TO W N O F A R C A D IA A rcadia,louisiana. Decem ber31,2002

Transcription

1 TO W N O F A R C A D IA A rcadia,louisiana Decem ber31,2002

2 TO W N O F A R CA D IA Arcadia,Louisiana Decem ber31,2002 Table ofcontents Page Com bined Balance Sheet-A lfund Types and AccountG roups Decem ber31, Com bined Statem entofrevenues, Expenditures and Changes in Fund Balances forthe YearEnded Decem ber Com bined Statem entofrevenues,expenditures and Changes infund Balances-Budget(GAAP Basis)and Actual,GeneralandSpecialRevenue Funds forthe YearEnded Decem ber Statem entofrevenues,expenses,and Changes in Retained Earnings - Proprietary Fund forthe YearEnded Decem ber Statem entofcash Flows - Proprietary Fund forthe YearEnded Decem ber Notes to the Com bined FinancialStatem ents Supplem entalinform ation Schedules Com bining Balance Sheet- SpecialRevenue Funds forthe YearEnded Decem ber Com bining Schedule ofrevenues,expenditures and Changes in Fund Balances - SpecialRevenue Funds forthe YearEnded Decem ber Com bining Balance Sheet- DebtService Funds forthe YearEnded Decem ber Com bining Schedule ofrevenues,expenditures and Changes in Fund Balances - DebtServ ice Funds forthe YearEnded Decem ber Schedule ofcom pensation Paid Alderm en ndependenta uditor's Report Reporton Com pliance and on InternalControlOver FinancialReporting Based on an AuditOfFinancialStatem ents Perform ed in Accordance w ith Governm entauditing Standards 25 Schedule offindings and Q uestioned Costs

3 TOW N OF ARCADIA Arcadia,Louisiana COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS December EXHIBIT A Govem tm entalfund Types Special Debt General Revenue Service Fund Funds Funds Proprietary Fund Type - W aterand Sewer Enterprise Fund AccountGroups General General Long-Term Fixed Assets Debt (Memorandum Only) ASSETS AND OTHER DEBITS Cash and cash equivalents Due from otherfunds Receivables(netofalowance foruncoileceble acceunts} 65,430 Inventory Restricted assets -custom erdeposits Notes receivable Land,buildings and equipm ent,net Amountavalib]e in debtservice funds Am ountto be provided forretirem ent ofgenerallong-term debt Totalassets and otherdebits 339,121 $ 414,923 $ 205,042 $ 494,251 $ ,731 26, ,478 12,554 32, ,828 $ 427,704 $ 529,844 $ 205,042 $ 5,397,268 $ 1,721, $ 1,453, ,230 12,554 32,183 13,868 6,520, , ,173 $ 1,106,215 $ 9,387,901 LIABILITIES Accounts payable Payrolwghholdfngs payable Due to otherfunds PayaNe from restricted assets Custom erdeposits Bonds payable Certificate ofindebtedness payable Capitallease payable Totalliabi]ties $ I3,571 17,662 10, ,485 $ 28,050 $ $ 52, ,018,000 25,742 62,473 1,106,215 54,093 17,662 97,884 32,183 1,018,000 25,742 62, BB,O37 FUND BALANCE Investmentin generalfixed assets Contributed capital Retained earnings -unreserved Fund balances: Reserved fordebtservice Unreserved -undesignated Totalfund balance 385, , , ,042 4,827, ,721, ,042 5,284,678 1,721,828 1,721,828 4,827, , ,316 8,079,864 Totalliabilftiesand fund balance $ 427,704 $ 529,844 $ 205,042 $ $ 1,721,828 $ t,106,215 $ 9,387,901 The accom panying notes are an integralpartofthis statem ent

4 TOW N OF ARCADIA Arcadia,Louisiana COMBINED STATEMENT OF REVENUE,EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENT FUND TYPES Forthe YearEnded Decem ber31,2002 EXHIBIT B General Fund Special Revenue Funds Debt Service Funds Total (Memorandum Only) REVENUE Taxes Ad valorem taxes Sales and use taxes Othertaxes,penalties,and interest Licenses and perm its Intergovem m entalrevenue State funds Fees,charges,and commissions forservices Fines and fon'e[tures Use ofmoney and property Otherrevenue Totalrevenue 71,878 $ $ 562, ,023 49, ,423 5,462 16,058 6, ,484 11, ,799 3, ,51C 71, ,851 49, ,423 5,462 16,058 33,667 42,374 1,085,646 EXPENDITURES Current Generalgovernm ent Public safety Public works Health and welfare Culture and recreation Ecomom ic developmentand assistance Transportation Debtservice Capitalou6ay Totatexpenditures 253, , ,248 18, , ,402 49,569 6,679 14,238 24, , ,353 EXCESS (DEFICIENCY)OF REVENUE OVER EXPENDITURES 154,587 ( (230,843) OTHER FINANCING SOURCE (USE) Operatingtransfersin(out) Proceeds from sale ofsurplus equipm ent EXCESS (DEFICIENCY)OF REVENUE AND OTHER FINANCING SOURCE OVER EXPENDITURES AND OTHER USE 173, , ~3,570 (172,172) 151,612 93,570 (17,585 70,723 2, (86,727) FUND BALANCE AT BEGINNING OF YEAR , ,315 1,160,084 FUND BALANCE AT END OF YEAR $ 482,359 $ 205,042 $ The accom panying notes are an integalpartofthis statem ent 2

