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HomeMy WebLinkAbout2024 Annual Report ValaguaVALAGUA METROPOLITAN DISTRICT ANNUAL REPORT FISCAL YEAR ENDING DECEMBER 31, 2024 The Valagua Metropolitan District (“District”) is required to provide an annual report to the Town of Gypsum (Town”) by October 1st for the preceding fiscal year, pursuant to Section 32- 1-207(3)(c), C.R.S., with regard to the following matters: For the year ending December 31, 2024, the District makes the following report: A. Boundary changes made. There were no changes made to the District’s boundaries in 2024. B. Intergovernmental Agreements entered into or terminated with other governmental entities. The District did not enter into, nor terminate, any Intergovernmental Agreements with other governmental entities in 2024. C. Access information to obtain a copy of District rules and regulations. The District has not adopted Rules and Regulations. D. A summary of litigation involving public improvements owned by the special district. We are not aware of any litigation pending against the District. E. Status of construction of public improvements by the special district. The District does not anticipate constructing additional public improvements. Certain water, sanitary sewer, storm sewer, street and park public improvements were constructed between 2006 and 2009. F. A list of facilities or improvements constructed by the special district that were conveyed or dedicated to the county or municipality. Offsite and onsite water, sanitary sewer, storm sewer and roadway public improvements were completed and conveyed to the Town between 2006 and 2009. G. The final assessed valuation of the special district as of December 31 of the reporting year. The District’s final assessed valuation for tax year 2024 was $10,617,750. H.A copy of the current year’s budget. A copy of the District’s 2025 Budget is attached hereto as Exhibit A. I. A copy of the audited financial statements, if required by part 6 of article 1 of title 29, or the application for exemption from audit, as applicable. The District’s 2024 Audit is attached hereto as Exhibit B. J. Notice of any uncured defaults existing for more than ninety days under any debt instrument of the special district. The District is not in default on any debt instrument. K. Any inability of the special district to pay its obligations as they come due under any obligation which continues beyond a ninety-day period. The District issued General Obligation Limited Tax Bonds, Series 2008, in the principal amount of $21,000,000 (“Bonds”). During 2014, the District drew down all of its Bond reserve accounts and since 2014 has not made full interest payments, nor any principal payments on the Bonds. The District continues to levy the “Required Mill Levy” and remit “Pledged Revenue” to Bondholders each year, as required by the Bond Indenture, and is not in default on the Bonds. Respectfully submitted this 30th day of September, 2025. VALAGUA METROPOLITAN DISTRICT Eagle County, Colorado By _________________________________ Authorized Representative EXHIBIT A TO ANNUAL REPORT 2025 Budget VALAGUA METROPOLITAN DISTRICT ____________________________________________________________________________________________________________ Administrative & Financial Management Provided By Marchetti & Weaver, LLC Mountain Office Website & Email Front Range Office 28 Second Street, Suite 213 www.mwcpaa.com 245 Century Circle, Suite 103 Edwards, CO 81632 Admin@mwcpaa.com Louisville, CO 80027 (970) 926-6060 (720) 210-9136 January 19, 2025 Division of Local Government 1313 Sherman Street, Room 521 Denver, CO 80203 RE: Valagua Metropolitan District LG ID #65189 Attached is the 2025 Budget for the Valagua Metropolitan District in Eagle County, Colorado, submitted pursuant to Section 29-1-116, C.R.S. This Budget was adopted on September 20, 2024. If there are any questions on the budget, please contact Mr. Jon Erickson, telephone number 970-926-6060 Ext. 101. The mill levy certified to the County Commissioners of Eagle County is 15.000 mills for all general operating purposes, subject to statutory and/or TABOR limitations; 54.355 mills for G.O. bonds; 0.000 mills for refund/abatement; and 0.00 mills for Temporary Tax Credit/Mill Levy Reduction. Based on an assessed valuation of $10,617,750, the total property tax revenue is $736,394.05. 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, Jon Erickson District Administrator Enclosure(s) VALAGUA METROPOLITAN DISTRICT 2025 BUDGET MESSAGE Valagua 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 provide financing for the design, acquisition, construction, installation and operation and maintenance of public improvements including streets, water, sanitary sewer and storm drainage, park and recreation, traffic and safety protection, telecommunication systems and services, transportation, fire protection and mosquito control. 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. 2025 BUDGET STRATEGY The District will continue to levy an operating mill levy of 15.000 mills to cover administrative costs of the District. Due to budget constraints the District no longer provides contracted services for the public safety and is instead depended on the Eagle County Sheriff’s office and the Brightwater Club Property Owners Association. The District will levy 54.355 (50 mills “adjusted” for changes in state-wide assessed valuation calculations) for debt service, which is not sufficient to cover the debt service expenditures for the year. Although a shortfall in funding is a material event under the documents of the Series 2008 General Obligation Bonds, the Bonds will not be in default as long as the District continues to levy the 50.000 mills adjusted for debt service. Such shortfalls will be accrued to future years and will be paid if and when funding becomes available. Page 1 of 5 RESOLUTIONS OF VALAGUA METROPOLITAN DISTRICT TO ADOPT 2025 BUDGET A RESOLUTION SUMMARIZING EXPENDITURES AND REVENUES FOR EACH FUND AND ADOPTING A BUDGET FOR THE VALAGUA METROPOLITAN DISTRICT, COLORADO, FOR THE CALENDAR YEAR BEGINNING ON THE FIRST DAY OF JANUARY 2025 AND ENDING ON THE LAST DAY OF DECEMBER 2025. WHEREAS, the Board of Directors of the Valagua Metropolitan District has appointed a budget committee to prepare and submit a proposed 2025 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 held on September 20, 2024, 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 Valagua 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 Valagua 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 capital or significant operating expenditures forecasted for the current year are anticipated to be extended into the following year, the expenditures and offsetting change in the budgeted beginning fund balance shall be updated to reflect management’s best estimate at the time the budget is to be filed with the Colorado Division of Local Affairs. 