HomeMy WebLinkAbout20153443.tiff WELD COUNTY FEDERAL MINERAL LEASE DISTRICT
July 6, 2015
Members present:
Mike Freeman, President (Absent)
Travis DePorter
Bruce White
Others Present:
Barb Connolly, Weld County Controller
Bob Choate, Assistant County Attorney
Janet Lundquist, Public Works •
Donald Warden, Weld County Finance Director
CALL TO ORDER:
Travis DePorter, Director, called the meeting to order at 3:05 p.m.
APPROVE MINUTES OF ARPIL 6, 2015:
By motion duly made and seconded, the minutes of April 6, 2015, were approved
unanimously.
REVIEW STATUS OF WELD COUNTY FOR ROAD PROJECTS: Janet Lundquist from Pubic Works
provided an update detailing the status of the HARP road projects. Public Works is on schedule
and staff believes that they will complete all of the projects on the 2015 HARP list in the IGA by
year end.
REVIEW 2014 AUDIT: Mr. Warden stated Anderson and Whitney, Certified Public Accountants,
conducted the audit as of December 31, 2014, and no exceptions were found. He stated all
funds were in compliance and recommended the Board accept the audit as presented. By
motion duly made and seconded, the audit was accepted as presented.
There was no other business to come before the Board.
NEXT MEETING DATE: The next meeting date is October 19, 2015, at 3:00 p.m.
ADJOURN: Director DePorter adjourned the meeting at 3:20 p.m.
The above and foregoing minutes were presented for approval on the 19th day of
October, 2015. ern-S.
4 11 P.2 _
Mike Freeman, President
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Independent Auditors' Report
Board of Directors
Weld County Federal Mineral Lease Act District
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities,
and each major fund of the Weld County Federal Mineral Lease Act District, as of and for the
years ended December 31, 2014 and 2013 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 the accounting principles generally accepted in the United States;
this includes the design, implementation, and maintenance of the 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
audits. We conducted our audits in accordance with auditing standards generally accepted in the
United States and the standards applicable to financial audits contained in Government Auditing
S'iandurcis, issued by the Comptroller General of the United States. 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 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 evaluation of 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 opinion.
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5801 West 11'h Street a Suite 300 (9'70) 352-7990
Greeley. Colorado 806'34-4813 www ewhitriey
Board of Directors
Weld County FederalMineral Lease Act District
Page 2
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 the major fund of
the Weld County Federal Mineral Lease Act District, as of December 31, 2014 and 2013, and the
respective changes in financial position, thereof for the year then ended in conformity with
accounting principles generally accepted in the United States.
Other Matters
Accounting principles generally accepted in the United States require that management
discussion and analysis on pages 3 through 4 and the budgetary comparison schedule on page 10
be presented to supplement the basic financial statements. Such 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. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with evidence sufficient to express an opinion or provide any assurance.
Other Reporting Required By Government Auditing Standards
In accordance with Government:-it_uliting Standards, we have also issued our report dated
July 9, 2013 on our consideration of Weld County Federal Mineral Lease Act District's internal
control over financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and
the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards, in considering the Weld County Federal Mineral Lease
Act District's internal control over financial reporting and compliance.
July 9, 20t5
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Independent Auditors' Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters, Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
Board of Directors
Weld County Federal Mineral Lease Act District
We have audited in accordance with auditing standards generally accepted in the United
States and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, the financial statements of
Weld County Federal Mineral Lease Act District and the related notes to the financial statements
as of and for the years ended December 31. 2014 and 2013, and have issued our report thereon
dated July 9, 2015.
