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12-2016 Base Village Metro Dist No 2 Financial Statements BASE VILLAGE METROPOLITAN DISTRICT NO.2 Pitkin County,Colorado FINANCIAL STATEMENTS December 31,2016 TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position 1 Statement of Activities 2 Fund Financial Statements Balance Sheet- Governmental Funds 3 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 4 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 5 General Fund - Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 6 Notes to Financial Statements 7 SUPPLEMENTARY INFORMATION 23 Debt Service Fund - Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 24 Schedule of Debt Service Requirements to Maturity 25 Schedule of Assessed Valuation, Mill Levy and Property Taxes Collected 26 1 I BAR\ 14,S GRIGGS I I I . & ASSOCIATES PC 5 Certified Public Accountants and Business Consultants INDEPENDENT AUDITOR'S REPORT To the Board of Directors Base Village Metropolitan District No. 2 Pitkin County, Colorado We have audited the accompanying financial statements of the governmental activities and each major fund of Base Village Metropolitan District No. 2 (the District) as of and for the year ended December 31 , 2016, and the related notes to the financial statements, which collectively comprise the District'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. 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 and each major fund of Base Village Metropolitan District No. 2, as of December 31 , 2016, and the respective changes in financial position thereof, and the budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Barnes Griggs & Associates, PC 12136 West Bayaud Ave., Suite 300• Lakewood. Colorado 80228 303.202.1800 Office•303 237.0155 Fax•www.barnesgriggs.com Other Matters Required Supplementary Information Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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 statement in an appropriate operation, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of legal compliance and additional analysis and is not a required part of the basic financial statements. The supplementary 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. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the 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 information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. leaAnt.C4—...)&4:7 I aile,c4)/zif )1d Lakewood, Colorado August 15, 2017 II BASIC FINANCIAL STATEMENTS BASE VILLAGE METROPOLITAN DISTRICT NO. 2 STATEMENT OF NET POSITION December 31, 2016 Governmental Activities ASSETS Cash and investments - Restricted $ 12,515,763 Receivable - County Treasurer 4,579 Due from other governments 5,150 Property taxes receivable 1 ,596,878 Total assets 14,122,370 LIABILITIES Accounts payable 119,825 Accrued interest - 2016A Bonds 44,199 Due to other governments 5,341 Noncurrent liabilities Accrued interest on 2016B Bonds 21 ,661 Due in more than one year 44,650,533 Total liabilities 44,841 ,559 DEFERRED INFLOW OF RESOURCES Deferred property tax revenue 1 ,596,878 Total deferred inflow of resources 1 ,596,878 NET POSITION U n restricted (32,316,067) Total net position $ (32,316,067) These financial statements should be read only in connection with the accompanying notes to financial statements. 1 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 STATEMENT OF ACTIVITIES Year Ended December 31, 2016 Net (Expense) Revenue and Changes in Program Revenues Net Position Charges Operating Capital for Grants and Grants and Governmental Functions/Programs Expenses Services Contributions Contributions Activities Primary government: Government activities: Intergovernmental $ 229,123 $ - $ - $ - $ (229,123) Interest and related costs on long-term debt 3,595.553 - - 36,050 (3.559.503) $ 3,824,676 $ - $ - $ 36,050 (3,788,626) General revenues: Property taxes 1,604,809 Specific ownership taxes 53,187 Investment income 11,243 Special items: Forgiveness and Cancellation of debt 22,045,518 Total general revenues and special items 23,714,757 Change in net position 19,926,131 Net position - Beginning (52,242,198 Net position - Ending S (32.316.067) These financial statements should be read in connection with the accompanying notes to financial statements. 2 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2016 Total Debt Governmental General Service Funds ASSETS Cash and investments - Restricted $ 4,709 $ 12,511 ,054 $ 12,515,763 Receivable - County Treasurer 632 3,947 4,579 Due from other governments - 5,150 5,150 Property tax receivable 220,259 1 ,376,619 1 ,596,878 TOTAL ASSETS $ 225,600 $ 13,896,770 $ 14,122,370 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable - COI $ - $ 119,825 $ 119,825 Due to other governments $ 5,341 $ - $ 5,341 Total liabilities 5,341 119,825 125,166 DEFERRED INFLOWS OF RESOURCES Deferred property tax revenue 220,259 1 ,376,619 1 ,596,878 Total deferred inflows of resources 220,259 1 ,376,619 1 ,596,878 FUND BALANCES Restricted for: Debt service - 12,400,326 12,400,326 Total fund balances - 12,400,326 12,400,326 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 225,600 $ 13,896,770 Amounts reported for governmental activities in the statement of net position are different because: Long-term liabilities are not due and payable in the current period and, therefore. are not reported in the funds. Bonds payable - 2016A (31 ,260,000) Bonds payable - 2016B (13,330,000) Bond premium (60,533) Accrued bonds interest payable - 2016A (44,199) Accrued bonds interest payable - 2016B (21 ,661) Net position of governmental activities $ (32,316,067) These financial statements should be read only in connection with the accompanying notes to financial statements. 