Bonds, Series
2016 (the Series 2016 Bonds), were issued on September 30, 2016. The proceeds from the
sale of the Series 2016 Bonds were used to finance the costs of certain water related public
improvements, currently refund the District's outstanding Limited Tax General Obligation Bonds,
Taxable Series 2012, and pay the costs of issuance of the Series 2016 Bonds.
13
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 5 - LONG-TERM OBLIGATIONS (CONTINUED)
The Series 2016 Bonds bear interest at 6.50% payable semi-annually on June 1 and
December 1, beginning on December 1, 2016. The Series 2016 Bonds are structured as cash
flow bonds, meaning that there are no scheduled payments of principal prior to the final maturity
date. The Series 2016 Bonds mature on December 1, 2046. The flow of funds directs the
Trustee to credit the interest account with the amounts necessary to fund current interest for the
Bond Year and additional pledged revenues are deposited to the Redemption Account. On
October 15th of each year the Trustee will determine how many bonds can be redeemed (in
integral multiples of $1,000) on December 1 and any additional funds on hand will be
transferred to the Interest Account to go towards the funding of the following year's interest
payments. Any accrued unpaid interest on the Series 2016 Bonds will compound semi-annually
on June 1 and December 1. The Series 2016 Bonds are secured by and payable solely from
and to the extent of Pledged Revenue consisting of monies derived by the District, net of any
costs of collection, from: (i) the District's Required Mill Levy; (ii) all Capital Pledge Agreement
Revenues; and (iii) Specific Ownership Tax which is collected as a result of the imposition of the
District's Required Mill Levy.
The Indenture provides a Required Mill Levy be imposed upon all taxable property in the District
in the amount of 50 mills, subject to adjustment for changes in the method of calculating
assessed valuation after January 1, 2006. The Capital Pledge Agreements require Pioneer
Metropolitan District Nos. 2, 4, and 5 to also impose 50 mills, subject to adjustment for changes
in the method of calculating assessed valuation after January 1, 2006, upon all taxable property
in the respective Districts.
The Series 2016 Bonds are subject to optional redemption prior to maturity, at the option of the
District, as a whole or in integral multiples of $1,000, on December 1, 2021, and on any date
thereafter, upon payment of par and accrued interest, and a redemption premium equal to a
percentage of the principal amount so redeemed, as follows.
Date of Redemption Redemption Premium
December 1, 2021, to November 30, 2022
December 1, 2022, to November 30, 2023
December 1, 2023, to November 30, 2024
December 1, 2024, and thereafter
Capital Pledge Agreements
3.00%
2.00%
1.00%
0.00%
Each of Pioneer Metropolitan District Nos. 2, 4, and 5 entered into Capital Pledge Agreements
with the District (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 the District for payment on the Series 2016 Bonds.
14
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 5 - LONG-TERM OBLIGATIONS (CONTINUED)
Developer Advance
The Developer advanced $8,332 to the District in 2014 to pay for operating costs of the District.
There is not currently an agreement in place documenting the District's obligation to repay the
advance. However, the advance is an obligation of the District that may only be repaid if, and
when, funds are available. Such repayment is subject to budget and appropriation.
Authorized Debt
On May 2, 2006, a majority of the qualified electors of the District who voted in the election
authorized the issuance of indebtedness in an amount not to exceed $3,680,000,000. On
May 4, 2010, and on May 6, 2014, a majority of the qualified electors of the District who voted in
the election authorized the issuance of indebtedness in an amount not to exceed
$3,680,000,000 and $4,010,000,000, respectively. At December 31, 2017, the District had
authorized but unissued indebtedness in the following amounts allocated for the following
purposes:
Streets
Water
Sanitary sewer
Parks and recreation
Traffic and safety
Mosquito control
Public transportation
Fire protection
Television relay and translation
Security Service
Operations and maintenance
Debt refunding
Intergovernmental contracts
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
Authorization
Used for
Series 2012
Bonds
$
3,695,000
145,000
310,000
Authorization
Used for
Series 2016
Bonds
2,671,000
3,743,000
$ 4,150,000 $ 6,414,000
Authorized
But
Unissued
$ 990,000,000
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
149,690,000
986,257,000
990,000,000
$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.
15
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 6 - NET POSITION
The District's net position consists of three components — net investment in capital assets,
restricted, and unrestricted.
