Financial Statements

Transcription

1 2010 Financial Statements Colorado Springs Briargate General Improvement District City of Colorado Springs, Colorado For the year ended December 31, 2010

2 TABLE OF CONTENTS Page INDEPENDENT AUDITOR'S REPORT 1 FINANCIAL STATEMENTS STATEMENT OF NET ASSETS STATEMENT OF ACTIVITIES GOVERNMENTAL FUND BALANCE SHEET RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUND TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUND TO THE STATEMENT OF ACTIVITIES NOTES TO FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - DEBT SERVICE FUND 14

3 44 INVERNESS DRIVE EAST ENGLEWOOD, COLORADO HO -I12 BONDI & Co. LLC CERTIFIED PUBLIC ACCOUNTANTS MANAGEMENT CONSULTANTS (303) PHONE (800) TOLL-FREE (303) 799-(,92(, FAX Board of Directors City of Colorado Springs Briargate Colorado Springs, Colorado Independent Auditors' Report We have audited the accompanying financial statements of the governmental activities and the major fund of the City of Colorado Springs Briargate General Improvement District, Colorado Springs, Colorado (District), a component unit of the City of Colorado Springs, Colorado, as of and for the year ended December 31, 2010, which collectively comprise the District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the District's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the District, as of December 31, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. The District has not presented a management's discussion and analysis that accounting principles generally accepted in the United States of America require to supplement, although not to be part of, the basic financial statements.

4 Board of Directors City of Colorado Springs Briargate Page 2 Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The accompanying Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund is presented for purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Debt Service Fund has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. May 28,2011 ~'ti~.l.l<! BONDI & Co. LLC

5 City of Colorado Springs Briargate STATEMENT OF NET ASSETS December 31, 2010 Governmental Activities ASSETS Due from other governments Accounts receivable T axes receivable Bond issuance costs - net Total assets LIABILITIES Accounts payable Accrued interest payable Unearned revenue Noncurrent liabilities: Due in more than one year Totalliabilities $13,580 4, ,202 56, , , ,202 8,800,000 10,016,755 NET ASSETS Unrestricted Total net deficit (9,212,205) ($9,212,205) The accompanying notes are an integral part of this statement. 3

6 City of Colorado Springs Briargate STATEMENT OF ACTIVITIES For the year ended December 31,2010 FunctionIPrograms Expenses Net (expense) revenue and changes in net assets Governmental Activities Governmental activities General government Interest on long-term debt $5,198 $627,371 ($632,569) General revenues: Property taxes Investment earnings 715,736 6,819 Total general revenues and transfers 722,555 Change in net assets 89,986 Net deficit - beginning ofyear (9,302,191) Net deficit - end of year ($9,212,205) The accompanying notes are an integral part of this statement. 4

7 City of Colorado Springs Briargate GOVERNMENTAL FUND BALANCE SHEET December 31, 2010 Debt Service Fund ASSETS Due from other governments Account receivable Taxes receivable Total assets $13,580 4, , ,696 LIABILITIES Accounts payable Deferred revenue - property taxes Totalliabilities , ,088 FUND BALANCE Unreserved Total fund balance 17,608 17,608 Total liabilities and fund balance $747,696 The accompanying notes are an integral part of this statement. 5

8 City of Colorado Springs Briargate RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUND TO THE STATEMENT OF NET ASSETS December 31, 2010 Amounts reported for governmental activities in the statement of net assets are different because: Fund balance - total governmental fund $17,608 Long-term liabilites are not due and payable in the current period and, therefore, are not reported in the funds. The details of this difference are as follows: Bonds payable Deferred charge for issuance costs (to be amortized over life of debt) Accrued interest payable Net deficit - governmental activities (8,800,000) 56,854 (486,667) ($9,212,205) The accompanying notes are an integral part of this statement. 6

