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HomeMy WebLinkAbout2019 Financial Statement Report
TRAER CREEK METROPOLITAN
DISTRICT
Eagle County, Colorado
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31, 2019
TRAER CREEK METROPOLITAN DISTRICT
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2019
INDEPENDENT AUDITOR’S REPORT I
BASIC FINANCIAL STAT EMENTS
GOVERNMENT -WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 1
STATEMENT OF ACTIVITIES 2
FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS 3
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – GOVERNMENTAL FUNDS 4
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF THE
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 5
GENERAL FUND – STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE – BUDGET AND ACT UAL 6
SPECIAL REVENUE FUND – STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND
ACTUAL 7
NOTES TO BASIC FINANCIAL STATEMENTS 8
SUPPLEMENTARY INFORMATION
DEBT SERVICE FUND – SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL 27
CAPITAL PROJECTS FUND – SCHEDULE OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND
ACTUAL 28
OTHER INFORMATION
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY 30
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Wipfli LLP
Lakewood, Colorado
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BASIC FINANCIAL STATEMENTS
TRAER CREEK METROPOLITAN DISTRICT
STATEMENT OF NET POSITION
DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(1)
ASSETS
Cash and Investments 975,045$
Cash and Investments - Restricted 4,340,709
Accounts Receivable 1,588,687
PIF Receivable 450,537
Accrued Interest Receivable 4,637
Capital Assets, Net:
Construction in Progress 3,398,211
Lot 2 Garage 3,943,328
Parks and Recreation 2,018,477
Total Assets 16,719,631
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 58,336
Total Deferred Outflows of Resources 58,336
LIABILITIES
Accounts Payable 114,670
Bond Interest Payable 43,945
Note Payable - Developer 4,011
Due to Wildlife Trust Fund 5,277
Noncurrent Liabilities:
Due Within One Year 1,500,000
Due in More Than One Year 58,869,464
Total Liabilities 60,537,367
NET POSITION
Net Investment in Capital Assets (43,732,584)
Restricted For:
Debt Service 1,500,275
Emergency Reserves 14,000
Unrestricted (1,541,091)
Total Net Position (43,759,400)$
TRAER CREEK METROPOLITAN DISTRICT
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(2)
Net Revenue
(Expense) and
Change in
Program Revenues Net Position
Charges Operating Capital
for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
FUNCTIONS/PROGRAMS
Primary Government:
Government Activities:
General Government 556,338$ -$ -$ -$ (556,338)$
Interest and Related Costs on Long-Term
Debt 2,298,675 - 231,152 1,717,819 (349,704)
Public Works 363,836 - - - (363,836)
Total Governmental Activities 3,218,849$ -$ 231,152$ 1,717,819$ (1,269,878)
GENERAL REVENUES
Retail Sales Fees 4,290,129
Net Investment Income 99,004
Miscellaneous Income 4,767
Total General Revenues 4,393,900
CHANGE IN NET POSITION 3,124,022
Net Position - Beginning of Year (46,883,422)
NET POSITION - END OF YEAR (43,759,400)$
TRAER CREEK METROPOLITAN DISTRICT
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(3)
Total
Special Debt Capital Governmental
General Revenue Service Projects Funds
ASSETS
Cash and Investments 737,050$ 237,995$ -$ -$ 975,045$
Cash and Investments - Restricted 14,000 - 4,287,970 38,739 4,340,709
PIF Receivable - - 450,537 - 450,537
Accrued Interest Receivable - - 4,637 - 4,637
Accounts Receivable - - 1,588,687 - 1,588,687
Due from other funds - - 119,282 - 119,282
Total Assets 751,050$ 237,995$ 6,451,113$ 38,739$ 7,478,897$
LIABILITIES AND FUND
BALANCES
LIABILITIES
Accounts Payable 96,400$ 153$ 11,957$ 6,160$ 114,670$
Bond Interest Payable - - 43,945 - 43,945
Due to Other Funds 119,282 119,282
Note Payable - Developer - 4,011 - - 4,011
Due to Wildlife Trust Fund - 5,277 - - 5,277
Total Liabilities 96,400 128,723 55,902 6,160 287,185
FUND BALANCES
Restricted For:
Emergency Reserves 14,000 - - - 14,000
Debt Service - - 6,395,211 - 6,395,211
Assigned For:
Capital Projects - - - 32,579 32,579
Special Revenue Fund - 109,272 - - 109,272
Unassigned, Reported in:
General Fund 640,650 - - - 640,650
Total Fund Balances 654,650 109,272 6,395,211 32,579 7,191,712
Total Liabilities and
Fund Balances 751,050$ 237,995$ 6,451,113$ 38,739$
Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds.9,360,016
The deferred loss on refunding is not a current financial resource,
therefore not reported as a deferred outflow of resources in the
fund financial statements.58,336
Long-term liabilities, including bonds payable, are not due and
payable in the current period and, therefore, are not reported in
in the funds.
Payable to Town (3,522,309)
Bonds payable (27,397,000)
Developer Advance Payable (14,758,119)
Letter of Credit Fee Payable (516,967)
Accrued Interest Payable - Developer Advance (13,888,894)
Accrued Interest Payable - Payable to Town (286,175)
Net Position of Governmental Activities (43,759,400)$
TRAER CREEK METROPOLITAN DISTRICT
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(4)
Total
Special Debt Capital Governmental
General Revenue Service Projects Funds
REVENUES
Intergovernmental Revenue - The Village -$ -$ 231,152$ -$ 231,152$
Retail Sales Fees 460,000 42,901 3,787,228 - 4,290,129
Transfer fees - 10,000 119,282 - 129,282
Tap fees - - 1,588,537 - 1,588,537
Net Investment Income 744 2,298 95,962 - 99,004
Miscellaneous Income 4,767 - - - 4,767
Total Revenues 465,511 55,199 5,822,161 - 6,342,871
EXPENDITURES
General and Administration:
Accounting 50,399 6,626 - - 57,025
Audit Fees 5,800 - - - 5,800
District Management 36,230 - - - 36,230
Dues and Membership 731 - - - 731
Insurance and Bonds 26,108 - - - 26,108
Legal 38,267 39,840 - - 78,107
Miscellaneous 1,271 20 - - 1,291
Intergovernmental Expense - The Village 36,919 - - - 36,919
Operations and Maintenance:
Acquisition of Eagle Park Reservoir Stock 11,880 - - - 11,880
Flag Pole Maintenance 3,740 - - - 3,740
Landscape Maintenance 6,179 - - - 6,179
Parking Garage Maintenance 158,350 - - - 158,350
Snow Removal 1,348 - - - 1,348
Tract E Park 13,035 - - - 13,035
Common Area Maintenance 107,573 - - - 107,573
Utilities 12,022 - - - 12,022
Debt Service:
Bond Principal - - 1,500,000 - 1,500,000
Bond Principal - deferred - - 927,000 - 927,000
Interest Expense - Bonds - - 683,027 - 683,027
Legal - - 5,624 - 5,624
LOC Fees - - 454,084 - 454,084
Paying Agent Fees - - 14,600 - 14,600
Remarketing Fees - - 32,307 - 32,307
Capital Outlay:
Streets - - - 113,094 113,094
Total Expenditures 509,852 46,486 3,616,642 113,094 4,286,074
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES (44,341) 8,713 2,205,519 (113,094) 2,056,797
OTHER FINANCING SOURCES (USES)
Developer Advance - - - 106,934 106,934
Total Other Financing Sources (Uses)- - - 106,934 106,934
NET CHANGE IN FUND BALANCES (44,341) 8,713 2,205,519 (6,160) 2,163,731
Fund Balances - Beginning of Year 698,991 100,559 4,189,692 38,739 5,027,981
FUND BALANCES - END OF YEAR 654,650$ 109,272$ 6,395,211$ 32,579$ 7,191,712$
TRAER CREEK METROPOLITAN DISTRICT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE S OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(5)
Net Change in Fund Balances - Total Governmental Funds 2,163,731$
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. In the statement of activities
capital outlay is not reported as an expenditure. However, the statement of activities will
report as depreciation expense the allocation of the cost of any depreciable asset over
the estimated useful life of the asset.