3 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended December 31 , 2016 Total Debt Governmental General Service Funds REVENUES Property taxes $ 221 ,464 $ 1 ,383,345 $ 1 ,604,809 Specific ownership tax 7,337 45,850 53,187 Capital facility fees - 36,050 36,050 Investment income 322 10,921 11 ,243 Total revenues 229,123 1 .476,166 1 ,705,289 EXPENDITURES Current County Treasurer's fees 11 ,084 69,273 80,357 Intergovernmental 218,039 - 218,039 Debt service Bond principal - 635,000 635,000 Bond interest - 581 ,940 581 ,940 Bond issue costs - 1 ,237,652 1 ,237,652 Paying agent/trustee fees - 3,000 3,000 Total expenditures 229,123 2,526,865 2,755,988 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - (1 ,050,699) (1 ,050,699) OTHER FINANCING SOURCES (USES) Bond issuance - 44,590,000 44,590,000 Loan refunding payment - (18,477,817) (18,477,817) Bond refunding payment - (13,991 ,082) (13,991 ,082) Bond premium - 60,567 60,567 Total other financing sources (uses) - 12,181 ,668 12,181 ,668 NET CHANGE IN FUND BALANCES - 11 ,130,969 11 ,130,969 FUND BALANCES - BEGINNING OF YEAR - 1 ,269,357 1 ,269,357 FUND BALANCES - END OF YEAR $ - $ 12,400,326 $ 12,400,326 These financial statements should be read only in connection with the accompanying notes to financial statements. 4 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended December 31, 2016 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - Total governmental funds $ 11 ,130,969 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Bond issuance $ (44,590.000) Bond principal payment 635,000 Refunding payment - 2013A (Loan) 18,477,817 Refunding payment - 2013B (Bond) 13,991 ,082 Forgiveness and cancellation of debt - 2013B and Guarantor Bonds 12,358,983 Refunding of 2013B debt - direct deposit to Supplemental fund 9,686,535 Bond premium (60,567) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Amortization of Bond preimium 34 Accrued interest on long-term obligations - Change in liability (1 ,703,722) Changes in net position of governmental activities $ 19,926,131 These financial statements should be read only in connection with the accompanying notes to financial statements. 5 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Year Ended December 31, 2016 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) REVENUES Property taxes $ 221 ,970 $ 221 ,970 $ 221 ,464 $ (506) Specific ownership tax 6,660 8,500 7,337 (1 ,163) Investment income 100 330 322 (8) Total revenues 228,730 230,800 229,123 (1 ,677) EXPENDITURES Current County Treasurer's fees 11 ,099 11 ,099 11 ,084 15 Intergovernmental 217,631 219,701 218,039 1 ,662 Total expenditures 228,730 230,800 229,123 1 ,677 NET CHANGE IN FUND BALANCE - - - - FUND BALANCES - BEGINNING OF YEAR - - - - FUND BALANCES - END OF YEAR $ These financial statements should be read only in connection with the accompanying notes to financial statements. 6 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 1 - DEFINITION OF REPORTING ENTITY Base Village Metropolitan District No. 2 (the District) was organized by Court Order in December 2004, to provide financing for the design, acquisition, installation and construction of streets, drainage, traffic and safety controls, park and recreation, transportation, and mosquito and pest control. The District's service area is located entirely within the Town of Snowmass Village (the Town), in Pitkin County, Colorado. Under the Consolidated Service Plan (Amended and Restated Consolidated Service Plan approved October 17, 2006), the District is the Financing District and is related to Base Village Metropolitan District No. 1 (Base Village No. 1), which serves as the Service District. The Service District is responsible for management of the construction of all facilities and improvements and for operation and maintenance of all improvements not conveyed to the Town. The Service District, together with the Financing District, provides the funding for infrastructure improvements and the tax base needed to support ongoing operations. The District follows the Governmental Accounting Standards Board (GASB) accounting pronouncements which provide guidance for determining which governmental activities, organizations and functions should be included within the financial reporting entity. GASB pronouncements set forth the financial accountability of a governmental organization's elected governing body as the basic criterion for including a possible component governmental organization in a primary government's legal entity. Financial accountability includes, but is not limited to. appointment of a voting majority of the organization's governing body, ability to impose its will on the organization, a potential for the organization to provide specific financial benefits or burdens and fiscal dependency. The District has no employees and all operations and administrative functions are contracted. The District is not financially accountable for any other organization, nor is the District a component unit of any other primary governmental entity. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The more significant accounting policies of the District are described as follows: Government-wide and Fund Financial Statements The government-wide financial statements include the statement of net position and the statement of activities. These financial statements include all of the activities of the District. The effect of interfund activity has been removed from these statements. Governmental activities are normally supported by taxes. The statement of net position reports all financial and capital resources of the District. The difference between the sum of assets and deferred outflows and the sum of liabilities and deferred inflows is reported as net position. 7 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Redemption of bonds are recorded as a reduction in liabilities. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The major sources of revenue susceptible to accrual are property taxes and specific ownership taxes. All other revenue items are considered to be measurable and available only when cash is received by the District. The District determined that Developer advances are not considered as revenue susceptible to accrual. Expenditures, other than interest on long-term obligations are recorded when the liability is incurred or the long-term obligation is due. The District reports the following major governmental funds: The General Fund is the District's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term debt of the governmental funds. 8 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Budgets In accordance with the State Budget Law of Colorado, the District's Board of Directors holds public hearings in the fall of each year to approve the budget and appropriate the funds for the ensuing year. The appropriation is at the total fund expenditures and other financing use level and lapses at year end. The District's Board of Directors can modify the budget by line item within the total appropriation without notification. The appropriation can only be modified upon completion of notification and publication requirements. The budget includes each fund on its basis of accounting unless otherwise indicated. The District has amended its budget for the year ended December 31 . 