The City of Crystal City, Missouri. Financial Statements, Independent Auditor's Reports, and Supplementary Information.

Transcription

1 The City of Crystal City, Missouri Financial Statements, Independent Auditor's Reports, and Supplementary Information March 31, 2018

2 The City of Crystal City, Missouri Table of Contents Financial Section Page Independent Auditor's Report 1 Financial Statements Government-Wide Financial Statements: Statement of Net Position 3 Statement of Activities 4 Fund Financial Statements: Combined Balance Sheet - Governmental Funds 5 Reconciliation of Total Government Fund Balance to Net Position of Governmental Activities 6 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 7 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 8 Statement of Net Position - Proprietary Fund 9 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Fund 10 Statement of Cash Flows - Proprietary Fund 11 Notes to the Financial Statements 12 Required Supplemental Information Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: General Fund 27 Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Road Tax Fund 28 Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Trash Fund 29 Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Stormwater/Parks Fund 30 Notes to the Required Supplementary Information - Budgetary Schedules 31 Schedule of Changes in Net Pension Liability and Related Ratios - Last 10 Fiscal Years 32 Schedule of Pension Contributions - Last 10 Fiscal Years 33

3 The City of Crystal City, Missouri Table of Contents Page Supplemental Information Combining Balance Sheet - Non-major Governmental Funds 34 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-major Governmental Funds 35 Other Information Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards 36 Schedule of Findings and Responses 38 Follow-Up on Prior Audit Findings 39

4 INDEPENDENT AUDITOR S REPORT To the Honorable Mayor and City Council City of Crystal City, Missouri Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Crystal City, Missouri, as of and for the year ended March 31, 2018, and the related notes to the financial statements, which collectively comprise the City of Crystal City, Missouri s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements The City of Crystal City, Missouri s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Crystal City, Missouri, as of March 31, 2018, 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.

5 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis which has been omitted and required supplemental 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. Although the management s discussion and analysis has been omitted, our opinion on the basic financial statements is not affected by this missing information. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Crystal City, Missouri s basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements are 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. Such 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 combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 19, 2018 on our consideration of the City of Crystal City, Missouri s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Crystal City, Missouri s internal control over financial reporting and compliance. Creve Coeur, Missouri September 19,

6 City of Crystal City, Missouri Statement of Net Position March 31, 2018 Governmental Business-Type Activities Activities Total Assets Current Assets: Cash and cash equivalents $ 1,403,423 $ 81,022 $ 1,484,445 Investments 1,045,257-1,045,257 Restricted cash and cash equivalents 41, , ,130 Restricted investments - 1,285,355 1,285,355 Receivables, net Taxes 44,541-44,541 Service charges - 90,628 90,628 Interest Other 43,560-43,560 Prepaid items 166,121 70, ,111 Unbilled revenue - 134, ,936 Due from other governments 956, ,750 Internal balances Total Current Assets 3,701,917 1,789,340 5,491,257 Noncurrent Assets: Capital assets, net 11,722,162 15,238,451 26,960,613 Joint venture - 639, ,474 Unamortized bond discounts - 64,919 64,919 Total Noncurrent Assets 11,722,162 15,942,844 27,665,006 Total Assets 15,424,079 17,732,184 33,156,263 Deferred Outflows of Resources Deferred outflows - pension related 825, ,007 1,109,343 Total Assets and Deferred Outflows of Resources $ 16,249,415 $ 18,016,191 $ 34,265,606 Liabilities Current Liabilities: Accounts payable $ 137,690 $ 22,654 $ 160,344 Sales tax payable - 5,580 5,580 Accrued compensated absences 314,874 74, ,015 Customer deposits payable - 130, ,353 Unclaimed property - 8,597 8,597 Current portion of bonds payable - 270, ,000 Current portion of certificates of participation - 255, ,000 Current portion of state revolving fund balance - 183, ,879 Accrued interest payable - 50,156 50,156 Other accrued liabilities 129,901 14, ,901 Total Current Liabilities 582,465 1,014,360 1,596,825 Noncurrent Liabilities: Unamortized bond premiums - 35,831 35,831 Net pension liability 730, ,208 1,252,513 Revenue bonds payable - 1,665,000 1,665,000 Proceeds from sale of capital assets - (270,000) (270,000) Certificates of Participation payable - 9,395,000 9,395,000 Less: current portion - (255,000) (255,000) State revolving fund reserve - 1,110,168 1,110,168 Less: current portion - (183,879) (183,879) Total Noncurrent Liabilities 730,305 12,019,328 12,749,633 Total Liabilities 1,312,770 13,033,688 14,346,458 Deferred Inflows of Resources Deferred inflows - pension related 73,962-73,962 Net Position Net investment in capital assets 11,722,162 2,967,533 14,689,695 Restricted for debt service - 1,285,355 1,285,355 Restricted for enabling legislation 1,495,645-1,495,645 Unrestricted net assets 1,644, ,615 2,374,491 Total Net Position 14,862,683 4,982,503 19,845,186 Total Liabilities, Deferred Inflows of Resources and Net Position $ 16,249,415 $ 18,016,191 $ 34,265,606 See Notes to the Financial Statements 3