Capital Outlay 113,094
Disposal of Capital Assets (14,832)
Depreciation Expense (363,836)
The issuance of long-term debt (e.g., bonds, Developer advances) provides current
financial resources to governmental funds, while the repayment of the principal of
long-term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net position. Also, governmental funds
report the effect of issuance costs, premiums, discounts, and similar items when debt
is first issued, whereas these amounts are deferred and amortized in the statement of
activities. This amount is the net effect of these differences in the treatment of long-
term debt and related items.
Developer Advances (106,934)
Deduction of Developer Advances 14,832
Interest on Developer Advances (961,103)
Interest on Payable to Town (52,835)
Principal Payment 2,427,000
Letter of Credit Fees - Deferred (87,402)
Amortization of Deferred Loss on Bond Refunding (7,693)
Changes in Net Position of Governmental Activities 3,124,022$
TRAER CREEK METROPOLITAN DISTRICT
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE –
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(6)
Variance with
Original Final Budget
and Final Actual Positive
Budget Amount (Negative)
REVENUES
Retail Sales Fees 500,000$ 460,000$ (40,000)$
Net Investment Income - 744 744
Miscellaneous Income - 4,767 4,767
Total Revenues 500,000 465,511 (34,489)
EXPENDITURES
General and Administration:
Accounting 56,000 50,399 5,601
Audit Fees 5,800 5,800 -
District Management 40,000 36,230 3,770
Dues and Membership 1,300 731 569
Insurance and Bonds 30,000 26,108 3,892
Legal 50,000 38,267 11,733
Miscellaneous 3,920 1,271 2,649
Intergovernmental Expense - The Village 42,100 36,919 5,181
Operations and Maintenance:
Acquisition of Eagle Park Reservoir Stock 11,880 11,880 -
Asphalt Overlay Contribution 40,000 - 40,000
Flag Pole Maintenance 10,000 3,740 6,260
Landscape Maintenance 5,000 6,179 (1,179)
Engineering 5,000 - 5,000
Parking Garage Maintenance 125,000 158,350 (33,350)
Snow Removal 20,000 1,348 18,652
Tract E Park 25,000 13,035 11,965
Common Area Maintenance 120,000 107,573 12,427
Utilities 20,000 12,022 7,978
Total Expenditures 611,000 509,852 101,148
NET CHANGE IN FUND BALANCE (111,000) (44,341) 66,659
Fund Balance - Beginning of Year 599,863 698,991 99,128
FUND BALANCE - END OF YEAR 488,863$ 654,650$ 165,787$
TRAER CREEK METROPOLITAN DISTRICT
SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BAL ANCE –
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(7)
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Retail Sales Fees 41,000$ 41,000$ 42,901$ 1,901$
Transfer Fees - - 10,000 10,000
Net Investment Income 1,000 2,298 2,298 -
Total Revenues 42,000 43,298 55,199 11,901
EXPENDITURES
General and Administration:
Accounting 10,000 9,000 6,626 2,374
Legal 5,000 40,000 39,840 160
District Management 1,000 - - -
Miscellaneous - 1,000 20 980
Contingency 4,020 - - -
Total Expenditures 20,020 50,000 46,486 3,514
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES 21,980 (6,702) 8,713 15,415
OTHER FINANCING SOURCES (USES)
Transfers to Other Funds (20,000) - - -
Total Other Financing Sources (Uses)(20,000) - - -
EXCESS OF REVENUES AND OTHER FINANCING
SOURCES OVER (UNDER) EXPENDITURES
AND OTHER FINANCING USES 1,980 (6,702) 8,713 15,415
Fund Balance - Beginning of Year 20,513 100,559 100,559 -
FUND BALANCE - END OF YEAR 22,493$ 93,857$ 109,272$ 15,415$
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(8)
NOTE 1 DEFINITION OF REPORT ING ENTITY
Traer Creek Metropolitan District (District), a quasi-municipal corporation, was organized on
February 3, 1999, concurrently with The Village Metropolitan District (The Village) and is
governed pursuant to provisions of the Colorado Special District Act (Title 32, Article 1,
Colorado Revised Statutes). The District’s service area is located entirely in the Town of
Avon (Avon or Town) in Eagle County, Colorado. The District’s service plan was approved
by the Town. The District was established to provide financing for the construction of streets,
traffic and safety protection, water facilities, sanitary sewer, storm drainage, parks and
recreation, television relay and translation, public transportation, fire protection and
emergency medical services and mosquito control. Pursuant to its Service Plan, the District
is intended to be the Service District related to The Village, serving as the Financing District,
for the development of the service area which encompasses the area of both the District and
The Village and is generally known as The Village at Avon (the Project).
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 has no employees and all operations and administrative functions are
contracted.