2016. Pooled Cash and Investments The District follows the practice of pooling cash and investments of all funds to maximize investment earnings. Except when required by trust or other agreements, all cash is deposited to and disbursed from a single bank account. Cash in excess of immediate operating requirements is pooled for deposit and investment flexibility. Investment earnings are allocated periodically to the participating funds based upon each fund's average equity balance in the total cash. Investments are carried at fair value. Property Taxes Property taxes are levied by the District's Board of Directors. The levy is based on assessed valuations determined by the County Assessor generally as of January 1 of each year. The levy is normally set by December 15 by certification to the County Commissioners to put the tax lien on the individual properties as of January 1 of the following year. The County Treasurer collects the determined taxes during the ensuring calendar year. The taxes are payable by April or if in equal installments, at the taxpayer's election, in February and June. Delinquent taxpayers are notified in August and generally sales of the tax liens on delinquent properties are held in November or December. The County Treasurer remits the taxes collected monthly to the District. Property taxes, net of estimated uncollectible taxes, are recorded initially as a deferred inflow of resources in the year they are levied and measurable. The deferred property tax revenues are recorded as revenue in the year they are available or collected. Capital Facility Fee A fee of $5,150 will be collected upon the initial sale of each residential living unit and used to pay debt service payments on the bonds. The district collected fees for 7 residential units during 2016. 9 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Expenditures Administrative Expenditures Base Village No. 1 records all operational and administrative expenditures for the Districts. Deferred Inflow of Resources In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, deferred property tax revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Amortization Original Issue Premium In the government-wide financial statements, bond premiums are deferred and amortized over the life of the bonds using the effective interest method. Equity Net Position For government-wide presentation purposes when both restricted and unrestricted resources are available for use, it is the District's practice to use restricted resources first, then unrestricted resources as they are needed. Fund Balance Fund balance for governmental funds should be reported in classifications that comprise a hierarchy based on the extent to which the government is bound to honor constraints on the specific purposes for which spending can occur. Governmental funds report up to five classifications of fund balance: nonspendable, restricted, committed, assigned, and unassigned. Because circumstances differ among governments, not every government or every governmental fund will present all of these components. The following classifications describe the relative strength of the spending constraints: • Nonspendable fund balance — The portion of fund balance that cannot be spent because it is either not in spendable form (such as prepaid amounts or inventory) or legally or contractually required to be maintained intact. 10 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) • Restricted fund balance — The portion of fund balance that is constrained to being used for a specific purpose by external parties (such as bondholders), constitutional provisions, or enabling legislation. • Committed fund balance — The portion of fund balance that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision-making authority, the Board of Directors. The constraint may be removed or changed only through formal action of the Board of Directors. • Assigned fund balance — The portion of fund balance that is constrained by the government's intent to be used for specific purposes, but is neither restricted nor committed. Intent is expressed by the Board of Directors to be used for a specific purpose. Constraints imposed on the use of assigned amounts are more easily removed or modified than those imposed on amounts that are classified as committed. • Unassigned fund balance — The residual portion of fund balance that does not meet any of the criteria described above. If more than one classification of fund balance is available for use when an expenditure is incurred, it is the District's practice to use the most restrictive classification first. NOTE 3 — CASH AND INVESTMENTS Cash and investments as of December 31 , 2016, are classified in the accompanying financial statements as follows: Statement of net position: Cash and investments — Restricted $ 12,515/63 Cash and investments as of December 31 , 2016 consist of the following: Deposits with financial institutions $ 16,748 Investments 12,499,015 Total $ 12,515,763 Deposits with Financial Institutions The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit cash in eligible public depositories. Eligibility is determined by state regulators. Amounts on deposit in excess of federal insurance levels must be collateralized. The eligible collateral is determined by the PDPA. PDPA allows the institution to create a single collateral pool for all public funds. The pool for all the uninsured public deposits as a group is to be maintained by another institution or held in trust. The market value of the collateral must be at least 102% of the aggregate uninsured deposits. 