Urban Renewal Authority of Dacono

Urban Renewal Authority of Dacono Meeting AGENDA Monday, July 10, 2023 Immediately following the City Council meeting, which starts at 6:00 PM Meeting location: New Annex Building, 512 Cherry Ave - Building C, Dacono, CO 80514 I. Roll Call II. Appointment of Chairperson III. *Approval of the February 1, 2023, Urban Renewal Authority of Dacono Meeting Minutes. IV. General Business A. *Presentation of the 2022 Audit. Presenter: Thuy Dam, Principal State and Local Government, CliftonLarsonAllen LLP V. Authority Member Reports VI. Adjournment *Materials in Packets. Accommodations for the disabled can be made upon request.  Urban Renewal Authority of Dacono Meeting Minutes Wednesday, February 1, 2023 Meeting called to order at 6:01 PM Commissioners Present Danny Long Adam Morehead Kevin Plain Jim Turini Kathryn Wittman Doris Crespo, Vice-Chairperson Rick Gerk Lori Saine Bill Haid, via Zoom Jackie Thomas, via Zoom Commissioners Absent Chico Garcia, excused Staff Present AJ Euckert, City Manager Jennifer Krieger, Secretary/Executive Director Thuy Dam, Clifton Larson Allen LLP Valerie Taylor, Clerk to the Authority Carolynne White, URAD Attorney I. Approval of the December 7, 2022 Urban Renewal Authority of Dacono Meeting Minutes. Commissioner Wittman moved to approve the December 7, 2022 Urban Renewal Authority of Dacono Meeting Minutes as presented. The vote was ayes: Commissioners Haid, Long, Morehead, Plain, Thomas, Turini, Wittman and Crespo. Abstain: Commissioners Saine and Gerk. Vice-Chairperson Crespo declared the motion carried. II. General Business A. Consideration and Approval of Resolution URAD 23-01, Accepting the Appointment of Commissioners to the Urban Renewal Authority of Dacono. Executive Director Jennifer Krieger presented her report. Commissioner Plain moved to approve URAD 23-01, accepting the Appointment of Commissioners to the Urban Renewal Authority of Dacono. The vote was ayes: Commissioners Gerk, Long, Morehead, Plain, Thomas, Turini, Wittman, Haid, and Crespo. Commissioner Saine recused herself. Vice- Chairperson Crespo declared the motion carried. B. Consideration and Approval of Resolution URAD 23-02, Approving an Engagement Letter by and between the Urban Renewal Authority of Dacono and Wipfli, LLP., for Audit Services. Thuy Dam, Clifton Larson Allen, LLP presented her report. Commissioner Plain moved to approve URAD 23-02, Approving an Engagement Letter by and between the Urban Renewal Authority of Dacono and Wipfli, LLP., for Audit Services. The vote was Ayes: Commissioners: Haid, Gerk, Long, Morehead, Plain, Thomas, Turini, Wittman, and Crespo. Abstain: Commissioner Saine. Vice-Chairperson Crespo declared the motion carried. C. Consideration and Approval of Resolution URAD 23-03, Amending the Annual Budget and Appropriating Expenditures for the Urban Renewal Authority of Dacono for Fiscal Year 2022. Page 1 of 2  Thuy Dam, Clifton Larson Allen, LLP presented her report. Commissioner Plain moved to approve URAD 23-03, Amending the Annual Budget and Appropriating Expenditures for the Urban Renewal Authority of Dacono for Fiscal Year 2022. The vote was unanimous with Vice-Chairperson Crespo declaring the motion carried. D. Discussion of Sanitary Sewer Lift Station. Executive Director Jennifer Krieger presented her report. No formal action taken. E. Urban Renewal 101 Attorney Carolynne White gave her presentation. Commissioner Saine left the meeting at 6:40 PM. III. Commissioner Reports Commissioner Wittman welcomed Commissioner Gerk to the Authority. IV. Adjournment With no further business to be discussed, the meeting was adjourned at 7:06 PM Approved this 5th day of July, 2023. _______________________________ Jackie Thomas, Chairperson Attest: ______________________________________ Jennifer Krieger, Secretary/Executive Director Page 2 of 2 Meeting Date: July 10, 2023 Presenter: Thuy Dam, Principal State and Local Government, CliftonLarsonAllen LLP Jennifer Krieger, Executive Director Background: Annually, the Urban Renewal Authority's financial statements are audited by a third-party firm. The audit reviews the financial position of the governmental activities and each major fund as of December 31, 2022. Wipfli LLP completed the 2022 audit. Thuy Dam will present the audit findings and answer any questions. The draft audit is published on the City website. The URAD must acknowledge receipt of the audit by July 31, 2023.  URBAN RENEWAL AUTHORITY OF DACONO WELD COUNTY, COLORADO FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2022 DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2022 INDEPENDENT AUDITOR’S REPORT I MANAGEMENT’S DISCUSSION AND ANALYSIS III BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS STATEMENT OF NET POSITION 1 STATEMENT OF ACTIVITIES 2 FUND FINANCIAL STATEMENTS BALANCE SHEET – GOVERNMENTAL FUNDS 3 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE NET POSITION OF GOVERNMENTAL ACTIVITIES 4 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 5 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 6 GENERAL FUND – STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL 7 NOTES TO BASIC FINANCIAL STATEMENTS 8 SUPPLEMENTARY INFORMATION DEBT SERVICE FUND – SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL 23 CAPITAL PROJECTS FUND PLAN AREA I – SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL 24 CAPITAL PROJECTS FUND PLAN AREA II – SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL 25 SUMMARY OF INCREMENTAL ASSESSED VALUATION, MILL LEVY, AND INCREMENTAL PROPERTY TAXES COLLECTED 26 DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  INSERT INDEPENDENT AUDITOR’S REPORT (I) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2022 As management of the Urban Renewal Authority of Dacono (the Authority), we offer readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended December 31, 2022. Financial Highlights  Liabilities and deferred inflows of resources exceed assets by $7,120,952 at the close of the fiscal year. This is primarily due to the Authority being responsible for the repayment of debt issued for public improvements which were conveyed to other governmental entities and which costs were removed from the Authority’s financial records.  Cash and investments at the close of the fiscal year were $3,512,469 including a restricted amount of $1,919,302, from bond proceeds to be used for capital projects.  As of the close of the current fiscal year, the Authority governmental funds reported combined ending fund balances of $3,452,350. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements. The Authority’s basic financial statements are comprised of the three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic 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 Authority’s finances, in a manner similar to a private- section business. The statement of net position represents information on all of the Authority’s assets and liabilities, with the difference between the two reported as 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. 