Net investment in capital assets consists of capital assets, net of accumulated depreciation and
reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings that are
attributable to the acquisition, construction, or improvement of those assets.
As of December 31, 2017, the District had net investment in capital assets calculated as follows:
Governmental
Activities
Net investment in capital assets:
Capital assets, net
Noncurrent portion of outstanding long-term obligations
Unspent bond proceeds
Net investment in capital assets
$ 4,596,952
(2,495,263)
268,349
$ 2,370,038
Restricted net position includes assets that are restricted for use either externally imposed by
creditors, grantors, contributors, or laws and regulations of other governments or imposed by
law through constitutional provisions or enabling legislation. The District had restricted net
position as of December 31, 2017, as follows:
Restricted net assets:
Emergency reserves
Debt service
Capital Projects
Total restricted net assets
The District has a deficit in unrestricted net position.
NOTE 7 - RELATED PARTY
Governmental
Activities
$ 15,400
4,107
988,865
$ 1,008,372
The members of the Board of Directors are employees, owners or are otherwise associated with
HP Farms Holding, LLC (the Property Owner) and Gateway American Resources, LLC (the
Developer). The Property Owner and the Developer may have conflicts of interest in dealing
with the District. During 2017, the District paid $525,000 for project management to the
Developer.
16
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 8 - AGREEMENTS
Memorandum of Understanding, dated November 12, 2008 (as amended March 26, 2012)
As contemplated by the Service Plan, Pioneer Regional Metropolitan District ("Pioneer
Regional") was designated as the "Service District" and Pioneer Metropolitan 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, 4, and 5, (the "2012 FFCO"). Pursuant to the 2012 FFCO, the
District is generally responsible for coordinating the financing, construction, ownership,
operation and maintenance of public improvements, while 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, the District, in its capacity as the "Coordinating District" under the FFCO has agreed
to pay the Reimbursable Costs.
The 2012 FFCO allows for a future amendment to include Pioneer Regional, District No. 1 and
District No. 6 to ensure 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.
17
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 8 - AGREEMENTS (CONTINUED)
Keenesburg Agreement (Pipeline)
Pursuant to an agreement with the Town of Keenesburg, as amended and assigned to the
District, the District had the sole, exclusive and perpetual right to 800 gallons per minute of
capacity in the Keenesburg Well Water Transmission Line (the Water Line). On March 31, 2017,
the District assigned 100% of its rights in the Water Line to the Town of Castle Rock by and
through the Town of Castle Rock Water Enterprise (Castle Rock). As consideration for the
assignment, Castle Rock paid $2,232,500 to the District and assumed the requirement to pay
$63,098.58 annually to Keenesburg until the final payment on May 25, 2032.
Pioneer Community Reimbursement IGA
In accordance with the MOU, Pioneer Regional incurred certain costs on behalf of the Financing
Districts. Pursuant to the Intergovernmental Agreement Regarding Assignment of
Reimbursement Obligations; Consent to Construction; and Collection of Regional Mill Levy
dated as of March 26, 2012, between Pioneer Regional and the District (the "Pioneer
Community Reimbursement IGA"), Pioneer Regional assigned to the District certain obligations
it had with respect to the Reimbursement Obligations and 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 the District
assuming the Pioneer Community Reimbursement Obligations.
Pioneer Regional is obligated to provide water and wastewater service to the future residents
and commercial development of the Districts. As noted above, in exchange for the District's
assumption of the Pioneer Community Reimbursement Obligations, Pioneer Regional agreed
that it will adjust the calculation considered in establishing its rate structure so that no charges
are passed along that would have otherwise been assessed as a result of Pioneer Regional's
former obligations pursuant to the MOU. This is expected to result in a decrease in the tap fee
rates ultimately payable for connection to water and wastewater systems for service.
Under the Pioneer Community Reimbursement IGA, Pioneer Regional agreed that it will not
object to the District's construction of (or causing the construction of) future water and
wastewater infrastructure that would otherwise be the responsibility of Pioneer Regional
pursuant to its Service Plan. The District agreed to give Pioneer Regional advance written
notice prior to constructing any water and wastewater improvements. In addition, pursuant to
the First Amendment to the MOU and the Pioneer Community Reimbursement IGA, Pioneer
Regional and the District will enter into an agreement prior to the connection of any resident to
water or wastewater service to ensure Pioneer Regional has adequate access to such
infrastructure to provide the services contemplated under its Service Plan and to establish an
orderly transition of the use and ownership of the improvements to each of the Districts.