11 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 3 — CASH AND INVESTMENTS (CONTINUED) The State Commissioners for banks and financial services are required by statute to monitor the naming of eligible depositories and reporting of the uninsured deposits and assets maintained in the collateral pools. At December 31 , 2016, the District had a bank and carrying balance of $16,748. Investments The District follows state statutes regarding investments, and as such, has not adopted a formal policy. The District generally limits its concentration of investments to those noted with an asterisk (*) below, which are believed to have minimal credit risk, minimal interest rate risk and no foreign currency risk. Additionally, the District is not subject to concentration risk or investment custodial risk disclosure requirements for investments that are in the possession of another party. Colorado revised statutes limit investment maturities to five years or less unless formally approved by the Board of Directors. Such actions are generally associated with a debt service reserve or sinking fund requirements. Colorado statutes specify investment instruments meeting defined rating and risk criteria in which local governments may invest which include: Obligations of the United States, certain U.S. government agency securities and securities of the World Bank General obligation and revenue bonds of U.S. local government entities Certain certificates of participation Certain securities lending agreements Bankers' acceptances of certain banks Commercial paper Written repurchase agreements and certain reverse repurchase agreements collateralized by certain authorized securities Certain money market funds Guaranteed investment contracts Local government investment pools Fair Value Measurement and Application The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. Investments not measured at fair value and not categorized include governmental money market funds (PFM Funds Governmental Select series); money market funds (generally held by Bank Trust Departments in their role as paying agent or trustee); and CSAFE which record their investments at amortized cost. 12 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 3 — CASH AND INVESTMENTS (CONTINUED) As of December 31, 2016, the District had the following investments: Investment Maturity Fair Value Colorado Surplus Asset Fund Trust (CSAFE) Weighted average under 60 days $ 34,155 Federated Treasury Money Market Fund Weighted average under 60 days 12,464,860 $ 12,499,015 CSAFE The District invested in the Colorado Surplus Asset Fund Trust (CSAFE), which is an investment vehicle established by state statute for local government entities to pool surplus assets. The State Securities Commissioner administers and enforces all State statutes governing CSAFE. CSAFE is similar to a money market fund, with each share valued at $1 .00. CSAFE may invest in U.S. Treasury securities, repurchase agreements collateralized by U.S. Treasury securities, certain money market funds and highest rated commercial paper. A designated custodial bank serves as custodian for CSAFE's portfolio pursuant to a custodian agreement. The custodian acts as safekeeping agent for CSAFE's investment portfolio and provides services as the depository in connection with direct investments and withdrawals. The custodian's internal records segregate investments owned by CSAFE. CSAFE is rated AAAm by Standard & Poor's. Federated Treasury Money Market Fund The debt service money that is included in the trust accounts at United Missouri Bank is invested in the Federated Treasury Obligations Fund. This portfolio is a money market mutual fund which invests in U.S. Treasury obligations, which are fully guaranteed as to principal and interest by the United States, with maturities of 13 months or less and repurchase agreements collateralized by U.S. Treasury obligations. The Federated Treasury Obligation Fund is rated AAAm by Standard & Poor's. 13 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 4 - LONG-TERM OBLIGATIONS The following is an analysis of the changes in the District's long-term obligations for the year ended December 31 , 2016: Balance at Balance at Due December 31, December 31, Within 2015 Additions Reductions 2016 One Year Governmental Activities: General obligations payable: Guarantor Bonds $ 1,278,000 $ - $ 1,278,000 $ - $ - Accrued interest on Guarantor Bonds 6,586,763 126,380 6,713,143 - - 2013A Loan 19,080,000 - 19,080,000 - - 2013B Bonds 23,760,000 - 23,760,000 - - Accrued interest on 2013B Bonds 2,758,297 1 ,527,160 4,285,457 - - 2016A Bonds - 31 ,260,000 - 31 ,260,000 - 2016B Bonds - 13,330,000 - 13,330,000 - Bond premium - 60,567 34 60,533 - $ 53,463,060 $ 46,304,107 $55,116,634 $44,650,533 $ - The details of the District's long-term obligations are as follows: General Obligation Bonds $20,300,000 Senior Tax-Free Loan Refunding & Improvement, Series 2013A, dated December 2, 2013. The loan matures on December 2, 2020, with mandatory redemption principal payments starting at $600,000 on December 1 , 2014, and interest payments due on June 1 and December 1 at a fixed interest rate of 3.05% per annum. The loan may be prepaid without premium or penalty starting on and after September 2, 2016. A balloon payment of $16,430,000 is due on the maturity date. In the event that the refinancing is not successful prior to that time, the loan balance will begin to bear interest at an adjusted rate 11 .05%. The loan is secured and payable from the following sources, net of any collection costs: 1) property tax revenues from the "Required Mill Levy", and 2) specific ownership tax revenue related to the "Required Mill Levy". The term "Required Mill Levy" includes both a debt service mill levy and an operations mill levy component. The Required Mill Levy is 37.5 mills for debt service and 6.0 mills for operations. The Required Mill Levy is subject to adjustment for changes in the ratio of actual value to assessed value of property within the District. The Consolidated Service Plan establishes certain limitations on the maximum mill levy that the District may impose for debt service, and the terms of the Bonds are subject to these limitations. $23,760,000 Subordinate Limited Tax Revenue Refunding Bond, Series 2013B, dated November 13, 2013. The bond matures on December 15, 2043, and has an interest rate of 6.50% that will be imposed on the unpaid principal amount. The bond is secured and payable from the following sources, net of any collection costs: 1) property tax revenues from the "Required Mill Levy", 2) specific ownership tax revenue related to the "Required Mill Levy", 3) capital fees, and 4) any other legally available money. 