7 City of Crystal City, Missouri Statement of Activities Program Revenues Net (Expense) Revenue and Changes in Net Assets Primary Government Operating Capital Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities: City council $ (10,119) $ - $ - $ - $ (10,119) $ - $ (10,119) Treasurer (1,292) (1,292) - (1,292) Municipal court (79,601) 248, , ,948 Mayor (4,991) (4,991) - (4,991) Elections (1,265) (1,265) - (1,265) City clerk/city administrator (1,164,841) 135, (1,029,129) - (1,029,129) City hall (246,425) (246,425) - (246,425) Police department (1,194,789) - 15,152 - (1,179,637) - (1,179,637) Dispatching (304,203) (304,203) - (304,203) Fire department (174,530) (174,530) - (174,530) Building inspector (111,148) (111,148) - (111,148) Canine control (31,676) 2, (29,356) - (29,356) Street department (1,249,273) (1,249,273) - (1,249,273) Mosquito control (12,400) (12,400) - (12,400) Library (106,112) 3,855 4,607 - (97,650) - (97,650) Park and pool (119,893) 52, (67,020) - (67,020) Road tax 38, , , ,333 Trash (517,938) 26, (491,759) - (491,759) Stormwater/Parks (283,842) (283,842) - (283,842) Total Governmental Activities (5,575,690) 469,178 20, ,685 (4,904,758) - (4,904,758) Business-Type Activities: Water and Sewer (2,645,720) 2,625, (19,918) (19,918) Total Business-Type Activities (2,645,720) 2,625, (19,918) (19,918) Total Primary Government $ (8,221,410) $ 3,094,980 $ 20,069 $ 181,685 $ (4,904,758) $ (19,918) $ (4,924,676) General Revenues Sales tax $ 3,407,017 $ - $ 3,407,017 Property taxes 634, ,708 Motor fuel tax 130, ,485 Utility and gross receipts tax 781, ,509 Investment income 10,231 61,452 71,683 Miscellaneous income 292,849 16, ,779 Gain (loss) on disposal of assets 4,800-4,800 Total General Revenues 5,261,599 78,382 5,339,981 Change in Net Position 356,841 58, ,305 Net Position - Beginning 14,505,842 4,924,039 19,429,881 Net Position - Ending $ 14,862,683 $ 4,982,503 $ 19,845,186 See Notes to the Financial Statements 4

8 City of Crystal City, Missouri Combined Balance Sheet - Governmental Funds March 31, 2018 Non-major Total Road Tax Trash Stormwater/Parks Governmental Governmental General Fund Fund Fund Funds Funds Assets Cash and cash equivalents $ 453,391 $ 6,200 $ 208,614 $ 471,154 $ 264,064 $ 1,403,423 Investments 942, ,667 1,045,257 Restricted cash and cash equivalents 41, ,721 Receivables, net Taxes 29, ,144 44,540 Interest Other - 41,108 2, ,560 Prepaid items 135,405-21,351-9, ,121 Due from other governments 411, ,013 62,137 49, ,636 Due from other funds Total Assets 2,014, , , , ,292 3,647,802 Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources $ 2,014,822 $ 426,321 $ 294,554 $ 520,813 $ 391,292 $ 3,647,802 Liabilities Accounts payable $ 48,793 $ 78,981 $ 8,244 $ - $ 1,672 $ 137,690 Accrued wages payable Due to other funds Other accrued liabilities 122,901-7, ,901 Total Liabilities 171,694 78,981 15,244-1, ,591 Deferred Inflows of Resources Unavailable revenue - property taxes 20, ,722 31,537 Fund Balance Nonspendable: Prepaid items 135,405-21,351-9, ,121 Restricted: Special revenue fund - 347, , , ,533 1,495,645 Unassigned: General fund 1,686, ,686,908 Total Fund Balances 1,822, , , , ,898 3,348,674 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 2,014,822 $ 426,321 $ 294,554 $ 520,813 $ 391,292 $ 3,647,802 See Notes to the Financial Statements 5