18
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 8 - AGREEMENTS (CONTINUED)
Finally, each of the Financing Districts will be obligated to impose a regional improvements mill
levy (the "Regional Mill Levy"), the proceeds of which are to be remitted to Pioneer Regional to
be used for the provision of regional water and wastewater improvements. Pursuant to the
Pioneer Regional Community Reimbursement IGA, the District 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 the District and for any other
purpose authorized by its Service Plan. The District did not make any payments related to this
agreement during 2017.
The Pioneer Community Reimbursement IGA was amended by that certain First Amendment to
Intergovernmental Agreement Regarding Assignment of Reimbursement Obligations; Consent
to Construction; and Collection of Regional Mill levy dated May 28, 2013 (the "First Amendment
to Pioneer IGA"). Pursuant to the First Amendment to Pioneer IGA, the District agreed to make
funds available to Pioneer Regional for Pioneer Regional's implementation of the Program
(defined below) adopted by the Board of Directors of Pioneer Regional. Pursuant to the First
Amendment to Pioneer IGA, such funds may be used for payment of any incentive payments,
water infrastructure or water as may be necessary for Pioneer Regional's implementation of the
Program. During 2017, the District 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 the District to evidence
the District's agreement to making funding available for the Program. At this time, one
participation agreement under the Program has been executed, as described below.
19
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 8 - AGREEMENTS (CONTINUED)
Pioneer Regional Metropolitan District Participation Agreement Agricultural Water
Conservation Pilot Program - Greenleaf Acres, LLC
On July 8, 2013, Pioneer Regional entered into its first participation agreement under the
Program with Greenleaf Acres, LLC ("Greenleaf") (the "Greenleaf Participation Agreement").
Pursuant to the Greenleaf Participation Agreement, Greenleaf has elected to participate in the
Program with respect to 920 acres of its property. The term of the Greenleaf Participation
Agreement is for 12 years. Greenleaf must make an annual election of the Conservation
Measures it intends to implement in any particular growing season (the "Plan"). If Greenleaf
fulfills its Plan in accordance with the Program requirements, then Greenleaf will be entitled to
certain incentive payments.
Pursuant to the First Amendment to Pioneer IGA, the District is required to make an incentive
payment to Greenleaf consisting of a combination of water delivery and/or cash, as set forth in
the Greenleaf Participation Agreement. In the event the total assessed valuation of real property
located within Pioneer Metropolitan District Nos. 2 — 5 decreases in any year from the total
assessed valuation for collection year 2013, the Greenleaf Participation Agreement provides
that the District has the right to decrease the amount of the incentive payment by an amount
that is proportionate to the decrease in total assessed valuation.
The scheduled cash payment for 2017 was $100,000. The total assessed valuation did not
decrease from 2013 collection year to 2017 collection year. The District did not deliver 200 acre
feet of water to Greenleaf in 2017. The cash value of that water was $43,760. During 2017, the
District paid Greenleaf $143,760 for its obligation.
Resource Colorado Water and Sanitation Metropolitan District Reimbursement IGA
The District, Resource Colorado Water and Sanitation Metropolitan District ("Resource"),
Resource Colorado Water and Sanitation District acting by and through Resource Colorado
Water and Sanitation District GAR Water Activity Enterprise No. 1 ("Enterprise No. 1"), and
Resource Colorado Water and Sanitation District acting by and through Resource Colorado
Water and Sanitation District Water Activity Enterprise (the "Original Enterprise"), entered into
that certain Intergovernmental Agreement Regarding Assignment of Reimbursement
Obligations and Consent to Construction on April 19, 2012 ("Resource IGA").
Pursuant to the Resource IGA, Resource, the Original Enterprise, and Enterprise No. 1 agree to
assign, and the District agrees to assume, their respective responsibilities for repayment of
those reimbursement obligations pursuant to those certain Gateway American Resources
Operation Funding Agreements, the Quebec Corp. Operation Funding Agreements, the
Gateway American Resources Project Funding Agreement and the Quebec Corp. Project
Funding Agreement (as defined therein) (the "Reimbursement Obligations"). In exchange,
Resource, the Original Enterprise, and Enterprise No. 1 agree not to include the costs incurred
in any rate structure for service established by Resource, the Original Enterprise or Enterprise
No. 1 for future services provided to the Districts' service area (the "Pioneer Community").
