Document Monument_doc_e7cd111cc4

Town of Monument, Colorado Financial Statements with Independent Auditors’ Report December 31, 2019 ---PAGE BREAK--- TOWN OF MONUMENT, COLORADO Basic Financial Statements December 31, 2019 BOARD OF TRUSTEES Mayor Don Wilson Mayor Pro Tem Kelly Elliott Trustee Jeffrey Bornstein Trustee Laurie Clark Trustee Greg Coopman Trustee Jim Romanello Trustee Ron Stephens ADMINISTRATIVE STAFF Mike Foreman – Town Manager Rosa Ooms – Finance Director Laura Hogan – Town Clerk Thomas Tharnish – Public Works Director Larry Manning – Planning Director ---PAGE BREAK--- Town of Monument, Colorado Table of Contents December 31, 2019 Independent Auditors’ Report 1 Management’s Discussion and Analysis i Basic Financial Statements Government-wide Financial Statements Statement of Net Position 4 Statement of Activities 5 Governmental Funds Balance Sheet 6 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 7 Statement of Revenues, Expenditures and Changes in Fund Balance 8 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities 9 Proprietary Fund Statement of Net Position 10 Statement of Revenues, Expenses and Changes in Net Position 11 Statement of Cash Flows 12 Notes to Financial Statements 13 Required Supplementary Information Budgetary Comparison Schedules General Fund 27 2A Water ASD Fund 28 Notes to Required Supplementary Information 29 Supplementary Information Nonmajor Governmental Funds Combining Balance Sheet 30 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 31 Budgetary Comparison Schedules Community Development Fund 32 Conservation Trust Fund 33 Traffic Impact Fee Fund 34 Storm Drainage Impact Fee Fund 35 Water Fund 36 ---PAGE BREAK--- Town of Monument, Colorado Table of Contents December 31, 2019 (Continued) Compliance Section State Compliance Local Highway Finance Report 37 ---PAGE BREAK--- 5950 S. Willow Dr., Ste. 302 Greenwood Village, Colorado 80111 TEL: [PHONE REDACTED] FAX: [PHONE REDACTED] www.HinkleCPAs.com Independent Auditors’ Report Honorable Mayor and Members of the Board of Trustees Town of Monument Monument, Colorado Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Monument, Colorado, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. ---PAGE BREAK--- Honorable Mayor and Members of the Board of Trustees Town of Monument, Colorado Page 2 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Monument, Colorado , as of December 31, 2019, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Comparative Financial Information The comparative financial information for the prior year has been presented in the accompanying financial statements in order to provide an analysis of changes in the Town’s financial position and operations. However, complete comparative financial information has not been presented in accordance with generally accepted accounting principles since its inclusion would make the financial statements cumbersome and difficult to read. The comparative financial information was derived from the Town’s financial statements for the year ended December 31, 2018, were audited by other auditors and the report dated July 21, 2019 expressed an unmodified opinion. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required budgetary information on pages i – ix and 25- 26 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements. The accompanying supplementary information and other information, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. ---PAGE BREAK--- Honorable Mayor and Members of the Board of Trustees Town of Monument, Colorado Page 3 The supplementary information and other information have been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the financial statements as a whole. Greenwood Village, Colorado September 9, 2020 ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis i This discussion and analysis of the Town of Monument’s financial performance provides an overview of the Town’s financial activities for the fiscal year ended December 31, 2019. Please read it in conjunction with the Town’s financial statements. This report contains other supplementary information in addition to the basic financial statements themselves. Financial Highlights  The assets of the Town of Monument exceeded its liabilities at the close of 2019 by $25,599,224 (net position).  The Town of Monument’s total net position increased by $1,958,367, which was higher than the increase in 2018 of $1,547,717.  At December 31, 2019, the Town of Monument’s governmental funds reported combined ending fund balances of $5,511,650 an increase of $1,802,401 in comparison with the prior year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Town of Monument’s basic financial statements. The Town of Monument’s basic financial statements comprise three components: 1) the government‐wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This reports 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 Town of Monument’s finances, in a manner similar to a private‐sector business. The statement of net position presents information on all the Town of Monument’s assets, liabilities, and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town of Monument is improving or deteriorating. The statement of activities presents information showing how the Town of Monument’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event 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 uncollected taxes and earned but unused vacation leave). Both of the government‐wide financial statements distinguish functions of the Town of Monument that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business‐type activities). The governmental activities of the Town of Monument include general government, public safety (law enforcement & court), public works (streets, parks and recreation, cemetery) and planning. The business‐type activities of the Town of Monument include water. ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis ii 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 Town of Monument, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements. All the Town’s funds can be divided into two categories: governmental funds and proprietary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government‐wide financial statements. However, unlike governmental‐wide financial statements, governmental fund 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. Most of the Town’s basic services are reported in governmental funds and use the modified accrual basis of accounting. 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 balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Proprietary fund. The Town’s one proprietary fund is the enterprise fund. Enterprise funds are used to report the same functions presented as business‐type activities in the government‐wide financial statements. Propriety funds provide the same type of information as the government‐wide financial statements, only in more detail. The proprietary fund financial statements provide information for the Town’s water fund. 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. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Town of Monument’s general and 2A water funds. These budget comparisons schedules can be found on pages 27 and 28 of this report. The combining and individual fund financial statements and schedules are presented immediately following the required supplementary information. ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis iii Government‐wide Financial Analysis As previously stated, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the Town of Monument, assets exceeded liabilities by $25,599,224 at the end of 2019 and at the end of 2018 by $23,640,857, resulting in an increase in Total Net Position of $1,958,367. 