VILLAGE OF RIVERVIEW, MISSOURI. FINANCIAL REPORT (Audited)

Transcription

1 VILLAGE OF RIVERVIEW, MISSOURI FINANCIAL REPORT (Audited) Year Ended December 31, 2014

2 FINANCIAL REPORT INDEPENDENT AUDITOR S REPORT 1 Page MANAGEMENT S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Position - Modified Cash Basis 6 Statement of Activities - Modified Cash Basis 7 Fund Financial Statements: Balance Sheet - Modified Cash Basis - Governmental Funds 8 Reconciliation of the Balance Sheet - Modified Cash Basis of Governmental Funds to the Statement of Net Position - Modified Cash Basis 9 Statement of Revenues, Expenditures, and Changes in Fund Balances - Modified Cash Basis - Governmental Funds 10 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Modified Cash Basis of Governmental Funds to the Statement of Activities - Modified Cash Basis 11 Notes to Financial Statements 12 SUPPLEMENTAL INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balances - Modified Cash Basis - Budget and Actual: General Fund 25 Capital Projects Fund 28 Notes to Schedules of Revenues, Expenditures, and Changes in Fund Balances - Modified Cash Basis - Budget and Actual 29 Graphs: General Fund Revenues 30 General Fund Expenditures 31 Contents

3 INDEPENDENT AUDITOR S REPORT June 30, 2015 Board of Trustees VILLAGE OF RIVERVIEW, MISSOURI REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying modified cash basis financial statements of the governmental activities and each major fund of the VILLAGE OF RIVERVIEW, MISSOURI (the Village), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the Village 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 the modified cash basis of accounting described in Note A-3; this includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for 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 of 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 Village s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the cir-

4 cumstances, but not for the purpose of expressing an opinion on the effectiveness of the Village s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective modified cash basis financial position of the governmental activities and each major fund of the Village as of December 31, 2014, and the respective changes in modified cash basis financial position thereof for the year then ended in accordance with the modified cash basis of accounting described in Note A-3. Basis of Accounting We draw attention to Note A-3 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village s basic financial statements. The management s discussion and analysis and supplemental information, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole on the basis of accounting described in Note A-3. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2015 on our consideration of the Village 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 Village s internal control over financial reporting and compliance. CERTIFIED PUBLIC ACCOUNTANTS Page 2

5 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014 This discussion and analysis is intended to be an overview of the Village of Riverview, Missouri s (the Village) financial activities for the fiscal year ended December 31, It should be read in conjunction with the Village s financial statements (attached). USING THE ANNUAL REPORT The annual report consists of a series of financial statements. The statement of net position - modified cash basis and the statement of activities - modified cash basis provide information about the activities of the Village as a whole. Fund financial statements report the Village s operation in more detail than the government-wide financial statements by providing information about the Village s General Fund and Capital Projects Fund. CONDENSED FINANCIAL STATEMENTS A condensed version of the statement of net position - modified cash basis follows: December Change Amount Percent ASSETS Current assets $ 573, ,760 (2,088) - % Capital assets, net of depreciation 1,289,489 1,233,899 55,590 5 Total Assets 1,863,161 1,809,659 53,502 3 LIABILITIES Current liabilities 8,198 5,614 2, NET POSITION Investment in capital assets 1,289,489 1,233,899 55,590 5 Restricted 632, ,983 (92,960) (13) Unrestricted (66,549) (154,837) 88, Total Net Position $ 1,854,963 1,804,045 50,918 3 % A condensed version of the statement of activities - modified cash basis follows: Page 3

6 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014 REVENUES Program revenues: For The Years Ended December Change Amount Percent Charges for services $ 240, ,116 25, % Operating grants and contributions 107, ,472 4,223 4 Total Program Revenues 347, ,588 29,319 9 General revenues: Taxes 761, ,009 64,694 9 Investment income 1, Insurance recoveries 9,532 34,881 (25,349) (73) Other 60,447 42,693 17, Total General Revenues 833, ,433 57,610 7 Total Revenues 1,180,950 1,094,021 86,929 8 EXPENDITURES Administration 207, ,065 1,691 1 City hall 88,082 90,378 (2,296) (3) Police department 614, ,200 (54,769) (8) Public works 219, ,293 64, Total Expenditures 1,130,032 1,120,936 9,096 1 CHANGE IN NET POSITION 50,918 (26,915) 77, NET POSITION, JANUARY 1 1,804,045 1,830,960 (26,915) (1) NET POSITION, DECEMBER 31 $ 1,854,963 1,804,045 50,918 3 % The Village s property tax rates in 2014 were $0.418 per $100 of assessed valuation for residential property, $0.295 per $100 of assessed valuation for commercial property, and $0.311 per $100 of assessed valuation for personal property. You can think of the Village s net position (the difference between assets and liabilities) as one way to measure the Village s financial health or financial position. Over time, increases or decreases in the Village s net position are one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors such as changes in the Village s property tax base, the amount of snow during the winter seasons, etc., to assess the overall health of the Village. The Village has $565,474 in combined ending fund balances. Of this amount, $632,023 is restricted and ($66,549) is unassigned. Page 4

