ST. TAMMANY PARISH ASSESSOR. Annual Financial Statements. December 31, 2014 LAPORTE

Transcription

1 Annual Financial Statements December 31, 2014 LAPORTE

2 Contents Independent Auditor's Report 1-3 Required Supplementary Information (Part I) Management's Discussion and Analysis 5-7 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 9 Statement of Activities 10 Fund Financial Statements Governmental Fund Balance Sheet Statement of Revenues, Expenditures and Changes in Fund Balance 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities 15 Notes to Financial Statements Required Supplementary Information (Part II) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 32 Schedule of Funding Progress - Retirees Health, Dental, and Life Insurance Plan 33 Other Supplementary Information Schedule of Compensation, Benefits and Other Payments to Agency Head 35 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Basic Financial Statements Performed in Accordance with Government Auditing Standards 36-37

3 ^ Y A Tl# LaPorte, APAC JLAx ORTE 5100 Village Walk j Suite 300 CPA. * BUSINESS ADVISORS Covingtoti, LA Fax LaPorte.com Independent Auditor's Report To the Honorable Louis Fitzmorris St. Tammany Parish Assessor Report on Financial Statements We have audited the accompanying financial statements of the governmental activities and the major fund of the St. Tammany Parish Assessor (the Assessor) as of and for the year ended December 31,2014, and the related notes to the financial statements, which collectively comprise the Assessor'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 conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. NEW ORLEANS HOUSTON BATON ROUGE COVINGTON An Independently Owned Member, McGladrey Alliance The McGiadrey ASence is a pronier affillblion of Independanl accounlng and conning ftms. The McGiadrey Alianca rrember firrtb maiitaln their name, aulcnomy and Independence end are raapensibia for thev own dent fee arrangements, defc/ery ot services and nwttenanoe ol dieni relationships.

4 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Assessor as of December 31, 2014, and the respective changes in financial position for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 5 through 7, budgetary comparison information on page 32, and schedule of funding progress on page 33, 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 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Assessor's basic financial statements. The schedule of compensation, benefits and other payments to agency head, as required by Louisiana Revised Statute (LRS) 24:513 A(3), is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The schedule of compensation, benefits and other payments to agency head 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, the schedule of compensation, benefits and other payments to agency head is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

5 other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 2, 2015, on our consideration of the St. Tammany Parish Assessor's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the 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 Assessor's internal control over financial reporting and compliance. A Professional Accounting Corporation Covington, LA June 2, 2015

6 REQUIRED SUPPLEMENTARY INFORMATION (PART I) MANAGEMENTS DISCUSSION AND ANALYSIS

7 Management's Discussion and Analysis The Management's Discussion and Analysis (MD&A) of the St. Tammany Parish Assessor's (the Assessor) financial statements presents a narrative overview and analysis of the Assessor's financial activities for the year ended December 31, This document focuses on the current year's activities, resulting changes, and currently known facts. Please read this document in conjunction with the additional information contained in the basic financial statements. The MD&A is an element of the reporting model adopted by the Government Accounting Standards Board (GASB) in their Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, issued June, Certain comparative information between the current year and prior year has been presented in the MD&A. FINANCIAL HIGHLIGHTS The minimum requirements for financial reporting on the St. Tammany Parish Assessor's office that was established by GASB No. 34 are divided into the following sections: (a) Management's Discussion and Analysis (b) Basic Financial Statements (c) Required Supplementary Information (Other than MD&A) (d) Other Supplementary Information Basic Financial Statements: The basic financial statements present information for the Assessor as a whole, in a format designed to make the statements easier for the reader to understand. The financial statements in this section are divided into the two following types: (1) Government-Wide Financial Statements, which include a Statement of Net Position and a Statement of Activities. These statements present information for all activities of the Assessor from an economic resources measurement focus using the accrual basis of accounting and providing both short-term and long-term information about the Assessor's overall financial status. (2) Fund Financial Statements, which include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balance for the General Fund (a governmental fund). These financial statements present information on the individual fund of the Assessor allowing for more detail. The current financial resources measurement focus and the accrual basis of accounting used to prepare these statements are dependent on the fund type. The Assessor's only governmental fund is the General Fund.