2019 2018 2019 2018 Governmental Activities Governmental Activities Business‐type Activities Business‐type Activities 2019 Total 2018 Total Current and other assets $ 7,656,729 $ 5,553,004 $ 2,323,630 $ 1,472,275 $ 9,980,359 $ 7,025,279 Capital assets, net 10,303,123 10,749,481 8,371,478 8,405,950 18,674,601 19,155,431 Total assets 17,959,852 16,302,485 10,695,108 9,878,225 28,654,960 26,180,710 Long term liabilities 533,222 400,437 48,733 74,768 581,955 475,205 Other liabilities 1,261,285 990,164 145,283 132,484 1,406,568 1,122,648 Total liabilities 1,794,507 1,390,601 194,016 207,252 1,988,523 1,597,853 Deferred Inflow of Resources Deferred Property Tax Revenue 1,067,213 942,000 ‐ ‐ 1,067,213 942,000 Net Position Net investment in capital assets 9,872,274 10,550,034 8,312,180 8,294,857 18,184,454 18,844,891 Restricted 236,595 231,130 1,143,494 1,129,954 1,380,089 1,361,084 Unrestricted 4,989,263 3,188,720 1,045,418 246,162 6,034,681 3,434,882 Total net position $ 15,098,132 $ 13,969,884 $ 10,501,092 $ 9,670,973 $ 25,599,224 $ 23,640,857 The largest portion of the Town of Monument’s net position, $18,184,454, reflects its investment in capital assets (e.g. land, buildings, infrastructure, vehicles, equipment, etc.), less any related outstanding debt used to acquire those assets. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. A small portion of the Town of Monument’s net position, $1,380,089, represents resources that are subject to external restriction on how they may be used. The remaining unrestricted balance is $6,034,681. ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis iv Changes in Net Position The Town’s net position increased $1,958,367 during 2019. Governmental Activities reported an $1,128,248 increase, with sales tax revenue and property taxes being the largest contributors. CHANGES IN NET POSITION 2019 Governmental Activities 2018 Governmental Activities 2019 Business Type Activities 2018 Business Type Activities 2019 Total 2018 Total Revenues: Program revenues: Charges for Services $ 468,146 $ 532,779 $ 1,562,945 $ 1,615,974 $ 2,031,091 $ 2,148,753 Operating Grants & Contributions 138,429 119,913 9,000 ‐ 147,429 119,913 Capital Grants & Contributions 50,607 43,762 883,792 652,730 934,399 696,492 General revenues: Property taxes 1,053,377 1,001,141 ‐ ‐ 1,053,377 1,001,141 Sales taxes 6,045,625 4,970,849 263,729 232,000 6,309,354 5,202,849 Franchise taxes 419,528 410,016 ‐ ‐ 419,528 410,016 Other Taxes 317,102 297,100 ‐ ‐ 317,102 297,100 Investment income 78,289 52,551 22,540 19,662 100,829 72,213 Other Misc. 39,061 9,350 22,867 34,270 61,928 43,620 Transfers 284,250 172,779 (284,250) (172,779) ‐ ‐ Total revenues 8,894,414 7,610,240 2,480,623 2,381,857 11,375,037 9,992,097 Expenses: General government 2,860,385 2,544,579 ‐ ‐ 2,860,385 2,544,579 Public safety 2,226,975 1,923,111 ‐ ‐ 2,226,975 1,923,111 Public works & parks 2,561,200 2,421,198 ‐ ‐ 2,561,200 2,421,198 Capital Outlay 104,185 ‐ ‐ ‐ 104,185 ‐ Interest on long‐term debt 13,421 7,986 (5,179) 5,129 8,242 13,115 Water ‐ ‐ 1,655,683 1,542,377 1,655,683 1,542,377 Total expenses 7,766,166 6,896,874 1,650,504 1,547,506 9,416,670 8,444,380 Change in net position 1,128,248 713,366 830,119 834,351 1,958,367 1,547,717 Net position, Beginning of year 13,969,884 13,256,518 9,670,973 8,836,622 23,640,857 22,093,140 Net Position, End of year $ 15,098,132 $ 13,969,884 $ 10,501,092 $ 9,670,973 $25,599,224 $23,640,857 ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis v Governmental Activities Sales and use taxes are the Town’s largest governmental activities revenue source at 70%. Property taxes are the second largest revenue source at 12% of the Town’s revenue for governmental activities. Charges for services include planning, traffic impact and storm drainage impact fees and comprise the third largest revenue source of the Town’s governmental activities at Charges for services 5% Operating grants and contributions 2% Capital grants and contributions 1% Property & specific ownership taxes 12% Sales & use taxes 70% Other taxes 4% Franchise fees 5% Investment income 1% Miscellaneous 0% Revenues by Source ‐ Governmental Activities Charges for services Operating grants and contributions Capital grants and contributions Property & specific ownership taxes Sales & use taxes Other taxes Franchise fees Investment income Miscellaneous ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis vi Business‐type Activities Charges for services account for 56.5% of the Town’s revenue for business‐type activities while capital grants and contributions accounted for 32%. Sales taxes account for 9.5% and the remaining interest income, grants & contributions and miscellaneous revenue accounts for 2% of total revenues. Financial Analysis of the Town’s Funds The Town of Monument uses fund accounting to ensure and demonstrate compliance with finance‐ related legal requirements. Charges for services 56.5% Operating grants and contributions 0% Capital grants and contributions 32% Sales taxes 9.5% Investment income 1% Miscellaneous 1% Revenues by Source ‐ Business‐type Activities Charges for services Operating grants and contributions Capital grants and contributions Sales taxes Investment income Miscellaneous ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis vii Governmental Funds. The focus of the Town’s governmental funds is to provide information on near‐ term in‐flows, out‐flows, and balances of spendable resources. Such information is useful in assessing the Town’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Town’s governmental funds reported combined ending fund balances of $5,511,650, an increase of $1,802,401 in comparison with the prior year. Of this amount, 13.6% ($750,129) constitutes unrestricted, unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is categorized to indicate that it is not available for new spending because it is classified as one of the following: A) nonspendable for prepaids ($69,270), B) Restricted for Emergencies ($209,000), C) restricted for parks and recreation ($27,595), or D) committed ($4,455,656). The general fund is the chief operating fund of the Town. At the end of the current fiscal year, unassigned fund balance of the general fund was $750,129 while total fund balance amounted to $1,028,399. The fund balance of the Town’s general fund increased by $322,847 during the current fiscal year. Key factors in this change are as follows:  Increase in sales tax collections over the prior year.  Reduction of expenses for projects that were delayed during the current fiscal year that will be expended in the next fiscal year. The fund balance of the Town’s 2A water fund increased by $1,452,863 during the current fiscal year. Key factors in this change are as follows:  Increase in sales tax collections over the prior year.  Capital Projects budgeted were pushed on to a future upcoming year. Proprietary Funds. As of the end of the current fiscal year, the Town’s water fund reported an ending net position of $10,501,092, an increase of $830,119 in comparison with the prior year. Of this amount, 9.9% ($1,039,137) constitutes unrestricted net position, which is available for spending. The remainder of net position is categorized to indicate that it is not available for new spending because it is classified as one of the following: A) net investment in capital assets ($8,318,461), B) restricted for future water storage ($672,384), or C) restricted for water line loop ($471,110). As stated above, the net position of the water fund increased by $830,119 during the current fiscal year. Key factors in this change are as follows:  Increase in sales tax collections over the prior year.  Increase in tap fees over the prior year.  Reduction in expenses compared to budget in operations and maintenance. ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis viii General Fund Budgetary Highlights The Board of Trustees must approve increases in the expenditure budget for any fund. Line item budget transfers are allowed within a fund with the approval of the Town Manager. The General fund budgeted for a decrease in fund balance of $421,733 and the actual increase in fund balance was $322,847. Significant budgetary variances are as follows:  $707,355 additional sales tax revenue collected over budgeted.  Less capital lease revenue than budgeted due to final purchase decisions.  