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6 AMBULANCE REVENUE and COST REPORT FIRE DISTRICT and SMALL RURAL COMPANY Arizona Department of Health Services Annual Ambulance Financial Report Timber Mesa Fire and Medical District dba Lakeside Fire District Reporting Ambulance Service Address: 3561 E. Deuce of Clubs City: Show Low Zip: Report Fiscal Year From: July 1, 2015 To: June 30, 2016 Mo. Day Year Mo. Day Year I hereby verify that I have directed the preparation of the enclosed annual report in accordance with the reporting requirements of the State of Arizona. I have read this report and hereby verify that the information provided is true and correct to the best of my knowledge. This report has been prepared using the accrual basis of accounting. Authorized Signature: Date: December 30, 2016 Print Name and Title: Gabriel Buldra, Finance Director Phone: Mail to: Department of Health Services Bureau of Emergency Medical Services Certificate of Necessity and Rates Section 150 North 18th Avenue, Suite 540 Phoenix, AZ Telephone: (602) Fax: (602) /22/2004 Formula's Excluded Page 1 TMFMD31.6

7 AMBULANCE REVENUE AND COST REPORT FIRE DISTRICT and SMALL RURAL COMPANY AMBULANCE SERVICE ENTITY: Timber Mesa Fire and Medical District dba Lakeside Fire District FOR THE PERIOD FROM: July 1, 2015 TO: June 30, 2016 STATISTICAL SUPPORT DATA (1) *(2) (3) (4) SUBSCRIPTION TRANSPORTS TRANSPORTS SERVICE UNDER NOT UNDER Line TRANSPORTS CONTRACT CONTRACT TOTALS No. DESCRIPTION 1 Number of ALS Billable Transports: Number of BLS Billable Transports: Number of Loaded Billable Miles: - - 6,262 6,262 4 Waiting Time (Hr. & Min.): Canceled (Non-Billable) Runs:. 1,616 AMBULANCE SERVICE ROUTINE OPERATING REVENUE 6 ALS Base Rate Revenue. 875,405 7 BLS Base Rate Revenue. 209,693 8 Mileage Charge Revenue. 89,175 9 Waiting Charge Revenue Medical Supplies Charge Revenue Nurses Charge Revenue Standby Charge Revenue (Attach Schedule) - 13 TOTAL AMBULANCE SERVICE ROUTINE OPERATING REVENUE (Post to Page 3, Line 1) 1,174,272 SALARY AND WAGE EXPENSE DETAIL GROSS WAGES: ** No. of FTE's 14 Management 121, Paramedics and IEMTs 246, Emergency Medical Technician (EMT) 210, Other Personnel 46, Payroll Taxes and Fringe Benefits - All Personnel 204, Total Wages, Taxes & Benefits (Sum Lines 14 through 18; Post to Page 3, Line 10) 829, * This column reports only those runs where a contracted discount rate was applied. ** Full-time equivalents (F.T.E.) is the sum of all hours for which employees wages were paid during the year divided by Page 2 TMFMD31.7

8 AMBULANCE REVENUE AND COST REPORT FIRE DISTRICT and SMALL RURAL COMPANY AMBULANCE SERVICE ENTITY: Timber Mesa Fire and Medical District dba Lakeside Fire District FOR THE PERIOD FROM: July 1, 2015 TO: June 30, 2016 SCHEDULE OF REVENUES AND EXPENSES Line No. DESCRIPTION Operating Revenues: 1 Total Ambulance Service Operating Revenue (From: Page 2, Line 13) 1,174,272 Settlement Amounts: 2 AHCCCS 134,183 3 Medicare 409,080 4 Subscription Service 5 Contractual 6 Other 10,711 7 Total (Sum of Lines 2 through 6) 553,973 8 Total Operating Revenue (Line 1 minus Line 7) 620,299 Operating Expenses: 9 Bad Debt 114, Total Salaries, Wages, and Employee-Related Expenses (From: Page 2, Line 19) 829, Professional Services 32, Travel and Entertainment - 13 Other General Administrative 1, Depreciation 99, Rent / Leasing - 16 Building / Station 11, Vehicle Expense 16, Other Operating Expense 67, Cost of Medical Supplies Charged to Patients 29, Interest 13, Subscription Service Sales Expense - 22 Total Operating Expense (Sum of Lines 9 through 21) 1,215, Total Operating Income or (Loss) (Line 8 minus Line 22) (595,251) 24 Subscription Contract Sales 25 Other Operating Revenue 26 Local Supportive Funding 579, Other Non-Operating Income (Attach Schedule) 28 Other Non-Operating Expense (Attach Schedule) 29 NET INCOME or (LOSS) Before Income Taxes (Sum of Lines 23 through 27, minus Line 28) (15,800) Provision for Income Taxes: 30 Federal Income Tax.. n/a 31 State Income Tax.. n/a 32 Total Income Tax.. (Line 30, plus Line 31) n/a 33 Ambulance Service Net Income (Loss).. (Line 29, minus Line 32) (15,800) Page 3 TMFMD31.8