On May 8, 2002, The Village (at Avon) Commercial Public Improvement Company
(Commercial PIC) and The Village (at Avon) Mixed-Use Public Improvement Company
(Mixed-Use PIC) were formed. Both the Commercial PIC and the Mixed-Use PIC are
Colorado nonprofit corporations that were formed for the purpose of adopting and imposing
Declarations and Covenants on property within the Village (at Avon) and for the purpose of
imposing and collecting certain fees. The Commercial PIC and the Mixed-Use PIC have
entered into an agreement with the District whereby the PICs have agreed to remit to the
District certain revenue received from fees imposed by the PICs in consideration of the
District’s financing, construction, and operation of public improvements which benefit the
members of the PICs, the Town of Avon and the general public.
The District is not financially accountable for any other organization, including The Village,
nor is the District a component unit of any other primary governmental entity, including
Avon.
The more significant accounting policies of the District are described as follows:
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(9)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government-Wide and Fund Financial Statements
The government-wide financial statements include the statement of net position and the
statement of activities. These financial statements include all of the activities of the District.
The effect of interfund activity has been removed from these statements. Governmental
activities are normally supported by taxes and intergovernmental revenues.
The statement of net position reports all financial and capital resources of the District. The
difference between the sum of assets and deferred outflows and the sum of liabilities and
deferred inflows is reported as net position.
The statement of activities demonstrates the degree to which the direct and indirect
expenses of a given function or segment are offset by program revenues. Direct expenses
are those that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services, or 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 the 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 government considers revenues to
be available if they are collected within 60 days of the end of the current fiscal period. The
major sources of revenue susceptible to accrual are retail sales fees and intergovernmental
revenues. 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.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(10)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
The Special Revenue Fund is used to account for the revenues earned and
expenditures incurred in connection with the Commercial PIC and the Mixed-Use PIC
that benefit the District. It accounts for the portion of retail sales fee revenues that are
used for the payment of administrative expenses for the PICs.
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.
The Capital Projects Fund is used to account for financial resources to be used for the
acquisition and construction of capital equipment and facilities.
Budgets
In accordance with the State Local Government Budget Law, the District’s Board of
Directors holds public hearings in the fall each year to approve the budget and appropriate
the funds for the ensuing year. The appropriation is at the total fund expenditures level and
lapses at year-end. The District’s Board of Directors can modify the budget by line item
within the total appropriation without notification. The appropriation can only be modified
upon completion of notification and publication requirements. The budget includes each fund
on its basis of accounting unless otherwise indicated.
The District has amended its annual budget for the year ended December 31, 2019.
Pooled Cash and Investments
The District follows the practice of pooling cash and investments of all funds to maximize
investment earnings. Except when required by trust or other agreements, all cash is
deposited to and disbursed from a single bank account. Cash in excess of immediate
operating requirements is pooled for deposit and investment flexibility. Investment earnings
are allocated periodically to the participating funds based upon each fund’s average equity
balance in the total cash.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g.
roads, bridges, sidewalks, and similar items), are reported in the government-wide financial
statements. Capital assets are defined by the District as assets with an initial, individual cost
of more than $5,000. Such assets are recorded at historical cost or estimated historical cost
if purchased or constructed. Donated capital assets are recorded at acquisition value at the
date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized. Improvements are capitalized and
depreciated over the remaining useful lives of the related fixed assets, as applicable.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(11)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capital Assets (Continued)
Depreciation expense has been computed using the straight-line method over the estimated
economic useful lives:
Infrastructure:
Street Networks 30 Years
Park Networks 30 Years
Water and Sewer Improvements 30 Years
Lot 2 Garage Improvements 30 Years
Garage Doors 10 Years
Tap Fees
Tap fees are recorded as capital contributions when received.
Cost of Bond Refunding
In the government-wide financial statements, the deferred cost of bond refunding is being
amortized using the interest method over the life of the new bonds. The amortization amount
is a component of interest expense and the unamortized deferred cost is refle cted as a
deferred outflow of resources.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period and so
will not be recognized as an outflow of resources (expense/expenditure) until that time. The
District has one item that qualifies for reporting in this category. Accordingly, the item, cost
of bond refunding, is deferred and recognized as an outflow of resources in the period that
the amount is incurred.
In addition to liabilities, the statement of net position reports a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period and so will
not be recognized as an inflow of resources (revenue) until that time. The District has no
items that qualify for reporting in this category. Accordingly, no items are deferred and
recognized as an inflow of resources in the period that the amount becomes available.
Equity
Net Position
For government-wide presentation purposes when both restricted and unrestricted
resources are available for use, it is the government’s practice to use restricted resources
first, then unrestricted resources as they are needed.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(12)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equity (Continued)
Fund Balance
Fund balance for governmental funds should be reported in classifications that comprise a
hierarchy based on the extent to which the government is bound to honor constraints on the
specific purposes for which spending can occur. Governmental funds report up to five
classifications of fund balance: nonspendable, restricted, committed, assigned, and
unassigned.
Because circumstances differ among governments, not every government or every
governmental fund will present all of these components. The following classifications
describe the relative strength of the spending constraints:
Nonspendable Fund Balance – The portion of fund balance that cannot be spent
because it is either not in spendable form (such as prepaid amounts or inventory) or
legally or contractually required to be maintained intact.
Restricted Fund Balance – The portion of fund balance that is constrained to being used
for a specific purpose by external parties (such as bondholders), constitutional
provisions, or enabling legislation.
Committed Fund Balance – The portion of fund balance that can only be used for
specific purposes pursuant to constraints imposed by formal action of the government’s
highest level of decision-making authority, the Board of Directors. The constraint may be
removed or changed only through formal action of the Board of Directors.
Assigned Fund Balance – The portion of fund balance that is constrained by the
government’s intent to be used for specific purposes, but is neither restricted nor
committed. Intent is expressed by the Board of Directors to be used for a specific
purpose. Constraints imposed on the use of assigned amounts are more easily removed
or modified than those imposed on amounts that are classified as committed.
Unassigned Fund Balance – The residual portion of fund balance that does not meet any
of the criteria described above.
If more than one classification of fund balance is available for use when an expenditure is
incurred, it is the District’s practice to use the most restrictive classification first.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(13)
NOTE 3 CASH AND INVESTMENTS
Cash and investments as of December 31, 2019 , are classified in the accompanying
financial statements as follows:
Statement of Net Position:
Cash and Investments 975,045$
Cash and Investments - Restricted 4,340,709
Total Cash and Investments 5,315,754$
Cash and investments as of December 31, 2019, consist of the following:
Deposits with Financial Institutions 912,326$
Investments 4,403,428
Total Cash and Investments 5,315,754$
Deposits with Financial Institutions
The Colorado Public Deposit Protection Act (PDPA) requires that all units of local
government deposit cash in eligible public depositories. Eligibility is determined by state
regulators. Amounts on deposit in excess of federal insurance levels must be collateralized.
