SWEETWATER COUNTY, WYOMING

Transcription

1 FINANCIAL AND COMPLIANCE REPORT JUNE 30, 2017

2 CONTENTS INDEPENDENT AUDITOR S REPORT 1 and 2 MANAGEMENT S DISCUSSION AND ANALYSIS 3-11 (Required Supplementary Information) BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position 12 Statement of Activities 13 Governmental Fund Financial Statements: Balance Sheet 14 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 15 Statement of Revenues, Expenditures, and Changes in Fund Balances 16 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 17 Proprietary Fund Financial Statements: Statement of Fund Net Position 18 Statement of Revenues, Expenses, and Changes in Fund Net Position 19 Statement of Cash Flows 20 Fiduciary Fund Financial Statement: Statement of Fiduciary Net Position 21 Discretely Presented Governmental Type Component Units: Statement of Net Position 22 and 23 Statement of Activities 24 and 25 Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (Budgetary Basis) General Fund 60 Schedule of Funding Progress 61 Schedules of the County s Law Enforcement Plan Proportionate Share of the Net Pension Liability, and Contributions 62 Schedules of the County s Public Employee Plan Proportionate Share of the Net Pension Liability, and Contributions 63 Schedules of the Southwest Counseling Services Proportionate Share of the Net Pension Liability, and Contributions 64 Schedules of the Event Complex s Proportionate Share of the Net Pension Liability, and Contributions 65 Schedules of the Library System s Proportionate Share of the Net Pension Liability, and Contributions 66 Schedules of the Museum Board s Proportionate Share of the Net Pension Liability, and Contributions 67 Schedules of the Recreation Board s Proportionate Share of the Net Pension Liability, and Contributions 68 Schedules of the District Board of Health s Proportionate Share of the Net Pension Liability, and Contributions 69 Notes to Required Supplementary Information SUPPLEMENTARY INFORMATION Combining Statements: Nonmajor Governmental Funds: Combining Balance Sheet 73 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 74 Schedule of Expenditures of Federal Awards 75 and 76 Notes to Schedule of Expenditures of Federal Awards 77 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 GOVERNMENT AUDITING STANDARDS 78 and 79 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE 80 and 81 Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings 85 EXHIBIT I: Corrective Action Plan

3 INDEPENDENT AUDITOR S REPORT Board of County Commissioners Sweetwater County, Wyoming Green River, Wyoming Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Sweetwater County, Wyoming (the County ), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the County s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the combined financial statements of Memorial Hospital of Sweetwater County (Hospital) which is presented as a major discretely presented component unit of the County and whose assets and deferred outflows of resources totaled $119,422,377, whose net position totaled $76,768,374, and whose revenues totaled $89,397,528 in the accompanying basic financial statements. The combined financial statements of the Hospital 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 Hospital, 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 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 County 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 County 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, 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 aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of June 30, 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. 1

4 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis on pages 3 through 11, the Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (Budgetary Basis) General Fund on page 60, the Schedule of Funding Progress on page 61, Schedules of Proportionate Shares of the Net Pension Liability and Schedules of Contributions on pages 62 through 69, and Notes to Required Supplementary Information on pages 70 through 72, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County s basic financial statements. The Combining Statements of Nonmajor Governmental Funds and Schedule of Expenditures of Federal Awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. This 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. 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, this information is 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 December 8, 2017 on our consideration of the County 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 solely 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 the effectiveness of the County s 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 County s internal control over financial reporting and compliance. Cheyenne, Wyoming December 8,