5 TOW N O F ARCADIA Arcadia,Louisiana COMBINED STATEMENT OF REVENUE,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS)AND ACTUAL GOVERNMENT FUND TYPES -GENERAL AND SPECIAL REVEUNE FUNDS Forthe YearEnded Decem ber EXHIBIT C Budget GENERAL FUND Varaince Favorable (Unfavorable) Budget SPECIAL REVENUE FUNDS Variance Favorable (Unfavorable) REVENUE Taxes Ad valorem taxes Sales and use taxes Othertaxes,penalties, and interest Licenses and perm its Intergovem m entalrevenues State funds Localfunds Fees,charges,and com m issions forservices Fines and forfeitures Use ofm oney and property Otherrevenues Totalrevenues 67,500 $ , ,878 $ , ,350 7,423 15,000 4,650 15,000 10,500 3,901 5,462 16,058 6,943 30, ,376 $ $ $ 48, , ,023 18,036 (27,708) (34,259) (927) (15,000) 812 1,058 (3,557) _ (237) 8,150 8, ,484 11, ,799 15,334 2,792 36,162 EXPENDITURES Current Generalgovernm ent Public safety Public works Health and welfare Culture and recreation Ecom om ic developm ent Transportation Debtserv ice Capitaloutlay Totalexpenditures 271, , , , ( ,700 18,402 46, ,248 18,402 13, ,750 17,512 14,240 11, ,452 32, , , ,402 49,569 6,679 14,238 24,933 (218) (30,321) (2,219) (14,238) 125,067 92,952 EXCESS (DEFICIENCY)OFREVENUES OVER EXPENDITURES 48, , ,298 (203,594) (74,480) 129,114 OTHER FINANCING SOURCE (USE) Operating transfersin(out) Proceeds from sale ofsurplus equipm ent EXCESS(DEFICIENCY OF REVENUES AND OTHER SOURCE OVER EXPENDITURES AND OTHER USE (85,760) (37,471) (173,608) 1,436 (172,172) (17,585 87,848) 114, (86,412) 19, , (89,544) 77,132 36, ,676 FUND BALANCE AT BEGINNING OF YEAR 44, , , , FUND BALANCE AT END OF YEAR 7,411 $ 385,957 50,859 $ 482,359 $ 431,500 The accom panying notes are an integralpartofthis statem ent 3

6 TO W N O F A RCA DIA Arcadia.Louisiana STATEM ENT O F REVENUES,EXPENSES,AND CHANGES IN RETAINED EARNINGS PROPRIETARY FUND TYPE W ATER AND SEW ER ENTERPRISE FUND Forthe YearEnded Decem ber EXHIBIT D O PERATING REVENUE Charges forwaterservice Charges forsew erservice Otheroperating revenue TataEoperating revenue OPERATING EXPENSES G eneratand adm ininstrative W aterdepartm ent Sewerdepartm ent Depreciation Totaloperating expenses O PERATING LOSS NON-OPERATING REVENUE (EXPENSES) interestincom e Sales tax revenue Non-operating transfers out Totalnon-operating revenue NET LOSS Add depreciation on fixed assets acquired with federalgrant RETAINED EARNINGS AT BEGINNING OF YEAR RETAINED EARNINGS AT END OF YEAR 540,667 83,417 4, , , , (157,232) 22, ,077 (131,046) (75,250 96, The accom panying notes are an integralpartofthis statem ent 4

7 TOW N O F A RCA DIA Arcadia,Louisiana STATEM ENT O F CASH FLOW S PRO PRIETARY FUND TYPE W ATER AND SEW ER ENTERPRISE FUND Forthe YearEnded Decem ber EXH IBIT E CASH FLOW S FRO M O PERATING ACTIVITIES O perating loss Adjustments to reconcile operating loss to netcash provided by operating activities Depreciation expense Increase in accounts receivable Decrease in inventory Decrease in accounts payable Decrease in due from otherfunds Increase in due to otherfunds Increase in custom erdeposits Netcash provided by operating activities CASH FLOW S FROM NON-CAPITAL FINANCING ACTIVITIES Sales tax revenue Non-operating transfers out Netcash provided by non-capitalfinancing activities CASH FLOW S FRO M CAPITA L AND RELATED FINANCING ACTIVITIES Acquisition and construction ofcapitalassets CASH FLOW FRO M INVESTING ACTIVITIES Interestearnings NE~T INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQ UIVALENTS AT BEG INNING O F YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR (157,232) 168,745 (12,808) 501 2,742 15,003 29, ,077 (131,046) (115,765) The accom panying notes are an integralpartofthis statem ent 5

8 TO W N O F A RC A D IA Arcadia,Louisiana Notes to the Com bined FinancialStatem ents as ofand forthe YearEnded Decem ber Note 1 Sum m ary of SignificantA ccounting Policies The Town ofarcadia ("Town")was incorporated June 26,1902,underthe provisions ofthe LawrasonAct. The Town operates undera M ayor-board ofalderm en form ofgovernm ent. The Town provides the folowing services as authorized by its charter: police and fire protection,waterand sewerage,streets,industrialdevelopm entand inducem entand generaladm inistrative services. Basis ofpresentation The accom panying generalpurpose financialstatem ents ofthe Town ofarcadia have been prepared in conform ity with U.S generaly accepted accounting principles (GAAP)asapplied to governmentalunits. Reporting Entity As the governing authority ofthe Town,forreporting purposes,the Town ofarcadia is considered a separate financial reporting entity. The financial reporting entity consists of the primary government (the Town), organizations forwhich the prim ary governm entis financialy accountable,and otherorganizations forw hich the nature and significance oftheirrelationship with the prim ary governm entare such thatexclusion would cause the reporting entity's financialstatem ents to be m isleading orincom plete. GovernmentalAccounting Standards Board (GASB)StatementNo.14 established criteria fordeterm ining which com ponentunits should be considered part ofthe Town ofarcadia forfinancialreporting purposes. The basic criterion forincluding a potentialcom ponentunitwithin the reporting entity is financialaccountability. The GASB has setforth criteria to be considered in determ ining financialaccountability. This criteria includes: ~ Appointing a voting majority ofan organization's governing body,and the ability ofthe Town to im pose itswil on thatorganization and/orthe potentialforthe organization to provide specific financialbenefits to orim pose specific financialburdens on the Tow n. Organizationsforwhich the Town doesnotappointa voting majority butare fiscaly dependenton the Town Organizations for which the reporting entity financial statem ents would be m isleading if data of the organization is notincluded because ofthe nature orsignificance ofthe relationship. Based on the previous criteria,the Town has determ ined thatthere are no com ponentunits thatare partofthe reporting entity. Fund Accounting The Town uses funds and accountgroups to reporton its financialposition and the results ofits operations. Fund accounting is designed to dem onstrate legal com pliance and to aid financial m anagem ent by segregating transactions relating to certain governm entfunctions oractivities. Funds are classified into three categories: governm ental proprietary,and fiduciary. Each category,in turn,is divided into separate fund types. Governm entalfunds are used to accountfora governm ent's generalactivities,