9 City of Crystal City, Missouri Reconciliation of Total Governmental Fund Balance to Net Position of Governmental Activities March 31, 2018 Total Governmental Fund Balances $ 3,348,674 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 11,722,162 Certain assets and liabilities are not financial resources (uses) and, therefore, are not reported in the governmental funds: Deferred outflows - pension related 825,336 Deferred inflows - pension related (73,962) Accounts receivable collected 60 days after the end of the year are not financial resources and therefore are not reported in the funds 85,652 Accrued net pension liability is not due and payable in the current period and therefore is not reported in the funds (730,305) Long-term liabilities, including compensated absences and capital leases are not due and payable in the current period and therefore are not reported in the funds (314,874) Net Position of Governmental Activities $ 14,862,683 See Notes to the Financial Statements 6

10 City of Crystal City, Missouri Combined Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Stormwater/ Non-major Total Road Tax Trash Parks Governmental Governmental General Fund Fund Fund Funds Funds Revenues Sales tax $ 2,322,820 $ 291,928 $ 448,379 $ 343,890 $ - $ 3,407,017 Property tax 433, , ,628 Motor fuel tax 130, ,485 Licenses, permits and fees 137,722-26,179-55, ,565 Utility and gross receipts tax 769, ,350 Fines and municipal court fees 248, , ,613 Grant revenue and state aid 15, , , ,754 Investment income 9, ,231 Miscellaneous income 57,360 3, ,360 64,021 Total Revenues $ 4,124,885 $ 476,827 $ 474,558 $ 343,977 $ 271,417 $ 5,691,664 Expenditures Current: City council $ 10,119 $ - $ - $ - $ - $ 10,119 Treasurer 1, ,292 Municipal court 76, ,183 Mayor 4, ,991 Elections 1, ,265 City clerk/city administrator 959, ,297 City hall 286, ,362 Police department 1,086, ,086,674 Dispatching 288, ,520 Fire department 123, ,942 Building inspector 123, ,049 Canine control 42, ,700 Street department 834, ,379 Mosquito control 12, ,400 Library ,286 92,286 Park and pool , ,386 Road tax Trash , ,429 Stormwater/Parks ,000-85,000 Capital outlay 480, , ,156 39,770 1,030,969 Debt Service: Debt payments - Principal Debt payments - Interest Total Expenditures $ 4,331,910 $ 361,306 $ 478,429 $ 234,156 $ 272,442 $ 5,678,243 Excess (Deficiency) of Revenues over Expenditures (207,025) 115,521 (3,871) 109,821 (1,025) 13,421 Other Financing Sources (Uses) Proceeds from sale of capital assets $ 4,800 $ - $ - $ - $ - $ 4,800 Insurance refunds and claims 228, ,828 Transfers in Transfers out Total Other Financing Sources $ 233,628 $ - $ - $ - $ - $ 233,628 Net Change in Fund Balance 26, ,521 (3,871) 109,821 (1,025) 247,049 Fund Balance - Beginning 1,795, , , , ,923 3,101,625 Fund Balance - Ending $ 1,822,313 $ 347,340 $ 279,310 $ 520,813 $ 378,898 $ 3,348,674 See Notes to the Financial Statements 7

11 City of Crystal City, Missouri Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Net Change in Fund Balance - Total Governmental Funds $ 247,049 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures while governmental activities report depreciation expenses to allocate those expenditures over the life of the assets: Capital asset purchases capitalized 919,240 Depreciation expense (658,738) Some revenue reported in the statement of activities do not represent financial resources and therefore is not reported as revenue in the funds 7,239 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds: Pension obligation (165,367) Accrued compensated absences 7,418 Change in Net Position of Governmental Activities $ 356,841 See Notes to the Financial Statements 8

