The URL can be used to link to this page

Browse Search

Home My WebLink About20141515.tiff PIONEER METROPOLITAN DISTRICT NO.4 Weld County,Colorado FINANCIAL STATEMENTS December 31,2013 RECEIVED MAY 1 5 2014 WELD COUNTY COMMISSIONERS 2014-1515 ey tfltW tAGaluaflc 5/19/a0i� 3b01aw TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities 2 Fund Financial Statements Balance Sheet- Governmental Funds 3 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 4 General Fund - Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 5 Notes to Financial Statements 6 SUPPLEMENTAL INFORMATION 15 Debt Service Fund - Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 16 SIMMONS &WHEELER, P.C. Certified Public Accountants Boos South Chester Street,Suite 150,Centennial,CO 80112 (303)689-0833,Fax(303)689-0834 Board of Directors Pioneer Metropolitan District No. 4 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. 4,as of and for the year ended December 31,2013,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 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.4 as of December 31, 2013, 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 opinions on the basic financial statements are 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. 4's basic financial statements. The supplemental 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 supplemental 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 supplemental information is fairly stated,in all material respects, in relation to the basic financial statements as a whole. 1AA,n.✓9" j P,C. Centennial, CO May 2, 2014 BASIC FINANCIAL STATEMENTS PIONEER METROPOLITAN DISTRICT NO. 4 STATEMENT OF NET POSITION December 31,2013 Governmental Activities ASSETS Receivable from County Treasurer $ 1,974 Property taxes receivable 250,215 Total assets 252,189 LIABILITIES Payable to Pioneer Metro No. 3 1,974 Total liabilities 1,974 DEFERRED INFLOWS OF RESOURCES Property tax revenue 250,215 Total deferred inflows of resources 250,215 NET POSITION Unrestricted _ Total net position $ - "these financial statements should be read only in connection with the accompanying notes to financial statements. • • Dec = CC N 'C � o ° � p, v 0J 7, E . ' v cv re. v 7 a O ≥ C a a a. M en Le V z V C4 C:J col O , , 3 cu o U C 7 O C o ds vv U V L 7 ,z ° CI:. eD a c > c a psi Tr S.... O ." .a E o as ._L. CIJ z L C L O G CJ U n © U ds v� aCi Gi .W. c Q, C o F N L. ≥ C tz 0 y m O F L OD t2J :n C iZ U V L O '^ y O y cs a Q < sat a y X V G .^' 'D I. C. Gx. V U V1 .a. E > O ,a L O 0 v 69 69 Q O i C' C ' v, N F E -.y.„ --E; y A. Ca v+ `rt s,. c t 0 W SS = Y C N C .S C� L 0 C C z ON N CC N .a 3 E Cy,O Cy0 C G C W W m v, — �o > O ❑ o o c_ W y c F L C c C C ,0 > CV a •.. . E a a V t� 7 c .O L 'y '� d W W N r, C O .Qt H U o OQ E W rt 69 fH C) 0.. (n z N N 4 U Z o z z y 0 o a � a w 'y V s z C O .. V .. O L y E 7; �• E ? E �, F U V ,-, y a c o c o' o .. oh L C JJ A a V O a E ° v v y E• O O J V O a U W PIONEER METROPOLITAN DISTRICT NO. 4 BALANCE SHEET GOVERNMENTAL FUNDS December 31,2013 Total Debt Governmental General Service Funds ASSETS Receivable from County Treasurer $ 456 $ 1,518 $ 1,974 Property taxes receivable 57.742 192,473 250,215 Total assets $ 58,198 $ 193,991 $ 252,189 LIABILITIES Payable to Pioneer Metro No. 3 $ 456 $ 1,518 $ 1,974 Total liabilities 456 1,518 1,974 DEFERRED INFLOWS OF RESOURCES Property tax revenue 57.742 192,473 250,215 Total deferred inflows of resources 57.742 192,473 250,215 FUND BALANCES Unassigned Total fund balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 58.198 $ 193,991 $ 252,189 These financial statements should be read only in connection with the accompanying notes to financial statements. 3 PIONEER METROPOLITAN DISTRICT NO. 4 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended December 31, 2013 Total Debt Governmental General Service Funds REVENUES Property taxes $ 74,108 $ 247,027 $ 321,135 Specific ownership taxes 5,427 18,082 23,509 Interest income 4 15 19 Total revenues 79,539 265,124 344,663 EXPENDITURES General County Treasurer's fees 1,112 3,705 4,817 Transfer to Pioneer Metro No. 3 78,427 261,419 339,846 Total expenditures 79,539 265.124 344,663 NET CHANGE IN FUND BALANCES - - - FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR These financial statements should be read only in connection with the accompanying notes to financial statements. 