CITY OF COLUMBUS Columbus, Wisconsin

Transcription

1 Columbus, Wisconsin FINANCIAL STATEMENTS Including Independent Auditors' Report

2 TABLE OF CONTENTS Independent Auditors' Report Required Supplementary Information Management's Discussion and Analysis Basic Financial Statements Government-Wide Financial Statements Page(s) Statement of Net Position 1 i - ii iii - xi Statement of Activities 2-3 Fund Financial Statements Balance Sheet - Governmental Funds 4-5 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 6 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 7-8 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 9 Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 12 Statement of Cash Flows - Proprietary Funds Statement of Assets and Liabilities - Agency Fund 15 Index to Notes to Financial Statements 16 Notes to Financial Statements Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Schedule of Proportionate Share of the Net Pension Liability/(Asset) - Wisconsin Retirement System 66 Schedule of Employer Contributions - Wisconsin Retirement System 66 Notes to Required Supplementary Information 67 Supplementary Information Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Statement of Cash Flows - Component Unit 76

3 INDEPENDENT AUDITORS' REPORT To the City Council City of Columbus Columbus, Wisconsin Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Columbus,Wisconsin, as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City of Columbus'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. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Water and Light Utility, an enterprise fund of the city. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Water and Light Utility, is based solely on the report of the other auditors. 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 auditors' 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 City of Columbus'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 City of Columbus'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. Page i

4 Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Columbus, Wisconsin, as of December 31, 2017 and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Columbus's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 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 supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole. Madison, Wisconsin June 21, 2018 Page ii

5 MANAGEMENT S DISCUSSION AND ANALYSIS

6 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) The management of the City of Columbus offers all persons interested in the financial position of the city this narrative overview and analysis of the city s financial performance during the fiscal year ended December 31, You are invited to read this narrative in conjunction with the city s financial statements. FINANCIAL HIGHLIGHTS > The assets and deferred outflows of resources of the City of Columbus exceeded its liabilities and deferred inflows of resources by $39,089,709 (net position), an increase of $1,108,858 from 2016 s year-end net position. Of this amount, $6,287,720 is considered unrestricted net position, $3,734,917 is restricted for specific purposes (restricted net position), and $29,067,072 is the city s net investment in capital assets. > The city s total net position is $39,089,709. Governmental activities net position is $13,864,254 while business-type activities net position is $25,225,455. > On December 31, 2017, the city s governmental funds reported combined fund balances of $4,702,438 an increase of $121,461 from General fund unassigned fund balance at year-end 2017 was $1,010,761, an increase of $172,165 from OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the city s basic financial statements. These financial statements consist of two parts: Management s Discussion and Analysis (this section) and the basic financial statements. The basic financial statements include two kinds of statements that present different views of the city: > The first two statements are government-wide financial statements that provide both long-term and short-term information about the city s overall financial status. > The remaining statements are fund financial statements that focus on individual parts of city government, reporting the city s operations in more detail than the government-wide statements. These financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. The remainder of this overview section of management s discussion and analysis explains the structure and contents of each of the statements. Page iii

7 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) OVERVIEW OF THE FINANCIAL STATEMENTS (cont.) GOVERNMENT-WIDE STATEMENTS The government-wide statements report information about the city as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the government s assets, deferred outflows of resources, liabilities, and deferred inflows of resources. All of the current year s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the city s net position and how it has changed. Net Position the difference between the city s assets and deferred outflows of resources and the city s liabilities and deferred inflows of resources is one way to measure the city s financial health, or position. Over time, increases or decreases in the city s net position are an indicator of whether its financial health is improving or deteriorating. To assess the overall health of the city you need to consider additional nonfinancial factors such as changes in the city s property tax base, the condition of the city s equipment/vehicles and the condition of the city s roads. The statement of activities presents information showing how the government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the cash flows. Thus, revenue and expenses reported in this statement for some items will only result in cash flows in future fiscal periods. The government-wide financial statements include the City of Columbus, the Columbus Water and Light Utilities, and the Columbus Sewer Utility, which are presented as the primary government. The Community Development Authority (CDA) is presented as a component unit. The Columbus Water and Light Utilities and the Columbus Sewer Utility prepare separate financial statements. Financial statements for the Columbus Water and Light Utilities may be obtained from the Columbus Water and Light Department office, located at 950 Maple Avenue, Columbus, and financial statements for the Columbus Sewer Utility may be obtained from Columbus City Hall, 105 North Dickason Boulevard, Columbus. The CDA does not prepare separate financial statements. FUND FINANCIAL STATEMENTS A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The city, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the city can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Page iv