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. Page 2 of 5 RESOLUTIONS OF VALAGUA METROPOLITAN DISTRICT (CONTINUED) TO SET MILL LEVIES A RESOLUTION LEVYING PROPERTY TAXES FOR THE YEAR 2024, TO HELP DEFRAY THE COSTS OF GOVERNMENT FOR THE VALAGUA METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO, FOR THE 2025 BUDGET YEAR. WHEREAS, the Board of Directors of the Valagua Metropolitan District, has adopted the annual budget in accordance with the Local Government Budget Law, on September 20, 2024 and; WHEREAS, the amount of money necessary to balance the budget for general operating expenses and capital expenditure purposes from property tax revenue is $159,266.25 and; WHEREAS, the Valagua Metropolitan District finds that it is required to temporarily lower the general operating mill levy to render a refund for $0.00, 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 $577,127.80, and; WHEREAS, the 2024 valuation for assessment for the Valagua Metropolitan District, as certified by the County Assessor is $10,617,750. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the VALAGUA METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO: Section 1. That for the purposes of meeting all general operating expenses of the Valagua Metropolitan District during the 2025 budget year, there is hereby levied a tax of 15.000 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2024. Section 2. That for the purposes of rendering a refund to its constituents during budget year 2025 there is hereby levied a temporary tax credit/mill levy reduction of 0.000 mills. Section 3. That for the purpose of meeting all capital expenditures of the Valagua Metropolitan District during the 2025 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 2024. Page 3 of 5 RESOLUTIONS OF VALAGUA METROPOLITAN DISTRICT (CONTINUED) TO SET MILL LEVIES (CONTINUED) Section 4. That for the purpose of meeting all payments for bonds and interest of the Valagua Metropolitan District during the 2025 budget year, there is hereby levied a tax of 54.355 mills upon each dollar of the total valuation for assessment of all taxable property within the District for the year 2024. Section 5. 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 Valagua 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 Valagua 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 VALAGUA 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 VALAGUA METROPOLITAN DISTRICT, EAGLE COUNTY, COLORADO, FOR THE 2025 BUDGET YEAR. WHEREAS, the Board of Directors has adopted the annual budget in accordance with the Local Government Budget Law, on September 20, 2024, 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 VALAGUA 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 $ 369,000 TOTAL GENERAL FUND $ 369,000 DEBT SERVICE FUND: Debt Service Expenditures $ 629,444 TOTAL DEBT SERVICE FUND $ 629,444 Page 5 of 5 RESOLUTIONS OF VALAGUA METROPOLITAN DISTRICT (CONTINUED) TO ADOPT 2025 BUDGET, SET MILL LEVIES AND APPROPRIATE SUMS OF MONEY (CONTINUED) The above resolutions to adopt the 2025 budget, set the mill levies and to appropriate sums of money were adopted this 20th day of September, 2024. Attest: ___________________________________ Title: ____________________________________ President VALAGUA METROPOLITAN DISTRICTSTATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE MODIFIED ACCRUAL BASIS2023 2024Variance YTD Thru YTD ThruVariance 2025COMBINED SUMMARY FINANCIALS Audited Adopted Favorable 2024 08/31/2024 08/31/2024 Favorable Adopted BudgetActual Budget (Unfavor) Forecast ActualBudget (Unfavor)Budget CommentsPROPERTY TAXESAssessed Value 4,532,370 10,699,630 10,699,630 10,617,750 2024 Final AV% Increase (Decrease) 1% 136% 136% -1% Calcualted % Change In AVOperations Mill Levy 15.000 15.000 15.000 15.000 Per General FundDebt Service Mill Levy 52.337 54.229 54.229 54.355 Adjusted Rate Per DS FundTotal Mill Levy67.337 69.229 69.229 69.355 REVENUES & OTHER SOURCESProperty Taxes- Operations 67,985 160,494 - 160,494 109,907 154,075 (44,167) 159,266 AV * Mill Levy / 1,000Property Taxes- Debt Service 237,210 580,230 - 580,230 397,344 557,021 (159,677) 577,128 AV * Mill Levy / 1,000State Property Tax Backfill- Operations - 6,178 - 6,178 6,178 - 6,178 - 90% of Lost Taxes From SB 22-238Specific Ownership Taxes 17,501 24,074 - 24,074 21,066 14,043 7,022 23,934 3.25% of taxesInterest Income 24,440 51,000 (26,000) 25,000 20,518 31,000 (10,482) 51,000 Includes $30,000 of contingencyTOTAL REVENUES 347,137 821,977 (26,000) 795,977 555,014 756,139 (201,125) 811,328 EXPENDITURESOPERATIONSGeneral Fund Operations 108,968 363,613 301,207 62,406 42,121 49,284 7,163 369,000 See General FundDebt Svc Treasurers and Other Fees 7,128 47,407 30,000 17,407 12,108 16,711 4,602 47,314 See Debt Service FundTotal Operations 116,096 411,020 331,207 79,813 54,229 65,995 11,765 416,314 PUBLIC SAFETY - - - - - - - - No Longer FundedDEBT SERVICEBond Payments- Principal - - - - - - No Funds AvailableBond Payments- Interest 246,121 585,339 - 585,339 243,827 276,885 33,058 582,130 Only Partially PaidBond Issue Costs - - - - - - - - Total Debt Service 246,121 585,339 - 585,339 243,827 276,885 33,058 582,130 CAPITAL - - - - - - - - No Capital ProjectsTOTAL EXPENDITURES 362,217 996,359 331,207 665,152 298,057 342,880 44,823 998,444 CHANGE IN FUND BALANCES (15,080) (174,382) 305,207 130,825 256,957 413,259 (156,302) (187,116) BEGINNING FUND BALANCES411,302 382,464 13,757 396,221 396,221 382,464 13,757 527,047 ENDING FUND BALANCES 396,221 208,083 318,964 527,047 653,179 795,723 (142,545) 339,930 ========No assurance is provided on these financial statements; substantially all disclosures required by GAAP omitted.PAGE 2 VALAGUA METROPOLITAN DISTRICTSTATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE MODIFIED ACCRUAL BASIS2023 2024Variance YTD Thru YTD ThruVariance 2025GENERAL FUND Audited Adopted Favorable2024 08/31/2024 08/31/2024 Favorable Adopted BudgetActual Budget (Unfavor) Forecast ActualBudget (Unfavor)Budget CommentsPROPERTY TAXESAssessed Value 4,532,370 10,699,630 10,699,630 10,617,750 2024 Final AVOperating Mill Levy Rate 15.000 15.000 15.000 15.000 Maximum Allowed Mill LevyREVENUESProperty Taxes 67,985 160,494 - 160,494 109,907 154,075 (44,167) 159,266 Assd Value Times Mill LevyState Property Tax Backfill 6,178 - 6,178 6,178 - 6,178 0 90% of Lost Taxes From SB 22-238Specific Ownership Taxes 3,899 5,217 - 5,217 4,564 3,043 1,521 5,177 3.25% of taxesInterest Income 21,565 19,000 - 19,000 15,581 13,500 2,081 19,000 Based on PY ForecastTOTAL REVENUE 93,449 190,889 - 190,889 136,231 170,618 (34,387) 183,443EXPENDITURESGENERAL OPERATIONSAccounting & Management 21,954 22,000 - 22,000 13,996 13,833 (163) 23,100 Based on PY ForecastAudit 4,900 5,000 - 5,000 5,000 5,000 - 5,300 Based on Proposal ReceivedDirectors Fees 875 1,000 300 700 335 667 332 1,000 Assuming 2 Meetings per YearElection 1,027 - - - - - - 2,000 2025 ElectionInsurance 3,342 3,509 (128) 3,637 3,637 3,509 (128) 4,183 Estimated incr for '25Legal 6,516 7,000 - 7,000 2,364 4,667 2,303 7,000 Based on PY ForecastOffice Overhead & Supplies 1,033 1,339 - 1,339 948 893 (55) 1,379 Based on PY ForecastWebsite 363 400 (580) 980 523 400 (123) 1,460 Streamline Agmt plus AdminTreasurers Fees 2,043 4,815 (185) 5,000 3,349 4,622 1,273 4,778 3% of Taxes (Incl Backfill)Bank & Trustee Fees 3,250 3,250 - 3,250 3,250 3,250 - 3,250 Negotiated rateValley Road, Fence, & Path Maintenance 60,365 10,000 - 10,000 5,220 7,143 1,923 10,000 Weed control and fence maintenancLandscaping & Irrigation Replacements 200,000 200,000 - 200,000 Valley Road Mosquito Spraying 3,300 3,500 - 3,500 3,500 3,500 - 3,750 8 Summer TreatmentsGround Squirrel Mitigation - 1,800 1,800 - - 1,800 1,800 1,800 Ground Squirrel MitigationGeneral Engineering - - - - - - - - No CapitalOperating Contingency 100,000 100,000 - - - 100,000 Security / Additonal LandscapingTOTAL GENERAL OPERATIONS108,968 363,613 301,207 62,406 42,121 49,284 7,163 369,000 TOTAL EXPENDITURES 108,968 363,613 301,207 62,406 42,121 49,284 7,163 369,000 REVENUE OVER (UNDER) EXPEND. (15,519) (172,724) 301,207 128,483 94,110 121,334 (27,224) (185,556) OTHER FINANCING SOURCES AND (USES)Bond Proceeds Xfer From (To) D/S Fund - - - - - - - - No funds availableTOTAL OTHER SOURCES (USES) - - - - - - - - NET CHANGE IN FUND BALANCE (15,519) (172,724) 301,207 128,483 94,110 121,334 (27,224) (185,556) Fund Balance- Beginning 409,396 377,663 16,214 393,877 393,877 377,663 16,214 522,361 Fund Balance- Ending 393,877 204,940 317,421 522,361 487,987 498,997 (11,010) 336,804 = = = = = = = No assurance is provided on these financial statements; substantially all disclosures required by GAAP omitted.PAGE 3 VALAGUA METROPOLITAN DISTRICTSTATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE MODIFIED ACCRUAL BASIS2023 2023Variance YTD Thru YTD ThruVariance 2025DEBT SERVICE FUND Audited Adopted Favorable 2024 08/31/2024 08/31/2024 Favorable Adopted BudgetActual Budget (Unfavor) Forecast ActualBudget (Unfavor)Budget CommentsPROPERTY TAXESAssessed Value 4,532,370 10,699,630 10,699,630 10,617,750 2024 Final AVDebt Service Mill Levy Rate 52.337 54.229 54.229 54.355 Required 50 Mills, AdjustedREVENUESProperty Taxes 237,210 580,230 - 580,230 397,344 557,021 (159,677) 577,128 Assd Value Times Mill LevySpecific Ownership Taxes 13,603 18,857 - 18,857 16,501 11,000 5,501 18,757 3.25% of taxesInterest Income 2,875 32,000 (26,000) 6,000 4,937 17,500 (12,563) 32,000 $2,000 Plus $30,000 contingencyTOTAL REVENUES 253,688 631,088 (26,000) 605,088 418,783 585,521 (166,738) 627,884EXPENDITURESBond Interest- 2008 Series 246,121 585,339 - 585,339 243,827 276,885 33,058 582,130 $1,627,500 due but not all availableBond Principal- 2008 Series - - - - - - - - Pmts due but no funds availableTreasurers Fees 7,128 17,407 - 17,407 12,108 16,711 4,602 17,314 3% of Property taxesBank Fees - - - - - - Contingency - 30,000 30,000 - - - - 30,000 To avoid budget amendmentTOTAL EXPENDITURES 253,249 632,746 30,000 602,746 255,936 293,596 37,661 629,444REVENUE OVER (UNDER) EXP 439 (1,658) 4,000 2,342 162,847 291,925 (129,078) (1,560)OTHER FINANCING SOURCES (USES) Bond Proceeds Trfr from (to) General Fund - - - - - - - - All Funds Used In Prior YearsTOTAL OTHER FINANCING S & U - - - - - - - - CHANGE IN FUND BALANCE 439 (1,658) 4,000 2,342 162,847 291,925 (129,078) (1,560)Fund Balance- Beginning 1,905 4,801 (2,457) 2,344 2,344 4,801 (2,457) 4,686Fund Balance- Ending 2,344 3,143 1,543 4,686 165,191 296,726 (131,535) 3,126= = = = = = = SCHEDULE OF UNPAID BUT ACCRUED INTERESTInterest Payments Due During Year 1,627,500 1,627,500 1,627,500 1,627,500 $21M at 7.75%Less Amounts Available For Payment (246,121) (585,339) (585,339) (582,130) Amt Available Per AboveSemi-Annual Compounding 1,254,052 1,448,891 1,459,857 1,646,667 Compounding at 7.75%Total Additions (to Unpaid Interest 2,635,431 2,491,053 2,502,018 - 2,692,036 Beginning Balance 15,563,858 18,199,289 18,199,289 18,199,289 20,701,307 Ending Balance of Unpaid But Accd Int 18,199,289 20,690,341 20,701,307 18,199,289 23,393,343 Accrued to Future Years====No assurance is provided on these financial statements; substantially all disclosures required by GAAP omitted.PAGE 4 112 County Tax entity code DOLA LGID/SID 65189 TO: County Commissioners1 of Eagle County , Colorado. On behalf of the Valagua Metropolitan District the Board of Directors of the Valagua Metropolitan District $ $ Submitted:12/4/2024 for budget/fiscal year 2025 . (not later than Dec 15) (mm/dd/yyyy)(yyyy) PURPOSE (see end notes for definitions and examples)LEVY2 REVENUE2 1.General Operating ExpensesH 15.000 mills 159,266.25$ 2. 0.000 mills -$ SUBTOTAL FOR GENERAL OPERATING: 15.000 mills 159,266.25$ 3.General Obligation Bonds and InterestJ 54.355 mills 577,127.80$ 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:[]69.355 mills 736,394.05$ Daytime phone:(970) 926-6060 ext 101 Signed: Title: District Accountant (local government)C (GrossD assessed valuation, Line 2 of the Certification of Valuation From DLG 57E) Hereby officially certifies the following mills to be levied against the taxing entity's GROSS assessed valuation of: 10,617,750 CERTIFICATION OF TAX LEVIES for NON-SCHOOL Governments (taxing entity)A (governing body)B 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 Contact person: (print) Jon Erickson 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: (NETG assessed valuation, Line 4 of the Certification of Valuation Form DLG 57) 10,617,750 Page 1 of 4 Form DLG 70 (rev 10/24) 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: Refunding of the 2006 and 2007 Bond Anticipation Notes and additional funding for future infrastructure construction and/or acquisition. Series: Series 2008 General Obligation Limited Tax Bonds Date of Issue: June 24, 2008 Coupon rate: 7.75% Maturity Date:December 1, 2037 Levy: 54.355 Revenue: $577,127.80 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 Page 2 of 4 Form DLG 70 (rev 10/24) EXHIBIT B TO ANNUAL REPORT 2024 Audit Valagua Metropolitan District Financial Statements December 31, 2024 Valagua Metropolitan District Financial Statements December 31, 2024 Table of Contents Page INDEPENDENT AUDITOR'S REPORT A1 – A3 Management’s Discussion and Analysis B1 – B3 Government-wide Financial Statements: Statement of Net Position C1 Statement of Activities C2 Fund Financial Statements: Balance Sheet -Governmental Funds C3 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position C4 Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds C5 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities C6 Notes to the Financial Statements D1 – D12 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual -Governmental Funds: General Fund E1 Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual -Governmental Funds: Debt Service Fund F1 History of Assessed Valuation, Mill Levy and Property Taxes Collected F2 McMahan and Associates, l.l.c. Certified Public Accountants and Consultants Web Site: www.McMahanCPA.com Main Office: (970) 845-8800 Member: American Institute of Certified Public Accountants Denver, Colorado Avon, Colorado Florence, Alabama A1 M & A INDEPENDENT AUDITOR'S REPORT To the Board of Directors Valagua Metropolitan District Gypsum, Colorado Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities and each major fund of Valagua Metropolitan District (the “District”), as of and for the year ended December 31, 2024, 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, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District, as of December 31, 2024 and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“U.S. 