The eligible collateral is determined by the PDPA. PDPA allows the institution to create a
single collateral pool for all public funds. The pool for all the uninsured public deposits as a
group is to be maintained by another institution or held in trust. The market value of the
collateral must be at least 102% of the aggregate uninsured deposits.
The State Commissioners for banks and financial services are required by statute to monitor
the naming of eligible depositories and reporting of the uninsured deposits and assets
maintained in the collateral pools.
At December 31, 2019, the District’s cash deposits had a bank and a carrying balance of
$912,326.
Investments
The District has not adopted a formal investment policy; however, the District follows state
statutes regarding investments.
The District generally limits its concentration of investments to those noted with an asterisk
(*) below, which are believed to have minimal credit risk, minimal interest rate risk and no
foreign currency risk. Additionally, the District is not subject to concentration risk or
investment custodial risk disclosure requirements for investments that are in the possession
of another party.
Colorado revised statutes limit investment maturities to five years or less unless formally
approved by the Board of Directors. Such actions are generally associated with a debt
service reserve or sinking fund requirement.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(14)
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Investments (Continued)
Colorado statutes specify investment instruments meeting defined rating and risk criteria in
which local governments may invest which include:
. Obligations of the United States, certain U.S. government agency securities and
securities of the World Bank
. General obligation and revenue bonds of U.S. local government entities
. Certain certificates of participation
. Certain securities lending agreements
. Bankers’ acceptances of certain banks
. Commercial paper
. Written repurchase agreements and certain reverse repurchase agreements
collateralized by certain authorized securities
* Certain money market funds
. Guaranteed investment contracts
* Local government investment pools
As of December 31, 2019, the District had the following investments:
Investment Maturity Amount
Colorado Liquid Asset Trust Weighted Average
(COLOTRUST) Under 60 Days 482,625$
U.S. Treasury Money Market Fund Weighted Average
Under 60 Days 3,920,803
Total 4,403,428$
COLOTRUST
The District invested in the Colorado Local Government Liquid Asset Trust (COLOTRUST)
(the Trust), an investment vehicle established for local government entities in Colorado to
pool surplus funds. The State Securities Commissioner administers and enforces all State
statutes governing the Trust. The Trust operates similarly to a money market fund and each
share is equal in value to $1.00. The Trust offers shares in two portfolios, COLOTRUST
PRIME and COLOTRUST PLUS+. Both portfolios may invest in U.S. Treasury securities
and repurchase agreements collateralized by U.S. Treasury securities. COLOTRUST
PLUS+ may also invest in certain obligations of U.S. government agencies, highest rated
commercial paper and any security allowed under CRS 24-75-601. A designated custodial
bank serves as custodian for the Trust’s portfolios pursuant to a custodian agreement. The
custodian acts as safekeeping agent for the Trust’s investment portfolios and provides
services as the depository in connection with direct investments and withdrawals. The
custodian’s internal records segregate investments owned by the Trust. COLOTRUST is
rated AAAm by Standard & Poor’s. COLOTRUST records its investments at fair value and
the District records its investment in COLOTRUST at net asset value as determined by fair
value. There are no unfunded commitments, the redemption frequency is daily, and there is
no redemption notice period.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(15)
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
U.S. Treasury Money Market Fund
The debt service money that was included in the trust accounts at U.S. Bank was invested
in the Fidelity Governmental Fund 57 (Class 1). The Fidelity Governmental Fund is a money
market fund that is managed by Fidelity Investments and each share is equal in value to
$1.00. The fund is AAAm rated and invests in high quality short-term obligations, with
approximately 80% of assets invested in government securities. The average maturity of the
underlying securities is 60 days or less.
NOTE 4 PROPERTY AND EQUIPMENT
An analysis of the changes in property and equipment for the year ended December 31,
2019, follows:
Balance - Balance -
December 31,December 31,
2018 Increases Decreases 2019
Governmental Activities
Capital Assets, not Being
Depreciated:
Construction in Progress 3,299,949$ 113,094$ 14,832$ 3,398,211$
Total Capital Assets,
Not Being Depreciated 3,299,949 113,094 14,832 3,398,211
Capital Assets, Being
Depreciated:
Lot 2 Garage 6,477,336 - - 6,477,336
Phase I Park 1,240,420 - - 1,240,420
Tract E Park 2,849,419 - - 2,849,419
Flagpole 312,242 - - 312,242
Total Capital Assets,
Being Depreciated 10,879,417 - - 10,879,417
Less Accumulated Depreciation
For:
Lot 2 Garage 2,316,909 217,099 - 2,534,008
Phase I Park 711,999 41,348 - 753,347
Tract E Park 1,373,954 94,980 - 1,468,934
Flagpole 150,914 10,409 - 161,323
Total Accumulated
Depreciation 4,553,776 363,836 - 4,917,612
Total Capital Assets,
Being Depreciated, Net 6,325,641 (363,836) - 5,961,805
Governmental Activities
Capital Assets, Net 9,625,590$ (250,742)$ 14,832$ 9,360,016$ Depreciation expense in the amount of $363,836 was charged to function/programs of the
District as Public works.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(16)
NOTE 5 LONG -TERM OBLIGATIONS
The following is an analysis of changes in general long-term obligations for the year ended
December 31, 2019:
Balance at Retirement of Balance at Due
December 31,Long-Term December 31,Within
2018 Additions Obligations 2019 One Year
Series 2014 Refunding Bonds 29,824,000$ -$ 2,427,000$ 27,397,000$ 1,500,000$
Developer advances*14,666,017 106,934 14,832 14,758,119 -
Interest on Developer advances 12,927,791 961,103 - 13,888,894 -
Payable to Town (long-term)*3,522,309 - - 3,522,309 -
Interest on Payable to Town 233,340 52,835 - 286,175 -
Letter of credit fees - deferred 429,565 87,402 - 516,967 -
Total 61,603,022$ 1,208,274$ 2,441,832$ 60,369,464$ 1,500,000$
* Subject to annual budget and appropriation and subordinate to the Bonds.