Annual expenditures under budget by $587,125, mainly due to capital outlay projects moved forward to next fiscal year. Capital Assets and Debt Administration Capital Assets. The Town of Monument’s investment in capital assets for its governmental and business‐ type activities as of December 31, 2019 totaled $18,674,601 (net of accumulated depreciation). Water fund capital assets represent 45% of this total. Major capital asset events during the current fiscal year included the following:  Governmental activities expenditures including $318,118 in vehicles & equipment, and $299,922 in street improvements for total capital outlay of $618,040.  Business‐type activities capital outlay of $55,549 in vehicles & equipment, $126,173 in wells/treatment projects and $125,276 in transmission & distribution for a total depreciable capital outlay of $306,998. Note 5 of the financial statements provide a detailed summary of the Town’s capital assets. Long‐term Debt. At the end of the current fiscal year, the Town had total long‐term debt outstanding of $826,693. Of this amount, $712,549 was debt of governmental activities while $114,144 was debt of business‐type activities. The Town’s long‐term debt increased by $209,565 during the current fiscal year. The increase was attributed to two new capital lease agreements entered into in 2019 for vehicles and equipment. Note 6 of the financial statements provide a detailed summary on the Town’s long‐term debt. Economic Factors and Next Year’s Budget The Town considered these factors in preparing the Town’s budget for the 2020 fiscal year:  The economic vitality of the Town  Inflationary effect on expenses  Legislative outlooks ---PAGE BREAK--- Town of Monument, Colorado 2019 Management’s Discussion & Analysis ix Requests for Information This financial report is designed to provide a general overview of the Town of Monument’s finances for all those with an interest in the Town’s finances. Questions concerning any of the information provided in this report or requests for additional financial information, may be addressed to the Town Treasurer at the Town of Monument, 645 Beacon Lite Road, Monument, Colorado, 80132. ---PAGE BREAK--- Basic Financial Statements ---PAGE BREAK--- 2018 Assets Cash and Investments $ 4,848,903 $ 1,039,331 $ 5,888,234 $ 3,418,996 Restricted Cash and Investments 27,595 672,384 699,979 666,974 Property Taxes Receivable 1,067,213 - 1,067,213 942,000 Sales and Other Receivable 1,622,277 - 1,622,277 1,395,942 Accounts Receivable 21,471 140,805 162,276 121,821 Prepaid Tap Fees - Water Line Loop 471,110 471,110 471,110 Prepaid Expenses 69,270 - 69,270 8,436 Capital Assets, Not being depreciated 1,797,021 3,662,248 5,459,269 5,365,748 Capital Assets, Net of accumulated depreciation 8,506,102 4,709,230 13,215,332 13,789,683 Total Assets 17,959,852 10,695,108 28,654,960 26,180,710 Liabilities Accounts Payable 605,105 58,480 663,585 562,069 Accrued Salaries and Benefits 94,820 13,758 108,578 91,956 Accrued Interest 4,092 834 4,926 2,205 Developer Escrow and Deposits 377,941 6,800 384,741 324,495 Noncurrent Liabilities Due Within One Year 179,327 59,130 238,457 141,923 Due in More Than One Year 533,222 55,014 588,236 475,205 Total Liabilities 1,794,507 194,016 1,988,523 1,597,853 Deferred Inflows of Resources Deferred Property Taxes 1,067,213 - 1,067,213 942,000 Net Position Net Investment in Capital Assets 9,872,274 8,318,461 18,190,735 18,844,891 Restricted for Emergencies 209,000 - 209,000 223,000 Restricted for Parks and Recreation 27,595 - 27,595 8,130 Restricted for Future Water Storage - 672,384 672,384 658,844 Restricted for Water Line Loop - 471,110 471,110 471,110 Unrestricted, unreserved 4,989,263 1,039,137 6,028,400 3,434,882 Total Net Position $ 15,098,132 $ 10,501,092 $ 25,599,224 $ 23,640,857 Activities Activities 2019 Governmental Business-Type Town of Monument, Colorado Statement of Net Position December 31, 2019 With Comparative Totals for December 31, 2018 Total Primary Government See Notes to Financial Statements. 4 ---PAGE BREAK--- 2019 2018 Primary Government Governmental Activities General Government $ 2,860,385 $ 314,353 $ 74,635 $ - $ (2,471,397) $ - $ (2,471,397) $ (2,127,039) Public Safety 2,226,975 74,015 12,958 - (2,140,002) - (2,140,002) (1,867,495) Public Works 2,509,187 79,778 50,836 - (2,378,573) - (2,378,573) (2,181,836) Parks and Recreation 52,013 - - 50,607 (1,406) - (1,406) (16,064) Capital Outlay 104,185 - - - (104,185) - (104,185) - Interest on Long-Term Debt 13,421 - - - (13,421) - (13,421) (7,986) Total Governmental Activities 7,766,166 468,146 138,429 50,607 (7,108,984) - (7,108,984) (6,200,420) Business-Type Activities Water 1,655,683 1,562,945 9,000 883,792 - 800,054 800,054 726,327 Interest on Long-Term Debt (5,179) - - - - 5,179 5,179 (5,129) Total Business-Type Activities 1,650,504 1,562,945 9,000 883,792 - 805,233 805,233 721,198 Total Primary Government $ 9,416,670 $ 2,031,091 $ 147,429 $ 934,399 $ (7,108,984) $ 805,233 $ (6,303,751) $ (5,479,222) General Revenues Sales and Use Taxes 5,647,683 263,729 5,911,412 4,798,732 Property Taxes 1,053,377 - 1,053,377 1,001,141 Franchise Taxes 419,528 - 419,528 410,016 Auto Sales Taxes 397,942 - 397,942 404,117 Other Taxes 317,102 - 317,102 297,100 Investment Income 78,289 22,540 100,829 72,213 Miscellaneous 39,061 22,867 61,928 43,620 Transfers 284,250 (284,250) - - Total General Revenues and Transfers 8,237,232 24,886 8,262,118 7,026,939 Change in Net Position 1,128,248 830,119 1,958,367 1,547,717 Net Position, Beginning of year 13,969,884 9,670,973 23,640,857 22,093,140 Net Position, End of year $ 15,098,132 $ 10,501,092 $ 25,599,224 $ 23,640,857 Functions/Programs Contributions Grants and Capital Expenses Services Charges for Grants and Contributions Program Revenues Net (Expense) Revenue and Change in Net Position Governmental Activities Business-Type Activities Total Operating Primary Government Town of Monument, Colorado Statement of Activities For the Year Ended December 31, 2019 With Comparative Totals for December 31, 2018 See Notes to Financial Statements. 5 ---PAGE BREAK--- Assets Cash and Investments $ 320,178 $ 4,386,140 $ 142,585 $ 4,848,903 $ 3,196,591 Restricted Cash and Investments - - 27,595 27,595 8,130 Property Taxes Receivable 1,067,213 - - 1,067,213 942,000 Other Taxes Receivable 1,622,277 - - 1,622,277 1,395,942 Accounts Receivable 21,471 - - 21,471 1,905 Prepaid Expenses 69,270 - - 69,270 8,436 Total Assets $ 3,100,409 $ 4,386,140 $ 170,180 $ 7,656,729 $ 5,553,004 Liabilities Accounts Payable $ 532,036 $ 35,659 $ 37,410 $ 605,105 $ 500,329 Accrued Salaries and Benefits 94,820 - - 94,820 82,731 Developer Escrow 377,941 - - 377,941 318,695 Total Liabilities 1,004,797 35,659 37,410 1,077,866 901,755 Deferred Inflows of Resources Property Taxes 1,067,213 - - 1,067,213 942,000 Fund Balance Nonspendable 69,270 - - 69,270 8,436 Restricted for Emergencies 209,000 - - 209,000 223,000 Restricted for Parks and Recreation - - 27,595 27,595 8,130 Committed - 4,350,481 105,175 4,455,656 2,995,567 Unrestricted, Unassigned 750,129 - - 750,129 474,116 Total Fund Balance 1,028,399 4,350,481 132,770 5,511,650 3,709,249 Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 3,100,409 $ 4,386,140 $ 170,180 $ 7,656,729 $ 5,553,004 General ASD Fund 2A Water Funds Governmental Other 2018 Total 2019 Governmental Funds Town of Monument, Colorado Balance Sheet December 31, 2019 With Comparative Totals for December 31, 2018 See Notes to Financial Statements. 6 ---PAGE BREAK--- Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because: Total Fund Balance of Governmental Funds $ 5,511,650 Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in governmental funds. 10,303,123 Long-term liabilities and related items are not due and payable in the current year and, therefore, are not reported in governmental funds. Capital leases payable (406,754) Accrued interest payable (4,092) Accrued compensated absences (305,795) Total Net Position of Governmental Activities $ 15,098,132 Town of Monument, Colorado Reconciliation of Balance Sheet of the Governmental Funds December 31, 2019 to the Statement of Net Position See Notes to Financial Statements. 