HomeMy WebLinkAbout20161986.tiffLIBERTY RANCH METROPOLITAN DISTRICT
Weld County, Colorado
FINANCIAL STATEMENTS
December 31, 2015
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2016-1986
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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
(Deficits) - Governmental Funds 4
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances (Deficits) of Governmental Funds to the Statement
of Activities 5
General Fund - Statement of Revenues, Expenditures and Changes in
Fund Balances (Deficits) - Budget and Actual 6
Notes to Financial Statements 7
SUPPLEMENTARY INFORMATION 21
Debt Service Fund - Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 22
Capital Projects Fund - Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual 23
Debt Service Requirements to Maturity 24
Summary of Assessed Valuation, Mill Levy and Property
Taxes Collected 25
L. PAUL GOEDECKE P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report
Board of Directors
Liberty Ranch Metropolitan District
Weld County, Colorado
Report on the Financial Statements
950 WADSWORTH BLVD.
SUITE 204
LAKEWOOD, COLORADO 80214
TELEPHONE (303) 232 2866
FAX (303) 232-9452
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We have audited the accompanying financial statements of the governmental activities and each major
fund of Liberty Ranch Metropolitan District as of and for the year ended December 31, 2015, and the
related notes to the financial statements, which collectively comprise the District's basic financial
statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement. An audit involves
performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements. We
believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
I
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND COLORADO SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
L Paul Goedecke, P.C.
May 23, 2016
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the Liberty Ranch
Metropolitan District as of December 31, 2015, and the respective changes in financial position and the
respective budgetary comparison for the general fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Economic Dependency
The District has not yet established a revenue base sufficient to pay its operational expenditures. As
discussed in Note 8, the District is dependent upon the Developer of the District's service area to
provide funds for such expenditures.
Other Matters
Management has omitted the management's discussion and analysis that accounting principles
generally accepted in the United States of America require to be presented to supplement the basic
financial statements. Such missing information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. Our opinions on the basic financial statements are not affected by this missing
information.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District's financial statements as a whole. The supplementary information as
listed in the table of contents is presented for purposes of legal compliance and additional analysis and
is not a required part of the financial statements. The supplementary information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the financial statements. The information has been subjected to the auditing
procedures applied in the audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records
used to prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the information is fairly stated in all material respects in relation to the financial statements
as a whole.
II
BASIC FINANCIAL STATEMENTS
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF NET POSITION
December 31, 2015
Governmental
Activities
ASSETS
Cash and investments
Cash and investments - Restricted
Receivable - County Treasurer
Property taxes receivable
Total assets
LIABILITIES
Accounts payable
Accrued bond interest
Noncurrent liabilities
Due within one year
Due in more than one year
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Property tax revenue
Total deferred inflows of resources
NET POSITION
Restricted for:
Emergency reserve
Unrestricted
Total net position
$ 7,181
13,105
4,382
963,394
988,062
28,198
24,375
150,000
11,046,654
11,249,227
963,394
963,394
1,500
(11,226,059)
$ (11,224,559)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
1
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF ACTIVITIES
Year Ended December 31, 2015
FunctionslProerams
Primary government:
Government activities:
General government
Interest and related costs on
long-term debt
Dedication of assets to other governments
Program Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Charges Operating Capital
for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
$ 44,599 $
$ $ (44,599)
686,199 - (686,199)
$ 730,798 $ - $
$ (730,798)
General revenues:
Property taxes 318,393
Specific ownership taxes 25,624
Net investment income 216
Total general revenues 344,233
Change in net position (386,565)
Net position - Beginning (10,837,994)
Net position - Ending $ (11,224,559)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
2
LIBERTY RANCH METROPOLITAN DISTRICT
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2015
ASSETS
Cash and investments
Cash and investments - Restricted
Receivable - County Treasurer
Property taxes receivable
Due from other fund
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
OF RESOURCES AND FUND BALANCES
LIABILITIES
Accounts payable
Due to other fund
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Property tax revenue
Total deferred inflows of resources
FUND BALANCES
Restricted for:
Debt Service
Emergencies (TABOR)
Deficits
Total fund balances
General
Total
Debt Capital Governmental
Service Projects Funds
$ 7,181 $ - $ $ 7,181
1,500 11,605 13,105
604 3,778 4,382
132,882 830,512 963,394
8,011 - 8,011
$ 150,178 $ 845,895 $ $ 996,073
$ 28,198 $
28,198
8,011
8,011 36,209
$ 28,198
8,011
132,882 830,512 963,394
132,882 830,512 963,394
1,500
(12,402)
(10,902) 7,372
7,372
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 150,178 $ 845,895 $
Amounts reported for governmental activities in the statement of net position are different because:
Long-term liabilities, including bonds payable and Developer advances,
are not due and payable in the current period and, therefore,
are not reported in the funds.