5 MANAGEMENT S DISCUSSION AND ANALYSIS INTRODUCTION The following is a discussion and analysis of Sweetwater County s (the County ) performance and activities for the year ended June 30, When read in conjunction with the financial statements, this section s financial highlights, overview and analysis should assist the reader in gaining a more complete knowledge of the County s financial performance. FINANCIAL HIGHLIGHTS For the primary government, the County s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $123,828,513 (net position). Of this amount, $33,903,995 (unrestricted net position) may be used to meet the County s ongoing obligations to citizens and creditors. For the entire government (including component units) net position was $213,018,049 and unrestricted net position was $65,201,169. Note that with the current financial reporting model, the total net position figure includes capital assets net of accumulated depreciation and financing arrangements, as applicable. At the close of the year, the County s governmental funds reported combined ending fund balances of $56,519,577, a decrease of $8,066,208 from the prior year. Of this amount, $35,308,219 is available for spending at the County s discretion (unassigned fund balance). At the end of the year, the unassigned fund balance for the general fund was $35,308,219 or 68% of total general fund expenditures. Total debt (capital leases) for the primary government decreased by $512,523 during the year. During the year, the County entered into one capital lease agreement of $314,326 and made payments of $826,849. Other than capital leases, no new debt was incurred. Capital leases payable as of June 30, 2017 were $576,737. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to Sweetwater County s basic financial statements. Under the current reporting model, the basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains required supplementary information as well as other supplementary information in addition to the basic financial statements. Government-wide financial statements. Government-wide financial statements are designed to provide readers with a broad overview of the County s finances in a manner similar to private-sector business reporting. These statements include the County as well as the component units of Sweetwater County (Memorial Hospital of Sweetwater County, Sweetwater County Events Complex, Southwest Counseling Services, Sweetwater County Library System, Sweetwater County Museum Board, Sweetwater County Recreation Board and the Sweetwater County District Board of Health). The Statement of Net Position, a component of the government-wide financial statements, presents information on all of the County s assets, deferred outflows of resources, liabilities, deferred inflows of resources and net position. The County s capital assets (land, buildings, equipment and infrastructure) are included in this statement and reported net of their accumulated depreciation. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. In evaluating the government s overall condition, however, additional non-financial factors should be considered such as the County s economic outlook, changes in its demographics, and the condition of its capital assets and infrastructure. 3

6 The Statement of Activities presents revenue and expense information showing how the County s net position changed during the fiscal year. To understand the basis of how these numbers are determined, it is important to note that changes in net position are reported whenever an event occurs that requires a revenue or expense to be recognized, regardless of when the related cash is received or disbursed (the accrual basis of accounting). For example, tax revenues are reported when the taxes are legally due, even though they may not be collected for some time after that date; and an obligation to pay a supplier is reported as an expense when the goods or services are received, even though the bill may not be paid until some time later. Both of the government-wide financial statements distinguish functions of the County that are principally supported by intergovernmental revenues and property taxes (governmental activities) from other functions designed to recover all or a significant portion of their costs through user fees and charges (business type activities). The governmental activities of the County include: general government, public safety, road and bridge, health, recreation and welfare and conservation of natural resources. Businesstype activities include the Memorial Hospital of Sweetwater County. The government-wide financial statements can be found on pages 12 and 13 of this report. Fund financial statements. A fund is a grouping of related accounts (revenues, expenditures, assets, deferred outflows of resources, liabilities and deferred inflows of resources) that is used to control resources that have been segregated for specific activities. Sweetwater County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds utilized by the County 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, for accounting and reporting purposes, government fund numbers are determined with a different approach. At the fund level, the focus is on changes in short-term spendable resources and the balance available to spend, rather than the long-term focus used for determining government-wide numbers. Because the focus is so different between fund statements and government-wide statements, reconciliation between the two types is necessary to understand how the numbers differ. Such reconciliations are provided on pages 15 and 17 of this report. The General Fund is the primary operating governmental fund of the County. Three other governmental funds are reported. A summary of the three other funds (nonmajor funds) is combined into one Nonmajor Governmental Funds column. To demonstrate legal compliance, a statement comparing budget-to-actual numbers for the General Fund is included in the required supplementary information. Proprietary Funds. There are two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Internal service funds are an accounting tool used to accumulate and allocate costs internally. The County uses an internal service fund to account for its self-insurance. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The County does not maintain an enterprise fund. Fiduciary Funds. Fiduciary funds are used to account for resources held on behalf of outside parties, including other governments. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County s own programs. The accounting used for fiduciary funds is similar to that used for proprietary funds. The basic fiduciary fund financial statement can be found on page 21. 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. The notes to the financial statements can be found starting on page 26 of this report. 4

7 Required supplementary information. The required supplementary information includes Budgetary Comparison Information for the General Fund, the Schedule of Funding Progress, the Schedules of Proportionate Shares of Net Pension Liabilities, the Schedules of Contributions, and Notes to Required Supplementary Information, starting on page 60. Other information. Combining fund schedules can be found starting on page 73 of this report. Government-Wide Financial Analysis Net Position. As stated earlier, an analysis of net position is probably the most important financial measurement to assist with understanding the financial position of the County, and whether the financial position improves or deteriorates each year. The following table presents summary information from the Statement of Net Position in the Basic Financial Statements. Summary of Net Position (expressed in millions, totals may not add due to rounding) Primary Primary Government Component Units Government Component Units Governmental Governmental Business-type Governmental Governmental Business-type Activities Activities Activities Activities Activities Activities Current and other assets $ $ $ $ $ $ Capital assets Total assets Deferred outflows of resources Current liabilities Non-current liabilities Total liabilities Deferred inflows of resources Net position: Net investment in capital assets Restricted Unrestricted (2.75) (2.14) Total net position $ $ $ $ $ $ As depicted, at June 30, 2017, the County s Primary government and component unit assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by approximately $ and $89.19 million (net position) respectively. 64% and 60% respectively of this amount is represented by the investment in capital assets, net of debt still outstanding relating to the acquisition of those assets. Due to the nature of these assets - long-term assets which are not readily convertible to liquid assets they are not considered to be available for spending or appropriation. Further, even though the presentation here shows capital assets net of related debt, it should be understood that the repayment of this debt does not come from the capital assets themselves, but comes from other sources. Other sub-classifications of net position are restricted and unrestricted. $10.77 million is restricted to expenditures in the CDC Tax Fund and State and County Roads. 5