8 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) OVERVIEW OF THE FINANCIAL STATEMENTS (cont.) FUND FINANCIAL STATEMENTS (cont.) Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The city maintains nineteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the debt service fund, capital projects fund, and TIF No. 3, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The city adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. Proprietary Funds The city maintains two proprietary funds, both of which are enterprise funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Proprietary fund financial statements present the same type of information as the government-wide financial statements, only in more detail. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the city s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information In addition to the basic financial statements and accompanying notes, required supplementary information presents a detailed budgetary comparison schedule for the general fund to demonstrate compliance with the budget. The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Page v

9 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) FINANCIAL ANALYSIS OF THE CITY AS A WHOLE An analysis of the city s financial position begins with a review of the Statement of Net Position and the Statement of Revenues, Expenses and Changes in Net Position. These two statements report the city s net position and changes therein. It should be noted that the financial position can also be affected by non-financial factors, including economic conditions, population growth and new regulations. A summary of the city s Statement of Net Position is presented below in Table 1. Table 1 Condensed Statement of Net Position Governmental Activities Business-type Activities Totals Current and other assets $ 9,261,506 $ 9,875,946 $ 9,445,23 $ 8,012,630 $ 18,706,737 $ 17,888,576 Capital assets 16,467,426 18,287,415 24,373,093 27,874,551 40,840,519 46,161,966 Total Assets 25,728,932 28,163,361 33,818,324 35,887,181 59,547,256 64,050,542 Deferred outflows of resources 1,161, , , ,765 1,723,330 1,200,933 Long-term liabilities 7,394,145 8,936,603 8,199,982 9,336,511 15,594,127 18,273,114 Other liabilities 1,669,776 1,833,743 1,597,888 1,581,664 3,267,664 3,415,447 Total Liabilities 9,063,921 10,770,346 9,797,870 10,918,215 18,861,791 21,688,561 Deferred inflows of resources 4,216,551 4,287, , ,276 4,427,944 4,473,205 Net investment in capital assets 8,773,330 10,764,008 18,668,359 20,016,309 27,253,669 29,067,072 Restricted 2,359,135 2,188,158 1,462,921 1,546,759 3,822,056 3,734,917 Unrestricted 2,477, ,088 4,239,134 3,662,387 6,905,126 6,287,720 Total Net Position $ 13,610,437 $ 13,864,254 $ 24,370,414 $ 25,225,455 $ 37,980,851 $ 39,089,709 A large portion of the city s total net position (74.36%) reflects its investment in capital assets (e.g., land, buildings and improvements, machinery and equipment, and infrastructure), less any debt used to acquire those assets that is still outstanding. The city uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the city s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. At the end of the current fiscal year, the city reported positive balances in all three categories of net position, both for the city as a whole, as well as for its separate governmental and business-type activities. Page vi

10 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) FINANCIAL ANALYSIS OF THE CITY AS A WHOLE (cont.) Table 2 Condensed Statement of Activities Governmental Activities Business-type Activities Totals REVENUES Program Revenues Charges for services $ 878,340 $ 986,568 $ 10,309,695 $ 10,601,049 $ 11,188,035 $ 11,587,617 Operating grants and contributions 668, , , ,834 Capital grants and contributions 1, ,326 71, ,765 73, ,091 General Revenues Property taxes 3,394,278 3,460, ,394,278 3,460,988 Other taxes 51,593 88, ,593 88,731 Intergovernmental 589, , , ,118 Other 457, ,300 38,943 94, , ,352 Total Revenues 6,041,737 6,264,865 10,420,046 11,504,536 16,461,783 17,247,731 EXPENSES General government 1,013, , ,013, ,531 Public safety 1,877,009 1,855, ,877,009 1,855,509 Public works 1,257,010 1,271, ,257,010 1,271,087 Health and human services 192, , , ,347 Culture/recreation/education 1,110,960 1,214, ,110,960 1,214,251 Conservation and development 683, , , ,607 Interest and fiscal charges 211, , , ,525 Electric - 996,844 1,023, ,844 1,023,592 Water - 7,185,851 7,314,491 7,185,851 7,314,491 Sewer - 1,437,149 1,583,603 1,437,149 1,583,603 Total Expenses 6,345,965 6,438,857 9,619,844 9,921,686 15,965,809 16,360,553 Changes in net position before transfers (304,228) (173,992) 800,202 1,282, ,974 1,108,858 Transfers 424, ,809 (424,110) (427,809) - - Changes in Net Position 119, , , , ,974 1,108,858 Beginning Net Position 13,490,555 13,610,437 23,994,322 24,370,414 37,484,877 37,980,851 Ending Net Position $ 13,610,437 $ 13,864,254 $ 24,370,414 $ 25,225,455 $ 37,980,851 $ 39,089,709 As previously noted, the Statement of Net Position shows the city s financial position as of December 31, The specific nature or source of these changes then becomes more evident in the Statement of Activities as shown above in Table 2. Page vii