20
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 8 - AGREEMENTS (CONTINUED)
In addition, pursuant to the Resource IGA, Resource on behalf of itself and the Pioneer
Community Enterprise consents to and agrees that it will not object to the District's construction,
or causing such construction to be done, in the future, of water infrastructure that may be
construed as a Resource and/or Pioneer Community Enterprise obligation under Resource's
Service Plan provided the District gives Resource advance written notice together with a copy of
the construction plans prior to commencement of such construction. Further, the Parties agree
that if the District undertakes any water or sewer infrastructure construction, it will enter into an
agreement with Pioneer Regional as contemplated in the First Amendment to MOU between
Pioneer Regional and Pioneer prior to the connection of a resident for water or sewer service to
a Pioneer Regional Improvement to ensure both Pioneer Regional (as the contracting entity with
Resource) and Resource have adequate access to such infrastructure to provide its services
under its respective Service Plan and such that Resource can satisfy the terms and provisions
of the Will Serve Letter (defined therein).
Memorandum of Understanding, dated November 2, 2015
The District entered into a Memorandum of Understanding (the "MOU") as of November 2,
2015, by and between Pioneer Regional and Resource. Pioneer Regional and Resource
declared Inactive Status effective January 1, 2016. Pioneer Regional and Resource anticipate a
shortfall in funding necessary to fund Pioneer Regional and Resources' General Fund
expenditures during the period of Inactive Status (the "Inactive Period Shortfall"). The District
will cause the Pioneer Districts to impose the Regional Mill Levy for budget years 2016 through
2020, the proceeds of which will be retained by the District. Pursuant to the MOU, the District
agrees to directly pay for any operation and maintenance expenses of Pioneer Regional and
Resource which may be required to maintain their corporate existence and compliance with
applicable laws, rules and regulations of the State of Colorado and Weld County.
NOTE 9 - INTERFUND AND OPERATING TRANSFERS
The transfer from the Debt Service Fund to the Capital Projects Fund represents Series 2016
Bond proceeds deposited to the Project Fund trust account to be used to pay capital costs.
NOTE 10 - RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; thefts of, damage to, or
destruction of assets; errors or omissions; injuries to employees; or acts of God.
The District is a member of the Colorado Special Districts Property and Liability Pool (Pool). The
Pool is an organization created by intergovernmental agreement to provide property, liability,
public officials' liability, boiler and machinery and workers compensation coverage to its
members. Settled claims have not exceeded this coverage in any of the past three fiscal years.
21
PIONEER METROPOLITAN DISTRICT NO. 3
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
NOTE 10 - RISK MANAGEMENT (CONTINUED)
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 11 - TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, referred to as the Taxpayer's Bill of Rights
(TABOR), contains tax, spending, revenue and debt limitations which apply to the State of
Colorado and all local governments.
Spending and revenue limits are determined based on the prior year's Fiscal Year Spending
adjusted for allowable increases based upon inflation and local growth. Fiscal Year Spending is
generally defined as expenditures plus reserve increases with certain exceptions. Revenue in
excess of the Fiscal Year Spending limit must be refunded unless the voters approve retention
of such revenue.
TABOR requires local governments to establish. Emergency Reserves. These reserves must be
at least 3% of Fiscal Year Spending (excluding bonded debt service). Local governments are
not allowed to use the emergency reserves to compensate for economic conditions, revenue
shortfalls, or salary or benefit increases.
The District's management believes it is in compliance with the provisions of TABOR. However,
TABOR is complex and subject to interpretation. Many of the provisions, including the
interpretation of how to calculate Fiscal Year Spending limits, will require judicial interpretation.
On May 2, 2006, the electorate approved the removal of limitations imposed by the TABOR
Amendment and any other law that purports to limit the District's revenue or expenditures, a
$10,000,000 annual property tax increase for operations, a $330,000,000 annual property tax
increase for intergovernmental agreements, and a $330,000,000 annual property tax increase
for regional improvements.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
As of December 31, 2017, the District had unexpended construction related contract
commitments of approximately $292,503.
This information is an integral part of the accompanying financial statements.
