HomeMy WebLinkAbout2023 HCMD Annual Report{00930563.DOCX / } HOLLAND CREEK METROPOLITAN DISTRICT EAGLE COUNTY, COLORADO 2023 ANNUAL REPORT County Clerk and Recorder Eagle County, Colorado via Email Office of the State Auditor 1525 Sherman Street, 7th Floor Denver, Colorado 80203 via E-Filing Portal Division of Local Government 1313 Sherman Street, Room 521 Denver, Colorado 80203 via E-Filing Portal Pursuant to Section 32-1-207(3)(c)(I), C.R.S., the Holland Creek Metropolitan District (the “District”) is required to submit an annual report for the preceding calendar year (the “Report”) no later than October 1 of each year to Eagle County, Colorado (the “County”), the Colorado Division of Local Government, the Colorado State Auditor, the County Clerk and Recorder; the Report must also be posted on the District’s website, if available. For the year ending December 31, 2023, the District makes the following report: 1. Boundary changes made: None 2. Intergovernmental agreements entered into or terminated: The District did not enter into, nor terminate, any Intergovernmental Agreements with other governmental entities in 2023. 3. Access information to obtain a copy of the Rules and Regulations: The Rule & Regulations can be access by the public on the Districts website: https://redskyranchmetro.net/ under “Governing Documents” menu item. 4. A summary of any litigation involving public improvements by the District: In May 2022, the Red Sky Ranch Metropolitan District filed a district court complaint against the developer (Vail Resorts), Holland Creek Metropolitan District, and others, asserting claims related to district governance and the development and financing of public infrastructure. The case was dismissed in part, and the partial dismissal is before the Court of Appeals. The remaining claims are stayed pending the Court of Appeals action. {00930563.DOCX / } 2 5. Status of the construction of public improvements by the District: None 6. List of facilities or improvements constructed by the District that were conveyed to the County: No facilities or improvements were constructed by the District and conveyed to the County in 2023. 7. Final Assessed Value of Taxable Property within the District’s boundaries as of December 31, 2023: The 2023 total assessed value of taxable property within the boundaries of the District is $61,990. 8. Current annual budget of the District: Attached as Exhibit A is a copy of the District’s Budget for the current fiscal year 2024. 9. Most recently filed audited financial statements of the District. To the extent audited financial statements are required by state law or most recently filed audit exemption: Attached as Exhibit B is a copy of the District’s audited financial statements for fiscal year 2023. 10. Notice of any uncured defaults existing for more than 90 days under any debt instrument of the District: The District is not in default on any debt instrument. 11. The District’s inability to pay any financial obligations as they come due under any obligation which continues beyond a ninety-day period: To our knowledge, the District has the ability to pay all financial obligations as required in accordance with the terms of the financial instruments. Respectfully submitted this 26th day of September, 2024 HOLLAND CREEK METROPOLITAN DISTRICT Eagle County, Colorado {00930563.DOCX / } 3 EXHIBIT A 2024 Budget HOLLAND CREEK METROPOLITAN DISTRICT __________________________________________ Administrative Management Provided By Marchetti & Weaver LLC 28 Second Street, Suite 213, Edwards, CO 81632; Phone (970) 926-6060; Fax (970) 926-6040 January 18, 2024 Division of Local Government 1313 Sherman Street, Room 521 Denver, CO 80203 Filed electronically: dlg-filing@state.co.us RE: Holland Creek Metropolitan District 2023 Budget; LGID #19073 Attached is the 2024 Budget for the Holland Creek Metropolitan District in Eagle County, Colorado, submitted pursuant to Section 29-1-113, C.R.S. This Budget was adopted on October 16, 2023. If there are any questions on the budget, please contact Mr. Kenneth J. Marchetti, telephone number 970-926-6060. The mill levy certified to the County Commissioners of Eagle County is 45.000 mills for all general operating purposes, subject to statutory and/or TABOR limitations; 0.000 mills for G.O. bonds; 0.000 mills for refund/abatement; and 0.000 mills for Temporary Tax Credit/Mill Levy Reduction. Based on an assessed valuation of $61,990, the total property tax revenue is $2,789.55. A copy of the certification of mill levies sent to the County Commissioners for Eagle County is enclosed. I hereby certify that the enclosed is a true and accurate copy of the budget and certification of tax levies to the Board of County Commissioners of Eagle County, Colorado. Sincerely, ____________________________________ Title ________________________________ Enclosure(s) Accountant HOLLAND CREEK METROPOLITAN DISTRICT 2024 BUDGET MESSAGE Holland Creek Metropolitan District is a quasi-municipal corporation organized and operated pursuant to provisions set forth in the Colorado Special District Act. The District was established to supply the necessary services of water, streets, parks & recreation, safety protection, sanitary sewer, and mosquito control. The District filed a joint service plan with Red Sky Ranch Metropolitan District, known as the “financing district.” The Holland Creek Metropolitan District is known as the “service district.” The District has no employees and all operations and administrative functions are contracted. The following budget is prepared on the modified accrual basis of accounting, which is consistent with the basis of accounting used in presenting the District's financial statements. 2024 BUDGET STRATEGY The District is the service district in a dual district structure whereby its primary sources of revenues are contract fees received from the companion district Red Sky Ranch Metropolitan District pursuant to an IGA. The District will use these revenues plus a small amount of property taxes it collects along with various user fees to finance the cost of providing the services and recreational amenities desired by the property owners and residents of the District. Page 1 of 5 RESOLUTIONS OF HOLLAND CREEK METROPOLITAN DISTRICT TO ADOPT 2024 BUDGET A RESOLUTION SUMMARIZING EXPENDITURES AND REVENUES FOR EACH FUND AND ADOPTING A BUDGET FOR THE HOLLAND CREEK METROPOLITAN DISTRICT, COLORADO, FOR THE CALENDAR YEAR BEGINNING ON THE FIRST DAY OF JANUARY 2024 AND ENDING ON THE LAST DAY OF DECEMBER 2024. WHEREAS, the Board of Directors of the Holland Creek Metropolitan District has appointed a budget committee to prepare and submit a proposed 2024 budget at the proper time; and WHEAREAS, such committee has submitted a proposed budget to this governing body at the proper time, for its consideration, and; WHEREAS, upon due and proper notice, published or posted in accordance with the law, said proposed budget was open for inspection by the public at a designated place, and a public hearing was opened on October 16, 2023 and interested taxpayers were given the opportunity to file or register any objections to said proposed budget; and; WHEREAS, whatever increases may have been made in the expenditures, like increases were added to the revenues or planned to be expended from reserves/fund balances so that the budget remains in balance, as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board of directors of the Holland Creek Metropolitan District, Eagle County, Colorado: Section 1. That the budget as submitted, amended, and summarized by fund, hereby is approved and adopted as the budget of the Holland Creek Metropolitan District for the year stated above, as adjusted for immaterial changes in the final certified assessed value of the District as certified by the county assessor and corresponding adjustments resulting from such changes to the assessed value. In the event there are material changes to the assessed value then a subsequent meeting of the Board shall be called to consider such changes. Furthermore, to the extent specific capital expenditures budgeted and forecasted for the current year are unable to be completed by the end of the current year, the budget for such expenditures shall be transferred into next year’s budget and the budgeted beginning fund balance for next year’s budget shall be updated to reflect such changes. Section 2. That the budget hereby approved and adopted shall be certified by any officer or the District Administrator of the District and made a part of the public records of the District. (THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK) Page 2 of 5 RESOLUTIONS OF HOLLAND CREEK METROPOLITAN DISTRICT (CONTINUED) TO SET MILL LEVIES A RESOLUTION LEVYING PROPERTY TAXES FOR THE YEAR 2023, TO HELP DEFRAY THE COSTS OF GOVERNMENT FOR THE HOLLAND CREEK METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO, FOR THE 2024 BUDGET YEAR. WHEREAS, the Board of Directors of the Holland Creek Metropolitan District, has adopted the annual budget in accordance with the Local Government Budget Law, on October 16, 2023 and; WHEREAS, the amount of money necessary to balance the budget for general operating expenses and capital expenditure purposes from property tax revenue is $2,590 and; WHEREAS, the Holland Creek Metropolitan District hereby documents its intent to preserve its voter approved operating mill levy rate of 45.000 mills and to provide property tax relief by a temporary reduction in property taxes in the amount of $0.00 in accordance with C.R.S. 39-1- 111.5, and; WHEREAS, the amount of money necessary to balance the budget for capital expenditure purposes from property tax revenue approved by voters or at public hearing is $0.00, and; WHEREAS, the amount of money necessary to balance the budget for voter approved bonds and interest is $0.00, and; WHEREAS, the 2023 valuation for assessment for the Holland Creek Metropolitan District, as certified by the County Assessor is expected to be $61,990. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the HOLLAND CREEK METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO: Section 1. That for the purposes of meeting all general operating expenses of the Holland Creek Metropolitan District during the 2024 budget year, there is hereby levied a tax of 45.000 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2023. Section 2. That for the purposes of rendering a temporary credit/refund during budget year 2024 there is hereby levied a temporary tax credit/mill levy reduction of 0.000 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2023. Section 3. That for the purpose of meeting all capital expenditures of the Holland Creek Metropolitan District during the 2024 budget year, there is hereby levied a tax of 0.000 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2023. Page 3 of 5 RESOLUTIONS OF HOLLAND CREEK METROPOLITAN DISTRICT (CONTINUED) TO SET MILL LEVIES (CONTINUED) Section 4. That for the purpose of meeting all payments for bonds and interest of the Holland Creek Metropolitan District during the 2024 budget year, there is hereby levied a tax of 0.000 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2023. Section 5. In the event the assessed value ultimately certified by the County Assessor for property tax year 2023 is different than $61,990 then the temporary mill levy credit may be adjusted to yield the same amount of net property taxes as generated with the current assessed value. Section 6. That for the purpose of recouping refunds and abatements of the Holland Creek Metropolitan District during the 2024 budget year, there is hereby levied a tax of 0.000 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2023. Section 7. That any officer or the District Administrator is hereby authorized and directed to either immediately certify to the County Commissioners of Eagle County, Colorado, the mill levies for the Holland Creek Metropolitan District as hereinabove determined and set, or be authorized and directed to certify to the County Commissioners of Eagle County, Colorado, the mill levies for the Holland Creek Metropolitan District as hereinabove determined and set based upon the final (December) certification of valuation from the county assessor. (THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK) Page 4 of 5 RESOLUTIONS OF HOLLAND CREEK METROPOLITAN DISTRICT (CONTINUED) TO APPROPRIATE SUMS OF MONEY (PURSUANT TO SECTION 29-1-108, C.R.S.) A RESOLUTION APPROPRIATING SUMS OF MONEY TO THE VARIOUS FUNDS AND SPENDING AGENCIES, IN THE AMOUNT AND FOR THE PURPOSE AS SET FORTH BELOW, FOR THE HOLLAND CREEK METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO, FOR THE 2024 BUDGET YEAR. WHEREAS, the Board of Directors has adopted the annual budget in accordance with the Local Government Budget Law, on October 16, 2023, and; WHEREAS, the Board of Directors has made provision therein for revenues in an amount equal or greater to the total proposed expenditures as set forth in said budget, and; WHEREAS, it is not only required by law, but also necessary to appropriate the revenues and reserves or fund balances provided in the budget to and for the purposes described below, thereby establishing a limitation on expenditures for the operations of the District. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE HOLLAND CREEK METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO: Section 1. That the following sums are hereby appropriated from the revenues of each fund, to each fund, for the purposes stated: GENERAL FUND: Current Operating Expenses $1,301,069 Equipment Purchases 0 Fund Transfers 50,000 TOTAL GENERAL FUND: $1,351,069 DEBT SERVICE FUND: Debt Service Expenditures $4,583,775 ENTERPRISE FUND: Current Operating Expenses $532,160 Capital and Project Expenditures 282,800 TOTAL ENTERPRISE FUND: $814,960 (THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK) RESOLUTIONS OF HOLLAND CREEK METROPOLITAN DISTRICT (CONTINUED) TO ADOPT 2024 BUDGET, SET MILL LEVIES AND APPROPRIATE SUMS OF MONEY (CONTINUED) The above resolutions to adopt the 2024 budget, set the mill levies and to appropriate sums of money were adopted this 16th day of October, 2023. ( � � .. -. .----··· � Officer oftheDistrict: a/x �///L/ 7/ ( ,./ j) Title: President ------ Page 5 of5 HOLLAND CREEK METROPOLITAN DISTRICT Printed MODIFIED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALAN 1/21/2024 ACCRUAL ACTUAL, BUDGET AND FORECAST FOR THE PERIODS INDICATED BASIS Cal Year GENERAL FUND 2022 2023 Cal Year 2024 Audited Adopted 2023 Adopted REVENUES Actual Budget Forecast Budget Assessed Valuation Holland Creek 64,430 64,430 64,430 61,990 Dec 23 Final AV Red Sky Ranch 17,678,270 17,049,390 17,049,390 27,516,300 Dec 23 Final AV RSR Operations Mill Levy Rate 30.916 30.916 30.916 25.000 Property Taxes-Operating 2,899 2,899 2,899 2,790 45 Mills Specific Ownership Taxes 156 65 65 65 RSRMD Prop Tax Trans.-Operating 544,543 527,099 527,099 687,908 RSRMD - 5.5% Sales Tax proceeds 0 0 0 0 RSRPOA/ VR Gatehouse Ops Funding 136,190 149,315 149,315 153,794 Other Income 51,084 0 0 0 Holy Cross Equity refund Interest Income 26,429 56,328 117,805 48,975 Est 4.5% TOTAL REVENUES 761,302 735,706 797,184 893,532 EXPENDITURES Accounting & Administration 58,337 54,000 54,000 55,620 Estimated Audit 8,300 10,000 9,980 10,279 Estimated Directors Fees 0 2,691 0 Election 1,688 6,500 1,500 0 No 2024 Election Expected Insurance 29,706 32,087 37,900 39,037 Estimated Legal 32,440 37,800 37,800 38,934 Estimated Special Projects - Legal 105,097 460,000 461,918 550,000 Special Counsel Office Overhead & Expense 86 155 155 160 Treasurer's Fees 87 87 87 84 Municipal Services- VRDC 42,289 79,350 79,350 81,731 Estimated Municipal Services - Direct Expense 1,978 10,800 10,800 11,124 Estimated R & M - Equipment 12,125 9,000 9,000 7,500 Estimated R & M - Roads Road Overlays/ Seals /Engineering 206,280 402,000 350,000 122,353 see capital based on AEI Traction Material 3,734 7,000 7,000 7,210 Striping 1,400 10,000 10,000 10,300 Estimated Asphalt Patching & Crack Seal 20,916 35,000 35,000 36,050 Estimated Miscellaneous Road Repairs 2,394 30,200 12,000 26,000 Includes guardrail & entry gates Street Lights, Address Markers, Sign Posts 7,855 35,600 5,000 36,668 includes staining Fire Mitigation 50,000 50,000 50,000 Per Agreement Mosquito Control 6,924 7,500 7,500 7,725 Estimated Weed Control 0 4,500 4,500 6,500 Estimated Equipment Lease/Purchase 0 200,000 200,000 0 see cap imp Gatehouse Operations Expense 136,190 149,315 149,315 153,794 gatehouse agree & VR budget Contingency 0 50,000 0 50,000 TOTAL EXPENDITURES 677,827 1,683,586 1,532,805 1,301,069 REVENUE OVER (UNDER) EXPEND.83,474 (947,879)(735,621)(407,537) OTHER SOURCES & (USES) Xfer to Enterprise Fund (200,000)(200,000)(200,000)(50,000) TOTAL OTHER SOURCES & (USES)(200,000)(200,000)(200,000)(50,000) FUND BALANCE - BEGINNING 2,140,490 1,877,579 2,023,964 1,088,343 FUND BALANCE - ENDING 2,023,964 729,700 1,088,343 630,806 = = = Components of Fund Balance: Reserved for Major Replacements (roads,etc)1,588,191 (11,093) 396,940 41,448 Reserved for Equipment Replacement 200,000 200,000 200,000 Reserved for Operations Expense 235,773 540,793 491,402 589,358 Unrestricted - - - Total 2,023,964 729,700 1,088,343 630,806 PAGE 2 (Page 1 Not Used for Budget) p statements and substantially all disclosures required by GAAP have been omitted. HOLLAND CREEK METROPOLITAN DISTRICT Printed MODIFIED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALAN 1/21/2024 ACCRUAL ACTUAL, BUDGET AND FORECAST FOR THE PERIODS INDICATED BASIS Cal Year DEBT SERVICE FUND 2022 2023 Cal Year 2024 Audited Adopted 2023 Adopted Actual Budget Forecast Budget REVENUES Developer Cap Imp Fee from RSRMD 176,600 398,600 398,600 198,775 Per Agreement TOTAL REVENUES 176,600 398,600 398,600 198,775 EXPENDITURES 2001 Bond Interest 75,573 189,300 189,300 90,638 Est 3% 2001 Bond Principal 0 0 0 4,385,000 Letter of Credit Fee 84,880 189,300 189,300 90,638 Est 3% Agent Fees 16,148 20,000 20,000 17,500 Developer Note Principal & Interest Plath Payment Contingency 0 0 TOTAL EXPENDITURES 176,600 398,600 398,600 4,583,775 REVENUE OVER (UNDER) EXPEND.0 0 0 (4,385,000) OTHER SOURCES & (USES) Transfer from RSR Bond Issuance 0 0 0 0 Based on RSR Est 23 AV Transfer from RSR DS Fund - Cap Obilig 0 0 4,385,000 Assumes RSR Bond Issuance TOTAL OTHER SOURCES & (USES)0 0 0 4,385,000 FUND BALANCE - BEGINNING 121 121 121 121 FUND BALANCE - ENDING 121 121 121 121 = = Balance Owed on 2001 Bonds 6,310,000 6,310,000 6,310,000 1,925,000 Balance Owed on Developer Note 3,961,554 3,961,554 3,961,554 Balance Owed on Developer Note Interest 4,573,374 4,097,988 4,335,681 Balance Owed on Plath Agreement 565,000 Balance Owed on Water Rights ??843,000 PAGE 3 No assurance is provided on these financial statements and substantially all disclosures required HOLLAND CREEK METROPOLITAN DISTRICT Printed MODIFIED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALAN 1/21/2024 ACCRUAL ACTUAL, BUDGET AND FORECAST FOR THE PERIODS INDICATED BASIS Cal Year ENTERPRISE-WATER & WASTEWATER 2022 2023 Cal Year 2024 Audited Adopted 2023 Adopted Actual Budget Forecast Budget 60 Homes - Res Service on-line 0 0 4 Tract AA - Res Service on-line 0 0 0 Residential Service On-line Cumulative 49 49 53 Residential Water User Fees (Average Annual)2,310 2,541 2,643 Sanitary Sewer User Fee 693 762 793 Commercial SFE in use 111.53 111.5 Residential SFE in use 51.20 51.20 Water Operations Water Use Fee & Misc Revenues Water User Fees Commercial 48,156 52,515 52,515 54,615 Tiered Rates Water User Fees Residential 200,125 202,950 202,950 213,711 Tiered Rates Interest/ Late Fee Income 15,213 15,000 51,001 67,344 4.5% Interest Telecom Room Lease Revenue 918 920 920 850 Total Water Operations Revenues 264,412 271,385 307,386 336,520 Water Operations Expenditures Administration (AmCoBi Water Billings)3,725 4,250 4,250 4,420 Water Lease - VA /Delivery fee 39,586 80,000 80,000 80,000 Based on 2023 Water Operations - Plant Op VR 6,000 6,000 6,000 6,240 See VR Exhibit C Water Operations - Plant Op WQCP 55,139 82,100 82,100 115,800 Per Agreement Water Operations Direct Expenses (Mostly Utilities)50,237 50,000 50,000 51,500 Inflation Increase Water System Repairs & Maintenance 39,622 50,000 50,000 52,000 includes water line breaks Water System Tools, Spare Meters 26,663 14,000 14,000 14,560 Meters & small tools Contingency 0 35,000 0 35,000 Total Water Operations Expenditures 220,971 321,350 286,350 359,520 Water Ops Revenues Over (Under) Expenditures 43,440 (49,965)21,036 (23,000) Water Capital Water Capital Revenues Water Tap Fees -Single Family 46,430 30,900 30,900 61,800 Est 2 Water PIF Fees - Single Family 6,426 5,200 5,200 10,400 Water Tap Fees - Cluster Homes (lots 24-50)0 12,500 12,500 0 Est 1 Water PIF Fees - Cluster Homes 0 2,100 2,100 0 Transfer from RSR Bond Issuance or Capital Obligatio 0 0 0 Total Water Tap Fee Revenues 52,856 50,700 50,700 72,200 Water Capital Expenditures GAC Replacement 51,754 25,000 25,000 25,000 GAC 1/2 Replace every yr Membrane Skids 0 12,500 12,500 12,500 Water Plant/Distribution Systems 33,886 66,500 130,000 53,000 WTP Compressor 13,800 Water Plant controls/radio 140 0 17,500 0 Water Plant building 0 0 0 0 Water Rights purchase 0 VRDC Construction Management - Water 0 0 0 0 Total Water Capital Expenditures 85,779 104,000 185,000 104,300 Water Tap Fee/Capital Surplus (Deficit)(32,923)(53,300)(134,300)(32,100) Water Revenues Over (Under) Expenditures 10,517 (103,265)(113,264)(55,100) PAGE 4A p statements and substantially all disclosures required by GAAP have been omitted. HOLLAND CREEK METROPOLITAN DISTRICT Printed MODIFIED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALAN 1/21/2024 ACCRUAL ACTUAL, BUDGET AND FORECAST FOR THE PERIODS INDICATED BASIS Cal Year ENTERPRISE-WATER & WASTEWATER - con't 2022 2023 Cal Year 2024 Audited Adopted 2023 Adopted Actual Budget Forecast Budget Wastewater Operations Wastewater User Fee Revenues Sanitary Septic User Fee Commercial 27,510 31,906 31,906 33,182 Sanitary Septic User Fee Residential 67,257 73,907 73,907 77,656 Total Wastewater Ops Revenues 94,767 105,813 105,813 110,838 Wastewater Operating Expenditures Sanitary Septic - Operations labor (VR)12,000 12,000 12,000 12,360 See VR Exhibit C Sanitary Septic - Operations labor (WQCP)22,688 45,000 45,000 0 Sanitary Septic - Operations labor (Altitude)0 0 0 40,000 Sanitary Septic - Operations 6,423 10,000 10,000 10,400 testing, utilities Sanitary Septic - Repairs & Maintenance 10,148 15,000 15,000 15,600 Sanitary Septic - State Systems Maintenance 0 20,000 20,000 20,800 includes one st system pumping Sanitary Septic - Norman/Fazio Repairs 0 Sanitary Septic - Non Routine Expenditures 0 25,000 37,000 38,480 pump replace & pumping Contingency 0 35,000 0 35,000 Total Wastewater Operating Expenditures 51,259 162,000 139,000 172,640 Wastewater Ops Revenue Over (Under) Expend 43,508 (56,187)(33,187)(61,802) Wastewater Capital Wastewater Tap Fees Wastewater Tap Fee Single Family 15,225 225,000 695,073 152,000 Wasewater Tap Fee Cluster Homes (lots 24-50) 0 65,000 65,000 0 Total Wastewater Tap Fee Revenues 15,225 290,000 760,073 152,000 Wastewater Capital Expenditures Wastewater System Construction- Single Family 345,754 300,000 300,000 152,000 Est 2 systems Wastewater System Construction- Cluster Homes 9,088 65,000 65,000 0 Est 1 systems Construction Management - WW 0 1,500 Other/Contingency 0 25,000 0 25,000 Total Wastewater Capital Expenditures 354,842 390,000 365,000 178,500 Wastewater Tap Fee/Capital Surplus (Deficit)(339,617)(100,000)395,073 (26,500) Wastewater Revenues Over (Under) Expenditures (296,109)(156,187)361,886 (88,302) OTHER SOURCES & (USES) Transfer from (to) General Fund 200,000 200,000 200,000 50,000 Transfer from (to) Capital Projects Fund 0 TOTAL OTHER SOURCES & (USES)200,000 200,000 200,000 50,000 FUND BALANCE - BEGINNING 1,133,511 869,091 1,047,919 1,496,541 FUND BALANCE - ENDING 1,047,919 809,639 1,496,541 1,403,140 = = = Components of Fund Balance: Reserved for GAC Carbon Replacement 65,000 61,836 61,836 58,672 Reserved for Water Capital Replacements 659,998 686,138 1,194,212 1,100,811 Reserved for Waste Water Capital 0 Unrestricted 322,921 61,665 240,493 243,657 Total 1,047,919 809,639 1,496,541 1,403,140 PAGE 4B statements and substantially all disclosures required by GAAP have been omitted. 88 County Tax entity code DOLA LGID/SID 19073 TO: County Commissioners1 of Eagle County , Colorado. On behalf of the Holland Creek Metropolitan District the Board of Directors of the Holland Creek Metropolitan District $61,990 $61,990 Submitted:12/21/2023 for budget/fiscal year 2024 . (not later than Dec 15) (mm/dd/yyyy)(yyyy) PURPOSE (see end notes for definitions and examples)LEVY2 REVENUE2 1.General Operating ExpensesH 45.000 mills 2,789.55$ 2.(0.000)mills -$ SUBTOTAL FOR GENERAL OPERATING: 45.000 mills 2,789.55$ 3.General Obligation Bonds and InterestJ 0.000 mills -$ 4.Contractual ObligationsK 0.000 mills -$ 5.Capital ExpendituresL 0.000 mills -$ 6.Refunds/AbatementsM 0.000 mills -$ 7.OtherN (specify): 0.000 mills -$ 0.000 mills -$ TOTAL:[]45.000 mills 2,789.55$ Daytime phone:(970) 926-6060 x8 Signed: Title:District Administrator CERTIFICATION OF TAX LEVIES for NON-SCHOOL Governments (taxing entity)A (governing body)B Contact person: (print)Kenneth J. Marchetti Sum of General Operating Subtotal and Lines 3 to 7 Note: If the assessor certified a NET assessed valuation (AV) different than the GROSS AV due to a Tax Increment Financing (TIF) AreaF the tax levies must be calculated using the NET AV. The taxing entity's total property tax revenue will be derived from the mill levy multiplied against the NET assessed valuation of: (local government)C Include one copy of this tax entity's completed form when filing the local government's budget by January 31st, per 29-1-113 C.R.S. with the Division of Local Government (DLG), Room 521, 1313 Sherman Street, Denver, Colorado 80203. Questions? Call DLG (303) 864-7720. 