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 Authority, 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 Authority are governmental funds. (III) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2022 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. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Authority maintains three major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for each of the major funds – General Fund, Debt Service Fund, and Capital Projects Fund. The Authority adopts an annual budget for its general fund. A budgetary comparison statement has been provided for this fund in the basic financial statements to demonstrate compliance with this budget. Notes to financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Supplementary information. The report includes individual fund schedules. Budgetary comparison schedules have been provided in this section for the capital projects fund to demonstrate compliance with the budget. (IV) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2022 Government-Wide Financial Analysis Statement of Net Position December 31, 2022 2021 ASSETS Current Assets $ 32,002,898 $ 16,246,463 Capital Assets 347,281 325,785 Total Assets 32,350,179 16,572,248 LIABILITIES Current Liabilities 116,702 1,256,824 Long-Term Liabilities 10,864,000 16,043,000 Total Liabilities 10,980,702 17,299,824 DEFERRED INFLOWS OF RESOURCES Incremental Property Tax Revenue 28,490,429 13,522,899 Total Deferred Inflows of Resources 28,490,429 13,522,899 NET POSITION Net Investment in Capital Assets - (13,925,744) Restricted For: Capital Projects 74,703 96,199 Unrestricted (7,195,655) (420,930) Total Net Position $ (7,120,952) $ (14,250,475) As noted earlier, net position may serve as a useful indicator for the Authority’s financial position. In the Authority’s case, 2022 ended with total assets valued at $32,350,179, with outstanding liabilities and deferred inflows of resources of $39,471,131. The Authority’s assets consist primarily of cash and investments, taxes receivable and capital assets. The Authority’s liabilities consist of current payables and bonds payable. (V) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2022 Statement of Activities December 31, 2022 2021 REVENUES Incremental Property Taxes $ 13,508,780 $ 810,560 Royalties 55,747 44,135 Transfer from City - 3,303 Net Investment Income 109,790 695 Other Revenue 25 - Total Revenues 13,674,342 858,693 EXPENSES General Government 464,979 201,348 Interest and Related Costs on Long-Term Debt 6,079,840 1,017,163 Dedication of Capital Assets to other Governments - 13,500,000 Total Expenses 6,544,819 14,718,511 CHANGE IN NET POSITION 7,129,523 (13,859,818) Net Position - Beginning of Year (14,250,475) (390,657) NET POSITION - END OF YEAR $ (7,120,952) $ (14,250,475) The Authority’s net position increased $7,129,523 from prior year, mainly due to the reduction of long- term debt resulting from the bond principal payment made during the year. General revenues consist primarily of incremental property taxes, which was $13,508,780. Financial Analysis of the Governmental Funds As noted earlier, the Authority uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the Authority’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources Such information is useful in assessing the Authority’s financing requirements. In particular, unassigned fund balances may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Authority’s governmental funds reported combined ending fund balances of $3,452,350. Of this balance, $1,895,676 is restricted for capital projects, $23,626 is restricted for debt service, $1,113,115 is assigned to subsequent year’s expenditures, and $419,933 constitutes the unassigned fund balance, which is available for spending at the government’s discretion within the parameters established for the general fund. (VI) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2022 Long-Term Debt At the end of the current fiscal year, the Authority had total outstanding long-term obligations of $10,864,000. The Authority’s Series 2020 Tax Increment Revenue Bonds mature on December 1, 2039 and pay interest at the rate of 6.250% each December 1 from and to the extent of available pledged revenue. The bonds are structured as cash flow bonds meaning that there are no scheduled payments of principal or interest prior to the final maturity date. Additional information on the Authority’s long-term debt can be found in Note 5. Requests for Information This financial report is designed to provide a general overview of the Urban Renewal Authority of Dacono finances for all those with an interest in the Authority’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Urban Renewal Authority of Dacono 512 Cherry Street Dacono, Colorado 80514 (VII) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  BASIC FINANCIAL STATEMENTS DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO STATEMENT OF NET POSITION DECEMBER 31, 2022 Governmental Activities ASSETS Cash and Investments $ 1,593,167 Cash and Investments - Restricted 1,919,302 Incremental Property Taxes Receivable 28,490,429 Capital Assets, Not Being Depreciated 347,281 Total Assets 32,350,179 LIABILITIES Accounts Payable 9,285 Due to Other Governments 50,834 Accrued Interest Payable 56,583 Noncurrent Liabilities: Due in More Than One Year 10,864,000 Total Liabilities 10,980,702 DEFERRED INFLOWS OF RESOURCES Incremental Property Tax Revenue 28,490,429 Total Deferred Inflows of Resources 28,490,429 NET POSITION Restricted For: Capital Projects 74,703 Unrestricted (7,195,655) Total Net Position $ (7,120,952) See accompanying Notes to Basic Financial Statements. (1) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2022 Net Revenues (Expenses) and Change in Program Revenues Net Position Charges Operating Capital for Grants and Grants and Governmental Expenses Services Contributions Contributions Activities FUNCTIONS/PROGRAMS Primary Government: Governmental Activities: General Government $ 464,979 $ - $ 55,747 $ - $ (409,232) Interest and Related Costs on Long-Term Debt 6,079,840 - - - (6,079,840) Total Governmental Activities $ 6,544,819 $ - $ 55,747 $ - (6,489,072) GENERAL REVENUES Incremental Property Taxes 13,508,780 Net Investment Income 109,790 Other Revenue 25 Total General Revenues 13,618,595 CHANGE IN NET POSITION 7,129,523 Net Position - Beginning of Year (14,250,475) NET POSITION - END OF YEAR $ (7,120,952) See accompanying Notes to Basic Financial Statements. (2) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2022 Capital Capital Total Debt Projects - Projects - Governmental General Service Plan Area I Plan Area II Funds ASSETS Cash and Investments $ 1,593,167 $ - $ - $ - $ 1,593,167 Cash and Investments - Restricted - 23,626 74,703 1,820,973 1,919,302 Incremental Property Taxes Receivable 1,018,876 27,471,553 - - 28,490,429 Total Assets $ 2,612,043 $ 27,495,179 $ 74,703 $ 1,820,973 $ 32,002,898 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES LIABILITIES Accounts Payable $ 9,285 $ - $ - $ - $ 9,285 Due to Other Governments 50,834 - - - 50,834 Total Liabilities 60,119 - - - 60,119 DEFERRED INFLOWS OF RESOURCES Incremental Property Tax Revenue 1,018,876 27,471,553 - - 28,490,429 Total Deferred Inflows of Resources 1,018,876 27,471,553 - - 28,490,429 FUND BALANCES Restricted for: Debt Service - 23,626 - - 23,626 Capital Projects - - 74,703 1,820,973 1,895,676 Assigned to: Subsequent Year's Expenditures 1,113,115 - - - 1,113,115 Unassigned: General Government 419,933 - - - 419,933 Total Fund Balances 1,533,048 23,626 74,703 1,820,973 3,452,350 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 2,612,043 $ 27,495,179 $ 74,703 $ 1,820,973 $ 32,002,898 See accompanying Notes to Basic Financial Statements. (3) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE NET POSITION OF GOVERNMENTAL ACTIVITIES DECEMBER 31, 2022 Fund Balances - Total Governmental Funds $ 3,452,350 Amounts reported for governmental activities in the statement of net position are different because: Capital assets are reported as assets on the statement of net position but are recorded as expenditures in the funds. Capital Assets, Not Being Depreciated 347,281 Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. Bonds Payable (10,864,000) Accrued Interest Payable (56,583) Net Position of Governmental Activities $ (7,120,952) See accompanying Notes to Basic Financial Statements. (4) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2022 Capital Capital Total Debt Projects - Projects - Governmental General Service Plan Area I Plan Area II Funds REVENUES Incremental Property Taxes $ 918,356 $ 12,590,424 $ - $ - $ 13,508,780 Royalties 55,747 - - - 55,747 Other Revenue 25 - - - 25 Net Investment Income 1,072 79,216 - 29,502 109,790 Total Revenues 975,200 12,669,640 - 29,502 13,674,342 EXPENDITURES Current: Accounting 31,373 - - - 31,373 Audit 5,850 - - - 5,850 County Treasurer's Fees 13,778 188,856 - - 202,634 Legal 14,834 - - - 14,834 Professional Services 39,503 - - - 39,503 Staffing 170,785 - - - 170,785 Debt Service: Trustee Fees - 3,000 - - 3,000 Property Tax Increment Payment: AIMS Junior College - 93,745 - - 93,745 Northern Colorado Water - 100,128 - - 100,128 School Dist RE1J - 2,871,466 - - 2,871,466 School Dist RE8 - 112,918 - - 112,918 St. Vrain Sanitation - 46,887 - - 46,887 Weld County - 812,377 - - 812,377 Mountain View Fire - 1,000,565 - - 1,000,565 Bond Interest - 2,171,804 - - 2,171,804 Bond Principal - 5,179,000 - - 5,179,000 Capital Outlay - - 21,496 - 21,496 Total Expenditures 276,123 12,580,746 21,496 - 12,878,365 OTHER FINANCING SOURCES (USES) Transfers from Other Funds 76,295 - - - 76,295 Transfers to Other Funds - (76,295) - - (76,295) Total Other Financing Sources (Uses) 76,295 (76,295) - - - NET CHANGE IN FUND BALANCES 775,372 12,599 (21,496) 29,502 795,977 Fund Balances - Beginning of Year 757,676 11,027 96,199 1,791,471 2,656,373 FUND BALANCES - END OF YEAR $ 1,533,048 $ 23,626 $ 74,703 $ 1,820,973 $ 3,452,350 See accompanying Notes to Basic Financial Statements. (5) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2022 Net Change in Fund Balances - Governmental Funds $ 795,977 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. In the statement of activities, capital outlay is not reported as an expenditure. However, the statement of activities will report as depreciation expense the allocation of the cost of any depreciable asset over the estimated useful life of the asset. Capital Outlay 21,496 Long-term debt (e.g., issuance of bonds, loans, and the receipt of Developer advances) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Bond Series 2020 Principal Payment 5,179,000 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Accrued Interest on Bonds Payable - Change in Liability 1,133,050 Change in Net Position of Governmental Activities $ 7,129,523 See accompanying Notes to Basic Financial Statements. (6) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2022 Variance with Original and Final Budget Final Actual Positive Budget Amounts (Negative) REVENUES Incremental Property Taxes $ 932,739 $ 918,356 $ (14,383) Royalties 35,000 55,747 20,747 Net Investment Income - 1,072 1,072 Other Revenue - 25 25 Total Revenues 967,739 975,200 7,461 EXPENDITURES Accounting 50,000 31,373 18,627 Audit 7,000 5,850 1,150 County Treasurer's Fees 13,991 13,778 213 Legal 60,000 14,834 45,166 Staffing 185,000 170,785 14,215 Professional Services 100,000 39,503 60,497 Contingency 9,009 - 9,009 Total Expenditures 425,000 276,123 148,877 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 542,739 699,077 156,338 OTHER FINANCING SOURCES (USES) Transfers to Other Fund - Plan Area I (1,042,530) - 1,042,530 Transfers to Other Fund - Plan Area I (Mountain View Fire) (111,271) - 111,271 Transfers from Other Funds 76,295 76,295 - Total Other Financing Sources (Uses) (1,077,506) 76,295 1,153,801 NET CHANGE IN FUND BALANCE (534,767) 775,372 1,310,139 Fund Balance - Beginning of Year 686,850 757,676 70,826 FUND BALANCE - END OF YEAR $ 152,083 $ 1,533,048 $ 1,380,965 See accompanying Notes to Basic Financial Statements. (7) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 1 DEFINITION OF REPORTING ENTITY The Economic Development Authority of Dacono (the Authority) was formed by resolution passed March 23, 2015, by the City Council of the City of Dacono, Colorado (the City) pursuant to the Colorado Urban Renewal Law, Colorado Revised Statutes. On June 8, 2020, a resolution was passed to change the name of the organization to the Urban Renewal Authority of Dacono (Authority). The purpose of the Authority is to acquire and develop certain blighted areas in the City to maintain the public welfare. The Authority currently has two outstanding project plans; they are identified as follows: 1) Dacono I Urban Renewal Plan – The Plan Area was approved in 2015 which includes 352 nonresidential parcels comprising of approximately 4,480 total acres, including rights-of-ways. The purpose of this Plan is to reduce, eliminate and prevent the spread of blight and to stimulate and catalyze growth and investment within the Area boundaries. 2) Dacono II Urban Renewal Plan – The Plan Area was approved in November 2019 for 19 nonresidential parcels comprising approximately 1,278 acres, as well as rights-of- ways, located between State Highway 52 on the north and County Road 6 on the south. The purpose of this Plan is to reduce and remove blighting conditions adversely impacting properties and businesses in the Area. In addition, it is the Authority’s intention to finance, install, construct, reconstruct and cooperate with others to complete capital improvements to infrastructure and utilities in the Area, in an effort to further local and regional economic growth, and facilitate the development of the community. The Authority follows the Governmental Accounting Standards Board (GASB) accounting pronouncements which provide guidance for determining which governmental activities, organizations and functions should be included within the financial reporting entity. GASB pronouncements set forth the financial accountability of a governmental organization’s elected governing body as the basic criterion for including a possible component governmental organization in a primary government’s legal entity. Financial accountability includes, but is not limited to, appointment of a voting majority of the organization’s governing body, ability to impose its will on the organization, a potential for the organization to provide specific financial benefits or burdens and fiscal dependency. The Authority has no employees, and all administrative functions are contracted. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Authority is considered a component unit of the City since the Authority’s tax increment financing indicates financial accountability with the City, due to the benefits redevelopment will provide the City. The Mayor appoints the Authority board members, and the City Council reviews the Urban Renewal Plans and any changes thereto. Legal counsel is of the opinion that under state statutes, the City is not liable with respect to the bonds issued by the Authority. (8) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The more significant accounting policies of the Authority are described as follows: Government-Wide and Fund Financial Statements The government-wide financial statements include the statement of net position and the statement of activities. These financial statements include all of the activities of the Authority. The effect of interfund activity has been removed from these statements. Governmental activities are normally supported by incremental property taxes and intergovernmental revenues. The statement of net position reports all financial and capital resources of the Authority. The difference between the assets, deferred outflow of resources, liabilities, and deferred inflow of resources of the Authority is reported as net position. The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for the governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Authority considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The major sources of revenue susceptible to accrual are incremental property taxes. All other revenue items are considered to be measurable and available only when cash is received by the Authority. Expenditures, other than interest on long-term obligations, are recorded when the liability is incurred or the long-term obligation due. (9) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The Authority reports the following major governmental funds: The General Fund is the Authority’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term debt of the governmental funds. The Capital Projects Fund is used to account for financial resources to be used for the acquisition and construction of major capital facilities. As a general rule, the effect of interfund activity has been eliminated from the government- wide financial statements. Exceptions to this general rule are charges between the Authority’s administrative function and various other functions of the Authority. Elimination of these charges would distort the direct costs and program revenues reported for the various functions covered. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenue. Likewise, general revenues include all incremental taxes received by the Authority. Budgets In accordance with the State Budget Law, the Authority’s Board of Commissioners holds public hearings in the fall each year to approve the budget and appropriate the funds for the ensuing year. The appropriation is at the total fund expenditures and other financing uses level and lapses at year-end. The Authority’s Board of Commissioners can modify the budget by line item within the total appropriation without notification. The appropriation can only be modified upon completion of notification and publication requirements. The budget includes each fund on its basis of accounting unless otherwise indicated. The Authority has amended its annual budget for the year ended December 31, 2022. Pooled Cash and Investments The Authority follows the practice of pooling cash and investments of all funds to maximize investment earnings. Except when required by trust or other agreements, all cash is deposited to and disbursed from a single bank account. Cash in excess of immediate operating requirements is pooled for deposit and investment flexibility. Investment earnings are allocated periodically to the participating funds based upon each fund’s average equity balance in the total cash and investments. (10) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Incremental Property Taxes The Authority receives incremental property tax revenue for each of the active Urban Renewal areas. Incremental property tax revenues are the property tax revenues in excess of an amount equal to the ad valorem property taxes produced by the levy at the rates fixed for such year by or for the governing bodies of the various taxing jurisdictions within or overlapping the Urban Renewal area upon a valuation for assessment equal to the property tax base amount. The property tax base amount is certified by the County Assessor as the valuation for assessment of all taxable property within the Urban Renewal area last certified by the County Assessor prior to the adoption of the Urban Renewal plan. The base amount may be proportionately adjusted for general reassessments in accordance with Colorado law. Property taxes are levied by various taxing entities in each of the project areas by certification to the County Commissioners. The levy is based on assessed valuations determined by the County Assessor generally as of January 1 of each year. The levy is normally set by December 15 by certification to the County Commissioners to put the tax lien on the individual properties as of January 1 of the following year. The County Treasurer collects the determined taxes during the ensuing calendar year. Taxes are payable by April or if in equal installments, at the taxpayer’s election, in February and June. Delinquent taxpayers are notified in August and generally sales of the tax liens on delinquent properties are held in November or December. The County Treasurer remits the incremental taxes collected monthly to the Authority. Incremental property taxes, net of estimated uncollectible taxes, are recorded initially as deferred inflows of resources in the year they are levied and measurable. The incremental property tax revenues are recorded as revenue in the year they are available or collected. Capital Assets Capital assets, which include property, equipment and infrastructure assets (e.g. roads, sidewalks and similar items), are reported in the applicable governmental activities column in the government-wide financial statements. Capital assets are defined by the Authority as assets with an initial, individual cost of more than $5,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. Capital assets which are