9 where the focus ofattention is on recovering the costofproviding services to the public orotheragencies through serv ice charges oruserfees. Fiduciary funds are used to accountforassets held forothers. The tow n's current operations require the use ofgovernm ental,proprietary and fiduciary fund types described as fo low s: Governm entalfunds GeneralFund -is the generaloperating fund ofthe Town. Itaccounts foralfinancialresources,exceptthose required to be accounted forin otherfunds. SpecialRevenue Funds -are used to accountforthe proceeds ofspecific revenue sources such as sales taxes. Those revenues are lega ly restricted by tax proposition to expenditures forspecified purposes such as street m aintenance and construction and industrialdevelopm entand inducem ent. DebtServ ice Funds -are used to accountforthe accum ulation ofresources forand the paym entofprincipaland intereston generallong-term debt. CapitalProjects Funds -accountforfinancialresources received and used forthe acquisition,construction,or im provem entofcapitalfacilities notreported in the othergovernm entalfunds. Proprietary Fund W aterand SewerEnterprise Fund -is used to accountforoperations thatare financed and operated in a m anner sim ilarto private business enterprises,where the intentofthe governing body is thatthe cost ofproviding goods or services to the generalpublic on a continuing basis be financed orrecovered prim arily through usercharges;or w here the governing body has decided the periodic determ ination ofrevenues earned,expenses incurred,and/or net incom e is appropriate for capitalm aintenance, public policy, m anagem ent control,accountability or other purposes. Fixed Assets and Long-Term Debt Generalfixed assets are notcapitalized in the funds used to acquire orconstructthem. Instead,capitalacquisition and construction are reflected asexpenditures(capitaloutlay)ingovernmentalfundsand the related assetsare reported in the generalfixed assets accountgroup. A lpurchased fixed assets are valued atcostw here historical records are available and atestim ated costw here no historicalrecords are available. Approxim ately 58% of generalfixed assets are valued atestim ated historicalcostbased on the actualcostoflike item s. Donated fixed assets are valued attheirestim ated fairm arketvalue on the date received. The costs ofnorm alm aintenance and repairs thatdo notadd to the value offixed assets orm aterialy extend their usefullives are notcapitalized butare only recognized as a norm alcurrentexpenditure ofthe governm entalfunds. Public dom ain or infrastructure generalfixed assets consisting of roads,bridges and drainage system s are not capitalized,as these assets are im m ovable and ofvalue only to the Town. The fixed assets used in the proprietary fund type operations are included on the balance sheetofthe fund. Depreciation ofa lexhaustible fixed assets used by the proprietary fund type operations is charged as an expense againstoperations. Depreciation is com puted using the straight-line m ethod overthe estim ated usefullives as fo low s: W atersystem Sewersystem im provem ents Equipm entand vehicles 30 years 40 years 20 years 4-15 years Generallong-term debt,such as bonds and certificates ofindebtedness payable,are recognized as a liability ofa governm entalfund only when due. The rem aining portion ofsuch debtis reported in the generallong-term debt accountgroup. Long-term liabilities expected to be financed from enterprise fund operations are accounted forin the enterprise fund. Basis ofaccounting The financialand reporting treatm entapplied to a fund is determ ined by its m easurem entfocus. A lgovem m enta funds are accounted forusing a currentfinancialresources m easurem entfocus. W ith this m easurem entfocus 7

10 only currentassets and currentliabilities are genera ly included on the balance sheet. O perating statem ents for these fundspresentincreases(i.e.,revenuesand otherfinancingsources)anddecreases(i.e.,expendituresand otherfinancing uses)innetcurrentassets. The m odified accrualbasis ofaccounting is used forreporting a lgovernm entalfund types. Underthe m odified accrualbasis ofaccounting,revenues are recognized when susceptible to accrual(i.e.,when they become both measurable and available)."measurable"means the amountofthe transactioncan be determ ined and "available" m eans co lectible w ithin the currentperiod orsoon enough thereafterto be used to pay liabilities ofthe current period.the Tow n uses the fo low ing practices in recognizing and reporting revenues and expenditures: Revenue Ad valorem taxes attach as an enforceable lien on property as ofjanuary 1 ofeach year. The Bienvile Parish Sherif, through a localservices agreem ent, bils and co lects property taxes using the assessed values determ ined by the tax assessorofbienvile Parish. The taxes are norm a ly biled in Novem berand colected in Decem berofthe currentyearand January and February ofthe ensuing year. Sales taxes are recognized in the m onth received by the Tow n's co lection agent,the Bienvitfe Parish School Board. Othertaxes,penalties and interest,fees,charges,and com m issions forservices,fines and forfe(tures and intergovernm entalrevenues are recorded w hen the Tow n is entitled to the funds. Interest incom e on bank deposits is recorded when the interest has been earned and the am ount is determ inable. Substantia ly a lotherrevenues are recorded when they are received by the Town Based on the above criteria, ad vatorem taxes, sales taxes, other taxes, penalties and interest and intergovernm entalrevenues have been treated as susceptible to accrual. Expenditures Expenditures are generaly recognized underthe m odified accrualbasis ofaccounting when the related fund liability is incurred. OtherFinancing Source (Use) Transfersbetweenfunds thatare notexpectedto be repaidare accounted forasotherfinancing source (use) and are recognized w hen the underlying events occur, Proprietary Fund Type- W aterand Sew erenterprise Fund The W aterand SewerEnterprise Fund is accounted forusing the accrualbasis ofaccounting. Revenues are recognized w hen they are earned,and expenses are recognized w hen they ere incurred. Budgetary Practices A proposed budgetforthe ensuing yearis prepared by the M ayorand Tow n Clerk and subm itted to the Board of Alderm en. Proposed budgets are prepared on the m odified accrualbasis. The Town publishes a notice of public hearing on the budgetand holds the public hearing in orderto receive com m ents from citizens. Changes are made to the proposed budgetbased on the public hearing and the desires ofthe Board ofalderm en as a whole.the budgetis then adopted through the passage ofan ordinance to take afectten days afterpassage. Budgetam endm ents involving the transferoffunds from one departm ent,program,orfunction orincreased expenditures resulting from increases in budgeted revenues require the approvalofthe board ofalderm en. Unexpended appropriations lapse at year-end and m ust be reappropriated for the fo low ing year to be expended. The Town does netuse encum brance accounting in its accounting system.the budgetcom parison statementincluded in the accom panying financialstatem ents includes the originaladopted budgets and the subsequentam endm ents.