7 ---PAGE BREAK--- Revenues Taxes $ 5,946,786 $ 1,571,744 $ - $ 7,518,530 $ 6,382,274 Licenses and Permits 70,323 - 73,695 144,018 132,596 Charges for Services 170,335 - 79,778 250,113 344,567 Intergovernmental 442,573 - 50,607 493,180 460,507 Court 74,015 - - 74,015 55,616 Investment Income 22,890 52,769 2,630 78,289 52,551 Contributions and donations 12,958 - - 12,958 - Miscellaneous 27,144 - 7,000 34,144 9,350 Total Revenues 6,767,024 1,624,513 213,710 8,605,247 7,437,461 Expenditures Current General Government 2,629,332 - 80,932 2,710,264 2,413,307 Public Safety 2,331,642 - - 2,331,642 1,888,180 Public Works 1,521,046 171,650 - 1,692,696 1,599,347 Parks and Recreation - - 31,350 31,350 1,398 Capital Outlay 481,457 - 74,737 556,194 649,772 Debt Service Principal 101,415 - - 101,415 110,209 Interest and Fiscal Charges 9,329 - - 9,329 7,986 Total Expenditures 7,074,221 171,650 187,019 7,432,890 6,670,199 Excess Revenues Over (Under) Expenditures (307,197) 1,452,863 26,691 1,172,357 767,262 Other Financing Sources (Uses) Proceeds from Issuance of Debt 345,794 - - 345,794 - Transfers In 284,250 - - 284,250 192,779 Transfers Out - - - - (20,000) Other Financing Sources (Uses) 630,044 - - 630,044 172,779 Net Change in Fund Balance 322,847 1,452,863 26,691 1,802,401 940,041 Fund Balance, Beginning of year 705,552 2,897,618 106,079 3,709,249 2,769,208 Fund Balance, End of year $ 1,028,399 $ 4,350,481 $ 132,770 $ 5,511,650 $ 3,709,249 General Fund ASD Town of Monument, Colorado Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 2A Water Other Governmental Funds 2018 Total 2019 See Notes to Financial Statements. 8 ---PAGE BREAK--- Amounts Reported for Governmental Activities in the Statement of Activities are Different Because: Net Change in Fund Balance of Governmental Funds $ 1,802,401 Capital outlays to purchase or construct capital assets are reported in governmental funds as expenditures. However, for governmental activities those costs are capitalized in the statement of net position and are allocated over their estimated useful lives as annual depreciation expense in the statement of activities. Capital Outlays 647,939 Depreciation Expense (1,094,297) Repayments of long-term liabilities are expenditures in governmental funds, but they reduce long-term liabilities in the statement of net position and do not affect the statement of activities. Proceeds on capital leases (345,794) Change in Interest payable (4,092) Principal payments on capital leases 106,332 Change in accrued compensated absences 15,759 Change in Net Position of Governmental Activities $ 1,128,248 Town of Monument, Colorado 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, 2019 See Notes to Financial Statements. 9 ---PAGE BREAK--- Assets Current Assets Cash and Investments $ 1,039,331 $ 222,405 Restricted Cash and investments 672,384 658,844 Accounts Receivable 140,805 119,916 Prepaid Tap Fees - Water Line Loop 471,110 471,110 Total Current Assets 2,323,630 1,472,275 Noncurrent Assets Capital Assets, Not being depreciated 3,662,248 3,598,626 Capital Assets, Net of accumulated depreciation 4,709,230 4,807,324 Total Noncurrent Assets 8,371,478 8,405,950 Total Assets 10,695,108 9,878,225 Liabilities Current Liabilities Accounts Payable 58,480 61,740 Accrued Liabilities 13,758 9,225 Accrued Compensated Absences, Current portion 6,113 1,719 Accrued Interest Payable 834 2,205 Leases Payable, Current Portion 53,017 51,795 Total Current Liabilities 132,202 126,684 Noncurrent Liabilities Deposits 6,800 5,800 Accrued Compensated Absences 55,014 15,470 Leases payable - 59,298 Total Noncurrent Liabilities 61,814 80,568 Total Liabilities 194,016 207,252 Net Position Net Investment in Capital Assets 8,318,461 8,294,857 Restricted for Future Water Storage 672,384 658,844 Restricted for Water Line Loop 471,110 471,110 Unrestricted 1,039,137 246,162 Total Net Position $ 10,501,092 $ 9,670,973 Town of Monument, Colorado Statement of Net Position Proprietary Fund December 31, 2019 2018 2019 With Comparative Totals for December 31, 2018 See Notes to Financial Statements. 10 ---PAGE BREAK--- Operating Revenues Charges for Services $ 1,562,945 $ 1,615,974 Miscellaneous 22,867 34,270 Total Operating Revenues 1,585,812 1,650,244 Operating Expenses Operations and Maintenance 1,145,939 1,096,140 Administrative and General 104,652 52,968 Depreciation 405,092 393,269 Total Operating Expenses 1,655,683 1,542,377 Net Operating Income (69,871) 107,867 Non-Operating Revenues (Expenses) Sales taxes 263,729 232,000 Grant Revenue 9,000 - Interest Income 22,540 19,662 Interest Expense 5,179 (5,129) Net Income (Loss) Before Contributed Capital 230,577 354,400 Contributed Capital and Transfers Tap Fees 883,792 652,730 Transfers Out (284,250) (172,779) Total Capital Contributions and Transfers 599,542 479,951 Change in Net Position 830,119 834,351 Net Position, Beginning of year 9,670,973 8,836,622 Net Position, End of year $ 10,501,092 $ 9,670,973 With Comparative Totals for the Year Ended December 31, 2018 Town of Monument, Colorado Statement of Revenues, Expenses and Changes in Net Position Proprietary Fund For the Year Ended December 31, 2019 2018 2019 See Notes to Financial Statements. 11 ---PAGE BREAK--- Cash Flows From Operating Activities Cash Received from Customers $ 1,542,056 $ 1,604,606 Cash Received from Others 22,867 34,270 Cash Paid to Suppliers (603,152) (655,774) Cash Paid to Employees (602,228) (487,047) Net Cash Provided by Operating Activities 359,543 496,055 Cash Flows From NonCapital Financing Activities Sales Tax Received 263,729 232,000 Grants Received 9,000 - Transfer to Other Funds (284,250) (172,779) Net Cash Provided by Noncapital Financing Activities (11,521) 59,221 Cash Flows From Capital and Related Financing Activities Tap fees received 883,792 652,730 Acquisition and Construction of Capital Assets (370,620) (1,147,642) Deposit Received from Customers 1,000 (8,700) Debt Principal Payments (58,076) (67,971) Debt Interest Payments 3,808 (5,129) Net Cash Used by Capital and Related Financing Activities 459,904 (576,712) Cash Flows From Investing Activities Interest received 22,540 19,662 Net Cash Used by Capital and Related Financing Activities 22,540 19,662 Net Change in Cash and Cash Equivalents 830,466 (1,774) Cash and Cash Equivalents, Beginning of year 881,249 883,023 Cash and Cash Equivalents, End of year $ 1,711,715 $ 881,249 Reconciliation of Net Operating Income to Net Cash Provided by Operating Activities: Net Operating Income $ (69,871) $ 107,867 Adjustments to Reconcile Net Operating Income to Net Cash Provided by Operating Activities Depreciation Expense 405,092 393,269 Changes in Assets and Liabilities Related to Operations Accounts Receivable (20,889) (11,368) Accounts Payable (3,260) 13,457 Accrued Expenses 4,533 9,225 Accrued Compensated Absences 43,938 (16,395) Net Cash Provided by Operating Activities $ 359,543 $ 496,055 2018 2019 With Comparative Totals for December 31, 2018 Town of Monument, Colorado Statement of Cash Flows Proprietary Fund For the Year Ended December 31, 2019 See Notes to Financial Statements. 12 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 13 Note 1: Summary of Significant Accounting Policies The accounting policies of the Town of Monument, Colorado (the “Town”) conform to generally accepted accounting principles as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. Following is a summary of the more significant policies. Reporting Entity In accordance with governmental accounting standards, the Town has considered the possibility of inclusion of additional entities in its basic financial statements. The definition of the reporting entity is based primarily on financial accountability. The Town is financially accountable for organizations that make up its legal entity. It is also financially accountable for legally separate organizations if Town officials appoint a voting majority of the organization’s governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the Town. The Town may also be financially accountable for governmental organizations that are fiscally dependent upon it. Based on the application of these criteria, the Town does not include additional organizations in its reporting entity. Government-wide and Fund Financial Statements The government-wide financial statements the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the Town. For the most part, the effect of interfund activity has been removed from these statements. 