Fiscal Year Inspire.

Transcription

1 Comprehensive Annual Financial Report Fiscal Year Inspire. in spire to animate, as an influence, feeling, thought, or the like, does: The students were inspired by a belief in a bright future. Educate. ed u cate to develop the faculties and powers of (a person) by teaching, instruction, or schooling: Teachers and parents educate children to be citizens of the world. Empower. em pow er to enable: Through education, we empower students for success. Adams County School District 14, 5291 East 60th Avenue, Commerce City, Colorado ,

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3 ADAMS COUNTY SCHOOL DISTRICT 14 COMMERCE CITY, COLORADO COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2010 Board of Education Mrs. Jeannette Lewis, President Mr. Robert Vashaw, Vice President Mr. Larry Quintana, Treasurer Mr. Bill Klocker, Secretary Mr. Adrian Schimpf, Director Superintendent of Schools Dr. Susan Chandler Issued by Division of Financial Services Martha A. Baldwin, CPA Director of Finance

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5 ADAMS COUNTY SCHOOL DISTRICT 14 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 Table of Contents INTRODUCTORY SECTION Letters of Transmittal... 1 Association of School Business Officials Certification of Excellence in Financial Reporting... 7 Government Finance Officers Association of the United States and Canada Certificate of Achievement for Excellence in Financial Reporting... 8 Board Members, District Coordinating Team, and Directors... 9 Central Administration Organizational Chart FINANCIAL SECTION Independent Auditors Report Management s Discussion and Analysis BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets Statement of Activities Fund Financial Statements Balance Sheet Governmental Funds Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Assets Proprietary Funds Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds Statement of Cash Flows Proprietary Funds Statement of Fiduciary Assets and Liabilities Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules General Fund Grants Fund Notes to Required Supplementary Information SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules Bond Redemption Fund Combining and Individual Fund Statements and Schedules Combining Balance Sheet Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Budgetary Comparison Schedules Capital Reserve Fund Capital Projects Building Fund Food Service Fund Adult Education Fund i

6 ADAMS COUNTY SCHOOL DISTRICT 14 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 Table of Contents (continued) Statement of Changes in Fiduciary Assets and Liabilities Combining Statement of Net Assets Component Units Combining Statement of Activities Component Units STATISTICAL SECTION Statistical Tables Table Financial Trends Net Assets by Component Changes in Net Assets Fund Balances of Governmental Funds Change in Fund Balances, Governmental Funds Revenue Capacity Summary of Revenue by Source and Other Financing Sources General Fund Assessed Value and Estimated Actual Value of Taxable Property Property Tax Rates, Direct and Overlapping Government Principal Taxpayers Property Tax Levies and Collections Debt Capacity Ratios of Outstanding Debt by Type Ratio of General Bonded Debt to Assessed Value and Bonded Debt per Capita Ratio of Direct and Overlapping Debt Legal Debt Margin Information Ratio of Debt Service Expenditures for General Bonded Debt to General Fund Expenditures Demographic and Economic Information Demographic Statistics Property Values and Construction Adams County Principal Employers Operating Information Full-time Equivalent Employees by Fund Miscellaneous Statistical Data Capital Asset Statistics by Function/Program COMPLIANCE SECTION Federal Financial Assistance Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors Report on Compliance 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 Schedule of Findings and Questioned Costs Independent Auditors Report on Schedule of Expenditures of Federal Awards Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Corrective Action Plan State Compliance Independent Auditors Report on Auditor s Integrity Report Colorado Department of Education Auditor s Integrity Report ii

7 Educational Support Services 5291 E. 60 th Avenue Commerce City, CO P: F: November 4, 2010 Board of Education Adams County School District E. 60 th Avenue Commerce City, CO Dear Members of the Board of Education, I am so pleased to submit to you the Comprehensive Annual Financial Report (CAFR) of Adams County School District 14 for the fiscal year ended June 30, The CAFR, for the fiscal year ended June 30, 2009, received the Certificate of Excellence in Financial Reporting from the Association of School Business Officials International and the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada. These awards represent acknowledgement from our peers that our District has prepared and presented our fiscal information in a clear, open and user-friendly format for stakeholders that qualifies the report for its recognition of excellence. I am confident that this year s CAFR will continue to qualify for these prestigious awards. The Division of Financial Services is to be congratulated for their leadership in moving the District towards the highest standards of fiscal accountability. The quality and completeness of this report is designed to continue to increase the confidence of all our stakeholders in the fiscal competence of our district. A review of this document provides clear evidence of the progress the District has made in achieving its fiscal goals. I would also extend my thanks to the members of the Board of Education for their support and direction in establishing clear and attainable fiscal goals for the District. Sincerely, Dr. Susan Chandler Superintendent 1

8 Martha A. Baldwin, CPA ESS Bulding 5291 E. 60 th Avenue Commerce City, CO P: F: November 4, 2010 Citizens and Members of the Board of Education of Adams County School District 14: We are pleased to submit the fiscal year 2010 Comprehensive Annual Financial Report (CAFR) of Adams County School District 14 (District) for the fiscal period from July 1, 2009, to June 30, The District s Division of Financial Services prepared this report. Responsibility for both accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the District. We believe the data as presented is accurate in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the District. All disclosures necessary to enable the reader to gain an understanding of the District's financial activities have been included. All funds within the District are required under Colorado statute (C.R.S. 1973, ) to have an annual audit performed on its financial statements by an independent certified public accountant. The District s financial statements have been audited by Swanhorst & Company LLC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the District for the fiscal year ended June 30, 2010, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the District s financial statements are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP). The independent auditors report is presented as the first component of the financial section of this report. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government s internal controls and compliance with legal requirements. These reports can be found in the compliance section along with information related to the single audit, schedule of expenditures of Federal awards and schedule of findings and questioned costs. The Auditor s Electronic Financial Data Integrity Check required by the Colorado Department of Education is also included in this section. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the financial statements in the form of Management s Discussion and Analysis (MD&A). 2

9 This letter is designed to complement the MD&A and should be read in conjunction with it. The MD&A immediately follows the report of the independent auditors. THE SCHOOL DISTRICT The District lies immediately north of Denver, Colorado, and serves a population of 33,116 according to the 2000 U.S. census. The District boundaries cover 52 square miles and serve Commerce City, parts of the City of Thornton and unincorporated Adams County. We are fortunate to enjoy culture and ethnic diversity in our school district. Our ethnic composition is about 0.3% Asian, 1.0% American Indian, 2.5% African American, 81.5% Hispanic, and 14.7% Anglo. Adams County School District 14, a state and nationally recognized leader in innovative education, has 457 teachers, 40 administrators, and 351 support staff for a total of 848 employees. The District, inclusive of a charter school, serves 6,823 funded full-time equivalent students. These students were housed in 2 preschools, 6 elementary schools, 1 prekindergarten to eighth grade school, 2 middle schools, 2 high schools and 1 charter school. This was an increase of 349 funded full-time equivalent students from the prior fiscal year. ORGANIZATION OF THE SCHOOL DISTRICT A five member Board of Education (Board) serves as the taxing authority, contracting body and policy maker for the District. The Board adopts the annual operating budget, certifies the property tax mill levy and appropriates all expenditures that use District revenues. One Board member is designated as the Treasurer for the District. The Superintendent is the Chief Executive Officer and is accountable to the Board for the education and support operations within the District. The Assistant Treasurer is the Chief Financial Officer of the District and is accountable to the Board for maintaining all financial records, issuing checks to pay the District s liabilities, acting custodian of all District funds and investing the District s idle cash as stipulated by Colorado law. Other Board appointed officials are the Chief Operating Officer, Chief Academic Officer, Chief Human Resources Officer, School Principals and the Directors of the many various educational, operational and support services within the District, all of whom report to the Superintendent. THE REPORTING ENTITY The District has reviewed its reporting entity definition in accordance with the Governmental Accounting Standards Board (GASB), which defines the governmental reporting entity. This report includes all funds, organizations and activities for which the Board has oversight responsibility as further described in Note A in the Notes to Financial Statements. Our financial statements include two component units: one charter school, Community Leadership Academy, and the Adams 14 Education Foundation. Detail financial information can be referenced in the combining statements for component units. 3

10 SERVICES PROVIDED The District provides a wide variety of education and support services as mandated by State statute or public desires. These include regular and vocational instruction, multi-cultural and bilingual programs, special education programs, student guidance and health services, preschool and many extracurricular activities. Enterprise fund services include adult education programs and nutritional service operations. ECONOMIC CONDITION AND OUTLOOK According to the Legislative Council Forecast (June 2010), Colorado s economy continues to recover amid significant headwinds. Growth is lagging the nation, and is expected to decelerate in the second half of Colorado banks are in worse shape than in most states, and lending from Colorado-based institutions continues to shrink. Heavy debt burdens are weighing down the real estate sector. In the first quarter of 2010, twenty-eight percent of mortgage holders were at or near negative equity, meaning that they owe more on their mortgage than the value of the home. There continues to be more properties flowing into foreclosure than out. There are weak signs of economic recovery, but job growth in Colorado remains elusive. The labor market continues to bleed jobs, and the unemployment rate will increase before it declines. The state has challenges to overcome in this recovery. Once the expansion regains solid footing and banking and real estate problems are resolved, Colorado is expected to once again grow faster than the nation. According to the City of Commerce City s website, Commerce City has 1,093 businesses of varying sizes that include the industrial, commercial, service and retail sectors. The Prairie Gateway Project opened in the spring of 2007 and continues to provide our constituents with job opportunities and more retail outlets. In addition, the northern areas of Commerce City that are outside of the District s boundaries continue to expand in residential and retail development. The District welcomes the continued prosperity in our community, but remains cautiously optimistic and conservative in fiscal policy and management. MAJOR INITIATIVES In November 2006, District voters approved a bond initiative that provided us with the resources to pursue academic opportunities for all students. This includes building a new high school/community learning center on a 55-acre parcel donated to the District by the City of Commerce City, retrofitting air-conditioning in all schools that did not already have it, building full-day kindergarten classrooms in our elementary schools and equipping our middle schools with state-of-the-art science labs. The high school/community learning center opened for the school year and all other projects were completed by October

11 FINANCIAL INFORMATION District management is responsible for establishing and maintaining a system of internal controls that are designed to provide reasonable, but not absolute, assurance that District assets are protected from material loss, theft or misuse. Furthermore, this system of internal controls shall provide accurate, reliable and sufficient accounting data to prepare financial statements in conformity with GAAP. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits that are likely to be derived from it; and (2) the valuation of those costs and benefits may require certain accounting estimates and professional judgment by District management. Accordingly, we believe that the District's internal controls do provide adequate safeguards of District assets and provide reasonable assurance that financial transactions are properly recorded. Single Audit As a recipient of Federal and State financial assistance, the District is responsible for maintaining adequate internal controls to ensure compliance with applicable laws and regulations related to those programs. These internal controls are subject to periodic evaluation by District management. Budgeting Controls The Board adopts the annual budget (appropriation) for the District in June for the next fiscal year. Colorado statutes provide that the Board can make changes to this adopted budget through January 31st. All disbursements and transfers of cash between funds require appropriate authorization from the Board. All purchase order requests must comply with District s purchasing practices and must be approved by the Superintendent or her designee and the Assistant Treasurer. Upon approval, the necessary funds are encumbered and the purchase orders are released to the appropriate vendor. Appropriations within a fund that exceed the amount available are prohibited by law and rejected until additional funds have been secured. Management has the authority to modify budget line items as long as the total fund appropriation is not exceeded. The finance system used by the District provides interim financial reports which details year-todate expenditures and encumbrances with comparative data to the original appropriation plus any authorized additional appropriations. Every administrator and school principal has the ability to retrieve financial and budgetary information about their school that they are responsible for. These reports detail monthly transactions and summarize the amounts available for future expenditures of goods and services among the various programs. In addition, the Board of Education receives quarterly General Fund financial reports as required by law. 5

12 Cash Management District funds are deposited and invested in accordance with the Public Deposit Protection Act of 1975 and other applicable Colorado statutes. Income on investments for all government wide funds for the fiscal year ended June 30, 2010, was $103,498. OTHER INFORMATION Awards The Association of School Business Officials (ASBO) awarded a Certificate of Excellence in Financial Reporting to Adams County School District 14 for its Comprehensive Annual Financial Report for fiscal year ended June 30, These certificates are awarded to government units that publish an easy-to-read and well-organized Comprehensive Annual Financial Report, whose content conforms to the program standards. Such reports must satisfy both generally accepted accounting principles and any other applicable legal requirements. In addition, the Government Finance Officers Association of the United States and Canada (GFOA) awarded a certificate of Achievement for Excellence in Financial Reporting to Adams County School District 14 for the fiscal year ended June 30, In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. Certificates from both ASBO and GFOA are valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Excellence and Certificate of Achievement Programs requirements and we are submitting it to both ASBO and GFOA to determine its eligibility for another certificate. Acknowledgment We want to extend a special thanks to our independent certified public accountant, Swanhorst & Company LLC, for their professional assistance helping us prepare our Comprehensive Annual Financial Report. In closing, we commend the Board for their continued interest and support in planning and conducting the financial operations of the District in a responsible and progressive manner. Respectfully submitted, Martha Baldwin, CPA Director of Finance 6

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15 ADAMS COUNTY SCHOOL DISTRICT E. 60 th Avenue Commerce City, CO BOARD OF EDUCATION Fiscal Year Mrs. Jeannette Lewis... President Mr. Robert Vashaw.... Vice President Mr. Larry Quintana...Treasurer Mr. Bill Klocker.... Secretary Mr. Adrian Schmipf...Director DISTRICT COORDINATING TEAM Dr. Susan Chandler... Superintendent of Schools Ms. Sandy Mutchler, CPA... Chief Operating Officer Ms. Lynn Heintzman... Chief Academic Officer Dr. Joseph Miller, Ph.D.... Chief of Assessment, Strategy and Evaluation Mr. Phil Bedford... Executive Director of Human Resources Mr. John Albright... Public Information Officer DIRECTORS Mr. Jerome Stiller... Director of Assessment and Evaluation Ms. Martha Baldwin, CPA... Director of Finance Ms. Janell Sueltz... Director of Student Achievement Ms. Dawn Loge-Greer... Director of Student Services 9

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17 Certified Public Accountants Board of Education Adams County School District 14 Commerce City, Colorado INDEPENDENT AUDITORS' REPORT We have audited the accompanying financial statements ofthe governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the Adams County School District 14 as of and for the year ended June 30, 2010, which collectively comprise the basic financial statements of the Adams County School District 14, as listed in the table of contents. These financial statements are the responsibility of the Adams County School District 14's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Adams 14 Education Foundation, which represent 5 percent and 6 percent, respectively, of the assets and revenues of the discretely presented component units. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to amounts included for the Adams 14 Education Foundation, is based solely upon the report ofthe other auditors. 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of the other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position ofthe governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information ofthe Adams County School District 14 as of June 30, 2010, and the respective changes in financial position and cash flows, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis and required supplementary information listed in the table of contents are not a required part ofthe basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. In accordance with Government Auditing Standards, we have also issued our report dated November 4,2010, on our consideration of the Adams County School District 14' s internal control over financial reporting and on our tests of its compliance with certain provisions oflaws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit I w 11

18 Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Adams County School District 14's basic financial statements. The supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. 8w~ ~v«-- November 4,

