COUNTY OF DEL NORTE, CALIFORNIA

Transcription

1 , CALIFORNIA FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITOR S REPORT FOR THE YEAR ENDED JUNE 30, 2017

2 TABLE OF CONTENTS INTRODUCTORY SECTION County Officials... 5 FINANCIAL SECTION Independent Auditors Report... 7 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Governmental Funds: Balance Sheet Reconciliation of the Governmental Funds Balance Sheet to the Government- Wide Statement of Net Position - Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities - Governmental Activities Proprietary Funds: Statement of Net Position Statement of Revenues, Expenses, and Changes in Net Position Statement of Cash Flows Fiduciary Funds Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Notes to Basic Financial Statements Page 1

3 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) Required Supplementary Information (Unaudited): Schedules of Funding Progress - Pension Schedules of Funding Progress - Other Postemployment Benefits (OPEB) Budgetary Comparison Schedules - General Fund Budgetary Comparison Schedules - Road Budgetary Comparison Schedules - Housing Rehabilitation Budgetary Comparison Schedules - Mental Health/Substance Abuse Budgetary Comparison Schedules - Mental Health Services Act Budgetary Comparison Schedules - Welfare Assistance Budgetary Comparison Schedules - Welfare Administration Budgetary Comparison Schedules Public Safety Realignment Budgetary Comparison Schedules - Stimson Mitigation Notes to Budgetary Comparison Schedules Combining Nonmajor Fund Statements: Nonmajor Governmental Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Special Revenue Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Capital Projects Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Debt Service Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

4 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) Nonmajor Enterprise Funds: Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Net Position Combining Statement of Cash Flows Internal Service Funds: Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Net Position Combining Statement of Cash Flows Fiduciary Funds: Trust Funds: Combining Statement of Fiduciary Net Position - Investment Trust Funds Combining Statement of Changes in Fiduciary Net Position - Investment Trust Funds Agency Funds: Combining Statement of Assets and Liabilities - Agency Funds Combining Statement of Changes in Assets and Liabilities - Agency Funds

5 INTRODUCTORY SECTION

6 COUNTY OFFICIALS BOARD OF SUPERVISORS Roger Gitlin...District 1 Lori Cowan...District 2 Chris Howard...District 3 Gerry Hemmingsen...District 4 Bob Berkowitz...District 5 COUNTY OFFICERS Jay Sarina...Administrative Officer Justin Riggs...Agricultural Commissioner Jennifer Perry...Assessor Clinton Schaad...Auditor/Controller Allen Winogradov...Building Maintenance & Parks Lonnie Reyman...Chief Probation Officer Aaron Goodwin...Child Support Services Alissia Northrup...Clerk/Recorder Heidi Kunstal...Community Development Director Elizabeth Cable...County Counsel Katherine Micks...District Attorney Heather Snow...Health and Human Services Director Dan McCorkle...Information Technology Director Erik Apperson...Sheriff/Coroner Barbara Lopez...Treasurer/Tax Collector 5

7 FINANCIAL SECTION

8 266 17th Street, Suite 200 Oakland, California Telephone: (510) Fax: (510) To the Board of Supervisors and Grand Jury County of Del Norte Crescent City, CA Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the County of Del Norte, California (County) as of and for the year ended June 30, 2017 and the related notes to the financial statements, which collectively comprise the County's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We 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. 7

9 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of the County of June 30, 2017, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Required Supplementary Information and budgetary comparison information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the Management s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this missing information. 8

10 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County s basic financial statements. The introductory section and combining nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining nonmajor fund financial statements are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 21, 2018, on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control over financial reporting and compliance. Patel & Associates, LLP Certified Public Accountants Oakland, California March 21,