12 City of Crystal City, Missouri Statement of Net Position - Proprietary Fund March 31, 2018 Water and Sewer Fund Assets Current Assets Cash and cash equivalents $ 81,022 Restricted cash and cash equivalents 126,409 Restricted Investments 1,285,355 Receivables, net Service charges 90,628 Interest - Prepaid items 70,990 Unbilled revenue 134,936 Total Current Assets 1,789,340 Noncurrent Assets Capital assets, net 15,238,451 Joint venture 639,474 Unamortized bond discounts 64,919 Total Noncurrent Assets 15,942,844 Total Assets 17,732,184 Deferred Outflows of Resources Deferred outflows - pension related 284,007 Total Assets and Deferred Outflows of Resources $ 18,016,191 Liabilities Current Liabilities Accounts payable $ 22,654 Sales tax payable 5,580 Accrued compensated absences 74,141 Customer deposits payable 130,353 Unclaimed property 8,597 Current portion of bonds payable 270,000 Current portion of certificates of participation 255,000 Current portion of state revolving fund balance 183,879 Accrued interest payable 50,156 Due to other funds - Other accrued liabilities 14,000 Total Current Liabilities 1,014,360 Noncurrent Liabilities Unamortized bond premiums 35,831 Net pension liability 522,208 Revenue bonds payable 1,665,000 Less: current portion (270,000) Certificates of participation payable 9,395,000 Less: current portion (255,000) State revolving fund balance 1,110,168 Less: current portion (183,879) 12,019,328 Total Liabilities 13,033,688 Deferred Inflows of Resources Deferred inflows - pension related - Net Position Net investment in capital assets 2,967,533 Restricted for debt service 1,285,355 Unrestricted net assets 729,615 Total Net Position 4,982,503 Total Liabilities, Deferred Inflows of Resources and Net Position $ 18,016,191 See Notes to the Financial Statements 9

13 City of Crystal City, Missouri Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds Water and Sewer Fund Operating Revenues Water and sewer charges $ 2,620,208 Other revenues 5,594 Total Operating Revenues 2,625,802 Operating Expenses Personnel 852,026 Repairs 560,797 Supplies 120,092 Telephone 8,268 Utilities 115,081 Depreciation 531,030 Miscellaneous 12,848 Total Operating Expenses 2,200,142 Net Operating Income (Loss) 425,660 Non-operating Revenues (Expenses) Interest expense and bond fees (445,578) Other revenues (expenses) 565 Interest income 61,452 Gain (loss) on joint venture 16,365 Net Non-operating Revenues (Expenses) (367,196) Change in Net Position $ 58,464 Total Net Position - Beginning of Year 4,924,039 Total Net Position - End of Year $ 4,982,503 See Notes to the Financial Statements 10

14 Water and Sewer Fund Cash Flows from Operating Activities Receipts from customers $ 2,616,762 Payments to suppliers (804,759) Payments to employees (812,802) Net Cash Provided (Used) by Operating Activities 999,201 Cash Flows from Capital and Related Financing Activities: Interest and debt issue costs (446,415) Principal paid on debt (420,000) Proceeds from sale of assets - Capital contributions - Miscellaneous income 565 Borrowings from General Fund (45,000) State revolving fund reserve (178,514) Net Cash Provided (Used) by Capital and Related Financing Activities (1,089,364) Cash Flows from Investing Activities Asset purchases (25,922) Investment earnings 52,494 Net Cash Provided (Used) by Investing Activities 26,572 Net Increase (Decrease) in Cash $ (63,591) Cash and cash equivalents - Beginning of Year 1,556,377 Cash and cash equivalents - End of Year $ 1,492,786 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating Income (Loss) $ 425,660 Adjustments to reconcile operating income to net cash provided (used) by operating activities Depreciation expense 531,030 Gain (loss) on joint venture 16,365 Changes in Assets and Liabilities Receivables, net (9,711) Prepaid items (7,256) Joint venture 40,413 Deferred outflows - pension related 111,135 Accounts and other payables (38,055) Wages and compensated absence payable (2,225) Unclaimed property payable 1,531 Net pension obligation (56,474) Other accrued liabilities (8,500) Deferred inflows - pension related (4,712) Net Cash Provided (Used) by Operating Activities $ 999,201 Noncash Investing, Capital and Financing Activities: None City of Crystal City, Missouri Statement of Cash Flows - Proprietary Fund See Notes to the Financial Statements 11