Developer advance payable
Accrued interest on Developer advances
Accrued bond interest payable
Bonds payable
Net position of governmental activities
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
7,372
1,500
(12,402)
(3,530)
(4,853,266)
(1,663,388)
(24,375)
(4,680,000)
$ (11,224,559)
LIBERTY RANCH METROPOLITAN DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
(DEFICITS) - GOVERNMENTAL FUNDS
Year Ended December 31, 2015
REVENUES
Property taxes
Specific ownership taxes
Net investment income
Total revenues
EXPENDITURES
Accounting
Audit
County Treasurer's fees
District management
Dues and memberships
Insurance
Legal
Miscellaneous
Paying agent fees
Bond interest
Bond principal
Total expenditures
NET CHANGE IN FUND BALANCES
(DEFICITS)
FUND BALANCES (DEFICITS) -
BEGINNING OF YEAR
FUND BALANCES (DEFICITS) -
END OF YEAR
General
Total
Debt Capital Governmental
Service Projects Funds
$ 43,916 $ 274,477 $
3,531 22,093
51 165
47,498 296,735
16,033
3,500
699
11,717
297
2,549
9,710
94
4,077
1,075
292,815
5,000
$ 318,393
25,624
216
344,233
16,033
3,500
4,776
11,717
297
2,549
9,710
94
1,075
292,815
5,000
44,599 302,967 347,566
2,899 (6,232) (3,333)
(13,801) 13,604 (197)
$ (10,902) $ 7,372 $ $ (3,530)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
4
LIBERTY RANCH METROPOLITAN DISTRICT
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS) OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Year Ended December 31, 2015
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - Total governmental funds
The issuance of long-term debt (e.g., bonds, Developer advances)
provides current financial resources to governmental funds, while
the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither
transaction, however, has any effect on net position. Also,
governmental funds report the effect of premiums, discounts, and
similar items when debt is first issued, whereas these amounts are
deferred and amortized in the statement of activities.
Current year 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
Accrued interest on Developer advance - Change in liability
$ (3,333)
5,000
28
(388,260)
Changes in net position of governmental activities $ (386,565)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
5
LIBERTY RANCH METROPOLITAN DISTRICT
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES (DEFICITS) - BUDGET AND ACTUAL
Year Ended December 31, 2015
Variance with
Final Budget
Original and Actual Positive
Final Amounts (Negative)
REVENUES
Property taxes
Specific ownership tax
Net investment income
Total revenues
EXPENDITURES
Accounting
Audit
County Treasurer's fees
District management
Dues and memberships
Insurance
Legal
Miscellaneous
Total expenditures
NET CHANGE IN FUND BALANCES
FUND BALANCES (DEFICITS) -
BEGINNING OF YEAR
FUND BALANCES (DEFICITS) -
END OF YEAR
$ 43,919 $ 43,916 $ (3)
3,510 3,531 21
5 51 46
47,434 47,498 64
16,000 16,033 (33)
3,500 3,500 -
659 699 (40)
12,000 11,717 283
500 297 203
2,623 2,549 74
12,000 9,710 2,290
618 94 524
47,900 44,599 3,301
(466) 2,899 3,365
1,984 (13,801) (15,785)
$ 1,518 $ (10,902) $ (12,420)
These financial statements should be read only in connection with
the accompanying notes to financial statements.