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 U.S. GAAP, 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 Valagua 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 U.S. 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 U.S. 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 that 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. The budgetary comparison information in section E is not a required part of the basic financial statements but is supplementary information required by U.S. GAAP. The budgetary comparison information has been subjected to the auditing procedures applied in the audit of the 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 U.S. GAAS. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. INDEPENDENT AUDITOR’S REPORT To the Board of Directors Valagua 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 comparison found in Section F, is presented for purposes of additional analysis and are not a required part of the basic financial statements. The budgetary item found in Section F is the responsibility of management and was 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. Other Information Management is responsible for the other information included in the annual financial report. The other information comprises the Schedule of Assessed Valuation, Mill Levy and Property Taxes Collected but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. McMahan and Associates, L.L.C. Avon, Colorado May 16, 2025 MANAGEMENT’S DISCUSSION AND ANALYSIS B1 Valagua Metropolitan District Management’s Discussion and Analysis December 31, 2024 As management of the Valagua Metropolitan District (“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, 2024. Overview of the Financial Statements This discussion and analysis are 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. This report also contains other supplementary information in addition to the basic financial statements themselves. 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 outflows, liabilities, and deferred inflows 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, however because the District has conveyed the majority of its capital assets to the Town of Gypsum, it has a substantial negative net position. 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 (i.e. uncollected taxes). The government-wide financial statements can be found on pages C1 - 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. All of the funds of the District can be divided into two categories: governmental funds and proprietary funds. The District has no proprietary funds. 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 spendable resources, as well as on balances of spendable 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. The District has two governmental funds, the General Fund and the Debt Service Fund. The governmental funds provide a B2 reconciliation to facilitate this comparison between governmental funds and governmental activities. The governmental funds financial statements and reconciliations are located on pages C3 - C6 of this report. The District adopts an annual appropriated budget for its General and Debt Service Funds. A budgetary comparison statement has been provided for the General Fund on page E1 and a budgetary comparison schedule for the Debt Service Fund on page F1 to demonstrate compliance with these budgets. Notes to the Financial Statements: The notes provide additional information that is essential to gain 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 – D12 of this report. Government-wide Financial Analysis The following tables show condensed financial information derived from the government-wide financial statements of the District which compares 2024 to 2023: Valagua Metropolitan District's Net Position 2024 2023 Assets: Current assets 1,282,430$ 1,138,232$ Capital and other non-current assets 957,335 1,011,678 Total Assets 2,239,765 2,149,910 Liabilities: Current liabilities 1,981 1,287 Long-term liabilities 41,817,448 39,334,914 Total Liabilities 41,819,429 39,336,201 Deferred Inflows 736,394 740,724 Net Position: Net Investment In Capital Assets 768,359 (11,488,705) Restricted 8,384 5,614 Unrestricted (41,092,801) (26,443,924) Total Net Position (40,316,058)$ (37,927,015)$ Revenues: Property and other taxes 782,263$ 322,697$ Interest 43,757 24,440 Total Revenues 826,020 347,137 Expens es: General government 64,643 52,431 Public works 63,063 63,773 Interest expense 3,087,357 2,881,552 Total Expenses 3,215,063 2,997,756 Change in Net Position (2,389,043) (2,650,619) Net Position - Beginning (37,927,015) (35,276,396) Net Position - Ending (40,316,058)$ (37,927,015)$ B3 The District’s main activity is servicing the Series 2008 Bonds. In previous years the District also conveyed a portion of its infrastructure to the Town of Gypsum which contributes to the negative net position of the District since only a small portion of the infrastructure but all of the debt from financing the assets is reported by the District. Financial Analysis of the District’s Funds The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. The majority of the Districts fund balance is reported in the General Fund and is available for future spending by the District. Budget Variances: Budget to actual comparisons are provided on page E1 for the General Fund and page F1 for the Debt Service Fund. Capital Assets: During 2024 the District assets depreciated by $54,343 and there were no capital additions. For more detail on capital assets see Section III. B. on page D9. Long-Term Debts: During 2008, the District issued $21,000,000 in Series 2008 General Obligation Limited Tax Bonds, the proceeds of which were used to repay both the 2006 and 2007 Series bond anticipation notes as well as to provide additional funding for future infrastructure. During 2024 the District made only a small portion of the required interest payments on the debt, which caused the shortfall to add to the balances that is accruing to future years. For more details on long-term debt see page D10. Economic Conditions and Outlook: The County Assessor reassesses the value of the property in the District effective January 1, of even numbered years. Due to the decline in real estate values within the District, the assessed valuation of the District has declined by 80% since the issuance of the 2008 Bonds. Due to these declines, the mill levy of the District was raised to the maximum of 65 mills (as further adjusted to offset the effects of reduction in assessment rates), which