1 If the taxing entity's boundaries include more than one county, you must certify the levies to each county. Use a separate form for each county and certify the same levies uniformly to each county per Article X, Section 3 of the Colorado Constitution. 2 Levies must be rounded to three decimal places and revenue must be calculated from the total NET assessed valuation (Line 4 of Form DLG57 on the County Assessor's FINAL certification of valuation). USE VALUE FROM FINAL CERTIFICATION OF VALUATION PROVIDED BY ASSESSOR NO LATER THAN DECEMBER 10 <Minus> Temporary General Property Tax Credit/ Temporary Mill Levy Rate ReductionI (GrossD assessed valuation, Line 2 of the Certification of Valuation From DLG 57E) (NETG assessed valuation, Line 4 of the Certification of Valuation Form DLG 57) Hereby officially certifies the following mills to be levied against the taxing entity's GROSS assessed valuation of: Form DLG 70 Page 1 THIS SECTION APPLIES TO TITLE 32, ARTICLE 1 SPECIAL DISTRICTS THAT LEVY TAXES FOR PAYMENT OF GENERAL OBLIGATION DEBT (32-1-603 C.R.S.). Taxing entities that are Special Districts or Subdistricts of Special Districts must certify separate mill levies and revenue to the Board of County Commissioners, one each for the funding requirements of each debt (32-1-603, C.R.S.) Use additional pages as necessary. The Special District's or Subdistrict's total levies for general obligation bonds and total levies for contractual obligations should be recorded on Page 1, Lines 3 and 4 respectively. CERTIFY A SEPARATE MILL LEVY FOR EACH BOND OR CONTRACT: BONDSJ: 1.Purpose of Issue: Finance construction, acquiring and equipping recreation facilities and refinance outstanding obligation. Series:Limited Tax General Obligation Series XXX Date of Issue:June 1, 2001 Coupon rate: Variable Maturity Date:June 1, 2041 Levy:0.000 Revenue: $0.00 2.Purpose of Issue: Series: Date of Issue: Coupon rate: Maturity Date: Levy: Revenue: CONTRACTSK: 3.Purpose of Contract: Title: Date: Principal Amount: Maturity Date: Levy: Revenue: 4.Purpose of Contract: Title: Date: Principal Amount: Maturity Date: Levy: Revenue: Use multiple copies of this page as necessary to separately report all bond and contractual obligations per 32-1-1603, C.R.S. CERTIFICATION OF TAX LEVIES, continued Holland Creek Metropolitan District Form DLG 70 Page 2 {00930563.DOCX / } EXHIBIT B 2023 Audited Financial Statements Holland Creek Metropolitan District Financial Statements December 31, 2023 i Holland Creek Metropolitan District Financial Statements December 31, 2023 Table of Contents Page INDEPENDENT AUDITOR'S REPORT A1 –A3 Management’s Discussion and Analysis B1 –B4 Government-wide Financial Statements: Statement of Net Position C1 Statement of Activities C2 Fund Financial Statements: Balance Sheet -Governmental Funds C3 Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds C4 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities C5 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: General Fund C6 Statement of Net Position -Proprietary Fund -Water and Sanitation Fund C7 Statement of Revenues, Expenses and Changes in Fund Net Position -Proprietary Fund -Water and Sanitation Fund C8 Statement of Cash Flows -Proprietary Fund -Water and Sanitation Fund C9 Notes to the Financial Statements D1 –D20 Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: Debt Service Fund E1 Schedule of Revenues, Expenditures and Transfers - Budget (Non-GAAP Basis) and Actual With Reconciliation to GAAP Basis -Proprietary Fund Type -Water and Sanitation Fund E2 History of Assessed Valuation, Mill Levy, and Property Taxes Collected E3 McMahan and Associates, l.l.c. Certified Public Accountants and Consultants Web Site: www.mcmahancpa.com Chapel Square, Bldg C Main Office: (970) 845-8800 245 Chapel Place, Suite 300 Facsimile: (970) 845-8108 P.O. Box 5850, Avon, CO 81620 E-mail: mcmahan@mcmahancpa.com Member: American Institute of Certified Public Accountants Paul J. Backes, CPA, CGMA Avon: (970) 845-8800 Michael N. Jenkins, CA, CPA, CGMA Aspen: (970) 544-3996 Matthew D. Miller, CPA Frisco: (970) 668-3481 A1 M & A INDEPENDENT AUDITOR'S REPORT To the Board of Directors Holland Creek Metropolitan District Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities, business-type activities, and each major fund of Holland Creek Metropolitan District (the “District”),as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, based on our audit, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, and each major fund of Holland Creek Metropolitan District,as of December 31, 2023, and the respective changes in financial position and, where applicable,cash flows thereof 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”).Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for one year after the date that the financial statements are issued. INDEPENDENT AUDITOR’S REPORT To the Board of Directors Holland Creek Metropolitan District A2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require the Management’s Discussion and Analysis in section B be presented to supplement the basic financial statements.Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. INDEPENDENT AUDITOR’S REPORT To the Board of Directors Holland Creek Metropolitan District A3 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s financial statements as a whole. The individual fund budgetary comparisons and the historical schedule found in Section E presented for purposes of additional analysis and are not a required part of the basic financial statements. The individual fund budgetary comparisons and historical schedule found in Section E are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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 financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. McMahan and Associates, L.L.C. Avon, Colorado September 25, 2024 MANAGEMENT’S DISCUSSION AND ANALYSIS B1 Holland Creek Metropolitan District Management’s Discussion and Analysis December 31, 2023 As management of Holland Creek Metropolitan District (the “District”), we offer readers of the District’s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended December 31, 2023. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements comprise three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. The report also includes additional supplementary information after the notes to the financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all the District’s assets, deferred inflows, liabilities, and deferred outflows with the difference between the amounts reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The Statement of Activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. The governmental activity of the District is the installation and operation of the roadway system in the District. The business-type activities of the District include domestic water treatment and distribution and, installation and operation of septic systems. The government-wide financial statements can be found on pages C1and C2 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District currently has three funds. The General Fund and the Debt Service Fund are governmental funds and the Water and Sewer Fund is a proprietary fund. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The governmental funds financial statements are located on pages C3 through C5 of this report. B2 Overview of the Financial Statements (continued) Proprietary funds. The District maintains a proprietary fund commonly known as an enterprise fund. An Enterprise fund is used to report the same functions presented as business-type activities in the government-wide financial statements. The District uses an enterprise fund to account for its water and sewer operations. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for each of the business-type services provided by the District, each of which is considered a major fund of the District. The basic proprietary fund financial statements can be found on pages C7 through C9 of this report. The District also presents a budgetary comparison for its proprietary funds on page E2. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found on pages D1 – D20 of this report. Government-wide Financial Analysis. The following tables show condensed financial information derived from the government-wide financial statements comparing the current year to the prior year. Holland Creek Metropolitan District’s Net Position 2023 2022 2023 2022 2023 2022 Assets and Deferred Outflows: Current assets 2,069,687 2,486,163 1,685,168 1,050,616 3,754,855 3,536,779 Capital and other non-current assets 8,640,277 7,911,368 389,952 1,226,880 9,030,229 9,138,248 Total Assets and Deferred Outflows 10,709,964 10,397,531 2,075,120 2,277,496 12,785,084 12,675,027 Liabilities and Deferred Inflows: Current liabilities and deferred inflows 167,707 131,478 3,052 2,697 170,759 134,175 Long-term and other non-current liabilities 15,082,622 14,844,928 - 15,082,622 14,844,928 Total Liabilities and Deferred Inflows 15,250,329 14,976,406 3,052 2,697 15,253,381 14,979,103 Net Position: Net investment in capital assets (9,906,158) (9,950,533) 2,072,068 2,274,799 (7,834,090) (7,675,734) Restricted 362,919 350,935 - - 362,919 350,935 Unrestricted 5,002,874 5,020,723 - - 5,002,874 5,020,723 Total Net Position (4,540,365) (4,578,875) 2,072,068 2,274,799 (2,468,297) (2,304,076) Governmental Business-type Activities Activities Total B3 Overview of the Financial Statements (continued) Government-wide Financial Analysis (continued) Holland Creek Metropolitan District’s Change in Net Position 2023 2022 2023 2022 2023 2022 Revenues: Program revenues: Charges for services - 401,575 344,302 401,575 344,302 Operating grants and contributions 696,000 731,817 - - 696,000 731,817 Capital grants and contributions 1,010,523 861,419 428,928 68,081 1,439,451 929,500 General revenues:- - Property and other taxes 3,063 3,055 - - 3,063 3,055 Interest and other revenue 125,548 26,429 55,858 14,878 181,406 41,307 Total Revenues 1,835,134 1,622,720 886,361 427,261 2,721,495 2,049,981 Expenses: General government 314,242 251,888 - - 314,242 251,888 Public works 648,231 505,057 - - 648,231 505,057 Intergovernmental agreement 634,197 (85,592) 634,197 (85,592) Interest on long-term debt 634,151 398,146 - - 634,151 398,146 Water and Sewer - 654,895 695,294 654,895 695,294 Total Expenses 1,596,624 1,155,091 1,289,092 609,702 2,885,716 1,764,793 Change in Net Position before Transfers 238,510 467,629 (402,731) (182,441) (164,221) 285,188 Capital transfers - - - - - - Operating transfers (200,000) (200,000) 200,000 200,000 - - Change in Net Position 38,510 267,629 (202,731) 17,559 (164,221) 285,188 Net Position - Beginning (4,578,875) (4,846,504) 2,274,799 2,257,240 (2,304,076) (2,589,264) Net Position - Ending (4,540,365) (4,578,875) 2,072,068 2,274,799 (2,468,297) (2,304,076) Governmental Business-type Activities Activities Total The District is the “service district” in a dual district structure whereby the District has and continues to construct and operate the infrastructure for the Red Sky Ranch subdivision. The District has entered into a District Facilities Construction and Service Agreement with Red Sky Ranch Metropolitan District and pursuant to this agreement the District is obligated to construct and provide the initial financing for the primary infrastructure for the Red Sky Ranch area. Red Sky Ranch Metropolitan District is the “financing district” and as such, Red Sky Ranch Metropolitan District will ultimately pay a “capital obligation” to the District to pay the costs of public infrastructure as well as a “service obligation” for the costs of operating and maintaining the facilities that exceed the revenues generated by the infrastructure. The District will then use the capital obligation funds received from Red Sky Ranch Metropolitan District to pay off the District’s debt. The District’s overall financial position, as measured by net position, decreased by a total of $164,221. The District’s revenues consisted primarily of intergovernmental agreement revenues from the increases in the service and capital obligations as well as Capital Improvement Fees received from Red Sky Ranch Metropolitan District as a pass thru of fees paid by Vail Resorts Development Co (VRDC). The VRDC Capital Improvement Fees were used to pay the interest expense and fees on the District’s debt. The Intergovernmental agreement revenues are being recorded as a decrease in the capital and service obligations owed to the District by Red Sky Ranch Metropolitan District. The primary expenses of the District are interest on the District’s debt and the operations and depreciation of the District’s fixed assets. B4 Financial Analysis of the District’s Funds