4 PIONEER METROPOLITAN DISTRICT NO. 4 GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL December 31,2013 Variance with Original Final Budget and Final Actual Positive Budget Amounts (Negative) REVENUES Property taxes $ 74,108 $ 74,108 $ - Specific ownership taxes 4,820 5,427 607 Interest income - 4 4 Other income 1,000 - (1,000) Total revenues 79,928 79,539 (389) EXPENDITURES County Treasurer's fees 1,112 1,1 12 Transfer to Pioneer Metro No. 3 77,816 78,427 (611) Contingency 1.000 - 1,000 Total expenditures 79,928 79,539 389 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - - - FUND BALANCES - BEGINNING OF YEAR - - - FUND BALANCES - END OF YEAR $ - $ - $ - These financial statements should be read only in connection with the accompanying notes to financial statements. 5 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 1 - DEFINITION OF REPORTING ENTITY Pioneer Metropolitan District No. 4 (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 I, 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. 'l'he 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. For the most part, 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 assets and liabilities of the District is reported as net position. The statement of activities demonstrates the degree to which the direct 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 I) charges to 6 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting,and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The major sources of revenue susceptible to accrual are District property taxes 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 general obligation debt of the governmental funds. Budgets In accordance with the State Budget Law of Colorado, 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 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 7 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) publication requirements. The budget includes each fund on its basis of accounting unless otherwise indicated. The District incurred expenditures in excess of appropriation for the year ended December 31, 2013 in the Debt Service Fund, which may be in violation of the Local Government Budget Law. 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 I 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 I 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 revenue in the year they are levied and measurable. The deferred property tax revenues are recorded as revenue in the year they are available or collected. 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 fiend 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. 8 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) • 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 policy to use the most restrictive classification first. NOTE 3 - LONG-TERM OBLIGATIONS Capital Pledge Agreements Each of Pioneer Metropolitan District Nos. 2, 4 and 5 (collectively, the Districts) entered into Capital Pledge Agreements with District No. 3 (collectively, the Capital Pledge Agreements) on April 18, 2012. 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 District No. 3 for payment on the Series 2012 Bonds and funding of the Surplus Fund. The Series 2012 Bonds are term bonds payable annually on December I with final maturity on December 1, 2037 bearing interest of 11.00% payable semiannually on June 1 and December I. The Bonds are subject to redemption prior to maturity, at the option of the District on December 1, 2015, and on any date thereafter, upon payment of par and accrued interest, without redemption premium. The Bonds are also subject to mandatory excess funds redemption on December I of each year, upon payment of par and accrued interest, without redemption premium, to the extent of any funds in the Redemption Account of the Bond Fund. Notwithstanding the foregoing, no redemption of the Bonds shall occur unless and until the Surplus Fund has an amount equal to the Required Surplus amount of$830,000. 9 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE 3 - LONG-TERM OBLIGATIONS (CONTINUED) Authorized Debt On May 2, 2006 a majority of the qualified electors of the District who voted in the election authorized the issuance of indebtedness in an amount not to exceed $3,680,000,000. On May 4, 2010, 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. The District's pledge under the Capital Pledge Agreement reduces the District's debt authorization by the amount of bonds issued by District No. 3. At December 31, 2013, the District had authorized but unissued indebtedness in the following amounts allocated for the following purposes: Debt Debt Pledged Authorized Authorized Authorized Under Series But May 2,2006 May 4,2010 2012 Bonds Unissued Streets $ 330,000,000 $ 330,000,000 $ - $ 660,000,000 Water 330,000,000 330,000,000 3,695,000 656,305,000 Sanitation 330,000,000 330,000,000 145,000 659,855,000 Parks and Recreation 330,000,000 