ELKO COUNTY, NEVADA JUNE 30, 2012

Transcription

1 ELKO COUNTY, NEVADA JUNE 30, 2012

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3 JUNE 30, 2012 TABLE OF CONTENTS FINANCIAL SECTION Independent Auditor's Report: On Financial Statements and Supplementary Data Management's Discussion and Analysis (Required Supplementary Information) PAGE NO a-3j Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Governmental Funds: Balance Sbeet Reconciliation of the Balance Sheet of Governmental Funds to the Statement ofnet Assets Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation ofthe Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Proprietary Funds: Statement ofnet Assets Statement of Revenues, Expenses and Changes in Net Assets Statement of Cash Flows Fiduciary Funds: Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to Financial Statements Required Supplementary Information: Schedule of Funding Progress - Other Post Employment Benefits Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget (Budgetary Basis) and Actual: General Fund Reconciliation of the General Fund (Budgetary Basis) to the Statement of Revenues, Expenditures and Changes in Fund Balances - General Fund (GAAP Basis) Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual: Major Special Revenue Funds: Regional Street and Highway Fund Road Construction Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget (Budgetary Basis) and Actual: Town of Jackpot General Fund Reconciliation of the Town of Jackpot General Fund (Budgetary Basis) to the Statement of Revenues, Expenditures and Changes in Fund Balances- Town of Jackpot General Fund (GAAP Basis) Notes to Required Supplementary Information II

4 JUNE 30, 2012 TABLE OF CONTENTS Supplementary Information: Combining and Individual Fund Statements and Schedules: Reconciliation of the General Fund (Budgetary Basis) to the General Fund (GAAP Basis) Combining Balance Sheet Reconciliation of the Town of Jackpot General Fund (Budgetary Basis) to the Town of Jackpot General Fund (GAAP Basis)- Combining Balance Sheet Governmental Funds: Major Governmental Funds: Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual: General County Capital Projects Fund Non-major Governmental Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Special Revenue Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual: General County: Road Fund Indigent Fund Agricultural Extension Fund Library Fund Juvenile Probation Fund Recreation Fund Library Special Federal Fund Senior Citizens Services Fund Road Equipment Reserve Fund Hospital Proceeds Fund County Jail Special Revenue Fund Library Service Fund Medical Assistance to Indigent Persons Fund Forensic Services Fund Seizure Forfeiture Fund Law Library Fund Abused Children Fund Local Emergency Planning Commission Fund Administrative Assessment Building Fund Inmate Commissary Fund Child Support Incentive Grant Fund Recorder's Technology Fund District Court II Rural Drug Court Grant Fund Assessor' s Technology Fund Secure Rural Schools Title Ill Fund Town of Jackpot: Recreation Fund ii

5 .njne 30, 2012 TABLE OF CONTENTS Town of Montello: General Fund Town of Mountain City: General Fund Non-major Debt Service Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual: Debt Service Fund Non-major Capital Projects Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual: General County: County Ad Valorem Capital Projects Fund Town of Jackpot: Capital Projects Fund Public Safety Capital Projects Fund Ad Valorem Capital Projects Fund Town of Montello: Ad Valorem Capital Projects Fund Town ofmountain City: Ad Valorem Capital Projects Fund Internally Reported (Budgetary Basis) Funds Reported as part of the General County General Fund and Town of Jackpot General Fund for External Reporting Purposes: Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual: In Lieu of Taxes Trust Fund Northeastern Nevada Regional Railport Fund Clerk's Election Fund Interpretive Center Fund Budgetary Incentive Fund Inmate Communication Fund Unemployment Insurance L iability Reserve Fund Post Employment Benefit Fund Vacation Benefits Fund Bond Income Fund Town of Jackpot: Unemployment Insurance Liability Reserve Fund Enterprise Funds: Major Enterprise Funds: Schedule of Revenues, Expenses and Changes in Net Assets - Budget and Actual: Town of Jackpot- Sewer Fund Town of Jackpot - Water Fund General County - Elko Area Transportation System Elko Ambulance Fund Non-major Enterprise Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses, and Changes in Net Assets Combining Statement of Cash Flows iii