9 AMBULANCE REVENUE AND COST REPORT FIRE DISTRICT and SMALL RURAL COMPANY AMBULANCE SERVICE ENTITY: Timber Mesa Fire and Medical District dba Lakeside Fire District FOR THE PERIOD FROM: July 1, 2015 TO: June 30, 2016 BALANCE SHEET See attached Audited Financials ASSETS CURRENT ASSETS 1 Cash.. 2 Accounts Receivable.. 3 Less: Allowance for Doubtful Accounts 4 Inventory.. 5 Prepaid Expen Other Current Assets TOTAL CURRENT ASSETS 9 PROPERTY & EQUIPMENT.. 10 Less: Accumulated Depreciation.. 11 OTHER NON CURRENT ASSETS 12 TOTAL ASSETS LIABILITIES & EQUITY CURRENT LIABILITIES 13 Accounts Payable - 14 Current Portion of Notes Payable 15 Current Portion of Long-Term Debt 16 Deferred Subscription Income. 17 Accrued Expenses and Other TOTAL CURRENT LIABILITIES - 21 NOTES PAYABLE 22 LONG-TERM DEBT, OTHER 23 TOTAL LONG-TERM DEBT - EQUITY & OTHER CREDITS Paid-In Capital: 24 Common Stock 25 Paid-In Capital in Excess of Par Value 26 Contributed Capital 27 Retained Earnings Fund Balance 31 TOTAL EQUITY - 32 TOTAL LIABILITIES & EQUITY - Page 4 TMFMD31.9

10 AMBULANCE REVENUE AND COST REPORT AMBULANCE SERVICE ENTITY: Timber Mesa Fire and Medical District dba Lakeside Fire District FOR THE PERIOD FROM: July 1, 2015 TO: June 30, 2016 STATEMENT OF CASH FLOWS See attached Audited Financials OPERATING ACTIVITIES: 1 Net (loss) Income.. Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Note: a increase in these accounts improves cash flow 2 Depreciation Expense 3 Deferred Income Tax. 4 Loss (gain) on Disposal of Property & Equipment (Increase) Decrease in: Note: a decrease in these accounts improves cash flow 5 Accounts Receivable 6 Inventories 7 Prepaid Expenses. Increase (Decrease) in: Note: a increase in these accounts improves cash flow 8 Accounts Payable. 9 Accrued Expenses.. 10 Deferred Subscription Income 11 NET CASH PROVIDED (Used) BY OPERATING ACTIVITIES - INVESTING ACTIVITIES: 12 Purchases of Property & Equipment. 13 Proceeds from Disposal of Property & Equipment. 14 Purchases of Investments 15 Proceeds from Disposal of Investments.. 16 Loans Made. 17 Collections on Loans.. 18 Other 19 NET CASH PROVIDED (Used) BY INVESTING ACTIVITIES - FINANCING ACTIVITIES: New Borrowings: 20 Long-Term.. 21 Short-Term Debt Reduction: 22 Long-Term.. 23 Short-Term 24 Funding From District. 25 Dividends Paid 26 NET CASH PROVIDED (Used) BY FINANCING ACTIVITIES NET INCREASE (Decrease) IN CASH.. 28 CASH AT BEGINNING OF YEAR. 29 CASH AT END OF YEAR.. SUPPLEMENTAL DISCLOSURES: Non-cash Investing and Financing Transactions: Interest Paid (Net of Amounts Capitalized) 34 Income Taxes Paid Page 5 TMFMD31.10