Repayment Principal Accrued
Priority of Repayment of Developer Advances Party Amount Interest Total 2
Amended and Restated Funding and Reimbursement
Agreement 1 Traer Creek, LLC 3,476,752$ 4,682,580$ 8,159,332$
Facilities Acquisition Agreement 3 See Note 3 Below 4,029,786 4,772,812 8,802,598
2003 Funding and Reimbursement Agreement,
as Amended - 8%Traer Creek, LLC 1,018,889 2,643,599 3,662,488
2003 Funding and Reimbursement Agreement,
as Amended - 1.5%Traer Creek, LLC 1,541,784 125,265 1,667,049
2006 Operation Funding Agreement Traer Creek, LLC 576,310 415,094 991,404
2007 Operation Funding Agreement Traer Creek, LLC 841,980 526,037 1,368,017
2008 Operation Funding Agreement (Noncash)Traer Creek, LLC 279,116 157,172 436,288
2009 Operations Advance (Noncash)Traer Creek, LLC 87,694 39,297 126,991
2010 Operations Advance (Noncash)Traer Creek, LLC 122,743 45,184 167,927
2011 Operations Advance (Noncash)Traer Creek, LLC 72,682 24,198 96,880
2018 Operations Advance and Repayment Agreement Traer Creek, LLC 240,000 66,255 306,255
2018 Advance and Repayment Agreement Traer Creek, LLC 2,470,383 391,401 2,861,784
Total 14,758,119$ 13,888,894$ 28,647,013$
Payable to Town
2008 Avon Receivable Town of Avon 482,642$ 39,213$ 521,855$
2009 Avon Receivable Town of Avon 1,064,062 86,451 1,150,513
2010 Avon Receivable Town of Avon 1,126,649 91,536 1,218,185
2011 Avon Receivable Town of Avon 848,956 68,975 917,931
Total Avon Receivable 3,522,309$ 286,175$ 3,808,484$
1 The net credit for amounts owed to the District by the Developer for Cable TV Filing 1; Utilities Filing 3; and the Parking
Structure (645k) accumulated interest that were in excess of the additional developer advances not captured above for the
Dirt Removal Agreement $417k with was applied against the accrued interest for the Amended and Restated Funding and
Reimbursement Agreement, pursuant to a May 8, 2013 Letter Agreement.
2 All totals are as of December 31, 2019.
3 The District's records reflect that the amount outstanding at December 31, 2019 (exclusive of interest) is as follows:
Traer Creek-RP, LLC 2,440,000$
Buffalo Ridge Affordable Housing Corporation, Buffalo Ridge II, LLP 1,589,786
Total amount outstanding at December 31, 2019 (exclusive of interest)4,029,786$
Repayment of amounts due under the Facilities Acquisition Agreement will be allocated equally (on a pari passu basis) as
funds are available after reimbursement to Traer Creek, LLC under the Amended and Restated Funding and
Reimbursement Agreement dated May 8, 2002, as amended.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(17)
NOTE 5 LONG -TERM OBLIGATIONS (CONTINUED)
Revenue Bonds Payable
The District issued $40,175,000 Taxable Variable Rate Revenue Refunding Bonds, Series
2014 (the Bonds), dated August 1, 2014, to refund Series 2002 bonds and Series 2004
bonds. The interest rate of the Bonds is a variable rate that is determined weekly by the
remarketing agent payable on the first business day of the following month. The Bonds are
payable from net pledged revenue including all retail sales fees, tap fees, real estate
transfer fees, accommodation fees, and other fees and taxes and all interest income or
other revenues received by the District and all property taxes (after the first $500,000 – see
Tank Project Financing Reimbursement and Pledge Agreement) and specific ownership
taxes collected by The Village.
The Bonds are secured by an irrevocable, direct pay letter of credit issued by BNP Paribas
(the Bank) in the stated amount of $40,551,434. The letter of credit expires on July 31,
2021, unless extended by the Bank at its sole discretion. The District is required to annually
pay the Bank a fee of 1.50% based on the rating of the long-term unsecured senior debt of
certain retail entities which have guaranteed certain fee payments to the District, as
stipulated in the Reimbursement Agreement with the Bank. Until such time the District has a
sufficient revenue stream, the Bank has agreed to defer a portion of the annual LOC fee. As
of December 31, 2019, the balance of deferred fees is $516,967 .
Using the interest rate at December 31, 2019 of 1.88%, the estimated annual requirement to
amortize the remaining Series 2014 Bonds is as follows:
Year Ending December 31,Principal Interest Total
2020 1,500,000$ 515,064$ 2,015,064$
2021 1,750,000 486,864 2,236,864
2022 1,750,000 453,964 2,203,964
2023 1,750,000 421,064 2,171,064
2024 2,000,000 388,164 2,388,164
2025-2029 11,500,000 1,348,620 12,848,620
2030 7,147,000 134,364 7,281,364
Total 27,397,000$ 3,748,104$ 31,145,104$
Using the interest rate at December 31, 2019, of 3%, the estimated annual requirement to
amortize the remaining Series 2014 Bonds is as follows:
Year Ending December 31,Principal Interest Total
2020 1,500,000$ 821,910$ 2,321,910$
2021 1,750,000 776,910 2,526,910
2022 1,750,000 724,410 2,474,410
2023 1,750,000 671,910 2,421,910
2024 2,000,000 619,410 2,619,410
2025-2029 11,500,000 2,137,050 13,637,050
2030 7,147,000 214,410 7,361,410
Total 27,397,000$ 5,966,010$ 33,363,010$
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(18)
NOTE 5 LONG -TERM OBLIGATIONS (CONTINUED)
Funding and Reimbursement Agreements
On January 16, 2002, the District and Traer Creek LLC (Developer) entered into a Funding
and Reimbursement Agreement, which was amended and restated on May 8, 2002, by the
Amended and Restated Funding and Reimbursement Agreement to set forth certain
agreements between the parties concerning the funding of certain public improvements. On
July 2, 2003, the District and the Developer entered into the 2003 Funding and
Reimbursement Agreement, which was amended by the First Amendment to 2003 Funding
and Reimbursement Agreement dated as of March 25, 2004 (as amended, the 2003
Funding and Reimbursement Agreement), to address the need for additional funds from the
Developer due to an increase in the costs of construction of the public improvements. Under
the 2003 Funding and Reimbursement Agreement, the District acknowledges certain
amounts of outstanding prior advances made by the Developer which supersede and clarify
amounts set forth in prior agreements, including the Amended and Restated Funding and
Reimbursement Agreement. Under the 2003 Funding and Reimbursement Agreement, the
District may require the Developer to advance additional funds for construction related
expenses to complete the improvements up to a maximum amount of $7,166,769 plus
unpaid prior advances of $3,476,752 for a total amount of $10,643,521. To the extent of
revenues available and on a basis subordinate to any amounts due to the bank and on the
Bonds, the District will reimburse the Developer for amounts advanced pursuant to the 2003
Funding and Reimbursement Agreement, plus interest at 8.0% per annum. Pursuant to a
settlement agreement on August 1, 2014, the interest rate was reduced to 1.5% on a portion
of the outstanding amount of the 2003 obligation.