19 MANAGEMENT S DISCUSSION AND ANALYSIS As management of Adams County School District 14 (District), we offer readers of the District s Comprehensive Annual Financial Report this narrative and analysis of the financial activities of the District for the fiscal year ended June 30, We encourage readers to consider the information presented here in conjunction with additional information that can be found in the letters of transmittal on pages 1-6 of this report. FINANCIAL HIGHLIGHTS The total assets of primary government, including land, buildings and equipment exceeded liabilities, including long term bonds payable at the close of fiscal year by $41,289,854 (net assets). Of this amount, $8,488,829 (unrestricted net assets) may be used to meet the District s ongoing obligations to citizens and creditors. The District s total net assets for the primary reporting entity increased by $3,795,662 while unrestricted net assets increased by $4,779,591. The District s Governmental Funds fund balance decreased by $577,354 to an ending fund balance of $18,207,526. Business-type activities have net assets totaling $728,500 after reporting a net gain for the fiscal year of $209,926. Of this net gain, the Adult Education Fund realized a net gain of $68,264. Furthermore, the Food Service Fund realized a net gain of $141,662 in conjunction with offering free lunch to every student in the District. The Governmental Funds reported combined unreserved fund balance of $9,032,474. At June 30, 2010, $3,859,906 of the $11,204,930 fund balance of the General Fund was reserved for inventories, prepaid expenditures, insurance, deposits, the Colorado Preschool Program, and the emergency contingency required by Article X, Section 20 of the Colorado Constitution. The $7,345,024 unreserved portion of the fund balance is equivalent to 12.69% of the total General Fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS Management s discussion and analysis is intended to serve as an introduction to the District s basic financial statements. The District s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to the basic 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 provide readers a broad overview of the school district s financial activities in a manner similar to a private sector business. The statement of net assets presents information on all of the District s assets and liabilities. The difference between assets and liabilities is reported as net assets. Over time, changes in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the net assets of the District changed during the current fiscal year. Changes in net assets are recorded in the statement of activities when the underlying event occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (example: levied but uncollected property taxes and earned but unused employees vacation leave). 13

20 The government-wide financial statements distinguish between the activities that are governmental (supported by taxes) and business-type (supported by user fees and charges). Governmental type funds include the General Fund, Debt Service Fund, Capital Projects Fund, and Special Revenue Funds. Business-type funds include the enterprise funds: Food Service Fund and the Adult Education Fund. The government-wide financial statements include not only the District itself (known as the primary government), but also one legally separate charter school and a foundation for which the District is financially accountable. Financial information for the component units are reported separately from the financial information presented for the primary government itself. The government-wide financial statements can be found on pages of this report. FUND FINANCIAL STATEMENTS Fund financial statements are designed to demonstrate compliance with finance-related legal requirements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other governments, uses fund accounting to ensure and demonstrate compliance. All of the funds of the District can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide statements, governmental fund financial statements focus on near-term financial resources and fund balances (which are spendable resources available at the end of the fiscal year). Such information may be useful in evaluating the District s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenue, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District maintains three governmental funds that are classified as major funds. They are the General Fund, the Grants Fund, and the Bond Redemption Fund. The General and Grant funds account for funds received from other government entities. The Bond Redemption Fund is used to account for property tax collections used to pay off the District s general obligation debt. Other governmental funds, classified as non-major funds, include the Capital Reserve Fund and the Capital Projects Building Fund. The District adopts an annual appropriated budget for each of the individual governmental funds. A budgetary comparison schedule for the General and Grants funds are included in the Required Supplementary Information to demonstrate compliance with the adopted budget. The remaining governmental funds budgetary comparisons are reported as Supplementary Information and can be found after the Required Supplementary Information section of this report. Proprietary Funds The District maintains one type of proprietary fund, which is called an enterprise fund. Enterprise funds are used to report the same functions as the business-type activities presented in the government-wide financial statements. The District uses enterprise funds to account for its food service operation and adult education program. 14

21 Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because these sources are not available to support direct educational programs. The pupil activity fund is the only fiduciary fund the District currently operates. NOTES TO THE FINANCIAL STATEMENTS The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. OTHER INFORMATION In addition to the financial statements and accompanying notes, this report also contains Supplementary Information concerning the District s non-major governmental fund. The non-major fund statement is presented after the Required Supplementary Information to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS The assets of the District are classified as current assets, non-current assets and capital assets. Cash and investments, receivables and inventories are current assets available to provide resources for the near-term operations of the District. Non-current assets include restricted investments, security deposits and deferred charges, net of accumulated amortization. Capital assets are used in the operations of the District and include buildings, land, machinery and equipment. As noted earlier, net assets may serve over time as a useful indicator of a government s financial position. The assets of the primary government exceed liabilities by $41,289,854. The investment of $23,765,682 in buildings, land, machinery and equipment net of related debt represents approximately 57.56% of the District s net assets. 15

22 Adams County School District 14 Net Assets For June 30, 2010 and 2009 Governmental activities Business-type activities Total As sets: Current assets $ 23,701,957 $ 22,524,891 $ 314,592 $ 18,557 $ 24,016,549 $ 22,543,448 Non-current assets 2,012,955 11,127, ,012,955 11,127,970 Capital assets 117,844, ,008, , , ,404, ,675,747 Total assets 143,558, ,661, , , ,434, ,347,165 Liabilities: Current liabilities 8,902,924 17,369, , ,206 9,047,216 17,524,777 Non-current liabilities 94,094,684 96,315,918 2,470 12,278 94,097,154 96,328,196 Total liabilities 102,997, ,685, , , ,144, ,852,973 Net assets: Invested in capital assets, net of related debt 23,205,012 23,343, , ,501 23,765,682 24,010,792 Restricted 9,035,343 9,774, ,035,343 9,774,162 Unrestricted 8,320,999 3,858, ,830 (148,927) 8,488,829 3,709,238 Total net assets $ 40,561,354 $ 36,975,618 $ 728,500 $ 518,574 $ 41,289,854 $ 37,494,192 GOVERNMENT-WIDE ACTIVITIES Governmental activities increased the net assets of the District by $3,585,736 during the current fiscal year. The increase was realized from an increase in state equalization as a result of increased student enrollment and a decrease in expenditures in many non-instructional activities. Business-type activities increased net assets by $209,926 during the same period. The increase was primarily realized from implementing tighter control over food costs. The main sources of revenue for the primary government are received through local property tax, state equalization payments and grants. Property taxes and specific ownership taxes account for 34.3% of the revenue received by the District with 46.3% being received from state equalization payments. Operating grants and contributions provide an additional 14.9%. Other sources, including general revenue grants, account for the remaining 4.5% of revenue. Governmental expenses totaled 95.5% of the total expenses, with business-type activities accounting for 4.5% of the total expenses for the District. Instructional expenses and services totaled 51.7% of the total governmental expenses. 16

23 Adams County School District 14 Changes in Net Assets For June 30, 2010 and 2009 Governmental activities Business-type activities Total REVENUES Program revenues Charges for services $ 0 $ 0 $ 787,287 $ 656,320 $ 787,287 $ 656,320 Operating grants and contributions 11,819,682 9,838,136 2,966,365 2,613,710 14,786,047 12,451,846 General revenues Taxes: Property taxes 25,493,529 25,059, ,493,529 25,059,965 Specific ownership taxes 1,742,041 1,940, ,742,041 1,940,348 Grants not restricted to specific programs 1,601,233 1,614, ,601,233 1,614,789 State equalization 36,775,469 32,960, ,775,469 32,960,291 Investment earnings 103, , , ,472 Miscellaneous 1,863,812 1,875, ,863,812 1,875,401 Total revenues 79,399,264 73,534,862 3,753,672 3,270,570 83,152,936 76,805,432 EXPENSES Instructional services 35,852,977 36,357, ,852,977 36,357,316 Operation and maintenance 9,806,015 8,375, ,806,015 8,375,355 Pupil services 6,075,319 5,271, ,075,319 5,271,708 Central support services 3,249,458 3,033, ,249,458 3,033,224 School administration 3,832,092 4,248, ,832,092 4,248,702 Instructional staff 5,153,995 4,365, ,153,995 4,365,083 Pupil transportation 2,348,355 1,883, ,348,355 1,883,602 Business administration 1,075,206 1,078, ,075,206 1,078,572 General administration 744, , , ,859 Community services 301, , , ,094 Adult education 88, , , , ,158 Other support services 577, , , ,042 Non-instructional services Nutrition services 131,700 31,681 2,990,867 3,105,226 3,122,567 3,136,907 Interest and fiscal charges 3,208,339 4,614, ,208,339 4,614,771 Charter school 3,367,398 3,134, ,367,398 3,134,349 Total expenses 75,813,528 73,638,697 3,543,746 3,661,487 79,357,274 77,300,184 Change in net assets 3,585,736 (103,835) 209,926 (390,917) 3,795,662 (494,752) Net assets - beginning 36,975,618 37,079, , ,491 37,494,192 37,988,944 Net assets - ending $ 40,561,354 $ 36,975,618 $ 728,500 $ 518,574 $ 41,289,854 $ 37,494,192 17

24 FUND FINANCIAL ANALYSIS Adams County School District 14 uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the District s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the District s financing requirements. In particular, unreserved fund balance may serve as a useful measure of the District s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year the District s governmental funds reported a combined ending fund balance of $18,207,526. Major Governmental Funds General Fund The General Fund is the major operating fund of the District, providing the majority of the resources for the educational and support programs. Revenues for the General Fund totaled $63.2 million in fiscal year compared to $59.2 million in fiscal year , an increase of 6.83%. State revenues increased while Federal and local revenues decreased. The most significant increase in State revenue is related to equalization payments. Equalization payments increased due to an increase in funded pupil count. The most significant decrease in Federal revenues is related to the delay of Impact Aid payments. The most significant decrease in local revenues can be found in investment and miscellaneous income. Investment income decreased due to a reduction in interest rates. FY FY Amount of Change Percentage of Change Revenues Federal Impact Aid $ 1,487,646 $ 1,501,390 $ (13,744) -0.92% Other 113, , % Subtotal 1,601,233 1,614,789 (13,556) State Equalization payments 36,775,469 32,960,291 3,815, % Vocational education 310, , , % Exceptional children's act (ECEA) 1,326,514 1,389,331 (62,817) -4.52% Transportation reimbursement 431, ,798 44, % ELPA reimbursement 350, ,526 55, % Other 210 1,020 (810) % Subtotal 39,195,294 35,147,332 4,047,962 Local Property taxes 20,683,827 20,633,064 50, % Payment in lieu of taxes 82,545 85,011 (2,466) -2.90% Investment income 7,133 66,907 (59,774) % Miscellaneous 1,673,168 1,650,756 22, % Subtotal 22,446,673 22,435,738 10,935 Total revenues $ 63,243,200 $ 59,197,859 $ 4,045, % 18

25 Fiscal year General Fund expenditures, which include the accrual for teacher salaries and benefits, totaled $57.9 million, compared to $57.4 million in fiscal year This represents an increase of $.5 million (0.80%) from the previous fiscal year. The following table compares expenditures for fiscal years and using the full accrual basis of accounting. FY FY Amount of Change Percentage of Change Expenditures Instructional services $ 30,415,397 $ 31,627,728 $ (1,212,331) -3.83% Operations and maintenance 6,740,118 6,198, , % Pupil services 4,137,481 3,474, , % Central support services 2,758,548 2,593, , % School administration 3,757,805 3,982,895 (225,090) -5.65% Instructional staff 2,014,962 1,986,138 28, % Pupil transportation 1,857,519 1,996,520 (139,001) -6.96% Business administration 867, ,385 (55,789) -6.04% General administration 625, ,293 26, % Other supporting services 263, ,783 66, % Community services 162,473 89,358 73, % Food service operations 19,247 27,155 (7,908) % Capital outlay 870, , , % Charter school 3,367,398 3,134, , % Total Expenditures $ 57,858,387 $ 57,399,709 $ 458, % Grants Fund The Grants Fund, a special revenue fund, maintains a separate accounting for Federal, State and local grant-funded programs which normally could have a different fiscal period than that of the District. Funds are received for a specific purpose to address a particular student group or need related to student achievement. The funds must be supplemental to the efforts of the District and are not used to supplant District funding responsibilities. Specific rules, statutes and regulations guide these programs, and the money received is accounted for independently of local budget funds. Board of Education policy regulates the application and receipt of these funds. Fiscal year grant revenues totaled $9.2 million and expenditures totaled $9.4 million compared to $7.7 million for each in the fiscal year. Bond Redemption Fund The Bond Redemption Fund is reported as a major fund for the fiscal year The Bond Redemption Fund is used to account for the requirements of the general obligation bonds. The primary revenue source is from a voter approved mill levy to satisfy principal and interest requirements on the debt. Principal and interest payments were $6.0 million for fiscal year compared to $5.9 million for the fiscal year Non-major Governmental Funds Capital Reserve Fund The Capital Reserve Fund is considered a non-major fund for fiscal year reporting purposes. Capital Reserve Fund total revenues and other financing sources totaled $3.5 million for fiscal year compared to $3.6 million for fiscal year Other financing sources included a $3.0 million transfer from the General Fund and $0.5 million in capital lease proceeds. 19

26 Capital Projects Building Fund Also reported as a non-major fund for fiscal year , the Capital Projects Building Fund is used to account for the voter approved projects. Total revenues for the Capital Projects Building Fund were $86.9 thousand for fiscal year Total expenditures were $3.9 million which related to the completion of the new high school that opened in August Proprietary Funds The District s proprietary funds provide the same type of information found in the district-wide financial statements, but in more detail. Proprietary funds account for operations that are organized to be selfsupporting through user charges. The District s proprietary funds consist of the Food Service Fund and the Adult Education Fund. Food Service Fund The Food Service Fund provides complete food services for the District including National School Lunch Program, National Breakfast Program and Summer Food Service Program. Primary revenues come from these program reimbursements. Fiscal year reported a net gain of $141,662 resulting in total net assets of $660,193. This gain is from implementing tighter control over food costs. Adult Education Fund The Adult Education Fund provides education services for adults within the community. Net assets increased by $68,264 resulting in ending net assets of $68,307 in the fiscal year. Revenues increased to $621,123 in fiscal year from $452,488 in fiscal year This was a result of a significant increase of student enrollment in the program. Expenditures decreased to $552,879 in fiscal year from $556,261 in fiscal year

27 GENERAL FUND BUDGETARY HIGHLIGHTS The proposed budget for fiscal year was presented to the Board of Education on April 14, 2009, with total General Fund appropriations of $61,223,470, net of the charter school allocation. A series of public budget hearings in March and April brought clarification and further refinement of our financial resources to our District goals, student achievement and our contractual obligations. On June 23, 2009, the budget was adopted and was later amended on January 26, 2010, to include the salary and benefit negotiated settlement. Overall actual revenues were lower than budgeted revenues by $697,139. Total operating expenditures were $4,666,133 under budget. Together, these increased the fund balance by $2,374,242. CAPITAL ASSETS AND DEBT ADMINISTRATION The District s governmental activities net investment in capital assets totaled $117,844,050 for fiscal year , which is an increase of $835,804 over the prior year. The increase is primarily due to the new high school building that was completed and put into operation in the current fiscal year. At June 30, 2010, the District had total bonded debt outstanding of $89,405,000 backed by the full faith and credit of the District. In November 2006, the voters in our District approved $78 million in general obligation bonds along with a mill levy increase to fund the construction of a new high school/community learning center, install air conditioning in schools that do not already have it, expand our full-day kindergarten facilities and upgrade our middle school science labs. The final $3.375 million of general obligation bonds were issued on January 3, Additional information on the District s capital assets and debt administration can be found in note F and G of this report. ECONOMIC FACTORS AND NEXT YEAR S BUDGETS The largest source of revenue for the District s operating funds is derived from the Public School Finance Act funding formula. In April 1994, the Colorado state legislature enacted the Public School Finance Act of 1994, which remains in effect. Funding is based on a statewide base per pupil funding formula that is adjusted for individual school districts by recognizing differences in personnel costs, non-personnel costs, local cost of living and school district size. Additional funding is also provided based on the presence of at-risk pupils. For FY , the state reduced K-12 funding by $260 million, reducing the per pupil revenue to the District from $7,711 to $7,694. As of November 4, 2010, the state is facing a $257 million short-fall in revenue in FY of which there is a likely potential for a portion of that short-fall to be rescinded from K-12 education funding. In November 2000, Colorado voters approved Amendment 23, Funding for Public Schools, which requires funding to increase by at least the rate of inflation plus one percent for a ten-year period beginning FY , and by at least the rate of inflation thereafter. In addition, State revenues collected from a tax of one-third of one-percent on Federal taxable income shall be deposited into the State Education Fund. Therefore, actual and projected student enrollment counts influence the District s current and future operating budgets. Enrollments for FY are estimated to increase by about 1% compared to FY levels. 21