14 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED) Pledged Revenues from the Required Mill Levy are available to pay for commitments under the Bond Resolution only after subtracting the Required Mill Levy revenues due under the Loan Agreement. To the extent of available Pledged Revenues, interest and principal payments are due annually on or before December 15, beginning on or after the Custodial Eligibility Date, defined as the first date on which the Debt to Assessed Ratio is equal to or less than 50%, until the bond is paid in full. However, any amount remaining unpaid on the bond maturity date shall be deemed fully discharged without further action by the District or the Owner. $1,278,000 Guarantor Bonds, Series 2011, dated December 23, 2011. On December 2, 2013, $31,272,000 of Guarantor bonds were refunded with the Series 2013A loan and Series 2013B Bonds, leaving a remaining balance of $1,278,000. The Guarantor bonds were held by Snowmass Acquisition Company LLC (SAC, see Note 6) as of December 31, 2013. Under the Fourth Supplemental Indenture of Trust, the underlying indenture is suspended, provided that the Guarantor bonds shall continue to bear interest at a rate of 10% and may be refunded at any date by the District. However, the District has no obligation to impose a mill levy for the purpose of repayment. Any amount remaining unpaid at maturity date of December 1, 2038, shall be deemed fully discharged without further action by the District. On December 22, 2016 the District refunded its outstanding 2013A Loan and a portion of its 2013B Bonds with the issuance of its 2016A General Obligation Limited Tax Refunding Bonds and its 2016B General Obligation Limited Tax Subordinate Bonds. As a result of the refunding, a combined $12,358,938 in 2013B Bonds, 2011 Guarantor Bonds. and accrued interest was forgiven by the bondholders and deemed canceled and paid in full. As a result of the refunding, the average interest rate of the new debt is 5.91% compared to 6.24% (using an interest rate of 3.05% for four years and 5.5% for 22 years on the 2013A Loan). Additionally, as part of the overall re-structuring. the District is no longer obligated to provide the funding to Base Village No. 1 for the purpose of paying the obligation under the Infrastructure Acquisition and Reimbursement Agreement (See Note 7). The estimated present value savings range from 3% to 10% given that the 2016B Bonds are cash flow obligations and the timing of repayment is dependent on actual results of development. Series 2016A Senior and Series 2016B Subordinate General Obligation Limited Tax Refunding Bonds The District issued its Series 2016A Bonds and Series 2016B Bonds on December 22, 2016, in the amounts of $31,260,000 and $13,330,000, respectively. The proceeds from the sale of the 2016A Bonds and a prior reserve fund were used to: (i) refund, on a current refunding basis: (a) all of the District's 2013A Loan: (b) a portion of the 2013B Bonds and together with the 2013A Loan, the "Refunded Bonds"); (ii) fund the Reserve Fund; (iii) fund the Surplus Fund; and (iv) pay the costs of issuing the Bonds. The 2016A Bonds bear interest at rates ranging from 5.50% to 5.75% payable semi-annually on June 1 and December 1, beginning on June 1, 2017. Annual mandatory sinking fund principal payments on the 2016A Bonds are due on December 1, beginning on December 1, 2020. The 2016A Bonds mature on December 1, 2046. 15 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED) The 2016A Bonds are also subject to redemption prior to maturity, at the option of the District, on any date on or after December 1 , 2021 , as follows: Redemption Date Redemption Premium December 1 , 2021 to and including November 30, 2022 3.0% December 1 , 2022 to and including November 30, 2023 2.0% December 1 , 2023 to and including November 30, 2024 1 .0% December 1 , 2024 and thereafter 0.0% The 2016B Bonds bear interest at the rate of 6.5% per annum and payable annually on December 15, but only to the extent of available Subordinate Pledged Revenue. The 2016B Bonds are structured as cash flow bonds meaning that there are no scheduled payments of principal or interest. Unpaid interest on the 2016B Bonds compounds annually on each December 15. In the event any amounts due and owing on the 2016B Subordinate Bonds remain outstanding on December 15, 2048, such amounts shall be extinguished and no longer be due and outstanding. The combined yield on the 2016A and 2016B bonds is 5.9115%. The 2016B Bonds are subject to redemption prior to maturity, at the option of the District, as a whole or integral multiples of $1 ,000, on December 15, 2021 , and on any date thereafter, upon payment of par and accrued interest, at the following price: Redemption Date Redemption Premium December 1 , 2021 to and including November 30, 2022 3.0% December 1 , 2022 to and including November 30, 2023 2.0% December 1 , 2023 to and including November 30, 2024 1 .0% December 1 , 2024 and thereafter 0.0% The 2016A Bonds are secured by and payable solely from and to the extent of Pledged Revenue which is defined generally in the 2016A Indenture as: (a) the Required Mill Levy; (b) the Specific Ownership Tax Revenue; (c) the Capital Facility Fee Revenue; (d) the Capital Levy Revenue (from which Shortfalls shall be paid — see Capital Pledge Agreement); (e) any other legally available moneys which the District determines, in its absolute discretion, to transfer to the Trustee for application as Pledged Revenue; If Pledged Revenue is insufficient to pay the debt service requirement on the 2016A Bonds in any year, a different flow of funds and associated funding requirements will apply as determined by the Levels defined in the 2016A Indenture. 