is still inadequate to fund the debt service costs of the District. Additional information related to the decline can be found in the History of Assessed Valuation, Mill Levy and Property Taxes Collected on page F2 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 the Valagua Metropolitan District, c/o Marchetti & Weaver, LLC, 28 Second Street, Unit 213, Edwards, CO 81632, (970) 926-6060. GOVERNMENT-WIDE FINANCIAL STATEMENTS As sets: Cash and cash equivalents 539,816 Amounts due from Eagle County 3,369 Property taxes receivable 736,394 Prepaid expenses 2,851 Capital assets, net 957,335 Total Assets 2,239,765 Liabilities: Current liabilities due in less than one year: Accounts payable 1,981 Accrued interest payable 20,817,448 Bonds payable 3,555,000 Non-current liabilities due in excess of one year: Bonds payable 17,445,000 Total Liabilities 41,819,429 Deferred Inflows of Resources: Property tax revenue 736,394 Total Deferred Inflows of Resources 736,394 Net Position: Net investment in capital assets 768,359 Restricted for debt service 6,714 Restricted for emergencies 1,670 Unrestricted (41,092,801) Total Net Position (40,316,058) December 31, 2024 Statement of Net Position Valagua Metropolitan District The accompanying notes are an integral part of these financial statements. C1 Operating Capital Charges for Grants and Grants and Net (Expense) Expenses Services Contributions Contributions Revenue Functions/Programs: Governmental activities: General government 64,643 - - - (64,643) Public works 63,063 - - - (63,063) Interest 3,087,357 - - - (3,087,357) Total primary government 3,215,063 - - - (3,215,063) General revenues: Taxes: Property tax 746,151 Specific ownership tax 36,112 Interest income 43,757 Total General Revenues 826,020 Change in Net Position (2,389,043) Net Position - Beginning (37,927,015) Net Position - Ending (40,316,058) Valagua Metropolitan District Statement of Activities For the Year Ended December 31, 2024 Program Revenues The accompanying notes are an integral part of these financial statements. C2 FUND FINANCIAL STATEMENTS Total Governmental General Debt Service Funds Assets: Equity in pooled cash and investments 535,741 4,075 539,816 Amounts due from Eagle County 730 2,639 3,369 Property taxes receivable 159,266 577,128 736,394 Prepaid expenditures 2,851 - 2,851 Total Assets 698,588 583,842 1,282,430 Liabilities, Deferred Inflow of Resources, Liabilities: Accounts payable 1,981 - 1,981 Total Liabilities 1,981 - 1,981 Deferred Inflows of Resources: Unavailable property tax revenue 159,266 577,128 736,394 Total Deferred Inflows of Resources 159,266 577,128 736,394 Fund Balances: Nonspendable 2,851 - 2,851 Restricted for debt service - 6,714 6,714 Restricted for emergencies 1,670 - 1,670 Unassigned 532,820 - 532,820 Total Fund Balances 537,341 6,714 544,055 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 698,588 583,842 1,282,430 December 31, 2024 Governmental Funds Balance Sheet Valagua Metropolitan District The accompanying notes are an integral part of these financial statements. C3 Governmental Funds Total Fund Balance 544,055 Capital assets used in governmental activities are not considered current financial resources and, therefore, are not reported in the funds. Details of these amounts are as follows: Capital assets 1,835,182 Accumulated depreciation (877,847) 957,335 Long-term liabilities, including bonds payable and leases payable, are not due and payable in the current period and, therefore, are not reported in the funds. This is the amount of District long-term liabilities. Details of these amounts are as follows: Bonds payable (21,000,000) Accrued interest payable (20,817,448) (41,817,448) Net Position of Governmental Activities (40,316,058) Valagua Metropolitan District Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position December 31, 2024 The accompanying notes are an integral part of these financial statements. C4 Total Governmental General Debt Service Funds Revenues: Property taxes 166,510 579,641 746,151 Specific ownership taxes 7,824 28,288 36,112 Interest 24,645 19,112 43,757 Total Revenues 198,979 627,041 826,020 Expenditures: General government 46,795 17,848 64,643 Public works 8,720 - 8,720 Debt service Interest - 604,823 604,823 Total Expenditures 55,515 622,671 678,186 Excess (Deficiency) of Revenues over Expenditures 143,464 4,370 147,834 Net Change in Fund Balances 143,464 4,370 147,834 Fund Balances - Beginning 393,877 2,344 396,221 Fund Balances - Ending 537,341 6,714 544,055 Valagua Metropolitan District Statement of Revenues, Expenditures For the Year Ended December 31, 2024 Governmental Funds and Changes in Fund Balances The accompanying notes are an integral part of these financial statements. C5 Net change in fund balances for total governmental funds 147,834 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of the assets is allocated over their estimated useful lives as depreciation expense. This is the net difference between depreciation and capital additions during the year. Details of these differences are as follows: Depreciation expense (54,343) The change in accrued interest reported in the Statement of Activities does not require the use of current financial resources and, therefore, is not reported as an expenditure in governmental funds.(2,482,534) Change in Net Position of Governmental Activities (2,389,043) Changes in Fund Balances of Governmental Funds to the Reconciliation of the Statement of Revenues, Expenditures, and Valagua Metropolitan District For the Year Ended December 31, 2024 Statement of Activities The accompanying notes are an integral part of these financial statements. C6 NOTES TO THE FINANCIAL STATEMENTS Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 D1 I.Summary of Significant Accounting Policies The Valagua Metropolitan District (the “District”) was established on November 22, 2003, as a quasi-municipal corporation and political subdivision of the State of Colorado. The District was formed to construct and acquire systems for water, sanitation, storm drainage, streets, safety, transportation, landscaping, parks and recreation, telecommunication, pest control, fire protection, and public improvements in an area of approximately 963 acres of land in the Town of Gypsum in Eagle County, Colorado. The financial statements of the District have been prepared in accordance with generally accepted accounting principles (“GAAP”) as applied to governmental units. The Governmental Accounting Standards Board (“GASB”) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies are described below. A.Reporting Entity 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 governmental type. 1.Government-wide Financial Statements In the government-wide Statement of Net Position, all balances 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 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. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D2 I.Summary of Significant Accounting Policies (continued) B.Government-wide and Fund Financial Statements (continued) 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 the governmental funds. 