8 Changes in Net Position. As taken from the Statement of Activities in the basic financial statements, the following table depicts the changes in net position for Statement of Activities (expressed in millions, totals may not add due to rounding) Primary Primary Government Component Units Government Component Units Governmental Governmental Business-type Governmental Governmental Business-type Activities Activities Activities Activities Activities Activities Revenues: Program Revenues: Charges for services $ 1.72 $ 3.88 $ $ 1.64 $ 4.04 $ Operating grants Capital grants and cont General Revenues: Property taxes Sales taxes State appropriations Licenses and permits Other income Investment income (loss) (0.17) Total revenues Expenses: General government Public safety Road and bridge Health, recreation and welfare Conservation of natural resources Interest Memorial Hospital of Sweetwater County Total expenses Change in net position (1.87) 0.14 (7.74) 6.77 (2.34) 0.90 Net position-beginning Net position-ending $ $ $ $ $ $ Governmental activities. Governmental activities for the primary government decreased the County s net position by approximately $1.87 million. The key elements of this decrease are as follows: Property taxes decreased by approximately $7.04 million. This is a 25% decrease compared to the prior year. General government is the largest expenditure program accounting for 42% of the total expenditures for the County. Public safety is second at 34% and road and bridge is third with 17%. 6

9 Business-type activities. The business type activity is the Memorial Hospital of Sweetwater County. Key elements of its activities are as follows: Revenues decreased by approximately $1.75 million or 2% compared to the prior year. Expenses increased by approximately $6.89 million or 8% over the prior year. Expenditures were in excess of revenues decreasing net position by approximately $7.74 million. General Fund Budgetary Highlights (expressed in millions, totals may not add due to rounding) Variance with Variance with Budgeted Amounts Final Budget Budgeted Amounts Final Budget Positive Positive Original Final Actual (Negative) Original Final Actual (Negative) Revenues: Taxes $ $ $ $ (0.33) $ $ $ $ (0.99) Licenses and permits (0.05) (0.04) Intergovernmental (2.82) (2.81) Charges for services (0.02) Investment income (loss) (0.08) Miscellaneous (0.02) Total revenues (3.25) (2.90) Expenditures: General government Public safety Road and bridge Health, recreation, and welfare Conservation of natural resources Capital outlay Total expenditures Other Financing Sources: Proceeds from capital leases Proceeds from sale of capital assets (0.02) Total other financing sources (0.02) Net change in Fund Balance $ (15.61) $ (15.80) $ (5.28) $ $ (0.19) $ (0.19) $ 8.39 $ 8.58 The differences between the original budget and the final amounts represent changes made by the commission as additional facts and information became available. Several factors lead to these modifications. They include: economic factors, change in governing officials, emergency purchases, and other factors. Tax revenues were under the budgeted amounts due to the condition of the local and state economies during the year. Total expenditures were under budget primarily due to projects which were either not undertaken or completed during the year. 7

10 Capital assets At the end of the year, for governmental activities, the County and its component units had invested $94.25 million in a variety of capital assets, as reflected in the following schedules, which represents an increase of $7.3 million or 8.4% from last year. The following schedules show the capital assets for the primary government, component units and the component unit business-type activities for the year ended June 30, Additional information on the County s capital assets can be found in Note 9 of this report. Primary Government Balance Deletions/ Balance June 30, 2016 Additions Transfers June 30, 2017 Capital assets not being depreciated: Land $ 1,157,819 $ - $ - $ 1,157,819 Construction in progress 4,121,891 9,664,946 (353,930) 13,432,907 Total capital assets not being depreciated 5,279,710 9,664,946 (353,930) 14,590,726 Capital assets being depreciated: Buildings and improvements 41,837,026 45,864-41,882,890 Equipment and furnishings 19,055, ,270 (365,127) 19,317,580 Infrastructure 122,095,883 2,099, ,195,583 Total capital assets being depreciated 182,988,346 2,772,834 (365,127) 185,396,053 Less: Accumulated depreciation: Buildings and improvements (12,775,192) (1,175,194) - (13,950,386) Equipment and furnishings (13,891,903) (1,282,790) 648,327 (14,526,366) Infrastructure (88,548,709) (3,225,211) - (91,773,920) Total accumulated depreciation (115,215,804) (5,683,195) 648,327 (120,250,672) Net depreciable assets 67,772,542 (2,910,361) 283,200 65,145,381 Total net capital assets $ 73,052,252 $ 6,754,585 $ (70,730) $ 79,736,107 8