6 JUNE 30, 2012 TABLE OF CONTENTS Schedule of Revenues, Expenses and Changes in Net Assets- Budget and Actual: General County: Tuscarora Water Enterprise Fund Jarbidge Water Enterprise Fund Solid Waste Fund Town of Jackpot: Waste Disposal Fund Town ofmontello: Water Fund Sewer Fund Internal Service Fund: Schedule of Net Assets - Group Health Insurance Fund Schedule of Revenues, Expenses and Changes in Net Assets - Budget and Actual Fiduciary Funds: Agency Funds: Combining Statement of Changes in Assets and Liabilities, All Agency Funds SUPPLEMENTARY DATA: Schedule No. 1 -Summary Schedule of Ending Cash and Investments Schedule No.2 - Schedule of Tuscarora Water Revenue Bond Requirements COMPLIANCE SECTION: Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-1 33 Schedule ofexpenditures offederal Awards Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings AUDITOR'S COMMENTS: Schedule of Fees Imposed Subject to the Provisions of NRS Limitation of Fees for Business Licenses, Town of Mountain City Current Year Statute Compliance Progress on P rior Year Statute Compliance Disposition of Prior Year Audit Recommendations Current Year Audit Recommendations SECONDARY DISCLOSURES FOR MUNICIPAL BOND ISSUES: Total and Unfunded Accrued Liabilities, Public Employees' Retirement System State of Nevada Summary Schedule of Revenues, Expenditures and Changes in Fund Balances - General Fund- Budgetary Basis Group Health Insurance Internal Service Fund Secured Property Assessed Valuation Secured Property Tax Levies, Collections and Delinquencies Ten Largest Property Owners Statewide Average and Overlapping Tax Rates Statutory Debt Limitation Outstanding Bonded Indebtedness I iv

7 JUNE 30,2012 TABLE OF CONTENTS Annual General Obligation and Revenue Bonds Debt Service Requirements Consolidated Tax Revenues Consolidated Tax Pledged Revenues and the Bonds Debt Service Requirements v

8 FINANCIAL SECTION

9 KAFOURY, ARMSTRONG & CO. A PROFESSIONAL CORPORATION CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT To the Honorable Board of Commissioners ofelko County, State ofnevada We have audited the accompanying fmancial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Elko County, State of Nevada, as of and for the year ended June 30, 2012, which collectively comprise the County's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Elko County management. Our responsibility is to express opinions on these financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinions. The financial statements of the Agricultural Association District No. 4 have not been audited and we were not engaged to audit the Agricultural Association District No. 4 financial statements as part of our audit of the County's basic financial statements. The Agricultural Association District No. 4 's financial activities are included in the County's basic fmancial statements as a discretely presented component unit and represent 1 00 percent of the assets, net assets, and revenues of the County's discretely presented component unit. Because the Agricultural Association District No. 4's financial statements have not been audited, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the financial statements of the discretely presented component unit ofeiko County, State of Nevada as of and for the year ended June 30, In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had the Agricultural Association District No. 4 's financial statements been audited, 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 Etko County, State of Nevada, as of June 30, 2012, and the respective changes in financial position and, where applicable, the cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated May 1, 2013 on our consideration of Elko 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 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 and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 3a through 3j, the Schedule of Funding Progress on page 42, and the Schedules of Budgetary Comparison Information and Reconciliations and related notes on pages 43 through 59 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 fmancial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Management Discussion and Analysis and the Schedule of Funding Progress 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 fmancial 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. The Schedules of Budgetary Comparison Information, the Reconciliations of the General and Special Revenue Funds (budgetary basis) to the General and Special Revenue Funds (GAAP basis), and the notes to the required supplementary information have been subjected to the auditing procedures

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11 applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements as a whole. Our audit was conducted for the purpose of forming opin ions on the financial statements that collectively comprise Elko County's financial statements as a whole, with the exception of the discretely presented component unit. The combining and individual nonmajor fund financial statements and schedules, including budgetary comparisons, supplementary data, and Secondary Disclosures for Municipal Bond Issues are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the fmancial statements. The 2012 combining and individual nonmajor fund statements and schedules, including budgetary comparisons, supplementary data, and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived ftom and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the fmancial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the fmancial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. We also have previously audited, in accordance with auditing standards generally accepted in the United States, Elko County's basic fmancial statements for the year ended June 30, 201 1, which are not presented with the accompanying financial statements. In our report dated May 16, 2012, we expressed unqualified opinions on the respective financial statements of the governmental activities, the business-type activities, each maj or fund, and the aggregate remaining fund information. The Agricultural Association District No. 4 was not audited, and therefore we did not express an opinion on this discretely presented component unit. In our opinion, the 20 II accompanying combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the financial statements for the year ended June 30, 2011, taken as a whole. The Secondary Disclosures for Municipal Bond Issues have 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. Elko, Nevada May I,