11 GOVERNMENT - WIDE FINANCIAL STATEMENTS

12 STATEMENT OF NET POSITION JUNE 30, 2017 Governmental Activities Business-Type Activities Total ASSETS Cash and investments $ 24,031,072 $ 612,023 $ 24,643,095 Cash with fiscal agent 756, ,842 Receivables: Accounts 355,597 92, ,676 Taxes and assessments 684,095 1,448,505 2,132,600 Intergovernmental 6,513,385 13,736 6,527,121 Prepaid insurance 1,547,813 1,547,813 Deposits 200, ,000 Inventory 60,353 60,353 Restricted cash and investments 12,302 12,302 Loans receivable 9,204,706 9,204,706 Sublease receivable 2,513,214 2,513,214 Capital assets: Non-depreciable 4,703,394 4,703,394 Depreciable, net 30,040,910 5,806,422 35,847,332 Total assets 80,623,683 7,972,765 88,596,448 DEFERRED OUTFLOWS OF RESOURCES Deferred outflow of resources - related to pension 10,292,453 10,292,453 Total deferred outflows of resources 10,292,453 10,292,453 LIABILITIES Accounts payable 2,582, ,444 2,739,633 Accrued salaries and benefits 1,034,398 1,034,398 Claims payable 2,663 2,663 Accrued interest payable 6,226 6,226 Deposits payable 251, ,084 Unearned revenue 2,560,193 20,320 2,580,513 Long-term liabilities: Net pension liability 42,015,820 42,015,820 Due within one year 2,901, ,793 3,238,566 Due in more than one year 41,944, ,568 42,166,255 Total liabilities 93,292, ,351 94,035,158 The notes to the basic financial statements are an integral part of this statement. 11

13 STATEMENT OF NET POSITION JUNE 30, 2017 Governmental Activities Business-Type Activities Total DEFERRED INFLOWS OF RESOURCES Deferred inflow of resources - related to pension 1,535,277 1,535,277 Total deferred inflows of resources 1,535,277 1,535,277 NET POSITION Net investment in capital assets 28,340,842 5,315,292 33,656,134 Restricted for: Public protection 5,811,453 5,811,453 Public ways and facilities 6,167,711 6,167,711 Public assistance 36,819 36,819 Health and sanitation 2,263,554 2,263,554 Debt service 4,969,063 4,969,063 Future claims 491, ,983 Unrestricted (51,993,373) 1,915,122 (50,078,251) Total Net Position $ (3,911,948) $ 7,230,414 $ 3,318,466 The notes to the basic financial statements are an integral part of this statement. 12

14 STATEMENT OF ACTIVITIES FOR THE FISCAL YEARS ENDED JUNE 30, 2017 Functions/Programs Expenses Charges for Services Program Revenues Operating Grants and Contributions Governmental activities: General government $ 4,186,053 $1,136,215 $ 1,259,792 $ Public protection 20,799,806 1,634,293 13,243,907 Public ways and facilities 5,259,529 95,158 1,764,279 Public assistance 29,541, ,061 16,310,460 Health and sanitation 12,884, ,586 4,947,472 Culture and recreation 600, ,561 33,450 Interest on long-term debt 231,890 Total governmental activities 73,503,936 3,626,874 37,559,360 Business-type Activities: Water and Sewer 985, ,589 Flood Control 2,859 7, Total business-type activities 988, , Total Primary government $ 74,492,621 $4,159,614 $ 37,559,538 $ General revenues: Taxes: Property taxes Sales and use taxes Transient occupancy taxes Property transfer taxes Timber yield taxes Franchise fees Tobacco settlement Interest and investment earnings Miscellaneous Profit/(Loss) on sale of assets Transfers Total General Revenues and Transfers Change in net position Net position - Beginning Restatement Net position - Beginning, restated Net position - Ending Capital Grants and Contributions The notes to the basic financial statements are an integral part of this statement. 13

15 STATEMENT OF ACTIVITIES FOR THE FISCAL YEARS ENDED JUNE 30, 2017 Net (Expense) Revenues and Changes in Net Position Functions/Programs Total Government Activities Business Type Activities Total Governmental activities: General government $ 2,396,007 $ (1,790,046) $ $ (1,790,046) Public protection 14,878,200 (5,921,606) (5,921,606) Public ways and facilities 1,859,437 (3,400,092) (3,400,092) Public assistance 16,723,521 (12,818,172) (12,818,172) Health and sanitation 5,174,058 (7,710,860) (7,710,860) Culture and recreation 155,011 (445,036) (445,036) Interest on long-term debt (231,890) (231,890) Total governmental activities 41,186,234 (32,317,702) (32,317,702) Business-type Activities: Water and Sewer 525,589 (460,237) (460,237) Flood Control 7,329 4,470 4,470 Total business-type activities 532,918 (455,767) (455,767) Total Primary government $ 41,719,152 (32,317,702) (455,767) (32,773,469) General revenues: Taxes: Property taxes 7,411,368 9,166 7,420,534 Sales and use taxes 6,202,318 6,202,318 Transient occupancy taxes 489, ,898 Property transfer taxes 118, ,688 Timber yield taxes 66,710 66,710 Franchise fees 647, ,409 Tobacco settlement 269, ,620 Interest and investment earnings 5,346 5,346 Miscellaneous 4,271, ,940 4,889,605 Profit/(Loss) on sale of assets (38,602) (38,602) Transfers 144,041 (144,041) Total General Revenues and Transfers 19,583, ,411 20,071,526 Change in net position (12,734,587) 32,644 (12,701,943) Net position - Beginning 9,138,950 7,197,770 16,336,720 Restatement (316,311) (316,311) Net position - Beginning, restated 8,822,639 7,197,770 16,020,409 Net position - Ending $ (3,911,948) $ 7,230,414 $ 3,318,466 The notes to the basic financial statements are an integral part of this statement. 14