The balance due to the Developer at December 31, 2019, was $13,488,869.
Buffalo Ridge Facilities Acquisition Agreement
A Facilities Acquisition Agreement was entered into on May 29, 2002, by and among the
District, Buffalo Ridge Affordable Housing Corporation, a Colorado nonprofit corporation,
Buffalo Ridge II, LLLP, a Colorado limited liability limited partnership (together, the
Affordable Housing Developer), and Traer Creek - RP, LLC (Traer Creek - RP) (the Buffalo
Ridge Facilities Acquisition Agreement). Pursuant to the Buffalo Ridge Facilities Acquisition
Agreement, the Affordable Housing Developer has agreed to fund costs related to the
construction of public improvements within the Buffalo Ridge affordable housing project (the
Buffalo Ridge Improvements). As set forth in the Buffalo Ridge Facilities Acquisition
Agreement, the Affordable Housing Developer has agreed to assign its rights to the
reimbursement of $2,440,000 of the cost of Buffalo Ridge Improvements constructed to
Traer Creek - RP. The District agrees to the extent of funds available therefore, to repay the
Affordable Housing Developer and the Developer for the total costs of the Buffalo Ridge
Improvements, including, but not limited to, all costs of design, testing, engineering,
construction, and related consulting and construction management fees and costs, plus
simple interest thereon at an annual interest rate of 8.0%. All parties agree that the interest
accrual on such reimbursements is to commence on the date the cost is incurred by the
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(19)
NOTE 5 LONG -TERM OBLIGATIONS (CONTINUED)
Buffalo Ridge Facilities Acquisition Agreement (Continued)
Affordable Housing Developer. Under the Buffalo Ridge Facilities Acquisition Agreement,
the District has agreed to reimburse the Affordable Housing Developer and Traer Creek -
RP from the proceeds of bonds issued by the District in the future or from available
revenues of the District, if appropriated for such purposes, on a basis subordinate to
amounts owing on the bonds or to the Bank, and under the 2002 Amended and Restated
Funding and Reimbursement Agreement. Under this agreement, the District acquired public
improvements, and acknowledged that the obligation to acquire such improvements was in
the principal amount of $4,029,786.
The balance due, collectively, to the Affordable Housing Developer and Traer Creek – RP at
December 31, 2019, was $8,802,598.
2006 Operation Funding Agreement
On January 26, 2006, the District, The Village, and the Developer entered into a 2006
Operation Funding Agreement (the 2006 Operation Funding Agreement). Pursuant to the
2006 Operation Funding Agreement, the Developer agreed to fund the ongoing operations
and maintenance costs of the District, upon request, up to a maximum amount of $712,000.
To the extent of revenues available and on a basis subordinate to any amounts due to the
bank and on the bonds, the District will reimburse the Developer for amounts advanced
pursuant to the 2006 Operation Funding Agreement, plus interest at 8.0% per annum from
the date of the advance. On August 1, 2014 the interest rate was reduced to 1.5% pursuant
to a settlement agreement.
The balance due to the Developer at December 31, 2019, was $991,404.
2007 Operation Funding Agreement
On November 30, 2006, the District, The Village, and the Developer entered into a 2007
Operation Funding Agreement (the 2007 Operation Funding Agreement). Pursuant to the
2007 Operation Funding Agreement, the Developer agreed to fund the ongoing operations
and maintenance costs of the District, upon request, up to a maximum amount of $712,000.
To the extent of revenues available and on a basis subordinate to any amounts due to the
bank and on the bonds, the District will reimburse the Developer for amounts advanced
pursuant to the 2007 Operation Funding Agreement, plus interest at 8.0% per annum from
the date of the advance. The 2007 Operation Funding Agreement was amended on
December 14, 2007, to raise the maximum shortfall amount to $842,000 and to modify
certain other provisions. On August 1, 2014 the interest rate was reduced to 1.5% pursuant
to a settlement agreement.
The balance due to the Developer at December 31, 2019, was $1,368,017 .
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(20)
NOTE 5 LONG -TERM OBLIGATIONS (CONTINUED)
2008 Operation Funding Agreement
On December 14, 2007, the District, the Village, and the Developer entered into a 2008
Operation Funding Agreement (the 2008 Operation Funding Agreement). Pursuant to the
2008 Operation Funding Agreement, the Developer agreed to fund the ongoing operations
and maintenance costs of the District, upon request. During 2008, the Developer provided
landscape maintenance services to the District’s public improvements and the District
recognized these costs as noncash advances in the amount of $279,116. To the extent of
revenues available and on a basis subordinate to any amounts due to the bank and on the
bonds, the District will reimburse the Developer for amounts advanced, plus interest at 8%
per annum from the date of the advance. On August 1, 2014 the interest rate was reduced
to 1.5% pursuant to a settlement agreement.
The balance due to the Developer at December 31, 2019, was $436,288.
2009 Operations Advance (Noncash)
During the year ended December 31, 2009, EMD-CM LLC (EMD-CM) and Traer Creek
Plaza LLC (TCP) provided maintenance services related to the District’s public
improvements. Pursuant to the First Amendment to the Second Amended and Restated
Phase II Construction Management and Maintenance Agreement, the Developer agreed to
pay EMD-CM and TCP directly for these landscaping services, and the District agreed to
reimburse the Developer for these amounts when funds become available, subject to budget
and appropriation, with interest at a rate of 8%. The District recognized the Developer’s
payments, on its behalf, as noncash advances. On August 1, 2014 the interest rate was
reduced to 1.5% pursuant to a settlement agreement.
The balance due to the Developer at December 31, 2019, was $126,991.
2010 Operations Advance (Noncash)
During the year ended December 31, 2010, EMD -CM and TCP provided maintenance
services related to the District’s public improvements. Pursuant to the First Amendment to
the Second Amended and Restated Phase II Construction Management and Maintenance
Agreement, the Developer agreed to pay EMD-CM and TCP directly for these landscaping
services, and the District agreed to reimburse the Developer for these amounts when funds
become available, subject to budget and appropriation, with interest at a rate of 8%. The
District recognized the Developer’s payments, on its behalf, as noncash advances. On
August 1, 2014 the interest rate was reduced to 1.5% pursuant to a settlement agreement.