28 REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of Adams County School District 14 s finances for all those with an interest in the District. Questions concerning any of the information provided in this report or requests for additional information should be addressed to: Division of Financial Services Adams County School District East 60 th Avenue Commerce City, Colorado

29

30 Adams County School District 14 Statement of Net Assets June 30, 2010 Governmental Activities Primary Government Business-type Activities Component Units Total ASSETS Current assets: Cash and investments $ 19,555,436 $ 92,978 $ 19,648,414 $ 1,476,952 Accounts receivable 449, ,989 2,848 Property taxes receivable 761, ,589 0 Internal balances 225,663 (225,663) 0 0 Due from other governments 2,476, ,039 2,768,318 0 Inventories 77, , ,376 0 Prepaid expenses 155, ,863 6,220 Total current assets 23,701, ,592 24,016,549 1,486,020 Non-current assets: Restricted cash and investments 80, ,673 1,134,829 Equity in insurance pool 687, ,555 0 Deferred charges, net of accumulated amortization 1,244, ,244, ,602 Capital assets, not depreciated Land and land improvements 11,796, ,796, ,000 Capital assets, net of accumulated depreciation Buildings and improvements 145,239, ,239,660 6,776,772 Machinery and equipment 8,598,257 1,676,578 10,274, ,874 Accumulated depreciation (47,790,820) (1,115,908) (48,906,728) (45,523) Total non-current assets 119,857, , ,417,675 9,232,554 Total assets 143,558, , ,434,224 10,718,574 LIABILITIES Current liabilities: Accounts payable 563,307 15, , ,496 Retainage payable 55, ,081 0 Accrued liabilities 1,410, ,410,632 0 Accrued salaries and benefits 3,327, ,896 3,431, ,499 Unearned revenue 313, ,941 0 Accrued interest payable 351, , ,763 Due within one year 2,880,751 25,209 2,905, ,000 Total current liabilities 8,902, ,292 9,047, ,758 Non-current liabilities: Due in more than one year 94,094,684 2,470 94,097,154 8,596,847 Total liabilities 102,997, , ,144,370 9,323,605 NET ASSETS Invested in capital assets, net of related debt 23,205, ,670 23,765,682 (619,122) Restricted for: Debt service 5,397, ,397, ,817 Emergencies 2,421, ,421, ,500 Insurance 687, ,555 0 Colorado Preschool Program 529, ,530 0 Repair and replacement ,249 Unrestricted 8,320, ,830 8,488,829 1,050,525 Total net assets $ 40,561,354 $ 728,500 $ 41,289,854 $ 1,394,969 The notes to the financial statements are an integral part of this statement. 24

31 Adams County School District 14 Statement of Activities For the Year Ended June 30, 2010 Functions/Programs Expenses Charges for Services Program Revenues Operating Grants and Contributions Net (Expense) Revenue and Changes in Net Assets Governmental Activities Business-type Activities Total Component Units 25 The notes to financial statements are an integral part of this statement. Primary Government Governmental activities: Instructional services $ 35,852,977 $ 0 $ 5,224,391 $ (30,628,586) $ 0 $ (30,628,586) $ 0 Operation and maintenance 9,806, ,339 (9,782,676) 0 (9,782,676) 0 Pupil services 6,075, ,928,887 (4,146,432) 0 (4,146,432) 0 Central support services 3,249, ,990 (3,239,468) 0 (3,239,468) 0 School administration 3,832, ,652 (3,634,440) 0 (3,634,440) 0 Instructional staff 5,153, ,054,200 (2,099,795) 0 (2,099,795) 0 Pupil transportation 2,348, ,278 (1,905,077) 0 (1,905,077) 0 Business administration 1,075, ,721 (858,485) 0 (858,485) 0 General administration 744, ,727 (633,096) 0 (633,096) 0 Other supporting services 577, ,729 (308,334) 0 (308,334) 0 Community services 301, ,468 (162,473) 0 (162,473) 0 Food service operations 131, ,453 (19,247) 0 (19,247) 0 Education for adults 88, , Interest and fiscal charges 3,208, (3,208,339) 0 (3,208,339) 0 Charter school 3,367, (3,367,398) 0 (3,367,398) 0 Total governmental activities 75,813, ,819,682 (63,993,846) 0 (63,993,846) 0 Business activities: Nutrition services 2,990, ,164 2,966, , ,662 0 Adult education 552, , ,244 68,244 0 Total business-type activities 3,543, ,287 2,966, , ,906 0 Total primary government $ 79,357,274 $ 787,287 $ 14,786,047 (63,993,846) 209,906 (63,783,940) 0 Component units activities $ 3,692,014 $ 17,975 $ 278,253 (3,395,786) General revenues: Taxes: Property taxes 25,493, ,493,529 0 Specific ownership taxes 1,742, ,742,041 0 Grants not restricted to specific programs 1,601, ,601,233 43,710 State equalization 36,775, ,775,469 0 Investment earnings 103, ,518 61,605 Miscellaneous 1,863, ,863,812 3,379,032 Total general revenues and transfers 67,579, ,579,602 3,484,347 Change in net assets 3,585, ,926 3,795,662 88,561 Net assets - beginning 36,975, ,574 37,494,192 1,306,408 Net assets - ending $ 40,561,354 $ 728,500 $ 41,289,854 $ 1,394,969

32 Adams County School District 14 Balance Sheet Governmental Funds June 30, 2010 General Fund Grants Fund Bond Redemption Fund Nonmajor Governmental Funds Total Governmental Funds ASSETS Cash and investments $ 12,354,298 $ 0 $ 5,187,276 $ 2,013,862 $ 19,555,436 Accounts receivable 449, ,989 Property taxes receivable 551, , ,589 Due from other funds 1,858, ,858,080 Due from other governments 0 2,476, ,476,279 Inventories 77, ,138 Prepaid items 124,497 30, ,863 Deposit in Insurance Pool 687, ,555 Restricted cash and investments 20, ,665 80,673 Total assets $ 16,123,350 $ 2,507,044 $ 5,397,080 $ 2,075,128 $ 26,102,602 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 314,398 $ 148,870 $ 0 $ 100,039 $ 563,307 Retainage payable ,081 55,081 Accrued liabilities 1,410, ,410,632 Accrued salaries and benefits 2,915, , ,327,737 Due to other funds 0 1,632, ,632,417 Deferred revenue 277, , , ,902 Total liabilities 4,918,420 2,706, , ,120 7,895,076 Fund balance: Reserved for: Inventories 77, ,138 Prepaid items 124,497 30, ,863 Security deposits 20, ,008 TABOR amendment 2,421, ,421,178 Colorado Preschool Program 529, ,530 Capital projects ,084 2,084 Debt service 0 0 5,281, ,281,696 Deposit in insurance pool 687, ,555 Unreserved, undesignated reported in: General fund 7,345, ,345,024 Special revenue funds 0 (229,873) 0 1,917,323 1,687,450 Total fund balance 11,204,930 (199,108) 5,281,696 1,920,008 18,207,526 Total liabilities and fund balance $ 16,123,350 $ 2,507,044 $ 5,397,080 $ 2,075,128 $ 26,102,602 The notes to financial statements are an integral part of this statement. 26

33 Adams County School District 14 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets June 30, 2010 Total fund balances for governmental funds $ 18,207,526 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 117,844,050 Other long-term assets are not available to pay for current period expenditures and therefore are deferred in the funds 591,961 Long-term liabilities, including long-term debt outstanding ($96,975,435) accrued interest payable of ($351,475), net of unamortized bond issuance costs $1,244,727 are not due and payable in the current period and therefore are not reported in the funds (96,082,183) Total net assets of governmental activities $ 40,561,354 The notes to financial statements are an integral part of this statement. 27

34 Adams County School District 14 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For The Year Ended June 30, 2010 General Fund Grants Fund Bond Redemption Fund Nonmajor Governmental Funds Total Governmental Funds REVENUES Federal $ 1,601,233 $ 8,371,549 $ 0 $ 0 $ 9,972,782 State 39,195, , ,703 39,614,825 Local: Taxes 20,683, ,518, ,202,412 Payments in lieu of taxes 82, , ,941 Investment income 7, ,941 88, ,498 Miscellaneous 1,673, , ,156,540 Total revenues 63,243,200 9,200,749 6,560, ,127 79,166,998 EXPENDITURES Current operating: Instructional services 30,415,397 3,170, ,585,669 Operations and maintenance 6,740,118 23, ,912,991 8,676,448 Pupil services 4,137,481 1,786, ,923,728 Central support services 2,758,548 9, ,768,538 School administration 3,757, , ,955,457 Instructional staff 2,014,962 3,034, ,049,373 Pupil transportation 1,857,519 11, ,869,139 Business administration 867, , ,084,317 General administration 625, , ,353 Other supporting services 263, , ,990 Community services 162, , ,941 Food service operations 19, , ,700 Education for adults 0 71, ,173 Capital outlay 870, , ,450,641 5,567,652 Debt Service: Principal retirement 0 0 1,725, ,815 2,121,815 Interest and fiscal charges 0 0 4,311, ,891 4,472,660 Charter school 3,367, ,367,398 Total expenditures 57,858,387 9,399,857 6,036,769 6,921,338 80,216,351 Excess of revenues over (under) expenditures 5,384,813 (199,108) 524,153 (6,759,211) (1,049,353) OTHER FINANCING SOURCES (USES) Capital lease , ,999 Transfers in ,010,571 3,010,571 Transfers out (3,010,571) (3,010,571) Total other financing sources (uses) (3,010,571) 0 0 3,482, ,999 Net change in fund balances 2,374,242 (199,108) 524,153 (3,276,641) (577,354) Fund balance - beginning 8,830, ,757,543 5,196,649 18,784,880 Fund balance - ending $ 11,204,930 $ (199,108) $ 5,281,696 $ 1,920,008 $ 18,207,526 The notes to financial statements are an integral part of this statement. 28

35 Adams County School District 14 Reconciliation of the Statement of Revenues Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2010 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds $ (577,354) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which the sum of depreciation expense of ($3,705,013) exceeded the sum of capital outlays of $4,540, ,804 Revenues in the statement of activities that do not provide current financial resources are deferred in the funds. This amount represents property taxes and grants not available at year end. 232,266 Bond and capital lease proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items: capital lease proceeds ($471,999), amortization of bond issuance costs ($73,909), amortization of bond premium $279,574, amortization of bond discount ($6,153), amortization of loss on refunding ($123,527) and a decrease in accrued interest payable of $74,094. (321,920) Arbitrage rebate, compensated absences and early retirement are not recorded as an expenditure in the governmental statements until it becomes due and payable. However, in the statement of activities they are reported as an expense when earned or incurred. 1,295,125 Repayments of bond principal of $1,725,000 and capital leases of $396,815 are expenditures in the governmental funds, but they reduce long-term liabilities in the statement of net assets and do not affect the statement of activities. 2,121,815 Change in net assets of governmental activities $ 3,585,736 The notes to financial statements are an integral part of this statement. 29

36 Adams County School District 14 Statement of Net Assets Proprietary Funds June 30, 2010 Business-type Activities Enterprise Funds Food Service Fund Adult Education Fund Total ASSETS Current assets: Cash and cash equivalents $ 1,085 $ 91,893 $ 92,978 Due from other governments 292, ,039 Inventories: Purchased food 138, ,277 Non-food 16, ,961 Total current assets 448,362 91, ,255 Non-current assets: Capital assets, net of accumulated depreciation Machinery and equipment 1,628,307 48,271 1,676,578 Accumulated depreciation (1,074,273) (41,635) (1,115,908) Total non-current assets 554,034 6, ,670 Total assets 1,002,396 98,529 1,100,925 LIABILITIES Current liabilities: Accounts payable 13,417 1,770 15,187 Accrued salaries and benefits 87,460 16, ,896 Due to other funds 225, ,663 Compensated absences due within one year 13,313 11,896 25,209 Total current liabilities 339,853 30, ,955 Non-current liabilities: Compensated absences due in more than one year 2, ,470 Total liabilities 342,203 30, ,425 NET ASSETS Invested in capital assets 554,034 6, ,670 Unrestricted 106,159 61, ,830 Total net assets $ 660,193 $ 68,307 $ 728,500 The notes to financial statements are an integral part of this statement. 30

37 Adams County School District 14 Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For The Year Ended June 30, 2010 Business-type Activities Enterprise Funds Food Service Adult Education Fund Fund Total OPERATING REVENUES Food sales $ 166,164 $ 0 $ 166,164 Tuition and fees 0 621, ,123 Total operating revenues 166, , ,287 OPERATING EXPENSES Food service operations 2,982, ,982,959 Adult education 0 552, ,879 Total operating expenses 2,982, ,879 3,535,838 Operating income (loss) (2,816,795) 68,244 (2,748,551) NONOPERATING REVENUES (EXPENSES) Federal aid: Lunch reimbursements 2,151, ,151,340 Breakfast reimbursements 564, ,395 Summer food reimbursements 18, ,150 USDA commodity food donations 153, ,348 State nutrition match 33, ,565 Other state revenue 45, ,567 Loss on disposal of capital assets (7,908) 0 (7,908) Investment income Total nonoperating revenue (expenses) 2,958, ,958,477 Change in net assets 141,662 68, ,926 Total net assets - beginning 518, ,574 Total net assets - ending $ 660,193 $ 68,307 $ 728,500 The notes to financial statements are an integral part of this statement. 31

38 Adams County School District 14 Statement of Cash Flows Proprietary Funds For The Year Ended June 30, 2010 Business-type Activities Enterprise Funds Food Service Adult Education Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from users $ 166,164 $ 621,123 $ 787,287 Cash paid to suppliers (1,505,515) (81,780) (1,587,295) Cash paid to employees (1,236,173) (457,119) (1,693,292) Net cash provided (used) by operating activities (2,575,524) 82,224 (2,493,300) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Federal and state financial assistance received 2,562, ,562,663 Cash received from other funds 19, ,201 Net cash provided by noncapital financing activities 2,581, ,581,864 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Sale of equipment 4, ,075 Purchase of equipment (10,414) 0 (10,414) Net cash provided (used) by capital and related financing activities (6,339) 0 (6,339) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments Net cash provided by investing activities Net increase in cash and cash equivalents 1 82,244 82,245 Cash and cash equivalents - beginning 1,084 9,649 10,733 Cash and cash equivalents - ending $ 1,085 $ 91,893 $ 92,978 OPERATING INCOME (LOSS) $ (2,816,795) $ 68,244 $ (2,748,551) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Commodities (included in food cost) 153, ,348 Depreciation 89,335 15, ,262 Change in assets and liabilities: (Increase) decrease in purchased food inventories 9, ,187 (Increase) decrease in non-food inventories 8, ,176 Increase (decrease) in accounts payable 11, ,055 Increase (decrease) in accrued salaries and benefits (33,687) (2,214) (35,901) Increase (decrease) in compensated absences payable 3,743 (619) 3,124 Total adjustments 241,271 13, ,251 Net cash provided (used) by operating activities $ (2,575,524) $ 82,224 $ (2,493,300) Non-cash transactions: Commodity donations $ 153,348 $ 0 $ 153,348 The notes to financial statements are an integral part of this statement. 32