11 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) FINANCIAL ANALYSIS OF THE CITY AS A WHOLE (cont.) GOVERNMENTAL ACTIVITIES Revenues in 2017 for governmental activities increased by $223,128 approximately 3.69% compared to the prior year. This is related to the increase in building permit fees collected and grants received in Expenses increased $92,892 approximately 1.46%, compared to the prior year because of additional costs for building inspections. At year-end 2017, net position increased by $253,817, approximately 1.86%, compared to an increase of $119,882 in BUSINESS-TYPE ACTIVITIES In 2017, net position for business-type activities increased by $855,041, or 3.51%. In 2016, net position increased by $376,092. Please refer to the separately issued financial statements for the Water and Light Utility and Sewer Utility for more details regarding these changes. FINANCIAL ANALYSIS OF THE CITY S FUNDS GOVERNMENTAL FUNDS The focus of the City of Columbus s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the city s financing requirements. In particular, unassigned fund balance may serve as a useful measure of the government s net resources available for spending at the end of the fiscal year. At December 31, 2017, the city s governmental funds reported combined fund balances of $4,702,438. Unassigned fund balance is normally available to meet the city s current and future needs; unassigned fund balance across all city funds totaled $812,711 at year-end. The remaining $3,889,727 is nonspendable for advances to other funds, restricted for debt service, trusts, and TIF districts, committed for specific purposes, or assigned for internal or budget purposes. General Fund The general fund s portion of fund balance totaled $2,124,470. The city s general fund is the chief operating fund of the city. Total fund balance in the general fund increased $27,142 or 1.29% since the prior year. The unassigned fund balance increased from $838,596 in 2016 to $1,010,761 in 2017, a change of $172,165 or 20.53%. The city evaluates general fund balance by measuring the unassigned general fund balance as a percentage of the subsequent year s general fund budget. For 2017, unassigned fund balance is $1,010,761 and the 2018 general fund expenditure budget is $3,789,030 resulting in an unassigned fund balance of 26.68%. It is recommended by financial advisors that, at a minimum, the undesignated fund balance fall between 15-20%, which would allow fund balance to fund expenditures for about two months, assuming there is no revenue. Page viii

12 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) FINANCIAL ANALYSIS OF THE CITY S FUNDS (cont.) GOVERNMENTAL FUNDS (cont.) General Fund (cont.) The city s original adopted budget planned for a decrease in the general fund balance of $68,852. The general fund had an actual fund balance increase of $27,142. Refer to the budget to actual comparison on pages of the financial statements for further details on specific departmental budget variances. The City Council adopted a budget amendment which recorded actual activity which occurred in Debt Service Fund The city s debt service fund accounts for the accumulation of resources for, and payment of, general longterm debt principal, interest and related costs. Fund balance of $780,584 is restricted for future debt service. TIF No. 3 TIF No. 3 accounts for the revenues and expenditures related to the city s Tax Incremental Financing District (TIF) No. 3. The city has expended funds to prepare the industrial park for future business development. TIF No. 3 currently has a fund balance of $86,001. In 2017, TIF No. 3 generated a net decrease in fund balance of $30,610. Capital Projects The capital projects fund accounts for the city s capital expenditures and the related financing sources. In 2017, this fund reported significant street improvement work and capital improvements/purchases which was financed by a borrowing in The ending fund balance totaled $554,556 and is restricted for future capital projects. Non-major Governmental Funds Fund balance of all other governmental funds is $1,156,827, which is generally restricted or committed for trusts, future projects, and special purposes. For 2017, the pool fund had a deficit totaling $198,050, which is a result of costs exceeding revenue sources for several years. For information on the other Non-major Governmental Fund balances refer to page 49. Proprietary Funds The City of Columbus s proprietary fund financial statements provide the same type of information found in the government-wide financial statements, but in more detail. Factors concerning the finances of these funds have already been addressed in the discussion of the city s business-type activities as well as separately issued financial statements. Page ix