The balance due to the Developer at December 31, 2019, was $16 7,927.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(21)
NOTE 5 LONG -TERM OBLIGATIONS (CONTINUED)
2011 Operations Advance (Noncash)
During the year ended December 31, 2011, EMD -CM and TCP provided maintenance
services related to the District’s public improvements. Pursuant to the First Amendment to
the Second Amended and Restated Phase II Construction Management and Maintenance
Agreement, the Developer agreed to pay EMD-CM and TCP directly for these landscaping
services, and the District agreed to reimburse the Developer for these amounts when funds
become available, subject to budget and appropriation, with interest at a rate of 8%. The
District recognized the Developer’s payments, on its behalf, as noncash advances. On
August 1, 2014 the interest rate was reduced to 1.5% pursuant to a settlement agreement.
The balance due to the Developer at December 31, 2019, was $96,880.
Service Agreement for Maintenance Services
On November 11, 2013, the District entered into the Service Agreement for Maintenance
Services with EMD-CM, pursuant to which EMD–CM agreed to provide an agreed upon
scope of maintenance services to the District. The District agrees to pay EMD–CM for such
services subject to budget appropriation with interest of 10% if not paid within 45 days.
Payable to the Town
On August 1, 2014, in connection with the terms of a settlement agreement being fulfilled
(see Note 8), the District became obligated to incur simple interest of 1.5% on the
$3,522,309 obligation due to the Town for costs associated with years 2008 – 2011.
2018 Advance and Repayment Agreement
On March 21, 2018, the District and the Developer entered into an Advance and Repayment
Agreement. The Developer has expended funds on behalf of the District previously, and
intends to make future payments for costs related to the provision of public infrastructure in
the nature of capital costs in furtherance of the District’s permitted purposes. The District
and the Developer established the terms and conditions under which the District will
reimburse the Developer for such costs and acquire Public Infrastructure that will either be
owned by the District or dedicated to other government entities. The District agreed to
reimburse the Developer for these amounts when funds become available, subject to budget
and appropriation, at the Authorized Private Lending Interest Rate.
The balance due to the Developer at December 31, 2019, was $3,168,039.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(22)
NOTE 5 LONG -TERM OBLIGATIONS (CONTINUED)
Debt Authorization
At December 31, 2019, the District had authorized but unissued indebtedness for capital
and operational purposes in the following amounts:
Amount Amount Amount
Authorized on Authorized on Authorized on Authorized
November 3,November 6,November 5,Series 2002 Series 2004 But
1998 2001 2002 Bonds Bonds Unissued
Streets 125,000,000$ 158,000,000$ 158,000,000$ 31,611,000$ 12,333,000$ 397,056,000$
Safety protection 2,000,000 158,000,000 158,000,000 - - 318,000,000
Parks and recreation 27,000,000 158,000,000 158,000,000 950,000 501,000 341,549,000
Water 19,000,000 158,000,000 158,000,000 1,156,500 2,714,000 331,129,500
Sewer 11,000,000 158,000,000 158,000,000 426,000 1,252,000 325,322,000
Public transportation 18,000,000 158,000,000 158,000,000 - - 334,000,000
Mosquito control 500,000 10,000,000 10,000,000 - - 20,500,000
Fire protection 2,000,000 158,000,000 158,000,000 1,156,500 - 316,843,500
Television relay and
Translation 1,000,000 158,000,000 158,000,000 - - 317,000,000
Refunding - 158,000,000 158,000,000 - - 316,000,000
Total 205,500,000$ 1,432,000,000$ 1,432,000,000$ 35,300,000$ 16,800,000$ 3,017,400,000$
Authorization Used
Pursuant to the Service Plan, the District is permitted to issue bonded indebtedness of up to
$158,000,000. In the future, the District may issue a portion or all of the remaining
authorized but unissued general obligation debt for purposes of providing public
improvements to support development as it occurs within the District’s service area,
however, as of the date of this audit, the amount and timing of any debt issuances is not
determinable. No additional authorization was used with the issuance of the 2014 Refunding
Bonds.
NOTE 6 NET POSITION
The District has net position consisting of three components - net investment in capital
assets, restricted, and unrestricted.
Net investment in capital assets consists of capital assets, net of accumulated depreciation
and reduced by the outstanding balances of bonds, mortgages, notes or other borrowings
that are attributable to the acquisition, construction, or improvement of those assets. As of
December 31, 2019, the District had net investment in capital assets, calculated as follows:
Governmental
Activities
Net Investment in Capital Assets
Capital Assets, Net 9,360,016$
Current Portion of Long-Term Obligations (1,353,072)
Noncurrent Portion of Long-Term Obligations (53,103,101)
Portion of Debt Related to Restricted Cash and
Investments 1,363,573
Net Investment in Capital Assets (43,732,584)$
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(23)
NOTE 6 NET POSITION (CONTINUED)
Restricted assets include net position that are restricted for use either externally imposed by
creditors, grantors, contributors, or laws and regulations of other governments or imposed
by law through constitutional provisions or enabling legislation. The District had restricted
net position as of December 31, 2019, as follows:
Restricted Net Position:
Debt Service 1,500,275$
Emergency Reserves 14,000
Total Restricted Net Position 1,514,275$
The District had a deficit net position as of December 31, 2019. This deficit amount was a
result of the District being responsible for the repayment of bonds issued and other debt
obligations in excess of capital assets remaining with the District.
NOTE 7 RELATED PARTIES
The Developer of the property within the District and The Village is Traer Creek LLC and
several affiliated limited liability companies (Developer). The members of the Board of
Directors of the District are employees, owners or otherwise associated with the Developer
and may have conflicts of interest in dealing with the District.
The members of the Board also serve as the Board members of The Village and some
members serve on the Boards for the Commercial PIC and Mixed-Use PIC.
EMD -CM is the landscape maintenance contractor for the District and custodial contractor
for the parking garage located in the District. As the landscape maintenance contractor,
EMD -CM performs tasks related to planting and maintaining several tracts and other areas
in the District. As the custodial contractor for the parking garage, EMD-CM performs tasks
related to maintenance inside and outside the parking garage area. During 2019, the District
paid $15,449 to EMD-CM.
Traer Creek Plaza Condo Owners Association, an affiliate of the Developer, provides
common area maintenance for the District. During 2019, the District paid $107,573 to Traer
Creek Plaza Condo Owners Association.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(24)
NOTE 8 AGREEMENTS
The Village
The District entered into a Facilities Funding, Construction and Operations Agreement on
July 31, 2001, and later amended on March 4, 2002, with The Village, whereby the District
will provide certain services and facilities, as described in the District’s Service Plan, to
current and future residents and property owners of both the District and The Village.