9 City of Colorado Springs Briargate GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the year ended December 31, 2010 Debt Service Fund Revenues Property taxes Investment earnings Total revenues $715,736 6, ,555 Expenditures Debt service: Interest Professional fees Total expenditures Net changes in fund balance Fund balance - beginning of year Fund balance - end of year 766,001 5, ,199 (48,644) 66,252 $17,608 The accompanying notes are an integral part of this statement. 7

10 City of Colorado Springs Briargate RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the year ended December 31, 2010 Amounts reported for governmental activities in the statement of activities are different because: Net changes in fund balances - total governmental funds ($48,644) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Also, governmental funds report the effect ofissuance costs when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The details of this differences is as follows: Amorization ofissuance costs included in interest on long-term debt (11,370) Some expenses reported in the statement of activities do not require the the use of current financial resources and therefore are not reported as expenditures in governmental funds. The detail of this difference is as follows: Accrued interest 150,000 Change in net assets - governmental activities $89,986 The accompanying notes are an integral part of this statement. 8

11 City of Colorado Springs Briargate NOTES TO FINANCIAL STATEMENTS December 31,2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows: 1. Reporting entiry The City of Colorado Springs Briargate (the District) is a quasimunicipal political subdivision and body corporate of the State of Colorado established pursuant to Title 31, Article 25, Part 6 of the Colorado Revised Statutes, as amended. The District, governed by a Board of Directors comprised of the members of the City Council of the City of Colorado Springs, Colorado, was established to provide for the construction and installation of street improvements and a water reservoir tank within the District. Under accounting principles generally accepted in the United States ofamerica (US GAAP), the District is considered to be a component unit of the City of Colorado Springs, Colorado. Accordingly, the District's financial data is included in the City's financial statements. The financial statements of the District consist only of the funds of the District. There are no legally separate organizations for which the governing officials of the District are financially accountable or for which the nature and significance of their relationship with the District are such that exclusion of their financial data would cause the District's financial statements to be misleading or incomplete. 2. Government-wide andfundfinancial statements The government-wide financial statements (i.e., the statement ofnet assets and the statement of activities) report information on all of the activities of the District. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Directexpenses are those that are clearly identifiable with a specific function or segment. Indirect expenses have not been allocated. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate fmancial statements are provided for the governmental fund. 3. Measurementfocus, basis ofaccounting andfinancial statementpresentation The government-"\vide financial statements are reported using the economic resources measurement focus and the accruai basis ofaccounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. 9

12 City of Colorado Springs Briargate NOTES TO FINANCIAL STATEMENTS December 31, 2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 3. Measurementfocus, basis ofaccounting andfinancialstatementpresentation (continued) Governmental fund fmancial statements are reported using the currentfinancial resources measurement focus and the modified accraal basis ofaccounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Property taxes associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: Debt servicefund accounts for the servicing of long-term debt. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. 4. Assets, liabilities and net assets or equity Deposits and investments The City of Colorado Springs holds all cash and cash equivalents for the District. The amount held by the City on behalf of the District is included in due from other governments on the government-"\vide and fund financial statements in the amount of $13,580. Property taxes The EI Paso County Assessor certifies property valuations to the District on November 25 of each year. By December 1, the District sets and certifies its mill levy rate with EI Paso County, which then bills and collects the property taxes due. These property taxes attach as an enforceable lien on January 1. The taxes are payable in two installments on February 28 and June 15, or in one installment due April 30. Revenue is recorded in the year for which the property tax was levied. Deferred revenue Deferred revenue represents property taxes levied and recorded as an asset in the current year but attach as an enforceable lien on property in the immediately subsequent year. Long-term obligations In the fund financial statements, long-term debt is recognized as a liability of the governmental funds when due. For other long-term obligations, only that portion financed from expendable available financial resources is reported as a fund liability. The current and non-current portions are recorded in the government-wide financial statements. 10