13 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) CAPITAL ASSETS At the end of 2017, the city had invested a total of $46,161,966 in capital assets, an increase of $5,321,447 from This investment in capital assets includes land, buildings and improvements, machinery and equipment, infrastructure, and utility plant. See Note III.D. for more information on capital assets. Table 3 Capital Assets Governmental Activities Business-type Activities Totals Land $ 561, ,500 $ 175,253 $ 210,856 $ 737,172 $ 858,356 Construction in progress 1,777, ,921-60,860 1,777, ,781 Other capital assets, net of depreciation 14,127,697 16,719,994 24,197,840 27,602,835 38,325,537 44,322,829 Total Capital Assets $ 16,467,426 $ 18,287,415 $ 24,373,093 $ 27,874,551 $ 40,840,519 $ 46,161,966 LONG-TERM OBLIGATIONS At December 31, 2017, the city had $19,952,234 of long-term obligations outstanding. Of this amount $8,791,404 is revenue debt, $10,397,514 is general obligation debt and related premiums, and the rest relates to vested compensated absences, a note payable, and the net pension liability. Refer to page 43 or Note III.F. for more information on long-term debt. The total long-term debt that was outstanding on December 31, 2017 increased $2,671,085 from December 31, 2016 due to additional revenue debt issued for the purchase of 1149 W. James Street property, purchase capital equipment/trucks and the James Street project. In accordance with Wisconsin Statutes, total general obligation indebtedness of the city may not exceed 5% of the equalized value of taxable property within the city's jurisdiction. At year end 2017 the City had $10,123,449 in general obligation debt. The city also had interest due of $1,788,106 for its general obligation debt. The city has a combined total of $11,911,555 in outstanding principal and interest for general obligation debt at year end 2017 and another $10,822,394 in outstanding principal and interest for revenue debt. The City adopted a general obligation debt limit policy in 2017 which states that the City may not borrow more than 65% of its 5% allowed limit by the State of Wisconsin. The current percentage considering principal only is 50.27%. The current percentage with both principal and interest is 59.15%. To exceed the 65% limit will require a super majority vote of all members present. Page x

14 MANAGEMENT S DISCUSSION AND ANALYSIS (Unaudited) CURRENTLY KNOWN FACTS/ECONOMIC CONDITIONS All currently known facts and economic conditions were considered in preparing the 2017 city budget. None of these conditions are anticipated to change the overall financial position of the city. REQUESTS FOR INFORMATION The financial report is designed to provide our citizens, customers, investors and creditors with a general overview of the city s finances. If you have questions about this report or need any additional information, contact Kim Manley, Finance Director/Treasurer at the City of Columbus; 105 N. Dickason Blvd, Columbus, Wisconsin 53925, or call Page xi

15 STATEMENT OF NET POSITION As of December 31, 2017 Component Primary Government Unit Governmental Activities Business-type Activities Totals Component Unit ASSETS Cash and investments $ 4,761,828 $ 3,474,551 $ 8,236,379 $ 117,043 Receivables (net) Taxes 3,969,319-3,969,319 - Delinquent taxes 5,150-5,150 - Accrued interest - 9,293 9,293 - Accounts 51, , ,080 - Special assessments 334, ,959 - Delinquent special assessments 5,191-5,191 - Loans 122, ,822 - Due from other governments Internal balances 621,025 (621,025) - - Prepaid items 3,310-3,310 - Inventories 1, , ,382 - Restricted assets Cash and investments - 3,589,191 3,589,191 - Other assets - 307, ,500 - Capital Assets Land 647, , ,356 - Construction in progress 919,921 60, ,781 - Other capital assets, net of depreciation 16,719,994 27,602,835 44,322,829 - Total Assets 28,163,361 35,887,181 64,050, ,043 DEFERRED OUTFLOWS OF RESOURCES Pension related amounts 759, ,765 1,200,933 - Total Deferred Outflows of Resources 759, ,765 1,200,933 - LIABILITIES Accounts payable 646, ,827 1,371,595 2,057 Accrued expenses 231,703 49, ,306 2,199 Deposits 62,175 8,001 70,176 - Public Benefits - 13,250 13,250 - Noncurrent Liabilities Due within one year 893, ,023 1,679,120 - Due in more than one year 8,936,603 9,336,511 18,273,114 - Total Liabilities 10,770,346 10,918,215 21,688,561 4,256 DEFERRED INFLOWS OF RESOURCES Unearned revenues 3,986,578-3,986,578 - Pension related amounts 301, , ,627 - Total Deferred Inflows of Resources 4,287, ,276 4,473,205 - NET POSITION Net investment in capital assets 10,764,008 20,016,309 29,067,072 - Restricted 2,188,158 1,546,759 3,734,917 - Unrestricted 912,088 3,662,387 6,287, ,787 TOTAL NET POSITION $ 13,864,254 $ 25,225,455 $ 39,089,709 $ 112,787 See accompanying notes to financial statements. Page 1