16 GOVERNMENTAL FUND FINANCIAL STATEMENTS

17 BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2017 Housing Rehabilitation Mental Health/Substance Abuse General Fund Road ASSETS Cash and cash equivalents $ 124,415 $ 5,186,996 $ 340,336 $ 1,853,129 Cash with fiscal agent Receivables: Accounts 80,519 67,041 Taxes 536,487 3,542 35,669 Intergovernmental 1,173, ,936 1,647,493 Prepaid insurance 942,012 Inventory 5,959 54,394 Due from other funds 1,444,621 Restricted cash and investments 12,302 Loans receivable 9,204,706 Sublease receivable 2,513,214 Total Assets 6,833,298 5,408,868 9,545,042 3,603,332 LIABILITIES Accounts payable 523, , ,913 Salaries and benefits payable 512,355 48,250 48,755 Deposits payable 202,509 Due to other funds Unearned revenue Total Liabilities 1,238, , ,668 DEFERRED INFLOWS OF RESOURCES Unavailable revenues 831, ,709 Total Deferred Inflows of Resources 831, ,709 FUND BALANCES Nonspendable 3,461,185 54,394 Restricted 12,302 4,445,627 9,545,042 2,544,955 Committed Assigned Unassigned 1,289,680 Total Fund Balances (Deficits) 4,763,167 4,500,021 9,545,042 2,544,955 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 6,833,298 $ 5,408,868 $ 9,545,042 $ 3,603,332 The notes to the basic financial statements are an integral part of this statement. 16

18 BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2017 Mental Health Services Act Welfare Assistance Welfare Administration 2011 Public Safety Realignment ASSETS Cash and cash equivalents $ 5,107,054 $ $ 1,598,952 $ Cash with fiscal agent Receivables: Accounts 1,172 Taxes 30,448 Intergovernmental 423, ,751 1,714,284 Prepaid insurance 17,285 Inventory Due from other funds 251,421 Restricted cash and investments Loans receivable Sublease receivable Total Assets 5,532, ,751 1,898,106 1,714,284 LIABILITIES Accounts payable 60,200 1,272 39,416 Salaries and benefits payable 51, ,466 Deposits payable Due to other funds 144, ,563 Unearned revenue 607,492 1,817,284 Total Liabilities 111, ,350 2,067, ,979 DEFERRED INFLOWS OF RESOURCES Unavailable revenues 37,569 Total Deferred Inflows of Resources 37, FUND BALANCES Nonspendable 17,285 Restricted 5,383,037 1,568,305 Committed Assigned Unassigned (120,599) (186,201) Total Fund Balances (Deficits) 5,383,037 (120,599) (168,916) 1,568,305 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,532,108 $ 631,751 $ 1,898,106 $ 1,714,284 The notes to the basic financial statements are an integral part of this statement. 17

19 BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2017 Stimson Mitigation Other Governmental Funds Total ASSETS Cash and cash equivalents $ 5,400,661 $ 4,386,483 $ 23,998,026 Cash with fiscal agent 756, ,842 Receivables: Accounts 138, ,339 Taxes 77, ,095 Intergovernmental 758,270 6,513,385 Prepaid insurance 13, ,092 Inventory 60,353 Due from other funds 1,696,042 Restricted cash and investments 12,302 Loans receivable 9,204,706 Sublease receivable 2,513,214 Total Assets 5,400,661 6,131,946 46,699,396 LIABILITIES Accounts payable 351,835 2,582,189 Salaries and benefits payable 125,270 1,034,398 Deposits payable 48, ,084 Due to other funds 1,444,621 1,696,042 Unearned revenue 135,417 2,560,193 Total Liabilities 0 2,105,718 8,123,906 DEFERRED INFLOWS OF RESOURCES Unavailable revenues 184,958 1,318,547 Total Deferred Inflows of Resources 0 184,958 1,318,547 FUND BALANCES Nonspendable 13,795 3,546,659 Restricted 4,969,063 28,468,331 Committed 5,400,661 5,400,661 Assigned 30,994 30,994 Unassigned (1,172,582) (189,702) Total Fund Balances (Deficits) 5,400,661 3,841,270 37,256,943 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,400,661 $ 6,131,946 $ 46,699,396 The notes to the basic financial statements are an integral part of this statement. 18