11 Cash and Cash Equivalents Understate law,the Tow n m ay depositfunds w ithin a fiscalagentbank organized underthe taws ofthe State of Louisiana,the laws ofany otherstate in the union,orthe laws ofthe United States. The Tow n m ay investin certificates and tim e deposits ofstate banks organized underlouisiana law and nationalbanks having principalor branch ofices in Louisiana. AtDecember31,2002 the Townhascashand cashequivalents(bookbalances)asfolows Demand deposits Tim e deposits Petty cash Total 473, , These deposits are stated atcost,whichapproximatesmarket. Understate law,these deposits (orthe resulting bankbalances)mustbe secured byfederaldepositinsurance orthe pledge ofsecuritiesownedbythe fiscalagent bank. The m arketvalue ofthe pledged securities plus the federaldepositinsurance m ustata ltim es equalthe am ounton depositwith the fiscalagent. These securities are held in the nam e ofthe pledging fiscalagentbank in a holding orcustodialbank thatismutualyacceptable to bothparties.cashand cashequivalents(bank balances) atdecem ber are secured as fo low s: Bank Balances Federaldepositinsurance Pledged securities (uncolateralized) T eta~ ,000 1, $ 1,353,560 AtDecem ber31,2002,the Town had $162,459 inunsecured deposits Because the pledged securities are held by a custodialbank in the nam e ofthe fiscalagentbank ratherthan in the name ofthe Town,they are considered uncolateralized (Category 3)underthe provisions ofgasb Codification C However,Louisiana Revised Statute 39:1229 im poses a statutory requirem enton the custodialbank to advertise and se lthe pledged securities w ithin 10 days ofbeing notified by the Tow n thatthe fiscalagentbank has failed to pay deposited funds upon dem and. Further,LRS 39:1224 states thatsecurities held by a third party sha l be deem ed to be held in the Town's nam e. Forpurposes ofthe Statem entofcash Flows,cash equivalents include a lhighly liquid investm ents with a m aturity date ofthree m onths orless w hen purchased. Inventory Inventory in the W aterand Sewer Enterprise Fund,consisting ofexpendable supplies held forconsum ption,is valued athistoricalcost. Vacation and Sick Leave Ful-tim e em ployees ofthe Town ofarcadia earn two weeks ofvacation afterone yearofservice. Vacation tim e which is earned butnotused during the calendaryearcannotbe carried forward into the nextcalendaryear,except underspecialcircum stances pre-approved by the M ayororboard ofalderm en. Em ployees earn tw o w eeks sick leave each calendaryearfo lowing the successfulcom pletion ofthe em ployee's probationary period. Unused sick leave can be accum ulated and can be carried forw ard to the next year, however, em ployees w il not be com pensated upon term ination orretirem ent. Risk Managem ent The Town is exposed to various risks ofloss related to torts;theftof,dam age to,and destruction ofassets;errors and omissions;and injuriesto employees.to handle suchriskofloss,the Townmaintainscommercialinsurance policies covering its autom obiles,professionalliability,generalliability,and surety bond coverage. No claim s were paid on any ofthe policies,during the pastthree years,which exceeded the policies'coverage am ounts. There w ere no significantreductions in insurance coverage during the yearended Decem ber31,2002.

12 Sales Tax O n O ctober18,1997,the voters ofthe Town ofarcadia approved the rededication ofthe 1987 one centsales tax to be used and dedicated as fo lows:60% forgeneraloperating revenue;30% forconstructing,paving,resurfacing, im proving, and/or m aintaining streets; 10% for acquiring, im proving, m aintaining and supporting parks and recreation program s in and forthe Town;and 10% forindustrialconstruction,inducem entand/orprocurem ent. The election on October18,1997 extended the lew and colection ofthe originaltax foran additionalten years from June 1,2002. O n July 13,1991,the voters approved a one percentsales and use tax requiring thatatleast40% of the proceeds be used for constructing, acquiring, extending and/or im proving sew er and sewerage disposal facilitiesand the waterworks system ofthe Tow n and the rem ainderto be used forany lawfulpurpose ofthe Tow n. The 1991tax is fora twenty-five yearperiod. The Bienvitle Parish SchoolBoard serves as the co lection agentfor the sales taxes and is paid a colection fee foracting as such. TotalColum n on the Com bined Statem ents Totalcolumnonthe combined statementsare captioned Memorandum Only(overview)to indicate thatthey are presented only to facilitate financialanalysis, Data in these colum ns de notpresentfinancialposition orresults of operations in conform ity with generaly accepted accounting principles, Neither is such data com parable to a consolidation. Interfund elim inations have notbeen m ade in the aggregation ofthis data. Note 2 Levied Taxes For the year ended Decem ber 31,2002,a 6.14 m iltax authorized by Article 6, Section 27 ofthe Louisiana Constitution of 1974 for generaloperating purposes was levied on property w ith assessed valuations totaling $11,357,960. Note 3 Receivables The fo lowing is a sum m ary ofreceivables atdecem ber31,2002 Taxes: Ad Valorem SaJes Accounts receivable Less alowance fordoubtfulaccounts Total G enera Fund Sales Tax Fund W aterand Sewer Enterprise Fund 65,430 $ $ ,834 $ 65,430 $ ( 26,322 $ 29,356 59,478 $ )( $ Total 65,430 26,322 88, Note 4 Due From /To OtherFunds ndividua]fund balances due from/to otherfunds atdecem ber31,2002,are as fo lows: Due from OtherFunds Due to O ther Funds G eneralfund Specialrevenue funds: Street IndustrialInducem ent Parks and Recreation Sales tax W aterand SewerEnterprise fund Total 23,153 $ 70,302 3, ,884 $ ,055 33,958 52,