As mentioned earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of expendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the District’s governmental funds reported a combined ending fund balance of $1,901,980. Of this fund balance, $362,919 is restricted, meaning it is not available for new spending because it has already been either committed for emergencies under the Taxpayers’ Bill of Rights (TABOR), for certain capital improvements or for impact fee payments related to construction of a fire facility. Another $445 of the fund balance is non-spendable since it has already been spent for 2024 expenditures; and $1,538,495 is assigned for future costs. Proprietary funds. The District’s proprietary fund provides the same type of information found in the government- wide financial statements, but in more detail. As of the end of the current fiscal year, the District’s proprietary fund reported an ending net position of $2,072,068, all of which is shown as Net Investment in Capital Assets. The reason for this is that like the Governmental Activities, all increases and decreases from the District’s operations are recorded as being due from or to Red Sky Ranch Metropolitan District. Budget variances. The District expenditures were primarily favorable to budget. Details can be seen on pages C6 and E1 of this report for governmental funds and page E2 for the Water and Sewer Fund. Capital assets. The District’s investment in capital assets government-wide, net of accumulated depreciation decreased by $158,358 as a result of current year capital additions being less than current year depreciation expense. Additional information as well as a detailed classification of the District’s net capital assets can be found in the Notes to the Financial Statement on pages D13 and D14 of this report. Long-term debts. The District’s long-term debts had a net increase of $237,694. The increase is due to the addition of accrued interest of $237,694 being added to the VR Holdings Inc. note. Additional information can be found in the Notes to the Financial Statement on pages D14 through D15 of this report. Request for Information This financial report is designed to provide a general overview of the District’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Marchetti & Weaver LLC, 28 Second Street, Suite 213, Edwards, CO 81632 or you may call (970) 926-6060. GOVERNMENT-WIDE FINANCIAL STATEMENTS Governmental Business-type Activities Activities Total Assets: Cash and investments 2,018,582 1,668,941 3,687,523 Accounts receivable - RSRMD 34,367 - 34,367 Accounts receivable - Other 12,407 16,227 28,634 Property tax receivable 2,789 - 2,789 Accrued interest 1,097 - 1,097 Prepaid expenses 445 - 445 Net capital and service obligation receivable from (prepaid by) RSRMD 8,274,881 (1,682,116) 6,592,765 Capital assets, net 365,396 2,072,068 2,437,464 Total Assets 10,709,964 2,075,120 12,785,084 Liabilities: Accounts payable 164,917 - 164,917 Unearned revenue - 3,052 3,052 Bonds payable 6,310,000 - 6,310,000 Note payable to VR Holdings, Inc.3,961,554 - 3,961,554 Interest payable to VR Holdings, Inc.4,811,068 - 4,811,068 Total Liabilities 15,247,539 3,052 15,250,591 Deferred Inflow of Resources: Unavailable property tax revenue 2,790 - 2,790 Total Deferred Inflow of Resources 2,790 - 2,790 Net Position (Deficit): Net investment in capital assets (9,906,158) 2,072,068 (7,834,090) Restricted for emergencies 32,319 - 32,319 Restricted for impact fees 330,600 - 330,600 Unrestricted 5,002,874 - 5,002,874 Total Net Position (Deficit)(4,540,365) 2,072,068 (2,468,297) Holland Creek Metropolitan District Statement of Net Position December 31, 2023 The accompanying notes are an integral part of these financial statements. C1 Operating Capital Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Activities Ac tivities Total Functions/Programs Governmental Activities: General government 314,242 - - - (314,242) (314,242) Public works 648,231 - 168,902 - (479,329) (479,329) Intergovernmental agreement - - 527,098 1,010,523 1,537,621 1,537,621 Interest expense 634,151 - - - (634,151) (634,151) Total Governmental Activities 1,596,624 - 696,000 1,010,523 109,899 109,899 Business-type Activities: Water and sanitation 654,895 401,575 - 428,928 175,608 175,608 Intergovernmental agreement 634,197 - - - (634,197) (634,197) Total Business-type Activities 1,289,092 401,575 - 428,928 (458,589) (458,589) Total 2,885,716 401,575 696,000 1,439,451 109,899 (458,589) (348,690) General revenues: Property and specific ownership tax 3,063 - 3,063 Investment earnings 125,548 55,858 181,406 Transfers (200,000) 200,000 - Total General Revenues and Transfers (71,389) 255,858 184,469 Change in Net Position 38,510 (202,731) (164,221) Net Position (Deficit) - Beginning (4,578,875) 2,274,799 (2,304,076) Net Position (Deficit) - Ending (4,540,365) 2,072,068 (2,468,297) Changes in Net PositionProgram Revenues Holland Creek Metropolitan District Statement of Activities For the Year Ended December 31, 2023 Net (Expense) Revenue and The accompanying notes are an integral part of these financial statements. C2 FUND FINANCIAL STATEMENTS Total Debt Governmental General Service Funds As sets: Cash and investments 2,018,582 - 2,018,582 Accounts receivable - RSRMD 2,646 31,721 34,367 Accounts receivable - Other 12,407 - 12,407 Property tax receivable 2,789 - 2,789 Accrued interest 1,097 - 1,097 Prepaid expenses 445 - 445 Due to (from) other funds 31,600 (31,600) - Total Assets 2,069,566 121 2,069,687 Liabilities, Deferred Inflow of Resources, and Fund Balances: Liabilities: Accounts payable 164,917 - 164,917 Total Liabilities 164,917 - 164,917 Deferred Inflow of Resources: Unavailable property tax revenue 2,790 - 2,790 Total Deferred Inflow of Resources 2,790 - 2,790 Fund Balances: Nonspendable 445 - 445 Restricted for ERFPD 330,600 - 330,600 Restricted for emergencies 32,319 - 32,319 Assigned - Capital replacements 200,000 - 200,000 Assigned - Infrastructure Replacement 1,338,495 - 1,338,495 Assigned - Other - 121 121 Total Fund Balances 1,901,859 121 1,901,980 Total Liabilities, Deferred Inflow of Resources, and Fund Balances 2,069,566 121 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds.365,396 service costs are not currently available financial resources and, therefore, are not reported in the funds.8,274,881 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.(15,082,622) Net Position of Governmental Activities (4,540,365) Net amounts due from Red Sky Ranch Metropolitan District for capital and Holland Creek Metropolitan District Balance Sheet Governmental Funds December 31, 2023 The accompanying notes are an integral part of these financial statements. C3 Total Debt Governmental General Service Funds Revenues: Property and specific ownership tax 3,063 - 3,063 RSRMD intergovernmental agreement 527,098 325,989 853,087 Investment income (loss)125,548 - 125,548 RSRPOA and VR gatehouse contributions 161,707 - 161,707 Other revenues 7,195 - 7,195 Total Revenues 824,611 325,989 1,150,600 Expenditures: General government 285,727 28,515 314,242 Public works 791,589 - 791,589 Debt service - 297,474 297,474 Total Expenditures 1,077,316 325,989 1,403,305 Excess (Deficiency) of Revenues Over Expenditures (252,705) - (252,705) Other Financing Sources (Uses): Transfers to other funds (200,000) - (200,000) Total Other Financing Sources (200,000) - (200,000) Net Change in Fund Balances (452,705) - (452,705) Fund Balances - Beginning 2,354,564 121 2,354,685 Fund Balances - Ending 1,901,859 121 1,901,980 For the Year Ended December 31, 2023 Holland Creek Metropolitan District Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds The accompanying notes are an integral part of these financial statements. C4 Net Change in Fund Balances of Governmental Funds (452,705) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeded capital outlay during the year.44,375 The net change in accrued interest at the end of the year is neither a source nor a use of current financial resources. As such, the change is not reported in the funds.(237,695) Changes in the am ount of the capital and service obligation due from Red Sky Ranch Metropolitan District do not consume current financial resources and, therefore, are not reported in governmental funds. Other changes 684,535 Change in Net Position of Governmental Activities 38,510 For the Year Ended December 31, 2023 Holland Creek Metropolitan District Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds To the Statement of Activities The accompanying notes are an integral part of these financial statements. C5 2022 Final Budget Original and Variance Final Positive Budget Ac tual (Negative)Ac tual Revenues: Property and specific ownership tax 2,964 3,063 99 3,055 RSRMD intergovernmental agreement 527,099 527,098 (1) 544,543 Interest 56,328 125,548 69,220 26,429 RSRPOA and VR Gatehouse Contributions 149,315 161,707 12,392 136,190 Other revenues - 7,195 7,195 51,084 Total Revenues 735,706 824,611 88,905 761,301 Expenditures: General Government Accounting fees 54,000 86,720 (32,720) 58,337 Audit fees 10,000 11,507 (1,507) 8,300 Directors' fees 2,691 - 2,691 - Elections 6,500 1,535 4,965 1,688 Insurance 32,087 35,263 (3,176) 29,706 Legal 497,800 150,509 347,291 137,537 Office overhead 155 106 49 86 Treasurer fees 87 87 - 87 Contingency 50,000 - 50,000 - Total General Government 653,320 285,727 367,593 235,741 Public Works Labor and equipment 79,350 52,556 26,794 42,289 Gatehouse operations 149,315 161,707 (12,392) 136,190 W eed and mosquito control 12,000 11,770 230 6,924 Repairs and maintenance 19,800 13,952 5,848 14,103 Fire mitigation 50,000 50,000 - - Road repair 519,800 402,622 117,178 242,580 Equipment purchases 200,000 98,982 101,018 - Total Public Works 1,030,265 791,589 238,676 442,086 Total Expenditures 1,683,585 1,077,316 606,269 677,827 Excess (Deficiency) of Revenues Over Expenditures (947,879) (252,705) 695,174 83,474 Other Financing Sources (Uses): Transfers to other funds (200,000) (200,000) - (200,000) Total Other Financing Sources (200,000) (200,000) - (200,000) Net Change in Fund Balance (1,147,879) (452,705) 695,174 (116,526) Fund Balance - Beginning 1,877,579 2,354,564 476,985 2,471,090 Fund Balance - Ending 729,700 1,901,859 1,172,159 2,354,564 2023 Holland Creek Metropolitan District Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund For the Year Ended December 31, 2023 With Comparative Totals For the Year Ended December 31, 2022 The accompanying notes are an integral part of these financial statements. C6 As sets: Current Assets: Equity in pooled cash 1,668,941 Accounts receivable, net of allowance for uncollectible accounts 16,227 Total Current Assets 1,685,168 Non-current Assets: Property, plant and equipment, net of accumulated depreciation 2,072,068 Total Non-current Assets 2,072,068 Total Assets 3,757,236 Liabilities: Current Liabilities: Unearned revenue 3,052 Total Current Liabilities 3,052 Non-current Liabilities: Prepayment of net capital and service obligation from RSRMD 1,682,116 Total Non-current Liabilities 1,682,116 Total Liabilities 1,685,168 Net Position: Investm ent in capital assets 2,072,068 Total Net Position 2,072,068 Holland Creek Metropolitan District Statement of Net Position Proprietary Fund - Water and Sanitation Fund December 31, 2023 The accompanying notes are an integral part of these financial statements. C7 Operating Revenues: Water and sewer fees 400,584 Lease revenue 991 Total Operating Revenues 401,575 Operating Expenses: Operations 173,027 Water lease 10,029 Repairs and maintenance 140,843 Depreciation 330,996 Total Operating Expenses 654,895 Operating (Loss)(253,320) Non-Operating Revenues (Expenses): Investment income 55,858 Change in net capital and service obligations prepaid by RSRMD (634,197) Total Non-Operating (Expenses)(578,339) (Loss) Before Contributions and Transfers (831,659) Contributions and Transfers: Tap and plant investment fees 428,928 Transfers in (out)200,000 Total Contributions and Transfers 628,928 Change in Net Position (202,731) Net Position - Beginning 2,274,799 Net Position - Ending 2,072,068 Proprietary Fund - Water and Sanitation Fund For the Year Ended December 31, 2023 Holland Creek Metropolitan District Statement of Revenues, Expenses and Changes in Fund Net Position The accompanying notes are an integral part of these financial statements. C8 Cash Flows From Operating Activities: Cash received from customers and others 389,834 Cash paid for goods and services (323,897) Net Cash (Used) by Operating Activities 65,937 Cash Flows From Non-Capital Financing Activities: Transfer from (to) other fund 200,000 Net Cash Provided by Non-Capital Financing Activities 200,000 Cash Flows From Capital Financing Activities: Cash paid for capital acquisitions (128,265) Tap and plant investment fees received 428,928 Net Cash (Used) by Capital Financing Activities 300,663 Cash Flows From Investing Activities: Interest received 