20 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION - GOVERNMENTAL ACTIVITIES JUNE 30, 2017 Total Fund Balance - Total Governmental Funds $ 37,256,943 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 governmental funds balance sheets. 34,744,304 Other long-term assets are not available to pay for current period expenditures and therefore, are reported as unavailable revenues in the governmental funds 1,318,547 Certain liabilities are not due and payable in the current period and therefore, are not reported in the governmental funds. Loans (2,614,320) Certificate of participation (3,789,142) Compensated absences (2,565,518) Internal service funds are used by management to charge the cost of certain activities, such as insurance and equipment maintenance and operations, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. (35,004,118) Net pension liability is not due and payable in the current period and therefore is not reported in the funds. (42,015,820) Deferred outflows and inflows of resources related to pensions are applicable to future periods and therefore, are not reported in the funds: Deferred outflows of resources related to pension 10,292,453 Deferred inflows of resources related to pension (1,535,277) Net position of Governmental Activities $ (3,911,948) The notes to the basic financial statements are an integral part of this statement. 19

21 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 General Fund Road Housing Rehabilitation REVENUES Taxes and assessments $ 10,962,847 $ $ Licenses, permits, and franchises 1,060,615 5,586 Intergovernmental 1,924,699 1,719,520 Use of money and property 118,580 52,268 3,154 Fines and forfeitures 390,121 Charges for services 1,538,419 2,228 Other revenues 790, , ,754 Total revenues 16,785,756 1,951, ,908 EXPENDITURES Current: General government 2,650,185 1,533 Public protection 17,181,410 Public ways and facilities 3,172,546 Public assistance 161,253 1,324 Health and sanitation 966,212 Culture and recreation 595,172 Debt service: Principal 126,294 Interest and other charges 90,019 Capital outlay 1,110,346 Total expenditures 22,880,891 3,174,079 1,324 Excess of Revenues Over (Under) expenditures (6,095,135) (1,222,085) 227,584 OTHER FINANCING SOURCES (USES) Transfer in 9,913, ,121 Transfer out (4,035,543) (482,923) (1,729) Sale of fixed assets 848 Total Other Financing Sources (Uses) 5,878,421 (360,802) (1,729) Net Change in Fund Balances (216,714) (1,582,887) 225,855 Fund balances (Deficits) - Beginning 5,006,907 6,113,705 9,319,187 Change in inventory on purchases method (27,026) (30,797) 0 Fund balance (Deficits) - Ending $ 4,763,167 $ 4,500,021 $ 9,545,042 The notes to the basic financial statements are an integral part of this statement. 20

22 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Mental Health/ Substance Abuse Mental Health Services Act Welfare Assistance REVENUES Taxes and assessments $ 107,828 $ $ 2,945,208 Licenses, permits, and franchises Intergovernmental 3,740,520 2,961,647 5,756,122 Use of money and property 15,531 49,703 Fines and forfeitures 200 Charges for services 61, Other revenues 196,603 5,208 21,734 Total revenues 4,122,445 3,017,293 8,723,064 EXPENDITURES Current: General government 24,360 Public protection Public ways and facilities Public assistance 6,349,937 11,909,200 Health and sanitation 2,333,189 Culture and recreation Debt service: Principal Interest and other charges Capital outlay 27,062 Total expenditures 6,401,359 2,333,189 11,909,200 Excess of Revenues Over (Under) expenditures (2,278,914) 684,104 (3,186,136) OTHER FINANCING SOURCES (USES) Transfer in 3,635, ,309 5,421,234 Transfer out (931,894) (723,976) (1,312,406) Sale of fixed assets Total Other Financing Sources (Uses) 2,703,165 (389,667) 4,108,828 Net Change in Fund Balances 424, , ,692 Fund balances (Deficits) - Beginning 2,120,704 5,088,600 (1,043,291) Change in inventory on purchases method Fund balance (Deficits) - Ending $ 2,544,955 $ 5,383,037 $ (120,599) The notes to the basic financial statements are an integral part of this statement. 21