11 Component Units Balance Deletions/ Balance June 30, 2016 Additions Transfers June 30, 2017 Capital assets not being depreciated: Construction in progress $ 16,996 $ 1,544,944 $ (39,035) $ 1,522,905 Capital assets being depreciated: Buildings and improvements 36,675, ,497 39,035 36,922,164 Equipment and furnishings 3,428,333 10,850-3,439,183 Total capital assets being depreciated 40,103, ,347 39,035 40,361,347 Less: Accumulated depreciation: Buildings and improvements (23,254,246) (1,027,375) - (24,281,621) Equipment and furnishings (2,966,011) (123,650) - (3,089,661) Total accumulated depreciation (26,220,257) (1,151,025) - (27,371,282) Net depreciable capital assets 13,883,708 (932,678) 39,035 12,990,065 Total net capital assets $ 13,900,704 $ 612,266 $ - $ 14,512,970 9

12 Business-Type Activities Balance Deletions/ Balance June 30, 2016 Additions Transfers June 30, 2017 Capital assets not being depreciated: Land $ 18,245 $ - $ - $ 18,245 Construction in progress 3,439,790 2,396,253 (4,497,398) 1,338,645 Total capital assets not being depreciated 3,458,035 2,396,253 (4,497,398) 1,356,890 Capital assets being depreciated: Buildings and improvements 39,643,153 7, ,439 40,253,857 Equipment and furnishings 103,163,349 1,253,797 1,782, ,199,372 Total capital assets being depreciated 142,806,502 1,261,062 2,385, ,453,229 Less: Accumulated depreciation: Buildings and improvements (13,664,012) (1,469,736) - (15,133,748) Equipment and furnishings (51,557,029) (7,395,838) 185,700 (58,767,167) Total accumulated depreciation (65,221,041) (8,865,574) 185,700 (73,900,915) Net depreciable assets 77,585,461 (7,604,512) 2,571,365 72,552,314 Total net capital assets $ 81,043,496 $ (5,208,259) $ (1,926,033) $ 73,909,204 10

13 Long-term debt At year-end, the County had $1,985,947 in long-term debt. In addition, governmental-type component units of the County had $677,607 in long-term debt and the business-type component unit of the County had $36,609,420 in long-term debt. Debt consists of compensated absences, capital leases, Hospital Revenue Bonds and notes payable. State statute allows the County to have 2% of its assessed valuation in general bonded debt. Additional information on the County s long-term debt can be found in Notes 11 through 15 of this report. Primary Government Balance at Balance at Due within June 30, 2016 Additions Reductions June 30, 2017 one year Compensated absences $ 1,430,249 $ 1,175,577 $ (1,196,616) $ 1,409,210 $ 1,196,616 Capital leases 1,089, ,326 (826,849) 576, ,922 Total long-term liabilities $ 2,519,509 $ 1,489,903 $ (2,023,465) $ 1,985,947 $ 1,668,538 Governmental-Type Component Units Compensated absences $ 638,478 $ 1,061,745 $ (1,063,816) $ 636,407 $ 636,407 Notes payable 206,000 - (164,800) 41,200 41,200 Total long-term liabilities $ 844,478 $ 1,061,745 $ (1,228,616) $ 677,607 $ 677,607 Business-Type Component Unit Compensated absences $ 2,013,694 $ 2,001,047 $ (2,013,694) $ 2,001,047 $ 2,001,047 Notes payable - 473, ,100 85,845 Capital leases 1,066,768 1,230,000 (485,220) 1,811, ,600 Hospital revenue bonds 36,181,468 - (3,857,743) 32,323,725 1,575,000 Total long-term liabilities $ 39,261,930 $ 3,704,147 $ (6,356,657) $ 36,609,420 $ 4,275,492 Other non-current liabilities At year-end, the County had $18,689,448 in other non-current liabilities. In addition, governmental-type component units of the County had $13,030,697 in other non-current liabilities. Other non-current liabilities consist of net OPEB obligations and net pension liabilities; none of these amounts are presented as current liabilities. Net OPEB obligation at year-end is $2,397,443, or a net increase of $223,384 from the prior year. Additional information on the County s net OPEB obligation can be found in Note 21 of this report. Pension related items are related to the implementation of Governmental Accounting Standards Board Statement No. 68 Accounting and Financial Reporting for Pensions. At June 30, 2017, the County reported deferred outflows of resources, deferred inflows of resources, and net pension liability as $4,453,523; $480,489 and $16,292,005, respectively. In addition, the governmental-type component units of the County reported deferred outflows of resources, deferred inflows of resources, and net pension liability as $3,260,575; $954,665; and $13,030,697, respectively. Additional information on the implementation of this pronouncement and its impact on the basic financial statements can be found in Note 6 of this report. Requests for Information This financial report is designed to provide citizens, customers, investors, creditors and others with a general overview of the County s finances and to demonstrate the County s accountability for the money it receives. Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to the office of the Sweetwater County Clerk. 11