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 net position reports all financial, capital and debt resources of the Town. The difference between assets, liabilities and deferred inflows of the Town is net position. The statement of activities demonstrates the degree to which the direct expenses of the given function or segments 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 governmental funds and proprietary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 14 Note 1: Summary of Significant Accounting Policies (Continued) 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, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when the 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. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 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 collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Property taxes, specific ownership taxes, grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and 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 Town. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, are recorded only when payment is due. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Town’s practice to use restricted resources first, then unrestricted resources as they are needed. In the fund financial statements, the Town reports the following major governmental funds: The General Fund is the Town’s primary operating fund. It accounts for all financial resources of the Town, except those required to be accounted for in another fund. The 2A Water ASD Fund accounts for the revenues and expenditures allocated for water projects. ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 15 Note 1: Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The Town also reports the following major proprietary fund: The Water Fund accounts for the financial activities associated with the provision of water services. Cash and Investments Cash equivalents include investments with original maturities of three months or less. Investments are recorded at fair value. Capital Assets Capital assets, which include property and equipment, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the Town as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Property and equipment of the Town is depreciated using the straight-line method over the following estimated useful lives: Water Rights 50 years Wells and Treatment Plant 30 years Infrastructure 30 years Transmission & Distribution 10 years Buildings 5 – 30 years Furniture, Equipment and Vehicles 3 – 10 years Park and Street Improvements 7 – 20 years Compensated Absences Employees of the Town are allowed to accumulate unused vacation time. Upon termination of employment from the Town, an employee will be compensated for all accrued vacation at a maximum amount ranging from 96 hours to 360 hours, based on length of service at their current rate of pay. Unused sick time will be compensated at a maximum of 120 hours of their current rate of pay. ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 16 Note 1: Summary of Significant Accounting Policies (Continued) Compensated Absences (Continued) These compensated absences are recognized as current salary costs when earned in the proprietary fund types and when due in the governmental fund types. A liability has been recorded in the government-wide financial statements for the accrued compensated absences. Long-Term Obligations In the government-wide financial statements, and proprietary fund type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Net Position The government-wide and business-type fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted. Net investment in capital assets is intended to reflect the portion of net position which is associated with non-liquid, capital assets less outstanding capital asset related debt. The net related debt is the debt less the outstanding liquid assets and any associated unamortized cost. Restricted net position is liquid assets, which have third party limitations on their use. Unrestricted net position represents assets that do not have any third-party limitations on their use. Fund Balance Classification The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the Town is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 17 Note 1: Summary of Significant Accounting Policies (Continued) Fund Balance Classification (Continued) The classifications used in the governmental fund financial statements are as follows: Restricted – This classification includes amounts for which constraints have been placed on the use of the resources either externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. The Town has classified Emergency Reserves as being restricted because their use is restricted by State Statute for declared emergencies. In addition, the Town has classified the fund balance in the Conservation Trust Fund as restricted because their use is restricted by State Statute. Committed – This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Trustees. These amounts cannot be used for any other purpose unless the Board of Trustees removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. The Town’s committed resources are presented in the governmental fund balance sheet as of December 31, 2019. Unassigned – This classification includes the residual fund balance for the General Fund. The Unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of Assigned fund balance amounts. The Town would typically use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned. Property Taxes Property taxes are levied on November 1 and attach as an enforceable lien on property on January 1. Taxes are payable in full on April 30 or in two installments on February 28 and June 15. The County Treasurer’s office collects property taxes and remits to the Town on a basis. Since property tax revenues are collected in arrears during the succeeding year, a receivable and corresponding deferred revenue are recorded at December 31. As the tax is collected in the succeeding year, the deferred revenue is recognized as revenue and the receivable is reduced. ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 18 Note 1: Summary of Significant Accounting Policies (Continued) Subsequent Events The Town evaluated subsequent events through September 9, 2020, the date the financial statements were available to be issued. Note 2: Stewardship, Compliance and Accountability Budgets and Budgetary Accounting The Town follows these procedures in establishing the budgetary data reflected in the financial statements:  In October, the Town staff submits to the Town Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them.  Public hearings are conducted to obtain taxpayer comments.  Prior to December 15, the budget is legally enacted through passage of an ordinance.  The Town Administration is authorized to transfer budgeted amounts between departments within any fund. However, any revisions that alter the total expenditures of any fund must be approved by the Town Council.  Budgets are legally adopted for all funds of the Town. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). The Budgetary comparison presented for the Enterprise Fund is presented on a non-GAAP budgetary basis. Capital outlay and debt payments are budgeted as expenditures and depreciation is not budgeted.  