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13 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 The County of Elko s (the County ) discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the County s financial activity, (c) identify changes in the County s financial position (its ability to address the next and subsequent year challenges), (d) identify any material deviations from the financial plan (the approved budget), and (e) identify individual fund issues or concerns. The Management s Discussion and Analysis ( MD&A ) is required as an element of the annual financial report by the Governmental Accounting Standards Board (GASB) and is designed to focus on the current year s activities, resulting changes and currently known facts. Please read it and the County s financial statements (beginning on page 4). FINANCIAL HIGHLIGHTS The assets of Elko County exceeded its liabilities at the close of the most recent fiscal year by $113 million (net assets). Of this amount $17.8 million (unrestricted net assets) may be used to meet the government s ongoing obligations to citizens and creditors. The auditor s report offers an unqualified opinion on the financial statements, the best opinion that can be attained except for the effects of the discretely presented component unit the Agricultural Association District No. 4. The County s net assets increased by $800 thousand. The governmental net assets increased by $1.2 million primarily related to the growth in assessed value of property and increases in consolidated tax related to economic activity, and the businesstype net assets decreased by $400,000. As of the close of the current fiscal year, Elko County s governmental funds reported the combined ending fund balances of $31.2 million, an increase of $4 million in comparison with the prior year. Approximately 51% of the total amount is available for spending at the government s discretion. At the end of the current fiscal year unassigned fund balance for the general fund was $15,757,754, or 61% of total general fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis are intended to serve as an introduction to Elko County s basic financial statements. Elko County s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-Wide Financial Statements The government-wide financial statements are designed to be corporate-like in that all governmental and business-type activities are consolidated into columns which add to a total for the Primary Government. The focus of the Statement of Net Assets (the Unrestricted Net Assets ) is designed to be similar to bottom line results for the County and its governmental and business-type activities. This statement combines and consolidates governmental fund s current financial resources (short-term spendable resources) with capital assets (including infrastructure) and long term obligations. Component Units, which are other governmental units over which the County can exercise influence and/or may be obligated to provide financial subsidy, are presented as a separate column in the government-wide statements. The focus of the statements are clearly on the Primary Government and the presentation allows the user to address the relative relationship with the Component Units. The Statement of Activities is focused on both the gross and net cost of various functions (including governmental, businesstype and component unit) which are supported by the government s general tax and other revenues. This is intended to summarize and simplify the user s analysis of cost of various governmental services and or subsidy to various business-type activities and/or component unit. The Governmental Activities reflects the County s basic services, on a functional basis. Departments included within those functions are identified in the General Fund Statement. Ad valorem, consolidated taxes and other identified general revenues 3a

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15 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 support the majority of these services. The Business-type Activities reflect private sector type operations (Water, Wastewater, Ambulance, Transit Services and Solid Waste Management), where the fee for service typically covers all or most of the cost of operation, including depreciation. Fund Financial Statements Traditional users of governmental financial statements will find the Fund Financial Statements presentation more familiar. The focus is on Major Funds, rather than fund types. The Governmental Major Fund presentation is presented on a sources and uses of liquid resources basis. This is the manner in which the financial plan (the budget) is typically developed. The flow and availability of liquid resources is a clear and appropriate focus of any analysis of a government. Funds are established for various purposes and the Fund Financial Statements allow the demonstration of sources and uses and/or budgeting compliance associated therewith. The Fund Financial Statements also allow the government to address its Fiduciary (or Trust) Funds summarized by type. While these Funds represent trust responsibilities of the government, these assets are restricted in purpose and do not represent discretionary assets of the government. Therefore, these assets are not presented as part of the Government-Wide Financial Statements. While the Total column on the Business-type Fund Financial Statements may be the same as the Business-type column at the Government-Wide Financial Statement, the Governmental Major Funds Total column requires a reconciliation because of the different measurement focus (current financial resources versus total economic resources) which is reflected on the page following each statement. The flow of current financial resources will reflect bond proceeds and inter-fund transfers as other financing sources, as well as capital purchases and bond principal payments as expenditures. The reconciliation will eliminate these transactions and incorporate the capital assets and long-term obligation into the Governmental Activities column (in the Government-wide statements). 3b