16 STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Charges for Services Program Revenues Operating Grants and Contributions Capital Grants and Contributions Functions/Programs Expenses Primary Government Governmental Activities General government $ 861,531 $ 95,046 $ - $ - Public safety 1,855, ,225 35,084 - Public works 1,271, , , ,326 Health and human services 202,347 31, Culture, recreation, and education 1,214, , ,874 - Conservation and development 706,607 3,725 28,533 - Interest and fiscal charges 327, Total Governmental Activities 6,438, , , ,326 Business-type Activities Water 1,023,592 1,318,666-35,119 Electric 7,314,491 7,777, ,146 Sewer 1,583,603 1,504,714-33,500 Total Business-type Activities 9,921,686 10,601, ,765 Total Primary Government $ 16,360,543 $ 11,587,617 $ 494,834 $ 850,091 Component Unit Community Development Authority $ 66,189 $ 1,239 $ 89,567 $ - General Revenues Taxes Property taxes, levied for general purposes Property taxes, levied for debt service Property taxes, levied for TIF districts Property taxes, levied for other purposes Other taxes Intergovernmental revenues not restricted to specific programs Public gifts and grants Investment income Miscellaneous Transfers Total General Revenues and Transfers Change in net position NET POSITION - Beginning of Year NET POSITION - END OF YEAR See accompanying notes to financial statements. Page 2

17 Net (Expenses) Revenues and Changes in Net Position Primary Government Component Unit Governmental Activities Business-type Activities Totals Community Development Authority $ (766,485) $ - $ (766,485) $ - (1,504,200) - (1,504,200) - (287,132) - (287,132) - (170,747) - (170,747) - (885,691) - (885,691) - (674,349) - (674,349) - (327,525) - (327,525) - (4,616,129) - (4,616,129) , , , , (45,389) (45,389) - - 1,188,128 1,188,128 - (4,616,129) 1,188,128 (3,428,001) ,617 1,930,640-1,930, , , , , , ,299-88,731-88, , , , ,008-82,630 94, , ,662-92, ,809 (427,809) - - 4,869,946 (333,087) 4,536, , ,041 1,108,858 24,925 13,610,437 24,370,414 37,980,851 87,862 $ 13,864,254 $ 25,225,455 $ 39,089,709 $ 112,787 See accompanying notes to financial statements. Page 3

18 BALANCE SHEET GOVERNMENTAL FUNDS As of December 31, 2017 General General Debt Service TIF No. 3 ASSETS Cash and investments $ 1,253,926 $ 780,584 $ 662,009 Receivables (net) Taxes 1,932, , ,605 Delinquent personal property tax 5, Accounts 8, Special assessments 8, ,610 - Delinquent special assessments 5, Loans Due from other funds 469, Advances to other funds 604, Inventories 1, Prepaid items 3, TOTAL ASSETS $ 4,292,272 $ 1,819,330 $ 1,179,614 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable $ 73,510 $ - $ - Accrued liabilities 134, Deposits 12, Due to other funds Advances from other funds ,462 Total Liabilities 220, ,008 Deferred Inflows of Resources Unearned revenues 1,939, , ,605 Unavailable revenues 8, ,610 - Total Deferred Inflows of Resources 1,947,543 1,038, ,605 Fund Balances Nonspendable 550, Restricted - 780,584 86,001 Committed Assigned 562, Unassigned (deficit) 1,010, Total Fund Balances 2,124, ,584 86,001 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 4,292,272 $ 1,819,330 $ 1,179,614 See accompanying notes to financial statements. Page 4

19 Capital Projects Nonmajor Governmental Funds Totals $ 666,814 $ 1,398,495 $ 4,761,828 32, ,045 3,969, ,150 7,114 35,789 51, , , , , , , , , ,310 $ 1,052,274 $ 2,331,151 $ 10,674,641 $ 457,843 $ 115,415 $ 646,768-7, ,028-50,000 62,175-35,003 35, , , , ,556 1,650,666 39, ,768 3,986, ,959 39, ,768 4,321, , ,556 1,066,253 2,487, , , ,824 - (198,050) 812, ,556 1,156,827 4,702,438 $ 1,052,274 $ 2,331,151 $ 10,674,641 See accompanying notes to financial statements. Page 5