Budgeted amounts in the financial statements are as originally adopted or as amended by the Town Council. All appropriations lapse at year end. Colorado governments may not exceed budgeted appropriations at the fund level. Note 3: Cash and Investments A summary of deposits and investments as of December 31, 2019 follows: Petty Cash $ 1,450 Cash Deposits 1,524,260 Investments 5,062,503 Total $ 6,588,213 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 19 Note 3: Cash and Investments (Continued) At December 31, 2019, cash and investments consisted of the following: 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 regulations. Amounts on deposit in excess of Federal Deposit Insurance Corporation (FDIC) levels must be collateralized by eligible collateral as determined by the PDPA. The FDIC insures depositors’ accounts up to $250,000 for each financial institution. The PDPA allows the financial institution to create a single collateral pool for all public funds held. The pool is to be maintained by another institution or held in trust for all the uninsured public deposits as a group. The market value of the collateral must be at least equal to 102% of the uninsured deposits. At December 31, 2019, the Town had deposits with financial institutions with a carrying amount of $1,831,330. The bank balances with the financial institutions totaling $1,835,383 of which $462,430 were covered by the FDIC and $1,267,417 were collateralized with securities held by the financial institution’s agent but not in the Town’s name. Investments The Town does not have a formal investment policy; however, the Town follows state statutes regarding investments. The Town generally limits its concentration risk of investments to Local Government Investment Pools, obligations of the United States and certain U.S. government agency securities, which are believed to have minimal credit risk, minimal interest rate risk and no foreign currency risk. Additionally, the Town is not subject to concentration of risk 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 Trustees. Such actions are generally associated with a debt service reserve or sinking fund requirements. State statutes specify investment instruments meeting defined rating, maturity, and concentration risk criteria in which local governments may invest, which include the following.  Obligations of the United States & certain U.S. government agency securities  Certain international agency securities  General obligation and revenue bonds of U.S. local government entities  Commercial paper  Local government investment pools  Written repurchase agreements collateralized by certain authorized securities  Certain money market funds  Guaranteed investment contracts Cash and Investments $ 5,888,234 Restricted Cash and Investments 699,979 Total $ 6,588,213 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 20 Note 3: Cash and Investments (Continued) Investments (Continued) At December 31, 2019, the Town had the following investments: The Town 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 operates similarly to a money market fund and each share is equal in value to $1.00. The Trust offers shares in two portfolios, ColoTrust PRIME and ColoTrust PLUS+. 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 rates commercial paper and any security allowed under CRS 24- 75-601. A designated custodial bank serves as custodian 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 is rated AAAm by Standard & Poor’s. ColoTrust records its investments at fair value and the Town records its investment in ColoTrust using the net asset value method. There are no unfunded commitments, the redemption frequency is daily and there is no redemption notice period. Interest Rate Risk - State statutes generally limit investments to an original maturity of five years unless the governing board authorizes the investment for a period in excess of five years. The Town does not have a policy for managing credit risk or interest rate risk. Future Water Storage – The Town has restricted $672,384 of the Water Fund’s cash balance for future water storage in relation to an intergovernmental agreement. The Town also restricted net position for future water storage in relation to this agreement. Parks and Recreation – The Town has restricted cash of $27,595 in the Conservation Trust Fund for future parks and recreation expenditures. Maturity Colorado Liquid Government Weighted Average Asset Trust (ColoTrust) under 60 days $ 4,744,537 2019 Restricted Cash Cash is restricted for the following purposes: Future Water Storage – Water Fund $ 672,384 Parks and Recreation – Conservation Trust Fund 27,595 Total $ 699,979 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 21 Note 4: Interfund Transfers Interfund transfers for the year ended December 31, 2019, consisted of the following: During the year ended December 31, 2019, the Water Fund transferred amounts to the General Fund for administrative costs and fees. Note 5: Capital Assets Capital assets activity for the year ended December 31, 2019 is summarized below: General Fund Water $ 284,250 Total $ 284,250 Transfers In Transfers Out Amount Governmental Activities Capital Assets, Not Being Depreciated Land $ 1,767,122 $ - $ - $ 1,767,122 Construction in Progress - 29,899 - 29,899 Total Capital Assets, Not Being Depreciated 1,767,122 29,899 - 1,797,021 Capital Assets, Being Depreciated Buildings 3,945,216 - - 3,945,216 Infrastructure 8,367,154 - - 8,367,154 Water Rights 135,324 - - 135,324 Furniture and Equipment 855,915 - - 855,915 Vehicles and Street Equipment 1,912,529 318,118 (81,455) 2,149,192 Park Improvements 666,382 - - 666,382 Street Improvements 5,572,068 299,922 - 5,871,990 Total Capital Assets, Being Depreciated $ 21,454,588 $ 618,040 $ (81,455) $ 21,991,173 Balance Balance 12/31/18 Additions Deletions 12/31/19 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 22 Note 5: Capital Assets (Continued) Depreciation expense was charged to functions/programs of the Town as follows: Governmental Activities (Continued) Capital Assets, Not Being Depreciated (Continued) Less Accumulated Depreciation Buildings $ (1,465,430) $ (128,347) $ - $ (1,593,777) Infrastructure (5,204,964) (276,265) - (5,481,229) Water Rights (26,456) (2,706) (29,162) Furniture and Equipment (588,201) (58,607) - (646,808) Vehicles and Street Equipment (1,511,034) (120,863) 81,455 (1,550,442) Park Improvements (390,115) (36,514) (426,629) Street Improvements (3,286,029) (470,995) - (3,757,024) Total Accumulated Depreciation (12,472,229) (1,094,297) 81,455 (13,485,071) Total Capital Assets, Being Depreciated, net 8,982,359 (476,257) - 8,506,102 Governmental Activities Capital Assets, net $ 10,749,481 $ (446,358) $ - $ 10,303,123 Balance Balance 12/31/18 Additions Deletions 12/31/19 Governmental Activities General Government $ 165,880 Public Safety 44,717 Public Works 831,687 Parks and Recreation 52,013 Total $ 1,094,297 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 23 Note 5: Capital Assets (Continued) Capital assets Business-Type activity for the year ended December 31, 2019 is summarized below: Business-Type Activities Capital Assets, Not Being Depreciated Water Master Plan $ 664,971 $ - $ - $ 664,971 Construction in Progress - 38,920 - 38,920 Monument Dam 2,933,657 24,700 - 2,958,357 Total Capital Assets, Not Being Depreciated 3,598,628 63,620 - 3,662,248 Capital Assets, Being Depreciated Water Rights 125,000 - - 125,000 Alluvium Wells 420,392 - - 420,392 Public Works Building 126,382 - - 126,382 Iron Treatment Plant 287,854 - - 287,854 Water Treatment Plant 1,199,322 - - 1,199,322 Other Equipment 1,228,592 20,865 - 1,249,457 Slabaugh Well 191,390 - - 191,390 Wells/Treatment 8,903,681 126,172 - 9,029,853 Transmission & Distribution 2,127,426 125,277 - 2,252,703 Equipment and Vehicles 422,412 34,684 - 457,096 Total Capital Assets, Being Depreciated 15,032,451 306,998 - 15,339,449 Total Capital Assets 18,631,079 370,618 - 19,001,697 Less: Accumulated depreciation Water Rights (62,500) (2,500) - (65,000) Alluvium Wells (398,283) (3,684) - (401,967) Public Works Building (48,306) (5,052) - (53,358) Iron Treatment Plant (287,854) - - (287,854) Water Treatment Plant (506,902) (39,977) - (546,879) Other Equipment (818,346) (61,126) - (879,472) Slabaugh Well (101,441) (3,828) - (105,269) Wells/Treatment (5,926,468) (188,473) - (6,114,941) Transmission & Distribution (1,753,745) (68,617) - (1,822,362) Equipment and Vehicles (321,282) (31,835) - (353,117) Business-Type Activities Capital Assets, net $ 8,405,952 $ (34,474) $ - $ 8,371,478 Balance Balance 12/31/18 Additions Deletions 12/31/19 ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 24 Note 6: Long-Term Debt