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 Governmental activities in the government-wide 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. 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. Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D3 I.Summary of Significant Accounting Policies (continued) C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) 3.Financial Statement Presentation Amounts reported as program revenues include 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 and interest income. D.Financial Statement Accounts 1.Cash and Cash Equivalents Cash and 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 amortized cost. The change in fair value or amortized cost of investments is recognized as an increase or decrease to investment assets and investment income. The District’s investment policy is detailed in note III.A. 2.Receivables Receivables are reported net of an allowance for uncollectible accounts.There was no allowance as of December 31, 2024. 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 GAAP, the assessed but uncollected property taxes have been recorded as a receivable and as deferred inflow of resources. 4.Capital Assets Capital assets, which include land, buildings, equipment, vehicles, and infrastructure assets, are reported in the governmental activity columns in the government-wide 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 five years. Such assets are recorded at historical cost. Donated capital assets are recorded at acquisition value. Infrastructure, buildings, and equipment are depreciated using the straight-line method over the following estimated useful lives: Assets Years Parks and recreation 15-20 Roads and easements 15 Water 20 Sewer 20 Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D4 I.Summary of Significant Accounting Policies (continued) D.Financial Statement Accounts (continued) 5.Long-term Debt In the government-wide financial statements, long-term debt is reported as liabilities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, bond premiums and discounts are recognized during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds, are reported as debt service expenditures in the fund financial statements. 6.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 assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District does not have any items to report in this category. 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 assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.Unavailable property tax revenue is deferred and recognized as an inflow of resources in the period that the amounts become available and earned. 7.Fund Balance The District classifies governmental fund balances as follows: Nonspendable -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. Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D5 I.Summary of Significant Accounting Policies (continued) D.Financial Statement Accounts (continued) 7.Fund Balance (continued) 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 targeted reserve positions and management reports the targeted amounts annually to Board of Directors. E.Use of Estimates The preparation of financial statements in conformity with GAAP 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. 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”). As required by Colorado Statutes, the District followed this timetable in approving and enacting a budget for the ensuing year. (1)For the 2024 budget, prior to August 25, 2023, the County Assessor sent to the District a certified assessed valuation of all taxable property within the District's boundaries. The County Assessor may change the assessed valuation on or before December 10, 2023, only once by a single notification to the District. Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D6 II. Stewardship, Compliance, and Accountability A.Budgetary Information (2)On or before October 15, 2023, the Budget Director submitted to the District's Board of Directors a recommended budget that detailed the necessary property taxes needed along with other available revenues to meet the District's operating requirements. (3)Prior to December 15, 2023, 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. (4)After a required publication of “Notice of Proposed Budget” and a public hearing, the District adopted the proposed budget and an appropriating resolution, which legally appropriated expenditures for the upcoming year. (5)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) supplemental appropriations to the extent of revenues in excess of the estimate in the budget; (c) emergency appropriations; and (d) reduction of appropriations for which originally estimated revenues are insufficient. Changes enacted by the Colorado Legislature delayed the Certification of County tax rolls. In November 2023, a short term property tax solution was passed during a special session, allowing Counties an extension to December 29, 2023 to provide final assessed valuations. The deadlines for the mill levy certifications was extended from December 15, 2023 to January 5, 2024. The level of control in the budget at which expenditures exceed appropriations is at the fund level. All appropriations lapse at year end. Taxes levied in one year are collected in the succeeding year. Thus, taxes certified in 2023 were collected in 2024 and taxes certified in 2024 will be collected in 2025. 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. 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. Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D7 II.Stewardship, Compliance, and Accountability (continued) B.TABOR Amendment (continued) 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. The reserve is calculated at 3% of fiscal year spending (excluding bonded debt service). Fiscal year spending excludes bonded debt service and enterprise spending. The District has reserved $1,670, which is the approximate required reserve, at December 31, 2024. On November 4, 2003 the District voters approved an election question allowing the District to retain and spend revenues it received in 2003 and in all subsequent years, without regard to any spending, revenues-raising, or other limitations contained within TABOR. The District's management believes it is in compliance with the financial provisions of TABOR. C.Authorized But Unissued Debt In November 2003,the District’s voters authorized the issuance of up to $21,000,000 of debt for public improvements. During 2008,the District issued bonds in the amount of $21,000,000 pursuant to this authorization and has $0 in remaining authorized but unissued indebtedness as of December 31, 2024. III.