7 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014 CAPITAL ASSETS The Village has invested $1,840,384 at December 31, 2014 in a broad range of capital assets, including land, land improvements, buildings, building improvements, machinery and equipment, vehicles, and infrastructure and accumulated depreciation totaled $550,895. This amount represents a net increase for the current fiscal year (including additions and deductions) of $55,590. The Village s capital assets, net of accumulated depreciation, consisted of: December Land $ 442, ,480 Land improvements 112, ,031 Buildings 72,721 75,572 Building improvements 51,584 57,898 Machinery and equipment 58,038 67,907 Vehicles 110,665 44,673 Infrastructure 441, ,338 Total $1,289,489 1,233,899 Additional information on the Village s capital assets can be found in Note C in the notes to the financial statements. BUDGETARY HIGHLIGHTS General Fund expenditures were $30,394 or 3% under the amount budgeted of $1,052,675. General Fund revenues were $96,071 or 11% above the amount budgeted of $879,345. The 2014 General Fund final budget was prepared with sales tax revenues set at $363,444, while the amount actually collected was $414,969, resulting in a positive variance of $51,525. The 2014 Capital Projects Fund budget was prepared with sales tax revenues set at $176,000. The amount actually collected was $181,212, resulting in a positive variance of $5,212. ECONOMIC FACTORS AND NEXT YEAR S BUDGETS AND RATES The 2015 budget was prepared using slow to flat expected revenues and expenditures. CONTACTING THE VILLAGE S FINANCIAL MANAGEMENT This financial report is designed to provide our residents and taxpayers with a general overview of the Village s finances and to show the Village s accountability for the money it receives. If you have any questions about this report or need additional financial information, please contact the Village Clerk s office at 9699 Lilac Drive, St. Louis, MO or by telephone, Page 5

8 STATEMENT OF NET POSITION - MODIFIED CASH BASIS DECEMBER 31, 2014 Governmental Activities ASSETS Cash $ 337,067 Cash - restricted 141,110 Certificates of deposit 95,495 Land 442,480 Capital assets, net of depreciation 847,009 Total Assets 1,863,161 LIABILITIES Payroll liabilities 130 Payable from restricted assets: Bail bonds payable 8,068 Total Liabilities 8,198 NET POSITION Investment in capital assets 1,289,489 Restricted for: Sewer lateral 119,599 Police training 13,443 Capital projects 498,981 Unrestricted (66,549) Total Net Position $ 1,854,963 See notes to financial statements Page 6

9 STATEMENT OF ACTIVITIES- MODIFIED CASH BASIS FOR THE YEAR ENDED DECEMBER 31, 2014 FUNCTIONS/PROGRAMS Governmental Activities Administration City hall Police department Public works Total Governmental Activities Expenses $ 207,756 88, , ,763 $ 1,130,032 Charges For Services 46, ,256 24, ,212 Program Revenues Operating Capital Grants And Grants And Contributions Contributions 107, ,695 Net Revenues (Expenses) And Changes In Net Position (161,380) (88,082) (445,175) (87,488) (782,125) General Revenues Taxes: Sales Property Other Investment income Insurance recoveries Other Total General Revenues 596,181 53, ,608 1,361 9,532 60, ,043 CHANGE IN NET POSITION 50,918 NET POSITION, JANUARY 1 1,804,045 NET POSITION, DECEMBER 31 $ 1,854,963 See notes to financial statements. Page7

10 BALANCE SHEET - MODIFIED CASH BASIS - GOVERNMENTAL FUNDS DECEMBER 31, 2014 General Fund Capital Projects Fund Total Governmental Funds ASSETS Cash $ 25, , ,067 Cash - restricted 141, ,110 Certificates of deposit - 95,495 95,495 Due from other fund - 92,097 92,097 Total Assets $ 166, , ,769 LIABILITIES AND FUND BALANCES Liabilities Due to other fund $ 92,097-92,097 Payroll liabilities Payable from restricted assets: Bail bonds payable 8,068-8,068 Total Liabilities 100, ,295 Fund Balances Restricted for: Sewer lateral 119, ,599 Police training 13,443-13,443 Capital projects - 498, ,981 Unassigned (66,549) - (66,549) Total Fund Balances 66, , ,474 Total Liabilities And Fund Balances $ 166, , ,769 See notes to financial statements Page 8