8 Management's Discussion and Analysis FINANCIAL ANALYSIS OF THE ASSESSOR Statements of Net Position As of December 31, 2014 and 2013 Current Assets Capital Assets $ 6,041,823 57,774 $ 5,813,632 96,917 Total Assets 6,099,597 5,910,549 Current Liabilities Noncurrent Liabilities 116,509 2,827, ,703 2,494,195 Total Liabilities 2,943,541 2,625,898 Net Position Net Investment in Capital Assets Unrestricted 57,774 3,098,282 96,917 3,187,734 Total Net Position $ 3,156,056 $ 3,284,651 The Assessor does not have any "restricted" net position. It does have "unrestricted" net position, which is net position that does not have any limitations on what these amounts may be used for. Net position of the Assessor's office decreased by $128,595, or 4%, from the prior year. This decrease was mostly due to an increase in professional services related to pictometry imaging. At December 31, 2014, the Assessor's office governmental fund reported an ending fund balance of $5,732,912. Compared to the prior year, the fund balance increased by $248,061, due primarily to a significant decrease in salaries and related expenditures. Statements of Activities For the Years Ended December 31, 2014 and Revenues $ 4,999,928 $ 4,820,955 Expenditures (5,128,523) (5,484,297) Change in Net Position $ (128,595) $ (663,342) The Assessor's total revenues increased by $178,973, or 4%, which was mostly due to an increase in ad valorem taxes and contributions from St. Tammany Parish. Total expenditures decreased by $355,774, or 6%, due primarily to decreases in personnel related expenditures.

9 Management's Discussion and Analysis CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets: At December 31, 2014, the Assessor had $57,774 invested in capital assets, including office furniture and equipment and vehicles. This amount represents the total original cost of the capital assets, less accumulated depreciation on those assets. The table below lists capital assets and accumulated depreciation: Capital Assets December 31, 2014 and 2013 Office Furniture and Equipment Vehicles Less: Accumulated Depreciation $ 369,618 $ 510, , , , ,692 (537,264) (650,775) Total Capital Assets, Net of Accumulated Depreciation $ 57,774 $ 96,917 Debt Administration: The Assessor had no debt outstanding at year end. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET The Assessor considered the following factors and indicators when setting up next year's budget: (1) the consistency of revenues to be received from the collection of ad valorem taxes and state revenue sharing; (2) additional salaries and related costs due to increases in health care, retirement contributions, and other salary related benefits and costs; and (3) operating expenses of the office incurred in the process of providing services to the public. The Assessor expects that next year's revenues, plus existing available net position carried forward from the previous year, will be sufficient to cover the office's expenses throughout the year. CONTACTING THE ASSESSOR This financial report is designed to provide the citizens, taxpayers, customers, investors, and creditors with a general overview of the Assessor's finances, and to show the Assessor's accountability for the money it receives. If you have any questions about this report or need additional financial information, please contact Mr. Louis Fitzmorris, St. Tammany Parish Assessor, St. Tammany Parish Courthouse, 701 North Columbia Street, Covington, Louisiana 70433, or call the office at

10 BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS

11 Statement of Net Position December 31, 2014 Assets Current Assets Cash and Cash Equivalents Investments Revenues Receivable Ad Valorem Taxes Receivable, Net State Revenue Sharing Receivable Other Receivables Prepaids Expenses Total Current Assets Noncurrent Assets Capital Assets, Net of Accumulated Depreciation Total Assets Liabilities Current Liabilities Accounts Payable Accrued Payroll Total Current Liabilities Long-Term Liabilities Net Other Postemployment Benefit Obligation (OPEB) Accrued Annual Leave Payable Total Long-Term Liabilities Total Liabilities Net Position Net Investment in Capital Assets Unrestricted Total Net Position Governmental Activities 729, ,960 4,653,741 70,428 24,626 56,568 6,041,823 57,774 6,099,597 38,807 77, ,509 2,695, ,700 2,827,032 2,943,541 57,774 3,098,282 $ 3,156,056 The accompanying notes are an integral part of these financial statements.