Additionally, the District will provide the operations, maintenance, and administrative
services for The Village. The Village pledges all revenue it receives from ad valorem
property taxes, specific ownership taxes and other rates, fees, tolls and charges that may be
imposed and collected by The Village, if such revenue is not otherwise pledged, to assist in
financing the facilities and services.
Town of Avon
On November 13, 2001, the District became a documented party to the First Amendment to
the Annexation and Development Agreement (Annexation Agreement), initially entered into
on October 13, 1998 (with Second and Third Amendments on May 27, 2003, and
October 26, 2004, respectively), by the Town and several owners of certain real property in
The Village (at Avon). The District has agreed to comply with the Town’s requirements,
policies and codes in the construction of infrastructure improvements and public facilities,
including streets, drainage facilities, water lines, parks and recreation facilities, which will
serve the needs of both The Village (at Avon) and the Town.
On October 22, 2013, the District entered into the Consolidated Amended and Restated
Annexation and Development Agreement for the Village (at Avon) (CARADA) which became
effective on August 1, 2014, as a result of the Series 2014 bond issuance. The CARADA
outlines the new responsibilities for maintenance and ownership of infrastructure
improvements within the development as well as the required contributions from the District.
The District is required to provide $40,000 towards asphalt overlays on an annual basis.
This obligation is due to the Town by November 1st of each year. The CARADA also assigns
$500,000 of pledged revenue towards the repayment of the capital costs incurred to
construct a water tank that is required for future development (discussed further under the
Tank Project Financing Reimbursement and Pledge Agreement).
Tank Project Financing Reimbursement and Pledge Agreement
On August 1, 2014, the District entered into a reimbursement and pledge agreement with
The Village and Traer Creek-RP LLC to deposit into Escrow sixty (60) semi-annual
payments for Tank Project Financing. The first $500,000 of property taxes received each
year from The Village will be pledged for Tank Project Financing and deposited into the
Escrow account. In 2015, The Village transferred net proceeds to the District of $7,460,000,
of which $7,264,500 was paid to the Developer to contribute to the overall cost of the water
tank which is to be owned and maintained by Upper Eagle Regional Water Authority.
TRAER CREEK METROPOLITAN DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(25)
NOTE 9 RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; thefts of, damage to, or
destruction of assets; errors or omissions; injuries to employees; or acts of God.
The District is a member of the Colorado Special Districts Property and Liability Pool (Pool)
as of December 31, 2019 . 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
coverage in any of the past three fiscal years.
The District pays annual premiums to the Pool for liability, property, public officials’ liability,
and workers compensation coverage. In the event aggregated losses incurred by the Pool
exceed amounts recoverable from reinsurance contracts and funds accumulated by the
Pool, the Pool may require additional contributions from the Pool members. Any excess
funds which the Pool determines are not needed for purposes of the Pool may be returned
to the members pursuant to a distribution formula.
NOTE 10 TAX, SPENDING AND DE BT 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 November 3, 1998, a majority of the District’s electors authorized the District to collect
and spend or retain all revenues, from whatever source derived, without regard to any
limitations under TABOR.
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.
(26)
SUPPLEMENTARY INFORMATION
TRAER CREEK METROPOLITAN DISTRICT
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE –
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2019
(27)
Variance with
Original Final Budget
and Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenue - The Village 227,765$ 231,152$ 3,387$
Retail Sales Fees 3,655,000 3,787,228 132,228
Transfer Fees - 119,282 119,282
Tap Fees - 1,588,537 1,588,537
Net Investment Income 50,000 95,962 45,962
Total Revenues 3,932,765 5,822,161 1,889,396
EXPENDITURES
Debt Service:
Bond Principal 1,500,000 1,500,000 -
Bond Principal - Deferred 1,025,000 927,000 98,000
Interest Expense - Bonds 949,313 683,027 266,286
Legal 10,000 5,624 4,376
Contingency 1,687 - 1,687
LOC Fees 500,000 454,084 45,916
Paying Agent Fees 15,000 14,600 400
Remarketing Fees 40,000 32,307 7,693
Total Expenditures 4,041,000 3,616,642 424,358
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES (108,235) 2,205,519 2,313,754
OTHER FINANCING SOURCES (USES)
Transfers from Other Funds 20,000 - (20,000)
Total Other Financing Sources (Uses)20,000 - (20,000)
EXCESS OF REVENUES AND OTHER FINANCING
SOURCES OVER (UNDER) EXPENDITURES
AND OTHER FINANCING USES (88,235) 2,205,519 2,293,754
Fund Balance - Beginning of Year 4,058,219 4,189,692 131,473
FUND BALANCE - END OF YEAR 3,969,984$ 6,395,211$ 2,425,227$
TRAER CREEK METROPOLITAN DISTRICT
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE –
BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31, 2019
(28)
Variance with
Final Budget
Budget Amounts Actual Positive
Original Budget Amounts (Negative)
REVENUES
-$ -$ -$ -$
Total Revenues - - - -
EXPENDITURES
Streets - 120,000 113,094 6,906
Contingency 38,739 - - -
Total Expenditures 38,739 120,000 113,094 6,906
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES (38,739) (120,000) (113,094) 6,906
OTHER FINANCING SOURCES (USES)
Developer advance - 106,934 106,934 -
Total Other Financing Sources (Uses)- 106,934 106,934 -
NET CHANGE IN FUND BALANCE (38,739) (13,066) (6,160) 6,906
Fund Balance - Beginning of Year 38,739 38,739 38,739 -
FUND BALANCE - END OF YEAR -$ 25,673$ 32,579$ 6,906$
(29)
OTHER INFORMATION
TRAER CREEK METROPOLITAN DISTRICT
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY
DECEMBER 31, 2019
(30)
Year Ending December 31,Principal Interest*Total
2020 1,500,000$ 821,910$ 2,321,910$
2021 1,750,000 776,910 2,526,910
2022 1,750,000 724,410 2,474,410
2023 1,750,000 671,910 2,421,910
2024 2,000,000 619,410 2,619,410
2025 2,000,000 559,410 2,559,410
2026 2,000,000 499,410 2,499,410
2027 2,500,000 424,410 2,924,410
2028 2,500,000 364,410 2,864,410
2029 2,500,000 289,410 2,789,410
2030 7,147,000 214,410 7,361,410
Total 27,397,000$ 5,966,010$ 33,363,010$
* The variable interest rate on the Bonds is estimated at 3.00%.
Principal Due October 1
$40,175,000 Taxable Variable Rate Revenue Refunding Bonds
Series 2014, Dated August 1, 2014
Weekly Interest Rate Mode Assumed
Payable 1st Business Day of the Month,