15 Note 1 - Summary of Significant Accounting Policies Background Financial Reporting Entity Government-Wide and Fund Financial Statements City of Crystal City, Missouri Notes to the Financial Statements The financial statements of the City of Crystal City, Missouri (the "City") have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below: The City of Crystal City, Missouri was incorporated in It currently operates as a third class city of the State of Missouri under a Mayor and Council form of government and provides the following services as authorized by its charter: public safety (fire, police and dispatching); streets, bridges and sidewalks; park and recreation; public improvements; planning and zoning; water, sewer and trash services; levee control; library; animal control and municipal court. Under generally accepted accounting principles, the reporting entity consists of the City and other organizations for which the City is financially accountable or organizations that, because of the nature and significance of their relationship to the City, may not be excluded from the financial reporting entity. Based upon these criteria, the City has determined that there are no other governmental units that should be included in the financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information about the reporting government as a whole. They include all funds of the reporting entity. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. The statement of activities demonstrates the degree to which the direct expenses of a given function or identifiable activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include 1) charges to those who purchase, use or directly benefit from goods, services or privileges provided by a given function or activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund financial statements of the reporting entity are organized into funds, each of which is considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute is assets, liabilities, fund equity, revenues and expenditures/expenses. Funds are organized into three categories: governmental, proprietary and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 12

16 City of Crystal City, Missouri Notes to the Financial Statements Note 1 - Summary of Significant Accounting Policies (continued) Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales tax, intergovernmental grants, and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City. In accordance with GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The City reports the following major governmental funds: General Fund - The General Fund is the primary operating fund of the City and is always classified as a major fund. It is used to account for all financial resources except those required to be accounted for in another fund. Road Tax Fund - A fund used to account for road sales tax revenue. The expenditures from this fund are restricted to the construction and maintenance of streets and bridges. Trash Fund A fund used to account for the trash service sales tax and user fees collected for trash service. The expenditures from this fund are restricted to those related to providing trash services to the residents of Crystal City. Stormwater/Parks Fund - A fund used to account for the stormwater/parks sales tax. The expenditures from this fund are restricted to use for the stormwater/parks maintenance. The City reports the following major proprietary fund: Water and Sewer Fund An enterprise fund is used to account for user fees for water and sewer services and expenditures related to providing those services. In addition, the City also reports the following governmental special revenue funds as non-major: Library Fund and Park & Pool Fund - Funds used to account for the proceeds of specific revenue that are legally restricted to expenditure for specified purposes. 13

17 Note 1 - Summary of Significant Accounting Policies (continued) Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued) Fund Equity City of Crystal City, Missouri Notes to the Financial Statements In accordance with GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre- November 30, 1989 FASB and AICPA Pronouncements, the City has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) Opinions, issued on or before November 30, 1989, for its government-wide and proprietary fund financial statements, unless those pronouncements conflict with or contradict GASB pronouncements. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the enterprise funds are the charges for goods and services provided. Operating expenses of the enterprise funds include the cost of these goods and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The government-wide and proprietary financial statements are classified in the following categories: Net Investment in Capital Assets represents capital assets, net of accumulated depreciation, less the outstanding balances of any notes, lease or other borrowings that are attributable to the acquisition, construction or improvements of the assets. Net assets invested in capital assets, net of related debt, excludes unspent bond and loan proceeds. Restricted net position is legally restricted or identified for specific purposes by outside parties or by law through constitutional provisions or enabling legislation. Unrestricted net position is the residual assets and represent assets available for future operations or distribution. The governmental fund equities, under GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, are classified in the following categories: Nonspendable fund balances are amounts that cannot be spent because they are either a.) not in spendable form (i.e. inventory and prepaid items) or b.) legally or contractually required to be maintained intact. Restricted fund balances are amounts that can be used only for specific purposes because of a.) constitutional provisions or enabling legislation or b.) externally imposed constraints such as creditors, grantors, laws or other governments. Committed fund balances are those amounts that can only be used for specific purposes pursuant to constraints imposed by the City Council through an ordinance or resolution. Assigned fund balances are any amounts for which it is the City's intent that the funds be used for specific purposes but there exist no legal or binding restrictions or commitments. Assignments are made by the City's management. Unassigned fund balances are residual amounts for the government's general fund and include all spendable amounts not contained in the other classifications. 14