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17 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 The following table reflects a summary of Net Assets compared to prior year: Table 1 Summary of Net Assets As of June 30, 2012 and 2011 Governmental Activities Business-type Activities Total Primary Government Current and other assets $38,501,509 $34,584,572 $2,947,454 $3,254,167 $41,448,963 $37,838,739 Capital assets 75,681,237 76,536,348 10,451,333 8,822,235 86,132,570 85,358,583 Total assets 114,182, ,120,920 13,398,787 12,076, ,581, ,197,322 Current and other liabilities 4,595,189 4,276, , ,867 4,929,737 4,489,080 Long-term liabilities 7,708,168 6,041,778 1,995, ,331 9,704,049 6,465,109 Total liabilities 12,303,357 10,317,991 2,330, ,198 14,633,786 10,954,189 Net assets: Invested in capital assets net of related debt 74,508,018 74,993,715 8,739,170 8,576,769 83,247,188 83,570,484 Restricted 11,879,328 12,202,335 16,545 4,614 11,895,873 12,206,949 Unrestricted 15,492,043 13,606,879 2,312,643 2,858,821 17,804,686 16,465,700 Total net assets $101,879,389 $100,802,929 $11,068,358 $11,440,204 $112,947,747 $112,243,133 For more detailed information see the Statement of Net Assets. Normal Impacts There are five basic (normal) transactions that will affect the comparability of the Net Assets summary presentation. Net Results of Activities which will impact (increase/decrease) current assets and unrestricted net assets. Borrowing for Capital which will increase current assets and long-term debt. Spending Borrowed Proceeds on New Capital which will reduce current assets and increase capital assets. There is a second impact, an increase in invested in capital assets and an increase in related net debt which will not change the invested in capital assets, net of debt. Principal Payment on Debt which will (a) reduce current assets and reduce long-term debt and (b) reduce unrestricted net assets and increase invested in capital assets, net of debt. Reduction of Capital Assets through Depreciation which will reduce capital assets and invested in capital assets, net of debt. 3c

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19 ELKO COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2012 Table 2 Summary of Changes in Net Assets For the Years Ended June 30, 2012 and 2011 Governmental Activities Business-type Activities Total Primary Government REVENUES Program Revenues: Charges for services $ 6,566,965 $ 6,027,033 $ 2,225,270 $ 1,969,690 $ 8,792,235 $ 7,996,723 Operating grants and contributions 2,213,798 3,606, , ,135 2,940,998 3,883,989 Capital grants and contributions 526, , , , ,415 1,385,857 General Revenues: Ad valorem taxes 13,847,897 11,355, ,847,897 11,355,212 Consolidated taxes 15,963,649 13,420, ,963,649 13,420,087 Motor vehicle fuel taxes 4,415,735 4,399, ,415,735 4,399,959 Other Taxes 3,233,421 3,087, ,233,421 3,087,938 Investment income 388, ,947 13,235 12, , ,349 Other general revenues 536, ,875 2,210 7, , ,002 Total Revenues 47,693,837 43,854,017 3,195,604 2,689,099 50,889,441 46,543,116 EXPENSES Program Activities Primary Government: General government 8,580,178 9,133, ,580,178 9,133,202 Judicial 11,177,982 10,654, ,177,982 10,654,705 Public safety 13,186,730 13,127, ,186,730 13,127,391 Public works 7,860,015 7,565, ,860,015 7,565,254 Health 812, , , ,043 Welfare 2,179,902 1,716, ,179,902 1,716,473 Culture and recreation 2,363,968 2,393, ,363,968 2,393,610 Community support 390, , , ,197 Special project - 907, ,814 Interest 24,904 2,692, ,904 2,692,875 Business-type Activities: Water , , , ,397 Sewer , , , ,917 Ambulance - - 1,736,716 1,710,521 1,736,716 1,710,521 Transit Services , , , ,611 Solid Waste , , , ,342 Total Expenses 46,577,011 48,907,564 3,527,450 2,948,788 50,104,461 51,856,352 Excess (Deficiency) of revenues over expenses before transfers 1,116,826 (5,053,547) (331,846) (259,689) 784,980 (5,313,236) Transfers 40,000 10,000 (40,000) (10,000) - - Change in Net Assets 1,156,826 (5,043,547) (371,846) (269,689) 784,980 (5,313,236) Net Assets, Beginning of Year, as Previously Reports 100,802, ,687,560 11,440,204 10,628, ,243, ,315,606 Prior Period Adjustment (80,366) 158,916-1,081,847 (80,366) 1,240,763 Net Assets - Beginning of Year, as Restated 100,722, ,846,476 11,440,204 11,709, ,162, ,556,369 Net Assets - End of Year $ 101,879,389 $ 100,802,929 $ 11,068,358 $ 11,440,204 $ 112,947,747 $ 112,243,133 3d

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21 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 Total Revenues Total revenue increased from the prior year revenue by 9%. Total governmental activity revenue rose 9%, while total business-type activity revenues rose by 19%. The increase in business-type revenues is due to operating grants awarded during the year. General revenues, mainly comprised of taxes and sales tax, represent 75% of total revenue. Program revenues are revenues directly related to service activities of a function and include charges for services, grants and contributions, and related investment earnings, when restricted for use in programs. Total General Revenues General revenues increased significantly when compared to the prior fiscal year primarily related to increases in assessed value and consolidated taxes. Investment earnings increased due to improvements in the bond market rate of return. Also, County investments are written up or down to a fair market value basis (mark to market rule). This mark to market rule will fluctuate with the changes in interest rates. Program revenues Total program revenues related to specific functions provided an average of 20% of the resources necessary to pay costs of providing program services. The remaining program costs were financed from general revenues. The graphs on this and the following page demonstrate governmental and business-type program revenue expense coverage on a functional and segment basis. Governmental Activities Program Revenues and Expenses $14,000,000 $12,000,000 $10,000,000 Expenses Program revenue $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 General government Judicial Public safety Public works Health Welfare Culture and recreation Community support Interest and fiscal charges 3e