14 BASIC FINANCIAL STATEMENTS

15 STATEMENT OF NET POSITION June 30, 2017 Primary Government Component Units Business-Type Governmental Governmental Activity ASSETS Activities Activities Memorial Hospital Total Current Assets Cash and investments $ 30,747,273 $ 8,649,164 $ 8,863,373 $ 17,512,537 Due from other governments 1,751, Accounts receivable, net 20,073,181 6,554,537 15,401,062 21,955,599 Grants receivable 889, , ,844 Note receivable 41, , ,340 Inventories 1,031,345 74,388 2,664,302 2,738,690 Prepaid items 389,352 51,169 2,004,625 2,055,794 Total current assets 54,923,880 15,806,102 29,154,702 44,960,804 Noncurrent Assets Cash and investments 36,010,190-15,480,563 15,480,563 Due from Library Foundation - 655, ,211 Notes receivable , ,181 Rental property, net , ,413 Other assets ,899 76,899 Capital assets not being depreciated: Land 1,157,819-18,245 18,245 Construction in progress 13,432,907 1,522,905 1,338,645 2,861,550 Capital assets being depreciated: Buildings and improvements 41,882,890 36,922,164 40,253,857 77,176,021 Equipment and furnishings 19,317,580 3,439, ,199, ,638,555 Infrastructure 124,195, Accumulated depreciation (120,250,672) (27,371,282) (73,900,915) (101,272,197) Total noncurrent assets 115,746,297 15,168,181 90,008, ,176,441 Total assets 170,670,177 30,974, ,162, ,137,245 DEFERRED OUTFLOWS OF RESOURCES Long-term debt refinancing , ,415 Pension related outflows 4,453,523 3,260,575-3,260,575 Total deferred outflows of resources 4,453,523 3,260, ,415 3,519,990 LIABILITIES Current Liabilities Warrants and vouchers payable 3,539, ,951 4,008,843 4,731,794 Due to other government 210, Accrued liabilities 2,738,309 75,634 1,837,740 1,913,374 Court bonds and other funds held 656, Unearned revenue 3,441, , ,896 Estimated third-party payor settlements , ,000 Notes payable, due within one year - 41,200 1,660,845 1,702,045 Capital leases payable, due within one year 471, , ,600 Compensated absences, due within one year 1,196, ,407 2,001,047 2,637,454 Total current liabilities 12,254,178 2,101,088 10,320,075 12,421,163 Noncurrent Liabilities Net OPEB obligation 2,397, Notes payable, due in more than one year ,135,980 31,135,980 Capital leases payable, due in more than one year 104,815-1,197,948 1,197,948 Compensated absences, due in more than one year 212, Net pension liability 16,292,005 13,030,697-13,030,697 Total noncurrent liabilities 19,006,857 13,030,697 32,333,928 45,364,625 Total liabilities 31,261,035 15,131,785 42,654,003 57,785,788 DEFERRED INFLOWS OF RESOURCES Unavailable property taxes 19,553,663 5,727,246-5,727,246 Pension related inflows 480, , ,665 Total deferred inflows of resources 20,034,152 6,681,911-6,681,911 NET POSITION Net investment in capital assets 79,159,370 14,512,970 39,300,831 53,813,801 Restricted for: State and county roads 8,779, CDC building 1,985, Endowment challenge program - 655, ,211 Tipple building - 9,500-9,500 Restricted by contributors and grantors for capital acquisition , ,645 Restricted for debt service reserve - - 3,017,205 3,017,205 Unrestricted 33,903,995 (2,756,519) 34,053,693 31,297,174 Total net position $ 123,828,513 $ 12,421,162 $ 76,768,374 $ 89,189,536 See Notes to Financial Statements. 12