23 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Welfare Administration 2011 Public Safety Realignment Stimpson Mitigation REVENUES Taxes and assessments $ 155,011 $ $ Licenses, permits, and franchises Intergovernmental 6,844,412 10,658,728 Use of money and property 35,491 Fines and forfeitures Charges for services 4,930 Other revenues 10,233 1,496,193 Total revenues 7,014,586 12,154,921 35,491 EXPENDITURES Current: General government Public protection 91,296 Public ways and facilities Public assistance 9,959,955 Health and sanitation Culture and recreation Debt service: Principal Interest and other charges Capital outlay 26,864 Total expenditures 9,986,819 91,296 0 Excess of Revenues Over (Under) expenditures (2,972,233) 12,063,625 35,491 OTHER FINANCING SOURCES (USES) Transfer in 2,366,266 59,887 Transfer out (1,829,920) (11,879,914) (30,722) Sale of fixed assets Total Other Financing Sources (Uses) 536,346 (11,879,914) 29,165 Net Change in Fund Balances (2,435,887) 183,711 64,656 Fund balances (Deficits) - Beginning 2,266,971 1,384,594 5,336,005 Change in inventory on purchases method Fund balance (Deficits) - Ending $ (168,916) $ 1,568,305 $ 5,400,661 The notes to the basic financial statements are an integral part of this statement. 22

24 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Other Governmental Funds Total REVENUES Taxes and assessments $ 138,915 $ 14,309,809 Licenses, permits, and franchises 1,066,201 Intergovernmental 4,873,364 38,479,012 Use of money and property 30, ,308 Fines and forfeitures 202, ,340 Charges for services 586,612 2,194,687 Other revenues 847,133 3,765,725 Total revenues 6,678,624 60,713,082 EXPENDITURES Current: General government 831,269 3,507,347 Public protection 3,326,951 20,599,657 Public ways and facilities 12,995 3,185,541 Public assistance 1,114,770 29,496,439 Health and sanitation 1,738,872 5,038,273 Culture and recreation 595,172 Debt service: Principal 246, ,759 Interest and other charges 141, ,890 Capital outlay 266,263 1,430,535 Total expenditures 7,679,456 64,457,613 Excess of Revenues Over (Under) expenditures (1,000,832) (3,744,531) OTHER FINANCING SOURCES (USES) Transfer in 2,579,257 24,431,249 Transfer out (2,944,944) (24,173,971) Sale of fixed assets 848 Total Other Financing Sources (Uses) (365,687) 258,126 Net Change in Fund Balances (1,366,519) (3,486,405) Fund balances (Deficits) - Beginning 5,207,789 40,801,171 Change in inventory on purchases method 0 (57,823) Fund balance (Deficits) - Ending $ 3,841,270 $ 37,256,943 The notes to the basic financial statements are an integral part of this statement. 23

25 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES - GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Net Change in Fund Balances - Total Governmental Funds $ (3,486,405) 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. Expenditures for capital outlay Depreciation expense 1,430,535 (2,964,597) Governmental funds only report the disposal of assets to the extent proceeds are received from the sale. In the statement of activities, a gain or loss is reported for each disposal. This is the net cost of the capital assets disposed. (39,450) Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal retirements 372,759 Some revenues reported in the statement of activities will not be collected for several months after the County's year end and do not provide current financial resources and therefore are not reported as revenues in the governmental funds. Change in unavailable revenue (49,173) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. Change in compensated absences payable 10,182 Measurement focus adjustment for inventory reported using the purchases method in the governmental funds and reported using the consumption method in the Statement of Activities. (57,823) Governmental funds report County's pension contributions as expenditures. However it the Statement of Activities, the cost of pension benefits earned net of employee contributions is reported as pension expense Pension expense (3,452,478) Employer contributions subsequent to the measurement date 3,406,947 Internal service funds are used by management to charge the cost of certain activities, such as insurance and equipment maintenance and operations, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. (7,905,084) Change in net position of governmental activities $ (12,734,587) The notes to the basic financial statements are an integral part of this statement. 24