Internal Control Over Financial Reporting
In planning and performing our audits, we considered the District's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing
our opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the District's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the District's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies in internal control, that results in a reasonable possibility that a
material misstatement of the District's financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose
• described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control that might be significant deficiencies or material weaknesses. Given these
limitations, during our audit we did not identify any deficiencies in internal control over financial
reporting that we consider to be material weaknesses. However, material weaknesses may exist
that have not been identified
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Board o[`Directors
Weld County Federal Mineral Lease Act District
Pate 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Weld County Federal Mineral
Lease Act District's financial statements are free of material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance
with which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion_ The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control
and compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
C+J44; rC
July 9, 2015
Preil nmm _ry Draft
Review and DiSCUSSIOrl
Sublet to Change
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WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
FINANCIAL STATEMENTS
AND
SUPPLEMENTARY INFORMATION
Years Ended December 31, 2014 and 2013
CONTENTS
Independent Auditor's Report 1
Management's Discussion and Analysis 3
Financial Statements
Balance Sheet (Statement of Net Position) 5
Statement of Revenues, Expenditures and Changes in
Fund balance (Statement of Activities) 6
Notes to Financial Statements 7
Required Supplementary Information 9
Budgetary Comparison Schedule 10
Note to Required Supplementary Information 11
Independent Auditor's Report on Internal Control Over
Financial Reporting on Compliance and Other Matters 12
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
II
Auditor's Report- Page 1
Page 1
Auditor's Report- Page 2
Page 2
WELD COUNTY FEDERAL MINERAL LEASE ACT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2014
The discussion and analysis of the Weld County Federal Mineral Lease Act District's (the
"District") financial performance provides an overall review of the District's financial activities as
of December 31, 2014 and for the period from January 1, 2014 to December 31, 2014. The intent
of this discussion and analysis is to look at the District's financial performance as a whole.
Readers should also review the financial statements and the notes to the financial statements to
broaden their understanding of the District's financial performance.
The Management's Discussion and Analysis (MD&A) is an element of the reporting model adopted
by the Governmental Accounting Standard Board (GASB) in the Statement No. 34, Basic Financial
Statements and Management's Discussion and Analysis for State and Local Governments, issued June
1999. Normally, certain comparative information between the current year and the prior year is
required to be presented in the MD&A.
Financial Highlights
The District was created in accordance with Colorado Revised Statute Sections 30-20-1301
through 1306 for the purpose of receiving moneys distributed by the Colorado State Department
of Local Affairs from the Local Government Mineral Impact Fund to mitigate the social and
economic impacts of the areas of unincorporated Weld County (County) impacted by the
development, processing, or energy conversion of fuels and minerals leased under the Federal
Mineral Leasing Act. The District was created August 17, 2011, nunc pro tunc,June 29, 2011. The
District's liabilities exceeded its assets at the close of 2014 by $422,331 (fund balance). As of
December 31, 2014, except as expended for administrative expenses as permitted by Colorado
Revised Statutes, the fund balance of the District is restricted for use on areas within the
unincorporated areas of the County that are impacted by the development, processing, or energy
conversion of fuels and minerals leased under the Federal "Mineral Lands Leasing Act" of
February 25, 1920,as amended.
The District had total revenues of $1,642,281 in 2014. The total operating revenues were
$1,632,368 and investment earnings were $9,912 for the fourth year of operation. The total
expenses were $1,219,950.
Using the Basic Financial Statements
The Basic Financial Statements consist of Management's Discussion and Analysis (this section)
and financial statements and notes to those statements. These statements are organized so that
the reader can understand the District as an entire operating entity.
Page 3
Since the District has no differences between the modified-accrual and full-accrual basis of
accounting,the presentation of the District-wide financial statements is essentially the same as the
presentation of funds. Therefore, only one set of financial statements is presented.
The Balance Sheet presents information on the District's assets and liabilities, with the difference
between the two reported as fund balance. Over time, increases or decreases in fund balance may
serve as a useful indicator of whether the financial position of the District is improving or
deteriorating.
The Statement of Revenues, Expenditures, and Changes in Fund Balance presents information
showing how the District's fund balance changed during 2014. This statement tells how general
District services were financed in the short term as well as what remains for future spending.