12 Statement of Activities For the Year Ended December 31, 2014 Expenses General Government Salaries and Related Expenses Net Other Posternployment Benefit Obligation (ORES) Professional Services Operating Services Depreciation Expense Education Total Expenses General Revenues Ad Valorem Taxes Contributions from St. Tammany Parish, Louisiana State Revenue Sharing Interest Earnings Other Total General Revenues Change in Net Position Net Position, Beginning of Year Net Position, End of Year Governmental Activities 3,878, , , ,551 45,466 28,637 5,128,523 4,684, , ,585 38,956 32,789 4,999,928 (128,595) 3,284,651 $ 3,156,056 The accompanying notes are an integral part of these financial statements. 10

13 FUND FINANCIAL STATEMENTS GOVERNMENTAL FUND 11

14 Balance Sheet Governmental Fund December 31, 2014 Assets Cash and Cash Equivalents Investments Revenues Receivable Ad Valorem Taxes Receivable, Net State Revenue Sharing Receivable Other Receivables Rrepalds Expenses T otal Assets Liabilities Accounts Payable Accrued Payroll Total Liabilities Deferred Inflows of Resources Unavailable Ad Valorem Taxes Total Deferred Inflows of Resources Fund Balance Nonspendable Amounts: Not In Spendable Form Unasslgned Total Fund Balance Total Liabilities, Deferred Inflows of Resources, and Fund Balance General Fund 729, ,960 4,653,741 70,428 24,626 56,568 $ 6,041,823 38,807 77, , , ,402 56,568 5,676,344 5,732,912 $ 6,041,823 The accompanying notes are an integral part of these financial statements. 12

15 Balance Sheet (Continued) Governmental Fund December 31, 2014 Reconciliation of the Governmental Fund Balance Sheet to the Statement of Net Position Total Fund Balance - Governmental Fund $ 5,732,912 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the Governmental Fund Balance Sheet. This amount represents capital assets, net of accumulated depreciation. 57,774 Deferred inflow of Resources - Unavailable Ad Valorem Taxes are not reported on government-wide financial statements. 192,402 Some liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Those liabilities consist of: Net Other Postempioyment Benefit Obligation (OPEB) (2,695,332) Accrued Annual Leave Payable (131,700) Total Net Position of Governmental Activities $ 3,156,056 The accompanying notes are an integral part of these financial statements. 13

16 Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Fund For the Year Ended December 31, 2014 Revenues Ad Valorem Taxes, Net Contributions from St. Tammany Parish, Louisiana State Revenue Sharing Interest Earnings Other Total Revenues Expenditures Salaries and Related Expenditures Professional Services Operating Services Education Total Expenditures Net Change in Fund Balance Fund Balance, Beginning of Year Fund Balance, End of Year General Fund 4,689, , ,585 38,956 34,061 5,005,876 3,977, , ,146 28,637 4,757, ,061 5,484,851 $ 5,732,912 The accompanying notes are an integral part of these financial statements. 14

17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities For the Year Ended December 31, 2014 Net Change in Fund Balance - Total Governmental Fund $ 248,061 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 depreciation exceeded capital outlays in the current period. (37,871) Losses on the disposal of capital assets reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. (1,272) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: Change in Unavailable Ad Valorem Taxes (4,676) Some Items reported in the Statement of Net Position do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Net Other Postemployment Benefit Obligation (OREB) Accrued Annual Leave (432,033) 99,196 Change in Net Position of Governmental Activities $ ( ) The accompanying notes are an integral part of these financial statements. 15