26 STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2017 Business-Type Activities Enterprise Funds Other Enterprise Fund Governmental Activities Internal Service Funds CSA#1 Totals ASSETS Current Assets: Cash and investments $ 220,041 $ 391,982 $ 612,023 $ 33,046 Receivables: Accounts 92,079 92,079 68,258 Intergovernmental 13, ,736 Assessments 1,448,505 1,448,505 Due from other funds 458,937 Prepaid expenses 574,721 Deposits 200,000 Total Current Assets 1,773, ,618 2,166,343 1,334,962 Noncurrent Assets: Capital assets: Depreciable, net 5,806,422 5,806,422 Total Noncurrent Assets 5,806,422 5,806,422 Total Assets 7,580, ,618 7,972,765 1,334,962 LIABILITIES Current liabilities: Accounts payable 156,179 1, ,444 Claims payable 2,663 Due to other funds 458,937 Accrued interest payable 6,226 6,226 Loans payable Total Current Liabilities 162,405 1, , ,600 Noncurrent Liabilities: Loans payable 491,130 67, ,361 Net OPEB obligation 35,877,480 Unearned revenues 20,320 20,320 Total Noncurrent Liabilities 511,450 67, ,681 35,877,480 Total Liabilities 673,855 68, ,351 36,339,080 NET POSITION Net investment in capital assets 5,315,292 5,315,292 Restricted for: Future claims 491,983 Unrestricted 1,591, ,122 1,915,122 (35,496,101) Total Net Position $ 6,906,292 $ 324,122 $ 7,230,414 $ (35,004,118) The notes to the basic financial statements are an integral part of this statement. 25

27 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Business-Type Activities Enterprise Funds Other Enterprise Funds Governmental Activities Internal Service Funds CSA#1 Totals OPERATING REVENUES Charges for services $ 525,589 $ 7,151 $ 532,740 $ 7,479,811 Other revenues 617, ,940 Total Operating Revenues 1,143,529 7,151 1,150,680 7,479,811 OPERATING EXPENSES Services and supplies 772,754 1, ,886 7,298,478 Claims/premium expense 1,958 1,958 7,974,223 Depreciation 182, ,735 Total operating expenses 957,447 1, ,579 15,272,701 Operating Income (Loss) 186,082 6, ,101 (7,792,890) NON-OPERATING REVENUES (EXPENSES) Taxes and assessments 9,166 9,166 Intergovernmental Loss on disposal of assets Interest income 1,640 3,706 5,346 1,043 Interest expense (28,379) (1,727) (30,106) Total Non-Operating Revenues (Expenses) (26,739) 11,323 (15,416) 1,043 Income (Loss) Before Transfers 159,343 17, ,685 (7,791,847) Transfer out (143,573) (468) (144,041) (113,237) Change in Net Position 15,770 16,874 32,644 (7,905,084) Total Net Position - Beginning 6,890, ,248 7,197,770 (26,782,723) Restatement (316,311) Total Net Position - Beginning, Restated 6,890, ,248 7,197,770 (27,099,034) Total Net Position - Ending $ 6,906,292 $ 324,122 $ 7,230,414 $ (35,004,118) The notes to the basic financial statements are an integral part of this statement. 26

28 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Business-Type Activities Enterprise Funds Other Enterprise CSA#1 Funds Totals Governmental Activities Internal Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 1,051,500 $ 7,151 $ 1,058,651 $ 7,444,585 Payments to suppliers (625,226) (184) (625,410) (7,753,208) Net Cash Provided (Used) by Operating Activities 426,274 6, ,241 (308,623) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Taxes and assessments received 9,166 9,166 Intergovernmental revenues received (12,548) 131 (12,417) Transfers to other funds (143,573) (468) (144,041) (113,237) Net Cash Provided (Used) by Noncapital Financing Activities (156,121) 8,829 (147,292) (113,237) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on debt (327,878) (3,847) (331,725) Interest paid on debt (31,079) (1,727) (32,806) Net Cash Provided (Used) by Capital and Related Financing Activities (358,957) (5,574) (364,531) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 1,640 3,706 5,346 1,043 Net Cash Provided (Used) by Investing Activities 1,640 3,706 5,346 1,043 Net Increase (Decrease) in Cash and Cash Equivalents (87,164) 13,928 (73,236) (420,817) Balances - Beginning 307, , , ,863 Balances - Ending $ 220,041 $ 391,982 $ 612,023 $ 33,046 The notes to the basic financial statements are an integral part of this statement. 27

29 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Business-Type Activities Enterprise Funds Other Enterprise CSA#1 Funds Totals Governmental Activities Internal Service Funds Operating income (loss) $ 186,082 $ 6,019 $ 192,101 $ (7,792,890) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 182, ,735 Decrease (increase) in: Accounts receivable (92,029) (92,029) (494,163) Increase (decrease) in: Accounts payable 149, ,434 (90,709) Claims Payable (18,504) Due to/due from ,937 Net OPEB obligation ,628,706 Net Cash Provided (Used) by Operating Activities $ 426,274 $ 6,967 $ 433,241 $ (308,623) The notes to the basic financial statements are an integral part of this statement. 28