6
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 1 - DEFINITION OF REPORTING ENTITY
Liberty Ranch Metropolitan District (District), a quasi -municipal corporation located entirely in
Weld County, Colorado, was organized by order and decree of the District Court for Weld
County on December 23, 2005, and is governed pursuant to provisions of the Colorado Special
District Act (Title 32, Article 1, Colorado Revised Statutes). The District was established to
provide for construction and financing for street, safety protection, water, sanitation and
mosquito control facilities and improvements. The street and safety control improvements have
been dedicated to and maintained by the Town of Mead. Water and sanitation improvements
have been dedicated to and are maintained by the Longs Peak Water District and St. Vrain
Sanitation District, respectively.
The District follows the Governmental Accounting Standards Board (GASB) accounting
pronouncements, which provide guidance for determining which governmental activities,
organizations and functions should be included within the financial reporting entity. GASB
pronouncements set forth the financial accountability of a governmental organization's elected
governing body as the basic criterion for including a possible component governmental
organization in a primary governments legal entity. Financial accountability includes, but is not
limited to, appointment of a voting majority of the organization's governing body, ability to
impose its will on the organization, a potential for the organization to provide specific financial
benefits or burdens and fiscal dependency.
The District has no employees and all operations and administrative functions are contracted.
The District is not financially accountable for any other organization, nor is the District a
component unit of any other primary governmental entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The more significant accounting policies of the District are described as follows:
Government -wide and Fund Financial Statements
The government -wide financial statements include the statement of net position and the
statement of activities. These financial statements include all of the activities of the District. The
effect of interfund activity has been removed from these statements. Governmental activities are
normally supported by property taxes 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.
7
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The statement of activities demonstrates the degree to which the direct and indirect expenses of
a given function or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include: 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment, and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not properly included among program revenues are reported instead as
general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows. Property taxes are recognized as revenues in the year for which they are levied.
Expenditures for property, plant and equipment are shown as increases in assets and
redemption of bonds and notes are recorded as a reduction in liabilities.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities of
the current period. For this purpose, the government considers revenues to be available if they
are collected within 60 days of the end of the current fiscal period. The major sources of
revenue susceptible to accrual are property taxes and specific ownership taxes. All other
revenue items are considered to be measurable and available only when cash is received by
the District. The District determined that Developer advances are not considered as revenue
susceptible to accrual. Expenditures, other than interest on long-term obligations, are recorded
when the liability is incurred or the long-term obligation is due.
The District reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another
fund.
The Debt Service Fund accounts for the resources accumulated and payments made for
principal and interest on long-term debt of the governmental funds.
The Capital Projects Fund is used to account for financial resources to be used for the
acquisition and construction of capital equipment and facilities.
Amounts reported as program revenues include capital grants and contributions, including
special assessments. Internally dedicated resources are reported as general revenues rather
than as program revenues. Likewise, general revenues include all taxes.
8
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Budgets
In accordance with the State Budget Law, the District's Board of Directors holds public hearings
in the fall each year to approve the budget and appropriate the funds for the ensuing year. The
appropriation is at the total fund expenditures level and lapses at year end. The District's Board
of Directors can modify the budget by line item within the total appropriation without notification.
The appropriation can only be modified upon completion of notification and publication
requirements. The budget includes each fund on its basis of accounting unless otherwise
indicated.
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.
Investments are carried at fair value.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
bridges, sidewalks and similar items), are reported in the applicable governmental or business -
type activities column in the government -wide financial statements. Capital assets are defined
by the District as assets with an initial, individual cost of more than $5,000. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair value at the date of donation.
Capital assets which are anticipated to be conveyed to other governmental entities are recorded
as construction in progress, and are not included in the calculation of invested in capital assets,
net of related debt component of the District's net position.
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.
9
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property taxes, net of estimated uncollectible taxes, are recorded initially as deferred inflow of
resources in the year they are levied and measurable. The unearned property tax revenues are
recorded as revenue in the year they are available or collected.