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23 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 Business-type Activities Program Revenues and Expenses $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 Water Sewer Ambulance Transit Solid Waste Expenses Program revenue $200,000 $0 Business-type activity charges for services provided 63% of the resources to finance the operations. The value of capital contributions from developers for water and sewer infrastructure assets is included in program revenues for the Water and Wastewater Funds. Total Revenues by Source Governmental Activities Ad valorem taxes Motor vehicle fuel taxes Payments in lieu of taxes Operating grants Investment earnings Consolidated taxes Room tax Charges for services Capital grants Miscellaneous Governmental Activities The two largest revenue sources for the County are ad valorem taxes and consolidated taxes, which comprise 63% of total revenues. Ad valorem taxes increased 22% from the prior year due to an increase in assessed value. 3f

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25 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 Consolidated taxes increased 19% due to increased taxable sales related to the overall economic activity in Elko County. This economic activity is related to the mining industry located within the region. Investment income increased 9% due to higher increased investment in callable bonds which provide a higher rate of return. Elko County holds the majority of investments to maturity thereby reducing the market risk and receiving full interest earnings and investment value. Payment in Lieu of Taxes received from the Federal Government was increased by Congress to full funding for FY2009 thru FY2012. The additional revenue totaled $173,630. Total Revenues by Source Business-type Activities 0% 0% 23% 7% 70% Charges for Service Capital contribution grants Miscellaneous Operating Grants Investment earnings Business-type Activities Charges for services increased by 13% or $256 thousand. These increases are related to rate adjustments in business-type activities. Rate increases will be monitored and potentially adjusted each fiscal year. Capital contributions consist of contributions from customers in the form of hookup fees and grant funds related to water and sewer construction projects and matching funds for Transit Services. 3g

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27 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 Expenses Salaries and wages comprise 36% of total expenses. Elko County has five employee associations which negotiate periodically for salary adjustments related to merit. Employee benefits average 21% of total expenses. Health insurance costs increased for the year due to the rising cost of medical inflation and claims costs. The merit increases also impacted employee benefit costs due to negotiated contractual increases. Services and supplies comprise 35% of total expenses. Details regarding variances on a fund level are available in separate reports. Depreciation expense represents the cost of using capital assets over their estimated useful lives. This information is included in the various functions in order to more closely approximate the cost of providing services. More detail is provided in the footnotes to the financial statement. Interest/issuance cost expense includes interest and other fiscal charges paid on outstanding debt. Financial Analysis of Elko County Major Funds Elko County uses fund accounting and budgetary integration to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds: The focus of Elko County s governmental funds is to provide information on current inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County s current funding requirements. In particular, unassigned fund balance may serve as a useful measure of net resources available for spending at the end of the fiscal year. As of the current fiscal year the County s governmental funds reported combined ending fund balances of $31.2 million, an increase of $4 million from the prior year. The General Fund is the primary operating fund of the County. At the end of the current fiscal year, fund balance of the General Fund was $17.3 million. As a measure of the General Fund s liquidity, it may be useful to compare fund balance to total fund expenditures. Fund balance represents 67% of total fund expenditures. The fund balance of the General Fund increased by $1.1 million. Key factors in this change are related to an increase in economic activity related to the mining industry which is reflected in the increase in consolidated tax revenue (includes sales tax) of $2.1 million and an increase in ad valorem taxes related to the Ruby Pipeline Project. Town of Jackpot, General Fund is the primary operating fund of the Town of Jackpot Nevada. At the end of the current fiscal year, fund balance of the General Fund was $1 million. As a measure of the Town General Fund s liquidity, it may be useful to compare fund balance to total fund expenditures. Fund balance represents 72% of total fund expenditures. Key factors in the $400 thousand increase in fund balance are as follows: Total revenues increased due to economic activity in Elko County which resulted in an increase in consolidated taxes for the Town. General County Capital Projects Fund accounts for resources received from the General Fund and bond proceeds for the purpose of constructing capital projects as determined by the Board of County Commissioners. Elko County maintains a five year capital project plan (available upon request). All major projects started in prior years are completed. The Fund has a fund balance of $2.32 million. A transfer in from the General Fund of $1,035,000 was provided in FY2012. Regional Street and Highway Fund accounts for resources received from a locally assessed gas tax rate of 6.5 cents. The taxes collected are allocated to County, Cities and Towns within Elko County. The resources are utilized for road repair and construction. The Fund has a fund balance of $3.6 million. Discussions are under review to raise the rate to the maximum allowed by Nevada Revised Statutes at 9 cents for fiscal year h