11 RECONCILIATION OF THE BALANCE SHEET - MODIFIED CASH BASIS OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION - MODIFIED CASH BASIS DECEMBER 31, 2014 Total Fund Balances - Governmental Funds $ 565,474 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. The cost of the assets is $1,840,384 and the accumulated depreciation is $550,895. 1,289,489 Total Net Position Of Governmental Activities $ 1,854,963 See notes to financial statements Page 9

12 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - MODIFIED CASH BASIS - GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Capital Total General Projects Governmental Fund Fund Funds REVENUES Taxes $ 712, , ,978 Licenses and inspection fees 30,421-30,421 Investment income 209 1,152 1,361 Charges for services 14,800-14,800 Court fines and costs 164, ,976 Other 52,244-52,244 Total Revenues 975, ,364 1,157,780 EXPENDITURES Current: Administration 197, ,756 City hall 82,211-82,211 Police department 633, ,381 Public works 107, ,574 Capital outlay 1, , ,062 Total Expenditures 1,022, ,703 1,171,984 REVENUES OVER (UNDER) EXPENDI- TURES (46,865) 32,661 (14,204) OTHER FINANCING SOURCES (USES) Transfers in 140, ,375 Transfers out - (140,375) (140,375) Insurance recoveries 9,532-9,532 Total Other Financing Sources (Uses) 149,907 (140,375) 9,532 NET CHANGE IN FUND BALANCES 103,042 (107,714) (4,672) FUND BALANCES (DEFICIT), JANUARY 1 (36,549) 606, ,146 FUND BALANCES, DECEMBER 31 $ 66, , ,474 See notes to financial statements Page 10

13 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - MODIFIED CASH BASIS OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES - MODIFIED CASH BASIS FOR THE YEAR ENDED DECEMBER 31, 2014 Net Change In Fund Balances - Governmental Funds $ (4,672) Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported in the governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays over the capitalization threshold ($145,038) exceeded depreciation ($65,810) in the current period. 79,228 The net effect of various transactions involving capital assets: Disposal of capital assets (23,638) Change In Net Position Of Governmental Activities $ 50,918 See notes to financial statements Page 11

14 NOTES TO FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The VILLAGE OF RIVERVIEW, MISSOURI (the Village), incorporated in 1950, is a political subdivision duly organized under the laws of the State of Missouri. The Village operates under the direction of a Board of Trustees and provides or contracts for the following services: public safety, police protection, road and street maintenance, and general administrative services. The more significant accounting policies consistently applied by the Village in the preparation of the accompanying financial statements are summarized below: 1. Reporting Entity The financial statements of the Village include the financial activities of the Village and any component units, entities which are financially accountable to the Village. The Village does not currently have any component units 2. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position - modified cash basis and the statement of activities - modified cash basis) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. The statement of activities - modified cash basis demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Major individual governmental funds are reported as separate columns in the fund financial statements. The Village does not have any fiduciary or proprietary funds. 3. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Measurement Focus In the government-wide statement of net position - modified cash basis and the statement of activities - modified cash basis, governmental activities are presented using the economic resources measurement focus, within the limitations of the modified cash basis of accounting. In the fund financial statements, all governmental funds utilize a current financial resources measurement focus as applied to the modified cash basis of accounting. Only Page 12

15 NOTES TO FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) current financial assets and liabilities are generally included on their balance sheets. Their operating statement present sources and uses of available spendable financial resourced during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. Basis of Accounting In the government-wide statement of net position - modified cash basis and statement of activities - modified cash basis and the fund financial statements, governmental activities are presented using a modified cash basis of accounting. This basis recognizes assets, liabilities, net position/fund balances, revenues, and expenses/expenditures when they result from cash transactions with a provision for depreciation in the government-wide financial statements. This basis is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. As a result of the use of this modified cash basis of accounting, certain assets and their related revenues (such as accounts receivable and revenues for billed or provided services not yet collected) and certain liabilities and their related expenses (such as accounts payable and expenses for goods or services received but not yet paid) are not recorded in these financial statements. If the Village utilized the basis of accounting recognized as accounting principles generally accepted in the United States of America, the fund financial statements for governmental funds would use the modified accrual basis of accounting. All government-wide financial statements would be presented on the accrual basis of accounting. The Village reports the following major governmental funds: General Fund -- The General Fund accounts for all activities except those required to be accounted for in another fund. Revenues in this fund are derived from taxes, fees, and other sources that usually are not designated for any specific purpose. The revenues are used for general ongoing government services such as administration, maintenance, and police protection. Capital Projects Fund -- The Capital Projects Fund is used to account for financial resources from capital improvements sales tax. The revenues are to be used for the acquisition, construction, or maintenance of major capital facilities, public improvements, and operating equipment. Page 13