11 TIMBER MESA FIRE AND MEDICAL DISTRICT YEAR ENDED JUNE 30,2016 TMFMD31.11

12 TIMBER MESA FIRE AND MEDICAL DISTRICT YEAR ENDED JUNE 30,2OI6 CONTENTS lndependent auditors' report Management's discussion and analysis Basic financial statements: Government-wide financial statements: Statement of net position Statement of activities Fund financial statements - governmental funds: Balance sheet Reconciliation of the balance sheet to the statement of net position Statement of revenues, expenditures and changes in fund balance Reconciliation of the statement of revenues, expenditures and changes in fund balances to the statement of activities Fund financial statements - fiduciary funds: Statement of fiduciary net position Statement of changes in fiduciary net position Notes to financial statements Required supplementary information : Schedule of revenues, expenditures and changes in fund balance - budget to actual - general fund Schedule of the District's proportionate share of the net pension liability - cost-sharing plan (ASRS) Schedule of changes in the net pension liability and related ratios - agent retirement plan (PSPRS) Schedule of pension contributions Notes to schedule of pension contributions Schedule of funding progress - post-retirement health insurance subsidy - agent retirement plan (PSPRS) Report on internal control and on compliance: lndependent auditors' 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 Other reports: Report on compliance with A.R.S , subsection G Page TMFMD31.12

13 BFCC BEACHFLEISCHMAN lndependent Auditors' RePort Governing Board and Management Timber Mesa Fire and Medical District Show Low, Arizona We have audited the accompanying financial statements of the governmental activities and each major fund of Timber Mesa Fire and n éo cãl District as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accorðance with U.é. generally accepted accounting principles; this includes the design, implementation and maintenance of intérnal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accórdance with U.S. generally accepted auditing standards 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. Thé procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. ln making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair fresentation 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 niáoe'oy management, as weil 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 ln our opinion, the nancial statements referred to above present fairly,, in all material respects, the respectivä financial position of the governmental activities and each major fund of Timber Mesa Fire and Meàical District, as of June 30, 2046, and the respective changes in financial position for the year then ended in accordance with U.S. generally accepted accounting principles' BeachFleischman PC. beachfleischman.com 1985 East River Road, Suite #201. Tucson, A ï f Easr Camelback Road, Suite #200. Phoenix, A T ' F TMFMD

14 Other Matter Required Supplementary I nformation U.S. generaily accepteã accounting principles require that the management's discussion and analysis, budgãtary comparison information, Jchedule of the District's proportionate share of the net pension liability - cosishaiing plans, schedule of changes in the net pension liability and related ratios - agent retirement plan, scneãuie of pension contributions, and schedule of funding progress - post-retirement health insuiance subsidy - agent retirement plan, 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 finåncial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We i.rave ãpplied certain limited procedures to the required supplementary information in accordance with U.S. generaily accepted auditing standards, which consisted of inquiries of management about the methods oi prepaiing 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 thé information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards ln accordance with GovernmentAuditing Standards, we have also issued our report dated November22, 2016, on our consideration of Timber Mesa Fire and Medical District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemðnts and other matters. The purpose of that report is to describe the scope of our testing of internal cõntrol over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control ovei financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Timber Mesa Fire and Medical District's internal control over financial reporting and compliance. 23"" 7 o/r-.*-, P( Tucson, Arizona November 22, TMFMD31.14

15 MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR END NE INTRODUCTION The Management of the Timber Mesa Fire and Medical District (District) presents these financial statements with a narrative overview and analysis of financial activities for the year ended June 30, We encourage readers to consider the information presented here in conjunction with the accompanying basic financial statements and the accompanying notes to those statements in their understanding of the District's financial position. FINANCIAL H GHLIGHTS FOR THE YEAR 1. The total assets of the Timber Mesa Fire and Medical District were 12,812,102, including deferred outflows related to pensions at the close of the fiscal year. The total assets exceeded liabilities and deferred inflows related to pensions by 6,463,490. Of this amount 2,633,054 represents the balance of the unrestricted net position. 2. The District realized a (561,423) decrease in Fund balances during the fiscal year. The decrease is primarily attributable to acquisition of capital assets and retirement of debt. 3. The District realized a decrease in its net position of 419,123, or 6.1, êquãl to the excess of expenses over revenues. 4. At the end of the current fiscal year, unassigned fund balances for the General Fund was 3,280,319. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the basic financial statements of the District. These basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the flnancial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-Wide Financ al Statements. The Gove mment-wide financial statements present the financial picture of the District from the economic measurement resources focus using the accrual basis of accounting. These statements include all assets of the District (including capital assets) as well as all liabilities (including long-term debt). They are intended to provide a broad overview in a manner similar 3 TMFMD31.15