16 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED) The Required Mill Levy of the District under the 2016A Indenture is limited to a maximum of 37.5 mills, as adjusted, during certain periods, and to a maximum of 43.5 mills, as adjusted, during certain other periods. The Capital Levy of District No. 1 under the Capital Pledge Agreement is also limited to a maximum of 43.5 mills, as adjusted. Such mill levies are subject to adjustment per the Gallagher Amendment from October 23, 2006. The 2016A Bonds are further secured by the Reserve Fund, which was funded in the amount of $654,168 and by the Surplus Fund, which was funded in the Maximum Surplus Amount of $2,000,000. At such time as the Senior Debt to Assessed Ratio is equal to or less than 50%, the Maximum Surplus Amount is reduced to $1,000,000. During certain periods described in the 2016A Indenture, amounts on deposit in the Surplus Fund in excess of $1,000,000, if any, are to be applied to the Annual Debt Service Requirements. All remaining amounts in the Surplus Fund may also be used to pay Annual Debt Service Requirements during certain other periods described in the 2016A Indenture. Additionally, at closing, the Supplemental fund was established in the amount of 9,686,535. Proceeds will be released to the prior 2013B bondholder as certain building permits are issued. In the event permits are not issued. the Supplemental fund serves as additional security on the 2016A Bonds. The 2016B Subordinate Bonds are payable solely from and to the extent of the Subordinate Pledged Revenue, which includes monies derived from the following, net of costs of collection: (a) the Subordinate Required Mill Levy; (b) the portion of the Specific Ownership Tax Revenue which is collected as a result of imposition of the Subordinate Required Mill Levy;; (c) the Subordinate Capital Facility Fee Revenue; (d) any other legally available moneys which the District determines, in its absolute discretion, to transfer to the Trustee for application as Subordinate Pledged Revenue: The Subordinate Indenture defines the Subordinate Require Mill Levy as a mill levy imposed equal to 37.5 mills, as adjusted, less the Senior Bond Mill Levy. 17 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED) Series 2016A Loan principal and interest will mature as follows: Principal Interest Total 2017 $ - $ 1 ,664,855 $ 1 ,664,855 2018 - 1 ,767,988 1 ,767,988 2019 - 1 ,767,988 1 ,767,988 2020 85,000 1 ,767,988 1 ,852,988 2021 285,000 1 ,763,313 2,048,313 2022-2026 2,340,000 8,506,087 10,846,087 2027-2031 3,640,000 7,727,838 11 ,367,838 2032-2036 5,435,000 6,540,387 11 ,975,387 2037-2041 7,780,000 4,768,473 12,548,473 2042-2046 11 ,695,000 2,178,101 13,873,101 $ 31 ,260,000 $ 38,453,018 $ 69,713,018 Capital Pledge Agreement between the District and Base Village No. 1 (2016) The District entered into a Capital Pledge Agreement with District No. 1 on December 22, 2016 by which District No. 1 has pledged the Capital Levy Revenue to the District for payment of the Bonds (subject to the limitations as outlined in the Agreement). District No. 1 will impose a capital levy each year in the number of mills necessary to produce the Capital Levy Revenue in an amount at least equal to the amount required to cover the annual Shortfall (defined below) through a pledge of the Capital Levy Revenue to the District. The Capital Levy shall not exceed 43.5 mills, as adjusted. The Capital Levy Revenue includes the property tax revenue derived from the imposition of the Capital Levy plus specific ownership tax revenue allocable to such Capital Levy, less costs of collection. The pledge of the Capital Levy Revenue secures the obligation of District No. 1 to make Shortfall payments in accordance with the Capital Pledge Agreement. The annual Shortfall is determined when the sum of the District Required Mill Levy, the proportionate share of Specific Ownership Taxes, the Capital Facility Fees received, and the moneys in the Surplus Fund in excess of $1 ,000,000, are less than the Senior Debt Service Requirements for the same Bond Year. Such insufficiency shall constitute a "Shortfall" and a Shortfall shall be deemed to occur with respect to such Bond Year. No Shortfall payment is anticipated from District No. 1 in 2017. 18 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 4 - LONG-TERM OBLIGATIONS (CONTINUED) Authorized Debt On November 1 , 2005, the District's electors authorized the issuance of indebtedness in an amount not to exceed $107,500,000. At December 31 , 2016, the District had authorized but unissued indebtedness in the following amounts allocated for the following purposes: Authorization Authorization Authorization Authorized Used Authorization Used Used Remaining at November 6, Series 2008 Used Series 2013 Series 2016 December 31, 2007 Election A&B Series 2008D A&B A&B 2015 Streets $ 41,300,000 $ 21,248,750 S - $ - S - $ 20,051,250 Public transportation 39,300.000 21.965,000 2,200,000 - - 15,135,000 Fire protection 2.000,000 1.193,750 - - - 806,250 Traffic and safety 1,800,000 - - - - 1,800,000 Parks and recreation 23,000,000 3,342,500 - - - 19,657,500 Mosquito control 100.000 - - - - 100.000 S 107,500,000 S 47.750,000 $ 2.200,000 $ - S - S 57.550,000 Pursuant to the Amended and Restated Consolidated Service Plan, the Districts are permitted to issue bond indebtedness of up to $48,700,000 in par amount, excluding underwriter discount, credit enhancement costs, other costs of issuance, and payments made by guarantors under any pledge agreement or for direct bond payments. As of December 31 , 2012, the District has issued $47,750,000 (inclusive of $4,179,943 of cost excludable as described above) of General Obligation Bonds and $2,200,000 in the form of a Developer Subordinate Note. During 2013, the District refunded its Series 2008A bonds, repaid its Developer Subordinate Note, and reduced its Guarantor Bond obligation through the issuance of the 2013A Loan and 2013B bond. No additional authorization was used as the District issued less debt than was previously issued with the 2008 obligations and Subordinate Note. During 2016, the District refunded its outstanding 2013A Loans and a portion of its 2013B Bonds with the issuance of its 2016A General Obligation Limited Tax Refunding Bonds and its 2016B General Obligation Limited Tax Subordinate Bonds. The 2011 Guarantor Bonds and the remaining portion of the 2013B Bonds, including remaining accrued interest, were forgiven by the bondholders and are deemed canceled and paid in full. No additional authorization was used by the District. Subsequent to year end the residential assessment rate was changed from 7.96% to 7.20%. Based upon the May 2017 preliminary assessed valuations, the service plan limitation of 43.500 mills could be increased to 48.091 mills. The final adjusted mill levy will be based upon final assessed value for collection in Budget Year 2018. NOTE 5 - NET POSITION The District has a deficit in unrestricted net position. This deficit amount is a result of the District being responsible for the repayment of bonds issued for public improvements, which are being held by Base Village No. 1 or conveyed to other governmental entities. 