anticipated to be conveyed to other governmental entities are recorded as construction in progress and are not included in the calculation of net investment in capital assets component of the Authority’s net position. It is the policy of the City to accept maintenance responsibility for all major public infrastructure within the City upon the Authority’s completion and conveyance of such improvements provided they meet the City’s specifications. (11) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Inflow/Outflow of Resources In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until that time. In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The Authority has one item that qualifies for reporting in this category. Accordingly, the item, incremental property tax revenue, is deferred and recognized as an inflow of resources in the period that the amount becomes available. Fund Equity Net Position For government-wide presentation purposes when both restricted and unrestricted resources are available for use, it is the Authority’s practice to use restricted resources first, then unrestricted resources as they are needed. Fund Balance Fund balance for governmental funds should be reported in classifications that comprise a hierarchy based on the extent to which the government is bound to honor constraints on the specific purposes for which spending can occur. Governmental funds report up to five classifications of fund balance: nonspendable, restricted, committed, assigned, and unassigned. Because circumstances differ among governments, not every government or every governmental fund will present all of these components. The following classifications describe the relative strength of the spending constraints: Nonspendable Fund Balance – The portion of fund balance that cannot be spent because it is either not in spendable form (such as prepaid amounts or inventory) or legally or contractually required to be maintained intact. Restricted Fund Balance – The portion of fund balance that is constrained to being used for a specific purpose by external parties (such as bondholders), constitutional provisions, or enabling legislation. Committed Fund Balance – The portion of fund balance that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority, the Board of Commissioners. The constraint may be removed or changed only through formal action of the Board of Commissioners. (12) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Equity (Continued) Fund Balance (Continued) Assigned Fund Balance – The portion of fund balance that is constrained by the government’s intent to be used for specific purposes but is neither restricted nor committed. Intent is expressed by the Board of Commissioners to be used for a specific purpose. Constraints imposed on the use of assigned amounts are more easily removed or modified than those imposed on amounts that are classified as committed. Unassigned Fund Balance – The residual portion of fund balance that does not meet any of the criteria described above. If more than one classification of fund balance is available for use when an expenditure is incurred, it is the Authority’s practice to use the most restrictive classification first. NOTE 3 CASH AND INVESTMENTS Cash and investments as of December 31, 2022, are classified in the accompanying financial statements as follows: Statement of Net Position: Cash and Investments $ 1,593,167 Cash and Investments - Restricted 1,919,302 Total Cash and Investments $ 3,512,469 Cash and investments as of December 31, 2022, consist of the following: Deposits with Financial Institutions $ 1,668,029 Investments 1,844,440 Total Cash and Investments $ 3,512,469 Deposits with Financial Institutions The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit cash in eligible public depositories. Eligibility is determined by state regulators. Amounts on deposit in excess of federal insurance levels must be collateralized. The eligible collateral is determined by the PDPA. PDPA allows the institution to create a single collateral pool for all public funds. The pool for all the uninsured public deposits as a group is to be maintained by another institution or held in trust. The market value of the collateral must be at least 102% of the aggregate uninsured deposits. The State Commissioners for banks and financial services are required by statute to monitor the naming of eligible depositories and reporting of the uninsured deposits and assets maintained in the collateral pools. At December 31, 2022, the Authority’s cash deposits had a bank balance of $1,668,502 and a carrying balance of $1,668,029. (13) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 3 CASH AND INVESTMENTS (CONTINUED) Investments The Authority has not adopted a formal investment policy; however, the Authority follows state statutes regarding investments. The Authority generally limits its concentration of investments to those noted with an asterisk (*) below, which are believed to have minimal credit risk, minimal interest rate risk, and no foreign currency risk. Additionally, the Authority is not subject to concentration risk or investment custodial risk disclosure requirements for investments that are in the possession of another party. Colorado revised statutes limit investment maturities to five years or less unless formally approved by the Board of Commissioners. Such actions are generally associated with a debt service reserve or sinking fund requirements. Colorado statutes specify investment instruments meeting defined rating and risk criteria in which local governments may invest which include: . Obligations of the United States, certain U.S. government agency securities, and securities of the World Bank . General obligation and revenue bonds of U.S. local government entities . Certain certificates of participation . Certain securities lending agreements . Bankers’ acceptances of certain banks . Commercial paper . Written repurchase agreements and certain reverse repurchase agreements collateralized by certain authorized securities . Certain money market funds . Guaranteed investment contracts * Local government investment pools As of December 31, 2022, the Authority had the following investments: Investment Maturity Amount Colorado Local Government Liquid Asset Weighted-Average Trust (COLOTRUST) Under 60 Days $ 1,844,440 (14) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 3 CASH AND INVESTMENTS (CONTINUED) COLOTRUST The District invested in the Colorado Local Government Liquid Asset Trust (COLOTRUST) (the Trust), an investment vehicle established for local government entities in Colorado to pool surplus funds. The State Securities Commissioner administers and enforces all State statutes governing the Trust. The Trust currently offers three portfolios – COLOTRUST PRIME, COLOTRUST PLUS+, and COLOTRUST EDGE. COLOTRUST PRIME and COLOTRUST PLUS+, which operate similarly to a money market fund and each share is equal in value to $1.00, offer daily liquidity. Both portfolios may invest in