16 to a private sector business. Additionally, certain eliminations have occurred as prescribed by Statement No. 34 in regards to interfund activity, payables and receivables. Statement of Net Position - The Statement of Net Posítion (page I l) presents information of all the assets and deferred outflows, and liabilities and deferred inflows of the District, with the difference between the two being reported as Nef Position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. Statement of Activities - The Sfafe ment of Activities (page 12) presents information showing how the net position of the District changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.9., uncollected taxes and earned but unused vacation leave). Fund Financial Statements. The Fund Financial Statements provide detailed information about the most significant funds not the District as a whole. Some funds are required to be established by State law and by bond covenants. However, management establishes other funds to help it control and manage resources for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. All the funds of the District are considered governmental funds. Governmental Funds. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government-wide financial statements. All of the basic services of the District are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end that are available for spend- ng. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short term view of the operations and basic services provided to residents. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance programs of the District. Because the focus of governmental funds is narrower than that of the Government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmentai activities in the Government-wide financial statements. By doing so, readers may better understand the long-term impact of the near-term financing decisions of the District. Thé reconciliation of differences between the governmental fund financial statements and the government-wide financial statements is explained in a section following each governmental fund financial statement. The District adopts an annual appropriated budget for the General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with the budget. 4 TMFMD31.16

17 Notes to the Financial Statements. The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-wide and Governmental fund financial statements. GOVERNMENT.WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of the financial position of a government entity. ln the case of the Timber Mesa Fire District, assets exceeded liabilities by 6,463,490 at the close of the 2016 fiscal year. The largest portion of net position of the District 3,830,436 reflects its investment in capital assets (e.g. land, buildings, vehicles, and equipment), less any debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to residents; consequently, the assets are not available for future spending. Although the investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The remaining balance of unrestricted net position 2,633,054 may be used to meet ongoing obligations of the District to citizens and creditors. At the end of Fiscal Year 2016, the District is able to report positive balances in net investment in capital assets and unrestricted net position. The following table reflects the condensed Statement of Net Position: Timber Mesa Fire District Gondensed Statement of Net Position As ofjune 30, 2016 Gor,ern mental Activities lncrease/ Decrease Cash and lnwstments Other Assets CapitalAssets Deferred Outflows TotalAssets 3,413, ,441 7,499,907 1,300,482 12,812,102 4,052,856 (63e,584) 517,134 81,307 6,819, ,771 1,033, ,344 12,422, ,838 Other Liabilities Long Term Liabilities Deferred lnflows Total Liabilities 936,638 4,655, , ,270 4,113, , , ,117 39,476 6,348,612 5,539, ,961 Net lnvestment in CapitalAssets Unrestricted Total Net Position 3,830,436 3,768,360 62,076 2,633,054 3,114,253 (481,1 6,463 6,882,613 (419,123) 5 TMFMD31.17

18 Governmental Activities. The Net Position of the District from governmental activities decreased from 6,882,613 to 6,463,490 a change of (6.1) %. The following table reflects the Condensed Statement of Activities: Timber Mesa Fire District Condensed Statement of Activities Year Ended June 30, 2016 Gorrernmental Activities lncrease/ Decrease Program Rercnues Charge for Services Capital grants and contributions General Rerenues Property Taxes Fire District Assistance Tax lnwstment Earnings Miscellaneous Total Rercnues Expenses Public Safety lnterest on Long Term Debt Total Expenses 1,239,532 5, ,134 37, ,398 (31,713) 6,898, ,000 21, ,010 5,765, ,631 27, ,720 1,132,577 20,369 (5,880) 39,290 8,746,215 6,860,174 1,886,041 9,008,325 6,567,793 2,440, ,013 72,933 84,080 9,165,338 6,640,726 2,524,612 lncrease (decrease) in Net Position (419,123) 219,448 (638,571) Beginning Net Position 6,882,613 6,663, ,448 Ending Net Position 6,463,490 6,882,613 (41e,123) 6 TMFMD31.18