19 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 6 - RELATED PARTIES On September 22, 2016, Snowmass Acquisition Company, LLC (the "Prior Developer") entered into a purchase and sale contract with East West Partners, Inc., a Colorado corporation (`East West") for the sale of the Prior Developer's interest. East West formed of a joint venture to acquire the Prior Developer's interest, the members of which are an affiliate of Aspen Skiing Company and an affiliate of KSL Capital Partners, LLC ("KSL"). The joint venture is Snowmass Ventures, LLC (the "Developer"). East West assigned its interest in the Purchase Agreement to the Developer on December 7, 2016. The Developer also acquired Snowmass Hospitality, LLC ("SH") which provides property management services and created a new entity SV Snowmass Hospitality, LLC to provide hospitality services in the future. During 2016, four of the five Board of Director positions were occupied by Prior Developer representatives. One Board member was affiliated with Aspen Skiing Company. Such Board members may have potential conflicts of interest with respect to actions taken in their capacity as Board members. Disclosure of any potential conflicts of interest is made in accordance with Colorado law, in advance of each Board meeting. NOTE 7 - DISTRICT AGREEMENTS Intergovernmental Agreement with Base Village No. 1 In connection with the issuance of the Series 2008A and Series 2008B bonds, the District and Base Village No. 1 entered into the "Amended and Restated" District Public Improvements Joint Financing Construction and Service Agreement dated June 25, 2008 (the "Joint Financing Agreement"). The Joint Financing Agreement made certain changes to an earlier agreement to accommodate the issuance of the Series 2008A and Series 2008B bonds, as well as additional debt, including the 2013A Loan and the 2013B Bonds. The District terminated this Agreement on November 28, 2016 and now operates under the Operations Agreement. Operations Agreement The District and Base Village No. 1 entered into an operations, Maintenance and Administrative Services Agreement dated as of November 28, 2016 and effective December 22, 2016 (the "Operations Agreement"). The Operations Agreement replaces the Joint Financing Agreement. The Operations Agreement establishes certain rights and obligations of the Districts with respect to the provision of operations, maintenance and administrative services of the Districts. The Operations Agreement obligates Base Village No. 1 to continue to serve as the administrative agent for the District with respect to statutory annual requirements that are required of the District, and also to operate and maintain public infrastructure owned by the Base Village No. 1 and/or as to which the District has operations and maintenance responsibilities pursuant to easements or other property interests. The Operations Agreement obligates the District to levy six mills as adjusted until such time as Base Village No. l's mill levy (in the amount of 43.5 mills less the Capital Levy under the Capital Pledge Agreement) is sufficient to meet a single year's operations, maintenance and administrative expenses, at which point, the District will no longer be obligated to fund any such expenses. 20 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 7 - DISTRICT AGREEMENTS (CONTINUED) Base Village Intergovernmental Agreement On September 30, 2006, the District and Snowmass Village General Improvement District No. 1 (the GID) entered into the "Base Village Intergovernmental Agreement" (the "Base Village IGA") in order to establish the total aggregate mill levies that are to be imposed by the Districts and the GID. Pursuant to the Base Village IGA, the mill levies will not exceed 49.500 mills annually, as adjusted, which may result in a total mill levy of 54.725 depending on the mill levy imposed by each entity during to the 2018 budget process. The District was allowed to levy 29.500 mills in 2006, 2007, and 2008 for operations and maintenance and then no more than 6.000 mills for operation and maintenance in any year thereafter. Commencing in 2009. the District was to levy 37.500 mills until certain subordinate debt expected to be issued by the Developer and the Town was repaid. Only the Developer Subordinate Note was issued, however, and was subsequently repaid in connection with the issuance of the 2013A Bonds. Pursuant to the Base Village IGA, the District is permitted to levy up to 37.500 mills for debt service. The GID was permitted to levy 20.000 mills in 2006, 2007, and 2008 for operations and maintenance expenses and then not more than 10.000 mills thereafter. Infrastructure Acquisition and Reimbursement Agreement Base Village No. 1 entered into an Infrastructure Acquisition and Reimbursement Agreement (IARA) dated October 19, 2007, with the District and the new Developer, Base Village Owner LLC. On September 28, 2012, the obligations were assigned to SAC (see Note 6). The District is party to the IARA for purposes of providing funding for payment of obligations to the Developer. Per the IARA, the Developer was to construct certain Public Infrastructure improvements and was to be reimbursed by the District for those improvements that were determined to be "District Eligible Costs". District Eligible Costs was defined to mean any and all costs that may be lawfully funded by the Districts under the Special District Act and the Districts' Service Plan. Base Village No. 1 was to accept District Eligible Costs after cost and engineer certifications were issued. With respect to District Eligible Costs for which the Districts become obligated to reimburse the Developer but remained unpaid, interest was to accrue at 8% per annum from the date of acceptance. The District was relieved of providing funding for this obligation, which is recorded on Base Village No. l's records, as a result of the 2016 debt re-structuring. NOTE 8 - RISK MANAGEMENT Except as provided in the Colorado Governmental Immunity Act, §24-10-101, et seq., C.R.S.. the District may be exposed to various risks of loss related to torts; thefts of, damage to, or destruction of assets; errors or omissions; injuries to employees; or acts of God. The District is a member of the Colorado Special Districts Property and Liability Pool (Pool). The Pool is an organization created by intergovernmental agreement to provide property, liability, public officials' liability, boiler and machinery and workers compensation coverage to its members. Settled claims have not exceeded this coverage in any of the past three fiscal years. 