13 N ote 5 Note Receivable O n June 12,1986,the Tow n entered into a contractwith KADAV,Inc.,wherein the Town agreed to loan to KA DAV, Inc.,$348,400 oflouisiana Com m unity Developm entblockgrantproceedsforthe renovationofa building in order to promote econom ic developm entin Arcadia. KADAV,Inc.agreed to repay the loan principaland interestofthree percentperannum,by m aking sixteen annualpaym ents of$27,736 through Septem ber 1,2002. O n M ay 31, 1991,the agreem entw as am ended so that KA DAV Inc.,rem its 50 percentofeach loan and interestpaym ent directly to the Town ofarcadia and the rem aining 50 percent directly to the State of Louisiana, Division of Adm inistration.the principaldue the TownatDecem ber31,2002 totals $13,868. Note 6 Fixed Assets The fo low ing presents the changes in generalfixed assets forthe yearended Decem ber31,2002: Balance at January 1, Additions Deletions Balance at Decem ber31 Land Buildings Im provem ents Equipm ent Total $ 1,286 $ 18, , , , ,156 1,641,582 $ 86,532 $ 6,286 $ 1,721,828 A sum mary ofproprietary fund type property,plant,and equipm entatdecem ber31,2002,folows Cost Accum ulated Depreciation NetBook Value Land W aterwe ls Pum ping plant Purification plant Storage reservoirtanks W aterdistribution system G eneralequipm ent Office equipm ent Im provem ents Sewersystem Autom obiles Total $ 268,628 $ 606, , , ,232 1,368, ,802 18,907 7,800 5,284, ,382 $ 8,3O7,879 $ 486,191 96, , ,094 1,003, ,548 14,586 5,550 1,462, $ 268, , , , ,254 4,321 2,250 3,832, ,509,077 $ 4,798,802 The Town recorded $168,745 in depreciation expense forthe yearended Decem ber31,2002 ofwhich $96,203 w as attributable to assets acquired w ith contributed capitalas described in Note 10. Note 7 Pension Plans Substantia ly a lem ployees ofthe Tow n ofa rcadia are m em bers ofeitherthe M unicipalem ployees'retirem ent System oflouisiana orthe M unicipalpolice Em ployees'retirem entsystem oflouisiana. The state retirem ent system s are cost-sharing,m ultiple-em ployer,defined benefitpension plans adm inistered by separate boards of trustees. Pertinentinform ation relative to each plan fo lows: MunicipalEm ployees'retirem entsystem oflouisiana (System) The System is com posed oftw o distinctplans,plan A and Plan B,w ith separate assets and benefits provisions.a l em ployees ofthe m unicipality are m em bers ofplan B. A lperm anentem ployees working atleast35 hours per week who are notcovered by anotherpension plan and are paid who ly orin part from m unicipalfunds and a l elected m unicipalofi cials are eligible to participate in the System. UnderPlan B,em ployees w ho retire atorafter 11

14 age 60 with atleast10 years ofcreditable service,atorafterage 55 with atleast30 years ofcreditable service are entitled to a retirem entbenefit,payable m onthly forlife,equalto tw o percentoftheirfinalaverage m onthly salary for each yearofcreditable serv ice. Furtherm ore,em ployees with atleast10 years ofcreditable service,butless than 30 years,m ay take early retirem entbenefits com m encing atorafterage 60,with the basic benefitreduced three percentforeach yearretirem entprecedes age 60,unless he has atleast30 years ofcreditable service. In any case,m onthly retirem ent benefits paid under Plan B cannotexceed 100 percentoffinalaverage salary. Final averagesalary isthe employee'saverage salary overthe 36 consecutive orjoinedmonthsthatproduce the highest average. Em ployees who term inate with at leastthe am ount ofcreditable serv ice stated above,and do not withdraw theirem ployee contributions,m ay retire atthe ages specified above and receive the benefits accrued to theirdate ofterm ination. The System also provides death and disability benefits. Benefits are established or am ended by state statute. The System issues an annual publicly available report that includes financial statem ents and required supplementary inform ation forthe System. Thatreport m ay be obtained by w riting to the M unicipalem ployees RetirementSystem oflouisiana,7937 Ofice Park Boulevard,Baton Rouge,Louisiana 70809,orby caling (504) UnderPlan B,m em bers are required by state statute to contribute five percentoftheirannualcovered salary and the Town ofarcadia is required to contribute atan actuaria ly determ ined rate. The currentrate is 4.5% ofannual covered payrol. Contributionsto the system include one-fourth ofone percent(exceptorleans and EastBaton Rouge Parishes)ofthe taxesshownto be colectible by the tax rolsofeach parish.these tax dolarsare divided betw een Plan A and Plan B based proportionately on the salaries ofthe active m em bers ofeach plan. The contribution requirem ents ofplan m em bers and the Town ofarcadia are established and m ay be am ended by state statute. As provided by Louisiana Revised Statute 11:103,the em ployercontributions are determ ined by actuarial valuationand are subjectto change eachyearbased onthe results ofthe valuation forthe priorfiscalyear. The Town ofarcadia's contributions to the System underplan B forthe years ended Decem ber31,2002,2001,and 2000 were $17,403,$15,086,and $13,943,respectively,equalto the required contributions foreach. M unicipalpolice Em ployees'retirem entsystem (System) A lful-tim e police departm entem ployees engaged in law enforcem entare required to participate in the System. Em ployees who retire atorafterage 50 with atleast20 years ofcreditable service atorafterage 55 w ith atleast12 years ofcreditable service are entitled to a retirem entbenefit,payable m onthly forlife,equalto three and one-third percentoftheirfinalaverage salary foreach yearofcreditable service. Finalaverage salary is the em ployee's average salary overthe 36 consecutive orjoined months thatproduce the highestaverage. Employees who term inate with at least the am ount of creditable serv ice stated above, and do not withdraw their em ployee contributions,m ay retire atthe ages specified above and receive the benefits accrued to theirdate ofterm ination. The System also provides death and disability benefits. Benefits are established by state statute. The System issues an annual publicly available report that includes financial statem ents and required supplementary inform ation far the System. That report m ay be obtained by w riting to the M unicipalpolice Em ployees Retirem entsystem oflouisiana,8401 United Plaza Boulevard,Baton Rouge,Louisiana , orbycaling(504) Plan m em bers are required by state statute to contribute 7.5% oftheirannualcovered salary and the Tow n of Arcadia is required to contribute atan actuarialy determ ined rate.the currentrate is 9% ofannualcovered payro l. The contribution requirem ents ofthe plan m em bers and the Town ofarcadia are established and m ay be am ended by state statute. As provided by Louisiana Revised Statute 11:103,the em ployercontributions are determ ined by actuarialvaluationand are subjectto change eachyearbased onthe resultsofthe valuationforthe priorfiscal year. The Town ofarcadia's contributions to the System forthe years ended Decem ber31,2002,2001,and 2000 were $13,024,$16,389,and $14,884,respectively,equalto the required contributions foreach. Note 8 CapitalLeases The Town records item s undercapitallease as an assetand an obligation in the accom panying financial statem ents.atdecem ber31,2002,the Tow n has one capitallease in effectfora fire truck w ith a recorded am ount of$147,987. The lease has an annualpaymentof$18,402 at6.9%. The lease obligations are paid from the 12