19 DISTRICT FUNDS FINANCIAL ANALYSIS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with fund related legal requirements. As of June 30, 2016, the governmental funds of the District reported combined fund balances of 93,459,718, which is a decrease of (561,423) compared to the prior period. Currently, the only major fund of the District is the general fund. General Fund. The General Fund accounts for all the resources retained by the District not accounted for in any other fund. The following statement provides the detail of the District fund balances Timber Mesa Fire District Governmental Funds - Fund Balances As of June 30, 2016 FiscalYear June 30, 2016 FiscalYear June 30, 2015 Major Funds Amount Amount Yo Generalfund: Nonspendable Assigned Unassigned 100, % 78, ,280, , ,657 3,833, % % Total Fund Balance 3,459, % 4,021, % BUDGETARY HIGHLIGHTS There were some variances of note for the fiscal year Revenues were over budget by 504,662. A 355,000 increase in wildland revenue, 51,000 in maintenance revenue and increase in miscellaneous revenue were reasons for this increase. a Expenses were over budget by 1,066,085 mainly due to 612,882 of non-budgeted depreciation. Personnel Costs were over budget due to the additional wildland deployments. Managerial Costs were both substantially over budget; however Buildings & Land and Vehicles & Equipment were both under budget. 7 TMFMD31.19

20 Timber Mesa Fire District Condensed Budget to Actual As of June 30, 2016 Budget General Fund Actual Variance with budget Total Relenues Total Expenses Rerenue owr (under) expenditures 8,323,177 8,323,177 8,827,839 10,259,512 (1, ,662 '1,936,335 (1,431,673) Total Other Financing Sources 870, ,250 Net Change in Fund Balance (561,423) (561,423) CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. As of June 30, 2016, the investment in capital assets for governmental activities amounts to 7,499,907 (net of accumulated depreciation). This investment in capital assets includes land, and improvements, buildings and improvements, vehicles, furniture and equipment. The total increase in capital assets for the current fiscal year was 680,771 or 10. Timber Mesa Fire District Gapital Assets as of June 30, 2016 (net of depreciation) Land and Buildings Equipment Vehicles Accumulated Depreciation Golernmental Activities ,781,397 1,689,712 5,525,210 (6,496, 412\ -S 6,6oZEA8 1,585,434 5,014,658 (6,383,e04) lncrease/ (Decrease) 178, , ,552 (112,508) Net CaptialAssets 7,499,907 6,819, ,771 I TMFMD31.20

21 Long Term Liabilities. At the end of the current fiscal year, the District had 5.2 million in long-term liabilities outstanding. The District continues to retire and manage debt to fund various capital projects which support program services. As of June 30, 2016, the District had total long-term debt (capital leases) outstanding of 3.65 million. This debt currently requires annual debt service payments that consist of principal and interest of approximately 407,789. All debt is backed by the full faith and credit of the District. ln accordance with GASB 68, the District is required to include the net pension liability on the financial statements. The net pension liability is measured as the total pension liability, less the pension plan's fiduciary net position. A net pension liability is recorded at June 30, 2016 relating to the District's participation in the Public Safety Personnel Retirement System (PSPRS) and the Arizona State Retirement System (ASRS) of 1.15 million. The following table shows the District's Outstanding Debt: Timber Mesa Fire District Outstanding Debt As ofjune 30, 2016 Compensated absences Lease purchase Net Pension Liability Golernmental Activities , ,069 3,652,302 3,030,863 1,158,423 1,126,522 lncrease/ (Decrease) (36,131) 621,439 31,901 Total Noncurrent Liabilites 5,233,663 4,616, ,209 Additional information can be found in the notes to the Financial Statements that follow ECONOMIC FACTORS AND FY2A16 BUDGET/TAX RATE The District was formed on September 20, 2015 from three other Districts in the area. This was the most feasible method of reducing operational costs while providing the highest level of service to the community. ln doing this, the organization not only reduced the tax burden on the area, but enhanced the level of service provided. For fiscal year the District realized a 0.56% increase in assessed value, with the nominal increase and continued increases in expenses the District adopted a tax rate of TMFMD31.21 I

22 F NANCIAL CONTACT The financial statements of the District are designed to present users (citizens, taxpayers, customers, investors and creditors) with a general overview of the finances of the District and to demonstrate accountability. lf you have questions regarding the report or need additional financial information, please contact the Finance Director of the District at 3561 E. Deuce of Clubs, Show Low, AZ or at TMFMD31.22

23 Basic Financial Statements TMFMD31.23

24 TIMBER MESA FIRE AND MEDICAL DISTRICT STATEMENT OF NET POSITION JUNE 30,2016 Governmental activities Assets: Cash and investments Receivables: Property taxes, net Ambulance, net Other Prepaid expenses Capital assets, not depreciated Capital assets, depreciated, net Total assets Deferred outflows of resources: Deferred outflows related to pensions 3,413, ,079 56, , , , , ', o Liabilities: Accounts payable Accrued payroll and related benefits Accrued interest Noncurrent liabilities: Due within one year Due in more than one year Total liabilities Deferred inflows of resources: Deferred inflows related to pensions 110, ,857 17, , Commitments and contingencies Net position: Net investment in capital assets Unrestricted Total net position 3,830, , See notes to financial statements 11 TMFMD31.24