16 NOTES TO FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 4. Property Taxes Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied in October of each year based on the assessed value as of the prior January 1 for all taxable real property located within the Village. Payment is due upon receipt of billing and becomes delinquent after December 31. Property taxes are billed and collected by St. Louis County and remitted by the County to the Village. The Village receives 98.5% of property tax collections (½% is paid to the St. Louis County Assessor and 1% is paid to the St. Louis County Collector for their services). For 2014, the Village s tax rates levied per $100 of assessed valuation was $0.418 for residential property, $0.295 for commercial property, and $0.311 for personal property. The assessed valuation for property located in the Village at January 1, 2014, upon which the 2014 levy was based for real property, personal property, and public utilities was $13,878, Cash and Investments For purposes of financial reporting, cash and investments includes all demand and savings accounts, certificates of deposit, and petty cash. The Village s investments consist of certificates of deposit. State statutes also authorize the Village to invest in obligations of the U.S. Treasury, federal agencies, commercial paper, corporate bonds, and repurchase agreements. 6. Interfund Transactions Transfers of resources from a fund receiving revenue to the fund through which the resources are to be expended are recorded as other financing sources (uses) in the governmental fund types. In the process of aggregating data for the statement of net position - modified cash basis and the statement of activities - modified cash basis, some amounts reported as interfund activity and balances in the funds were eliminated or reclassified. Interfund receivables and payables were eliminated to minimize the grossing up effect on assets and liabilities within the governmental activities column. Page 14

17 NOTES TO FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 7. Compensated Absences The policy for vacation pay allows employees to take time off with pay and requires vacation leave to be used in the year of accumulation. The policy for sick pay allows employees to earn one-half work day per month up to a maximum of 240 hours. One-third of sick pay accumulated is paid upon an employee leaving the Village. Because of the accounting method used, the Village does not record a liability for unused sick time. 8. Fund Balance Policies The fund balance amounts are reported in the following applicable categories listed from the most restrictive to the least restrictive: Nonspendable -- The portion of fund balance that is not in a spendable form or is required to be maintained intact. Restricted -- The portion of fund balance that is subject to external restrictions and constrained to specific purposes imposed by agreement, through constitutional provisions, or by enabling legislation. Committed -- The portion of fund balance with constraints or limitations by formal action (ordinance) of the Board of Trustees, the highest level of decision-making authority. Assigned -- The portion of fund balance that the Village intends to use for a specific purpose as determined by the applicable Village officials to which the Board of Trustees has designated authority. Unassigned -- Amounts that are available for any purpose; these amounts are reported only in the General Fund. When both restricted and unrestricted resources are available, the Village will spend the most restricted amounts before the least restricted. 9. Capital Assets The Village s modified cash basis of accounting reports capital assets resulting from cash transactions and reports depreciation where appropriate. The accounting treatment over capital assets depends on whether they are reported in the government-wide or fund financial statements. Page 15

18 NOTES TO FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 9. Capital Assets (Continued) In the government-wide financial statements, capital assets arising from cash transactions are accounted for as assets in the statement of net position - modified cash basis. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable. Depreciation of all exhaustible capital assets arising from cash transactions is recorded as an allocated expense in the statement of activities - modified cash basis, with accumulated depreciation reflected in the statement of net position - modified cash basis. Depreciation is provided over the assets estimated useful lives using the straight-line method of depreciation. A capitalization threshold of $5,000 is used to report capital assets. The estimated useful lives by type of asset is as follows: Asset Years Land improvements Buildings 50 Building improvements 5-50 Machinery and equipment 5-20 Vehicles 8 Infrastructure 7-50 In the fund financial statements, capital assets arising from cash transactions acquired for use in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. 10. Restricted Assets Certain resources set aside for sewer lateral, police training, and bail bonds amounting to $119,599, $13,443, and $8,068, respectively, at December 31, 2014, are classified as restricted assets because their use is limited. 11. Use of Estimates The preparation of financial statements requires the Village to make estimates and assumptions that affect the reported amounts of assets and liabilities at fiscal year-end. Actual results could differ from those estimates. NOTE B - CASH AND INVESTMENTS 1. Deposits with Financial Institutions Custodial credit risk for deposits is the risk that in the event of a bank failure, the Village s deposits may not be returned or the Village will not be able to recover collateral Page 16