16 STATEMENT OF ACTIVITIES Year Ended June 30, 2017 Net (Expenses) Revenues and Changes in Net Position Primary Component Units Program Revenues Business-Type Charges for Operating Capital Activity Sales and Grants and Grants and Governmental Governmental Memorial FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Hospital Total Primary Government Governmental activities: General government $ 19,360,479 $ 1,003,992 $ 4,349,610 $ 2,025,618 $ (11,981,259) $ - $ - $ - Public safety 15,513, , , ,780 (14,210,477) Road and bridge 7,812,469-1,076, ,876 (6,474,526) Health, recreation, and welfare 3,182,199-1,575,827 - (1,606,372) Conservation of natural resources 315, (315,258) Interest 13, (13,316) Total governmental activities 46,197,419 1,720,920 7,457,017 2,418,274 (34,601,208) Component Units Governmental activities 22,523,493 3,883,572 9,640,427 1,503,223 - (7,496,271) - (7,496,271) Business-type activities 97,136,077 83,585,449 4,810 42, (13,503,102) (13,503,102) Total component units 119,659,570 87,469,021 9,645,237 1,545,939 - (7,496,271) (13,503,102) (20,999,373) General Revenues Taxes: Property taxes 21,003,074 6,378,299-6,378,299 Sales and other taxes 10,351, ,709 3,210,608 3,725,317 State appropriations - 140, ,328 Licenses and permits 1,524, Other income 19, ,770 2,393,795 2,984,565 Investment income (168,577) 13, , ,942 Total general revenues 32,729,654 7,637,898 5,764,553 13,402,451 Change in net position (1,871,554) 141,627 (7,738,549) (7,596,922) Net Position, beginning 125,700,067 12,279,535 84,506,923 96,786,458 Net Position, ending $ 123,828,513 $ 12,421,162 $ 76,768,374 $ 89,189,536 See Notes to Financial Statements. 13

17 GOVERNMENTAL FUND FINANCIAL STATEMENTS

18 BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2017 Nonmajor Total General Governmental Governmental ASSETS Fund Funds Funds Cash and investments $ 53,547,290 $ 8,441,237 $ 61,988,527 Due from other governments 1,453, ,836 1,751,858 Receivables: Taxes and interest on taxes 19,881,858-19,881,858 Accounts 9,790-9,790 Accrued interest 145,336 5, ,913 Grants 889, ,671 Note receivable 41,200-41,200 Inventories 1,031,345-1,031,345 Prepaid items 199, ,352 Total assets 77,198,864 8,745,650 85,944,514 LIABILITIES Warrants and vouchers payable $ 3,515,646 $ 24,135 $ 3,539,781 Accrued expenses 1,998,650-1,998,650 Due to other governments - 149, ,468 Court bonds and other funds held 656, ,148 Unearned revenue 3,427,719-3,427,719 Total liabilities 9,598, ,603 9,771,766 DEFERRED INFLOWS OF RESOURCES Unavailable property taxes 19,653,171-19,653,171 FUND BALANCES Nonspendable: Inventories 1,031,345-1,031,345 Prepaid items 199, ,352 Restricted for: State and county roads 2,193,101 6,586,756 8,779,857 CDC Building - 1,985,291 1,985,291 Committed to: Capital replacements 8,148,091-8,148,091 Impact tax 536, ,679 Economic development infrastructure 111, ,162 Insurance reserves 418, ,393 Assigned to: Hospital maintenance 1,188-1,188 Unassigned 35,308,219-35,308,219 Total fund balances 47,947,530 8,572,047 56,519,577 Total liabilities, deferred inflows of resources, and fund balances $ 77,198,864 $ 8,745,650 $ 85,944,514 See Notes to Financial Statements. 14

19 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30, 2017 Total Fund Balances - Governmental Funds $ 56,519,577 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, not reported in the governmental funds. 79,736,107 Some of the County's revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures and, therefore, are deferred in the funds. 99,508 Long-term positions, including net OPEB obligation ($2,397,443), net pension liability ($16,292,005), capital leases payable ($576,737), accrued interest expense on capital leases ($2,505), 2013 specificpurpose tax financing arrangement ($60,882), and compensated absences ($1,409,210), are not due and payable in the current period and, therefore, are not reported in the funds. (20,738,782) An internal service fund is used by management to charge the costs of certain activities to individual funds. The assets and liabilities of this internal service fund are included with governmental activities in the Statement of Net Position. 4,239,069 Pension related outflows and inflows of resources do not provide current financial resources and, therefore, are not reported in the funds. 3,973,034 Net position of governmental activities $ 123,828,513 See Notes to Financial Statements. 15