22
SUPPLEMENTAL INFORMATION
23
PIONEER METROPOLITAN DISTRICT NO. 3
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2017
REVENUES
Property taxes
Net investment income
Transfer from Pioneer Metro No. 2
Transfer from Pioneer Metro No. 4
Transfer from Pioneer Metro No. 5
Total revenues
EXPENDITURES
Bond principal
Interest expense - Bonds
Miscellaneous
Paying agent fees
Contingency
Total expenditures
EXCESS (DEFICIENCY) 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
Budget Amounts Actual
Original Final Amounts
Variance with
Final Budget
Positive
(Negative)
$ $ 1 $ 1 $
100 9,400 9,434
31,675 32,522 32,521
60,029 61,633 61,633
1,477,567 1,516,743 1,516,751
1,569,371
1,130, 000
420,837
2,000
7,163
1,620,299 1,620,340
1,178, 000
416,910
100
7,500
7,484
1,178, 000
416,910
174
3,500
1,560,000 1,609,994 1,598,584
9,371
9,371
3,309
10,305
21,756
(210,006) (210,006)
(210,006) (210,006)
(199,701) (188,250)
220,719 220,719
34
(1)
8
41
(74)
4,000
7,484
11,410
11,451
11,451
$ 12,680 $ 21,018 $ 32,469 $ 11,451
24
PIONEER METROPOLITAN DISTRICT NO. 3
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2017
REVENUES
Net investment income
Other revenue
Proceeds from sale of water rights
Total revenues
EXPENDITURES
Accounting
Capital outlay
Keenesburg Agreement
Legal services
Miscellaneous
Water Conservation Program
Wilson Detention Pond
Huwa Detention Pond
Total expenditures
Original
and Final
Budget
Actual
Amounts
$ 500 $
25,194
7,500
2,232,500
500 2,265,194
- 9,103
3,023,839 1,170, 079
63,099 -
114,729
275
143,760 143,760
- 58,000
532,332
3,230,698 2,028,278
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (3,230,198)
OTHER FINANCING SOURCES (USES)
Transfers from other fund
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
206,859
206,859
(3,023,339)
3,023,339
236,916
210,006
210,006
446,922
Variance with
Final Budget
Positive
(Negative)
$ 24,694
7,500
2,232,500
2,264,694
(9,103)
1,853,760
63,099
(114,729)
(275)
(58,000)
(532,332)
1,202,420
3,467,114
3,147
3,147
3,470,261
1,105,039 (1,918,300)
$ - $ 1,551,961 $ 1,551,961
25
CONTINUING DISCLOSURE
(UNAUDITED)
26
PIONEER METROPOLITAN DISTRICT NO. 3
HISTORY OF THE PIONEER METROPOLITAN
DISTRICT NOS. 2, 3, 4 AND 5 ASSESSED VALUATION
December 31, 2017
(Unaudited)
Levy/ All Percent
Collection Year Districts Change
2007/2008 $ 6,046,880
2008/2009 5,815,530 -3.83%
2009/2010 7,455,400 28.20%
2010/2011 1,809,098 -75.73%
2011/2012 888,940 -50.86%
2012/2013 23,375,230 2529.56%
2013/2014 16,227,776 -30.58%
2014/2015 9,207,560 -43.26%
2015/2016 14,254,810 54.82%
2016/2017 30,324,070 112.73%
2017/2018 19,839,760 -34.57%
27
PIONEER METROPOLITAN DISTRICT NO. 3
ASSESSED VALUATION OF CLASSES OF PROPERTY IN THE
PIONEER METROPOLITAN DISTICT NOS. 2, 3, 4 AND 5
December 31, 2017
(Unaudited)
Property
Class
Vacant
Residential
Commercial
Agricultural
Oil and Gas
State
Assessed
Personal
Property
Total
Property
Class
Vacant
Residential
Commercial
Agricultural
Oil and Gas
State
Assessed
Personal
Property
Total
2012
Assessed
Valuation
44,910
123,740
23,012,610
475,240
$ 23,656,500
2015
Assessed
Valuation
$
31,740
183,260
12, 310, 350
1,729,460
Percentage
of 2012
Assessed
Valuation
0.19%
0.52%