Facility Fees
On July 26, 2006, the Board of Directors of the District adopted resolutions imposing certain
Facilities Fees upon the property in the District. Pursuant to the Resolutions, the District
imposes a Residential Facilities Fee in the amount of $2,000 per unit for each single-family
detached or attached residential unit, and a Commercial Facilities Fee per building in the
amount of $0.50 per square foot of commercial space within the District, both payable upon the
issuance of a building permit for the subject property. Any unpaid Facilities Fees constitute a
statutory and perpetual lien upon the property until paid.
Deferred Oufflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will
not be recognized as an outflow of resources (expense/expenditure) until then. The government
has no items that qualify for reporting in this category.
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(s) and so will not be
recognized as an inflow of resources (revenue) until that time. The government has only one
item that qualifies for reporting in this category. Accordingly, the item, property tax revenue, is
deferred and recognized as an inflow of resources in the period that the amounts become
available.
Equity
Net Position
For government -wide presentation purposes when both restricted and unrestricted resources
are available for use, it is the government's practice to use restricted resources first, then
unrestricted resources as they are needed.
10
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
Deficits
The General Fund reported a deficit in the fund financial statements in the amount of $(10,902)
as of December 31, 2015. The deficits will be eliminated with the receipt of property taxes in
2016.
11
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 3 - CASH AND INVESTMENTS
Cash and investments as of December 31, 2015, are classified in the accompanying financial
statements as follows:
Statement of net position:
Cash and investments
Cash and investments - Restricted
Cash and investments as of December 31, 2015, consist of the following:
Deposits with financial institutions
Investments
' Total cash and investments
Cash Deposits
$ 7,181
13,105
$ 20.286
$ 4,807
15,479
$ 20.286
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, 2015, the District's cash deposits had a bank balance and a carrying balance
of $4,807.
Investments
The District's formal investment policy is to follow state statutes regarding investments.
The District generally limits its concentration of investments to those noted with an asterisk (*)
below, which are believed to have minimal credit risk, minimal interest rate risk and no foreign
currency risk. Additionally, the District is not subject to concentration risk or investment custodial
risk disclosure requirements for investments that are in the possession of another party.
Colorado revised statutes limit investment maturities to five years or less unless formally
approved by the Board of Directors. Such actions are generally associated with a debt service
reserve or sinking fund requirements.
12
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 3 - CASH AND INVESTMENTS (CONTINUED)
Colorado statutes specify investment instruments meeting defined rating and risk criteria in
which local governments may invest which include:
Obligations of the United States, certain U.S. government agency securities and
securities of the World Bank
General obligation and revenue bonds of U.S. local government entities
Certain certificates of participation
Certain securities lending agreements
Bankers' acceptances of certain banks
Commercial paper
Written repurchase agreements and certain reverse repurchase agreements
collateralized by certain authorized securities
Certain money market funds
Guaranteed investment contracts
Local government investment pools
As of December 31, 2015, the District had the following investments:
Investment
Maturity Fair Value
Colorado Surplus Asset Fund Trust (CSAFE) Weighted average under
60 days $ 15.479
CSAFE
The District invested in the Colorado Surplus Asset Fund Trust (CSAFE), 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 CSAFE. CSAFE 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.
13
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 4 - LONG-TERM OBLIGATIONS
The following is a summary of long-term obligations as of December 31, 2015:
Governmental Activities:
G.O. Limited Tax
2006 Bonds
Developer advance
Developer advance interest
Total payable
Balance at
December 31,
2014
$ 4,685,000
4,853,266
1,275,128
$ 10,813,394
Balance at Due
December 31, Within
Additions Reductions 2015 One Year
$ $ 5,000 $ 4,680,000 $150,000
4,853,266
388,260 1,663,388
$ 388,260 $ 5,000 $ 11,196,654 $150,000
$4,935,000 General Obligation Bonds, dated August 29, 2006 (the Bonds), with an interest
rate of 6.25%, which are due December 1, 2036. The Bonds are subject to redemption prior to
maturity at the option of the District as a whole or in integral multiples of $1,000 on any order of
maturity and in whole or partial maturities, on December 1, 2016, and on any date thereafter,
upon payment of par and accrued interest, without redemption premium. The Bonds are also
subject to mandatory sinking fund redemption, in part, by lot, on December 1, 2010, and each
December 1 thereafter.
