EL RANCHO FLORIDA METROPOLITAN DISTRICT
2013 BUDGET MESSAGE
The Budget is a means for citizens to understand the financial aspect of their community government, El Rancho Florida Metropolitan District. It is a guide, a planning document, of amounts to be spent on services within the district. The Budget was developed by the El Rancho Florida Metropolitan District Board of Directors and their Budget Officer. It reflects the projected spending plan for improvements and services associated with the District’s road system, water system and common areas.
In May 2004, the electors of El Rancho Florida Metropolitan District voted to ‘De-Bruce’, Amendment No.1. This permitted the District to accept, collect, retain and expend the full revenues generated from any and all sources during fiscal year 2004 and each subsequent year, as permitted by law, including and without limitation, the revenues generated from payment of taxes and fees, grants, gifts, loans or any other source of revenue, notwithstanding the provisions of Article X, Section 20 of the Colorado Constitution (“TABOR”), and as a permanent waiver of section 29-1-301, C.R.S. (“5.5% revenue limitation”), or any other law.
Term limitations for the Board of Directors were eliminated in the 1996 election.
In November 2008, the District asked the electors of El Rancho Florida Metropolitan District for voter approval on Ballot Issue 5C. The ballot issue was passed by the electors with an 85.87% Yes and 14.13% No. The issue allows the District to increase their debt up to $2,000,000 and assess a mill levy or increase monthly water fees, for needed improvements to the water system. The Board of Directors is also pursuing grants, low interest loans, and Federal and State assistance where ever the District may qualify for funding.
The General Fund revenues will remain about the same as the 2012 levels. The primary sources of General Fund revenue are projected to be $15,000 from Highway User Tax and $26,880 from User Fees. The General Fund revenues are used to provide contract services, address needed road improvements, allocate employee wages and maintain equipment associated with continuance of the District road system. The Directors believe the purchase of the water truck in 2002 has allowed the District to maintain the roads more frequently and more cost effectively. In 2010 the District did gravel replacement and dust control on several of the roads throughout the Subdivision. This expense was approximately $75,000. It is the intention of the Board to do similar types of road maintenance on an annual, rotational basis. 2013 expenditures are expected to be $20,000 for gravel expense/culvert work, $5,600 for the dust-control application, $5,000 for road grading/ditch maintenance and $3,000 for snow removal. There are no large capital expenses budgeted for in the General Fund.
The District was placed on the State Historical Register in 1996. This made it possible to receive grant money to restore the railroad bridge over the Florida River. The bridge project, upon completion, cost a total of $95,030. ($60,340 of which was received in grant money from the State of Colorado).
The District paved the bridge approaches on both ends to allow for better maintenance of the bridge and the road. The improvement cost came in at $42,551. This amount included maintenance of the bridge decking.
Weed control has been done in association with the Weed Cost Share Program in La Plata County. It is the intention of the District to continue the program in 2012, upon acceptance and approval of the cost Share application. The District has budgeted $3,200 for Weed Control in 2013.
The Board will be been assessing a $10/mo./lot Road Improvement Fee again in 2013. This fee will be adjusted in future years to build a reserve for future road and bridge improvements as needed. An amount of $15,960 is added annually to the Road Improvement Fund.
The Enterprise Fund was established to finance services to the District’s water system and cover all administrative costs of the District. The Revenue sources in 2013 for the Fund will be higher than in 2012. The sources include: $96,000 in User Fees, $71,820 in Capital Improvement Fees, and projected Water Revenues of $5,000. The District will be using a portion of the CWPA Loan that was approved in 2011 for Capital Improvements to the Districts water system, however, that amount is undetermined at the adoption of the 2013 Budget. In 2012, revenue from oil and gas royalties received from BP and RED WILLOW were approximately $2,500. The amount received for 2013 will vary as a function of gas use and price but is budgeted at $3,000.
In October of 2000, the District implemented a special assessment of $15/lot to help meet the annual lease/purchase payment of the Bowman Tract. The land acquisition was implemented in order to protect the District water quality and supply. The lease/purchase agreement on the Bowman Tract was paid off in August of 2005. In 2006 the Board had decided to increase the $15/month charge to $40/month/lot to increase reserve funds for future capital improvements to the water system. This fee was decreased in 2009 to $30/lot and was spent by the Board of Directors for the addition of a new 158,000 gallon tank. In addition to the reserve funds and grant money [$110,407] from DOLA (December or early January 2010), the improvements were fully funded without the need to impose a mill levy for 2009 or 2010. The District was anticipating costs for the new tank to run approximately $ 414,000. However, the actual costs came in at $261,315. The Board has also spent approximately $33,790 on upgrades to the system’s control panel and electrical components. An additional expense was estimated at $130,000 for a leak detection survey, a system-wide water study, and a meter upgrade program [initial replacement of ¼ of the meters]. So far the leak detection survey came in at just under $3,000, that is, $1000 under budget. The system-wide water study (PER) was budgeted at $94,000 in 2010. So far, the District has spent roughly $65,000 of the budgeted amount. Depending on funding sources, main water line upgrades, pump house improvements, looping of the water lines, meter upgrades, and miscellaneous improvements will be completed on a priority basis over the next 2-5 years. The District has budgeted, and anticipates spending before December 31st, roughly $20,000 on line upgrades in 2011. An unexpected expense for 2010 was an Environmental Assessment at a cost of $24,000. The assessment was a requirement for application to the USDA and the Colorado Water and Power Authority for improvement funds. The assessment has been completed and is included with the PER with applications for low interest loans. It is anticipated that the total cost for upgrades will be approximately $1.8 million. The monthly reserve fee will be adjusted annually to build a reserve for future repairs/improvements. For 2013 the Capital Assessment will decrease to $45/mo./lot.