30 STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2017 Investment Trust Funds Agency ASSETS Cash and investments $ 26,656,851 $ 3,155,327 Taxes and assessments receivable 1,064,537 Due from other funds 858,778 Total Assets 26,656,851 5,078,642 LIABILITIES Due to other funds 858,778 Agency obligations 4,219,864 Total Liabilities 5,078,642 NET POSITION Net position held in trust for investment pool participants $ 26,656,851 $ The notes to the basic financial statements are an integral part of this statement. 29

31 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS Investment Trust Funds ADDITIONS Contributions to investment pool $ 5,611,651 Total Additions 5,611,651 DEDUCTIONS Distributions from investment pool 3,828,989 Total Deductions 3,828,989 Change in Net Position 1,782,662 Net Position - Beginning 24,874,189 Net Position - Ending $ 26,656,851 The notes to the basic financial statements are an integral part of this statement. 30

32 NOTES TO BASIC FINANCIAL STATEMENTS

33 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of County of Del Norte (County) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the County s accounting policies are described below. A. Reporting Entity The County operates under an Administrator-Board of Supervisors form of government and provides various services on a countywide basis including public safety, highways & streets, sanitation, health and social services, culture-recreation, public improvements, planning and zoning, and general administrative services. Generally accepted accounting principles require government financial statements to include the primary government and its component units. Component units of a governmental entity are legally separate entities for which the primary government is considered to be financially accountable and for which the nature and significance of their relationship with the primary government are such that exclusion would cause the combined financial statements to be misleading. The primary government is considered to be financially accountable if it appoints a majority of an organization s governing body and is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the primary government. Reporting for component units on the County s financial statements can be blended or discretely presented. Blended component units are, although legally separate entities, in substance part of the County s operations and, therefore, data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, would be reported in a separate column in the government-wide financial statements to emphasize it is legally separate from the government. For financial reporting purposes, the County s basic financial statements include all financial activities that are controlled by or are dependent upon actions taken by the County s Board. The financial statements of the individual component units may be obtained by writing to the County of Del Norte, Auditor-Controller s Office, 981 H Street, Suite 140, Crescent City, CA Blended Component Units Special Districts Governed by the Board of Supervisors - The County Board of Supervisors is the governing body of a number of special purpose district funds. Among its duties, the County Board of Supervisors approves the budgets, special taxes, and fees of these special districts. As an integral part of the County, these special districts are reported in the County s financial statements as follows: Nonmajor Special Revenue Funds: Flood Control District - The Flood Control District was established to provide for flood control in the County. 32

34 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) A. Reporting Entity (Continued) Blended Component Units (Continued) Nonmajor Special Revenue Funds: (Continued) Flood Control Subzone 4-A - The Flood Control Subzone 4-A District was established to provide for flood control in County Subzone 4-A. Flood Control Subzone 4-C - The Flood Control Subzone 4-C District was established to provide for flood control in County Subzone 4-C. Major Enterprise Fund: CSA #1 - The CSA #1 District was established to provide County services to residents. Nonmajor Enterprise Fund: Flood Control W-1 - The Flood Control W-1 District was established to provide for water and flood control in the Meadowbrook Acres neighborhood. Discretely Presented Component Units There are no component units of the County which meet the criteria for discrete presentation. Related Organizations Del Norte Solid Waste Management Authority is a jointly governed organization. However, it has not met the criteria stated above and its financial information is not combined with that of the County. The financial statements of the Authority may be obtained by writing to the Del Norte Solid Waste Management Authority, 1700 State Street, Crescent City, CA Joint Agencies The County is a participant in Trindel Insurance Fund (Trindel) the purpose of which is to provide for the creation and operation of a common risk sharing and insurance purchasing pool to be used to meet the obligations of the member counties to provide Worker s Compensation benefits for their employees and to provide public liability and property damage insurance for its members. Trindel is governed by a Joint Powers Agreement between the member counties pursuant to Article 1 (commencing with Section 6500), Chapter 5 of Division 7, Title 1 of the Government Code of California. Complete audited financial statements can be obtained from their office at P.O. Box 2069, Weaverville, CA The County is not financially accountable for this organization and therefore it is not a component unit under Statement Nos. 14, 39 and 61 of the Governmental Accounting Standards Board. 33