18 NOTES TO FINANCIAL STATEMENTS 16

19 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies Introduction As provided by Article VII, Section 24, of the Louisiana Constitution of 1974, the Assessor is elected by the voters of the parish and serves a four year term. The Assessor assesses all real and movable property in the parish subject to ad valorem taxation. The Assessor is authorized to appoint as many deputies as may be necessary for efficient operation of the office and provide assistance to the taxpayers of the parish. The deputies are authorized to perform all functions of the office, but the Assessor is officially and pecuniarily responsible for the actions of the deputies. The St. Tammany Parish Assessor (the Assessor) has an office in Covington and an office in Slidell within St. Tammany Parish, Louisiana (the Parish). In accordance with Louisiana law, the Assessor bases real and movable property assessments on conditions existing on January 1 of the tax year. The Assessor completes an assessment listing for the tax year and submits the list to the Parish governing authority and the Louisiana Tax Commission, as prescribed by state law. Once the assessment listing is approved, the Assessor submits the assessment roll to the Parish tax collector, who is responsible for collecting and distributing taxes to the various taxing bodies located in the Parish. Reporting Entity For financial reporting purposes, in conformity with GASB Codification Section 2100, the Assessor is an independently elected official who operates his office without oversight responsibility to the Parish. Louisiana revised statutes give each Assessor control over all of their operations. This includes the hiring and retention of employees, authority over budgeting, responsibility for funding deficits and operating deficiencies, and fiscal management for controlling the collection and disbursement of funds. Therefore, the Assessor reports as an independent reporting entity and the financial statements include only the transactions of the St. Tammany Parish Assessor. Furthermore, St. Tammany Parish does not include the Assessor as a component unit in its comprehensive annual financial report. Basis of Presentation The accompanying basic financial statements of the Assessor have been prepared in conformity with governmental accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accompanying basic financial statements have been prepared in conformity with GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as amended by GASB Statement No. 63. Such accounting and reporting procedures also conform to the requirements of Louisiana Revised Statute (LRS) 24:513 and to the guidance set forth in the Louisiana Governmental Audit Guide, and to the industry audit guide. Audits of State and Local Governmental Units. 17

20 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) Basis of Presentation (Continued) The Assessor's basic financial statements include both government-wide and fund financial statements. The Assessor currently has only one fund, the General Fund, which is reported as a governmental activity. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on the governmental activities using the full accrual, economic resource basis, which recognizes all long-term assets and receivables, as well as long-term debt and obligations. The Statement of Activities demonstrates the degree to which the direct expenses of the Assessor's primary function are offset by program revenues. Direct expenses are those that are clearly identifiable to the Assessor program. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by the Assessor program and 2) grants and contributions that are restricted to meeting the operational or capital requirements of the Assessor program. Taxes and other items not considered program revenues are reported as general revenues. The Assessor had no program revenues for The Assessor uses funds to maintain its financial records during the year. Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain Assessor functions and activities. A fund is a segregating fiscal and accounting entity with a self-balancing set of accounts. The emphasis on fund financial statements is on major funds, each displayed in a separate column. A fund is considered major if it is the primary operating fund of the entity or the total assets, liabilities, revenues, or expenditures of the individual governmental fund is at least 10 percent of the corresponding total for all governmental funds. The General Fund is the primary operating and sole fund of the Assessor. It accounts for all the financial transactions and is classified as a governmental fund type. The focus of the governmental funds' measurement is upon the determination of financial position and changes in financial position rather than upon net income. Measurement Focus / Basis of Accounting The governmental activities in the government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Intergovernmental revenues and grants are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 18