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29 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 General County Road Construction Fund accounts for resources received from the motor vehicle fuel tax of 1.25 cents. The resources received are utilized for road repair and construction projects on County roadways. The Fund has a fund balance of $185 thousand at year end. Proprietary Funds: The proprietary fund statements provide the same type of information found in the government-wide financial statements, but in more detail. The Town of Jackpot Sewer Fund was established for the purpose of accounting for the Town of Jackpot-owned and operated sewer system. Unrestricted net assets at the end of the year amounted to $448 thousand. The Town of Jackpot Water Fund was established for the purpose of accounting for the Town of Jackpot-owned and operated water system. Unrestricted net assets at the end of the year amounted to $526 thousand. The Elko Area Transportation System Fund was established for the purpose of accounting for an on demand public transportation system in the Elko area. It is funded with Federal Transportation grants and local funding. The Elko Ambulance Fund was established for the purpose of operations of an emergency medical transport service in Elko County. Unrestricted net assets at the end of the year amounted to $521 thousand. General Fund Budgetary Highlights Functions represent the legal level of budgetary control. The final amended budget appropriations are greater than the original budget. The main factor of the increase in appropriations was related to receipt of State and Federal grant funds. Capital Assets and Debt Administration Capital Assets: The County s investment in capital assets for its governmental and business-type activities as of June 30, 2012 amounts to $86 million (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment, construction in progress and infrastructure. The total decrease in the County s investment in capital assets for the current fiscal year was less than 1%. Table 4 Elko County Capital Assets (Net of Depreciation) Governmental Activities Business-type Activities Total Land $ 5,550,514 $ 540 $ 5,551,054 Construction in progress 273, ,326 Buildings / improvements 52,509,583 15,132,175 67,641,758 Machinery and equipment 19,255,682 2,137,738 21,393,420 Infrastructure 63,650,959-63,650,959 Accumulated depreciation (65,558,827) (6,819,120) (72,377,947) $ 75,681,237 $ 10,451,333 $ 86,132,570 Major additions for the current fiscal year for Elko County were the addition of infrastructure, building improvements and equipment additions. The major projects were related to water and sewer infrastructure in the Town of Jackpot. Additional information on the County s capital assets can be found in Note 5. 3i

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31 ELKO COUNTY MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2012 Table 5 Elko County Outstanding Debt General Obligation Bonds, Revenue Bonds, Leases and Notes Governmental Activities Business-type Activities Total General Obligation Revenue Backed $ 385,000 $ 1,700,438 $ 2,085,438 Leases Payable 33,450-33,450 Notes Payable 754,769 11, ,494 $ 1,173,219 $ 1,712,163 $ 2,885,382 State statute (NRS 244A.059) limits the amount of general obligation debt a government entity may issue to 10% of its total assessed valuation. The current limitation for Elko County is $159 million, which is significantly in excess of Elko County s outstanding general obligation debt. Additional information on Elko County s long- term debt can be found in Note 13 which is included in this report. Economic Factors The County s primary revenue sources are ad valorem property taxes and consolidated taxes. Property taxes were consistent in the last fiscal year due to the mining economy within our region. The 2012 assessed valuation is $1.5 billion and has increased over the last year. At the same time the increases in gold prices has resulted in an increase in the net proceeds of mines revenue. Additionally the ad valorem taxes have increased due to the completion of the Ruby Pipeline Project. The County s current operating tax rate is below the statutorily allowed rate. Consolidated tax consists of six different tax sources, the largest being city/county sales taxes. Gross taxable sales have been relatively flat in prior years and are now starting to slightly increase. Projections for FY2013 indicate a 20% to 30% increase in this revenue source. The Northeastern Nevada Railport industrial area is currently operating and has assisted in diversifying the economic base of Elko County by expanding the tax base and job availability for this region. Due to the budgetary constraints of the State of Nevada the 2011 Legislature required Elko County to provide fiscal support to multiple state services. The fiscal impact for FY2013 is approximately $2.2 million. These and other factors were taken into consideration in the preparation of the 2013 fiscal year budget. At this time Elko County is not proposing any new revenue sources for future operations except for proprietary operations where user rates fund the operations. Requests for Information This report is designed to provide a general overview of Elko County s finances for all interested parties. Questions concerning the information provided in this report or requests for additional financial information should be addressed to Cash A. Minor, Assistant County Manager / Chief Financial Officer, 540 Court Street, Elko, Nevada Questions concerning the information provided in this report or requests for additional financial information concerning the Agricultural Association District No. 4 component unit should be addressed to the District at P.O. Box 1167, Elko, Nevada j