18 Note 1 - Summary of Significant Accounting Policies (continued) Cash and Investments For the purpose of the Statement of Net Position and proprietary fund Statement of Cash Flows, cash and cash equivalents include all demand and savings accounts, and certificates of deposit or short-term investments with an original maturity of three months or less. Inventories The City does not maintain an inventory of supplies. Receivables Receivables consist of all revenues earned and not yet received. All receivables are reported at their gross value and, where appropriate, are reduced by the estimated amount deemed to be uncollectible. Allowance for uncollectable accounts for business-type activities for the year ended March 31, 2018 was $24,000. Capital Assets and Depreciation The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its measurement focus. General capital assets are long-lived assets of the City as a whole. When purchased, such assets are recorded as expenditures in the governmental funds and capitalized in the government-wide statements. Infrastructure such as streets, traffic signals and signs are capitalized on a prospective basis beginning April 1, The valuation basis for general capital assets are historical cost, or where historical cost is not available, estimated historical cost based on replacement cost. Donated capital assets are capitalized at estimated fair market value on the date donated. Depreciation of capital assets is computed and recorded by the straight-line method. Estimated useful lives of the various classes of depreciable capital assets are as follows: buildings, 20 to 50 years; improvements/infrastructure, 5 to 50 years; equipment, 2 to 15 years. Budgets and Budgetary Accounting In accordance with Chapter 67, RSMo, the City of Crystal City adopts an annual operating budget at the beginning of the fiscal year, which can be amended by the Council throughout the year. Formal budgetary accounting is employed as a management control for all funds of the City. Budgetary comparison schedules are presented as Required Supplementary Information. The budgetary basis is the modified accrual basis of accounting. Unpaid Compensated Absences City of Crystal City, Missouri Notes to the Financial Statements Capital assets in the proprietary funds are capitalized in the fund in which they are utilized. The valuation basis for proprietary fund capital assets are the same as those used for the general capital assets. It is the City s policy to permit employees to accumulate earned, but unused vacation, which will be paid to employees upon separation from the City s service. The City accrues unused portions of vacation pay in the period the fund liability is incurred. The liability for accrued vacation for the fiscal year ending March 31, 2018 was $120,975 for governmental activities and $25,878 for business-type activities. 15

19 Note 1 - Summary of Significant Accounting Policies (continued) Unpaid Compensated Absences (continued) As permitted by Governmental Accounting Standards Board Statement No. 16, the vesting method is used to accrue sick leave liability. The liability is based on the sick leave accumulated at year-end by those employees who are expected to become eligible to receive such payments. The portion not expected to be liquidated with expendable available financial resources is not reported as a fund liability in accordance with Interpretation No. 6 of the Governmental Accounting Standards Board. The liability for accrued sick leave for the fiscal year ending March 31, 2018 was $193,899 for governmental activities and $48,263 for business-type activities. Post-Employment Benefits Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Missouri Local Government Employees Retirement System (LAGERS) and additions to/deductions from LAGERS fiduciary net position have been determined on the same basis as they are reported by LAGERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Property Taxes Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied at the end of August and mailed to residents in October, and are payable on or before January 1 of the following year. All unpaid taxes then become delinquent. Jefferson County bills and collects property taxes on the City s behalf. Property tax revenues are recognized when billed. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Restricted Net Position/Fund Balance When both restricted and unrestricted resources are available for use, it is the City s policy to use restricted resources first and then unrestricted resources, as needed. Note 2 - Deposits and Investments City of Crystal City, Missouri Notes to the Financial Statements The City does not provide significant post-employment benefits, except those mandated by the Consolidated Omnibus Budget Reconciliation Act (COBRA). The requirements established by COBRA are fully funded by employees who elect coverage under the Act, and no direct costs are incurred by the City. Proprietary funds, because of certain bond covenants, are required to establish and maintain prescribed amounts of resources (consisting of cash and temporary investments) that can be used only for specific purposes such as servicing outstanding debt, construction, and specific types of expenses. Cash and time deposits include all funds held in checking accounts, money market accounts, cash on hand and certificates of deposit with original maturities of greater than three months. For cash flow purposes, these are considered cash equivalents. Deposits and investments are stated at cost, which approximates market. Restricted cash includes amounts held in trust as required by certain bond covenants. 16