21 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) Measurement Focus / Basis of Accounting (Continued) The amounts reflected in the governmental fund financial statements are accounted for using the current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. The statement of revenues, expenditures and changes in fund balance reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach is then reconciled, through adjustment, to the government-wide financial statements. The amounts reflected in the governmental fund financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measureable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Assessor considers all revenues available if they are collected within 60 days after the fiscal year end. Expenditures are recorded when the related fund liability is incurred, except for interest and principal payments on any general long-term debt, which would be recognized when payment is due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Ad valorem taxes are considered to be collected when they are collected by the St. Tammany Parish Sheriff. Ad valorem taxes collected after 60 days are recorded as a deferred inflow on the governmental fund balance sheet. State revenue sharing associated with the current fiscal period is considered susceptible to accrual and so has been recognized as revenues of the current fiscal period. All other revenue items are considered to be measureable and available only when cash is received by the Assessor. Budgets The original budget for the year ended December 31, 2014, was made available for public inspection at the Assessor's office and advertised on November 14, The original budget was subsequently adopted on December 5, 2013, after a public hearing on that day. All budgets were prepared on the modified accrual basis of accounting. The Assessor reserves all authority to make changes to the budget. Formal budget integration within the accounting records is employed as a management control device during the year. Budgeted amounts included in the accompanying financial statements include the original adopted budget and all subsequent amendments. All appropriations contained in the budget lapse at year end. 19

22 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) Cash, Cash Equivalents, and Investments Cash includes amounts in interest bearing demand deposits. Cash equivalents include amounts in time deposits and those investments with original maturities of 90 days or less. Under state law, the Assessor may deposit funds in demand deposits, interestbearing demand deposits, money market accounts, or time deposits with state banks organized under Louisiana law and national banks having their principal offices in Louisiana. The Assessor may invest in United States bonds, treasury notes, or certificates. These are classified as investments if their original maturities exceed 90 days or as cash equivalents if the original maturities are 90 days or less. Investments are stated at fair market value. Short-term investments are stated at amortized cost, which approximates market. Certain investments, as required by GASB 31, are reported at fair value, which is determined using published market prices. Investments consist only of certificates of deposit and funds held in the Louisiana Asset Management Pool (LAMP) and are stated at cost, which equals market value. Revenues Receivable Receivables are made up of revenues from ad valorem taxes, state revenue sharing, and city tax bills. The allowance for uncollectible amounts is $143,453, which represents 3% of the total ad valorem tax receivable at December 31, This estimate is based on the Assessor's history of collections within this revenue stream. Capital Assets Capital assets, which include vehicles and furniture and equipment, are reported in the government-wide financial statements. Capital assets are recorded at historical cost, or estimated cost if historical cost is not available. Donated assets are recorded at their estimated fair market value at the date of donation. Depreciation of all exhaustible capital assets is charged as an expense against the Assessor's operations. In the fund financial statements, capital assets are accounted for as capital outlay expenditures upon acquisition. Capital Assets (Continued) The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets, if applicable. The Assessor capitalizes all vehicles and office furniture and equipment in excess of $1,000. Estimated useful life is management's estimate of how long the asset is expected to meet service demands. The following estimated useful lives and methods are used to compute depreciation: Vehicles 5 Years Straight-Line Office Furniture and Equipment 5 Years Straight-Line Depreciation expense amounted to $45,466, for the year ended December 31,

23 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) Annual and Sick Leave Effective May 1, 2013, the Assessor implemented a personal time off (PTO) policy which is a combination of vacation and sick time made available to full time employees. PTO is accrued at a rate based on years of service. All PTO above 105 hours should be used within the fiscal year earned. Anything greater than 105 hours will be forfeited. Upon termination, resignation, or retirement, employees will be paid for all accumulated PTO. Due to many employees with a large number of accrued vacation and sick time from the previous policy, there is a one-time exception that allows PTO to be carried until March 15, After that date, any hours greater than 105 will be forfeited. At December 31, 2014, the Assessor had accrued compensated absences payable of $131,700, which has been reported on the Statement of Net Position. Accrued compensated absences payable decreased by $99,196, during the year ended December 31, 2014, due to employees using their excess PTO hours before the forfeit date mentioned above. Equity Classifications Government-wide net position is divided into three components: 1. Net Investment in Capital Assets - consists of the historical cost of capital assets including any restricted capital assets, net of accumulated depreciation, and reduced by the outstanding balances of any borrowings that are attributable to the acquisition, construction, or improvement of those assets. 2. Restricted - consists of assets that have constraints that are externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or constraints imposed by law through constitutional provisions or enabling legislation. 3. Unrestricted - all other net position is reported in this category. In the governmental fund financial statements, fund balances are classified as follows: 1. Nonspendable - amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact. 2. Restricted - amounts that can be spent for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments. 21