19 NOTE B - CASH AND INVESTMENTS (Continued) 1. Deposits with Financial Institutions (Continued) VILLAGE OF RIVERVIEW, MISSOURI NOTES TO FINANCIAL STATEMENTS securities in the possession of an outside party. The Village s bank deposits are required by state law to be secured by the deposit of certain securities specified at RSMo with the Village or trustee institution. The value of the securities must amount to the total of the Village s cash not insured by the Federal Deposit Insurance Corporation. As of December 31, 2014, the carrying amount of the Village s deposits, including certificates of deposit, was $573,672 and the bank balances totaled $579,310. Of the Village s bank balances, $381,111 was covered by federal depository insurance, $100,675 was covered by collateral pledged by the banks and held by the pledging institution s trust department or agent in the Village s name, $95,495 was covered by credit union insurance, and $2,029 was uncollateralized. 2. Investments Investment Policies Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Village minimizes credit risk by prequalifying the financial institutions, broker/dealers, intermediaries, and advisors with which the Village will do business, limiting investments to the safest types of securities, and diversifying the portfolio so that potential losses on individual securities will be minimized. Interest Rate Risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Investments held for longer periods are subject to increased risk of adverse interest rate changes. The Village minimizes interest rate risk by structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity and investing operating funds primarily in shorter-term securities. Concentration of Credit Risk is the risk of loss attributed to the magnitude of the Village s investment in a single issuer. The Village minimizes concentration of credit risk by diversifying the portfolio. NOTE C - CAPITAL ASSETS The following is a summary of changes in capital assets - governmental activities: Page 17

20 NOTE C - CAPITAL ASSETS (Continued) VILLAGE OF RIVERVIEW, MISSOURI NOTES TO FINANCIAL STATEMENTS For The Year Ended December 31, 2014 Balance Balance December 31 December Increases Decreases 2014 Capital assets not being depreciated: Land $ 452,480-10, ,480 Capital assets being depreciated: Land improvements 150, ,625 Buildings 170, ,317 Building improvements 118, ,414 Machinery and equipment 152, ,237 Vehicles 155,041 97,038 41, ,098 Infrastructure 548,213 48, ,213 Total Capital Assets Being Depreciated 1,294, ,038 41,981 1,397,904 Less - Accumulated depreciation for: Land improvements 22,594 15,063-37,657 Buildings 94,745 2,851-97,596 Building improvements 60,516 6,314-66,830 Machinery and equipment 84,330 9,869-94,199 Vehicles 110,368 17,408 28,343 99,433 Infrastructure 140,875 14, ,180 Total Accumulated Depreciation 513,428 65,810 28, ,895 Total Capital Assets Being Depreciated, Net 781,419 79,228 13, ,009 Governmental Activities Capital Assets, Net $ 1,233,899 79,228 23,638 1,289,489 Depreciation expense was charged to functions/programs as follows: For The Year Ended December City hall $ 5,871 Police department 17,708 Public works 42,231 Total $65,810 Page 18

21 NOTES TO FINANCIAL STATEMENTS NOTE D - PENSION PLAN 1. Plan Description The Village contributes to the Missouri Local Government Employees Retirement System (LAGERS), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for local government entities in Missouri. LAGERS is a defined benefit pension plan which provides retirement, disability, and death benefits to plan members and beneficiaries. LAGERS was created and is governed by State Statute, Section RSMo As such, it is LAGERS responsibility to administer the law in accordance with the expressed intent of the General Assembly. The plan is qualified under the Internal Revenue Code Section 401(a) and it is tax exempt. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to LAGERS, P.O. Box 1665, Jefferson City, MO or by calling Funding Policy The Village s full-time employees contribute 4% of their gross pay to the pension plan. The Village is required to contribute at an actuarially determined rate; the current rate is 6.6% (general) and 5.7% (police) of annual covered payroll. The contribution requirements of plan members are determined by the governing body of the Village. The contribution provisions of the Village are established by State Statute. 3. Annual Pension Cost (APC) The Village s APC and net pension obligation (NPO) for the current year were as follows: Annual required contribution $30,739 Interest on NPO - Adjustment to annual required contribution - APC 30,739 Actual contributions 30,739 Increase (decrease) in NPO - NPO, beginning of year - NPO, End Of Year $ - The required contribution was determined as part of the February 29, 2012 and February 28, 2013 annual actuarial valuation using the entry age actuarial cost method. The actuarial assumptions as of February 28, 2014 included: a) a rate of return on the investment of present and future assets of 7.25% per year, compounded annually; b) projected salary increases of 3.5% per year, compounded annually, attributable to inflation; c) addi- Page 19