20 Note 2 - Deposits and Investments (continued) City of Crystal City, Missouri Notes to the Financial Statements The City complies with Missouri state statute and allows investments in obligations of the United States, the state of Missouri, certain bonds of political subdivisions within Missouri, and out-of-state municipal bonds, provided they are rated in the highest nationally ranked category. Deposits and investments held by at the City at March 31, 2018 consisted of the following: Type Maturities Cost Unrestricted Deposits: Petty cash/change funds n/a $ 325 Demand deposits n/a 1,479,622 Money markets n/a 4,498 Total Unrestricted Deposits 1,484,445 Restricted Deposits: Time deposits n/a 41,721 Money market n/a 126,409 Total Restricted Deposits 168,130 Total Unrestricted and Restricted Deposits $ 1,652,575 Unrestricted Investments: Certificate of deposit 08/28/19 $ 146,496 Certificate of deposit 08/28/18 139,253 Certificate of deposit 08/28/18 127,783 Certificate of deposit 08/28/19 134,300 Certificate of deposit 08/28/18 158,397 Certificate of deposit 03/21/19 100,752 Certificate of deposit 03/20/19 135,609 Certificate of deposit 06/09/18 10,676 Certificate of deposit 07/20/18 30,947 Certificate of deposit 09/02/18 10,060 Certificate of deposit 06/24/18 50,984 Total Unrestricted Investments 1,045,257 Restricted Investments: Guaranteed investment contract 12/30/22 18,750 Guaranteed investment contract 12/30/22 205,815 Guaranteed investment contract 12/30/22 3,365 Guaranteed investment contract 12/30/22 146,250 Guaranteed investment contract 12/30/22 904,353 Guaranteed investment contract 12/30/22 6,822 Total Restricted Investments 1,285,355 Total Unrestricted and Restricted Investments $ 2,330,612 17

21 Note 2 - Deposits and Investments (continued) Investments are recorded at cost, which approximates market. Reported Percent of Issuer Investment Type Amount Portfolio Bank of Bloomsdale Certificates of deposit $ 1,045, % UMB Bank Guaranteed investment contracts 1,285, % Note 3 - Risk Management City of Crystal City, Missouri Notes to the Financial Statements Interest Rate Risk - The City's investment policy minimizes the risk that the market value of securities mature to meet cash requirements for ongoing operations and investing operating funds primarily in short-term securities. Investments in banker's acceptance and commercial paper shall mature and become payable not more than 180 days from the date of purchase. All other investments shall mature and become payable not more than five years from the date of purchase. The City's established investment policy has limited the City's investment portfolio to a weighted-average maturity that does not exceed three years. Credit Risk - State law permits Cities to invest in obligations of the State of Missouri or U.S. Government and obligations of government agencies that mature or become payable in one year or less from the date of issue. Custodial Credit Risk - For an investment, custodial credit risk is the risk that, in the event of failure of the counter party, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State law requires depository financial institutions to pledge as collateral for public funds on deposit, governmental unit securities, which, when combined with Federal Deposit Insurance Corporation ("FDIC") insurance, are at least equal to the amount on deposit at all times. As of March 31, 2018, the deposits and investments of the City were fully insured or collateralized by securities held in the City's name. Concentration of Credit Risk - The City places no limit on the amount the City may invest in any one issuer. The following investments represent more than 5%, individually, of total investments: All other investments are reported using a cost-based measure in accordance with the requirements of GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. The City is exposed to various risks of losses related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees and natural disasters, and has established a risk management strategy that attempts to minimize losses and the carrying costs of insurance. The City has purchased commercial insurance that includes reasonable deductible amounts. The portion of uninsured loss is not expected to be significant with respect to the financial position of the City. There have been no significant reductions in coverage from the prior year and settlements have not exceeded coverage in the past three years. The City participated in a limited risk management program for major medical. The City is responsible for claims, claim reserves and administration costs of the program. The City s self-insurance is limited to $40,000 per individual per calendar year. After claims reach this amount, a private insurance carrier will pay the remaining claims. Liabilities for this program are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Accrued insurance claim liabilities as of March 31, 2018, are as follows: Fund Balance General Fund $ 49,000 Trash Fund 7,000 Water/Sewer Fund 14,000 $ 70,000 18