24 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) 3. Committed - amounts that can be used only for specific purposes determined by a formal action of the Assessor. The Assessor is the highest level of decision making authority for the Assessor's office. Commitments may be established, modified, or rescinded only through ordinances or resolutions approved by the Assessor. 4. Assigned - amounts that do not meet the criteria to be classified as restricted or committed, but that are intended to be used for specific purposes. Under the Assessor's adopted policy, only the Assessor may assign amounts for specific purposes. 5. Unassigned - all other spendable amounts. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the Assessor considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Assessor considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the Assessor has provided otherwise in his commitment or assignment actions. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Impact of Recently Issued Accounting Principles The GASB issued Statement 67, Financiai Reporting Pension Pians - an amendment of GASB Statement No. 25, in June The objective of this Statement is to improve financial reporting by state and local governmental pension plans. The provisions of this Statement are effective for financial periods beginning after June 15, The adoption of this statement in 2014 did not have any impact on the Assessor's financial statements. The GASB issued Statement No. 70, Accounting and Financiai Reporting for Nonexchange Financiai Guarantees, in April The objective of this Statement is to improve accounting and financial reporting by state and local governments that extend and receive nonexchange financial guarantees. The provisions of this Statement are effective for reporting periods beginning after June 15, The adoption of this statement in 2014 did not have any impact on the Assessor's financial statements. 22

25 Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) Impact of Recently Issued Accounting Principles to be Implemented in 2015 The GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27, in June The objective of this Statement is to improve accounting and financial reporting by state and local governments for pensions. The provisions of this Statement are effective for periods beginning after June 15, The Assessor is working with Louisiana Assessors' Retirement System and plans on implementing GASB Statement No. 68 in the year ending December 31, Note 2. Cash and Cash Equivalents At December 31, 2014, the carrying amounts (book balances) of all cash and cash equivalents of the Assessor were as follows: Demand Deposits $ 729,500 These deposits are stated at cost, which approximates market. Under state law, these deposits, or the resulting bank balances, must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties. At December 31, 2014, $566,815 of the Assessor's bank balance of $1,316,815 was exposed to custodial credit risk. However, these deposits are secured from risk by the pledge of securities owned by the fiscal agent bank. Louisiana Revised Statute 39:1229 imposes a statutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notified by the Assessor that the fiscal agent has failed to pay deposited funds upon demand. Note 3. Investments At December 31, 2014, the Assessor had the following types of investments: Type of Investment Amount Certificate of Deposit $ 505,305 Louisiana Asset Management Pool (LAMP) 1,655 Total Investments $ 506,960 23

26 Notes to Financial Statements Note 3. Investments (Continued) LAMP is administered by LAMP, Inc., a non-profit corporation organized under the laws of the State of Louisiana. Only local government entities having contracted to participate in LAMP have an investment interest in its pool of assets. The primary objective of LAMP is to provide a safe environment for the placement of public funds in short-term, high quality investments. The LAMP portfolio includes only securities and other obligations in which local governments in Louisiana are authorized to invest in accordance with LRS 33:2955. GASB Statement No. 40, Deposit and Investment Risk Disclosures, requires disclosure of credit risk, custodial credit risk, concentration of credit risk, interest rate risk, and foreign currency risk for all public entity investments. LAMP is a 2a7-like investment pool. The following facts are relevant for 2a7-like investment pools: Credit risk: LAMP is rated AAAm by Standard & Poor's. Custodial credit risk: LAMP participants' investments in the pool are evidenced by shares of the pool. Investments in pools should be disclosed, but not categorized because they are not evidenced by securities that exist in physical or book-entry form. The public entity's investment is with the pool, not the securities that make up the pool; therefore, no disclosure is required. Concentration of credit risk: disclosure requirement. Pooled investments are excluded from the 5 percent interest rate risk: LAMP is designed to be highly liquid to give its participants immediate access to their account balances. LAMP prepares its own interest rate risk disclosure using the weighted average maturity (WAM) method. The WAM of LAMP assets is restricted to not more than 60 days, and consists of no securities with a maturity in excess of 397 days. The WAM for LAMP'S total investments is 52 as of December 31, Foreign currency risk: Not applicable to 2a7-like pools. The investments in LAMP are stated at fair value based on quoted market rates. The fair value is determined on a weekly basis by LAMP and the value of the position in the external investment pool is the same as the value of the pool shares. LAMP, Inc. is subject to the regulatory oversight of the state treasurer and the board of directors. LAMP is not registered with the Securities and Exchange Commission as an investment company. If you have any questions, please feel free to contact the LAMP administrative office at