Governmental Activities Following is a summary of long-term debt transactions for the governmental activities for the year ended December 31, 2019. Accrued Compensated Absences are being paid from resources generated by the General Fund. Capital Leases The Town has entered into several capital lease agreements to purchase vehicles and equipment which will be paid from revenues of the General Fund. These leases require interest to be paid ranging from 2.36% to 3.54%. These leases mature from 2020 – 2024. Following is a schedule of the future minimum lease payments required under the outstanding capital lease obligations at December 31, 2019: Business-Type Activities Following is a summary of long-term debt transactions for the business-type activities for the year ended December 31, 2019. Governmental Activities Capital leases $ 167,292 $ 345,794 $ 106,332 $ 406,754 $ 148,747 Compensated Absences 321,554 319,838 335,597 305,795 30,580 Total $ 488,846 $ 665,632 $ 441,929 $ 712,549 $ 179,327 Due Within 12/31/18 Additions Deletions 12/31/19 One Year Balance Balance Year Ended December 31, 2020 $ 160,932 2021 150,065 2022 67,595 2023 34,812 2024 17,407 Total Future Minimum Lease Payments 430,811 Less: Interest (24,057) Present Value of Future Minimum Lease Payments $ 406,754 Total Business-Type Activities Capital leases $ 111,093 $ - $ 58,076 $ 53,017 $ 53,017 Compensated Absences 17,189 62,480 18,542 61,127 6,113 Total $ 128,282 $ 62,480 $ 76,618 $ 114,144 $ 59,130 One Year Balance Balance Due Within 12/31/18 Additions 12/31/19 Deletions ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 25 Note 6: Long-Term Debt (Continued) Following is a schedule of the future minimum lease payments required under the outstanding capital lease obligations at December 31, 2019. Conduit Debt In January 2014, the Town issued $15,650,000 Refunding and Improvement Variable Rate Revenue Bonds for the Discover Goodwill of Southern and Western Colorado Project to provide financial assistance to a Colorado nonprofit entity to acquire, construct and equip retail facilities for donated goods. In December 2019, these bonds were fully redeemed in the amount of $12,012,810. Neither the Town, State, nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as a liability in the Town’s financial statements. Note 7: Retirement Commitments Deferred Compensation Plan The Town offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan is available to all Town employees and permits them to defer a portion of their salary until future years. The Town matches employee contributions up to 5% of eligible salary. During the year ended December 31, 2019, the Town contributions were $119,457 equal to the required contribution. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Note 8: Public Entity Risk Pool The Town is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. For these risks of loss, the Town is involved with the Colorado Intergovernmental Risk Sharing Agency (CIRSA), a separate and independent governmental and legal entity formed by intergovernmental agreement by member municipalities pursuant to the provision of 24-10-115.5, Colorado Revised Statutes (1982 Replacement Volume) and Colorado Constitution, Article XIV, Section 18(2). The purposes of CIRSA are to provide members defined liability, property, and workers compensation coverages and to assist members in preventing and reducing losses and injuries to municipal property and to persons or property which might result in claims being made against members of CIRSA, their employees and officers. Year Ended December 31, 2020 $ 54,268 Total Future Minimum Lease Payments 54,268 Less: Interest (1,251) Present Value of Future Minimum Lease Payments $ 53,017 Total ---PAGE BREAK--- Town of Monument, Colorado Notes to Financial Statements December 31, 2019 26 Note 8: Public Entity Risk Pool (Continued) It is the intent of the members of CIRSA to create an entity in perpetuity which will administer and use funds contributed by the members to defend and indemnify, in accordance with the bylaws, any member of CIRSA against stated liability of loss, to the limit of the financial resources of CIRSA. It is also the intent of the members to have CIRSA provide continuing stability and availability of needed coverages at reasonable costs. All income and assets of CIRSA shall be at all times dedicated to the exclusive benefit of its members. CIRSA is a separate legal entity and the Town does not approve budgets nor does it have the ability to significantly affect the operations of entity. Note 9: Commitments and Contingencies Litigation The Town is involved in pending and threatened litigation and investigation of the Town’s finances as of December 31, 2019. However, the outcome of the litigation and investigation cannot be determined at this time. TABOR Amendment Colorado voters passed an amendment to the State Constitution, Article X, Section 20, which has several limitations, including revenue raising, spending abilities, and other specific requirements of state and local government. In November 1996, voters within the Town approved the collection, retention, and expenditure of the all revenues generated by the Town in 1996 and subsequent years, notwithstanding the provisions of the Amendment. The Town believes it is in substantial compliance with the Amendment. The Town has established an emergency reserve, representing 3% of qualifying expenditures, as required by the Amendment. At December 31, 2019, the emergency reserve of $209,000 was recorded in the General Fund. Note 10: Subsequent Event Subsequent to December 31, 2019, the Federal Government and the State of Colorado declared a state of emergency related to the COVID-19 pandemic. While the full extent of the financial impact to the Town is not know at this time, the Town has suffered some lost revenue and has received $554,033 from El Paso County through the Federal Cares Act. These funds are required to be spent by December 31, 2020 or returned to the County. ---PAGE BREAK--- Required Supplementary Information ---PAGE BREAK--- 2018 Actual Revenues Taxes $ 5,239,431 $ 5,946,786 $ 707,355 $ 5,167,972 Licenses and Permits 68,601 70,323 1,722 64,632 Charges for Services 251,992 170,335 (81,657) 226,739 Intergovernmental 412,873 442,573 29,700 416,745 Court 58,033 74,015 15,982 55,616 Interest 16,548 22,890 6,342 21,081 Contributions and Donations - 12,958 12,958 - Miscellaneous - 27,144 27,144 4,000 Total Revenues 6,047,478 6,767,024 719,546 5,956,785 Expenditures Current General Government 2,453,828 2,629,332 (175,504) 2,309,369 Public Safety 2,156,214 2,331,642 (175,428) 1,888,180 Public Works 1,827,310 1,521,046 306,264 1,474,222 Capital Outlay 1,084,823 481,457 603,366 388,346 Debt Service Principal 133,457 101,415 32,042 110,209 Interest 5,714 9,329 (3,615) 7,986 Total Expenditures 7,661,346 7,074,221 587,125 6,178,312 Excess Revenues Over (Under) Expenditures (1,613,868) (307,197) 1,306,671 (221,527) Other Financing Sources (Uses) Proceeds from Issuance of Debt 752,285 345,794 (406,491) - Transfers In 439,850 284,250 (155,600) 172,779 Transfers Out - - - (20,000) Net Change in Fund Balance (421,733) 322,847 744,580 (68,748) Fund Balance, Beginning of year 452,059 705,552 253,493 774,300 Fund Balance, End of year $ 30,326 $ 1,028,399 $ 998,073 $ 705,552 Variance Town of Monument, Colorado Budgetary Comparison Schedule General Fund For the Year Ended December 31, 2019 With Comparative Actual Totals for the Year Ended December 31, 2018 (Negative) Positive Actual Original and Final Budget See the accompanying Independent Auditors' Report. 27 ---PAGE BREAK--- 2018 Actual Revenues Sales Taxes $ 950,466 $ 1,571,744 $ 621,278 $ 1,214,302 Interest 25,000 52,769 27,769 26,527 Total Revenues 975,466 1,624,513 649,047 1,240,829 Expenditures Public Works 544,500 171,650 372,850 125,125 Capital Outlay 2,924,711 - 2,924,711 - Total Expenditures 3,469,211 171,650 3,297,561 125,125 Net Change in Fund Balance (2,493,745) 1,452,863 3,946,608 1,115,704 Fund Balance, Beginning of year 2,493,745 2,897,618 403,873 1,781,914 Fund Balance, End of year $ - $ 4,350,481 $ 4,350,481 $ 2,897,618 Final Budget Actual (Negative) Original and Variance Positive Town of Monument, Colorado Budgetary Comparison Schedule 2A Water ASD Fund For the Year Ended December 31, 2019 With Comparative Actual Totals for the Year Ended December 31, 2018 See the accompanying Independent Auditors' Report. 