The District has only one fund, which is a governmental fund. The financial statements also
include notes that explain some of the information in the financial statements.
Financial Analysis of the District as a Whole
Reporting the District's Fund •
Fund financial reports provide detailed information about the District's single fund. Federal
mineral lease revenues for 2014 were $1,632,368. Net non-operating revenues for 2014 were
$9,912 from investment earnings.
Budget and Actual Comparisons
For 2014, actual Federal mineral lease actual revenue exceeded budgeted revenues by $471,480.
Budgeted expenditures exceeded actual expenditures by$1,650.
The Future of the District
The District has adopted policies for the distribution of grants to mitigate the social and economic
impacts of the areas of unincorporated County impacted by the development, processing, or
energy conversion of fuels and minerals leased under the Federal Mineral Leasing Act. In 2013,
the District planned on granting funds to mitigate traffic impacts from oil and gas drilling activities
on County roads and funding a water quality testing program for landowners with oil and gas
wells near their water wells in the County.
Request for Information
• The financial report is designed to provide information for regulatory reporting to state agencies
and those with an interest in the District's finances. Questions concerning this or any additional
information should be addressed to Don Warden, District Secretary, PO Box 758, Greeley,
Colorado 80632.
Page 4
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
BALANCE SHEET (Statement of Net Position)
2014 2013
Assets
Deposits with County Treasurer (Note 2) $ 1.348.851 $ 926.520
Total Assets 1,348,851 926,520
Liabilities
Accounts Payable $ 0 $ 0
Fund Balance, restricted (Note 1) 1.348.851 926.520
Total Liabilities and Fund Balance $ 1,348,851 $ 926,520
See Notes to Financial Statements.
Page 5
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES
IN FUND BALANCE (Statement of Activities)
2014 2013
Revenues
Intergovernmental revenue - federal mineral lease revenue $1,632,368 $ 896,880
Investment income 9.912 10,796
Total Revenue 1,642,280 907,676
Expenditures
Current:
General Government 1.219.950 1.083.000
Total Expenditures 1,219,950 1,083,000
Excess of Revenues over Expenditures $ 422,330 $ (175,324)
See Notes to Financial Statements
Page 6
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
NOTES TO FINANCIAL STATEMENTS •
Note 1: Nature of Business and Summary of Significant Accounting Policies
Basis of presentation: The accompanying financial statements of the Weld County Federal Mineral
Lease Act District (the "District") have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) applicable to governmental entities.
Since the District has no differences in accounting between modified-accrual and full-accrual, the
presentation of the District-wide financial statements is essentially the same as the presentation of
funds. Therefore, only one set of financial statements is presented.
Financial reporting entity: In the 2011 Colorado Legislative Session, House Bill 11-1218 was
passed which allowed counties to create a "Federal Mineral Lease Act District" to receive direct
distribution Federal mineral lease payments from the Colorado Department of Local Affairs. The
District was established for the purpose of transferring these payments to the District to
streamline the mitigation of impacts according to the guidance in the Mineral Lands Leasing Act
30 U.S.C. 191 and provisions of Colorado Revised Statutes.
The District is administered by Weld County, Colorado (the "County"), which provides meeting
space, maintenance of financial records, treasury services, payroll services, and other
administrative services as may be requested by the District Board of Directors and agreed upon by
the County for a small monthly fee.
Basis of accounting: The District uses the modified accrual basis of accounting. Under the
modified accrual basis of accounting, revenues are recognized when susceptible to accrual; that is
when they become both measurable and available. "Measurable" means the amount of the
transaction can be determined and "available" means collectible within the current period or soon
enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded
when the related fund liability is incurred.
Use of estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Page 7
Deposits with State Treasurer: The District's cash is pooled with the County's cash in an account
managed by the Weld County Treasurer. The account is reported at the fair market value of the
cash and securities underlying the investment pool.