22 NOTE D - PENSION PLAN (Continued) 3. Annual Pension Cost (APC) (Continued) VILLAGE OF RIVERVIEW, MISSOURI NOTES TO FINANCIAL STATEMENTS tional projected salary increases ranging from 0% to 6% per year, depending on age and division, attributable to seniority/merit; d) pre-retirement mortality based on 75% of the RP-2000 Combined Healthy table set back zero years for men and zero years for women; and e) post-retire-ment mortality based on 105% of the 1994 Group Annuity Mortality table set back zero years for men and zero years for women. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a five-year period. The unfunded actuarial accrued liability (UAAL) is being amortized as a level percentage of projected payroll on a closed basis. The amortization period as of February 29, 2012 was 20 years for the General division and 19 years for the Police division. The amortization period as of February 28, 2013 was 20 years for the General division and 18 years for the Police division. 4. Trend Information Three-year Trend Information For The Percentage Years Ended Of APC June 30 APC Contributed NPO 2014 $30, % $ , , Schedule of Funding Progress For The Entry Age Actuarial Actuarial Valuation Actuarial Accrued Years Ended Value Liability February 28/29 Of Assets (AAL) UAAL 2014 $700,661 $736,746 $ 36, , , , , , ,182 Page 20

23 NOTE D - PENSION PLAN (Continued) 4. Trend Information (Continued) VILLAGE OF RIVERVIEW, MISSOURI NOTES TO FINANCIAL STATEMENTS For The Actuarial Valuation Annual UAAL As A Years Ended Funded Covered Percentage Of February 28/29 Ratio Payroll Covered Payroll % $542,341 7% , , The above assets and AAL do not include the assets and present value of benefits associated with the Benefit Reserve Fund and Casualty Reserve Fund. The actuarial assumptions were changed in conjunction with the February 28, 2011 annual actuarial valuation. For a complete description of the actuarial assumptions used in the annual valuations, contact the LAGERS office in Jefferson City, MO. NOTE E - CONTRACTUAL AGREEMENT The Village purchases its police dispatching services under a contractual agreement with the St. Louis County Police Department. The contract is renegotiated annually. For 2014, $21,142 was paid for dispatching services. NOTE F - OPERATING LEASE The Village is obligated under two noncancelable operating lease agreements for office equipment through November Total costs under the leases were $4,727 for the year ended December 31, The following is a schedule of future minimum rental payments required per the lease agreements: For The Years Ending December $4, , ,768 Page 21

24 NOTE G - INTERFUND ASSETS/LIABILITIES Individual interfund assets and liabilities balances are as follows: Due from/to other funds VILLAGE OF RIVERVIEW, MISSOURI NOTES TO FINANCIAL STATEMENTS December 31 Receivable Fund Payable Fund 2014 Capital Projects Fund General Fund $92,097 All of these interfund balances are due to either timing differences or to the elimination of negative cash balances within the various funds. Interfund balances are expected to be repaid, beginning the next fiscal year. Interfund transfers For The Year Ended December 31 Transfers Out Transfers In 2014 Capital Projects Fund General Fund $140,375 Interfund transfers were used to move revenues from the fund that ordinance or budget requires to collect them to the fund that ordinance or budget requires to expend them. NOTE H - RESTRICTED NET POSITION The government-wide statement of net position - modified cash basis reports $632,023 of restricted net position, all of which is restricted by enabling legislation. NOTE I - RISK MANAGEMENT The Village is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Village maintains commercial insurance coverage covering each of those risks of loss. Settled claims did not exceed this commercial coverage in any of the past three years. NOTE J - FINES AND COURT COSTS FOR TRAFFIC VIOLATIONS RSMo requires an accounting of the percentage of annual fines and court costs for traffic violations, including amended charges from any charged traffic violation, occurring within the Village to total general operating revenue, to be included in the annual financial report. During the year, the Page 22

25 NOTES TO FINANCIAL STATEMENTS NOTE J - FINES AND COURT COSTS FOR TRAFFIC VIOLATIONS (Continued) amount of fines and court costs for traffic violations; general operating revenue; and related percent amounted to $124,565, $827,384, and 15.1%, respectively, which is below the threshold of 30% identified in RSMo NOTE K - FUTURE ACCOUNTING PRONOUNCEMENTS GASB Statement No. 68 (GASB 68), Accounting and Financial Reporting for Pensions, will require the Village to record UAAL on the government-wide statement of net position. UAAL equals the difference between the total pension liability and the value of assets set aside in a pension plan to pay benefits. GASB 68 may also require changes to the projection of benefit payments and the rate used to discount the projected benefit payments. GASB 68 will be effective for the Village for the year ending December 31, Page 23