20 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended June 30, 2017 Nonmajor Total General Governmental Governmental Fund Funds Funds Revenue Taxes $ 30,665,419 $ 799,918 $ 31,465,337 Licenses and permits 1,524,978-1,524,978 Intergovernmental revenue 8,558,446 1,316,845 9,875,291 Charges for services 1,720,920-1,720,920 Investment income (loss) (64,358) (61,500) (125,858) Miscellaneous 19,179-19,179 Total revenue 42,424,584 2,055,263 44,479,847 Expenditures Current: General government 17,705,409-17,705,409 Public safety 14,112,496-14,112,496 Road and bridge 3,756,936-3,756,936 Health, recreation, and welfare 2,930,195 50,000 2,980,195 Conservation of natural resources 315, ,258 Capital outlay 12,091, ,432 12,381,783 Debt service: Principal 826, ,918 1,626,767 Interest and other charges 13,316-13,316 Total expenditures 51,751,810 1,140,350 52,892,160 Excess (deficiency) of revenue over expenditures (9,327,226) 914,913 (8,412,313) Other Financing Sources (Uses) Proceeds from capital leases 314, ,326 Proceeds from sale of capital assets 31,779-31,779 Net change in fund balances (8,981,121) 914,913 (8,066,208) Fund Balance, beginning 56,928,651 7,657,134 64,585,785 Fund Balance, ending $ 47,947,530 $ 8,572,047 $ 56,519,577 See Notes to Financial Statements. 16

21 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended June 30, 2017 Net Change in Fund Balances - Total Governmental Funds $ (8,066,208) 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 Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital purchases and contributions ($12,437,780) exceeded depreciation ($5,683,195) in the current period. 6,754,585 Governmental funds do not report gains and losses on sales, or donations for disposals of capital assets. However, the Statement of Activities reports these amounts. (70,730) The Statement of Activities reports a decrease in revenue due to current activity in deferred revenues which is only reported at the fund level. (111,263) The net OPEB obligation and the liability for compensated absences are not recorded in the fund level, but are reported in the Statement of Net Position. This is the current year change in these liabilities, reported as an expense in the Statement of Activities. (202,345) Repayment of capital lease principal, including the 2013 specific-purpose tax financing arrangement, is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. This is offset by the total capital leases issued during the year and the change in accrued interest on capital leases. 1,312,463 Internal service funds are accounted for as proprietary funds, therefore, they are not included in the governmental funds. 294,738 The change in the defined benefit net pension liability and pension related outflows and inflows are not reported in the governmental funds. This is is the net effect of the change in these balances in the Statement of Net Position. (1,782,794) Change in net position of governmental activities $ (1,871,554) See Notes to Financial Statements. 17

22 PROPRIETARY FUND FINANCIAL STATEMENTS

23 STATEMENT OF FUND NET POSITION PROPRIETARY FUND June 30, 2017 ASSETS Internal Service Insurance Fund Current Assets Cash $ 1,867,431 Investments 2,901,505 Receivables: Accounts 16,256 Interest 14,364 Prepaid expenses 190,000 Total assets 4,989,556 LIABILITIES AND NET POSITION Current Liabilities Accrued liabilities 737,154 Unearned revenue 13,333 Total current liabilities 750,487 Net Position Unrestricted 4,239,069 Total net position $ 4,239,069 See Notes to Financial Statements. 18

24 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUND Year Ended June 30, 2017 Internal Service Insurance Fund Operating Revenues Insurance premiums $ 7,021,109 Operating Expenses Insurance claims 6,683,652 Operating income 337,457 Nonoperating Revenue Investment income (loss) (42,719) Change in net position 294,738 Net Position Beginning of year 3,944,331 End of year $ 4,239,069 See Notes to Financial Statements. 19

25 STATEMENT OF CASH FLOWS PROPRIETARY FUND Year Ended June 30, 2017 Internal Service Insurance Fund Cash Flows from Operating Activities Cash receipts on premiums $ 7,027,890 Payments on insurance claims (6,511,001) Net cash provided by operating activities 516,889 Cash Flows from Investing Activities Interest income 49,133 Purchase of investments (2,500,503) Sale of investments 1,000,335 Net cash (used in) investing activities (1,451,035) Net (decrease) in cash (934,146) Cash Beginning of year 2,801,577 End of year $ 1,867,431 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ 337,457 Adjustments to reconcile operating income to net cash provided by operating activities: Change in assets and liabilities: Accounts receivable 307,812 Accrued liabilities (126,601) Unearned revenue (1,779) Net cash provided by operating activities $ 516,889 Noncash Investing Activities Unrealized gain (loss) on investments $ (99,323) See Notes to Financial Statements. 20