14
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
The Bonds are secured by and payable from the Pledged Revenue consisting of monies derived
by the District from the following sources, net of any collection costs: 1) the Required Mill Levy;
2) the portion of the Specific Ownership Tax which is collected as a result of the imposition of
the Required Mill Levy; 3) the "capital fees" which includes Facilities Fees imposed by the
District; and 4) any other legally available monies which the District determines to be treated as
Pledged Revenue. Required Mill Levy means an ad valorem mill levy imposed upon all taxable
property of the District each year in an amount sufficient to pay the principal, premium if any,
and interest on the Bonds as the same become due/payable. The maximum Required Mill Levy
is 50 mills and the minimum mill levy is 40 mills; both will be adjusted for changes in the ratio of
actual value to assessed value of property within the District. The District must levy at least the
minimum as long as the debt to assessed value ratio is greater than 50% and the Surplus Fund
is less than its maximum amount of $604,000. As of December 31, 2015, the District has
certified 50.000 mills for debt service for tax collection year 2016.
During the year ended December 31, 2015, the District was unable to make its fully scheduled
principal payment on December 1, 2015. The District made a $5,000 principal payment and
anticipates the $65,000 unpaid principal payment will be made in 2016.
The District's general obligation bonds mature as follows:
2016
2017
2018
2019
2020-2024
2025-2029
2030-2034
2035-2036
Principal
Interest Total
$ 150,000 $ 292,500 $ 442,500
90,000 283,125 373,125
100,000 277,500 377,500
110,000 271,250 381,250
720,000 1,239,688 1,959, 688
1,090,000 970,626 2,060,626
1,600,000 570,938 2,170,938
820,000 77,813 897,813
$ 4,680,000 $ 3,983,440 $ 8,663,440
15
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
Authorized Debt
On November 1, 2005, a majority of the qualified electors of the District authorized the issuance
of indebtedness in an amount not to exceed $108,800,000 at an interest rate not to exceed 18%
per annum. At December 31, 2015, the District had the following remaining authorized but
unissued indebtedness:
Authorized Remaining at
November 1, 2005 Authorization December 31,
Election Used 2013
Streets $ 9,900,000 $ 1,950,000 $ 7,950,000
Water facilities 14,800,000 2,175,000 12,625,000
Sanitation facilities 10,300,000 810,000 9,490,000
Mosquito control 100,000 100,000
Safety protection 1,000,000 1,000,000
Operations and maintenance 500,000 500,000
Debt refunding 36,100,000 - 36,100,000
Intergovermental agreement 36,100,000 - 36,100,000
$ 108,800,000 $ 4,935,000 $ 103,865,000
Pursuant to the District's Service Plan, the District is limited to issuing a total of $18,500,000 in
bonds. The District is also limited to a maximum debt service mill levy of 50 mills, as adjusted
for changes in the ratio of actual value to assessed value of property within the District, pursuant
to the Service Plan. There have been no adjustments; therefore, the maximum mill levy for debt
service is 50.000 mills as of December 31, 2015.
In the future, the District may issue a portion or all of the remaining authorized but unissued
debt for purposes of providing public improvements to support development as it occurs within
the District's service area.
Developer Advances
Facilities Acquisition Agreement(s)
The District entered into a Facilities Acquisition Agreement on March 1, 2006, with Centex
Homes (Centex) whereby the Developer will design, construct, complete and convey to the
District, and the District will accept, certain public infrastructure improvements benefiting the
development within the District. The District agrees to make payment to Centex for costs of the
improvements, including but not limited to, all costs of design, testing, engineering, acquisition,
construction, related consultant fees and construction management up to a maximum amount of
$18,500,000, together with interest thereon, at an annual rate of eight percent (8%). The
Facilities Acquisition Agreement was amended on November 29, 2006, to decrease the
maximum amount to be advanced by Centex to $9,000,000. Repayment of the advances is
subject to annual appropriation by the District's Board of Directors.