25 TIMBER MESA FIRE AND MEDICAL DISTR CT STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Governmental activities Expenses: Public safety: Communications Depreciation lnsurance Managerial Meetings and training Other Payroll taxes and employee benefits Salaries and wages Utilities and station expenses Vehicles and equipment lnterest Total program expenses Program revenues: Charges for services Capital grants and contributions Total program revenues Net program expense General revenues: Property taxes Fire district assistance tax lnvestment earnings Other Gain on sale of capital assets Total general revenues Change in net position before special item Special item - insurance settlement Change in net position Net position, beginning Net position, end 252, ,882 97, , ,353 26,368 1,848,073 5,076, , , ,239, ,898, ,000 21,403 60,760 o? ,701 (469,123) oo0 (419,123) 6, s See notes to financial statements 12 TMFMD31.25

26 TIMBER MESA FIRE AND MEDIGAL DISTRICT BALANCE SHEET. GOVERNMENTAL FUNDS JUNE 30, 2016 Assets: Cash and investments Receivables: Property taxes, net Ambulance, net Other Prepaid expenses Total assets Generalfund 3,413, ,079 56, , Liabilities: Accounts payable Accrued payroll and related benefits Total liabilities Deferred inflows of resources: Unavailable revenue - property taxes Unavailable revenue - ambulance Total deferred inflows of resources 110, 'l ,745 60, Fund balance: Nonspendable: Prepaid expenses Assigned to: Capital projects Unassigned Totalfund balance Total liabilities, deferred inflows of resources and fund balance 100,561 78, s See notes to financial statements. 13 TMFMD31.26

27 TIMBER MESA FIRE AND MEDICAL DISTRICT RECONCILIATION OF THE BALANCE SHEET. GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30,2016 Total fund balances - governmental funds 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' Some receivables are not available to pay for current period expenditures and, therefore, are reported as deferred inflows in the funds. Certain liabilities are not due and payable in the current period and, therefore, are not reported in the funds: Accrued interest Accrued compensated absences Capital leases payable Net pension liability Deferred outflows and inflows of resources related to pensions are applicaþle to future reporting periods and, therefore, are not reported in the funds: Deferred outflows of resources related to pensions Deferred inflows of resources related to pensions Net position of governmental activities 3,459,718 7,499, ,618 (17,169) (422,938) (3,652,302) (1,158,423) 1,300,482 ( ) s See notes to financial statements 14 TMFMD31.27

28 TIMBER MESA FIRE AND MEDICAL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE. GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Generalfund Revenues: Property taxes Fire district assistance tax Capital grants Charges for services lnvestment earnings Other Total revenues Expenditures: Public safety: Emergency operations Administration Prevention support services Capital outlay: Buildings and improvements Construction in progress Furniture and equipment Vehicles Debt service: Principal lnterest Total expenditures Revenues under expenditures Other financing sources: Proceeds from sale of capital assets Payment on refinanced capital leases Proceeds from capital lease obligations Total other financing sources Special item - insurance settlement Net change in fund balance Fund balance, beginning Fund balance, end 6,962, ,000 5,982 1,326,760 21, ,788, , , ,999 14, ,278 1,010, , (1,481,673) 70,250 (1,261,168) 2,061, , (561,423) s See notes to financial statements TMFMD

29 TIMBER MESA FIRE AND MEDICAL DISTRICT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES. GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Net change in fund balances - governmental funds Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported in governmental funds as expenditures. However, iñ the statement of activities, the cost of those capital assets is allocated over their estimated useful lives as depreciation expense. ln the current period, these amounts are: CapitaloutlaY Depreciation expense ln the statement of activities, only the gain/loss on the sale of capital assets is reported, whereas, in the governmental funds, the proceeds from the sale increase financial resources. Gain on sale of capital assets Proceeds from sale of capital assets Certain revenues relating to property taxes and ambulance services in the statement of aciivities that do not provide current financial resources are not reported as revenues in the funds District pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as ãeferred outflows of resources in the statement of net position because the reported net pension liability is measured a year before the District's report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the statement of activities. Pension contributions Pension expense ln the statement of activities, interest is accrued on long-term debt, whereas in the governmental funds it is recorded as an interest expenditure when Paid. Compensated absence 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' Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces noncurrent liabilities in the statement of net position. ln the current period, the amount consists of: Capital lease Proceeds Principal paid Change in net position of governmental activities (561,423) 1,293,653 (612,882) 70,250 (70,250) (151,874) 617,665 (421,698) 2,744 36,1 31 (2,061,168) _l3l-w3) See notes to financial statements. 16 TMFMD31.29