39 Adams County School District 14 Statement of Fiduciary Assets and Liabilities Fiduciary Fund June 30, 2010 Agency ASSETS Current assets: Cash and investments $ 219,342 Total assets $ 219,342 LIABILITIES Current liabilities: Due to student organizations $ 219,342 Total liabilities $ 219,342 The notes to financial statements are an integral part of this statement. 33

40 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Adams County School District 14 (The District ) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the acceptable standard-setting body for establishing governmental accounting and financial reporting principles. A summary of the District s significant policies consistently applied in the preparation of these financial statements follows. These policies are presented to assist the reader in interpreting the financial statements and other data in the report. The policies are considered essential and should be read in conjunction with the accompanying financial statements. 1. Reporting Entity The financial reporting entity consists of the District and organizations for which the District is financially accountable. All funds, organizations, institutions, agencies, departments and offices that are not legally separate are part of the District. In addition, any legally separate organizations for which the District is financially accountable are considered part of the reporting entity. Financial accountability exists if the District appoints a voting majority of the organization s governing board and is able to impose its will on the organization, or if the organization provides benefits to or imposes financial burdens on the District. The definition of the reporting entity is based primarily on financial accountability. The District includes Community Leadership Academy and the Adams 14 Education Foundation within its reporting entity because the charter school and foundation are fiscally dependent on the District, provide resources exclusively to the District, and their exclusion would render the District s financial statements incomplete. Since the charter school and foundation have a separately elected board, the balances and transactions of the charter school and foundation are discretely presented in the financial statements. The charter school and foundation are considered nonmajor for financial reporting purposes. Separate financial statements for Community Leadership Academy and Adams 14 Education Foundation may be obtained by contacting them at the corresponding addresses listed below. Community Leadership Academy Adams 14 Education Foundation 6880 Holly Street 5291 E 60 th Avenue Commerce City, CO Commerce City, CO Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the District and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges for interfund services that are reasonably equal to the services provided. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component units for which the District is financially accountable. 34

41 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 The statement of activities demonstrates the degree to which the direct expenses of a given function or a segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to students or others 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. Internally dedicated revenues are reported as general revenues rather than as program revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the District s financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 3. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The fiduciary fund financial statements are reported using the accrual basis of accounting. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities within sixty (60) days after the end of the current fiscal year, except grant revenues, which are considered to be available when they are collected within ninety (90) days. Property taxes, specific ownership taxes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when the District receives cash. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, are recorded only when payment is due. The District reports the following major governmental funds: The General Fund is the District s primary operating fund. It accounts for all financial resources of the District, except those that are required to be accounted for in another fund. The Grants Fund is provided to maintain a separate accounting for fully funded Federal, State and local grant programs. 35

42 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 The Bond Redemption Fund is provided to maintain a separate accounting for the District s bond principal and interest payments using property taxes dedicated for debt service. The District designates the following major proprietary fund: The Food Service Fund accounts for the financial activities associated with the District s school breakfast and lunch programs. Additionally, the District reports the following fund type: The Agency Fund is used to account for resources legally held in trust for use by individual school administration for selected programs. All resources of the fund, including any earnings on invested resources, may be used to support the school activities. There is no requirement that any portion of these resources be preserved as capital. The District holds all resources in a purely custodial capacity. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent privatesector guidance for their business-type activities and enterprise funds, subject to the same limitation. The District has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the District s Nutrition Services Fund, and the Adult Education Fund come from various sources which include grants and charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the District s policy to use restricted resources first, and then unrestricted resources as they are needed. 4. Assets, Liabilities and Net Assets or Fund Balance Deposits and Investments The District s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments for the District are reported at fair value. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as due to/from other funds (i.e., the current portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. 36

43 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 All trade and property tax receivables are shown net of an allowance for uncollectibles. The County bills and collects property taxes for all taxing districts within the County. Property tax receipts are remitted to the District in the subsequent month. The taxes are recorded as a receivable and reported as deferred revenue if not available. The County collects specific ownership taxes on motor vehicles registered within the District s assessment area. Tax receipts collected by the County are remitted to the District in the subsequent month. Prepaid Items Payments made to vendors for services that will benefit periods beyond year-end are recorded as prepaid items using the consumption method. A current asset for the prepaid amount is recorded at the time of payment, and an expenditure/expense is reported in the year in which the services are consumed. Inventories General Fund purchased inventories are stated at cost, determined by the weighted average cost method and recorded under the consumption method. Inventory in the General Fund consists of expendable supplies held for consumption. Expenditures for supplies are recorded upon delivery of these items to the various schools and departments from the District warehouse. Food Service Fund purchased inventories are stated at cost, determined by the weighted average cost method and recorded under the consumption method. Expenses for food items are recorded when used. Capital Assets Capital assets, which include property and equipment, are reported in the applicable governmental or business-type activities column in the government-wide financial statements and proprietary funds in the fund financial statements. The District defines capital assets as assets with an individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materiality extend assets lives are not capitalized. Property and equipment of the District is depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings & Improvements Machinery & Equipment

44 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 Accrued Salaries and Benefits Salaries and retirement benefits of certain contractually employed personnel are paid over a twelvemonth period from August through July, but are incurred over the school year which is approximately ten months. Accordingly, the accrued compensation is reflected as a liability in the General, Grants, Food Service and Adult Education Funds in the accompanying fund financial statements. Arbitrage Rebate Liability Arbitrage rebate liability is an estimate calculated on Series 2006 bond proceeds invested at rates higher than the cost of bonds. This liability was paid in full on August 20, Deferred Revenues Deferred revenues arise when resources are received by the District before it has legal claim to them or when assets are not available as current financial resources in the governmental funds. Grant funds that have been collected but the corresponding expenditures have not been incurred are reported as deferred revenues. Property taxes and grants earned but not available are also recorded as deferred revenue in the governmental fund financial statements. Compensated Absences/Early Retirement Vacation pay is accrued for all classified and administrative personnel at a rate based upon years of service. District policy allows eligible employees to accumulate up to thirty (30) days of vacation leave. Payment is made to eligible employees upon separation with the District. Sick pay is accumulated for all certificated, administrative and classified full-time personnel at rates between $15 and $30 per day depending on the employee s classification. District policy allows employees to accumulate unused sick leave without limit. Payment is made to employees upon separation with the District if they have met the required years of service of 10 and 20 years for their classification. Sick pay is reported as a liability in the government-wide financial statements. The District provides a financial incentive for early retirement to employees with at least 20 years of continuous full-time service with the District. The retirement request must be submitted to the District no later than five years after they qualify. The maximum salary on which the early retirement benefit will be computed shall be the employee s twentieth (20 th ) year salary. The early retirement incentive is equal to eighty percent (80%) of the twentieth year salary. The retirement incentive is made in three (3) equal annual installments. Early retirement is reported as a liability in the government-wide financial statements upon acceptance by the retiring employees and as a liability in the fund financial statements when due. 38

45 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 Long-term Obligations In the government-wide financial statements and in the proprietary fund type statement of net assets, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Net Assets/Fund Balance In the government-wide financial statements and the proprietary funds in the fund financial statements, net assets are restricted when constraints placed on the net assets are externally imposed. In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available or are legally restricted by outside parties for a specific purpose. NOTE B ACCOUNTABILITY At June 30, 2010, the Grants Fund had deficit fund balance of $199,108, primarily as a result of delayed payments from the state. The District expects to collect the full amount by the end of the calendar year. NOTE C CASH, CASH EQUIVALENTS AND INVESTMENTS Cash and investments reported in the financial statements are as follows: Cash and investments $ 19,648,414 Restricted cash and investments 80,673 Fiduciary fund cash and investments 219,342 Total $ 19,948,429 A summary of deposits and investments at June 30, 2010 follows: Petty Cash $ 1,185 Deposits 1,707,287 Investments 18,239,957 Total $ 19,948,429 39

46 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, Deposits The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit cash in eligible public depositories. Eligibility is determined by state regulations. Amounts on deposit in excess of Federal insurance levels must be collateralized by eligible collateral as determined by the PDPA. PDPA allows the financial institution to create a single collateral pool for all public funds held. The pool is to be maintained by another institution or held in trust for all the uninsured public deposits as a group. The market value of the collateral must be at least equal to 102% of the uninsured deposits. At June 30, 2010, the District had bank deposits of $1,967,354 collateralized by securities held by the financial institution s agent but not in the District s name. 2. Investments The District s investment policy, DFAA, defines eligible investments as well as the requirements to comply with State statutes which specify investment instruments meeting defined rating, maturity and concentration risk criteria in which local governments may invest. State statutes do not address custodial risk. Following is a list of the investment instruments that comply with State statutes: Obligations of the United States and certain U.S. Agency securities Certain international agency securities General obligation and revenue bonds of U.S. local government entities Bankers acceptances of certain banks Commercial paper Written repurchase agreements collateralized by certain authorized securities Certain money market funds Guaranteed investment contracts Local government investment pools Maturity Fair Value S&P Rating 12 Months or Less Local Government Investment Pool $ 17,359,532 AAA $ 17,359,532 Repurchase Agreement (Vectra Bank) 880,425 N/A 880,425 $ 18,239,957 $ 18,239,957 The District has invested $17,359,532 in the Colorado Surplus Asset Fund Trust (CSAFE). CSAFE is a local government investment pool trust fund organized under C.R.S , et seq. The Colorado Division of Securities administers and enforces the requirements of creating and operating CSAFE. CSAFE operates similarly to a money market fund as all funds are available without limitation on a daily basis and each share is equal in value to $1.00. Investments of CSAFE consist of U.S. Treasury, U.S. Agency securities and repurchase agreements. The designated custodial bank provides safekeeping and depository services to CSAFE in connection with the direct investment and withdrawal functions of CSAFE. Substantially all securities owned by CSAFE are held by the Federal Reserve Bank in an account maintained for the custodial bank. The custodian s internal records identify the investments owned by the participating governments. 40

47 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 To minimize credit risk, or the risk that an insurer or other counterparty to an investment will not fulfill its obligations, the District s investment policy and State statutes limit direct investments in U.S. government agency securities to the highest rating issued by at least two nationally recognized statistical rating organizations (NRSROs). In addition, repurchase agreements must be collateralized at no less than 102% of the market value with U.S. agency or treasury securities. The District s investment policy and state statutes also limit investments of money market funds to those that maintain a constant share price, with a maximum remaining maturity in accordance with Rule 29-7, and either have assets of one billion dollars or the highest rating issued by a NRSRO. The concentration of credit risk, or the risk of loss attributed to the magnitude of a government s investment in a single issuer, occurs when investments are not diversified. District policy states that its intent is to maintain a proportionate mix of investments of no more than 25% of the total investment portfolio in Jumbo CDs and 75% of the total in government securities. Of the portion invested in government securities and no more than one-third in government agency securities. At June 30, 2010, the District s investment in a repurchase agreement was 5% of the District s total investments. Interest rate risk is the extent to which changes in interest rates will adversely affect the fair value of an investment. The District does not have a formal investment policy that limits investment maturities as means of managing its exposure to fair value losses arising from increasing interest rates. However, the District s investment policy follows State statutes. State statutes generally limit investments to an original maturity of five years unless the governing board authorizes the investment for a period in excess of these limits. 3. Restricted Cash and Investments Restricted cash and investments totaled $80,673, which represents a security deposit held in the General Fund for a pending sale agreement and unspent bond proceeds in the Building Fund. NOTE D PROPERTY TAXES Under Colorado law, all property taxes become due and payable in the year following that in which they are levied. Property taxes are recognized as revenue based upon when received by the County Treasurer. The 2010 fiscal year property tax calendar for Adams County was as follows: Assessor certifies total assessed valuation... December 11, 2009 Levy date... January 1, 2010 Lien date... January 1, 2009 Tax bills mailed... January 15, 2010 First installment due... February 28, 2010 Second installment due... June 15, 2010 If paid in full, due... April 30, 2010 Tax sale: Delinquent property taxes... November 13,

48 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE E INTERFUND BALANCES AND TRANSACTIONS Interfund balances at June 30, 2010, were as follows: FUND DUE FROM OTHER FUNDS DUE TO OTHER FUNDS General Fund $ 1,858,080 $ 0 Grants Fund 0 1,632,417 Food Service Fund 0 225,663 Total $ 1,858,080 $ 1,858,080 The District maintains a pooled cash account that all funds use to deposit money into and write checks out of. Periodically, usually monthly, an accounting and settlement is made of all applicable interfund transactions. A due to interfund balance represents the net amount owed to other funds for transactions incurred since the last settlement. A due from interfund balance represents the net amount due from other funds for transactions incurred since the last settlement. Interfund transfer activity for the year ended June 30, 2010 is as follows: FUND Governmental Funds TRANSFERS IN TRANSFERS OUT General Fund $ 0 $ 3,010,571 Capital Reserve Fund 3,010,571 0 Total Governmental Funds 3,010,571 3,010,571 Total all funds $ 3,010,571 $ 3,010,571 The General Fund transferred $1,500,000 to the Capital Reserve Fund for the potential demolition of the old Adams City High School site and an additional $1,510,571 for regular maintenance of building and purchase of capital equipment. 42

49 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE F CAPITAL ASSETS Activity for capital assets, which are capitalized by the District, is summarized below: Balance Additions Deletions Governmental Activities Capital Assets Not Being Depreciated Land $ 11,796,953 $ 0 0 Balance $ $ 11,796,953 Construction in Progress 83,893,677 3,901,013 87,794,690 0 Total Not Being Depreciated 95,690,630 3,901,013 87,794,690 11,796,953 Being Depreciated Buildings 57,344,209 87,895, ,239,660 Machinery and Equipment 8,396, , ,152 8,598,257 Total Being Depreciated 65,740,575 88,434, , ,837,917 Less: Accumulated Depreciation Buildings 37,294,900 3,240, ,535,075 Machinery and Equipment 7,128, , ,152 7,255,745 Total Accumulated Depreciation 44,422,959 3,705, ,152 47,790,820 Total Being Depreciated, Net 21,317,616 84,729, ,047,097 Total Governmental Activities Capital Assets, Net $ 117,008,246 $ 88,630,494 $ 87,794,690 $ 117,844,050 Business-Type Activities Capital Assets Being Depreciated Equipment 1,745,599 10,414 79,435 1,676,578 Total Being Depreciated 1,745,599 10,414 79,435 1,676,578 Less: Accumulated Depreciation Equipment 1,078, ,262 67,452 1,115,908 Total Accumulated Depreciation 1,078, ,262 67,452 1,115,908 Total Being Depreciated, Net Total Business-Type Activities 667,501 (94,848) 11, ,670 Capital Assets, Net $ 667,501 $ (94,848) $ 11,983 $ 560,670 43