26 SUPPLEMENTAL INFORMATION SUPPLEMENTAL INFORMATION SECTION Page 24

27 SUPPLEMENTAL INFORMATION - SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE - MODIFIED CASH BASIS - BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2014 Over Original Final (Under) Budget Budget Actual Budget REVENUES Taxes Real estate $ 39,500 39,500 46,710 7,210 Personal property 6,205 6,205 7, Road and bridge 14,590 14,590 15,757 1, 167 Railroad/utility 2,495 2,495 2, Cigarette 7,365 7,365 7,282 (83) Gasoline 72,378 72,378 73,715 1,337 Motor vehicle 31,094 31,094 33,980 2,886 Sales 363, , ,969 51,525 Use 42,230 42,230 36,688 (5,542) Franchise 45,277 45,277 49,315 4,038 Sewer lateral 22,950 22,950 24,580 1,630 Total Taxes 647, , ,766 65,238 Licenses and Inspection Fees Business licenses 12,926 12,926 15,017 2,091 Dog licenses Building inspection fees 20,675 20,675 15,200 (5,475) Total Licenses And Inspection Fees 33,802 33,802 30,421 (3,381) Investment Income Charges for Services 15,072 15,072 14,800 (272) Court Fines and Costs 128, , ,976 36,118 Other Lease income 36,972 36,972 41,436 4,464 Miscellaneous 2,249 2,249 5,373 3,124 Bond forfeiture income 10,250 10,250 4,280 (5,970) Lien release income 4,565 4,565 1, 155 (3,410) Total Other 54,036 54,036 52,244 (l,792) Total Revenues 879, , ,416 96,071 EXPENDITURES Administration Wages 6,000 6,000 6,004 4 Bank service charges Court system fees 6,750 6,750 7,858 1,108 City attorney fees 6,000 6,000 10,488 4,488 (Continued) Page 25

28 SUPPLEMENT AL INFORMATION - SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE - MODIFIED CASH BASIS - BUDGET AND ACTUAL - GENERAL FUND (Continued) THE YEAR ENDED DECEMBER 31, 2014 Over Original Final (Under) Budget Budget Actual Budget EXPENDITURES (Continued) Administration (Continued) Crime victim compensation 9,932 9,932 12,129 2,197 Dues and subscriptions Election expenses Employee health insurance 4,923 4,923 6,462 1,539 Employee retirement 2,047 2,047 1,879 (168) Inspector compensation 31,013 31,013 31,013 Miscellaneous 1,580 1, (834) Payroll taxes 3,200 3,200 4,465 1,265 Professional fees 39,464 39,464 25,629 (13,835) Property and liability insurance 38,725 38,725 52,221 13,496 Seminars and training 1,789 1,789 1,519 (270) Workers' compensation 30,422 49,628 36,207 (13,421) Total Administration 182, , ,756 (4, 170) City Hall Wages 54,470 54,470 53,051 (1,419) Dues and subscriptions Employee health insurance Employee retirement 3,595 3, (2,704) Maintenance and repairs (607) Miscellaneous ,204 5,479 Payroll taxes 4,200 4,200 4,038 (162) Postage 1,300 1,300 1,297 (3) Seminars and training (509) Supplies 2,160 2,160 3,813 1,653 Utilities 11, , , Total City Hall 79,530 79,530 82,211 2,681 Police Department Wages 485, , ,410 (25,457) Capital outlay Employee health insurance 30,626 30,626 33,763 3,137 Employee retirement 27,694 27,694 19,978 (7,716) Equipment maintenance 14,100 14,100 13,644 (456) Gas and oil 20,000 20,000 24,691 4,691 Jail fees 1,000 1, (825) Law enforcement supplies 1,000 1,000 2,015 1,015 Miscellaneous 2,200 2,200 2, Office supplies (19) Payroll taxes 33,646 33,646 33, (Continued) Page 26