27 Notes to Financial Statements Note 4. Levied Taxes The following is a summary of authorized and levied ad valorem taxes: Operations The following are the principal taxpayers for the Parish: Maximum Millage 2.73 Levied Millage 2.69 Taxpayer Type of Business 2014 Assessed Valuation Percentage of Total Assessed Valuation Central La. Electric AT&T Parkway Pipeline Florida Marine Transporters Chevron USA Utility Telephone Oil/Transportation Transportation Oil 50,884,810 14,768,740 12,521,040 11,760,020 10,958, % 0.83% 0.70% 0.66% 0.62% Total $ 100,892, % The total assessed valuation for all taxpayers at December 31, 2014, was $1,777,607,532. This figure was used in calculating the percentage of the "assessed valuation of each of the five largest taxpayers" listed above to the "total assessed valuation for all taxpayers." Note 5. Capital Assets The following is a summary of the changes in capital assets for the fiscal year ended December 31, 2014: Capital ^sets Being Depreciated Vehicles Furniture and Equipment Beginning Ending Balance Increases Decreases Balance $ 237, ,261 $ - : E (12,011) 7,595 (148,238) $ 225, ,618 Total Capital ^sets Being Depreciated 747,692 7,595 (160,249) 595,038 Less A:cumulated Depreciation for: Vehicles Furniture and Equipment (211,730) (439,045) (12,396) (33,070) 12, ,966 (212,115) (325,149) Total Accumulated Depreciation (650,775) (45,466) 158,977 (537,264) Capital ^sets - Net $ 96,917 : B (37,871) J B (1,272) $ 57,774 25

28 Notes to Financial Statements Note 6. Pension Plan Plan Description Substantially all employees of the St. Tammany Parish Assessor's office are members of the Louisiana Assessors' Retirement System (the System), a cost-sharing, multipleemployer defined benefit pension plan administered by a separate board of trustees. All full-time employees who are under the age of 60 at the time of original employment and are not drawing retirement benefits from any other public retirement system in Louisiana are required to participate in the System. Employees who retire at or after age 55 with at least 12 years of credited service or at or after age 50 with at least 30 years of credited service are entitled to a retirement benefit, payable monthly for life, equal to three and one-third percent of their final-average salary for each year of credited service, not to exceed 100 percent of their final-average salary. Final-average salary is the employee's average salary over the 36 consecutive or joined months that produce the highest average. Employees who terminate with at least 12 years of service and do not withdraw their employee contributions may retire at or after age 55 and receive the benefit accrued to their date of termination. The System also provides death and disability benefits. Benefits are established by state statute. The System issues an annual publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to the Louisiana Assessors' Retirement System, Post Office Box 1786, Shreveport, Louisiana , or by calling (318) Funding Policy For the entire year, plan members (employees) were required by state law to contribute 8.0 percent of their annual covered salary into the System. Also, for the entire current year, the Assessor (employer) was required to contribute 13.5 percent of an employee's annual covered payroll into the System. Contributions to the System also include onefourth of one percent (one percent for Orleans Parish) of the taxes shown to be collectible by the tax rolls of each parish, plus revenue sharing appropriated by the legislature. The contribution requirements of plan members and the Assessor are established and may be amended by state statute. As provided by Louisiana Revised Statute 11:103, the employer contributions are determined by actuarial valuation and are subject to change each year based on the results of the valuation for the prior fiscal year. The Assessor's (employer) portion of contributions to the System for the years ended December 31, 2014, 2013, and 2012, were $322,650, $356,773, and $351,063, respectively. These amounts equaled the required contributions for those years. In addition, the Assessor paid the entire portion of employees' annual contributions to the System for the years ended December 31, 2014, 2013, and 2012, and the amounts were $190,197, $211,421, and $208,037, respectively. These amounts equaled the required contribution amounts for those years. 26