50 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 Depreciation expense was charged to programs of the District as follows: Governmental Activities Instruction $ 2,230,613 Operations & Maintenance 1,473,340 Business-Type Activities 1,060 Total Governmental Activities 3,705,013 Business-Type Activities Food Services $ 89,335 Adult Education 15,927 Total Business-Type Activities 105,262 Total Depreciation $ 3,810,275 NOTE G LONG-TERM DEBT 1. Changes in Long-Term Debt The changes in long-term debt for the year ended June 30, 2010, are as follows: Balance at June 30, 2009 Additions Deletions Balance at June 30, 2010 Due Within One Year Governmental Activities General Obligation Bonds Dated February 24, ,160, ,515,000 11,645,000 1,550,000 Dated December 21, ,625, ,000 64,500, ,000 Dated January 23, ,000, ,000,000 0 Dated January 3, ,345, ,000 3,260,000 90,000 Bond Premium (2005) 477, , ,703 0 Bond Premium (2006) 4,708, ,272 4,499,420 0 Bond Discount (2007) (113,829) 0 (6,153) (107,676) 0 Bond Premium (2008) 228, , ,959 0 Deferred Amount on Refunding (988,210) 0 (123,527) (864,683) 0 Compensated Absences 517, , , , ,282 Early Retirement 752, , , , ,354 Capital Lease (2008) 2,242, ,664 2,162, ,267 Capital Lease (2009) 0 471, , , ,848 Arbitrage Rebate Liability 1,114, ,114, Totals $ 100,070,270 $ 988,855 $ 4,083,690 $ 96,975,435 $ 2,880,751 Business-Type Activities Compensated Absences $ 24,555 $ 26,492 $ 23,368 27,679 $ 25,209 Totals $ 24,555 $ 26,492 $ 23,368 $ 27,679 $ 25,209 The governmental activities compensated absences and early retirement are expected to be liquidated with revenues from the General Fund. 44

51 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 The Series 2005 General Obligation Bonds dated February 25, 2005, were issued for a total of $15,480,000 to finance improvements to school buildings. Principal payments are due annually on December 1 through Interest payments are due semi-annually on June 1 and December 1, with interest accruing at rates ranging from 3.5% to 5%. The Series 2006 General Obligation Bonds dated December 21, 2006, were issued for a total of $64,625,000 to finance a new high school and make improvements to school buildings. Principal payments are due annually beginning on December 1, 2009, through Interest payments are due semi-annually on June 1 and December 1, with interest accruing at rates ranging from 4.0% to 5.125%. The Series 2007 General Obligation Bonds dated January 23, 2007, were issued for a total of $10,000,000 to finance improvements to school buildings. Principal payments are due annually beginning on December 1, 2024, through Interest payments are due semi-annually on June 1 and December 1, with interest accruing at rates ranging from 4.0% to 5.25%. The Series 2008 General Obligation Bonds dated January 3, 2008, were issued for a total of $3,375,000 to finance improvements to school buildings. Principal payments are due annually beginning on December 1, 2008, through Interest payments are due semi-annually on June 1 and December 1, with interest accruing at rates ranging from 4.0% to 5.25%. The capital lease agreement dated October 3, 2008, is for energy performance equipment, including but not limited to lighting upgrades, HVAC systems, water/sewer improvements and an energy management system for a total of $2,242,942. Lease payments are due annually beginning on September 11, 2009, through 2021, with interest accruing at 4.64% per annum. The lease has been capitalized at the present value of future lease payments. The capital lease is an obligation of the capital reserve fund. The capital lease agreement dated July 31, 2009, is a master equipment lease/purchase agreement for school buses. The first lease payment was due on November 1, Final payment on the lease will be made prior to June 30, 2011, with interest accruing at 3.39%. The lease has been capitalized at the present value of future lease payments. The capital lease is an obligation of the capital reserve fund. 2. Summary of Debt Service Requirements to Maturity The following schedule reflects the debt service requirements to maturity for the District s general obligation bonded debt at June 30, 2010 Year Ended June 30, Principal Interest Total 2011 $ 1,965,000 $ 4,247,948 $ 6,212, ,235,000 4,163,976 6,398, ,525,000 4,061,160 6,586, ,640,000 3,948,032 6,588, ,750,000 3,842,474 6,592, ,425,000 17,070,831 33,495, ,305,000 12,378,500 33,683, ,875,000 6,693,171 33,568, ,685, ,769 13,343,769 Totals $ 89,405,000 $ 57,064,861 $ 146,469,861 45

52 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 The following schedule reflects the future minimum lease payments required under capital lease obligation at June 30, 2010 Year Ended June 30, , , , , , ,334, ,091 Total minimum lease payments 2,979,865 Less: Interest portion (661,739) Present Value of Minimum Lease Payments $ 2,318,126 NOTE H SHORT-TERM DEBT To meet short-term General Fund cash flow needs, the District participates in the state of Colorado Interest-Free Loan Program. One draw of $3,500,000 was made on loan on December 15, The loan was repaid on March 11, NOTE I RISK MANAGEMENT EQUITY IN INSURANCE POOL The District has combined with four other Adams County school districts to form the Adams County BOCES Self-Insurance Pool. The pools provide insurance to the participating districts in the areas of liability, property and workers compensation. Assets held by the pools include reserves restricted under the various pool agreements, including statutory reserves required by the Colorado Commissioner of Insurance. Pool assets consist primarily of direct obligations of the United States government or funds collateralized by such obligations. The pools board of directors consists of one member appointed by the Board of Education of each participating school district. All members of the pools board of directors has an equal vote in the administration of the pools activities and they are responsible for selection of management and have complete responsibility for all fiscal matters in the operation of the pools. The market value of assets approximates the book value. This pooling plan allows the participating districts to set self-insurance retention amounts under the various purchased insurance policies. Types of coverage, self-insured retention and excess insurance are as follows: Self-Insured Retentions (per occurrence) Excess Insurance (per occurrence) Liability $150,000 $5,000,000 Property 100,000 75,000,000 Workers Compensation 300,000 1,000,000 (plus statutory) 46

53 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 As of June 30, 2010, the District has recorded equity in insurance pool of $687,555 in the General Fund to reflect the District s equity in the insurance pool. The pools are administered in accordance with the Colorado Pooling Statutes and insurance regulations of the Division of Insurance. Annual examinations by the Division of Insurance are conducted in accordance with statute. A designated custodial bank serves as the trustee for the funds of the selfinsurance pools and limits their investments to government securities. Summit Point Consulting is the claims administrator as well as the pools administrator. Losses in the pool are adjusted by Summit Point Consulting. The allocation of required premiums for the self-insurance pools is determined by the pooling agreements. Each district pays a pro rata portion of their average daily attendance entitlement for liability coverage and a pro rate portion of their property values for property coverage into the combined liability and property Pool, and a pro rata portion of their payroll for coverage in the workers compensation pool. The contributions are based on an overall budget, which is determined by the board of directors on an annual basis. In developing a budget, the board of directors consults an independent actuary for a determination of expected losses for liability and workers compensation claims including a provision for incurred but not reported claims. Expected losses for property are determined by the amount that claims have depleted the pool from the previous year. Settled claims resulting from these risks have not exceeded insurance coverage in the past three fiscal years. NOTE J COMMITMENTS AND CONTINGENCIES 1. Defined Benefit Pension Plan Plan Description The District contributes to the School Division Trust Fund (SDTF), a cost-sharing multiple-employer defined benefit pension plan administered by the Public Employees Retirement Association of Colorado (PERA). The SDTF provides retirement and disability, annual increases and death benefits for members of their beneficiaries. All employees of the District are members of the SDTF. Title 24, Article 51 of the Colorado Revised Statutes, as amended, assigns the authority to establish benefit provisions to the State Legislature. PERA issues a publicly available annual financial report that includes financial statements and required supplementary information for the SDTF. That report may be obtained by writing to Colorado PERA, 1301 Pennsylvania Street, Denver, Colorado or by calling PERA s InfoLine at PERA (7372) or Denver metro area Funding Policy Plan members and the District are required to contribute at a rate set by statute. The contribution requirements of plan members and the District are established under Title 24, Article 51, Part 4 of the Colorado Revised Statutes, as amended. The contribution rate for members was 8.0%. The District s contribution rate for calendar years 2008, 2009, and 2010 was 12.05%, 12.95%, and 13.85% of covered salary, respectively. A portion of the District s contribution (1.02% of covered salary) is allocated for the Health Care Trust Fund. The District s contributions to the SDTF for the years ending June 30, 2010, 2009, and 2008 were $5,552,035, $5,033,794, and $4,595,389, respectively, equal to their required contributions for each year. 47

54 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, Post Employment Healthcare Benefits Plan Description The District contributes to the Health Care Trust Fund (HCTF), a cost-sharing multiple-employer post-employment healthcare plan administered by PERA. HCTF provides a healthcare premium subsidy to PERA participating benefit recipients and their eligible beneficiaries. Title 24, Article 51, Part 12 of the Colorado Revised Statutes, as amended, assigns the authority to establish the HCTF benefit provisions to the State Legislature. PERA issues a publicly available annual financial report that includes financial statements and required supplementary information for the HCTF. That report may be obtained by writing to Colorado PERA, 1301 Pennsylvania Street, Denver, Colorado or by calling PERA s InfoLine at Denver metro area or PERA (7372). Funding Policy The District was required to contribute at a rate of 1.02% for all PERA members as set by statute. No member contributions are required. The contribution requirements for the District are established under Title 24, Article 51, Part 4 of the Colorado Revised Statutes, as amended. The apportionment of the contribution to the HCTF is established under Title 24, Article 51, Section 208 of the Colorado Revised Statutes, as amended. The District s contributions to HCTF for the years ending June 30, 2010, 2009, and 2008 were $422,122, $410,685, and $403,944, respectively, equal to their required contributions for each year. 3. Post Employment Life Insurance Benefits The District adopted the standards of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, for the year ended June 30, 2009, on a prospective basis. Plan Description The District provides post-employment life insurance benefits to eligible retired employees through an agent multiple-employer defined benefit plan. Retirees can elect a $7,000 life insurance benefit on a fully contributory basis. Annual insurance coverage reductions are based on a schedule from age 65 to 85. A separate audited benefit report is not available for the plan. Funding Policy Retirees are required to contribute 100% of their life insurance premium. However, the retirees contribution amounts are based upon a group rate, which includes a mix of active employees and retirees. In accordance with GASB Statement 45, since retiree contributions are not based solely upon their age, the District is providing an implicit subsidy of their life insurance benefit. For the 2010 plan year, the group life insurance rate is eighteen cents (18 ) on every thousand dollars ($1,000) worth of coverage per month. For the fiscal year ended June 30, 2010, the District s Annual Required Contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45, is $4,000. This liability has not been reported in the financial statements because it is insignificant. 48

55 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 Annual OPEB Cost For the 2010 plan year, the District s annual OPEB cost (expense) of $4,000 was equal to the ARC. The District s annual OPEB cost percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for June 30, 2010, was as follows: Fiscal Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 6/30/2009 $4, % $0 6/30/2010 $4, % $0 Funded Status and Funding Progress The funded status of the plan as of June 30, 2010 was as follows: Actuarial Accrued Liability (AAL) $73,000 Actuarial value of plan assets 0 Unfunded accrued liability $73,000 Funded ratio (actuarial value of plan assets AAL) 0.0% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far in the future. Examples include assumptions about future employment, mortality, and life insurance cost trends. Amounts determined regarding the funding status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employee and plan members (if any) to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the June 30, 2010, actuarial valuation, the entry age actuarial cost method was used. This method projected the unit credit with benefits from the date of hire to the expected retirement age. The unfunded actuarial accrued liability is amortized over the maximum acceptable period of 30 years on an open basis. It is calculated assuming a level percentage of projected payroll and constant participant life insurance premiums and retiree contributions. 4. Taxpayer s Bill of Rights (TABOR) Amendment In November 1992, the voters of the State of Colorado approved Article X, Section 20 to the State Constitution. This amendment is referred to as the Taxpayer s Bill of Rights (TABOR). TABOR contains tax, spending, revenue and debt limitations which apply to the State of Colorado and all local governments. TABOR requires, with certain exceptions, voter approval prior to imposing new taxes, increasing a tax rate, imposing a mill levy that will produce property tax revenue in excess of the amount collected in the previous year adjusted by the growth factor, extending an expiring tax or implementing a tax policy change which directly causes a net tax revenue gain. 49

56 ADAMS COUNTY SCHOOL DISTRICT 14 NOTES TO FINANCIAL STATEMENTS June 30, 2010 Except for bond refinancing at lower interest rates or adding employees to existing pension plans, TABOR specifically prohibits the creation of multiple-fiscal year debt or other financial obligations without voter approval or without irrevocably pledging present cash reserves for all future payments. In November 1999, the voters approved a ballot issue authorizing the District to collect, retain and expend all excess revenues and other funds collected in the budget year and in each subsequent budget year thereafter, notwithstanding the limitations of Article X, Section 20 of the Colorado Constitution or any other law, with the restriction that no local tax rate or property tax mill levy shall be increased without voter approval. TABOR requires the District to maintain an emergency reserve of 3 percent of fiscal year eligible expenditures. At June 30, 2010, the District reserves of $2,421,178 are recorded as reserved fund balance in the General Fund and as restricted net assets in the government-wide financial statements. The District believes it is in compliance with the requirement of TABOR. However, TABOR is complex and subject to interpretation. Ultimate interpretation may depend upon litigation and legislative guidance. 5. Operating Agreement The District entered into an operating agreement with the City of Commerce City for a building, which was renovated to be a preschool. The agreement requires an annual payment of $12. The property will revert back to the city at the end of the agreement. The District is responsible for the utilities and maintenance on the property and those expenditures are included in the Preschool enterprise fund. 6. Grants The District participates in a number of federal and state programs that are fully or partially funded by grants received from other governmental entities. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program regulations, the District may be required to reimburse the grantor government. At June 30, 2010, significant amounts of grant expenditures have not been audited but the District believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on the overall financial position of the District. 7. Litigation The District is involved in various pending or threatened litigation. The outcome of the litigation cannot be predicted at this time. NOTE K RESTATEMENT During the year ended June 30, 2010, the District adjusted capital assets of the governmental activities to remove the expenditures that were associated with the district-wide energy management project out of construction in progress. Net assets and capital assets at June 30, 2009, were restated as follows to reflect this correction: Net Assets Capital Assets Balance, June 30, 2009, as originally stated $38,845,758 $118,878,386 Expenditures not capitalized (1,870,140) (1,870,140) Balance, June 30, 2009, as restated $36,975,618 $117,008,246 50

57 REQUIRED SUPPLEMENTARY INFORMATION

58 Adams County School District 14 Budgetary Comparison Schedule General Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual REVENUES Federal: Impact aid $ 1,806,000 $ 1,806,000 $ 1,487,646 $ (318,354) American Recovery & Reinvestment Act (ARRA) 1,476, Other 100, , ,587 13,587 Subtotal 3,382,630 1,906,000 1,601,233 (304,767) State: Equalization payments 35,024,060 37,995,679 36,775,469 (1,220,210) Vocational education 202, , , ,327 Exceptional children's act (ECEA) 1,041,840 1,041,840 1,326, ,674 Transportation reimbursement 493, , ,658 16,738 ELPA reimbursement 302, , ,616 48,496 Other Subtotal 37,064,270 39,957,059 39,195,294 (761,765) Local: Property taxes 20,655,960 20,341,610 20,683, ,217 Payments in lieu of taxes 90,040 92,890 82,545 (10,345) Investment income 50,000 10,000 7,133 (2,867) Miscellaneous 1,646,780 1,632,780 1,673,168 40,388 Subtotal 22,442,780 22,077,280 22,446, ,393 Total revenues 62,889,680 63,940,339 63,243,200 (697,139) EXPENDITURES Current operating: Instructional services 31,841,060 31,841,060 30,415,397 1,425,663 Operation and maintenance 7,389,500 7,772,750 6,740,118 1,032,632 Pupil services 3,352,760 3,352,760 4,137,481 (784,721) Central support services 3,049,990 3,049,990 2,758, ,442 School administration 4,102,870 4,102,870 3,757, ,065 Instructional staff 2,172,010 2,412,175 2,014, ,213 Pupil transportation 1,959,740 1,959,740 1,857, ,221 Business administration 1,008,240 1,008, , ,644 General administration 696, , ,626 70,374 Other supporting services 1,825,290 2,051, ,261 1,788,724 Community services 65,000 65, ,473 (97,473) Food service operations ,247 (19,247) Capital outlay 765, , ,956 (105,946) Charter school 3,457,800 3,446,940 3,367,398 79,542 Total expenditures 61,685,270 62,524,520 57,858,387 4,666,133 Excess of revenues over expenditures 1,204,410 1,415,819 5,384,813 3,968,994 Other financing (uses) Transfers out (1,232,000) (3,010,571) (3,010,571) 0 Total other financing (uses) (1,232,000) (3,010,571) (3,010,571) 0 Net change in fund balance (27,590) (1,594,752) 2,374,242 3,968,994 Fund balance - beginning 7,487,240 8,830,688 8,830,688 0 Fund balance - ending $ 7,459,650 $ 7,235,936 $ 11,204,930 $ 3,968,994 See the accompanying independent auditors report. 52