U.S. Treasury securities and repurchase agreements collateralized by U.S. Treasury securities. COLOTRUST PLUS+ may also invest in certain obligations of U.S. government agencies, highest rated commercial paper, and any security allowed under CRS 24‐75‐601. COLOTRUST EDGE, a variable Net Asset Value (NAV) Local Government Investment Pool, offers weekly liquidity and is managed to approximate a $10.00 transactional share price. COLOTRUST EDGE may invest in securities authorized by CRS 24-75-601, including U.S. Treasury securities, repurchase agreements collateralized by U.S. Treasury securities, certain obligations of U.S. government agencies, highest rated commercial paper, and any security allowed under CRS 24-75-601. A designated custodial bank serves as custodian for the Trust’s portfolios pursuant to a custodian agreement. The custodian acts as safekeeping agent for the Trust’s investment portfolios and provides services as the depository in connection with direct investments and withdrawals. The custodian’s internal records segregate investments owned by the Trust. COLOTRUST PRIME and COLOTRUST PLUS+ are rated AAAm by Standard & Poor’s. COLOTRUST EDGE is rated AAAf/S1 by FitchRatings. COLOTRUST records its investments at fair value and the District records its investment in COLOTRUST at net asset value as determined by fair value. There are no unfunded commitments, the redemption frequency is daily or weekly, and there is no redemption notice period. (15) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 4 CAPITAL ASSETS An analysis of the changes in capital assets for the year ended December 31, 2022 follows: Balance at Balance at December 31, December 31, 2021 Increases Decreases 2022 Governmental Activities: Capital Assets, Not Being Depreciated: Construction in Progress $ 325,785 $ 21,496 $ - $ 347,281 Total Capital Assets, Not Being Depreciated 325,785 21,496 - 347,281 Governmental Activities Capital Assets, Net $ 325,785 $ 21,496 $ - $ 347,281 In prior years, a significant portion of the capital assets constructed or acquired by the Authority were conveyed to other governmental entities. The costs of all capital assets transferred to other governmental entities were removed from the Authority’s financial records. NOTE 5 LONG-TERM OBLIGATIONS The following is an analysis of changes in the Authority’s long-term obligations for the year ended December 31, 2022: Balance Balance Due December 31, December 31, Within 2021 Additions Retirements 2022 One Year Bonds Payable: Tax Increment Revenue Bonds Series 2020 $ 16,043,000 $ - $ 5,179,000 $ 10,864,000 $ - Total Bonds Payable 16,043,000 - 5,179,000 10,864,000 - Total Long-Term Obligations $ 16,043,000 $ - $ 5,179,000 $ 10,864,000 $ - The details of the Authority’s long-term obligations are as follows: Tax Increment Revenue Bonds, Series 2020 On October 28, 2020, the Authority issued $16,043,000 in Tax Increment Revenue Bonds, Series 2020. Proceeds from the bonds will be used to: (i) acquire certain water rights known as the Windy Gap Units for use in the Tax Increment Financing (TIF) Area and elsewhere within the City, (ii) finance a portion of the costs of the design, construction, acquisition, and equipping of certain water and sewer infrastructure within the TIF Area and elsewhere within the City, and (iii) pay costs of issuing the bonds. (16) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 5 LONG TERM OBLIGATIONS (CONTINUED) Tax Increment Revenue Bonds, Series 2020 (Continued) The bonds bear interest rate of 6.250% per annum and are payable annually on December 1, beginning on December 1, 2020, from and to the extent of available pledged revenue. The bonds mature on December 1, 2039 and are subject to mandatory redemption on December 1 of each year to the extent of available pledged revenue. The bonds are structured as cash flow bonds meaning that there are no scheduled payments of principal or interest prior to the final maturity date. Pledged revenue consists of pledged property tax revenues and any other legally available moneys, which the Authority determines, in its absolute discretion, to transfer to the Trustee for application as pledged revenue. Pledged property tax revenues are generally defined as that portion of the property tax increment revenues that is derived solely from property classified as oil and gas real property or oil and gas personal property as certified by the County Assessor in the TIF Area, net of any costs of collection of the City and/or County and any tax refunds or abatements authorized by or on behalf of the City and/or County. Property tax increment revenues generated from other taxable property in the TIF Area are not pledged to the payment of the bonds. To the extent principal of any bonds is not paid when due, such principal shall remain outstanding until the termination date of December 2, 2044 and shall continue to bear interest at the rate then borne by the bonds. To the extent interest on any bonds is not paid when due, such interest shall compound annually on each interest payment date at the rate then borne by the bonds. The bonds will be deemed discharged on the termination date. Events of Default occur if the Authority fails or refuses to apply the Pledged Revenues as required by the Indenture, and does not comply with other customary terms and conditions consistent with normal municipal financing as described in the Indenture. Acceleration of the bonds shall not be an available remedy for an Event of Default. The bonds to not have any unused lines of credit, and no assets have been pledged as collateral on the bonds. (17) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 6 AGREEMENTS City Cooperation Agreement On December 16, 2019, the Authority entered into a Cooperation Agreement (Dacono II Urban Renewal Plan) with the City (the City Cooperation Agreement). Pursuant to the City Cooperation Agreement, the parties agreed that, in furtherance of carrying out the purposes of the Plan, the Authority may retain and expend, 100% of the following revenue: (a) incremental property tax revenues derived from the City’s mill levy and transferred by the County Treasurer to the Authority for deposit into the Special Fund (the City Property Tax Increment) and (b) the incremental sales and use tax revenues from the portion of the City’s 3.0% general fund sales and use tax which are in excess of the sales tax base amount which revenues are deposited into the Special Fund by the City (the City Sales Tax Increment and together with the City Property Tax Increment, the City Increment). Under the City Cooperation Agreement, the Authority agreed to use the City Increment to pay eligible costs of the redevelopment of the TIF Area. The City Sales Tax Increment is not pledged to the Bonds and will be used by the Authority for other uses. The City presently imposes a debt service mill levy for the payment of general obligation indebtedness (2.62 of its 25.082 mills imposed in 2019, all of which will contribute to the Pledged Revenues) with