Fund equity: The Governmental Accounting Standards Board (GASB) has issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54). As prescribed by
GASB 54, governmental funds report fund balance in classifications based primarily on the extent
to which the District is bound to honor constraints on specific purposes for which amounts in the
funds can be spent.
Restricted fund balance includes amounts that can be spent only for specific purposes stipulated
by constitution, external resource providers, or through enabling legislation. Restrictions may
effectively be changed or lifted only with consent of the resource providers.
As of December 31, 2014, except as expended for administrative expenses as permitted by
Colorado Revised Statutes,the fund balance of the District is restricted for use on areas within the
unincorporated areas of the County that are impacted by the development, processing, or energy
conversion of fuels and minerals leased under the Federal Mineral Lands Leasing Act of February
25, 1920, as amended.
Note 2: Contingencies and Commitments:
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; errors and omissions; injuries; and natural disasters. The District does not have specific
insurance coverage beyond the insurance policies and risk management of Weld County.
In 1992, Colorado voters approved the Taxpayer's Bill of Rights (TABOR). The District believes
that it is exempt from TABOR since it does not have the authority to levy taxes
Note 3: Deposits
Deposits for the District are invested in the pooled cash and investments account managed by the
Weld County Treasurer. State Statutes authorize the Treasurer to invest in obligations of the
United States and certain U.S. agency securities, certain international agency securities, general
obligation and revenue bonds of U.S. local government entities, banker's acceptance of certain
banks, commercial paper, written repurchase agreements collateralized by certain authorized
securities, certain money market funds, and guaranteed investment contracts. The County has no
provisions in its investment policy that would further limit investment choices. Detailed
information on the County Treasurer's pooled cash and investments is available from the County
Treasurer.
Page 8
n.
REQUIRED SUPPLEMENTARY INFORMATION
The District's required supplementary information includes the budgetary
comparison schedule as described in the accompanying Note to Required
Supplementary Information following the schedule.
Page 9
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND
2014 Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
Intergovernmental Revenue
Federal Mineral Lease Revenue $ 1,000,000 $ 1,166,800 $ 1,632,368 $ 465,568
Investment income 4,000 4,000 9,912 5,912
Total Revenue $ 1,004,000 $ 1,170,800 $ 1,642,280 $ 471,480
Expenditures
General government $ 1.054.800 $ 1,221,600 $ 1.219.950 $ 1.650
Net Change in Fund Balance $ (50,800) $ (50,800) $ 422,330 $ 473,130
2013 Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
Intergovernmental Revenue
Federal Mineral Lease Revenue $ 1,000,000 $ 1,000,000 $ 896,880 $ (103,120)
Investment income 4.000 4.000 10.796 6.796
Total Revenue $ 1,004,000 $ 1,004,000 $ 907,676 $ (96,324)
Expenditures
General government $ 1.087.382 $ 1.087.382 $ 1.083.000 $ 4.382
Net Change in Fund Balance $ (83,382) $ (83,382) $ (175,324) $ (91,942)
See Note to Required Supplementary Information
Page 10
WELD COUNTY
FEDERAL MINERAL LEASE ACT DISTRICT
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
Budget
The budgetary comparison schedule presents a comparison of the legally adopted budget with
actual data. The District prepares its budget on a cash basis, and the revenues and expenditures
presented in the aforementioned schedule are on the modified accrual basis. Any differences in
revenues and expenditures as a result of the difference in accounting basis are considered
immaterial. Appropriations lapse at fiscal year end. All budget amendments are approved by the
Board of Directors and are presented within the final budget figures.
Colorado State Statutes require the preparation of an annual budget which provides
documentation that all sources and uses of District resources are properly planned, budgeted, and
approved. The budget, upon adoption, is the legal document which places restrictions and
limitation on the purposes and amounts for which District monies may be expended.
Financial Reporting on Compliance and Other Matters- Page 1
Page 11
Financial Reporting on Compliance and Other Matters - Page 2
Page 12
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