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33 STATEMENT OF NET ASSETS JUNE 30, 2012 ASSETS Cash and investments Restricted cash Interest receivable Accounts receivable Taxes receivable, delinquent Internal balances Due from other governments Prepaid expenses Capital assets: Land and construction in progress PRildARYGOYERNMENT GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES $ 33,333,204 $ 2,0I6,273 25,547 22,906 95,528 40I, ,742 I58, ,820 (290,820) 4,196, ,353 5,823, Other capital assets (net of accumulated depreciation) 69,857,397 I 0,450,793 Total Assets I l4,182,746 13,398,787 TOTAL COMPONENT UNIT AGRICULTURAL ASSOCIATION DISTRICT NO. 4 (UNAUDITED) $ 35,349,477 $ 152,927 48,453 95,528 1,236,121 5, ,983 I7,830 4,560, ,606 7,233 5,824,380 80,308, , ,581,533 1,092,199 LIABILITIES Accounts payable 1,366, ,273 Accrued interest 1,083 3,561 Accrued liabilities I,279,237 57,907 Uue to other governments 427,687 Deposits 6,361 Unearned revenue 1,123,4 14 5,446 Funds held in trust 397,661 Noncurrent liabilities Net OPEB obligation 5, 127, ,702 Due within one year 926, ,468 Due in more than one year 1,653,896 1,650,711 Total Liabilities 12,303,357 2,330,429 1,627,380 23,451 4,644 1,337,144 6, ,687 6,361 1,128,860 50, ,661 5,368,363 1,031,079 3,304,607 14,633,786 80,167 NET ASSETS Invested in capital assets, net ofrelated debt 74,508,0 18 8,739,170 Restricted for: Towns 1,146,860 Unemployment insurance reserve 247,213 indigent 1,101,420 Road projects 4,236,837 Self-insured group health insurance 2,591,590 Special purposes 2,529,861 Debt service 25,547 16,545 Unrestricted 15,492,043 2,3 12,643 Total Net Assets $ 101,879,389 $ 11,068, ,247, ,340 1,146, ,213 1,101,420 4,236,837 2,591,590 2,529,861 42,092 17,804, ,692 $ 11 2,947,747 $ 1,012,032 See accompanying notes. 4

34 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 FUNCTIONS/PROGRAMS Primary government: Governmental activities: General government Judicial Public safety Public works Health Welfare Culture and recreation Community support Debt service: Interest on long-term debt EXPENSES $ 8,580,178 $ 2,527,143 11,177, ,901 I 3,186,730 2,760,841 7,860, , ,937 2,179,902 2,363, , ,395 24,904 PROGRAM REVENUES CHARGES FOR OPERATING GRANTS AND CAPITAL GRANTS AND SERVICES CONTRIBUTIONS CONTRIBUTIONS $ 128,001 1,39 1, , ,251 14, ,203 93,324 $ 287,030 5, ,030 Total governmental activities 46,577,011 6,566,965 2,213, ,726 Business-type activities: Water Sewer Ambulance Transit services Solid waste 5 10, , , ,308 1,736,716 1,331, ,006 29, , ,854 12, , ,370 1,819 12,500 Total business-type activities 3,527,450 2,225, , ,689 Total primary government $ 50,104,461 $ 8,792,235 $ 2,940,998 $ 754,4 15 Component Unit- Agricultural District No. 4 (Unaudited) $ 932,680 $ 550,918 $ $ GENERAL REVENUES, SPECIAL ITEMS AND TRANSFERS: General Revenues: Taxes Ad valorem taxes Consolidated tax Motor vehicle fuel taxes Room tax Payments in lieu of taxes Gaming licenses Investment earnings Miscellaneous Transfers Total general revenues, special items and transfers Change in net assets NET ASSETS - BEGINNING OF YEAR Prior period adjustments NET ASSETS - BEGINNING OF YEAR, as restated NET ASSETS - END OF YEAR 5