330,000,000 - 660,000,000 Traffic & Safety 330,000,000 330,000,000 - 660,000,000 Mosquito Control 330,000,000 330.000,000 - 660,000,000 Public Transportation 330,000,000 330,000,000 - 660,000,000 Fire Protection 330,000,000 330,000,000 - 660,000,000 Television Relay and Translation 330,000,000 330,000,000 - 660,000,000 Operations and Maintenance 50,000,000 50,000,000 310,000 99,690,000 Debt Refunding 330,000,000 330,000,000 - 660,000,000 Intergovernmental Agreements 330,000,000 330,000,000 - 660,000,000 $3,680,000,000 $ 3,680,000,000 $ 4,150,000 $7,355,850,000 In the future, the District may issue a portion or all of the remaining authorized but unissued general obligation debt for purposes of providing public improvements to support development as it occurs within the District's service area. However, as of the date of this audit, the amount and timing of any debt issuance is not determinable. NOTE 4 - RELATED PARTY The members of the Board of Directors are employees, owners or are otherwise associated with HP Farms Holding LLC and Pioneer Communities Holdings LLC (collectively, the Property Owners) and Gateway American Resources LLC (the Developer). The Property Owners and the Developer may have conflicts of interest in dealing with the District. 10 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 5 - AGREEMENTS Memorandum of Understanding 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. I through 6 and Pioneer Regional, whereby the Service District was granted the authority to enter into an agreement with the Town of Keenesburg regarding the cost sharing of a water pipeline and grant of capacity therein pursuant to which the Service District agreed to reimburse the Town of Keenesburg for costs of the water pipeline. In addition to the Keenesburg obligation, 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 District Nos. I through 6 from their obligations under the MOU and to allow District Nos. 2 through 5 to enter in to the 2012 FFCO (defined below) as contemplated by the Service Plans for the Districts. The amendment to the MOU, however, contemplates that the FFCO will be amended in the future to ensure transition and/or use of any public improvements constructed thereunder to Pioneer Regional as the Service District. Facilities Funding Construction and Operations Agreement As anticipated by the amendment to the MOU as noted above, on March 26, 2012, the District entered into a Facilities Funding, Construction and Operations Agreement with Pioneer Metropolitan District Nos. 2, 3, and 5, (the "2012 FFCO"). Pursuant to the 2012 FFCO, District No. 3 is generally responsible for coordinating the financing, construction, ownership, operation and maintenance of public improvements, while District Nos. 2, 4, and 5, serving as the "Financing Districts" are generally responsible for producing property tax and other revenue sufficient to pay the costs of operations and debt service expenses incurred for the purpose of providing such improvements and services. In addition, District No. 3, in its capacity as the "Coordinating District" under the FFCO has agreed to pay the Reimbursable Costs and will assume Pioneer Regional's obligations under the Keenesburg Agreement allowing the Future Development to continue to have the Keenesburg water transmission source available. 11 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE 5-AGREEMENTS (CONTINUED) The 2012 FFCO allows for a future amendment to include Pioneer Regional, District No. I 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. 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 District No. 3 (the "Pioneer Community Reimbursement IGA"), Pioneer Regional assigned to District No. 3 certain obligations it had with respect to the Reimbursement Obligations and Organization Costs and Services (each, as defined therein) which are collectively referred to therein as the "Pioneer Community Reimbursement Obligations." Pioneer Regional has agreed to adjust the formula in determining its rates to be charged to end users in the Future Development in exchange for District No. 3 assuming the Pioneer Community Reimbursement Obligations. Pioneer Regional is obligated to provide water and wastewater service to the future residents and commercial development of the Districts. As noted above, in exchange for District No. 3's assumption of the Pioneer Community Reimbursement Obligations, Pioneer Regional agreed that it will adjust the calculation considered in establishing its rate structure so that no charges are passed along that would have otherwise been assessed as a result of Pioneer Regional's former obligations