29 Notes to Financial Statements Note 7. Long-Term Liabilities Other Postemployment Benefit Obligations (OPEB) Plan Description: The Assessor administers and contributes to a defined benefit health, dental, and life insurance plan for retirees and active employees, as authorized by the Assessor. The plan provides lifetime health, dental, and life insurance for retirees and for full-time employees that retire at age 55 or older with 12 years of service or have 30 years of service at any age. The Assessor has coverage through the Louisiana Assessors' Insurance Fund. No separate financial statements are available for the Assessor's plan. The Assessor implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. By adopting the requirements of GASB Statement No. 45, the Assessor recognizes the cost of postemployment benefits in the year when employee services are rendered and provides information useful in assessing potential demands on the Assessor's future cash flows. Because the Assessor has adopted the requirements of GASB Statement No. 45 prospectively, recognition of the liability accumulated from prior years will be phased in over 30 years, commencing with the 2009 liability. Funding Policy: The Assessor contributes 100% of the costs of the current year's health, dental, and life insurance premiums for eligible retired employees only, but does not pay for spouse or dependent coverage. The Assessor finances its plan on a pay-asyou-go basis; therefore, no funds are reserved for payment of future health insurance premiums. For the year ended December 31, 2014, the Assessor contributed $89,954 to the plan on behalf of the retirees Annual OPEB Cost and Net OPEB Obligation: The Assessor's annual other postemployment benefit (OPEB) is calculated based on the annual required contribution (ARC). The Assessor has elected to calculate the ARC and related information using the "unit credit actuarial cost method." The ARC represents a level of funding that, if paid on an ongoing basis, it is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the Assessor's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Assessor's net OPEB obligation to the plan: Annual Required Contribution $ 576,333 Interest on Prior Year Net OPEB Obligation 90,532 Adjustments to Annual Required Contribution (144,878) Annual OPEB Cost 521,987 Contributions Made (89,954) Increase in Net OPEB Obligation 432,033 Net OPEB Obligation, Beginning of Year 2,263,299 Net OPEB Obligation, End of Year $ 2,695,332 27

30 Notes to Financial Statements Note 7. Long-Term Liabilities (Continued) Other Postemployment Benefit Obligations (OPEB) (Continued) The Assessor's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the current year were $521,897, 17%, and $2,695,332, respectively. Funded Status and Funding Progress: As of December 31, 2014, the actuarial accrued liability for benefits was $4,047,622, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $2,402,222, and the ratio of the unfunded actuarial accrued liability (UAAL) to the covered payroll was 168%. The projection of future benefits for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Amounts determined regarding the funded status of a plan and the employer's annual required contributions are subject to continued revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The following simplifying assumptions were made: Retirement age for active employees - Active members were assumed to retire at 62 years of age. Marital status - Marital status of members at the calculation date was assumed to continue throughout retirement. Mortality - Life expectancies were based on mortality tables from the National Center for Health Statistics. Turnover - Non-group-specific age-based turnover data from GASB Statement No. 45 were used as the basis for assigning active members a probability of remaining employed until the assumed retirement age and for developing an expected future working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid. Healthcare cost trend rate - The expected rate of increase in healthcare insurance premiums was based on projections of the Office of the Actuary at the Centers for Medicare and Medicaid Services. A rate of 9% initially, reduced to an ultimate rate of 5% after nine years, was used. 28