16
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED)
On December 1, 2010, the District terminated the Facilities Acquisition Agreement with Centex
and entered into a Facilities Funding and Acquisition Agreement with LR Investments, LLC (LR),
subject to the closing of the sale of property within the District's boundaries from Centex to LR.
Previous advances made by Centex and the accrued interest on those advances were
transferred to LR through the simultaneous execution of the Termination of Facilities Acquisition
Agreement with Centex and the Facilities Funding and Acquisition Agreement with LR. As of
December 31, 2015, the District had outstanding advances of $1,757,995 and accrued interest
on advances of $1,197,757 payable to LR, pursuant to the Facilities Acquisition Agreement.
On July 8, 2014, the District entered into a Facilities Acquisition Agreement with Lorson South
Land Corporation (LSLC) whereby the Developer will design, construct, complete and convey to
the District, and the District will accept, certain public infrastructure improvements benefitting the
development within the District. The District agrees to make payment to LSLC for costs of the
improvements, including but not limited to, all costs of design, testing, engineering, acquisition,
construction, related consultant fees and construction management, together with interest
thereon, at an annual rate of eight percent (8%). Repayment of the advances is subject to
annual appropriation by the District's Board of Directors. During 2014, the District accepted
$2,879,630 in improvements and had an obligation to LSLC in the same amount with accrued
interest at December 31, 2015, of $340,488 for a total of $3,220,118.
Operations Funding Agreements
On March 1, 2006, the District and Centex entered into an Operations Funding Agreement
(2006 OFA) in which Centex agreed to advance amounts to a maximum stated amount to fund
operations and maintenance expenditures of the District in the event District revenues are not
sufficient. The District agreed to repay Centex for such advances plus accrued interest at the
rate of 8%. Additionally, the District entered into Operation Funding Agreements (hereinafter
referred to as 2007 OFA, 2008 OFA, 2009 OFA and 2010 OFA and, collectively with the 2006
OFA, the 2006-2010 OFAs) with similar terms and provisions for 2007, 2008, 2009 and 2010.
On December 1, 2010, the District terminated the 2006-2010 OFAs with Centex and entered
into a 2010-2011 Operation Funding Agreement (2010-2011 OFA) with LR. Pursuant to the
2010-2011 OFA, LR agrees to advance up to $30,000 for operations and maintenance for the
period beginning December 1, 2010, through December 31, 2011. Previous advances made by
Centex and the accrued interest on those advances have been transferred to LR through the
simultaneous execution of the Termination of 2006-2010 OFAs with Centex and the 2010-2011
OFA with LR.
On November 2, 2011, the District entered into a 2012 Operation Funding Agreement with LR
(2012 OFA). Under the 2012 OFA, LR agreed to advance up to $14,000. No amounts were
advanced under the 2012 OFA.
As of December 31, 2015, the District had outstanding advances of $215,641 and accrued
interest of $125,143.
17
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 5 - NET POSITION
The District has net position consisting of two components - restricted and unrestricted.
Restricted assets include net position that are restricted for use either externally imposed by
creditors, grantors, contributors, or laws and regulations of other governments or imposed by
law through constitutional provisions or enabling legislation. The District had restricted net
position as of December 31, 2015, in the amount of $1,500 for Emergency Reserves.
The District's unrestricted net position as of December 31, 2015, is $(11,226,059). This deficit
amount was a result of the District being responsible for the repayment of bonds issued for
public improvements which were conveyed to other governmental entities and which costs were
removed from the District's financial records.
NOTE 6 - RELATED PARTY
The owners of the majority of the undeveloped property within the District are LR and LSLC. All
of the members of the Board of Directors are associated with LR and LSLC and/or may have
conflicts of interest in dealing with the District.