a final maturity date of December 1, 2025. County Tax Increment Revenue Sharing Agreement On December 16, 2019, the Authority entered into a Tax Increment Revenue Sharing Agreement with the County (the County Sharing Agreement). The parties agreed that the Authority may retain 50% of the net property tax increment revenues generated from the County’s mill levy during the TIF Period (the County Increment) and the Authority will remit to the County the remaining 50% of the net property tax increment revenues. St. Vrain Valley School District IGA On December 16, 2019, the Authority and St. Vrain Valley School District RE-1J (the St. Vrain School District) entered into an Intergovernmental Agreement for Tax Increment Revenue Sharing By And Between the Economic Development Authority of Dacono and St. Vrain Valley School District (the St. Vrain School District IGA). The parties agreed that the Authority may retain the property tax increment revenues generated from the St. Vrain School District’s mill levy (currently in the amount of 24.995 mills) established by the Colorado Public School Finance Act, Section 22-54-106, C.R.S. (the St. Vrain Total Program Mill Levy Increment) and the Authority will remit to the St. Vrain School District all of the property tax increment revenues derived from the St. Vrain School District’s other mill levies and any future mill levies. The parties agreed that the Authority may retain an annual administrative fee equal to 1% of property tax increment revenues received by the Authority to pay the administrative costs of the Authority. (18) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 6 AGREEMENTS (CONTINUED) Weld RE-8 School District IGA On December 11, 2019, the Authority and Weld RE-8 School District (the Weld School District) entered into an Intergovernmental Agreement for Tax Increment Revenue Sharing By And Between the Economic Development Authority of Dacono and Weld RE-8 School District (the Weld School District IGA). The parties agreed that the Authority may retain the property tax increment revenues generated from the Weld School District’s mill levy (currently in the amount of 12.143 mills) established by the Colorado Public School Finance Act, Section 22-54-106, C.R.S. (the Weld Total Program Mill Levy Increment) and the Authority will remit to the Weld School District all of the property tax increment revenues derived from the Weld School District’s other mill levies and any future mill levies. Carbon Valley Parks and Recreation District IGA On November 19, 2019, the Authority and Carbon Valley Parks and Recreation District (the Parks and Recreation District) entered into an Intergovernmental Agreement for Property Tax Increment Revenue Sharing (Carbon Valley Parks and Recreation District) (Dacono II Urban Renewal Plan) (the Parks and Recreation District IGA). The parties agreed that the Authority may retain and expend in furtherance of the Urban Renewal Project 100% of the property tax increment revenues generated from the Parks and Recreation District’s mill levy (the Parks and Recreation District Increment). The parties agreed that the Authority may retain an annual administrative fee equal to 1% of the incremental property tax revenue received by the Authority to pay the administrative costs of the Authority. Mountain View Fire Rescue District IGA On December 9, 2019, the Authority and Mountain View Fire Rescue District (the Fire District entered into an Intergovernmental Agreement for Property Tax Increment Revenue Sharing (Mountain View Fire Rescue District) (Dacono II Urban Renewal Plan) (the Fire District IGA). The parties agreed that the Authority may retain and expend in furtherance of the Urban Renewal Project 42% of the property tax increment revenues generated from the Fire District’s mill levy (the Fire District Increment), subject to a limit of $16,000,000 (the Fire District Increment Cap). If the Authority collections hit the Fire District Increment Cap prior to expiration of the TIF Period, then the Authority will not be entitled to retain the Fire District Increment and will remit it to the Fire District. The parties agreed that the Authority may retain an annual administrative fee equal to 1% of the property tax increment revenues received by the Authority to pay the administrative costs of the Authority. The Authority agreed to use the Fire District Increment solely for transportation infrastructure projects identified in the Plan. Given the restrictions on the use of the Fire District Increment in the Fire District IGA, the Fire District Increment is not pledged to the payment of the Bonds. High Plains Library District IGA On December 16, 2019, the Authority entered into an Intergovernmental Agreement for Property Tax Increment Revenue Sharing (High Plains Library District) (Dacono II Urban Renewal Plan) with High Plains Library District (the Library District) (the Library District IGA). The parties agreed that the Authority will remit to the Library District all of the property tax increment revenues derived from the Library District’s mill levy allocated to the Special Fund, except that the Authority may retain an annual administrative fee equal to 1% of such property tax increment revenues to pay the administrative costs of the Authority. (19) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 6 AGREEMENTS (CONTINUED) St. Vrain Sanitation District IGA On November 20, 2019, the Authority and St. Vrain Sanitation District (as previously defined, the Sanitation District) entered into an Intergovernmental Agreement for Property Tax Increment Revenue Sharing (St. Vrain Sanitation District) (Dacono II Urban Renewal Plan) (the Sanitation District IGA). The parties agreed that the Authority will remit to the Sanitation District all of the property tax increment revenues derived from the Sanitation District’s mill levy allocated to the Special Fund, except that the Authority may retain an annual administrative fee equal to 1% of property tax increment revenues received by the Authority to pay the administrative costs of the Authority. Aims Junior College District IGA On December 3, 2019, the Authority and Aims Junior College District (the College District) entered into an Intergovernmental Agreement for Property Tax Increment Revenue Sharing (Aims Junior College District) (Dacono II Urban Renewal Plan) (the College District IGA). The parties agreed that the Authority will remit to the College District all of the property tax increment revenues derived from the College District’s mill levy allocated to the Special Fund. Northern Colorado Water Conservancy District On November 25, 2019, the Authority sent a letter to the Northern Colorado Water Conservancy District (the Water District) to notify the Water District that the Authority would remit to the Water District all of the property tax increment revenues derived from the Water District’s mill levy. Accordingly, the Authority did not enter into an intergovernmental agreement with the Water District governing the sharing