30 TIMBER MESA FIRE AND MEDICAL DISTR CT STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2016 Pension Trust Funds Assets: Cash and cash equivalents lnvestments Total assets Liabilities: Accrued expenses Total liabilities Net position: Held in trust for pension benefits 269, , s See notes to financial statements. 17 TMFMD31.30

31 TIMBER MESA FIRE AND MEDICAL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2016 Pension Trust Funds Additions: Contributions lnvestment income Net change in fair value of investments Total additions Deductions: Benefits paid lnvestment expense Total deductions Change in net position Net position, beginning Net position, end 7,204 8, , (108,504) 401, : See notes to financial statements 18 TMFMD31.31

32 TTMBER MESA FIRE AND MEDICAL DISTRICT NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2OI6 1 Description of organization and summary of significant accounting policies: The accounting policies of Timber Mesa Fire and Medical District (the District) conform to U.S. generally accépted accounting principles (GAAP) applicable to governmental units as promulgated by the GovernmentalAccounting Standards Board (GASB). Reporting entity: The Dlstrict, establishe d in 2014 pursuant to Arizona Revised Statute Title 48, is a special-purpose local government organized to provide fire protection and other emergency services to residents within the District boundaries. The District formed as the result of a merger between Lakeside Fire District, Linden Fire District, and Show Low Fire District. The District is a primary government because it is a special-purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governmen[s. Furthermore, there are no component units combined with the District for financial statement presentation purposes and it is not included in any other governmental reporting entity. Government-wide and fund financial statements: The basic financial statements include both government-wide financial statements and fund financial statements. The government-wide financial statements focus on the District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between entities to enhance the usefulness of the information. The government-wide financial statements include a statement of net position and a statement of activities. These statements report the financial activities of the overall government, but do not include fiduciary activities of the District. A statement of activities presents a comparison between direct expenses and program revenues for each function of the District's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include:. charges to customers for services provided,. grants and contributions Revenues that are not classified as program revenues, including all taxes and internally dedicated resources, are reported as general revenues. Fund financial statements provide information about the District's funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. 19 TMFMD31.32

33 TIMBER MESA FIRE AND MEDIGAL DISTRIGT NOTES TO FTNANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30,2016 Description of organization and summary of significant accounting policies (continued): Measurement focus, basis of accounting and financial statement presentation. The government-wide financial statements are presented using the economic resources meaéurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Property taxes are recognized as revenue in the year for which they are levied. Grants are recognized as revenue as soon as all eligibility requirements the provider imposed have been met. Governmental funds in the fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues reported in the governmental funds to be available if the revenues are collected within 60 days afier year-end. Expenditures are recorded when the related fund liability is incurred, except for princiþal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they are due and payable' General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long{erm debt and acquisitions under capital lease agreements are reported as other financing sources. Real and personal property taxes are levied on or before the third Monday in August that become due and payable in two equal installments. The first installment is due on the first day of October and becomes delinquent after the first business day of November. The second installment is due on the first day of March of the next year and becomes delinquent after the first business day of May. A lien assessed against real and personal property attaches on the first day of January preôeding assessment and levy. All property taxes are billed and collected by Navajo County and remiited to the District. ln the governmental fund financial statements, property taxes are reflected as revenues in the fiscal period for which they were levied, provided they are due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period (60 days). Otherwise, they are reported as deferred inflows of resources. lnvestment earnings associated with the current fiscal period are all considered to be susceptible to accrual and 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 government. The District reports the following major governmentalfunds: The general fund is the primary operating fund of the District. The principal revenue source is property taxes. Primary expenditures are for public safety. There are no financial resources required to be accounted for in a separate fund, either legally or by Board direction. 2Q TMFMD31.33