59 Adams County School District 14 Budgetary Comparison Schedule Grants Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual REVENUES Federal $ 11,047,905 $ 11,693,124 $ 8,371,549 $ (3,321,575) State 329, , ,828 (27,230) Local 2,757,691 2,068, ,372 (1,585,066) Total revenues 14,134,620 14,134,620 9,200,749 (4,933,871) EXPENDITURES Instructional services 3,889,750 3,934,313 3,170, ,041 Operation and maintenance 21,008 23,508 23, Pupil services 2,147,911 2,516,882 1,786, ,635 Central support services 0 0 9,990 (9,990) School administration 158, , ,652 (35,481) Instructional staff 4,449,021 4,583,562 3,034,411 1,549,151 Pupil transportation 18,000 18,000 11,620 6,380 Business administration 201, , ,721 (7,555) General administration 161, , ,727 49,439 Other supporting services 210, , ,729 (58,375) Community services 2,439,135 1,809, ,468 1,669,552 Food service operations 112, , ,453 (171) Education for adults 36, ,395 71,173 33,222 Capital Outlay 289, , ,055 43,746 Total expenditures 14,134,620 14,134,620 9,399,857 4,734,763 Net change in fund balance 0 0 (199,108) (199,108) Fund balance - beginning Fund balance - ending $ 0 $ 0 $ (199,108) $ (199,108) See the accompanying independent auditors report. 53

60 ADAMS COUNTY SCHOOL DISTICT 14 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION June 30, 2010 NOTE L BUDGETS AND BUDGETARY ACCOUNTING The District adheres to the following procedures in establishing the budgetary data reflected in the financial statements: Budgets are required by State law for all funds. The Superintendent submits to the Board of Education a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them. It also includes a statement describing the major objectives of the educational program to be undertaken by the District and the manner in which the budget proposes to fulfill such objectives. Public hearings are conducted by the Board of Education to obtain public comments. Prior to June 30, the budget is adopted by formal resolution. After the adoption of the budget, the board may review and change the budget at any time prior to January 31 of the fiscal year for which the budget was adopted. After January 31, the board shall not review or change the budget except that, where money for a specific purpose from other than ad valorem taxes becomes available to meet a contingency. Authorization to transfer budgeted amounts between departments within any fund and the reallocation of budget line items within any department in the General Fund rests with the Superintendent. Revisions that alter the total expenditures in any fund must be approved by the Board of Education. Appropriations are based on total funds expected to be available in each budget year, including beginning fund balances as established by the Board of Education. Budgets for all fund types are adopted on a basis consistent with Generally Accepted Accounting Principles. Budgeted amounts reported in the accompanying financial statements are as originally adopted and as amended by the Superintendent and/or Board of Education throughout the year. All appropriations lapse at the end of each fiscal year. 54

61 SUPPLEMENTARY INFORMATION

62 Adams County School District 14 Budgetary Comparison Schedule Bond Redemption Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual REVENUES Taxes: Taxes $ 6,487,550 $ 6,487,550 $ 6,518,585 $ 31,035 Payments in lieu of taxes ,396 34,396 Investment income 50,000 50,000 7,941 (42,059) Total revenues 6,537,550 6,537,550 6,560,922 23,372 EXPENDITURES Principal retirement 1,725,000 1,725,000 1,725,000 0 Interest and fiscal charges 4,312,480 4,312,480 4,311, Total expenditures 6,037,480 6,037,480 6,036, Net change in fund balance 500, , ,153 24,083 Fund balance - beginning 4,750,817 4,757,543 4,757,543 0 Fund balance - ending $ 5,250,887 $ 5,257,613 $ 5,281,696 $ 24,083 See the accompanying independent auditors report. 56

63 Adams County School District 14 Balance Sheet Nonmajor Governmental Funds June 30, 2010 Special Revenue Fund Capital Projects Total Nonmajor Capital Reserve Building Fund Governmental Funds ASSETS Cash and cash equivalents $ 2,013,862 $ 0 $ 2,013,862 Prepaid items Restricted cash and investments 0 60,665 60,665 Total assets $ 2,014,463 $ 60,665 $ 2,075,128 LIABILITIES Accounts payable $ 96,539 $ 3,500 $ 100,039 Retainage payable 0 55,081 55,081 Total liabilities 96,539 58, ,120 FUND BALANCE Reserved for: Prepaid items Capital projects 0 2,084 2,084 Unreserved 1,917, ,917,323 Total fund balance 1,917,924 2,084 1,920,008 Total liabilities and fund balance $ 2,014,463 $ 60,665 $ 2,075,128 See the accompanying independent auditors report. 57

64 Adams County School District 14 Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For The Year Ended June 30, 2010 Special Revenue Fund Capital Projects Total Nonmajor Capital Reserve Building Fund Governmental Funds REVENUES State $ 73,703 $ 0 $ 73,703 Investment income 1,510 86,914 88,424 Total revenues 75,213 86, ,127 EXPENDITURES Operations and maintenance 1,912, ,912,991 Capital outlay 549,601 3,901,040 4,450,641 Debt service Principal retirement 396, ,815 Interest and fiscal charges 160, ,891 Total expenditures 3,020,298 3,901,040 6,921,338 Excess of revenues (under) expenditures (2,945,085) (3,814,126) (6,759,211) OTHER FINANCING SOURCES Capital lease 471, ,999 Transfers in 3,010, ,010,571 Total other financing sources 3,482, ,482,570 Net change in fund balance 537,485 (3,814,126) (3,276,641) Fund balance - beginning 1,380,439 3,816,210 5,196,649 Fund balance - ending $ 1,917,924 $ 2,084 $ 1,920,008 See the accompanying independent auditors report. 58

65 Adams County School District 14 Budgetary Comparison Schedule Capital Reserve Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual REVENUES State $ 0 $ 0 $ 73,703 $ 73,703 Investment income 10,000 10,000 1,510 (8,490) Total revenues 10,000 10,000 75,213 65,213 EXPENDITURES Operations and maintenance 1,005,000 1,994,167 1,912,991 81,176 Capital outlay 1,500,000 1,500, , ,399 Debt service Principal retirement 532, , , ,185 Interest and fiscal charges ,891 (160,891) Total expenditures 3,037,000 4,026,167 3,020,298 1,005,869 Excess of revenues (under) expenditures (3,027,000) (4,016,167) (2,945,085) 1,071,082 OTHER FINANCING SOURCES Capital lease , ,999 Sale of land 1,500, Transfers in 1,232,000 3,010,571 3,010,571 0 Total other financing sources 2,732,000 3,010,571 3,482, ,999 Net change in fund balance (295,000) (1,005,596) 537,485 1,543,081 Fund balance - beginning 520,000 1,380,439 1,380,439 0 Fund balance - ending $ 225,000 $ 374,843 $ 1,917,924 $ 1,543,081 See the accompanying independent auditors report. 59

66 Adams County School District 14 Budgetary Comparison Schedule Capital Projects - Building Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual REVENUES Investment income $ 750, ,000 $ 86,914 $ (13,086) Total revenues 750, ,000 86,914 (13,086) EXPENDITURES Central support services 8,250 8, ,250 Capital outlay 15,226,150 3,907,960 3,901,040 6,920 Total expenditures 15,234,400 3,916,210 3,901,040 15,170 Net change in fund balance (14,484,400) (3,816,210) (3,814,126) 2,084 Fund balance - beginning 14,484,400 3,816,210 3,816,210 0 Fund balance - ending $ 0 $ 0 $ 2,084 $ 2,084 See the accompanying independent auditors report. 60

67 Adams County School District 14 Budgetary Comparison Schedule Food Service Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual OPERATING REVENUES Food sales: Lunch $ 19,300 $ 19,300 $ 81 $ (19,219) Breakfast 2,620 2,620 0 (2,620) Ala carte 128, , ,052 (24,588) Catering 59,080 59,080 34,503 (24,577) Other ,528 27,168 Total operating revenues 210, , ,164 (43,836) OPERATING EXPENSES Salaries and benefits 1,307,820 1,307,820 1,206, ,591 Contracted services 87,120 87,120 56,347 30,773 Food costs: Purchased food 987,100 1,137,100 1,222,803 (85,703) Donated commodities 227, , ,374 67,416 Supplies 23,550 23,550 39,047 (15,497) Equipment repairs and replacement 25,000 25,000 44,091 (19,091) Other 89,500 89, ,733 (75,233) Depreciation 99,800 99,800 89,335 10,465 Total operating expenses 2,847,680 2,997,680 2,982,959 14,721 Operating (loss) (2,637,680) (2,787,680) (2,816,795) (29,115) NON-OPERATING REVENUES (EXPENSES) Federal aid: Lunch reimbursements 1,963,830 2,113,830 2,151,340 37,510 Breakfast reimbursements 461, , , ,225 Summer food reimbursements 15,000 15,000 18,150 3,150 Commodity food donations 195, , ,348 (42,352) State nutrition match 41,250 41,250 33,565 (7,685) Other state revenue ,567 45,567 Loss on disposal of capital assets 0 0 (7,908) (7,908) Investment income (50) Total non-operating revenue (expenses) 2,677,000 2,827,000 2,958, ,457 Change in net assets 39,320 39, , ,342 Net assets - beginning 460, , ,531 0 Net assets - ending $ 500,100 $ 557,851 $ 660,193 $ 102,342 See the accompanying independent auditors report. 61

68 Adams County School District 14 Budgetary Comparison Schedule Adult Education Fund For The Year Ended June 30, 2010 Original Budget Final Budget Variance Positive (Negative) Actual OPERATING REVENUES Local Tuition and fees $ 450,000 $ 597,292 $ 621,123 $ 23,831 Total operating revenues 450, , ,123 23,831 OPERATING EXPENSES Salaries and benefits 360, , ,286 35,409 Contracted services 6,990 13,160 15,498 (2,338) Supplies 37,000 37,000 39,878 (2,878) Other 33,990 45,490 27,290 18,200 Depreciation 12,140 12,140 15,927 (3,787) Total operating expenses 450, , ,879 44,606 Operating income (loss) (150) (193) 68,244 68,437 NON-OPERATING REVENUES Investment income (130) Change in net assets 0 (43) 68,264 68,307 Net assets - beginning Net assets - ending $ 0 $ 0 $ 68,307 $ 68,307 See the accompanying independent auditors report. 62

69 Adams County School District 14 Statement of Changes in Fiduciary Assets and Liabilities Fiduciary Fund For the Year Ended June 30, 2010 June 30, 2009 Additions Deletions June 30, 2010 ASSETS Cash and investments $ 235,449 $ 232,976 $ 249,083 $ 219,342 Total assets $ 235,449 $ 232,976 $ 249,083 $ 219,342 LIABILITIES Due to student organizations $ 235,449 $ 232,976 $ 249,083 $ 219,342 Total liabilities $ 235,449 $ 232,976 $ 249,083 $ 219,342 See the accompanying independent auditors report. 63

70 Adams County School District 14 Combining Statement of Net Assets Component Units June 30, 2010 Community Leadership Academy Adams 14 Education Foundation Total Component Units ASSETS Current assets: Cash and investments $ 927,191 $ 549,761 $ 1,476,952 Accounts receivable 202 2,646 2,848 Prepaid expenses 5, ,220 Total current assets 933, ,657 1,486,020 Non-current assets: Restricted cash and investments 1,134, ,134,829 Debt issuance costs 280, ,602 Capital assets, not depreciated 820, ,000 Capital assets, net of accumulated depreciation 6,997, ,997,123 Total non-current assets 9,232, ,232,554 Total assets 10,165, ,657 10,718,574 LIABILITIES Current liabilities: Accounts payable 220,499 1, ,496 Accrued salaries and benefits 106,883 1, ,499 Accrued interest payable 275, ,763 Non-current liabilities due within one year 120, ,000 Total current liabilities 723,145 3, ,758 Non-current liabilities: Due in more than one year 8,596, ,596,847 Total non-current liabilities 8,596, ,596,847 Total liabilities 9,319,992 3,613 9,323,605 NET ASSETS Invested in capital assets, net of related debt (619,122) 0 (619,122) Restricted for debt service 802, ,817 Restricted for repair and replacement 56, ,249 Restricted for emergencies 104, ,500 Unrestricted 501, ,044 1,050,525 Total net assets $ 845,925 $ 549,044 $ 1,394,969 See the accompanying independent auditors report. 64

71 Adams County School District 14 Combining Statement of Activities Component Units For The Year Ended June 30, 2010 FUNCTIONS/PROGRAMS Community Leadership Academy Adams 14 Education Foundation Total Component Units EXPENSES Instruction $ 1,829,392 $ 0 $ 1,829,392 Supporting services 1,015, ,829 1,196,930 Building corporation 665, ,692 Total expenses 3,510, ,829 3,692,014 PROGRAM REVENUES Charges for services 17, ,975 Operating grants and contributions 122, , ,253 Total program revenues 140, , ,228 Net program (expense) (3,369,212) (26,574) (3,395,786) GENERAL REVENUES Per pupil revenue 3,367, ,367,398 Capital construction funding 43, ,710 Investment income 3,181 58,424 61,605 Miscellaneous 11, ,634 Total general revenues 3,425,823 58,524 3,484,347 Change in net assets 56,611 31,950 88,561 Net assets - beginning 789, ,094 1,306,408 Net assets - ending $ 845,925 $ 549,044 $ 1,394,969 See the accompanying independent auditors report. 65

72 66

73 STATISTICAL SECTION This part of the Adams County School District 14 comprehensive annual financial report presents detailed data as a context for understanding the information in the financial statements, note disclosures, and required supplementary information. Contents Financial Trends These schedules contain trend information to help the reader understand how the District s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the District s most significant local revenue source, the property tax. Debt Capacity These schedules provide the reader with information to assess the affordability of the District s current levels of outstanding debt and the District s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the District s financial activities take place. Operating Information These schedules contain service data to help the reader understand how the information in the District s financial report relates to the services the District provides and the activities it performs. Table Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 67

74

75 FINANCIAL TRENDS Financial Trends These schedules contain trend information to help the reader understand how the District s financial performance and well-being have changed over time. Table 1 Table 2 Table 3 Table 4 Net Assets by Component Change in Net Assets Fund Balances of Governmental Funds Change in Fund Balances, Governmental Funds