of incremental property tax revenues. NOTE 7 NET POSITION The Authority has net position consisting of two components – restricted and unrestricted. Restricted net position includes assets that are restricted for use either externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or imposed by law through constitutional provisions or enabling legislation. The Authority had restricted net position as of December 31, 2022, as follows: Restricted Net Position: Capital Projects Fund Reserve $ 74,703 Total Restricted Net Position $ 74,703 The Authority has a deficit in unrestricted net position. The deficit amount is a result of the Authority being responsible for the repayment of bonds issued for public improvements which were conveyed to other governmental entities and which costs were removed from the Authority’s financial records. (20) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 8 RISK MANAGEMENT The Authority is exposed to various risks o loss related to torts; thefts of, damage to, or destruction of assets; errors or omissions; injuries to employees; or acts of God. The Authority maintains commercial insurance for all risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years, nor have any claims been submitted. NOTE 9 TAX, SPENDING, AND DEBT LIMITATIONS Article X, Section 20 of the Colorado Constitution, commonly known as the Taxpayer’s Bill of Rights (TABOR), contains tax, spending, revenue, and debt limitations which apply to the State of Colorado and all local governments. In 2002, the Colorado Court of Appeals determined that TABOR does not apply to urban renewal authorities such as the Authority. The application of TABOR to the City, however, could impact the amount of Sales Tax Revenues received by the Authority, and the application of TABOR to the School District and other local governments which overlap the Urban Renewal Area could impact the amount of Property Tax Revenues received by the Authority. (21) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  SUPPLEMENTARY INFORMATION (22) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2022 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) REVENUES Incremental Property Taxes $ 12,590,160 $ 12,590,424 $ 12,590,424 $ - Net Investment Income - 65,000 79,216 14,216 Total Revenues 12,590,160 12,655,424 12,669,640 14,216 EXPENDITURES Trustee Fees 3,000 3,000 3,000 - County Treasurer's Fees 188,852 188,856 188,856 - Property Tax Increment Payment: AIMS Junior College 93,743 93,745 93,745 - Northern Colorado Water 100,126 100,128 100,128 - School Dist RE1J 2,871,405 2,871,466 2,871,466 - School Dist RE8 112,915 112,918 112,918 - St. Vrain Sanitation 46,886 46,887 46,887 - Weld County 812,360 812,377 812,377 - Mountain View Fire 1,000,544 1,000,565 1,000,565 - Bond Interest 2,171,804 2,171,804 2,171,804 - Bond Principal 5,100,000 5,179,000 5,179,000 - Contingency - 4,959 - 4,959 Total Expenditures 12,501,635 12,585,705 12,580,746 4,959 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 88,525 69,719 88,894 19,175 OTHER FINANCING SOURCES (USES) Transfers to Other Funds (76,295) (76,295) (76,295) - Total Other Financing Sources (Uses) (76,295) (76,295) (76,295) - NET CHANGE IN FUND BALANCE 12,230 (6,576) 12,599 19,175 Fund Balance - Beginning of Year 10,874 11,027 11,027 - FUND BALANCE - END OF YEAR $ 23,104 $ 4,451 $ 23,626 $ 19,175 (23) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO CAPITAL PROJECTS FUND PLAN AREA I SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2022 Variance with Original and Final Budget Final Actual Positive Budget Amounts (Negative) REVENUES Total Revenues $ - $ - $ - EXPENDITURES I-25 Corridor (Market Analysis) 100,000 - 100,000 URAD Property (Site Planning) 65,000 21,496 43,504 County Road 12 (Design/Survey) 100,000 - 100,000 County Road 12 (Construction) 985,000 - 985,000 Total Expenditures 1,250,000 21,496 1,228,504 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (1,250,000) (21,496) 1,228,504 OTHER FINANCING SOURCES (USES) Transfers from Other Funds 1,153,801 - (1,153,801) Total Other Financing Sources (Uses) 1,153,801 - (1,153,801) NET CHANGE IN FUND BALANCE (96,199) (21,496) 74,703 Fund Balance - Beginning of Year 96,199 96,199 - FUND BALANCE - END OF YEAR $ - $ 74,703 $ 74,703 (24) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO CAPITAL PROJECTS FUND PLAN AREA II SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2022 Variance with Original and Final Budget Final Actual Positive Budget Amounts (Negative) REVENUES Net Investment Income $ 500 $ 29,502 $ 29,002 Total Revenues 500 29,502 29,002 EXPENDITURES Capital Outlay 1,791,976 - 1,791,976 Total Expenditures 1,791,976 - 1,791,976 NET CHANGE IN FUND BALANCE (1,791,476) 29,502 1,820,978 Fund Balance - Beginning of Year 1,791,476 1,791,471 (5) FUND BALANCE - END OF YEAR $ - $ 1,820,973 $ 1,820,973 (25) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO SUMMARY OF INCREMENTAL ASSESSED VALUATION, MILL LEVY, AND INCREMENTAL PROPERTY TAXES COLLECTED DECEMBER 31, 2022 Prior Year Assessed Valuation for Current Year Property Tax Levy Total Less: Net Combined Total Incremental Percent Year Ended Assessed Base Increment Mills Property Taxes Collected December 31, Valuation Valuation Valuation Levied Levied Collected to Levied 2019 Plan Area I $ 34,533,460 $ 33,733,772 $ 799,688 138.256 $ 110,562 $ 111,272 100.64% 2020 Plan Area I 35,774,960 32,757,098 3,017,862 136.407 413,985 410,975 99.27% 2021 Plan Area I 35,433,460 29,512,409 5,921,051 136.069 810,424 792,141 97.74% 2022 Plan Area I 35,626,450 28,760,142 6,866,308 135.843 932,739 918,356 98.46% Estimated for the Year Ending December 31, 2023 Plan Area I $ 38,601,030 $ 31,133,465 $ 7,467,565 136.440 $ 1,018,876 NOTE: Incremental property taxes collected in any one year include collection of delinquent property taxes levied in prior years. Information received from the County Treasurer does not permit identification of specific year of levy. (26) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.  URBAN RENEWAL AUTHORITY OF DACONO SUMMARY OF INCREMENTAL ASSESSED VALUATION, MILL LEVY, AND INCREMENTAL PROPERTY TAXES COLLECTED (CONTINUED) DECEMBER 31, 2022 Prior Year Assessed Valuation for Current Year Property Tax Levy Total Less: Net Combined Total Incremental Percent Year Ended Assessed Base Increment Mills Property Taxes Collected December 31, Valuation Valuation Valuation Levied Levied Collected to Levied 2021 Plan Area II $ 1,160,620 $ 1,001,160 $ 159,460 117.942 $ 18,807 $ 18,419 97.94% 2022 Plan Area II 119,959,920 10,273,740 109,686,180 114.783 12,590,160 12,590,424 100.00% Estimated for the Year Ending December 31, 2023 Plan Area II $ 263,443,390 $ 25,748,291 $ 237,695,099 115.575 $ 27,471,553 NOTE: Incremental property taxes collected in any one year include collection of delinquent property taxes levied in prior years. Information received from the County Treasurer does not permit identification of specific year of levy. (27) DRAFT. NO ASSURANCE IS PROVIDED ON THESE FINANCIAL STATEMENTS.