13 City of Colorado Springs Briargate NOTES TO FINANCIAL STATEMENTS December 31, 2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 4. Assets, liabilities and netassets or equiry (continued} Bond issuance costs are deferred and amortized over the life of the bonds using the straight-line interest method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond issuance costs during the current period. The face amount of debt issued is reported as other fmancing sources. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. NOTE B - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILI1Y Budgetary information Annual budgets are adopted on a basis consistent with US GAAP. All annual appropriations lapse at fiscal year end. A budget is required by state law. The Board of Directors holds public hearings and adopts a budget resolution to legally enact the budget. Any revisions that alter total expenditures must be approved by the Board of Directors. NOTE C - DETAILED NOTES 1. ung-term debt In January 2004, the District issued $8,800,000 limited tax general obligation bonds (Bonds). The bonds carry interest at 7%. Annual maturities range from $1,980,000 to $2,430,000 with the final payment due As of December 31, 2010, the principal amount of $8,800,000 was outstanding. The proceeds from the sale of the 2004 bonds were used to construct and/or acquire street and water improvements. The 2004 bonds are a general obligation of the District and are not an obligation of the City of Colorado Springs. There is no obligation for the City to levy taxes with respect to the bonds. As of December 31,2010, the District has $10,200,000 of authorized but unissued debt. In 2007, the District entered into a loan agreement with one ofits bondholders to provide a loan and delay payment of the bondholders interest subject to provisions in the loan agreement. At this time, no advance has been made under the loan agreement, but the bondholder's interest was deferred in the amount of $287,000 for 2008 and $174,000 for

14 City of Colorado Springs Briargate NOTES TO FINANCIAL STATEMENTS December 31,2010 NOTE C - DETAILED NOTES - Continued 1. Long-term debt (continued) The following schedule reflects the debt service requirements to maturity of the District's limited tax general obligation bonds as of December 31, 2010: Year ending December 31, Principal Interest Total 2011 $ $ 616,000 $ 616, ,980, ,000 2,596, ,120, ,400 2,597, ,270, ,000 2,599, ,430, ,100 2,600,100 $ $ $ The changes in long-term debt for the year ended December 31, 2010, were as follows: Balance January 1, 2010 Additions Reductions Balance December 31, 2010 Amounts due within one year $ 8 800,000 $ $ $ $ NOTE D - OTHER INFORMATION 1. TABOR In November 1992, the voters of Colorado approved Amendment 1, commonly known as the Taxpayer's Bill of Rights (TABOR) which added a new Section 20 to Article X of the Colorado Constitution. TABOR contains tax, spending, revenue and debt limitations that apply to the State ofcolorado and all local governments. The District's financial activity for 2004 provides the basis for calculation of future limitations adjusted for allowable increases tied to inflation and local growth. Subsequent to 2004, revenue in excess of the District's "spending limit" must be refunded unless voters approve the retainage of such excess revenue. TABOR generally requires voter approval for any new tax, tax increases and new debt. TABOR is complex and subject to interpretation. Ultimate interpretation may depend upon litigation and legislative guidance. The District does not believe it is subject to the provisions of TABOR because of the nature ofits operations; however, it believes it has complied with all aspects of the TABOR amendment. 2. SUBSEQUENTEVENTS On February 1, 2011 holders of the District's bonds were sent a letter updating the status of anticipated debt service payments on the bonds. Current projections indicated that the District will be able to continue making all interest payments on the bonds and currently is anticipating making principal payments beginning in 2013 with the bond principal balance to be retired in

15 SUPPLEMENTARY INFORMATION 13

16 City of Colorado Springs Briargate SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - DEBT SERVICE FUND For the year ended December 31, 2010 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) Revenues Property taxes Investment earnings $744,742 3,000 $744,742 3,000 $715,736 6,819 ($29,006) 3,819 Total revenues 747, , ,555 (25,187) Expenditures Debt service Interest Professional fees Total expenditures Net changes in fund balances 796, , ,001 30,499 7,500 7,500 5,198 2, , , ,199 32,801 ($56,258) ($56,258) (48,644) $7,614 Fund balances - beginning of year Fund balances - end of year 66,252 $17,608 See independent auditor's report. 14