97.28%
2013
Assessed
Valuation
Percentage
of 2013
Assessed
Valuation
2014
Assessed
Valuation
$ $
19,070 0.12% 19,070
147,500 0.91% 147,500
15,722,406 96.89% 8,224,440
2.01% 338,800 2.09% 816,550
100.00% $ 16,227,776
Percentage
of 2015
Assessed
Valuation
2016
Assessed
Valuation
Percentage
of 2014
Assessed
Valuation
0.21%
1.60%
89.32%
8.87%
100.00% $ 9,207,560 100.00%
Percentage
of 2016
Assessed
Valuation
2017
Assessed
Valuation
$ - $
Percentage
of 2017
Assessed
Valuation
0.22% 31,740 0.10% 14,300 0.07%
1.29% 187,740 0.62% 203,260 1.02%
86.36% 28,175,010 92.91% 18,103,210 91.25%
12.13% 1,929,580 6.36% 1,518,990 7.66%
$ 14,254,810 100.00% $ 30,324,070 100.00% $ 19,839,760 100.00%
28
PIONEER METROPOLITAN DISTRICT NO. 3
HISTORICAL ASSESSED AND ACTUAL VALUATION OF
OIL AND GAS PROPERTIES IN WELD COUNTY
December 31, 2017
(Unaudited)
Levy/ Actual Percent Assessed Percent
Collection Year Valuation Change Valuation Change
2007/2008 $2,219,722,237 - $1,749,119,710 -
2008/2009 2,160,997,296 -2.65% 1,709,997,160 -2.24%
2009/2010 3,541,190,356 63.87% 2,868,304,890 67.74%
2010/2011 2,135,827,100 -39.69% 1,673,838,130 -41.64%
2011/2012 3,114,664,791 45.83% 2,439,298,540 45.73%
2012/2013 4,393,771,015 41.07% 3,282,053,530 34.55%
2013/2014 5,135,073,446 16.87% 3,900,510,227 18.84%
2014/2015 7,530,472,671 46.65% 5,738,450,900 47.12%
2015/2016 10,068,678,775 33.71% 7,669,479,580 33.65%
2016/2017 7,114,656,477 -29.34% 4,959,441,120 -35.34%
2017/2018 6,898,968,972 -3.03% 4,611,244,810 -7.02%
PIONEER METROPOLITAN DISTRICT NO. 3
TOTAL TAXES LEVIED AND COLLECTED IN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
December 31, 2017
(Unaudited)
Total Total Percent Total Mill
Levy/ Taxes Taxes of Levy Levy for Each
Collection Year Levied Collected Collected District
2012/2013 $ 1,519,390 $ 1,517,919 99.90% 65.00
2013/2014 1,054,815 1,054,805 100.00% 65.00
2014/2015 598,493 564,393 94.30% 65.00
2015/2016 960,475 960,475 100.00% 65.00
2016/2017 1,971,066 1,971,066 100.00% 65.00
29
PIONEER METROPOLITAN DISTRICT NO. 3
2017 TAXPAYERS AND ASSESSED VALUATION WITHIN THE
PIONEER METROPOLITAN DISTRICT NOS. 2, 3, 4 AND 5
December 31, 2017
(Unaudited)
Taxpayer
Kerr McGee Oil & Gas Onshore LP
Kerr McGee Gathering LLC
Anadarko Watterberg Oil Complex LLC
Noble Energy Inc
DCP Midstream
Public Service Co of Colo (Xcel)
Colorado Interstate Gas Co
Greenleaf Acres LLC
Flogistix
Rivera Carmelo Jr
HP Farms Holdings LLC
Pioneer Communities Holding LLC
Crestone Peak Resources, LP
Total Assessed Value
in District
Percent of
Taxable Taxable Taxable Taxable Districts'
Value Value Value Value Total
District District District District Total Assessed
No. 2 No. 3 No. 4 No. 5 District Valuation
$ - $ $ - $ 16,335,960 $ 16,335,960 82.3%
101,060 124,050 540,820 765,930 3.9%
- - 615,610 615,610 3.1%
171,280 400,540 571,820 2.9%
221,200 209,030 61,920 492,150 2.5%
141,400 193,180 100,180 434,760 2.2%
- - 318,300 318,300 1.6%
- 175,830 175,830 0.9%
- 82,980 82,980 0.4%
- - 18,360 18,360 0.1%
570 10 14,020 - 14,600 0.1%
3,690 5,080 - 8,770 0.0%
- 4,690 4,690 0.0%
$ 639,200 $ 209,040 $ 803,480 $ 18,188,040 $ 19,839,760 100.0%
30
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