35 NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS PRIMARY GOVERNMENT COMPONENT UNIT AGRICUL TVRAL ASSOCIATION GOVERNMENTAL BUSINESS-TYPE DISTRICT NO. 4 ACTIVITIES ACTIV!TlES TOTAL (UNAUDITED) $ (5,638,004) $ $ (5,638,004) $ (8,821,271) (8,821,271) (I 0,253,930) ( I 0,253,930) (7,341,016) (7,341,016) (812,937) (812,937) (2,164,986) (2, 164,986) (1,915,403) (1,915,403) (297,071) (297,071) (24,904) (24,904) (37,269,522) (37,269,522) 106, ,960 (32, 143) (32, 143) (393,348) (393,348) (11.596) (II,596) (17,164) (17,164) ( ) (347,291) (37,269,522) (347,291) (37,616,8 13) (381,762) (381,762) (381,762) 13,847,897 13,847, ,325 15,963,649 15,963,649 4,415,735 4,415, , , ,444 2,904,627 2,904, , , , ,837 13, , ,606 2, ,816 40,000 (40,000) 38,426,348 (24,555) 38,401, ,1 10 I,156,826 (371,846) 784,980 (23,652) I 00,802,929 11,440, ,243,133 1,035,684 (80,366) (80,366) I 00,722,563 11,440, ,162,767 1,035,684 $ 101,879,389 $ 11,068,358 $ 112,947,747 $ 1,012,032 See accompanying notes.

36 BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2012 REGIONAL ROAD STREET AND CONSTRUCTION GENERAL HIGHWAY FUND FUND ASSETS Cash and investments $ 16,024,386 $ 3,335,540 $ 500,822 Restricted cash 25,547 Interest receivable 77,324 18,204 Accounts receivable 2 19,43 3 Taxes receivable, delinquent 11 2,253 Due from other funds 360,652 Due from other governments 2, 186, , ,496 Total Assets s 19,006,343 s 3,941, 131 $ 707,318 LI ABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 191,177 $ 159,478 $ 149 Accrued liabilities 984,193 Due to other funds 50,000 Due to other governments 54, ,498 Deferred revenue 112, ,577 Funds held in trust 373,787 Total Liabilities 1,7 15, , ,726 Fund Balances: Restricted: Towns Debt service 25,547 Capital projects Interpretive Center Grant 34,041 Road projects 3,615, ,592 Indigent Public safety Judicial Culture and recreation Community support Recorder's technology Assessor's Technology Unemployment insurance reserve 240,583 Committed: Northeastern Nevada Regional Rail port 201,707 Judicial Health and welfare Culture and recreation Assigned: Debt service Culture and recreation Capital projects Public safety 14,886 Post employment benefits 966,356 Vacation benefits 50,000 Unassigned I 5,757,754 Total Fund Balances 17,290,874 3,615, ,592 TOTAL LIABILITIES AND FUND BALANCES $ 19,006,343 $ 3,941,131 $ 707,318 See accompanying notes. 6

37 TOWN OF JACKPOT GENERAL COUNTY NONMAJOR TOTAL GENERAL CAPITAL PROJECTS GOVERNMENTAL GOVERNMENTAL FUND FUND FUNDS FUNDS $ 692,708 $ 2,388,065 $ 7, 174,411 $ 30, 11 5,932 25,547 95,528 41,535 49, , , ,983 61, , , ,923 4, 196,048 $ 1,046,793 $ 2,388,065 $ 8,234,854 $ 35,324,504 $ 9,364 64,128 $ 225,031 $ 649,327 20, ,057 1,279,237 81, , , , ,044 1,282,397 23, , ,698 64,128 1,507,677 4,167,674 1,008, ,395 1,146,860 25, , ,341 34, ,090 4,236,837 1,101,420 1,101, , , , , , ,692 37,626 37, , , , ,8 16 6, , , , , ,674 71, , , , , , ,456 2,323, ,575 2,592, , ,356 50,000 (47,578) 15,710, 176 1,015,095 2,323,937 6,727, , 156,830 $ 1,046,793 $ 2,388,065 $ 8,234,854 $ 35,324,504

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39 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30,2012 TOTAL FUND BALANCES FOR THE GOVERNMENTAL FUNDS AS SHOWN ON THE BALANCE SHEET $ 31,156,830 Capital assets used in governmental activities are not fmancial resources and, therefore, are not reported in the governmental funds. 75,681,237 Deferred revenue represents amount that are not available to fund current expenditures and, therefore, are not reported in the Governmental Funds. 158,983 An Internal Service Fund is used by management to charge the costs of the self-funded health insurance program for County employees, dependents and retirees. The assets and liabilities of the Internal Service Fund are included in Governmental Activities in the Statement of Net Assets. 2,591,590 Long-tenn liabilities, the related accrued interest payable and the net OPEB obligation for postemployment healthcare are not due and payable in the current period and, therefore, are not reported in the Governmental Funds. (7,709,251) TOTAL NET ASSETS FOR GOVERNMENTAL ACTIVITIES AS SHOWN ON THE STATEMENT OF NET ASSETS $ 101,879,389 See accompanying notes. 7