55,856 Net Cash Provided by Investing Activities 55,856 Net Change in Cash and Cash Equivalents 622,456 Cash and Cash Equivalents - Beginning of Year 1,046,485 Cash and Cash Equivalents - End of Year 1,668,941 Reconciliation of Operating (Loss) to Net Cash (Used) by Operating Activities: Operating (loss)(253,320) Adjustments to reconcile operating (loss) to net cash (used) by operating activities: Decrease (increase) in accounts receivable (12,094) Increase (decrease) in unearned revenue 355 Depreciation expense 330,996 Total Adjustments 319,257 Net Cash (Used) by Operating Activities 65,937 Holland Creek Metropolitan District Statement of Cash Flows Proprietary Fund - Water and Sanitation Fund For the Year Ended December 31, 2023 The accompanying notes are an integral part of these financial statements. C9 NOTES TO THE FINANCIAL STATEMENTS Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 D1 I.Summary of Significant Accounting Policies Holland Creek Metropolitan District (the “District”) was organized on December 29, 2000, contemporaneously with the Red Sky Ranch Metropolitan District as a quasi-municipal corporation and political subdivision of the State of Colorado. The District was formed primarily to finance, construct, operate, and maintain the basic public infrastructure for Red Sky Ranch Metropolitan District in an area of approximately 780 acres of land near Wolcott, Colorado. The District’s financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”). The Governmental Accounting Standards Board (“GASB”) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The more significant accounting policies established by GAAP used by the District are discussed below. A.Reporting Entity The District is governed by an elected Board which is responsible for setting policy, appointing administrative personnel and adopting an annual budget in accordance with the provisions of the Colorado Special District Act. The reporting entity consists of (a) the primary government; i.e., the District, and (b) organizations for which the District is financially accountable. The District is considered financially accountable for legally separate organizations if it is able to appoint a voting majority of an organization's governing body and is either able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits, to, or to impose specific financial burdens on, the District. Consideration is also given to other organizations which are fiscally dependent; i.e., unable to adopt a budget, levy taxes, or issue debt without approval by the District. Organizations for which the nature and significance of their relationship with the District are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete are also included in the reporting entity. Based on the criteria discussed above, the District is not financially accountable for any other entity, nor is the District a component unit of any other government. B.Government-wide and Fund Financial Statements The District’s basic financial statements include both government-wide (reporting the District as a whole) and fund financial statements (reporting the District’s major funds). Both the government-wide and fund financial statements categorize primary activities as either governmental or business-type. 1.Government-wide Financial Statements In the government-wide Statement of Net Position, the governmental activities columns are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The District’s net position is reported in three parts; net investment in capital assets;restricted;and unrestricted net position. The government-wide focus is on the sustainability of the District as an entity and the change in the District’s net position resulting from the current year’s activities. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D2 I.Summary of Significant Accounting Policies (continued) B.Government-wide and Fund Financial Statements (continued) 1.Government-wide Financial Statements (continued) As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. 2.Fund Financial Statements The financial transactions of the District are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. The fund focus is on current available resources and budget compliance. The District reports the following governmental funds: The General Fund is the District’s primary operating fund. It accounts for all financial resources of the District, 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 governmental funds. The District reports the following proprietary or business-type fund: The Water and Sanitation Fund accounts for the activities of the District’s water and sanitation operations. These operations include the purchase and delivery of water, and construction, maintenance and operation of the District’s water and sanitation equipment. C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation Measurement focus refers to whether financial statements measure changes in current resources only (current financial focus) or changes in both current and long-term resources (long-term economic focus). Basis of accounting refers to the point at which revenues, expenditures, or expenses are recognized in the accounts and reported in the financial statements. Financial statement presentation refers to classification of revenues by source and expenses by function. 1.Long-term Economic Focus and Accrual Basis Both governmental and business-type activities in the government-wide financial statements and the proprietary fund financial statements use the long-term economic focus and are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of the related cash flows. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D3 I.Summary of Significant Accounting Policies (continued) C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) 2.Current Financial Focus and Modified Accrual Basis The governmental fund financial statements use the current financial focus and are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and available. “Available” means collectible within the current period or soon enough thereafter (60 days)to be used to pay liabilities of the current period. Expenditures are generally recognized when the related liability is incurred. The exception to this general rule is that principal and interest on general long-term debt, if any, is recognized when due. 3.Financial Statement Presentation Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non- operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the District’s enterprise funds are charges to customers for sales and services. Operating expenses for the enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. D.Financial Statement Accounts 1.Cash, Cash Equivalents, and Investments Cash and cash equivalents are defined as deposits that can be withdrawn at any time without notice or penalty and investments with maturities of three months or less. Investments are stated at fair value or net asset value, depending on the investment (see Note IV.A.). The change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D4 I.Summary of Significant Accounting Policies (continued) D.Financial Statement Accounts (continued) 1.Cash, Cash Equivalents, and Investments (continued) The District follows Colorado statutes specifying specific investment instruments meeting defined rating criteria in which local governments may invest, which include: Obligations of the United States and certain U.S. government agency securities Certain international agency securities General obligation and revenue bonds of U.S. local government entities Banker's acceptances of certain banks Commercial paper Written repurchase agreements collateralized by certain authorized securities Certain money market mutual funds Guaranteed investment contract Local government investment pools 2.Receivables Receivables are reported net of an allowance for uncollectible accounts. At December 31, 2023, the allowance on the Net Capital and Service Obligation Receivable is $5,230,496; all other receivables are considered to be collectible and no allowance is recorded. 3.Property Taxes Property taxes are assessed in one year as a lien on the property, but not collected by governmental units until the subsequent year. In accordance with accounting principles generally accepted in the United States of America, the assessed but uncollected property taxes have been recorded as a receivable and deferred inflow of resources. 4.Capital Assets Capital assets, which include land, buildings, equipment, vehicles, and infrastructure assets, are reported in the applicable governmental or business- type activity columns in the government-wide financial statements as well as the proprietary fund financial statements. The District defines capital assets as assets with an initial cost of $5,000 or more and an estimated useful life in excess of two years. Such assets are recorded at historical cost. Donated capital assets are recorded at estimated fair value at the date of donation. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D5 I.Summary of Significant Accounting Policies (continued) D.Financial Statement Accounts (continued) 4.Capital Assets (continued) Infrastructure, buildings, and equipment are depreciated using the straight-line method over the following estimated useful lives: Asse ts Ye ars Water, sewer, and storm systems 3-20 Infras truc ture 15 Buildings 10-20 Equipment and ve hicles 4-7 5.Long-term Capital and Service Obligations Receivable Red Sky Ranch Metropolitan District (“Red Sky”) is obligated under the District Facilities Construction and Service Agreement (Note V.B.) to reimburse the District over time for the cost of the infrastructure constructed (capital obligation) as well as operating and maintenance costs (service obligation)by the District. These items represent the portion of the obligations not yet been paid by Red Sky as of December 31, 2023. 6.Long-term Debt In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt is reported as a liability in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. 7.Interfund Transactions Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it that are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of expenditures or expenses in the fund that is reimbursed. All other interfund transactions, except quasi-external transactions and reimbursements, are reported as transfers. 8.Deferred Outflows and Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The District doesn’t have any items that qualify for reporting in this category at December 31, 2023. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D6 I.Summary of Significant Accounting Policies (continued) D.Financial Statement Accounts (continued) 8.Deferred Outflows and Inflows of Resources (continued) In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District has only one type of item that qualifies for reporting in this category. Accordingly, the item, unavailable property tax revenue, is deferred and recognized as an inflow of resources in the period that the amounts become available and earned. 9.Fund Balance The District classifies governmental fund balances as follows: Non-spendable -includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual requirements. Restricted –includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation. Committed –includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority which is the Board of Directors. Assigned –includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. Fund balance may be assigned by the Board of Directors or its management designee. Unassigned -includes residual positive fund balance within the General Fund which has not been classified within the other above-mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. The District uses restricted amounts first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the District first uses committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The District does not have a formal minimum fund balance policy. However, the District’s budget includes a calculation of a targeted reserve positions and management reports the targeted amount annually to Board of Directors. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D7 I.Summary of Significant Accounting Policies (continued) E.Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the District’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenditures or expenses during the reporting period. Actual results could differ from those estimates. II.Reconciliation of Government-wide and Fund Financial Statements A.Explanation of certain differences between the governmental fund Balance Sheet and the government-wide Statement of Net Position The governmental fund Balance Sheet includes a reconciliation between fund balance – governmental funds and net position of governmental activities as reported in the government-wide Statement of Net Position. One element of that reconciliation explains, “capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds.” The details of this $365,396 difference are capital asset cost of $12,621,811 and accumulated depreciation of $12,256,415 as discussed in Note IV.B. The second element of that reconciliation explains, “net amounts due from Red Sky Ranch Metropolitan District for capital and service costs are not currently available financial resources and, therefore, are not report in the funds.” The details of this $8,274,881 difference are accounts receivable of $13,505,377 and an allowance for doubtful accounts of $5,230,496 as discussed in Note V.B. Another element of that reconciliation explains, “Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.” The details of this negative $15,082,622 difference are as follows: Bonds pay able 6,310,000 Not e pay able to VR Holdings, Inc .3,961,554 In teres t pay abl e to VR Holdings , Inc .4,811,068 Total Long-term Liabilities 15,082,622 B.Explanation of certain differences between the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance and the government-wide Statement of Activities The governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance includes a reconciliation between net change in fund balances of governmental funds and changes in net position of governmental activities as reported in the government-wide Statement of Activities. One element of this reconciliation explains, “Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense”. The details of this $44,375 difference are capital outlay of $98,982 less $54,607 of depreciation expense. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D8 III.Stewardship, Compliance, and Accountability A.Budgetary Information In the fall of each year, the District's Board of Directors formally adopts a budget with appropriations by fund for the ensuing year pursuant to the Local Government Budget Law of Colorado. The budgets for the funds are adopted on a basis consistent with generally accepted accounting principles (“GAAP”). The budget for the proprietary funds is adopted on a Non-GAAP budgetary basis and is reconciled to the GAAP basis below: Ne t Change in Net Position - Non-GAAP Basis 634,197 Re conci liati on to GAAP Basis: Capitalized ex pens es 128,265 Deprec iat ion (330,996) Tota l Adjustm ents (836,928) Ne t Ch ange in Net Position - GAAP Basis (202,731) As required by Colorado statutes, the District followed the following timetable in approving and enacting a budget for 2023: (1)For the 2023 budget year, prior to August 25, 2022, the County Assessor sent to the District the certified assessed valuation of all taxable property within the District’s boundaries and prior to December 10, 2022, the County Assessor sent the final recertified assessed valuation to the District. (2)On or before October 15, 2022, the District’s accountant submitted to the District’s Board of Directors a recommended budget which detailed the necessary property taxes needed along with other available revenues to meet the District’s operating requirements. (3)A public hearing on the proposed budget and capital program was held by the Board no later than 45 days prior to the close of the fiscal year. (4)For the 2023 budget, prior to December 15, 2022, the District computed and certified to the County Commissioners a rate of levy that derived the necessary property taxes as computed in the proposed budget. (5)For the 2023 budget, the final budget and appropriating resolution was adopted prior to December 31, 2022. After adoption of the budget resolution, the District may make the following changes: a) it may transfer appropriated monies between funds or between spending agencies within a fund, as determined by the original appropriation level; b) it may approve supplemental appropriations to the extent of revenues in excess of the estimated in the budget; c)it may approve emergency appropriations; and d) it may reduce appropriations for which originally estimated revenues are insufficient. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D9 III.Stewardship, Compliance, and Accountability (continued) A.Budgetary Information (continued) Taxes levied in one year are collected in the succeeding year. Thus, taxes certified in 2022 were collected in 2023 and taxes certified in 2023 will be collected in 2024. Taxes are due on January 1st in the year of collection; however, they may be paid in either one installment (no later than April 30th) or two equal installments (not later than February 28th and June 15th) without interest or penalty. Taxes which are not paid within the prescribed time bear interest at the rate of one percent (1%) per month until paid. Unpaid amounts and the accrued interest thereon become delinquent on June 15th. The level of control in the budget at which expenditures exceed appropriations is at the fund level. All appropriations lapse at year end. B.TABOR Amendment In November 1992, Colorado voters amended Article X of the Colorado Constitution by adding Section 20;commonly known as the Taxpayer's Bill of Rights (“TABOR”). TABOR contains revenue, spending, tax and debt limitations that apply to the State of Colorado and local governments. TABOR requires, with certain exceptions, advance voter approval for any new tax, tax rate increase, mill levy above that for the prior year, extension of any expiring tax, or tax policy change directly causing a net tax revenue gain to any local government. Any revenues earned in excess of the fiscal year spending limit must be refunded in the next fiscal year, unless voters approve retention of such excess revenue. Except for refinancing bonded debt at a lower interest rate or adding new employees to existing pension plans, TABOR requires advance voter approval for the creation of any multiple-fiscal year debt or other financial obligation unless adequate present cash reserves are pledged irrevocably and held for payments in all future fiscal years. TABOR also requires local governments to establish an emergency reserve to be used for declared emergencies only. Emergencies, as defined by TABOR, exclude economic conditions, revenue shortfalls, or salary or fringe benefit increases. The reserve is calculated at 3% of fiscal year spending. Fiscal year spending excludes bonded debt service and enterprise spending. The District has reserved $32,319 which is the approximate required reserve at December 31, 2023. On November 7, 2000, the District’s voters approved an increase in debt up to $89,993,047 for the acquisition, construction, or otherwise providing infrastructure and mosquito control. Voters also approved a related increase in taxes up to $100,792,210, annually, or by such lesser annual amount as may be necessary to pay the District’s debt. In addition, the District’s voters approved taxes to be increased $1,500,000 annually, or by such lesser amount as may be necessary to pay for the District’s operations, maintenance, and other expenses. All debt and tax increases constitute voter-approved revenue changes and are to be collected and spent by the District without regard to any spending, revenue-raising, or other limitation contained within Article X, Section 20 of the Colorado Constitution, and without limiting in any year the amount of other revenues that may be collected and spent by the District. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D10 III.Stewardship, Compliance, and Accountability (continued) B.TABOR Amendment (continued) The District's management believes it is in compliance with the financial provisions of TABOR. However, TABOR is complex and subject to interpretation. Many of its provisions, including the interpretation of how to calculate fiscal year spending limits, will require judicial interpretation. IV.Detailed Notes on all Funds A.Deposits and Investments The District’s deposits are entirely covered by federal depository insurance (“FDIC”) or by collateral held under Colorado’s Public Deposit Protection Act (“PDPA”). The FDIC insures the first $250,000 of the District’s deposits at each financial institution. Deposit balances over $250,000 are collateralized as required by PDPA. The carrying amount of the District’s demand deposits was $3,361,424 at year end. Fair Value of Investments The District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1:Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3:Unobservable inputs. At December 31, 2023, the District had the following recurring fair value measurements: Tota l Le ve l 1 Le ve l 2 Le ve l 3 Certificates of depos it 326,099 - 326,099 - Colotrus t 3,358,221 Inve st ments Me asure d at Ne t Asse t Value Fa ir Value Me asure ment Usi ng Investm ents Measure d at Fa ir Va lue Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D11 IV.Detailed Notes on all Funds (continued) A.Deposits and Investments (continued) Debt and equity securities classified in Level 1 are valued using prices quoted in active markets for those securities. Debt and equity securities classified in Level 2 are valued using the following approaches: U.S. Treasuries, U.S. Agencies, and Commercial Paper: quoted prices for identical securities in markets that are not active; Repurchase Agreements, Negotiable Certificates of Deposit, and Collateralized Debt Obligations: matrix pricing based on the securities’ relationship to benchmark quoted prices; Money Market, Bond, and Equity Mutual Funds: published fair value per share (unit) for each fund. The Investment Pool represents investments in COLOTRUST. The fair value of the pool is determined by the pool’s share price. The District has no regulatory oversight for the pool. At December 31, 2023, the District’s investments in Colotrust represented of the District’s investment portfolio. Interest Rate Risk.As a means of limiting its exposure to interest rate risk, the District has invested primarily in COLOTRUST. Funds in COLOTRUST can be withdrawn without notice or penalty. Credit Risk.The District’s investment policy limits investments to those authorized by State statutes as listed in note I.D.1. The District’s general investment policy is to apply the prudent-person rule: investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and, in general, avoid speculative investments. Concentration of Credit Risk.The District diversifies its investments by security type and institution. Financial institutions holding District funds must provide the District a copy of the certificate from the Banking Authority that states that the institution is an eligible public depository. The District had the following cash and investments with the following maturities: Standa rd & Poor's Ca rryi ng Le ss tha n One to Ra ti ng Am ounts one year fi ve years Depos its: Chec king Not rat ed 3,203 3,203 - Inves tment s: Cert ificates of depos it Not rat ed 326,099 - 326,099 Inves tment pool AAAm 3,358,221 3,358,221 - 3,687,523 3,361,424 326,099 Cas h and inve stment s 3,687,523 Te rm to Ma turity Fina nci al Statement Ca ptions: Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D12 IV.Detailed Notes on all Funds (continued) A.Deposits and Investments (continued) The District had invested $3,358,221 in the Colorado Local Government Liquid Asset Trust (the “Trust”). The Trust is 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, measured at net asset value, and each share is equal in value to $1.00. Investments consist of U.S. Treasury bills, notes and note strips and repurchase agreements collateralized by U.S. Treasury securities. A designated custodial bank provides safekeeping and depository services in connection with the direct investment and withdrawal functions. Substantially all securities owned are held by the Federal Reserve Bank in the account maintained for the custodial bank. The District’s investment income for the year ended December 31, 2023 is summarized as follows: Interest and dividend income 177,673 Unrealized gains (losses)3,733 Net inves tment return 181,406$ B.Net Capital and Service Obligation Receivable from RSRMD As set forth in more detail in Note V.B., on June 8, 2001 the District entered into District Facilities Construction and Service Agreement with Red Sky Ranch Metropolitan District (the “Financing District”) that generally provides the Financing District will pay to Holland Creek Metropolitan District (the “Service District”) over a period of years the costs of 1) the construction, acquisition, and equipping of certain public facilities and services (the “Facilities”), and 2) the operation and maintenance of the Facilities. Under the Agreement, the Financing District owes the Service District $13,505,377 at December 31, 2023. However, due to a time limitation imposed by the Financing District’s November 7, 2000 Ballot Issue L to repay the obligation by 2030, the Financing District may not be able to fully fund the obligation through the issuance of bonds or property taxes. The Service District has therefore estimated an allowance for doubtful accounts in the amount of $5,230,496, resulting in a net capital and service obligation receivable of $8,274,881. The estimated allowance for doubtful accounts is based on projections of bonds to be issued by the Financing District in 2024, 2026, 2028, and 2030, which are based on the Financing District’s projections of total annual assessed valuation amounts through 2030. The projected annual assessed valuation amounts are based on current assumptions and estimates through 2030 of the national, state and local economy remaining strong, stable municipal bond interest rates, stable real estate prices in the area, new construction within the Financing District’s boundaries, and residential appreciation at 8% biennially. Between 2007 and 2018, the Financing District’s assessed valuation ranged from a low of $13,128,370 in 2012 to a high of $25,807,622 in 2009. As this range indicates, there is a significant risk that the current projections, assumptions, estimated and actual assessed valuation amounts may vary from year to year, and that these variations may be material to the estimates of the allowance for doubtful accounts. The resulting variations in the allowance for doubtful accounts may also be material to the financial statements of the District from year to year until 2030. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D13 IV.Detailed Notes on all Funds (continued) C.Capital Assets Capital asset activity for the year ended December 31, 2023 is as follows: Be ginning En ding Ba lance Incre ases De cre ases Ba lance Gove rnmenta l Activities: Capital assets, being deprec iated: Vehi cles and equi pm ent 316,644 98,982 - 415,626 Buildings 773,087 - - 773,087 Im provements 849,545 - - 849,545 In fras truc ture 10,583,554 - - 10,583,554 To tal capital assets being deprec iated 12,522,830 98,982 - 12,621,812 Les s accumulated deprec iation for: Vehicles and equipment (316,643) (7,070) - (323,713) Buildings (680,676) (16,630) - (697,306) Im provements (849,546) - - (849,546) Infras truc ture (10,354,944) (30,907) - (10,385,851) To tal accumulated deprec iation (12,201,809) (54,607) - (12,256,416) Gove rnmenta l Activities Capital Asse ts, Net 321,021 44,375 - 365,396 Be ginning En ding Ba lance Incre ases De cre ases Ba lance Bu si ne ss-type Acti vi ti es: Capital assets, not being deprec iated: Water ri ght s 59,855 - - 59,855 To tal c api tal assets, not being deprec iat ed 59,855 - - 59,855 Capital assets, being deprec iated: Water system and improvement s 8,215,978 - - 8,215,978 Sewer system and improvement s 4,597,158 128,265 - 4,725,423 To tal c api tal assets bei ng deprec iated 12,813,136 128,265 - 12,941,401 Les s accumulat ed deprec iation for: Water system and improvement s (7,624,534) (106,011) - (7,730,545) Sewer system and improvement s (2,973,658) (224,985) - (3,198,643) To tal accumulat ed deprec iation (10,598,192) (330,996) - (10,929,188) Bu si ne ss-type Acti vi ti es Capital Asse ts, Net 2,274,799 (202,731) - 2,072,068 Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D14 IV.Detailed Notes on all Funds (continued) C.Capital Assets (continued) The District had the following capital outlay, depreciation expense, and capital asset transfers for the following functions: De pre ci ation Ca pita l Ex pe nse Outlay Gove rnmenta l Activities: Public work s, inc luding infrastruc ture 54,607 98,980 Tota l - Gove rnmenta l Acti vi ti es 54,607 98,980 Busi ne ss-type Activi ties: Water and sanitation 330,996 128,266 Tota l - Business-type Acti vi ties 330,996 128,266 D.Interfund Transfers During 2023, $200,000 was transferred between funds. E.Long-term Debt 1.Series 2001 Variable Rate Revenue Bonds On June 27, 2001 the District issued $12,000,000 of Variable Rate Revenue Bonds (the “Series 2001 bonds”)where the District pledged income derived from capital improvement fees to pay debt service. The Series 2001 bonds were issued to finance initial construction, operation and maintenance of municipal infrastructure.The bonds mature on June 1, 2041, and initially have a variable interest rate determined weekly by the designated remarketing agent. Provisions of the bonds’ indenture agreement provide for conversion of the bonds from variable rates determined weekly to variable rates determined monthly or fixed rates,subject to certain conditions, on conversion dates specified in the indenture agreement. Interest is payable by the District on the first day of each calendar month while under variable, weekly or monthly,interest rates. Following conversion to fixed rates, interest becomes payable on June 1 and December 1 of each year. The Series 2001 bonds are subject to optional tender at the election of a bond owner from the first adjustment date, during any period in which the Series 2001 bonds bear interest at a variable rate. The purchase of tendered Series 2001 bonds by the District must be made solely from the proceeds of the subsequent remarketing of such Series 2001 bonds and amounts realized under the letter of credit or any substitute credit facility as defined in the indenture. The Series 2001 bonds are also subject to optional purchase by the District at face value plus accrued interest during any period in which the Series 2001 bonds bear interest at a variable rate. During any fixed rate period the bonds may be purchased at the option of the District at par value plus any premium as set forth in the indenture and accrued interest. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D15 IV.Detailed Notes on All Funds (continued) E.Long-term Debt (continued) 1.Series 2001 Variable Rate Revenue Bonds (continued) The Bonds are secured by an irrevocable, direct pay letter of credit, issued by the Bank of America National Association (the “Bank”) in the stated amount of $6,382,608. The letter of credit expires on August 31, 2023,unless extended by the Bank at its sole discretion. The District’s financial plan is for these bonds to be refunded through proceeds from general obligation bonds to be issued in the future by Red Sky Ranch Metropolitan District and conveyed to the District through capital improvement fees. There is no fixed amortization schedule for the bond redemption; therefore, no amortization schedule is presented. 2.Promissory Note Payable to VR Holdings, Inc. On August 21, 2002, the District entered into a promissory note with VR Holdings, Inc. Proceeds from the note are to be used to fund construction costs over and above the proceeds from the Series 2001 Bonds previously discussed. Under the terms of the note, draw requests are issued by the District to the VR Holdings, Inc. as needed up to a maximum of $5,228,291. The note bears interest as to each loan advance at the rate of 6% per annum. All amounts advanced to the District by VR Holdings, Inc.under the note mature, with accrued interest,on December 31, 2032. The District may pay down the note balance and accrued interest any time prior to the maturity date. At December 31, 2023, the District had drawn $3,961,554 on the note, the full amount of which, in addition to $4,811,068 of accrued interest, remained outstanding on that date. The District had the following changes in debt for the year ended December 31, 2023. Be ginning En ding Curre nt Ba lance Additi ons De letions Ba lance Porti on Gove rnm enta l Activities Debt: Series 2001 revenue bonds 6,310,000 - - 6,310,000 - Promissory note 3,961,554 - - 3,961,554 - Int eres t pay able on note 4,573,374 237,694 - 4,811,068 - Total Long-te rm Debt 14,844,928 237,694 - 15,082,622 - Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D16 V.Other Information A.Related Party Transactions At December 31, 2023, five members of the District’s Board of Directors are employees of Vail Resorts Development Company, Vail Resorts Management Company, or related entities. In 2002, the District entered into an operations agreement with Vail Resorts Development Company (“VRDC”). Under this agreement, VRDC provides general operating services for the District. These services include snow removal, maintenance of roads, equipment, utility conduits,landscaping, and the provision of certain water operations services. During 2023, the District incurred costs of $201,307 under this agreement. At December 31, 2023, $27,912 of these costs remained outstanding and payable to VRDC. On July 26, 2010 the District entered into an agreement with Vail Associates, Inc. (“VA”) and Red Sky Ranch Association (“RSRPOA”) related to the operations and maintenance of the Gate House. Under the agreement VA and RSRPOA will provide funding for the operations and maintenance costs incurred by the District for the Gate House. The original agreement expired in 2020. On January 1, 2021 the District entered into an Amended and Restated Agreement with the same parties under similar terms which has an initial term of five years with automatic renewal for three successive five-year terms. Under the indenture to the Series 2001 bonds discussed previously in Note IV, the Series 2001 bonds are secured by an irrevocable letter of credit. The Vail Corporation, doing business as Vail Associates, Inc., provided this letter of credit on behalf of the District. No agreement has been entered into between the District and the Vail Corporation regarding reimbursement by the District for any monies drawn on the letter of credit. During the year ended December 31, 2023,letter of credit fees totaling $89,711 were incurred by the Vail Corporation. The District entered into a Special Warranty Deed and Agreement with Vail Associates Inc. on May 5, 2017 to complete the water rights purchase. The Agreement includes terms for the cost of pumping the water rights purchased. The District incurred pumping costs of $3,636 during the year ended December 31, 2023. On July 1, 2018, the District entered into an agreement with Vail Associates, Inc., a corporation affiliated with the Developer, to lease certain water rights owned by VA. The lease agreement has a term of 1 year and four months, expiring October 31, 2019. On October 17, 2019, November 1, 2020,November 1, 2021 and November 1, 2022 the District entered into supplemental agreements with VA to continue to lease the water rights owned by VA. The lease agreements have a term of one year and are subject to annual renewal. During the year ended December 31, 2023 the District incurred costs under the lease totaling $36,460. It has been brought to the District’s attention that additional water rights will be required to meet the developments future needs. The District is presently in the process of negotiating with Vail Associates the terms of such a water rights lease or acquisition. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D17 V.Other Information (continued) B.District Facilities Construction and Service Agreement On June 8, 2001 the District entered into District Facilities Construction and Service Agreement with Red Sky Ranch Metropolitan District (the “Financing District”) that generally provides the Financing District will pay to Holland Creek Metropolitan District (the “Service District”) over a period of years the costs of 1) the construction, acquisition, and equipping of certain public facilities and services (the “Facilities”), and 2) the operation and maintenance of the Facilities. The Agreement states that the obligation to pay the amounts required there under is a general obligation debt of the Financing District subject to certain limitations, and as such the question of whether the Financing District should enter into and perform the Agreement was submitted at an election called for such purpose and held on November 7, 2000. The question was approved by the electorate. On May 3, 2010, the Districts entered into the First Amendment to District Facilities and Service Agreement to clarify definitions and descriptions regarding improvements and responsibilities of the Districts and to replace the outdated long-range plan. Under the Agreement, the Financing District covenants to levy the taxes necessary, together with other available funds, to meet the payment obligations set forth in the Agreement. In return for the payment of the monies required to be paid under the Agreement, the Service District agrees to 1) acquire, construct and equip the Facilities, 2) thereafter provide for their operation and maintenance, and 3) utilizing the Facilities, provide or have others provide to the property within, and the inhabitants of both districts, all related services (the “Services”), including but not limited to water and sanitation services, street maintenance, television services, parks and recreation services and mosquito control services, as well as certain administrative services. As set forth in the Agreement, though the total obligation of the Financing District represented by the Agreement will be treated for financial disclosure purposes as a $36,382,378 debt obligation, the actual obligations to provide for the construction, acquisition and equipping of the Facilities, and for the provision of the above mentioned services, are classified as two separate obligations and each is contingent and limited to the extent that the Financing District is able to meet its obligations through certain limited means. In the case of the Facilities, except as provided below, in any given year the Financing District is obligated to fund its construction and acquisition only to the extent it would be capable of funding it through the issuance of general obligation debt in an aggregate principal amount not to exceed the greater of $2 million or 50% of the assessed value of the taxable property lying within the boundaries of the Financing District as they may, from time to time, be enlarged. Such general obligation debt limitation is subject to automatic increase if applicable Colorado law increases the amount by which such debt may be issued. The Financing District has the option in any year to pay for the construction, acquisition and equipping costs of the Facilities on an annual basis pursuant to the provisions of the Agreement. Additionally, pursuant to an amendment of the agreement adopted on May 3, 2010 the Financing District is obligated to use its best efforts to issue bonds or other indebtedness at the earliest practicable date to pay for the construction acquisition and equipping costs of the Facilities. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D18 V.Other Information (continued) B.District Facilities Construction and Service Agreement (continued) Similarly, in the case of the Services, in any given year the Financing District is obligated to fund its costs only to the extent it is capable of funding through tax revenues resulting from the certification by the Financing District against the assessed value of the taxable property lying within its boundaries, as such boundaries may from time to time be enlarged, to 49 mills. To the extent that in any year the Financing District does not fund its obligations under the Agreement, the amounts not funded are carried forward as service and capital obligations in future years under the Agreement. In addition, the Service District may supplement the revenues from the Financing District through the imposition of fees against the properties and inhabitants of the Financing District for the services the Service District provides. An allowance for doubtful accounts of $5,230,496 has been recorded at December 31, 2023 to provide for the possibility of the Financing District not being able to issue general obligation debt per limitations discussed above. The Agreement may be terminated by either district upon one year’s notice, provided that the Financing District may terminate the agreement only if, prior to the time of termination, all remaining payments and financial obligations set forth in the Agreement are paid to the Service District in full and upon the retirement of all outstanding debt of the service district. The Service District may terminate the Agreement only if, in the context of the termination, the Service District either 1) transfers to the Financing District, free and clear and in its entirety, its interest in the Facilities and in each and every one and all of the water rights, contracts, leases, easements, properties held in fee, and any other personal, real or intangible property then held or owned by the Service District and necessary for the continued provision of the Services, 2) makes the transfer to another governmental entity or entities pursuant to such terms and conditions for the continued provision of the Facilities and Services as may be satisfactory to the Board of Directors of the Financing District or, 3) in the event the Service District is dissolving in accordance with Colorado law, makes the transfer pursuant to such terms and conditions for the continued provision of the Facilities and Services as may be held in accordance with that law by an appropriate Colorado Court. There are no payments, expenditures, or remaining restricted capital contributions under this agreement as of December 31, 2023. C.Improvement Fee Agreement and Pledge Agreement On June 8, 2001, Red Sky Ranch Metropolitan District entered into Improvement Fee and Reimbursement Agreement and a Pledge Agreement with Vail Resorts Development Company (“VRDC”). Pursuant to the Improvement Fee Agreement, in consideration of significant capital improvements to be provided by the District in Red Sky Ranch Metropolitan District with a portion of the proceeds of the Series 2001 bonds,and in order to maintain in the Red Sky Ranch Metropolitan District mill levies and other charges at levels required under the Facilities Agreement, VRDC has agreed to make certain limited payments (“Capital Improvement Fees”) to Red Sky Ranch Metropolitan District. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D19 V.Other Information (continued) C.Improvement Fee Agreement and Pledge Agreement (continued) The amount of Capital Improvement Fees payable by VRDC under this agreement may not exceed $10,000,000. Red Sky Ranch Metropolitan District is required under the Improvement Fee Agreement to submit each request received from the District for payment of the Capital Improvement Fees directly to VRDC promptly upon receipt of such request. The Improvement Fee Agreement may be terminated on the date of its tenth anniversary if certain conditions set forth therein have been satisfied. In addition, pursuant to the Pledge Agreement, Red Sky Ranch Metropolitan District has pledged, conveyed and assigned to the District all Capital Improvement Fees received by it or due to be paid to it under the Improvement Fee Agreement in order to effectuate the Improvement Fee Agreement.During the year ended December 31, 2023, the District invoiced Red Sky Ranch Metropolitan District $325,989 for capital improvement fees under this agreement. D.Operations Agreements On January 1, 2011, the District entered into an agreement with American Conservation Billing Co (“AmCoBi”).Under this agreement, AmCoBi will provide billing and administrative services related to the District’s water and wastewater operations.The agreement is subject to annual renewal. On June 30, 2016, the District entered into an agreement with Water Quality Control Professionals, LLC (“WQCP”). Under this agreement, WQCP provides certain water operations and maintenance services. The agreement is subject to annual renewal. The District is billed monthly based on rates set forth in the agreement. For the year ended December 31, 2023, the District was billed $98,380 under this agreement. E.Contingent Liability Red Sky Ranch Metropolitan District (“RSRMD”)included several lots contiguous to the District into its boundaries pursuant to an agreement dated August 31, 2001 between Red Sy Ranch Metropolitan District and the owner of the lots. Under the agreement, infrastructure improvements constructed by the owner of the lots were conveyed to Holland Creek Metropolitan District in 2008.The agreement also requires the issuance of general obligation bonds, using best efforts, to reimburse the owner for cost of the improvements ($564,623)when the assessed valuation of the related lots reaches $2,600,000. The most recently available assessed value of these lots is $2,772,840.New bonds may only be issued with voter authorization and RSRMD’s voter authorization to issue new bonds has expired. RSRMD is currently seeking voter authorization to issue bonds but the outcome of the election is unknown at this time. Holland Creek Metropolitan District Notes to the Financial Statements December 31, 2023 (Continued) D20 V.Other Information (continued) F.Risk Management (continued) Colorado Special Districts Property and Liability Pool (continued) Except as provided within the Colorado Governmental Immunity Act, the District may be exposed to various risks of loss related to torts, thefts of, damage to, or destruction of assets; errors or omissions; or injuries to employees. The District is insured for such risks as a member of the Colorado Special Districts Property and Liability Pool (“Pool”). The Pool is an organization created by intergovernmental agreement to provide property and general liability, automobile physical damage and liability, public officials liability and boiler and machinery coverage to its members. The Pool provides coverage for property claims up to the values declared and liability coverage for claims up to $1,000,000. 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 official’s 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. A summary of audited statutory basis financial information for the Pool as of and for the year ended December 31, 2022 (the latest audited information available) is as follows: Asse ts 69,212,177 Liabilities 45,329,704 Capital and surplus 23,882,473 Total 69,212,177 Revenue 27,064,468 Underwri ting ex pens es 25,447,966 Underwri ting income (loss)1,616,502 Ot her income 462,530 Net Incom e (Loss)2,079,032 SUPPLEMENTARY INFORMATION 2022 Final Budget Original Variance and Final Positive Budget Actual (Negative)Actual Revenues: RSRMD intergovernmental agreement 398,600 325,989 (72,611) 176,600 Total Revenues 398,600 325,989 (72,611) 176,600 Debt Service Expenditures: Bond interest 189,300 207,763 (18,463) 75,573 Letter of credit fees 189,300 89,711 99,589 84,880 Other debt service expenditures: Agent fees 20,000 28,515 (8,515) 16,147 Total Debt Service Expenditures 398,600 325,989 72,611 176,600 Net Change in Fund Balance - - - - Fund Balance - Beginning (121) 121 242 121 Fund Balance - Ending (121) 121 242 121 2023 Holland Creek Metropolitan District Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Debt Service Fund For the Year Ended December 31, 2023 With Comparative Totals For the Year Ended December 31, 2022 E1 2022 Final Budget Variance Original Final Positive Budget Budget Actual (Negative)Actual Revenues: Water tap fees 50,700 50,700 22,459 (28,241) 52,856 Water fees 255,465 255,465 292,396 36,931 248,617 Sanitation fees 105,813 105,813 108,188 2,375 94,767 Sanitation tap fees 290,000 290,000 406,469 116,469 15,225 Investment revenue 15,000 15,000 55,858 40,858 14,878 Miscellaneous revenue 920 920 991 71 918 Total Revenues 717,898 717,898 886,361 168,463 427,261 Expenditures: Administration 4,250 4,250 4,055 195 3,725 Water operations 138,100 138,100 140,632 (2,532) 111,378 Water lease 80,000 80,000 10,029 69,971 39,586 Repairs and maintenance - W ater 76,500 76,500 113,572 (37,072) 134,413 Sanitation operations 67,000 67,000 28,340 38,660 41,111 Repairs and maintenance - Sanitation 60,000 60,000 27,271 32,729 10,148 Capital outlay 481,500 481,500 128,265 353,235 372,492 Contingency 70,000 70,000 - 70,000 - Total Expenditures 977,350 977,350 452,164 525,186 712,853 Excess of Revenues Over Expenditures (259,452) (259,452) 434,197 693,649 (285,592) Transfers: Transfers in (out)200,000 200,000 200,000 - 200,000 Total Transfers 200,000 200,000 200,000 - 200,000 Net Change in Net Position - Non-GAAP Basis (59,452) (59,452) 634,197 693,649 (85,592) Reconciliation to GAAP Basis: Capitalized expenses 128,265 372,493 Decrease (increase) in service and capital obligations (634,197) 85,592 Depreciation (330,996) (354,934) Net Change in Net Position - GAAP Basis (202,731) 17,559 2023 With Comparative Totals For the Year Ended 2022 Holland Creek Metropolitan District Schedule of Revenues, Expenditures and Transfers Budget (Non-GAAP Basis) and Actual With Reconciliation to GAAP Basis Proprietary Fund Type - Water and Sanitation Fund For the Year Ended December 31, 2023 E2 Calendar Prior Year All Percent Year Assessed Valuation Funds Property Taxes Collected Ended For Current Year Mills Total All Funds to December 31 Property Tax Levy Levied Levied Collected Levied 2002 31,480 45.00 1,417 1,416 100% 2003 44,220 45.00 1,990 1,990 100% 2004 36,090 45.00 1,624 1,624 100% 2005 37,920 45.00 1,706 1,706 100% 2006 44,220 45.00 1,990 1,990 100% 2007 44,220 45.00 1,990 1,990 100% 2008 44,220 45.00 1,990 2,899 146% 2009 44,220 45.00 1,990 1,990 100% 2010 44,220 45.00 1,990 1,990 100% 2011 44,220 45.00 1,990 1,990 100% 2012 44,220 45.00 1,990 1,990 100% 2013 44,220 45.00 1,990 1,990 100% 2014 44,220 45.00 1,990 1,990 100% 2015 44,220 45.00 1,990 1,990 100% 2016 44,220 45.00 1,990 1,990 100% 2017 44,220 45.00 1,990 1,990 100% 2018 44,220 45.00 1,990 1,990 100% 2019 44,220 45.00 1,990 1,990 100% 2020 64,430 45.00 2,899 2,899 100% 2021 64,430 45.00 2,899 2,899 100% 2022 64,430 45.00 2,899 2,899 100% 2023 64,430 45.00 2,899 NOTE: Property taxes collected in any one year include collection of delinquent property taxes levied in prior years. Information received from the County Treasurer does not permit identification of specific year of levy. Holland Creek Metropolitan District History of Assessed Valuation, Mill Levy and Property Taxes Collected December 31, 2023 E3