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 $43,510 at year end. Colorado statutes specify investment instruments meeting defined rating and risk criteria in which local governments, and entities such as the District, 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 Bankers’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 Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D8 III.Detailed Notes on all Funds (continued) A.Deposits and Investments (continued) Interest Rate Risk.As a means of limiting its exposure to interest rate risk, the District diversifies its investments by security type and institution, and limits holdings in any one type of investment with any one issuer and type of issuer. The District coordinates its investment maturities to closely match cash flow needs and restricts the maximum investment term to less than five years (less in some cases) from the purchase date. As a result of the limited length of maturities the District has limited its interest rate risk. Credit Risk.District investment policy limits investments to those authorized by State statutes. 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. At year end, the District had the following deposits and investments with the following maturities: Te rm to Ma turity Standa rd & Poors Ca rrying Le ss th an More tha n Ra ti ng Am ounts one year one year Depos its: Chec king and savi ngs Not rat ed 43,510 43,510 - Investments: Inves tment pool AAAm 496,306 496,306 - 539,816 539,816 - Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D9 III.Detailed Notes on all Funds (continued) A.Deposits and Investments (continued) At December 31, 2024, the District had the following recurring measurements: Total CS AFE 496,259 Inve st ments Me asured at Amortized Cost The District had invested $496,259 in CSAFE, an investment vehicle established for local government entities in Colorado to pool surplus funds. CSAFE operates similarly to a money market fund and each share is equal in value to $1.00. A designated custodial bank provides safekeeping and depository services to CSAFE in connection with the direct investment and withdrawal functions of CSAFE. Substantially all securities owned by CSAFE are held by the Federal Reserve Bank in the account maintained for the custodial bank. The custodian’s internal records identify the investments owned by CSAFE. CSAFE carries a Standard & Poor’s AAAm rating. There is no custodial, interest rate or foreign currency risk exposure. CSAFE operates like a 2a7-like external investment pool in the fair value hierarchy established by GASB 72. The underlying investments held by CSAFE, and the District’s investment in CSAFE, are valued at amortized cost which approximates fair value. There are no limitations on withdrawals. The District had invested $47 in UMB Corporate Trust Services for its debt and bond proceeds. The UMB investments consisted of funds held in CSAFE and money market accounts. There is no custodial, interest rate or foreign currency risk exposure. B. Capital Assets An analysis of the changes in capital assets for the year ended December 31, 2024, follows: Be ginning En ding Ba lance Increases De cre ases Ba lance Capi tal assets, not bei ng deprec iated: Infras truc ture to be convey ed 788,377 - - 788,377 Capi tal assets, being deprec iated: Roads /eas ement s 87,637 - - 87,637 Water system 282,157 - - 282,157 Sewer system 420,676 - - 420,676 Park s and rec reat ion 256,335 - - 256,335 To tal capital assets 1,835,182 - - 1,835,182 Les s accumulated deprec iation fo r: Roads /eas ement s (84,543) (3,094) - (87,637) Water system (225,729) (14,108) - (239,837) Sewer system (336,543) (21,034) - (357,577) Park s and rec reat ion (176,689) (16,107) - (192,796) To tal accumulated deprec iation (823,504) (54,343) - (877,847) Ne t Ca pita l Asse ts 1,011,678 (54,343) - 957,335 Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D10 III.Detailed Notes on all Funds (continued) B. Capital Assets Depreciation and amortization expense and capital outlay expenditures are classified by function as follows: Ca pital De pre ci ation Outlay Ex pe nse Public Work s - 54,343 - 54,343 At fiscal year-end December 31, 2024, the District considers the $788,377 balance as infrastructure to be conveyed; these assets consists of underlying water and sewer construction during the initial development of the District. The intent is to convey the infrastructure to another government once development is more substantially complete. The assets are being treated as construction in progress during this time and are not being depreciated. C.Long-term Debt The District had the following long-term debt outstanding during the fiscal year: 1.General Obligation Refunding Bonds, Series 2008 $21,000,000 General Obligation Refunding Bonds, Series 2008, dated June 20, 2008, with interest of 7.75% payable semiannually on June 1 and December 1 of each year.Principal payments are due annually on December 1 of each year, beginning in 2014. The Bonds were issued to pay off the 2006 and 2007 Limited Tax General Obligation Bond Anticipation Notes, to pay off the obligation to the District's Developer for costs incurred during construction, to provide additional funding for future infrastructure, and to cover the issuance costs and funding of required reserves. Pursuant to the Indenture of Trust, the District is required to levy a minimum of 30 mills and a maximum of 50 mills for payment of the bonds, both of which are subject to adjustments for changes in the assessment ratio as set by the Colorado legislature. In the event that the revenues generated from the 30-mill minimum levy are insufficient to pay the upcoming years’ debt service, rather than increasing the mill levy, the District has the option to transfer funds previously designated for capital projects to cover such shortfall, thus allowing the mill levy to stay lower than would otherwise be required. However, beginning in 2012, no funds were available for this purpose. Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D11 III.Detailed Notes on all Funds (continued) C.Long-term Debt (continued) 2.Debt Service Requirements In the event that the revenues generated by the Required Mill Levy, combined with other pledged revenues, and amounts available in the Capital Projects Fund, Bond Fund, Surplus Fund and Debt Service Guaranty Fund, if any, are insufficient to pay the debt service when due, unpaid principal shall remain outstanding and unpaid interest shall compound semiannually on each scheduled interest payment date until December 1, 2037. If any unpaid amounts remain on December 1, 2037, the final maturity date of the Bonds, the District is required to continue to levy the Required Mill Levy until such time as all balances are brought current. Due to the limited nature of the pledged revenue for repayment of the Bonds, so long as the District imposes the Required Mill Levy and applies the pledged revenue as required by the Indenture of Trust, the inability to pay the principal of or interest on the Bonds when due shall not, in and of itself, constitute an event of default. During 2014, the District drew down all of its Bond reserve accounts and became unable to meet its annual debt service obligations. In 