20 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION As of December 31, 2017 Total Fund Balances - Governmental Funds $ 4,702,438 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds. Land 647,500 Construction in progress 919,921 Other capital assets 23,806,317 Less: Accumulated depreciation (7,086,323) Some receivables that are not currently available are reported as unavailable revenues in the fund financial statements but are recognized as revenue when earned in the government-wide statements. 334,959 The net pension liability does not relate to current financial resources and is not reported in the governmental funds. (98,695) Deferred outflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds. 759,168 Deferred inflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds. (301,351) Some liabilities, including long-term debt, are not due and payable in the current period and therefore, are not reported in the funds. Bonds and notes payable (9,388,449) Compensated absences (175,070) Accrued interest (88,675) Unamortized premium on debt (130,898) Capital lease payable (36,588) NET POSITION OF GOVERNMENTAL ACTIVITIES $ 13,864,254 See accompanying notes to financial statements. Page 6

21 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 General General Debt Service TIF No. 3 REVENUES Taxes $ 1,942,490 $ 619,260 $ 503,691 Intergovernmental 908,297-2,221 Licenses and permits 138, Fines, forfeitures and penalties 66, Public charges for services 107, Intergovernmental charges for services Special assessments 6, ,854 - Investment income 22,302 12,744 2,850 Miscellaneous revenues 102, Total Revenues 3,293, , ,762 EXPENDITURES Current General government 790,789 2,500 3,204 Public safety 1,453, Health and human services 110, Public works 724, Culture, recreation, and education 310, Conservation and development 334, ,562 Capital Outlay Debt Service Principal - 1,166,898 - Interest and fiscal charges - 221,176 14,911 Total Expenditures 3,723,901 1,390, ,677 Excess (deficiency) of revenues over expenditures (430,168) (611,716) 201,085 OTHER FINANCING SOURCES (USES) Debt issued Premium on debt issued Proceeds of capital leases Transfers in 552, ,170 - Transfers out (95,499) - (281,695) Property sales ,000 Total Other Financing Sources (Uses) 457, ,170 (231,695) Net Change in Fund Balances 27,142 (275,546) (30,610) FUND BALANCES - Beginning of Year 2,097,328 1,056, ,611 FUND BALANCES - END OF YEAR $ 2,124,470 $ 780,584 $ 86,001 See accompanying notes to financial statements. Page 7

22 Capital Projects Nonmajor Governmental Funds Totals $ - $ 484,278 $ 3,549,719 24, ,380 1,050,627-61, ,659-3,792 70,340 40, , , , , ,205 3,114 41,620 82, , ,390 68,004 1,377,387 6,026, , , ,621 1,653,673-88, , , , ,167 1,042,529-59, ,626 1,574, ,031 2,399,823 19,817-1,186,715 43,870 31, ,564 1,639,281 2,199,045 9,260,478 (1,571,277) (821,658) (3,233,734) 1,910, ,000 2,805,000 13,743 2,238 15,981 56,405-56, , ,478 (114,547) (72,928) (564,669) ,000 1,865, ,809 3,355, , , , ,232 1,050,676 4,580,977 $ 554,556 $ 1,156,827 $ 4,702,438 See accompanying notes to financial statements. Page 8

23 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Net change in fund balances - total governmental funds $ 121,461 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of net position the cost of these assets is capitalized and they are depreciated over their estimated useful lives and reported as depreciation expense in the statement of activities. Capital outlay is reported as an expenditure in the fund financial statements but is capitalized in the government-wide financial statements 2,399,823 Some items reported as operating expenditures but are capitalized in the government-wide financial statements 129,761 Depreciation is reported in the government-wide financial statements (603,109) Net book value of assets retired (106,486) Receivables not currently available are reported as revenue when collected or currently available in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. Special assessments 188,121 Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Debt and capital lease issued (2,861,405) Principal repaid 1,166,898 Capital lease principal payment 19,817 Governmental funds report debt premiums and discounts as other financing sources (uses) or expenditures. However, in the statement of net position, these are reported as additions to or deductions from long-term debt. These are allocated over the period the debt is outstanding in the statement of activities and are reported as interest expense. Premium on debt issued (15,981) Amortization of debt premium 16,852 Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences (11,450) Accrued interest on debt (32,813) Net pension liability 109,128 Deferred outflows of resources related to pensions (402,809) Deferred inflows of resources related to pensions 136,009 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 253,817 See accompanying notes to financial statements. Page 9