28 ---PAGE BREAK--- Town of Monument, Colorado Notes to Required Supplementary Information December 31, 2019 29 Note 1: Stewardship, Compliance, and Accountability Budgets Budgets are legally adopted for all funds of the Town. Budgets for the governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Budgetary comparisons for the proprietary fund are presented on a non-GAAP budgetary basis, whereby capital outlay and debt principal are budgeted as expenditures. The Town follows these procedures to establish the budgetary information reflected in the financial statements:  Management submits to the Town Board a proposed budget for the fiscal year commencing the following January 1. The budget includes proposed expenditures and the means of financing them.  Public hearings are conducted to obtain taxpayer comments.  Prior to December 31, the budget is legally enacted through passage of a resolution.  Management is authorized to transfer budgeted amounts between departments within any fund. However, any revisions that alter the total expenditures of any fund must be approved by the Town Board.  All appropriations lapse at year end. ---PAGE BREAK--- Supplementary Information ---PAGE BREAK--- Assets Cash and Investments $ 18,227 $ - $ 110,486 $ 13,872 $ 142,585 $ 97,949 Restricted Cash and Investments - 27,595 - - 27,595 8,130 Total Assets $ 18,227 $ 27,595 $ 110,486 $ 13,872 $ 170,180 $ 106,079 Liabilities Accounts Payable 2,441 - 34,909 60 37,410 - Total Liabilities 2,441 - 34,909 60 37,410 - Fund Balance Restricted for Parks and Recreation - 27,595 - - 27,595 8,130 Committed 15,786 - 75,577 13,812 105,175 97,949 Total Fund Balance 15,786 27,595 75,577 13,812 132,770 106,079 Total Liabilities and Fund Balance $ 18,227 $ 27,595 $ 110,486 $ 13,872 $ 170,180 $ 106,079 Special Revenue Funds Town of Monument, Colorado Combining Balance Sheet Nonmajor Governmental Funds December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 2018 Total 2019 Fund Fund Fund Trust Storm Fund Community Conservation Traffic Drainage Development Park Impact Fee See the accompanying Independent Auditors' Report. 30 ---PAGE BREAK--- Revenues Licenses and Permits $ 73,695 $ - $ - $ - $ 73,695 $ 67,964 Intergovernmental - 50,607 - - 50,607 43,762 Charges for Services - - 39,119 40,659 79,778 117,828 Investment Income 492 208 1,644 286 2,630 4,943 Miscellaneous 7,000 - - - 7,000 5,350 - - Total Revenues 81,187 50,815 40,763 40,945 213,710 239,847 Expenditures General Government 80,932 - - - 80,932 103,938 Parks and Recreation - 31,350 - - 31,350 1,398 Capital Outlay - - 34,909 39,828 74,737 261,426 Total Expenditures 80,932 31,350 34,909 39,828 187,019 366,762 Excess Revenues Over (Under) Expenditures 255 19,465 5,854 1,117 26,691 (126,915) Other Financing Sources (Uses) Transfers In - - - - - 20,000 Net Change in Fund Balance 255 19,465 5,854 1,117 26,691 (106,915) Fund Balance, Beginning of year 15,531 8,130 69,723 12,695 106,079 212,994 Fund Balance, End of year $ 15,786 $ 27,595 $ 75,577 $ 13,812 $ 132,770 $ 106,079 Town of Monument, Colorado Combining Statement of Revenues, Expenditures and Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 31, 2019 Special Revenue Funds Community Conservation Traffic Drainage Storm 2018 Total 2019 Development Fund Trust Fund Impact Fee Impact Fee Fund Fund See the accompanying Independent Auditors' Report. 31 ---PAGE BREAK--- 2018 Actual Revenues Business Licenses $ 65,000 $ 73,695 $ 8,695 $ 67,964 Interest 700 492 (208) 704 Miscellaneous 5,000 7,000 2,000 5,350 Total Revenues 70,700 81,187 10,487 74,018 Expenditures General Government 97,189 80,932 16,257 103,938 Total Expenditures 97,189 80,932 16,257 103,938 Net Change in Fund Balance (26,489) 255 26,744 (29,920) Fund Balance, Beginning of year 26,489 15,531 (10,958) 25,451 Fund Balance, End of year $ - $ 15,786 $ 15,786 $ (4,469) 2019 Town of Monument, Colorado Budgetary Comparison Schedule Community Development Fund For the Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Original and Final Budget Variance Actual (Negative) Positive See the accompanying Independent Auditors' Report. 32 ---PAGE BREAK--- 2018 Actual Revenues Lottery Revenues $ 63,000 $ 50,607 $ (12,393) $ 43,762 Interest 75 208 133 62 Total Revenues 63,075 50,815 (12,260) 43,824 Expenditures Park and Recreation 68,607 31,350 (37,257) 38,802 Total Expenditures 68,607 31,350 (37,257) 38,802 Net Change in Fund Balance (5,532) 19,465 24,997 5,022 Fund Balance, Beginning of year 5,532 8,130 2,598 3,108 Fund Balance, End of year $ - $ 27,595 $ 27,595 $ 8,130 Town of Monument, Colorado Budgetary Comparison Schedule Conservation Trust Fund For the Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Final Budget Actual (Negative) 2019 Variance Original and Positive See the accompanying Independent Auditors' Report. 33 ---PAGE BREAK--- 2018 Actual Revenues Traffic Impact Fees $ 133,623 $ 39,119 $ (94,504) $ 50,819 Interest 3,500 1,644 (1,856) 3,574 Total Revenues 137,123 40,763 (96,360) 54,393 Expenditures Capital Outlay 211,198 34,909 176,289 160,965 Total Expenditures 211,198 34,909 176,289 160,965 Net Change in Fund Balance (74,075) 5,854 79,929 (106,572) Fund Balance, Beginning of year 74,075 69,723 (4,352) 176,295 Fund Balance, End of year $ - $ 75,577 $ 75,577 $ 69,723 Budgetary Comparison Schedule Traffic Impact Fee Fund For the Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Town of Monument, Colorado Final Budget Actual (Negative) 2019 Variance Original and Positive See the accompanying Independent Auditors' Report. 34 ---PAGE BREAK--- 2018 Actual Revenues Storm Drainage Impact Fees $ 141,750 $ 40,659 $ (101,091) $ 67,009 Interest 700 286 (414) 603 Total Revenues 142,450 40,945 (101,505) 67,612 Expenditures Capital Outlay 142,450 39,828 102,622 63,057 Total Expenditures 142,450 39,828 102,622 63,057 Net Change in Fund Balance - 1,117 1,117 4,555 Fund Balance, Beginning of year - 12,695 12,695 8,140 Fund Balance, End of year $ - $ 13,812 $ 13,812 $ 12,695 Town of Monument, Colorado Budgetary Comparison Schedule Storm Drainage Impact Fee For the Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Final Budget Actual (Negative) 2019 Variance Original and Positive See the accompanying Independent Auditors' Report. 35 ---PAGE BREAK--- 2018 Actual Revenues Charges For Services $ 1,804,012 $ 1,562,945 $ (241,067) $ 1,615,974 Other Income 88,830 22,867 (65,963) 34,270 Total Revenue 1,892,842 1,585,812 (307,030) 1,650,244 Expenses Operations and Maintenance 1,423,148 1,145,939 277,209 1,096,140 Administration and General 92,300 104,652 (12,352) 52,968 Capital Outlay 2,155,000 370,620 1,784,380 1,147,642 Total Expenses 3,670,448 1,621,211 2,049,237 2,296,750 Net Operating Income (1,777,606) (35,399) 1,742,207 1,777,606 Nonoperating Revenues (Expenses) Sales taxes 506,429 263,729 (242,700) 232,000 Grant Revenue - 9,000 9,000 - Interest Income 19,439 22,540 3,101 19,662 Debt Service (267,519) (54,268) 213,251 73,100 Total Nonoperating Revenues (Expenses) 258,349 241,001 (17,348) 324,762 Net Income (Loss) Before Contributed Capital (1,519,257) 205,602 1,724,859 2,102,368 Contributed Capital Tap Fees 3,281,860 883,792 (2,398,068) 652,730 Transfers Out (439,850) (284,250) 155,600 172,779 Change in Net Position, Budgetary Basis $ 1,322,753 $ 805,144 $ (517,609) $ 2,927,877 Reconciliation to GAAP Basis Capital Outlay 370,620 1,147,642 Debt Service Principal 58,076 67,971 Change in accrued interest 1,371 - Depreciation (405,092) (393,269) Change in Net Position, GAAP Basis $ 830,119 $ 3,750,221 Original and Final Budget Variance Positive Actual (Negative) Town of Monument, Colorado Budgetary Comparison Schedule Water Fund For the Year Ended December 31, 2019 See the accompanying Independent Auditors' Report. 36 ---PAGE BREAK--- Compliance Section ---PAGE BREAK--- State Compliance ---PAGE BREAK--- 37 ---PAGE BREAK--- 38