21 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE 8 - RISK MANAGEMENT (CONTINUED) The District pays annual premiums to the Pool for liability, property and public officials' liability coverage. In the event aggregated losses incurred by the Pool exceed amounts recoverable from reinsurance contracts and funds accumulated by the Pool, the Pool may require additional contributions from the Pool members. Any excess funds which the Pool determines are not needed for purposes of the Pool may be returned to the members pursuant to a distribution formula. NOTE 9 - TAX, SPENDING AND DEBT LIMITATIONS Article X, Section 20 of the Colorado Constitution, referred to as the Taxpayer's Bill of Rights (TABOR), contains tax, spending, revenue and debt limitations which apply to the State of Colorado and all local governments. Spending and revenue limits are determined based on the prior year's Fiscal Year Spending adjusted for allowable increases based upon inflation and local growth. Fiscal Year Spending is generally defined as expenditures plus reserve increases with certain exceptions. Revenue in excess of the Fiscal Year Spending limit must be refunded unless the voters approve retention of such revenue. TABOR requires local governments to establish Emergency Reserves. These reserves must be at least 3% of Fiscal Year Spending (excluding bonded debt service). Local governments are not allowed to use the Emergency Reserves to compensate for economic conditions, revenue shortfalls, or salary or benefit increases. The District transfers its net operating revenue to Base Village No. 1 pursuant to the Operations Agreement. Therefore, the Emergency Reserves related to the District's revenues are captured in Base Village No. 1. On November 4, 2004, a majority of the District's electors authorized the District to collect and spend or retain in a reserve. all currently levied taxes and fees of the District without regard to any limitations under TABOR. The District's management believes it is in compliance with the provisions of TABOR. However. TABOR is complex and subject to interpretation. Many of the provisions, including the interpretation of how to calculate Fiscal Year Spending limits, will require judicial interpretation. This information is an integral part of the accompanying financial statements. 22 SUPPLEMENTARY INFORMATION 23 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Year Ended December 31 , 2016 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) REVENUES Property taxes $ 1 ,387, 311 $ 1 ,387,311 $ 1 ,383,345 $ (3,966) Specific ownership tax 41 ,620 41 ,620 45,850 4,230 Capital facility fees 154,500 30,900 36,050 5, 150 Investment income 1 ,800 8,500 10,921 2,421 Total revenues 1 ,585,231 1 ,468,331 1 ,476, 166 7,835 EXPENDITURES Current County Treasurer's fees 69,366 69,366 69,273 93 Bond principal 635,000 635,000 635,000 - Bond interest 871 ,639 581 ,940 581 ,940 - Bond issue costs - 1 ,241 ,984 1 ,237,652 4,332 Paying agent/trustee fees 8,000 6,000 3,000 3,000 Total expenditures 1 ,584,005 2,534,290 2,526,865 7,425 EXCESS OF REVENUE OVER (UNDER) EXPENDITURES 1 ,226 (1 ,065,959) (1 ,050,699) 15,260 OTHER FINANCING SOURCES (USES) Bond issuance - 44,590,000 44,590,000 - Loan Refunding payment - (18,477,817) (18,477,817) - Bond Refunding payment - (13,991 ,282) (13,991 ,082) 200 Bond premium - 60,567 60,567 - Total other financing sources (uses) - 12, 181 ,468 12, 181 ,668 200 NET CHANGE IN FUND BALANCE 1 ,226 11 , 115,509 11 , 130,969 15,460 FUND BALANCES - BEGINNING OF YEAR 1 ,254,980 1 ,269,357 1 ,269,357 - FUND BALANCES - END OF YEAR $ 1 ,256,206 $ 12,384,866 $ 12,400,326 $ 15,460 24 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY December 31, 2016 $31,260,000 General Obligation Limited Tax Refunding Bonds, Series 2016A Dated December 22, 2016 Principal Payable December 1 Interest at 5.50% - 5.75% Total Payable June 1 and December 1 Debt Year Ended December 31, Principal Interest Service 2017 $ - $ 1 ,664,855 $ 1 ,664,855 2018 - 1 ,767,988 1 ,767,988 2019 - 1 ,767,988 1 ,767,988 2020 85,000 1 ,767,988 1 ,852,988 2021 285,000 1 ,763,313 2,048,313 2022 385,000 1 ,747,637 2,132,637 2023 410,000 1 ,726,463 2,136,463 2024 475,000 1 ,703,912 2,178,912 2025 500,000 1 ,677,788 2,177,788 2026 570,000 1 ,650,287 2,220,287 2027 600,000 1 ,618,938 2,218,938 2028 680,000 1 ,585,937 2,265,937 2029 715,000 1 ,548,538 2,263,538 2030 800,000 1 ,509,213 2,309,213 2031 845,000 1 ,465,212 2,310,212 2032 940,000 1 ,418,738 2,358,738 2033 990,000 1 ,367,037 2,357,037 2034 1 ,090,000 1 ,312,587 2,402,587 2035 1 ,150,000 1 ,252,637 2,402,637 2036 1 ,265,000 1 ,189,388 2,454,388 2037 1 ,330,000 1 ,119,812 2,449,812 2038 1 ,455,000 1 ,043,338 2,498,338 2039 1 ,540,000 959,674 2,499,674 2040 1 ,680,000 871 ,125 2,551 ,125 2041 1 ,775,000 774,524 2,549,524 2042 1 ,930,000 672,462 2,602,462 2043 2,040,000 561 ,488 2,601 ,488 2044 2,210,000 444,188 2,654,188 2045 2,335,000 317,113 2,652,113 2046 3,180,000 182,850 3,362,850 $ 31 ,260,000 $ 38,453,018 $ 69,713,018 25 BASE VILLAGE METROPOLITAN DISTRICT NO. 2 SCHEDULE OF ASSESSED VALUATION, MILL LEVY AND PROPERTY TAXES COLLECTED December 31, 2016 Prior Year Assessed Valuation for Current Mills Levied Percentage Year Ended Year Property Debt Total Property Taxes Collected December 31, Tax Levy Operations Service Levied Collected to Levied 2012 $ 32,925,410 6.000 37.500 $ 1 ,432,255 $ 1 ,317,137 91 .96% 2013 $ 32,201 ,150 6.000 37.500 $ 1 ,400,750 $ 1 ,394,022 99.52% 2014 $ 35,695,930 6.000 37.500 $ 1 ,552,773 $ 1,552,355 99.97% 2015 $ 37,167,320 6.000 37.500 $ 1 ,616,779 $ 1,616,778 99.99% 2016 $ 36,994,950 6.000 37.500 $ 1 ,609,281 $ 1 ,604,809 99.72% Estimated for the year ending December 31 , 2017 $ 36,709,840 6.000 37.5000 $ 1 ,596,878 Property taxes collected in any one year include collection of delinquent property taxes levied in prior years. Information received from the County Treasurer does not permit identification of specific year of levy if delinquent taxes are collected. 26