76 ADAMS COUNTY SCHOOL DISTRICT 14 NET ASSETS BY COMPONENT LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year Governmental activities Invested in capital assets, net of related debt $ 23,205,012 $ 23,343,291 $ 25,012,252 $ 21,723,897 $ 13,196,266 $ 7,147,174 $ 6,954,573 $ 7,382,808 Restricted 9,035,343 9,774,162 7,291,149 6,751,861 4,615,613 1,433,611 3,862,762 3,351,252 Unrestricted 8,320,999 3,858,165 4,776,052 5,070,033 7,710,076 17,657,466 9,997,364 7,668,887 Total governmental activities net assets $ 40,561,354 $ 36,975,618 $ 37,079,453 $ 33,545,791 $ 25,521,955 $ 26,238,251 $ 20,814,699 $ 18,402,947 Business-type activities Invested in capital assets, net of related debt $ 560,670 $ 667,501 $ 764,118 $ 908,861 $ 704,184 $ 697,603 $ 613,298 $ 506,707 Unrestricted 167,830 (148,927) 145,373 1,031,808 1,227,647 1,403,261 1,497,414 1,485,193 Total business-type activities net assets $ 728,500 $ 518,574 $ 909,491 $ 1,940,669 $ 1,931,831 $ 2,100,864 $ 2,110,712 $ 1,991,900 Total primary government Invested in capital assets, net of related debt $ 23,765,682 $ 24,010,792 $ 25,776,370 $ 22,632,758 $ 13,900,450 $ 7,844,777 $ 7,567,871 $ 7,889,515 Restricted 9,035,343 9,774,162 7,291,149 6,751,861 4,615,613 1,433,611 3,862,762 3,351,252 Unrestricted 8,488,829 3,709,238 4,921,425 6,101,841 8,937,723 19,060,727 11,494,778 9,154,080 Total primary government activities net assets $ 41,289,854 $ 37,494,192 $ 37,988,944 $ 35,486,460 $ 27,453,786 $ 28,339,115 $ 22,925,411 $ 20,394,847 Table 1 Note: Normally ten years of data is presented, however, we re reporting this data only in the years in which the District reported under GASB

77 ADAMS COUNTY SCHOOL DISTRICT 14 CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year Expenses Governmental activities: Instructional services $ 35,852,977 $ 36,357,316 $ 34,934,261 $ 36,839,177 $ 36,755,855 $ 34,621,606 $ 36,075,979 $ 35,545,861 Supporting services ,764,917 19,317,061 Operations and maintenance 9,806,015 8,375,355 6,894,201 6,857,327 5,991,205 5,192, Pupil services 6,075,319 5,271,708 5,982,422 5,868,731 5,507,022 5,639, Central support services 3,249,458 3,033,224 3,861,785 5,271,015 3,938,497 4,878, School administration 3,832,092 4,248,702 4,625,588 2,518,456 3,715,263 4,590, Instructional staff 5,153,995 4,365,083 3,704,366 2,337,101 1,608,486 1,091, Pupil transportation 2,348,355 1,883,602 2,153,311 1,875,279 1,560,089 1,411, Business administration 1,075,206 1,078,572 2,186,755 2,315, ,759 1,791, General administration 744, , , , , , Community services & education for adults 390, ,991 55,753 76, ,508 22, Other support services 577, , , ,028 4,381,319 1,294, Non-instructional services Food service operations 131,700 31, Interest and fiscal charges 3,208,339 4,614,771 4,848,089 2,996, , , ,534 1,074,653 Charter schools 3,367,398 3,134,349 3,084,601 3,878, Total governmental activities expenses 75,813,528 73,638,697 73,543,443 71,763,745 66,556,753 62,024,426 58,698,430 55,937,575 Business-type activities: Nutrition services 2,990,867 3,105,226 2,660,863 2,626,161 2,290,709 2,088,806 2,124,416 2,052,708 Child care services 0 0 1,003, , , , , ,641 Adult education 552, , , , , , , ,158 Total business-type activities expenses 3,543,746 3,661,487 4,222,193 3,928,689 3,523,487 3,065,241 3,171,009 2,789,507 Total primary government expenses $ 79,357,274 $ 77,300,184 $ 77,765,636 $ 75,692,434 $ 70,080,240 $ 65,089,667 $ 61,869,439 $ 58,727,082 Program revenues Governmental activities: Charges for services $ 0 $ 0 $ 0 $ 0 $ 114,759 $ 99,879 $ 94,665 $ 66,138 Operating grants and contributions 11,819,682 9,838,136 10,450,685 10,933,696 11,191,123 9,869,357 10,646,008 8,826,701 Capital grants and contributions ,791, Total governmental activities program revenues 11,819,682 9,838,136 10,450,685 15,725,296 11,305,882 9,969,236 10,740,673 8,892,839 Business-type activities: Food services: Charges for services 166, , , , , , , ,105 Operating grants and contributions 2,966,365 2,613,710 1,925,508 2,051,079 1,997,928 1,694,642 1,610,649 1,617,022 Preschool and daycare: Charges for services 0 0 1,085, , , , , ,911 Operating grants and contributions ,286 32, Capital grants and contributions ,800 0 Community education: Charges for services 621, , , , , , , ,055 Total business-type activities program revenues 3,753,652 3,270,030 3,570,279 3,836,558 3,320,433 2,987,589 3,279,365 2,858,093 Total primary government revenues $ 15,573,334 $ 13,108,166 $ 14,020,964 $ 19,561,854 $ 14,626,315 $ 12,956,825 $ 14,020,038 $ 11,750,932 Net (expense) / revenue Governmental activities $ (63,993,846) $ (63,800,561) $ (63,092,758) $ (56,038,449) $ (55,250,871) $ (52,055,190) $ (47,957,757) $ (47,044,736) Business-type activities 209,906 (391,457) (651,914) (92,131) (203,054) (77,652) 108,356 68,586 Total primary government net (expense) / revenue $ (63,783,940) $ (64,192,018) $ (63,744,672) $ (56,130,580) $ (55,453,925) $ (52,132,842) $ (47,849,401) $ (46,976,150) General revenues and other changes in net assets Governmental activities: Property and specific ownership taxes $ 27,235,570 $ 27,000,313 $ 26,577,916 $ 23,422,316 $ 19,871,008 $ 19,007,653 $ 19,431,483 $ 19,720,012 State equalization 36,775,469 32,960,291 31,296,829 31,307,659 30,274,580 28,063,611 27,009,855 25,946,614 Investment earnings 103, ,932 3,751,244 2,558, , , , ,508 Grants not restricted to specific programs 1,601,233 1,614,789 2,335,192 5,897,732 3,087,907 6,844,819 3,771,590 1,608,213 Miscellaneous 1,863,812 1,875,401 2,255, , , ,999 38, ,557 Transfers and special items ,215 (55,300) Total governmental activities 67,579,582 63,696,726 66,626,420 64,062,285 54,534,575 54,868,342 50,369,509 47,796,904 Business-type activities: Investment earnings ,891 45,669 34,021 19,155 10,456 12,719 Miscellaneous revenues , Transfers 0 0 (410,216) 55, Total business-type activities (379,918) 100,969 34,021 19,155 10,456 12,719 Total primary government $ 67,579,602 $ 63,697,266 $ 66,246,502 $ 64,163,254 $ 54,568,596 $ 54,887,497 $ 50,379,965 $ 47,809,623 Change in net assets Governmental activities: $ 3,585,736 $ (103,835) $ 3,533,662 $ 8,023,836 $ (716,296) $ 2,813,152 $ 2,411,752 $ 752,168 Business-type activities 209,926 (390,917) (1,031,832) 8,838 (169,033) (58,497) 118,812 81,305 Total primary government $ 3,795,662 $ (494,752) $ 2,501,830 $ 8,032,674 $ (885,329) $ 2,754,655 $ 2,530,564 $ 833,473 Table 2 Note: Normally ten years of data is presented, however, we re reporting this data only in the years in which the District reported under GASB

78 ADAMS COUNTY SCHOOL DISTRICT 14 FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year General Fund Reserved $ 3,859,906 $ 3,657,139 $ 2,496,851 $ 2,912,029 $ 2,644,168 Unreserved 7,345,024 5,173,549 5,821,687 5,557,073 5,912,722 Total general fund net assets $ 11,204,930 $ 8,830,688 $ 8,318,538 $ 8,469,102 $ 8,556,890 All other governmental funds Reserved for Encumbrances and other $ 0 $ 0 $ 0 $ 0 $ 0 Capital 2,685 3,816,210 42,532,820 70,524,273 2,000,670 Debt service 5,281,696 4,757,543 4,187,177 3,540,506 1,772,305 Special revenue 1,718,215 1,380, , , ,923 Total other governmental funds $ 7,002,596 $ 9,954,192 $ 47,541,697 $ 75,035,934 $ 4,610,898 Total governmental funds $ 18,207,526 $ 18,784,880 $ 55,860,235 $ 83,505,036 $ 13,167, Table 3

79 Fiscal Year General Fund $ 2,122,495 $ 1,870,016 $ 1,638,710 $ 1,535,318 $ 1,532,669 Reserved 12,532,298 12,131,703 9,623,012 8,234,144 7,020,464 Unreserved $ 14,654,793 $ 14,001,719 $ 11,261,722 $ 9,769,462 $ 8,553,133 Total general fund net assets Reserved for $ 66,484 $ 61,510 $ 91,457 $ 0 $ 529,611 Encumbrances and other 2,687, , , ,436 1,189,379 Capital 1,606,822 1,717,873 1,355,907 1,338,079 1,304,157 Debt service 499, , , ,076 1,162,477 Special revenue $ 4,860,590 $ 2,508,393 $ 2,541,234 $ 3,150,591 $ 4,185,624 Total other governmental funds $ 19,515,383 $ 16,510,112 $ 13,802,956 $ 12,920,053 $ 12,738,757 Total governmental funds Table 3 73

80 ADAMS COUNTY SCHOOL DISTRICT 14 CHANGE IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year Revenues Taxes $ 27,319,353 $ 27,148,442 $ 26,717,975 $ 23,402,674 $ 19,866,347 Intergovernmental 49,587,607 44,200,103 43,471,567 47,782,466 44,328,857 Investment income 103, ,932 3,751,244 2,558, ,445 Tuition ,759 Miscellaneous 2,156,540 1,975,166 2,574,511 1,287, ,240 Total revenues 79,166,998 73,569,643 76,515,297 75,031,638 65,801,648 Expenditures Instructional services 33,585,669 34,263,432 34,784,970 36,488,172 35,945,597 Operations and maintenance 8,676,448 9,296,945 7,366,272 7,242,177 6,240,072 Pupil services 5,923,728 5,261,300 5,971,764 5,874,467 5,515,023 Central support services 2,768,538 3,302,839 2,993,066 5,285,580 9,123,549 School administration 3,955,457 4,295,356 4,414,123 3,947,833 3,979,360 Instructional staff 5,049,373 4,363,771 3,700,806 2,337,101 1,958,313 Pupil transportation 1,869,139 1,996,520 2,153,309 1,875,279 1,787,939 Business administration 1,084,317 1,076,730 1,157,667 1,306,855 1,013,759 General administration 737, , , , ,818 Other supporting services 531, , , , ,135 Non-instructional services Community services & education for adults 373, ,991 55,753 76,543 43,693 Preschool food service operations 131,700 31, Construction in progress and capital outlay 5,567,652 38,713,890 35,401,836 10,262,207 0 Charter school 3,367,398 3,134,349 2,939,537 3,878,927 3,469,203 Debt service Principal 2,121,815 1,500,000 1,425,412 1,364,144 1,267,940 Interest and fiscal charges 4,472,660 4,409,566 4,320,821 2,267, ,431 Bond issuance cost ,849 1,286,443 0 Total expenditures 80,216, ,887, ,971,760 84,422,052 72,465,832 Excess of revenues over (under) expenditures (1,049,353) (39,318,297) (31,456,463) (9,390,414) (6,664,184) Other financing sources (uses) Transfers in 3,010,571 1,286,000 1,509,920 1,786,160 7,007,041 Transfers out (3,010,571) (1,286,000) (1,317,800) (1,786,160) (6,690,452) Bonds issued 0 0 3,375,000 74,625,000 0 Bond premium ,542 5,231,872 0 Bond discount (129,210) 0 Promissory note Payment to refunded bond escrow agent Capital Lease 471,999 2,242, Total other financing sources (uses) 471,999 2,242,942 3,811,662 79,727, ,589 Net change in fund balances $ (577,354) $ (37,075,355) $ (27,644,801) $ 70,337,248 $ (6,347,595) Debt service as a percentage of noncapital expenditures 8.8% 8.0% 7.9% 4.9% 2.8% 74 Table 4

81 Fiscal Year Revenues $ 19,114,024 $ 19,431,483 $ 19,720,012 $ 19,358,349 $ 16,134,355 Taxes 44,179,572 41,178,568 35,319,110 32,160,967 30,155,578 Intergovernmental 369, , , , ,149 Investment income 99, Tuition 1,181,214 38, , , ,860 Miscellaneous 64,943,949 60,766,632 55,561,187 52,198,150 47,326,942 Total revenues Expenditures 33,962,369 33,574,194 31,901,344 30,512,912 26,743,735 Instructional services 6,146, Operations and maintenance 5,639, Pupil services 3,981,101 21,292,161 18,876,229 17,426,643 16,411,199 Central support services 4,590, School administration 1,091, Instructional staff 1,411, Pupil transportation 784, Business administration 597, General administration 448,380 1,508,333 2,051, Other supporting services Non-instructional services 22, Community services & education for adults Preschool food service operations ,295,653 1,895,537 Construction in progress and capital outlay 1,124, Charter school Debt service 1,327, , , , ,586 Principal 810, ,674 1,074,653 1,107,357 1,132,450 Interest and fiscal charges 0 261, Bond issuance cost 61,938,678 58,385,841 54,793,284 52,157,803 46,927,507 Total expenditures 3,005,271 2,380, ,903 40, ,435 Excess of revenues over (under) expenditures Other financing sources (uses) 4,335,952 65, , ,492 Transfers in (4,335,952) Transfers out 0 15,480, Bonds issued 0 835, Bond premium Bond discount , Promissory note 0 (16,054,375) Payment to refunded bond escrow agent ,178 Capital Lease 0 326, , , ,670 Total other financing sources (uses) $ 3,005,271 $ 2,707,156 $ 882,903 $ 181,296 $ 681,105 Net change in fund balances 3.5% 3.0% 3.6% 3.9% 4.2% Debt service as a percentage of noncapital expenditures Table 4 75

82

83 REVENUE CAPACITY Revenue Capacity These schedules contain information to help the reader assess the District s most significant local revenue source, the property tax. Table 5 Table 6 Table 7 Table 8 Table 9 Summary of Revenue by Source and Other Financing Sources, General Fund Assessed and Estimated Actual Value of Taxable Property Property Tax Rates Direct and Overlapping Governments Principal Taxpayers Property Tax Levies and Collections

84 ADAMS COUNTY SCHOOL DISTRICT 14 SUMMARY OF REVENUE BY SOURCE AND OTHER FINANCING SOURCES GENERAL FUND LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year Revenue from Local Sources Property taxes $ 20,683, % $ 18,692, % $ 18,310, % $ 16,236, % $ 15,833, % Specific ownership taxes % 1,940, % 2,048, % 1,944, % 1,911, % Investment income 7, % 66, % 276, % 330, % 414, % Tuition % % % % 114, % Other 1,755, % 1,735, % 2,198, % 858, % 731, % Total local sources 22,446, % 22,435, % 22,834, % 19,368, % 19,006, % Revenue from State Sources Equalization aid 36,775, % 32,872, % 31,296, % 31,307, % 30,274, % Amendment 23 revenue % % % % % Vocational education 310, % 114, % 108, % 201, % 119, % Exceptional children's act (ECEA) 1,326, % 1,389, % 1,342, % 1,302, % 991, % Transportation reimbursement 431, % 475, % 475, % 379, % 307, % ELPA reimbursement 350, % 295, % 235, % 188, % 142, % Other % 1, % 1, % 10, % % Total state sources 39,195, % 35,147, % 33,461, % 33,390, % 31,835, % Revenue from Federal Sources Impact aid 1,487, % 1,501, % 2,243, % 5,797, % 2,963, % Other 113, % 113, % 91, % 92, % 102, % Total federal sources 1,601, % 1,614, % 2,335, % 5,889, % 3,066, % Total revenue $ 63,243, % $ 59,197, % $ 58,630, % $ 58,648, % $ 53,908, % Table 5 78