pursuant to the MOU. This is expected to result in a decrease in the tap fee rates ultimately payable for connection to water and wastewater systems for service. Under the Pioneer Community Reimbursement IGA, Pioneer Regional agreed that it will not object to District No. 3's construction of (or causing the construction ot) future water and wastewater infrastructure that would otherwise be the responsibility of Pioneer Regional pursuant to its Service Plan. Pioneer Metropolitan District No. 3 agreed to give Pioneer Regional advance written notice prior to constructing any water and wastewater improvements. In addition, pursuant to the First Amendment to the MOU and the Pioneer Community Reimbursement IGA, Pioneer Regional and District No. 3 will enter into an agreement prior to the connection of any resident to water or wastewater service to ensure Pioneer Regional has adequate access to such infrastructure to provide the services contemplated under its Service Plan and to establish an orderly transition of the use and ownership of the improvements to each of the Districts. Finally, each of the Districts will be obligated to impose a regional improvements mill levy (the "Regional Mill Levy"), the proceeds of which are to be remitted to Pioneer Regional to be used for the provision of regional water and wastewater improvements. Pursuant to the Pioneer Regional Community Reimbursement IGA, District No. 3 will cause each of the other Districts 12 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 5—AGREEMENTS (CONTINUED) to impose the Regional Mill Levy and will collect and remit the revenue derived from such levy to Pioneer Regional. Pioneer Regional is to use such revenue for payment of its on-going operations expenses and certain reimbursement obligations which were retained by Pioneer Regional and not assigned to or assumed by District No. 3 and for any other purpose authorized by its Service Plan. NOTE 6 - RISK MANAGEMENT The District is exposed to various risks of loss related to torts, thefts of, damage to, or destruction of assets; errors or omissions; injuries to employees, or acts of God. The District is a member of the Colorado Special Districts Property and Liability Pool (Pool) as of December 31, 2013. The Pool is an organization created by intergovernmental agreement to provide property, liability, public officials liability, boiler and machinery and workers compensation coverage to its members. Settled claims have not exceeded this coverage in any of the past three fiscal years. The District pays annual premiums to the Pool for liability, property and public officials liability coverage. In the event aggregated losses incurred by the Pool exceed amounts recoverable from reinsurance contracts and funds accumulated by the Pool, the Pool may require additional contributions from the Pool members. Any excess funds which the Pool determines are not needed for purposes of the Pool may be returned to the members pursuant to a distribution formula. NOTE 7 - TAX, SPENDING AND DEBT LIMITATIONS Article X, Section 20 of the Colorado Constitution, referred to as the Taxpayer's Bill of Rights (TABOR) contains tax, spending, revenue and debt limitations which apply to the State of Colorado and all local governments. Spending and revenue limits are determined based on the prior year's Fiscal Year Spending adjusted for allowable increases based upon inflation and local growth. Fiscal Year Spending is generally defined as expenditures plus reserve increases with certain exceptions. Revenue in excess of the Fiscal Year Spending limit must be refunded unless the voters approve retention of such revenue. 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. 13 PIONEER METROPOLITAN DISTRICT NO. 4 NOTES TO FINANCIAL STATEMENTS December 31,2013 NOTE 7 - 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. 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. 14 SUPPLEMENTAL INFORMATION 15 PIONEER METROPOLITAN DISTRICT NO. 4 DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Year Ended December 31, 2013 Variance with Original Final Budget and Final Actual Positive Budget Amounts (Negative) REVENUES Property taxes $ 247,027 $ 247,027 $ - Specific ownership taxes 16,060 18,082 2,022 Other income 1,000 - (1,000) Interest income - 15 15 Total revenues 264,087 265,124 1,037 EXPENDITURES County Treasurer's fees 3,705 3,705 - Transfer to Pioneer Metro No. 3 259,382 261,419 (2,037) Contingency 1,000 - 1,000 Total expenditures 264,087 265,124 (1,037) EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - - - FUND BALANCES - BEGINNING OF YEAR _ - - FUND BALANCES - END OF YEAR $ - $ - $ - 16 Hello