15 generalfund. The fo low ing is a sum m ary offuture m inim um lease paym ents,togetherw ith the presentvalue of the netm inim um lease paym ents,as ofdecem ber31,2002: Year Totalm inim um lease paym ents Less am ountrepresenting interest Presentvalue ofnetm inim um lease paym ents $ 18,402 18,402 18, ,608 ( 11,135 ) $ 62,473 Note 9 C hanges in Long-Term Debt The fo lowing is a sum m ary ofgenerallong-term debttransactions forthe yearended Decem ber31,2002 Bonds Payable Certificate of ndebtedness Tota Long-term debtatdecem ber31,2001 Additions Retirem ents Long-term debtatdecem ber31,2002 $ ( $ 1,135,000 1,018,000 1,135,000 1, $ )( $ 172, , , Long-term debtatdecem ber31,2002,is com prised ofthe fo low ing individualissues 2002 Sales Tax Refunding Bonds -$1,018,000 - Sales tax refunding bond issue dated January 31,2002,due inannualinstalments each January 1~tof$96, 000 to $154,000 through January 2010; interest at 0.1% to 5.0%, due in sem i-annual instalments each January 1stand July 1st. Debtretirementpayments are made $ 1,018,000 from the 2002 Sales Tax Bonds DebtService Fund. Certificates ofindebtedness-$100,000 issue dated March 17,1994,forthe purpose ofpurchasing equipment. The principalis due in annualinstalments of$7,237 to $13,306 throughmarch 17,2004,with interestat7%.debtretirementpayments are m ade from the IndustrialDevelopm entspecialrevenue Fund. 25,742 Total 1.043,742 The annualrequirem ents to am ortize a lgenerallong-term debtoutstanding atdecem ber31,2002,including interestof$194,014 and $2,733,respectively,are asfolows: Year Total Bonds and InterestPayable $ 113, , , , , ,450 Certificate of ndebtedness and Interest 14,238 $ Total 127, , , , , $ 1,212,014 28,475 $ 1,240,489 13

16 Note 10 C ontributed C apitam The Town has received grants from various federalagencies to finance the acquisition and construction ofthe enterprise fund fixed assets.the am ount,shown as contributed capitalon the balance sheet, is reduced each year by the am ountofdepreciation expense recognized on fixed assets constructed oracquired w ith federalgrantfunds. The folow ing schedule presents changes in contributed capitalforthe yearended Decem ber31, 2002: Balance,January 1,2002 Deductions - Depreciation on fixed assets acquired w ith federalgrant Balance.Decem ber $ 4,923,780 ( 96,203 ) $ 4,827,577 N ote 11 LocalServices A greem ent Note 12 Litigation and Claim s At Decem ber 31,2002,the Tow n was involved in severallawsuits, w hich,in the opinion of legalcounselis adequately covered by the Town's liability insurance.therefore, no liability has been recorded in the accom panying financialstatem ents. Note 13 Related Party Transaction During 2002,the Town incurred $780 in catering service relative to safety meetings with FastPak Foods. Foods isow ned and operated by M r.randy W right,the fire chiefofthe volunteerfire departm ent. FastPak 14

17 Supplem entalinform ation Schedules

18 TOW N O F ARCA DIA Arcadia,Louisiana SpecialRevenue Funds Com bining Balance Sheet Decem ber Schedule 1 Street Industrial Industrial Sales nducem ent Development Tax Parks and Recreation A ssets Cash and cash equivalents Due from otherfunds Receivables (netofalowance for unco lectible accounts Notes receivable TotalAssets 10,267 $ 313,463 $ $ 1,649 $ 89,544 $ 414,923 70,301 3,113 1,317 74, ,322 26,322 13,868 80,568 $ 316,576 $ 13,868 $ 27,971 $ 90,861 $ 529,844 Liabilities and Fund Equity Accounts payable Due to otherfunds TotalLiabilities $ 10,428 $ 66 $ 66 $ 1,060 $ $ 12, ,018 1,974 47,485 Fund Equity (Deficit)-Unreserved and Undesignated 70, ,510 13, 868 (7,046) ,359 TotalLiabilities and Fund Equity $ 80,566 $ 316,576 $ 13,868 $ 27,971 $ 90,851 $ 529,844 See IndependentA uditor's Report 16

19 TOW N O F A RCADIA Arcadia,Louisiana SpecialRevenue Funds Com bining Schedufe ofrevenue,expendituresand Changes in Fund Balances Forthe YearEnded Decem ber Schedule 2 Street Industrial nducemen [ndustgal Developm ent Sales Tax Parksand Recreation Revenue Sales and use taxes Use ofmoney and property Otherm isce laneous revenue $ 142,558 $ 47,519 $ 144 5, $ 14,427 $ 47,519 $ 13, , ,023 23,484 11,292 To~ lrevenue , ,799 Expenditures Current Generalgovernm ent Public works 251,402 Culture and recreation Ecom omic developm entand assistance Debtservice Capitaloutlay 21, , ,402 49,569 6,679 14,238 24,933 TotalExpenditures , ,279 Excess(Deficiency)ofRevenue overexpenditures 118,518) 46,699 (347) 322 (2,635) (74,480 OtherFinancing Source O perating transfers in Proceeds from sale ofsurplus equipm ent TotalOtherFinancing Source 140, , ,612 Excess ofrevenue and OtherFinancing Source OverExpenditures 23,296 46,699 Fund Balances (Deficit)atBeginning ofyear Fund Balances(Deficit)atEnd ofyear ,140 $ 316,519 $ 13,868 (7,366) 82, ,227 88,885 $ 482,359 See IndependentAuditor's Report 17