2024, $2,482,534 of interest and $590,000 of principal was unable to be paid, bringing the accumulated past due balance for interest to $20,681,823 and past due principal to $3,555,000. Annual debt service requirements to maturity for the general obligation bonds are as follows: Principa l Interest Total 2025 3,555,000 22,309,323 25,864,323 2026 770,000 1,351,988 2,121,988 2027 850,000 1,292,313 2,142,313 2028 980,000 1,226,438 2,206,438 2029 1,075,000 1,150,488 2,225,488 2030 - 2034 7,440,000 4,292,338 11,732,338 2035 - 2037 6,330,000 1,009,050 7,339,050 To tal 21,000,000 32,631,936 53,631,936 The District had the following changes in long-term obligations for the year ended December 31, 2024: Be gi nning En ding Du e Within Ba la nce Ad diti ons Re ducti ons Ba lance One Year Bonds payable: G.O. Bonds , Seri es 2008 21,000,000 - - 21,000,000 3,555,000 To tal bonds pay able:21,000,000 - - 21,000,000 3,555,000 Valagua Metropolitan District Notes to the Financial Statements December 31, 2024 (continued) D12 IV.Other Information A.Risk Management Colorado Special Districts Property and Liability Pool The District is exposed to various risks of loss related to torts, thefts of, damage to, or destruction of assets; errors or omissions; injuries to employees, or acts of God. The District has elected to participate in the Colorado Special District Property and Liability Pool (the Pool), which is sponsored by the Special District Association of Colorado. The Pool provides property and general liability, automobile physical damage and liability, public official’s liability and machinery coverage to its members. Members of the Pool are required to make additional surplus contributions. 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. During the year ended December 31, 2024 the Pool made no distributions to the District. A summary of audited statutory basis financial information for the Pool as of and for the year ended December 31, 2023 (the latest audited information available) is as follows: Asse ts 81,143,798 Liabilit ies 58,670,068 Capital and surplus 22,473,730 Total 81,143,798 Revenues 29,593,851 Underwriting ex pens es 31,416,477 Underwri ting gain (los s)(1,822,626) Ot her In come 1,695,393 Ne t income (l oss)(127,233) B.Related Party –Shades of Green Lawn Maintenance The District contracted with Shades of Green Lawn Maintenance (“Shades of Green”) for landscape maintenance and weed control. The contract began April 1, 2022 and has been extended through October 9, 2027.Shades of Green is currently owned by a board member for the District. For the year ending December 31, 2024, the District paid $5,220 to Shades of Green. The owner of Shades of Green abstains from all board decisions regarding agreements with their company. REQUIRED SUPPLEMENTARY INFORMATION 2023 Final Budget Original Variance & Final Positive Budget Actual (Negative)Actual Revenues: Property taxes 166,672 166,510 (162) 67,985 Specific ownership taxes 5,218 7,824 2,606 3,899 Interest 19,000 24,645 5,645 21,565 Total Revenues 190,890 198,979 8,089 93,449 Expenditures: General government: Office overhead 1,339 1,222 117 1,033 Elections - 307 (307) 1,027 Legal 7,000 4,239 2,761 6,516 Audit and accounting 27,000 26,989 11 26,854 Insurance 3,509 3,635 (126) 3,342 Director's fees 1,000 670 330 875 Treasurer's fees 4,815 4,937 (122) 2,043 Operating 400 1,546 (1,146) 363 Agent fees 3,250 3,250 - 3,250 Contingency 100,000 - 100,000 - Public works: Road, fence, and path maintenance 10,000 5,220 4,780 60,365 Landscaping 200,000 - 200,000 - Weed and pest control 3,500 3,500 - 3,300 Other 1,800 - 1,800 - Total Expenditures 363,613 55,515 308,098 108,968 Net Change in Fund Balance (172,723) 143,464 316,187 (15,519) Fund Balance - Beginning 377,663 393,877 16,214 409,396 Fund Balance - Ending 204,940 537,341 332,401 393,877 Schedule of Revenues, Expenditures and Changes in Fund Balance Valagua Metropolitan District 2024 (With Comparative Actual Amounts For the Year Ended 2023) For the Year Ended December 31, 2024 General Fund Budget and Actual E1 SUPPLEMENTARY INFORMATION 2023 Final Budget Original Variance & Final Positive Budget Actual (Negative)Actual Revenues: Property taxes 580,230 579,641 (589)237,210 Specific ownership taxes 18,858 28,288 9,430 13,603 Interest 32,000 19,112 (12,888) 2,875 Total Revenues 631,088 627,041 (4,047) 253,688 Expenditures: General government: Treasurer fees 17,407 17,848 (441)7,128 Contingency 30,000 -30,000 - Debt service: Interest 585,339 604,823 (19,484)246,121 Total Expenditures 632,746 622,671 10,075 253,249 Net Change in Fund Balance (1,658) 4,370 6,028 439 Fund Balance - Beginning 4,801 2,344 (2,457) 1,905 Fund Balance - Ending 3,143 6,714 3,571 2,344 Schedule of Revenues, Expenditures and Changes in Fund Balance Valagua Metropolitan District 2024 (With Comparative Actual Amounts For the Year Ended 2023) For the Year Ended December 31, 2024 Debt Service Fund Budget and Actual F1 Calendar Prior Year Al l 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 2005 92,780 15.000 1,392 1,392 100.0% 2006 476,220 15.000 7,143 7,143 100.0% 2007 6,947,610 40.000 277,904 275,640 99.2% 2008 22,295,170 40.000 891,807 894,512 100.3% 2009 22,517,030 45.000 1,013,266 469,675*46.4% 2010 15,199,950 45.000 683,998 665,238 97.3% 2011 14,863,100 45.000 668,840 482,780**72.2% 2012 5,613,380 65.000 364,870 565,164**154.9% 2013 5,678,390 65.000 369,096 369,087 100.0% 2014 3,131,800 65.000 203,568 203,566 100.0% 2015 3,111,430 65.000 202,243 202,236 100.0% 2016 3,296,630 65.000 214,281 198,351***92.6% 2017 3,059,270 65.000 198,853 198,376 99.8% 2018 3,741,670 66.356****248,282 247,235 99.6% 2019 3,730,220 66.390 247,649 247,648 100.0% 2020 4,472,370 66.308 296,554 296,526 100.0% 2021 4,461,980 66.311 295,878 276,129 93.3% 2022 4,471,640 66.655 298,057 296,667 99.5% 2023 4,532,370 67.337 305,196 305,195 100.0% 2024 10,699,630 69.229 740,724 746,151 100.7% 2025 10,617,750 69.355 736,394 NOTES: Information received from the County Treasurer does not permit identification of a specific year of levy. **** Beginning in 2018, as required under the terms of the 2008 Bonds, the debt service mill levy of the District was adjusted to offset the effects of changes in the calculation of assessed valuation. December 31, 2024 and Property Taxes Collected History of Assessed Valuation, Mill Levy Valagua Metropolitan District Property taxes collected in any one year include collection of delinquent property taxes levied in prior years. *During 2009, abatements totaling $535,770 were approved by the Eagle County Board of Equalization, which when netted out of collections of $1,013,266 show a substantial decrease in collections. **During 2011, the original developer did not remit property taxes due in the amount of $184,657 because they were in bankruptcy. These taxes were remitted in 2012. ***During 2016, Abatements totaling $15,377 were approved by the Eagle County Board of Equalization, which when netted out of collections of $214,281 show a decrease in collections. F2