34 TIMBER MESA FIRE AND MEDICAL DISTRICT NOTES TO FTNANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2OI6 1 Description of organization and summary of significant accounting policies (continued): Measurement focus, basis of accounting and financial statement presentation (continued) Fiduciary funds are used to account for resources held for the benefit of parties outside of the Districi. The Lakeside Fire District Volunteer Firefighter's Pension Fund, Lakeside Fire District Auxiliary Fund, Linden Fire District Volunteer Firefighter's Pension Fund, and Show Low Volunteer Fire Department Retirement Plan are reported as fiduciary funds. Fiduciary funds are presented on the accrual basis of accounting and have been excluded from the government-wide iinancial statements because the resources of this fund are not available to support the District's own programs. Estimates: The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and investments: The District's cash and cash equivalents are considered to be cash on hand, demand deposits, cash and investments held by the County Treasurer, and highly liquid investments. lnvestments are stated at fair value. lnvestment earnings are comprised primarily of interest earnings only Fair value measurements: During the year, the District implemented Governmental Accounting Standards Board (GASB) Statáments No. 72 Fair Value Measurement and Application and No. 79 Certain External Investment Pools and Pool Participants. Fair value is defined as the price to sell an asset or transfer a liability between market participants in an orderly exchange in the principal or most advantageous market for that asset or liability. Mutual funds are valued at quoted market prices. The fair value for the commingled funds and qualifying alternative investments is determined based on the investment's net asset value as a practical expedient. Considerable judgment is required in interpreting market data used to develop the estimates of fair value. Accordingly, the estìmates presented in the financial statements are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and estimation methodologies may have a material effect on the estimated fair value. 21 TMFMD31.34

35 TIMBER MESA FIRE AND MEDICAL DISTRICT NOTES TO FINANCIAL STATEIUIENTS (CONTINUED) YEAR ENDED JUNE 30, 2OI6 1 Description of organization and summary of significant accounting policies (continued): Receivables, unearned revenue and deferred inflows of resources: All accounts and property tax receivables are shown net of allowance, if any, for uncollectible accounts. Property taxes receivable for the governmental fund types, which have been remitted within 60 days subsequent to period end, are considered measurable and available and recognized aô revenues. All other property taxes are offset by unavailable revenue and, accoidingly, have not been recorded as revenue. Real and personal property taxes are levied upon all [axable property within the District and become liens against the property on the first day of January preceding assessment and levy. Federal and state grants and contracts are recorded as receivables and revenues when the related expenditures are incurred. The portion of reimbursement in excess of expenditures are recorded as unearned revenues and amounts not remitted within 60 days subsequent to period end are recorded as deferred inflows of resources. Prepaid expenses: Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses in both the government-wide and fund financial statements. Capital assets: Capital assets, which include land, buildings and improvements, fire equipment and vehicles, are reported in the government-wide financial statements. Capital assets are defined as assets with an initial, individual cost of 2,500 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if actual cost is not available. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Land Buildings and improvements Fire equipment Vehicles Not depreciated 27.5 to 40 years 5 to 10 years 5 to 10 years 22 TMFMD31.35

36 TIMBER MESA FIRE AND MEDICAL DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, Description of organization and summary of significant accounting policies (continued): Compensated absences: It is the District's policy to permit employees to accumulate earned but unused paid time off. A liability is reported foi paid time off that the District will pay upon termination or retirement. None of the liabiliiy for compensated absences is expected to be liquidated with expendable available financial resources. Accordingly, compensated absences are accrued as a liability only in the government-wide financial statements. Long{erm obligations: lñ tne goveinment-wide financial statements, long-term debt and other long-term obligations are reported as noncurrent liabilities in the statement of net position. ln the fund financial statements, proceeds from debt issued are reported as other financing sources and principal and interest payments are recognized as expenditures in the statement of revenues, expenditures and changes in fund balances. Deferred outflows and inflows of resources: The statement of net position and balance sheet include separate sections for deferred outflows of resources and deferred inflows of resources. Deferred outflows of resources represent a consumption of net position that applies to future periods that will be recognized as an expense or expenditure in future periods. Deferred inflows of resources represent an acquisition of net position or fund balance that applies to future periods and will be recognized as a revenue in future periods. Pensions: For purposes of measuring the net pension liability or asset, deferred outflows of resources and deierred inflows of resoulces related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, þenefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. The plan's investments are reported at fair value. Fund balance: ln the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the District is bound to observe constraints imposed upon the use of the resources. The classifications are as follows: o a Nonspendable - includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual constraints Restricted - includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation 23 TMFMD31.36