35 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) A. Reporting Entity (Continued) Joint Agencies (Continued) The County is a member of the California State Association of Counties Excess Insurance Authority (CSAC). CSAC is a joint powers authority organized for the purpose of developing and funding excess insurance programs for member counties. CSAC operates public entity risk pools for workers compensation, comprehensive liability, property, and medical malpractice, and the pool purchases excess insurance and services for members. CSAC is under the control and direction of a board of directors consisting of representatives of the fifty member counties. Complete audited financial statements can be obtained from CSAC s office at 75 Iron Point Circle, Suite 200, Folsom, California The County is not financially accountable for this organization and therefore it is not a component unit under Statement Nos. 14, 39 and 61 of the Governmental Accounting Standards Board. B. Basis of Presentation Government-Wide Financial Statements The statement of net position and statement of activities display information on all of the nonfiduciary activities of the County and its blended component units. These statements include the financial activities of the overall government, except fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County. Governmental activities, which are normally supported by taxes and inter-governmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for each different identifiable activity of the County s business-type activities and each function of the County 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. Certain indirect costs, which cannot be identified and broken down, are included in the program expense reported for individual functions and activities. Program revenues include (1) charges paid by the recipients of goods and services offered by the program, (2) operating grants and contributions, and (3) capital grants and contributions. Taxes and other items not properly included among program revenues are presented instead as general revenues. Fund Financial Statements The fund financial statements provide information about the County s funds, including fiduciary funds and blended component units. Funds are organized into three major categories: governmental, proprietary, and fiduciary. The emphasis is placed on major funds within the governmental and proprietary categories; each is displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as nonmajor funds. 34

36 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) B. Basis of Presentation (Continued) Fund Financial Statements (Continued) The County reports the following major governmental funds: The General fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the County that are not accounted for through other funds. For the County, the General Fund includes such activities as general government, public protection, public assistance, education, public ways and facilities and culture and recreation services. The Road fund is a special revenue fund used to account for revenues and expenditures for streets and road expansion and maintenance. Funding comes primarily from state highway users taxes and state and federal highway improvement grants. The Housing Rehabilitation fund is a special revenue fund used to account for revenues and expenditures for housing rehabilitation grant programs. Funding comes primarily from federal and state grant revenues. The Mental Health/Substance Abuse fund is a special revenue fund used to account for revenues and expenditures associated with providing mental health and substance abuse care services to County residents. Funding comes primarily from federal and state grant revenues and transfers from other funds. The Mental Health Services Act Fund is a special revenue fund used to account for revenues and expenditures associated with providing mental health services to County residents. Funding comes primarily from Proposition 63 and state and federal grants. The Welfare Assistance fund is a special revenue fund used to account for revenues and expenditures for welfare activities. Funding comes primarily from federal and state grants and transfers from other funds. The Welfare Administration fund is a special revenue fund used to account for revenues and expenditures for administering welfare programs. Funding comes primarily from federal and state grants and transfers from other funds. The 2011 Public Safety Realignment fund is a special revenue fund used to account for revenues and expenditures related to 2011 realignment funding. Funding comes primarily from state realignment revenues. The Stimson Mitigation fund is a special revenue fund used to account for revenues and expenditures for mitigation activities. Funding comes primarily from interest earned on mitigation fees collected. 35

37 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) B. Basis of Presentation (Continued) Fund Financial Statements (Continued) The County reports the following major proprietary funds: The CSA #1 fund is an enterprise fund used to account for district operations, debt and bond redemption activity. The County reports the following additional fund types: Internal Service Funds account for the County s self insurance programs which provide services to other departments on a cost reimbursement basis. The Investment Trust Funds account for the external portion of the County s Investment Pool, which commingles resources of legally separate local governments within the County in an investment portfolio for the benefit of all participants. These entities include school districts, special districts governed by local boards, regional boards, and authorities and courts. These funds represent the assets, primarily cash and investments, and the related liability of the County to disburse these monies on demand. Agency Funds account for assets held by the County as an agent for the State of California and various local governments. These funds typically do not involve a formal trust agreement, and are used to account for situations where the role is purely custodial such as the receipt, temporary investment, or remittance of fiduciary resources. The Agency Funds are most commonly used to account for taxes or fees collected from one government on behalf of other governments. The Agency Funds maintained by the County include the following: Accrued Trust Funds - Accounts for property tax receipts awaiting apportionment to other local government agencies and investment earnings awaiting apportionment to other local government agencies. County Departmental Agency Funds - Accounts for all assets under the control of County departments which are held in a fiduciary capacity. C. Basis of Accounting and Measurement Focus The government-wide and proprietary fund 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 at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales tax, grants, entitlements, and donations. Under the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. 36