NOTE 7 — AGREEMENTS
St. Vrain Intergovernmental Agreement
The District and the St. Vrain Sanitation District (SVSD) entered into an Intergovernmental
Agreement (the St. Vrain IGA) on February 15, 2006, pursuant to which SVSD consented to the
formation of the District and authority of the District to construct and finance certain on site
sanitary sewer system improvements as necessary within the development. Upon completion
and acceptance of the sewer improvements by SVSD, the District dedicated and conveyed such
sewer improvements to SVSD, at which time SVSD was assigned the responsibility for the
operation and maintenance of the sewer improvements. The District agrees to request a
meeting of SVSD to discuss and implement steps to dissolve the District when all of the
financial obligations issued by the District have been repaid or when adequate provisions for
payment in full have been made and there are not further operational requirements for District
improvements which the District is responsible for.
Longs Peak Intergovernmental Agreement
The District and Longs Peak Water District (LPWD) entered into an Intergovernmental
Agreement (the Longs Peak IGA) on April 20, 2006, pursuant to which LPWD consented to the
formation of the District and authority of the District to construct and finance certain limited water
system improvements as may be necessary within the Development. Upon completion and
acceptance of the water improvements by LPWD, the District dedicated and conveyed such
water improvements to LPWD, at which time LPWD assumed the responsibility for the operation
and maintenance of the water improvements.
18
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 7 —AGREEMENTS (CONTINUED)
The District is required to obtain the consent of LPWD prior to including any property into the
boundaries of the District or amending its Service Plan. In addition, the District also agrees to
notify LPWD when all of the financial obligations issued by the District have been repaid or
when adequate provisions for payment have been made and there are no further operational
requirements for District improvements to which the District is responsible for to request a
meeting to discuss and implement steps to dissolve the District.
NOTE 8 - ECONOMIC DEPENDENCY
The District has not yet established a revenue base sufficient to pay operational expenditures.
Until an independent revenue base is established, continuation of operations in the District will
be dependent upon funding by LR and LSLC.
NOTE 9 - 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) as
of December 31, 2015. The Pool is an organization created by intergovernmental agreement to
provide property, liability, public officials' liability, boiler and machinery and workers
compensation coverage to its members. Settled claims have not exceeded this coverage in any
of the past three fiscal years.
The District pays annual premiums to the Pool for liability, property, public officials' liability and
workers compensation coverage. In the event aggregated losses incurred by the Pool exceed
amounts recoverable from reinsurance contracts and funds accumulated by the Pool, the Pool
may require additional contributions from the Pool members. Any excess funds which the Pool
determines are not needed for purposes of the Pool may be returned to the members pursuant
to a distribution formula.
NOTE 10 - TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, commonly known as the Taxpayer's Bill of
Rights (TABOR), contains tax, spending, revenue and debt limitations which apply to the State
of Colorado and all local governments.
Spending and revenue limits are determined based on the prior year's Fiscal Year Spending
adjusted for allowable increases based upon inflation and local growth. Fiscal Year Spending is
generally defined as expenditures plus reserve increases with certain exceptions. Revenue in
excess of the Fiscal Year Spending limit must be refunded unless the voters approve retention
of such revenue.
19
LIBERTY RANCH METROPOLITAN DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 10 - TAX, SPENDING AND DEBT LIMITATIONS (CONTINUED)
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. As of December 31, 2015, the District had provided but
did not fund an Emergency Reserve, which may be a violation of the Constitutional Amendment.
On November 1, 2005, District voters passed an election question to increase property taxes
$500,000 annually, without limitation of rate, to pay the District's operational and maintenance
costs. The voters also authorized the District to retain and spend all revenue from sources other
than property taxes without regard to any limitations under TABOR.
The District's management believes it is in compliance with the provisions of TABOR. However,
TABOR is complex and subject to interpretation. Many of the provisions, including the
interpretation of how to calculate Fiscal Year Spending limits will require judicial interpretation.
This information is an integral part of the accompanying financial statements.