24 STATEMENT OF NET POSITION PROPRIETARY FUNDS As of December 31, 2017 Business-type Activities - Enterprise Funds Water and Light Utility Sewer Utility Totals ASSETS Current Assets Cash and investments $ 1,000,622 $ 2,473,929 $ 3,474,551 Receivables (net) Interest 1,400 7,893 9,293 Accounts 903,160 24, ,032 Due from other funds 34,026 92, ,645 Advances to other funds - 25,190 25,190 Inventories 325, ,088 Restricted Assets Redemption account - current 347, , ,050 Total Current Assets 2,611,965 2,808,884 5,420,849 Noncurrent Assets Restricted Assets Depreciation account 360, ,675 Equipment replacement - 492, ,440 Reserve account 384, , ,970 Energy efficiency program 155, ,160 Construction account 1,439,614 86,282 1,525,896 Capital Assets Property and equipment 27,400,167 22,810,415 50,210,582 Construction work in progress - 60,860 60,860 Less: Accumulated depreciation (10,784,354) (11,612,537) (22,396,891) Other Assets Advances to other funds - 133, ,711 Preliminary survey and investigation 14,657-14,657 Investment in American Transmission Company 292, ,843 Total Noncurrent Assets 19,263,129 12,109,774 31,372,903 Total Assets 21,875,094 14,918,658 36,793,752 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension 333, , ,765 Total Deferred Outflows of Resources 333, , ,765 See accompanying notes to financial statements. Page 10

25 Business-type Activities - Enterprise Funds Water and Light Utility Sewer Utility Totals LIABILITIES Current Liabilities Accounts payable $ 568,540 $ 156,287 $ 724,827 Accrued liabilities - 12,559 12,559 Due to other funds 906, ,571 Customer deposits 8,001-8,001 Compensated absences 22,804 4,881 27,685 Public benefits 13,250-13,250 Notes payable 29,735-29,735 General obligation debt 60,000 70, ,000 Liabilities Payable from Restricted Assets Revenue bonds payable 350, , ,603 Accrued interest 18,245 18,799 37,044 Total Current Liabilities 1,977, ,129 2,488,275 Noncurrent Liabilities Long-Term Debt General obligation bonds 55, , ,000 Revenue bonds payable 4,250,000 3,942,801 8,192,801 Compensated absences 84,776 47, ,641 Note payable 206, ,862 Net pension liability 42,539 13,501 56,040 Unamortized debt premium 143, ,167 Total Noncurrent Liabilities 4,782,344 4,554,167 9,336,511 Total Liabilities 6,759,490 5,065,296 11,824,786 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pension 140,505 44, ,276 Total Deferred Inflows of Resources 140,505 44, ,276 NET POSITION Net investment in capital assets 13,345,030 6,671,279 20,016,309 Restricted for Debt service 329, , ,945 Depreciation 360, ,675 Equipment replacement - 492, ,440 Energy efficiency programs 155, ,160 Pension 42,539-42,539 Unrestricted 1,075,855 2,586,532 3,662,387 TOTAL NET POSITION $ 15,308,682 $ 9,916,773 $ 25,225,455 See accompanying notes to financial statements. Page 11

26 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-type Activities - Enterprise Funds Water and Light Utility Sewer Utility Totals OPERATING REVENUES $ 9,096,335 $ 1,504,714 $ 10,601,049 OPERATING EXPENSES Operation and maintenance 7,570, ,870 8,422,283 Depreciation 654, ,905 1,206,616 Total Operating Expenses 8,225,124 1,403,775 9,628,899 Operating Income 871, , ,150 NONOPERATING REVENUES (EXPENSES) Investment income 66,494 28,228 94,722 Miscellaneous expenses (17,184) - (17,184) Interest expense (109,698) (116,086) (225,784) Amortization of bond premium 13,923-13,923 Debt issuance costs - (63,742) (63,742) Total Nonoperating Revenues (Expenses) (46,465) (151,600) (198,065) Income (Loss) Before Contributions and Transfers 824,746 (50,661) 774,085 CONTRIBUTIONS AND TRANSFERS Capital contributions 475,265 33, ,765 Transfers out (427,809) - (427,809) Total Contributions and Transfers 47,456 33,500 80,956 Change in Net Position 872,202 (17,161) 855,041 NET POSITION - Beginning of Year 14,436,480 9,933,934 24,370,414 NET POSITION - END OF YEAR $ 15,308,682 $ 9,916,773 $ 25,225,455 See accompanying notes to financial statements. Page 12