22 City of Crystal City, Missouri Notes to the Financial Statements Note 4 - Fixed Assets Changes in fixed assets are as follows for the year ended March 31, 2018: Balance, Balance, March 31, 2017 Additions Deletions March 31, 2018 Governmental Activities: Capital Assets, non-depreciable Land $ 395,990 $ - $ - $ 395,990 Construction in process 72, , ,434 Capital Assets, depreciable Buildings 2,332, ,332,786 Infrastructure 12,316, ,316,055 Furniture, Machinery and Equipment 3,063, ,116-3,312,951 Vehicles 1,037,852 70,668-1,108,520 $ 19,219,496 $ 919,240 $ - $ 20,138,736 Less: Accumulated Depreciation (7,757,835) (658,739) - (8,416,574) Capital Assets (net) $ 11,461,661 $ 260,501 $ - $ 11,722,162 Business-Type Activities Capital Assets, non-depreciable Construction in process $ - $ - $ - $ - Capital Assets, depreciated Buildings 9,784,211 17,328-9,801,539 Infrastructure 9,786, ,786,743 Furniture, Machinery and Equipment 1,589,184 8,594-1,597,778 Vehicles 156, ,595 $ 21,316,733 $ 25,922 $ - $ 21,342,655 Less: Accumulated Depreciation (5,573,174) (531,030) - (6,104,204) Capital Assets (net) $ 15,743,559 $ (505,108) $ - $ 15,238,451 Depreciation expense charged to each function for the year ended March 31, 2018 is as follows: City Clerk $ 11,216 City Hall 43,182 Police Department 72,482 Fire Department 27,223 Building Inspector 4,287 Canine 4,000 Street Department 192,433 Library 8,713 Park Department 10,141 Pool Department 12,719 Road Department 196,770 Trash Department 21,209 Stormwater/Parks Department $ 54, ,739 19

23 City of Crystal City, Missouri Notes to the Financial Statements Note 5 - Economic Concentrations Approximately 39% of the city sales tax revenues received in the General Fund and Stormwater/Parks Fund is provided by a single taxpayer located in the City. The taxes are collected by the State of Missouri and remitted to the City of Festus, Missouri who pays them to the City of Crystal City. Note 6 - Employee Retirement Plan General Information about the Pension Plan Plan description - The City of Crystal City's defined benefit pension plan provides certain retirement, disability and death benefits to plan members and beneficiaries. The City of Crystal City participates in the Missouri Local Government Employees Retirement System (LAGERS). LAGERS is an agent multiple-employer, statewide public employee pension plan established in 1967 and administered in accordance with RSMo As such, it is LAGERS responsibility to administer the law in accordance with the expressed intent of the General Assembly. The plan is qualified under the Internal Revenue Code Section 401(a) and is tax exempt. The responsibility for the operations and administration of LAGERS is vested in the LAGERS Board of Trustees consisting of seven persons. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by accessing the LAGERS website at Benefits provided - LAGERS provides retirement, death and disability benefits. Benefit provisions are adopted by the governing body of the employer, within the options available in the state statutes governing LAGERS. All benefits vest after 5 years of credited service. Employees who retire on or after age 60 (55 for police) with 5 or more years of service are entitled to an allowance for life based upon the benefit program information provided below. Employees may retire with an early retirement benefit with a minimum of 5 years of credited service and after attaining age 55 (50 for police) and receive a reduced allowance Valuation Benefit Multiplier 2.00% Final Average Salary 5 years Member Contributions 0% Benefit terms provide for annual post retirement adjustments to each member s retirement allowance subsequent to the member s retirement date. The annual adjustment is based on the increase in the Consumer Price Index and is limited to 4% per year. Employees covered by benefit terms - At June 30, 2017, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 32 Inactive employees entitled to but not yet receiving benefits 23 Active employees