29 SUPPLEMENTAL INFORMATION - SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE - MODIFIED CASH BASIS - BUDGET AND ACTUAL - GENERAL FUND (Continued) FOR THE YEAR ENDED DECEMBER 31, 2014 Over Original Final (Under) Budget Budget Actual Budget EXPENDITURES (Continued) Police Department (Continued) Police dispatch service 22,512 22,512 21,142 (1,370) Police communication 1,876 1,876 Police uniforms 1,000 1, (140) Seminars and training 4,997 4,997 Utilities 3,000 3,000 2,734 (266) Vehicle maintenance 2,500 10,415 10,415 Total Police Department 645, , ,255 (19,505) Public Works Wages 47,955 47,955 45,590 (2,365) Capital outlay Clothing allowance (308) Employee health insurance 6,827 6,827 6,725 (102) Employee retirement 2,497 2,497 1,927 (570) Equipment maintenance 3,000 3, (2,222) Gas and oil 6,000 6,000 5,674 (326) Sewer lateral repairs 16,300 16,300 14,595 (1,705) Materials (296) Miscellaneous Park expense 1,700 1, (824) Payroll taxes 3,530 3,530 3,339 (191) Signs Small equipment (200) Street lighting 24,100 24,100 24,086 (14) Street repair 1,000 1, (982) Utilities 1,300 1,300 1, Vehicle maintenance 1,500 1, (714) Total Public Works 117, , ,059 (9,400) Total Expenditures 1,025,554 1,052,675 1,022,281 (30,394) REVENUES UNDER EXPENDITURES (146,209) (173,330) (46,865) 126,465 OTHER FINANCING SOURCES Transfers in 113, , ,375 26,700 Insurance recoveries 9,532 9,532 Total Other Financing Sources 113, , ,907 36,232 NET CHANGE IN FUND BALANCE $ (32,534) (59,655) 103, ,697 FUND BALANCE, JANUARY I (36,549) FUND BALANCE, DECEMBER 31 $ 66,493 Page 27

30 SUPPLEMENTAL INFORMATION - SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE - MODIFIED CASH BASIS - BUDGET AND ACTUAL - CAPITAL PROJECTS FUND FOR THE YEAR ENDED DECEMBER 31, 2014 Over Original Final (Under) Budget Budget Actual Budget REVENUES Sales taxes $ 176, , ,212 5,212 Investment income , Intergovernmental 24,000 24,000 - (24,000) Total Revenues 200, , ,364 (17,816) EXPENDITURES Capital outlay 103, , ,703 44,097 REVENUES OVER EXPENDITURES 96,674 94,574 32,661 (61,913) OTHER FINANCING USES Transfers out (110,000) (110,000) (140,375) 30,375 NET CHANGE IN FUND BALANCE $ (13,326) (15,426) (107,714) (92,288) FUND BALANCE, JANUARY 1 606,695 FUND BALANCE, DECEMBER 31 $ 498,981 Page 28

31 SUPPLEMENTAL INFORMATION - NOTES TO SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - MODIFIED CASH BASIS - BUDGET TO ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Budgetary Data The Village follows these procedures in establishing the budgetary data reflected in the financial statements: a. The proposed budget is submitted to the Board of Trustees for the fiscal year in December for all funds. The operating budget includes proposed expenditures and means of financing them, not to exceed the total revenues of the preceding year plus any fund balance at the end of such year. b. The budget must be adopted by the Board of Trustees prior to the beginning of the fiscal year. c. Budget amendments must be approved by the Board of Trustees. The current year budget includes amendments. d. All annual appropriations lapse at fiscal year-end. Excess of Expenditures Over Appropriations For the year ended December 31, 2014, expenditures exceeded appropriations in the Capital Projects Fund by $44,097. Page 29

32 SUPPLEMENTAL INFORMATION - GENERAL FUND REVENUES FOR THE YEARS ENDED DECEMBER 31 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $ Taxes 654, , , , , , , , , ,766 Licenses and inspection fees 64,569 64,164 65,110 69,382 79,759 38,622 26,403 36,228 34,002 30,421 Investment income 10,801 12,425 11,782 13,548 6,223 3,074 1, Charges for services - 8,202 9,186 8,914 14,363 16,064 23,397 17,419 15,202 14,800 Intergovernmental - 11,716 10,502 7,501-6,035 15,371 4, Court fines and costs 176, , , , , , , , , ,976 Other 68,870 57,932 68,511 76,165 63,049 59,769 66,350 68,881 58,365 52,244 Page 30

33 SUPPLEMENTAL INFORMATION - GENERAL FUND EXPENDITURES FOR THE YEARS ENDED DECEMBER 31 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $ Administration 144, , , , , , , , , ,756 City hall 137, , , , , , ,592 83,077 84,229 82,211 Police department 541, , , , , , , , , ,381 Public works 155, , , , , , , , , ,574 Capital outlay 6,557 6,770 12,768 3, , ,359 Page 31