HomeMy WebLinkAbout20141516.tiff PIONEER METROPOLITAN DISTRICT NO. 5
Weld County,Colorado
FINANCIAL STATEMENTS
December 31,2013
RECEIVED
MAY 15 2014
WELD COUNTY
COMMISSIONERS
2014-1516
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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
8005 South Chester Street,Suite 180,Centennial,CO 80112 (303)689-0833, Fax(303)689-0834
Board of Directors
Pioneer Metropolitan District No. 5
Weld County, Colorado
Independent Auditors' Report
We have audited the accompanying financial statements of the governmental activities and each major fund of
the Pioneer Metropolitan District No. 5,as of and for the year ended December 31,2013,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.5
as of December31, 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. 5'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.
Centennial,CO
May 2,2014
11
BASIC FINANCIAL STATEMENTS
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF NET POSITION
December 31,2013
Governmental
Activities
ASSETS
Receivable from County Treasurer $ 6,959
Property taxes receivable 746,941
'total assets 753,900
LIABILITIES
Payable to Pioneer Metro No. 3 6,959
Total liabilities 6,959
DEFERRED INFLOWS OF RESOURCES
Property tax revenue 746,941
Total deferred inflows of resources 746,941
NET POSITION
Unrestricted _
Total net position $ -
These financial statements should be read only in connection with
the accompanying notes to financial statements.
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PIONEER METROPOLITAN DISTRICT NO. 5
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31,2013
Total
Debt Governmental
General Service Funds
ASSETS
Receivable from County Treasurer $ 1,606 $ 5,353 $ 6,959
Property taxes receivable 172,371 574,570 746,941
Total assets $ 173,977 $ 579,923 $ 753,900
LIABILITIES
Payable to Pioneer Metro No. 3 $ 1,606 $ 5,353 $ 6,959
Total liabilities 1,606 5,353 6,959
DEFERRED INFLOWS OF
RESOURCES
Property tax revenue 172,371 574,570 746,941
Total deferred inflows of resources 172,371 574,570 746,941
FUND BALANCES
Unassigned - - -
Total fund balances - - -
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES $ 173,977 $ 579,923 $ 753,900
These financial statements should be read only in connection with
the accompanying notes to financial statements.
3
PIONEER METROPOLITAN DISTRICT NO. 5
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended December 31, 2013
Total
Debt Governmental
General Service Funds
REVENUES
Property taxes $ 260,974 $ 869,912 $ 1,130.886
Specific ownership taxes 19,128 63,765 82,893
Interest income - - -
Total revenues 280,102 933.677 1,213.779
EXPENDITURES
General
County Treasurer's fees 3,912 13,042 16,954
Transfer to Pioneer Metro No. 3 276,190 920,635 1,196,825
Total expenditures 280,102 933,677 1,213,779
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. 5
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES- BUDGET AND ACTUAL
December 31,2013
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)
REVENUES
Property taxes $ 258,342 $ 261,313 $ 260,974 $ (339)
Specific ownership taxes 16.790 16,985 19,128 2,143
Other income 1,000 1,702 - (1,702)
Total revenues 276,132 280,000 280,102 102
EXPENDITURES
County Treasurer's fees 3,875 3,912 3,912 -
Transfer to Pioneer Metro No. 3 271,257 274,386 276,190 (1.804)
Contingency 1.000 1,702 - 1,702
Total expenditures 276,132 280,000 280,102 (102)
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. 5
NOTES TO FINANCIAL STATEMENTS
December 31,2013
NOTE 1 - DEFINITION OF REPORTING ENTITY
Pioneer Metropolitan District No. 5 (District), a quasi-municipal corporation and political
subdivision of the State of Colorado, was organized by court order and recorded with the Weld
County Clerk and Recorder on August 29, 2006 and is governed pursuant to provisions of the
Colorado Special District Act (Title 32, Article 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 tire
protection.
The District follows the Governmental Accounting Standards Board (GASB) accounting
pronouncements which provide guidance for determining which governmental activities,
organizations and functions should be included within the financial reporting entity. GASB
pronouncements set forth the financial accountability of a governmental organization's elected
governing body as the basic criterion for including a possible component governmental
organization in a primary government's legal entity. Financial accountability includes, but is not
limited to, appointment of a voting majority of the organization's governing body, ability to
impose its will on the organization, a potential for the organization to provide specific financial
benefits or burdens and fiscal dependency.
The District is not financially accountable for any other organization, nor is the District a
component unit of any other primary governmental entity.
The District has no employees and all operations and administrative functions are contracted.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The more significant accounting policies of the District are described as follows:
Government-wide and Fund Financial Statements
The government-wide financial statements include the statement of net position and the
statement of activities. These financial statements include all of the activities of the District. 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. 5
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. 5
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.
During the year, supplementary appropriations approved by the District modified the 2013
appropriations from $276,132 to $280,000 in the General Fund and from $918,110 to $935,000
in the Debt Service Fund.
The District incurred expenditures in excess of amended appropriation for the year ended
December 31, 2013 in the General 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 1 of each year. The levy is
normally set by December IS 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 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.
8
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• 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 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 I, 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
I. 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. 5
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
Greenleaf Acres LLC (the Property Owner) and/or Gateway American Resources LLC (the
Developer). The Property Owners and the Developer may have conflicts of interest in dealing
with the District.
10
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31, 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. I
through 6, inclusive, were designated as the "Financing Districts." The Service Plans for the
Service District and each of the Financing Districts provided that the Service District and the
Financing Districts would enter into a Facilities Funding Construction and Operations
Agreement (the "FFCO") in order to establish the rights and obligations of the Service District
and Financing Districts to provide for the financing, construction, operation, and maintenance of
certain public infrastructure required for the planned future development within the Districts (the
"Future Development"). Prior to completing discussions on the terms of the FFCO, the Service
District and the Financing Districts entered into a Memorandum of Understanding (the "MOU")
dated November 12, 2008 (as amended March 26, 2012), by and among Pioneer Metropolitan
District Nos. 1 through 6 and Pioneer Regional, whereby the 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. 1 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 4, (the "2012 FFCO"). Pursuant to the 2012 FFCO, District
No. 3 is generally responsible for coordinating the financing, construction, ownership, operation
and maintenance of public improvements, while District Nos. 2, 3, and 4, 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.
II
PIONEER METROPOLITAN DISTRICT NO. 5
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 of) 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.
12
PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31,2013
NOTE 5-AGREEMENTS (CONTINUED)
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
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.
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PIONEER METROPOLITAN DISTRICT NO. 5
NOTES TO FINANCIAL STATEMENTS
December 31,2013
NOTE 7 - TAX, SPENDING AND DEBT LIMITATIONS (CONTINUED)
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.
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.
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SUPPLEMENTAL INFORMATION
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PIONEER METROPOLITAN DISTRICT NO.5
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES- BUDGET AND ACTUAL
Year Ended December 31,2013
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)
REVENUES
Property taxes $ 861,140 $ 871,044 $ 869,912 $ (1,132)
Specific ownership taxes 55,970 56,618 63,765 7,147
Other income 1,000 7,338 - (7,338)
Total revenues 918,110 935,000 933,677 (1,323)
EXPENDITURES
County Treasurer's fees 12,917 13,040 13,042 (2)
Transfer to Pioneer Metro No. 3 904,193 914,622 920,635 (6,013)
Contingency 1,000 7,338 - 7,338
Total expenditures 918,110 935,000 933,677 1,323
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.
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