20 TOW N O F A RCADIA Arcadia.Louisiana Notes to Supplem entalinform ation Schedules as ofand forthe YearEnded Decem ber SpecialRevenue Funds Street Fund - accounts for30% ofthe % sales tax to be dedicated and used forconstructing,paving resurfacing,im proving and/orm aintaining streets in and forthe Town. IndustrialInducem entfund - accounts for10% ofthe % sales tax to be dedicated and used forindustrial construction,inducem entand/orprocurem ent. IndustrialDevelopm entfund - accounts forthe repaym entofprincipaland interestby KADAV,Inc.on a loan the Town m ade to KA DAV to financialy assist the corporation for certain econom ic developm ent in the Town. Recaptured funds are used to assistotherbusinesses w ithin the Tow n in orderto prom ote econom ic developm ent and forotherpurposes approved by the Louisiana Division ofadm inistration. Sales Tax Fund - used to accountforthe Town's sales tax co lections. Designated taxes are distributed to the appropriate funds and the rem aining portion is used forpaying the costofcolection ofthe taxes and to fund any otherlawfulpurpose. Parks and Recreation Fund - accounts for10% ofthe % sales tax to be dedicated and used to acquire m aintain,im prove,and supportparks and recreation program s in and forthe Tow n, 18

21 TO W N O F A RCA DIA Arcadia,Louisiana DebtService Funds Schedule 3 Com bining Balance Sheet Decem ber Assets 1992 Sales Tax Bonds 2OO2 Refunding Bonds Total Cashand cash equivalents $ 205,042 $ 205,042 Fund Equity Fund equity - fund balances reserved fordebtserv ice $ 205,042 $ 205,042 See IndependentAuditor's Report 19

22 TOW N O F ARCA DIA A rcadia.louisiana DebtService Funds Schedule 4 Com bining Schedule ofrevenue,expenditures And Changes in Fund Balances Forthe YearEnded Decem ber Revenue Uses ofm oney and propedy Other Expenditures DebtService 1992 Sales Tax Bonds 355 $ OO2 Refunding Bonds 2, Tota 3, Excess(Deficiency)ofRevenue overexpenditures ( 114,902 )( 124,941 )( 239,843 ) OtherFinancing Source Operating transfers in (out) 232, ,875 93,570 Excess ofrevenue and O therfinancing Source Over (Unde0 Expenditures 347, ,934 ( 146,273 ) Fund Balances atbeginning ofyear 347, Fund Balances atend ofyear 205,042 $ 205,042 See IndependentAuditor's Report

23 TO W N O F A RCA DIA Arcadia,Louisiana Notes to Supplem entalinform ation Schedules as ofand forthe YearEnded Decem ber DebtService Funds 1992 Sales Tax Bonds - This fund accum ulates m onies forthe retirem entofthe January 1,1992 sales tax bonds issued forthe purpose ofconstructing,acquiring,extending and/orim proving sewers and sewerage disposaland w aterw orks system in the Tow n. Financing is provided by interestearned.these bonds were refinanced in Refunding Bonds - This fund accum ulates m onies forthe retirem entofthe Novem ber1,1992 refunding bonds issued to refund outstanding certificates ofindebtedness dated M ay 5,1989 and M arch 1,1990. Financing is provided by transfers from the Sales Tax SpecialRevenue Fund.

24 TO W N O F A RCA DIA Arcadia.Louisiana Schedule ofcom pensation Paid Alderm en as ofand forthe YearEnded Decem ber Schedule 5 Gary Carlisle (mayorpro tem) C harlie Brow n Edward M ason Jean Keley Bruce Russe l Total 2,700 2,400 2,400 2, Com pensation Paid A lderm en The schedule ofcom pensation paid alderm en is presented in com pliance w ith House ConcurrentResolution No. 54 ofthe 1979 Session ofthe Louisiana Legislature. Com pensation ofalderm en has been setby ordinance at $200 per month with the mayor pro tern receiving $225 per month and is included in generalgovernment expenditures ofthe G eneralfund. See IndependentAuditor's Report 22

25 R O B ER TS,CH ER RY & C O M PA~ Certlt~ed Public A ccountlm ts,consultants ndependenta uditor's Report M ayorand Board ofalderm en Tow n ofarcadia Arcadia,Louisiana W e have audited the accom panying generalpurpose financialstatem ents ofthe Tow n ofarcadia,as ofand forthe yearended Decem ber31,2002,as listed in the Table ofcontents. These generalpurpose financialstatem ents are the responsibility ofthe Town ofarcadia's m anagem ent. O urresponsibility is to express an opinion on these generalpurpose financialstatem ents based on ouraudit. W e conducted ourauditin accordance w ith auditing standards generaly accepted in the United States ofam erica and the standards applicable to financialaudits contained in Governm entauditing Standards,issued by the Com ptrolergeneralofthe Unit9d States. Those standards require thatwe plan and perform the auditto obtain reasonable assurance aboutw hetherthe generalpurpose financialstatem ents are free ofm aterialm isstatem ent. An auditincludes exam ining,on a testbasis,evidence supporting the am ounts and disclosures in the general purpose financialstatem ents. An auditalso includes assessing the accounting principles used and significant estim ates m ade by m anagem ent, as w e l as evaluating the overa l general purpose financial statem ent presentation. W e believe thatourauditprovides a reasonable basis forouropinion. In ouropinion,the generalpurpose financialstatem ents referred to above presentfairly,in a lm aterialrespects, the financialposition ofthe Town ofarcadia as ofdecem ber31,2002,and the results ofits operations and the cash flows of its proprietary fund forthe yearthen ended in conform ity with accounting principles generaly accepted in the United States ofam erica. O urauditwas m ade forthe purpose ofform ing an opinion on the generalpurpose financialstatem ents taken as a whole. The supplem entalinform ation schedules listed in the table ofcontents are presented farthe purpose of additfonalanalysis and are nota required part ofthe generalpurpose financialstatem ents ofthe Tow n ofarcadia. Such information has been subjected to the auditing procedures applied in the auditofthe generalpurpose financialstatem ents and, in our opinion,is fairly presented in a lm aterialrespects in relation to the general purpose financialstatem ents taken as a w hole. In accordance with Governm entauditing Standards,we have also issued a reportdated M ay 30,2003,on the Tow n ofarcadia's com pliance w ith law s,regulations,and contracts,and ourconsideration ofthe Tow n's internal controlover financial reporting. That report is an integral part of an audit perform ed in accordance with GovemmentAuditing Standards and should be read in conjunctionwith thisreportin considering the resultsofour audit. A Corporation of Certified Public Accountants Shreveport,Louisiana M ay 30,2003 A Corporatiou of Certit~ed ~ub~l'c A cco lltal~t$ ~ P.O.BOX 4278 * SHREVEPORT,LA o (3]8) o FAX (318)