The District levied a property tax to the lot owners in 1986 for the original water system [$160,000]. The bonds were paid in 2001. With the passing of the Ballot Issue 5C in November of 2008, levying a property tax will be a means for future funding of improvements beginning in 2012. For repayment on the debt in 2013, an amount of $93,700.45 is budgeted. To cover the cost of the debt payment in 2013, a tax will be levied based on a 29.000 mill levy. An expense of $584,000 in improvements occurred in 2012 and was paid for with funds received from the CWPA loan. These funds covered the cost of engineering to design a new pump house, construction of the new pump house, implement water source security measures and raise the well head for the District’s water source.
The Board of Directors implemented a Water Study in 1992 of the current system to determine the water supply and capital improvements for future demands on the water system. That study was updated in 2010 to include looping of the system lines, upgrades to controls for monitoring storage tank levels, main line upgrades, pump house improvements, meter upgrade program, and installation of isolation valves. The District has drilled an auxiliary well as a back up source for our water supply. In 2006, the Board spent $65,000 to drill a 2 inch well and to upgrade to a 10 inch water line. The larger line addresses the need to increase chlorine retention time before delivery to the first household. For 2012, the Board has budgeted expenditures of $8500 to repair main lines. An additional $4,500 was budgeted for repair and maintenance to the main pump house and a backup pump. Due to the addition of the new well, the District will incur increased maintenance costs for testing, pumping, and insurance.
The budgeted amount for testing in 2013 is $2,500. This is dramatically lower than the 2012 amount of $16,000. Due to the ‘re-classification’ of the District’s water system by the State of Colorado, it was unknown just what the testing costs would be for 2012. Testing costs in 2012 came in at $3,600. The District’s water system was previously classified as a ‘ground water system’, but after review by the State Engineers it now holds a classification of ‘ground water under the direct influence of surface water’. With this new classification the District has incurred additional expense for treatment beyond chlorination in 2012 in the amount of $68,000 in order to meet the criteria defined by the State. The District is implementing ‘interim measures’ approved by the State until the completion of the new pump house by December 31, 2012.
In an effort to have transparency for the tap holders and anyone requiring information on the District, the Board has set up a website where all information on the District’s Budget, rates, maps, minutes, agenda of upcoming meetings, notices, etc. can be obtained. The District is linked with the Department of Local Affairs website to enable transparency of the District’s operations. The District’s web site is: elranchoflorida.org
CONSERVATION TRUST FUND:
Funds for restocking the pond, mowing, and improvements to common areas are the expenses budgeted in the Conservation Trust Fund. Money for this fund is received from Colorado State Lottery and amounts to $2000 annually. Improvements to the common area have been made in 2012 in the amount of $112. In 2011 the District, in conjunction with the Home Owners Association, enlarged the parking area at the pond, expanded the beach area, installed security fencing and a solar operated locking gate to secure the area.
2012 expenditures were for repairs to the blowers in the pond.
In 2013, the Board does not intend to stock the pond with fish; however, $4,000 is budgeted for upkeep of the beach area and repairs to the aeration system at the pond.
The District utilizes contract labor for administrative services, water operation services, road maintenance, and snow removal. Legal and auditing services are also on a contractual basis.
Monthly User Fees = $80/developed lot per month
Included in the $80 Base Fee is 10,000 gallons of water. 78% of the base fee is allocated to the operation and maintenance of the water system. A tiered rate structure is implemented for summer use beyond the 10,000 gallons to encourage conservation of water. Road maintenance is 22% of the $80 Base Fee.
Transfer Fees: $100
Tap Fees: None are anticipated for 2012.
Disconnection Fees: $100
There are only 5 undeveloped lots in the Subdivision and four have prepaid taps as a part of the existing water system. A tap purchased in 2012 will be an amount required to cover all costs of tapping into the water system. Currently the Tap Fee is set at $8,000 with an Installation Fee of $375.
Capital Improvement Fees:
A special assessment of $45/lot per month is charged to pay for capital improvements to the water system in 2013. For 2013 that total amount will be adjusted to $71,820. A Road Improvement Fund was set up in 2010 for future road improvements. Each lot will be charged $10/mo./lot totaling $15,960 in 2013.
Some of the future capital improvements and major replacement/repairs beyond 2012 are:
Water system design continued beyond source of water and treatment
District wide line upgrades/looping
Addition of isolation valves and meters
Meter Upgrades, Reading and Billing Software
The Board contracted with an engineering firm to propose a capital replacement plan (PER) for the next 10 to 15 years. The PER was completed in 2010. Grant and financing options will be pursued whenever possible. In the interim, capital assessment fees will continue for 2013 at $45/mo./lot.
METHOD OF ACCOUNTING:
The District operates on a modified accrual basis of accounting each calendar year. An annual Audit or Audit Exemption is performed by a CPA and is sent to the State Auditor for review and approval.