27 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-type Activities - Enterprise Funds Water and Light Utility Sewer Utility Totals CASH FLOWS FROM OPERATING ACTIVITIES Received from customers $ 9,043,341 $ 1,513,735 $ 10,557,076 Received from other funds for services 100, ,062 Paid to suppliers for goods and services (6,900,881) (611,248) (7,512,129) Paid to employees for services (657,823) (234,122) (891,945) Net Cash Flows From Operating Activities 1,584, ,365 2,253,064 CASH FLOWS FROM INVESTING ACTIVITIES Investments sold and matured 2,885, ,940 3,295,374 Investment income 61,310 21,410 82,720 Investments purchased (384,367) (1,171,979) (1,556,346) Investment in American Transmission Company (16,181) - (16,181) Net Cash Flows From Investing Activities 2,546,196 (740,629) 1,805,567 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Paid to municipality for tax equivalent (432,132) - (432,132) Transfers to other funds (15,849) - (15,849) Repayment of advances from other funds - 24,696 24,696 Net Cash Flows From Noncapital Financing Activities (447,981) 24,696 (423,285) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Debt retired (535,001) (854,453) (1,389,454) Interest paid (111,576) (112,161) (223,737) Acquisition and construction of capital assets (1,885,657) (1,706,903) (3,592,560) Capital contributions received 84,005 33, ,505 Note paid (29,735) - (29,735) Proceeds from debt issue - 2,555,000 2,555,000 Debt issuance costs - (63,742) (63,742) Net Cash Flows From Capital and Related Financing Activities (2,477,964) (148,759) (2,626,723) Net Change in Cash and Cash Equivalents 1,204,950 (196,327) 1,008,623 CASH AND CASH EQUIVALENTS - Beginning of Year 2,098,790 2,399,983 4,498,773 CASH AND CASH EQUIVALENTS - END OF YEAR $ 3,303,740 $ 2,203,656 $ 5,507,396 See accompanying notes to financial statements. Page 13

28 Business-type Activities - Enterprise Funds Water and Light Utility Sewer Utility Totals RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income $ 871,211 $ 100,939 $ 972,150 Nonoperating revenue (expense) (1,335) - (1,335) Adjustments to Reconcile Operating Income to Net Cash Flows From Operating Activities Depreciation 654, ,905 1,206,616 Depreciation charged to other funds 46,237-46,237 Changes in assets, deferred outflows, liabilities, and deferred inflows Accounts receivable 40,485 2,374 42,859 Due from other funds - 6,647 6,647 Inventories 12,923-12,923 Accounts payable (69,207) (12,264) (81,471) Accrued liabilities - (4,592) (4,592) Due to other funds (10,288) - (10,288) Compensated absences 11,574 5,890 17,464 Public benefits (1,935) - (1,935) Other current liabilities (1,273) - (1,273) Pension related deferrals and liabilities 31,596 17,466 49,062 NET CASH FLOWS FROM OPERATING ACTIVITIES $ 1,584,699 $ 668,365 $ 2,253,064 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION - PROPRIETARY FUNDS Cash and investments $ 1,000,622 $ 2,473,929 $ 3,474,551 Restricted cash and investments Redemption account 347, , ,050 Reserve account 384, , ,970 Depreciation account 360, ,675 Construction account 1,439,614 86,282 1,525,896 Energy efficiency program 155, ,160 Equipment replacement account - 492, ,440 Total Cash and Investments 3,688,107 3,375,635 7,063,742 Less: Noncash equivalents (384,367) (1,171,979) (1,556,346) CASH AND CASH EQUIVALENTS $ 3,303,740 $ 2,203,656 $ 5,507,396 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Developer financed additions to utility plant $ 357,758 $ - Dividends reinvested in American Transmission $ 5,184 $ - Company Amortization of bond premium $ 13,923 $ - See accompanying notes to financial statements. Page 14

29 STATEMENT OF ASSETS AND LIABILITIES AGENCY FUND As of December 31, 2017 Agency Fund Tax Collection ASSETS Cash and investments $ 4,088,116 Taxes receivable 1,736,046 TOTAL ASSETS $ 5,824,162 LIABILITIES Due to other governments $ 5,824,162 TOTAL LIABILITIES $ 5,824,162 See accompanying notes to financial statements. Page 15