26 R O B E R TS,CH ER RY & CO M PA NY Certified Publlc A ccountants~consultm~ts REPO RT O N CO M PLIA NCE A ND ON INTERNA L CO NTRO L OVER FINA NCIA L REPO RTING BASED O N AN A UDIT O F FINA NCIA L STATEM ENTS PERFO RM ED IN ACCORDA NCE W ITH GO VERNM EN T A UDITING STANDARDS M AYO R A ND BOA RD O F A LD ER M EN TOW N O F ARCADIA Arcadia,Louisiana W e have audited the generalpurpose financialstatem ents ofthe Tow n ofarcadia,as ofand forthe yearended Decem ber 31,2002,and have issued our reportthereon dated M ay 30,2003. W e conducted our audit in accordance w ith auditing standards genera ly accepted in the United States of Am erica and the standards applicable to financialaudits contained in Governm enta uditing Standards,issued by the Com ptrollerg eneralof the United States. Com pliance As part of obtaining reasonable assurance about w hether the Town of Arcadia's generalpurpose financial statem ents are free ofm aterialm isstatem ent,we perform ed tests ofits com pliance with certain provisions oflaw s, regulations,contracts and grants, noncom pliance with which could have a direct and m aterialefect on the determ ination offinancialstatem entam ounts. However,providing an opinion on com pliance with those provisions was notan objective ofourauditand,accordingly,we do notexpress such an opinion.the results ofourtests disclosed no instances ofnoncom pliance thatare required to be reported undergovernm entauditing Standards. However,we noted certain im m aterialinstances ofnoncom pliance thatw e have reported to m anagem entofthe Tow n ofa rcadia,state oflouisiana,in a separate letterdated M ay 30,2003. nternalcontroloverfinancialregortina In planning and perform ing ouraudit,we considered the Town ofarcadia's internalcontroloverfinancialreporting in orderto determ ine ourauditing procedures forthe purpose ofexpressing ouropinion on the generalpurpose financialstatem ents and notto provide assurance on the internalcontroloverfinancialreporting.o urconsideration ofthe internalcontroloverfinancialreporting would notnecessarily disclose a lm a ters in the internalcontrolover financialreporting thatm ightbe m aterialweaknesses.a m aterialw eakness is a condition in w hich the design or operation ofone orm ore ofthe internalcontrolcom ponents does notreduce to a relatively low levelthe risk that m isstatem ents in am ounts thatwould be m aterialin relation to the generalpurpose financialstatem ents being audited m ay occurand notbe detected within a tim ely period by em ployees in the norm alcourse ofperform ing their assigned functions.w e noted no m aters involving the internalcontrolover financialreporting and its operation thatw e considerto be m aterialweaknesses. This report is intended solely forthe Louisiana Legislative Auditor,and specified parties. inform ation and use ofthe Town ofarcadia,m anagem entofthe town,and the is not intended to be and should not be used by anyone otherthan these A Corporation of Certified Public Accountants Shreveport,Louisiana M ay 30,2003 A Corporation of Certified Public A ccountants ~ P.0,BOX 4278 o SHREVEPORT.LA ~ (318) o FAX (318)

27 TO W N O F A R CA D IA A rcadia,louisiana Schedule offindings and Q uestioned Costs Decem ber31,2002 PRIO R YEA R FINDINGS None CURRENT YEA R FINDINGS None Sum m ary ofa uditor's Results,, W e have issued an unqualified opinion on the financialstatem ents ofthe Tow n ofarcadia as ofand forthe yearended Decem ber31,2002. ~ No instances ofnoncom pliance m aterialto the financialstatem ents ofthe Tow n ofarcadia were disclosed during the audit. No reportable conditions relating to the audit ofthe financialstatem ents are reported in the Independent Auditor's Report on InternalControl. 25

28 R O B E R T S,CH E R R Y & C O M PA N Y Cert~Tied Public A ccountants~consultunls To the Board of A lderm en Tow n of A rcadia A rcadia,louisiana This letter includes com m ents and suggestions w ith respectto m atters thatcam e to our attention in connection w ith our auditof the generalpurpose financialstatem ents of the Tow n of Arcadia for the year ended D ecem ber 31,2002. These item s are offered as constructive suggestions to be considered as part of the ongoing process of m odifying and im proving the Tow n'spracticesand procedures. E thicalc onsiderations D uring ourauditw e w ere requested by the Legislative A uditor'soffice the review certain com plaints associated w ith the Town of Ar cadia. A s a result of our review it w as determ ined thatthe husband of the ex-m ayor used the com puter assigned to econom ic developm ent for personaluse and the fire chief of the voluntary fire departm entw as participating in transactionsw ith a businessthathe w holly own ed. Section 111IA of the Code of G overnm ent Ethic prohibits the receipt of a th ing of econom ic value,otherthan the entitled com pensation and benefitsfrom th e governm ental entity.the husband of the ex-m ayor w as notan em ployee of the Tow n butitcould be view ed asa benefitto the m ayorthatexceedsthe entitled benefits. Section 1113A of the Code of G overnm ent Ethics prohibits contractual arrangem ents betw een a public servantand a legalentity in w hich the public servanthasa controlling interestfrom entering into transactionsthatisunderthe superv ision orjurisdiction of such publicserv an t.the fire chief of thevolunteerfire departm entisconsidered a public servantasdefined underr.s.42:i102 (18)(c)and (19);therefore,itwould notbeethical forhim to enterinto transactionsw ith a com pany in w hich he holdsa controlling interest. Itisrecom m ended thatthe Board of A lderm en estabiish policy to prohibitthese typesof activities in the future.should these type activities present them selves in future,they should be referred to the Board of Ethicspriorto the Tow n entering into the transaction. C ouateralized B ank D eposits The am ounton depositw ith banksm ustbe secured atalltim esby a com bination of FD IC insurance and appropriate obligations.w e discovered th atboth th e FirstN ationalb ank of A rcadia and the G ibsland B ank & Trust,w hich ar e the Tow n'sdepository and investm ent banks,had invested balances w hich w ere not fully collateralized as of D ecem ber 31, A Corporation of Certified Public A ccountants ~ P.O.BOX 4278 ~ SHREVEPORT,LA ~ (318) ~ FAX (318)