26 FIDUCIARY FUND FINANCIAL STATEMENT

27 STATEMENT OF FIDUCIARY NET POSITION AGENCY FUND June 30, 2017 ASSETS Property Tax Fund Cash and investments $ 23,732,043 Due from other governments 2,528,496 Property taxes and interest receivable 2,057,417 $ 28,317,956 LIABILITIES Due to other taxing units $ 28,317,956 See Notes to Financial Statements. 21

28 DISCRETELY PRESENTED GOVERNMENTAL TYPE COMPONENT UNITS

29 STATEMENT OF NET POSITION DISCRETELY PRESENTED GOVERNMENTAL TYPE COMPONENT UNITS June 30, 2017 Southwest Counseling Events Library ASSETS Services Complex System Cash and investments $ 4,896,591 $ 942,200 $ 1,524,141 Due from Library Foundation ,211 Receivables: Taxes and interest on taxes 686,823 1,775,587 2,578,713 Accounts and insurance credits 696,106 21,757 - Grants 6, ,440 - Inventories - 44,295 13,835 Prepaid items 18,177 3,382 17,521 Capital assets not being depreciated: Construction in progress - 1,522,905 - Capital assets being depreciated: Buildings and improvements 8,011,794 16,391,429 2,880,869 Equipment and furnishings 906,446 1,878, ,450 Accumulated depreciation (5,088,469) (11,113,971) (2,511,436) Total assets 10,133,943 11,820,901 5,348,304 DEFERRED OUTFLOWS OF RESOURCES Pension related outflows 1,910, , ,174 LIABILITIES Warrants and vouchers payable 253, ,860 20,863 Accrued expenses - 9,921 36,477 Unearned revenue 394, ,381 - Notes payable: Due within one year - 41,200 - Compensated absences: Due within one year 243, , ,554 Net pension liability 7,671,229 1,256,628 2,302,947 Total liabilities 8,563,774 2,073,052 2,539,841 DEFERRED INFLOWS OF RESOURCES Unavailable property taxes 675,234 1,745,422 2,533,414 Pension related inflows 482,625 32, ,706 Total deferred inflows of resources 1,157,859 1,777,772 2,743,120 NET POSITION Net investment in capital assets 3,829,771 8,679, ,883 Restricted for: Endowment challenge program ,211 Tipple building Unrestricted (1,506,557) (363,317) (605,577) Total net position $ 2,323,214 $ 8,315,923 $ 608,517 See Notes to Financial Statements. 22

30 Nonmajor Component Units District Total Museum Recreation Board of Component Board Board Health Units $ 365,504 $ 445,854 $ 474,874 $ 8,649, , , ,405 1,409 5,828, , , , ,844 16, , ,089 51, ,522, ,777 8,894,295-36,922,164 50, ,477 14,612 3,439,183 (638,436) (8,008,134) (10,836) (27,371,282) 822,242 2,232, ,996 30,974,283 63,057 68, ,795 3,260,575 1,834 11,577 3, ,951 2,153 6,871 20,212 75, , , ,200 21,158 17,512 68, , , ,040 1,440,948 13,030, , ,000 1,535,068 15,131, , ,176-5,727,246 47,778 50, , , , , ,532 6,681, ,662 1,285,638 3,776 14,512, ,211 9, , , ,208 (725,585) (2,756,519) $ 343,471 $ 1,551,846 $ (721,809) $ 12,421,162 23

31 STATEMENT OF ACTIVITIES DISCRETELY PRESENTED GOVERNMENTAL TYPE COMPONENT UNITS Year Ended June 30, 2017 Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Southwest Counseling Services Health, recreation, and welfare $ 12,407,113 $ 2,363,478 $ 8,704,423 $ - Events Complex Health, recreation, and welfare 3,959, ,495 58,000 1,503,223 Library System Health, recreation, and welfare 3,305, Nonmajor Component Units Museum Board: Health, recreation, and welfare 373,990 21, Recreation Board: Health, recreation, and welfare 619,463 9, District Board of Health: Health, recreation, and welfare 1,858, , ,478 - Total component units $ 22,523,493 $ 3,883,572 $ 9,640,427 $ 1,503,223 General Revenues Taxes: Property taxes Sales and other taxes State appropriations Other income Interest income Total general revenues Change in net position Net Position, beginning Net Position, ending Program Revenues See Notes to Financial Statements. 24