20
SUPPLEMENTARY INFORMATION
21
LIBERTY RANCH METROPOLITAN DISTRICT
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2015
Variance with
Final Budget
Original Actual Positive
Budget Amounts (Negative)
REVENUES
Property taxes
Specific ownership tax
Net investment income
Bond proceeds
Total revenues
EXPENDITURES
County Treasurer's fees
Paying agent fees
Bond interest
Bond principal
Refunding bond payment
Contingency
Total expenditures
$ 274,494 $ 274,477 $ (17)
21,960 22,093 133
10 165 155
4,685,000 (4,685,000)
4,981,464 296,735 (4,684,729)
3,845 4,077 232
2,150 1,075 (1,075)
292,813 292,815 2
5,000 5,000 -
4,685,000 (4,685,000)
1,192 (1,192)
4,990,000
NET CHANGE IN FUND BALANCES (8,536)
302,967 (4,687,033)
(6,232) 2,304
FUND BALANCES - BEGINNING
OF YEAR 9,252 13,604 4,352
FUND BALANCES - END OF YEAR $ 716 $ 7,372 $ 6,656
22
LIBERTY RANCH METROPOLITAN DISTRICT
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
Year Ended December 31, 2015
Variance with
Final Budget
Original Actual Positive
Budget Amounts (Negative)
REVENUES $
EXPENDITURES
Repay Developer advance
Capital outlay
Bond issue costs
Total expenditures
$ - $
5,035,000 5,035,000
280,000 - 280,000
5,315,000 - 5,315,000
OTHER FINANCING SOURCES (USES)
Developer advance -
Bond proceeds 5,315,000 - (5,315,000)
Total other financing sources (uses) 5,315,000 - (5,315,000)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
OF YEAR
FUND BALANCES - END OF YEAR $
23
$ $
LIBERTY RANCH METROPOLITAN DISTRICT
DEBT SERVICE REQUIREMENTS TO MATURITY
December 31, 2015
Year
Ending
December 31,
$ 4,935,000 General Obligation Bonds
Issue date August 29, 2006
Principal Due Annually December 1
Interest at 6.25%
Due June 1 and December 1
Principal Interest
Total
2016 $ 150,000 $ 292,500 $ 442,500
2017 90,000 283,125 373,125
2018 100,000 277,500 377,500
2019 110,000 271,250 381,250
2020 120,000 264,375 384,375
2021 130,000 256,875 386,875
2022 145,000 248,750 393,750
2023 155,000 239,688 394,688
2024 170,000 230,000 400,000
2025 185,000 219,375 404,375
2026 205,000 207,813 412,813
2027 215,000 195,000 410,000
2028 235,000 181,563 416,563
2029 250,000 166,875 416,875
2030 275,000 151,250 426,250
2031 295,000 134,063 429,063
2032 320,000 115,625 435,625
2033 340,000 95,625 435,625
2034 370,000 74,375 444,375
2035 395,000 51,250 446,250
2036 425,000 26,563 451,563
$ 4,680,000 $ 3,983,440 $ 8,663,440
24
LIBERTY RANCH METROPOLITAN DISTRICT
SUMMARY OF ASSESSED VALUATION,
MILL LEVY AND PROPERTY TAXES COLLECTED
December 31, 2015
Year Ended
December 31,
Prior Year
Assessed Valuation
for Current Year
Property Tax Levy
Mills Levied for
Total
Property Taxes
Refunds
and
General Debt Service Abatements Levied
2011 $ 3,849,560 8.000
2012 $ 3,933,390 8.000
2013 $ 5,790,730 8.000
2014 $ 7,175,849 8.000
2015 $ 5,119,570 8.000
Estimated for
calendar year
ending
December 31,
2016 $ 16,610,240
Percent
Collected to
Collected Levied
50.000 0.000 $ 223,274 $ 223,274 100.0%
50.000 0.000 $ 228,137 $ 228,134 100.0%
50.000 0.000 $ 335,863 $ 314,937 93.8%
50.000 0.000 $ 416,199 $ 416,182 99.9%
50.000 4.195 $ 318,413 $ 318,393 99.9%
8.000 50.000
25
0.000 $ 963,394
Hello