85 Fiscal Year Revenue from Local Sources $ 15,491, % $ 18,210, % $ 17,938, % $ 15,389, % $ 14,028, % Property taxes 1,673, % % % 2,123, % 2,106, % Specific ownership taxes 328, % % % 191, % 421, % Investment income 99, % % % % % Tuition 585, % % % 454, % 615, % Other 18,179, % 18,210, % 17,938, % 18,158, % 17,171, % Total local sources Revenue from State Sources 28,063, % 26,858, % 25,746, % 21,660, % 19,621, % Equalization aid % % % 122, % % Amendment 23 revenue 116, % % % 224, % 200, % Vocational education 891, % % % 816, % 767, % Exceptional children's act (ECEA) 299, % % % 291, % 218, % Transportation reimbursement 111, % % % % % ELPA reimbursement % % % 621, % 85, % Other 29,483, % 26,858, % 25,746, % 23,737, % 20,892, % Total state sources Revenue from Federal Sources 6,169, % 3,834, % 1,663, % 1,138, % 716, % Impact aid 28, % % % 52, % 55, % Other 6,197, % 3,834, % 1,663, % 1,190, % 772, % Total federal sources $ 53,859, % $ 48,903, % $ 45,349, % $ 43,086, % $ 38,836, % Total revenue Table 5 79

86 ADAMS COUNTY SCHOOL DISTRICT 14 ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Assessment Year Residential Property Commercial Property Personal Property Industrial, Agricultural, and Natural Resources State Assessed, Vacant Land, And Other Total Assessed Value Total Direct Tax Rate Per $1,000 of Valuation Estimated Actual Taxable Value Assessed Value as a Assessment Rate Percentage of Actual Value Residential All Others ,791,600 98,894,870 93,632,600 13,201,800 12,632, ,153, ,497,903, % 9.74% 29.00% ,761, ,203,590 97,560,380 17,874,820 16,738, ,139, ,955,869, % 9.15% 29.00% ,630, ,140, ,075,630 17,760,220 16,115, ,722, ,020,775, % 9.15% 29.00% ,811, ,152, ,687,880 19,316,190 17,023, ,991, ,376,642, % 9.15% 29.00% ,892, ,421,690 95,649,290 18,965,620 16,072, ,001, ,379,649, % 7.96% 29.00% ,308, ,308, ,872,810 22,444,120 19,914, ,847, ,572,040, % 7.96% 29.00% ,694, ,330, ,966,680 23,056,900 19,237, ,286, ,635,714, % 7.96% 29.00% ,229, ,036, ,620,020 24,188,130 19,626, ,700, ,876,050, % 7.96% 29.00% ,503, ,136, ,244,550 25,585,290 19,001, ,471, ,932,950, % 7.96% 29.00% ,196, ,631, ,542,710 24,684,940 19,059, ,114, ,772,628, % 7.96% 29.00% 80 Source: Adams County Assessor's Office. Table 6

87 ADAMS COUNTY SCHOOL DISTRICT 14 PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1,000 OF ASSESSED VALUE) LAST TEN CALENDAR YEARS (Unaudited) Taxing Authority Adams County School District 14 General Fund Bond Redemption Fund Adams County School District 14 Total Adams County Cities & Towns Commerce City City of Thornton Fire Districts North Metro Fire Rescue District # North Washington Fire District # South Adams Fire District # North Metro Fire Dist #1 Fire Pension Sanitation & Water Districts South Adams Water & Sanitation District Hazeltine Heights Water & Sanitation District Metropolitan Districts Eagle Creek Metropolitan District Special Districts Central Colo Water Conservancy District Central Colo. Ground Water Subdistrict Urban Drainage & Flood Control District Urban Drainage South Platte Rangeview Library f/k/a Adams County Library System Notes: (1) Totals are not shown since individual properties are not subject to all levies. (2) Industrial Park Water & Sanitation District and Regional Transportation District also overlap the School District, but have not assessed a mill levy. Source: Adams County Assessor's Office. 81 Table 7

88 ADAMS COUNTY SCHOOL DISTRICT 14 PRINCIPAL TAXPAYERS FOR THE ASSESSMENT YEARS ENDING Taxpayer Type of Business Taxable Assessed Value December 31, 2009 December 31, 2000 Rank Percentage of Total Taxable Assessed Value Taxable Assessed Value Rank Percentage of Total Taxable Assessed Value Suncor Energy USA Inc. (formerly Conoco, Inc.) Oil & Gas $ 123,264, % $ 23,594, % Rentech Energy Technology Center Renewal energy technologies 16,470, % Qwest Corp (formerly U.S. West, Inc.) Telecommunications 9,402, % 7,674, % Public Service CO of Colorado Public Utility 6,776, % 5,779, % Con Agra Flour Milling CO Processed & packed foods 6,148, % Setzer Properties Commerce City LLC Property management 5,720, % FEDEX Ground Package System Air delivery & freight services 5,666, % 0.00% Continental World Leasing Real Estate Real estate leasing 4,808, % CalEast Nat, LLC Real estate investment 4,204, % 0.00% 1480 Welton Inc. Subsidiary of Public Service CO 4,082, % 3,713,920 5 BT-OH LLC Subsidiary of UPS 3,899,400 4 RPS Inc. Freight services 3,482, % Colorado Refining CO Oil & Gas 3,477, % United Parcel Services Air delivery & freight services 2,877, % Wal-Mart Real Estate Business Trust Commercial Property 2,311,560 9 Mile High Kennel Club Greyhound Racing 2,124, % Totals $ 186,545,120 $ 58,936,120 Total Assessed Valuation $ 572,114,590 $ 295,153,140 Source: Adams County Abstract of Assessments. Table 8 82

89 ADAMS COUNTY SCHOOL DISTRICT 14 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Assessment Year Collection Year Current Tax Levy Current Tax Collections Percent of Current Taxes Collected Delinquent Tax Collections Total Tax Collections Ratio of Total Tax Collections to Total Tax Levy (1) Estimated Outstanding Delinquent Taxes Ratio of Estimated Delinquent Taxes to Total Tax Levy ,087,913 15,448, % 38,913 15,487, % 639, % ,165,646 17,105, % (91,961) 17,013, % 60, % ,361,671 16,992, % 66,388 17,059, % 368, % ,510,266 17,611, % 82,996 17,694, % % ,404,157 17,403, % 37,615 17,440, % 1, % ,017,847 17,953, % 19,913 17,972, % 64, % ,505,270 20,687, % 20,845 20,708, % 818, % ,572,936 24,480, % 42,291 24,522, % 92, % ,109,420 25,061, % 32,844 25,094, % 47, % ,579,243 25,468, % 25,053 25,493, % 110, % Note: (1) In accordance with modified accrual accounting, delinquent taxes are recorded in the year collected, not the year assessed. Ratios above 100% represent collections of prior year delinquent taxes. Source: Adams County Abstract of Assessments. Table 9

90

91 DEBT CAPACITY Debt Capacity These schedules present information to help the reader assess the affordability of the District s current levels of outstanding debt and the District s ability to issue additional debt in the future. Table 10 Table 11 Table 12 Table 13 Table 14 Ratio of Outstanding Debt by Type Ratio of General Obligation Debt to Assessed Value and Bonded Debt per Capita Ratio of Direct and Overlapping Debt Legal Debt Margin Information Ratio of Debt Service Expenditures for General Bonded Debt to General Fund Expenditures

92 ADAMS COUNTY SCHOOL DISTRICT 14 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (Unaudited) Governmental Activities Fiscal Year General Obligation Bonds Capital Leases Total Primary Government Percentage of Personal Income (1) Per Capita (1) 2001 $ 21,205,000 $ 201,415 $ 21,406, % $ 1, ,455, ,178 20,591, % ,635,000 66,779 19,701, % ,890,000 31,028 19,921, % ,615, ,615, % ,370, ,370, % ,655, ,655, % 2, ,630, ,630, % 2, ,130,000 2,242,943 93,372, % 2, ,405,000 2,318,126 91,723, % 2,160 Note: Details regarding the District's outstanding debt can be found in the notes to the financial statements. (1) See the Schedule of Demographic Statistics on page 92 for personal income and population data. Table 10 86

93 ADAMS COUNTY SCHOOL DISTRICT 14 RATIO OF GENERAL BONDED DEBT TO ASSESSED VALUE AND BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (Unaudited) Assessment Year Collection Year Assessed Value General Bonded Debt Ratio of General Bonded Debt to Assessed Value Population (1) Net Bonded Debt Per Capita ,153,140 21,205, % 20,991 1, ,139,040 20,455, % 21, ,722,320 19,635, % 24, ,991,990 19,890, % 24, ,001,680 18,615, % 26, ,847,140 17,370, % 29, ,286,470 90,655, % 35,159 2, ,700,500 92,630, % 37,874 2, ,471,120 91,130, % 42,500 (2) 2, ,114,590 89,405, % 42,473 (3) 2,104 Source: (1) Colorado Department of Local Affairs, Demography Section, last modified November 2008 (2) City of Commerce City - estimate (3) US Census Bureau 87 Table 11

94 ADAMS COUNTY SCHOOL DISTRICT 14 RATIO OF DIRECT AND OVERLAPPING DEBT (1) JUNE 30, 2010 (Unaudited) Outstanding Percent 2009 General Applicable Assessed Obligation To The Overlapping Valuation (3) Debt (4) District Debt (2) Direct Debt: Adams County School District 14 $ 572,114,590 $ 89,405, % $ 89,405,000 Overlapping Debt: (1) North Metro Fire Rescue District 304,088,460 24,630, % 38,546 Central Colorado Ground Water Subdivision 106,201,670 17,236, % 5,857,257 Aberdeen Metropolitan District No 1 1,031,300 7,098, % 4,051,642 South Adams County Water & Sanitation 580,623,390 7,717, % 5,069,911 Hazeltine Heights Water & Sanitation 1,264, , % 766 Eagle Creek Metropolitan District 4,279,280 3,165, % 3,165,000 Total Overlapping Debt $ 997,488,900 $ 60,195,578 $ 18,183,122 TOTAL $ 1,569,603,490 $ 149,600,578 $ 107,588,122 Notes: (1) Adams County, City of Commerce City, City of Thornton, Rangeview Library District, Central Colorado Water Conservancy District, Hazeltine Heights Water and Sanitation District, Industrial Park Water and Sanitation District, South Adams County Fire District #4, Regional Transportation District, Urban Drainage Flood Control, and Urban Drainage South Platte also overlap the School District, but have no general obligation debt outstanding. (2) Overlapping debts are general obligations of local and county governments that apply to property owners within Adams County School District 14. Not all overlapping rates apply to all District property owners because the rates f or special districts apply only to the proportion of the District's property owners whose property is located within the geographic boundaries of the special district. (3) Sources: Adams County Assessor's Office (4) Sources: Overlapping debt confirmed with overlapping entities Table12 88

95 ADAMS COUNTY SCHOOL DISTRICT 14 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year Assessment Year Assessed Value DEBT LIMIT COMPUTATIONS Debt limit (20% of Total net debt Assessed applicable to Legal debt Value) limit margin Percentage of Total net debt applicable to the limit to Debt limit $ 295,153,140 $ 59,030,628 - $ 21,205,000 = $ 37,825, % $ 355,139,040 $ 71,027,808 - $ 20,455,000 = $ 50,572, % $ 367,722,320 $ 73,544,464 - $ 19,635,000 = $ 53,909, % $ 398,991,990 $ 79,798,398 - $ 19,890,000 = $ 59,908, % $ 397,001,680 $ 79,400,336 - $ 18,615,000 = $ 60,785, % $ 435,847,140 $ 87,169,428 - $ 17,370,000 = $ 69,799, % $ 453,286,470 $ 90,657,294 - $ 90,655,000 = $ 2, % $ 542,700,500 $ 108,540,100 - $ 92,630,000 = $ 15,910, % $ 558,471,120 $ 111,694,224 - $ 91,130,000 = $ 20,564, % $ 572,114,590 $ 114,422,918 - $ 89,405,000 = $ 25,017, % Source: Adams County Assessor's Office. 89 Table 13

96 ADAMS COUNTY SCHOOL DISTRICT 14 RATIO OF DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO GENERAL FUND EXPENDITURES LAST TEN FISCAL YEARS (Unaudited) Fiscal Year Annual Debt Service Expenditures for General Bonded Debt Total General Fund Expenditures (1) Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Fund Expenditures ,844,885 37,905, % ,879,243 51,457, % ,919,663 43,856, % ,078,406 46,163, % ,170,801 48,870, % ,992,625 53,632, % ,631,304 56,950, % ,746,233 54,715, % ,909,566 54,265, % ,036,769 54,490, % Notes: (1) The expenditures are net of charter school expenditures in the General Fund. Table 14 90

97 DEMOGRAPHIC and ECONOMIC INFORMATION Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the District s financial activities take place. Table 15 Table 16 Table 17 Demographic Statistics Property Values and Construction City of Commerce City Principal Employers

98 ADAMS COUNTY SCHOOL DISTRICT 14 DEMOGRAPHIC STATISTICS LAST TEN CALENDAR YEARS (Unaudited) Year Ending Personal Median Age School Unemployment December 31, Population (1) Income (2) (in years) (4) Enrollment Rate (5) ,991 $9,811, , % ,567 $10,355, , % ,897 $10,300, , % ,320 $10,464, , % ,291 $10,935, , % ,647 $11,514, , % ,432 $12,272, , % ,874 $12,772, , % ,500 $13,156,000 (3) , % ,473 $13,551,000 (3) , % Sources: (1) Colorado Bureau of Labor Statistics for Commerce City, Colorado. The District boundaries include parts of two diff erent cities and unincorporated Adams County, however, the majority of the District is located within the City of Commerce City. Population inf ormation for the District is generally not available until the United States decennial census has been published. The 2008 population is an estimate provided by the City of Commerce City. (2) U.S. Department of Commerce, Bureau of Economic Analysis for Adams County, Colorado. (3) Estimate based upon information f rom U.S. Department of Commerce, Bureau of Economic Analysis for Adams County, Colorado. (4) Colorado Department of Labor Statistics for Adams County, Colorado. (5) Colorado Department Labor & Employment and for Adams County, Colorado. 92 Table 15

99 ADAMS COUNTY SCHOOL DISTRICT 14 PROPERTY VALUES AND CONSTRUCTION LAST TEN CALENDAR YEARS (Unaudited) Year City of Commerce City Commercial and Residential Construction (1) Adams County School District 14 Property Values (2) Ending No. of Estimated December 31, Permits Value Assessed Actual (3) , ,114, ,153,140 1,497,903, , ,466, ,139,040 1,955,869, , ,264, ,722,320 2,020,775, , ,894, ,991,990 2,376,642, , ,809, ,001,680 2,379,649, , ,524, ,847,140 2,572,040, , ,298, ,286,470 2,635,714, , ,055, ,700,500 2,876,050, , ,165, ,471,120 2,932,950, ,477 49,765, ,114,590 2,772,628,789 Notes: (1) (2) Source: Commerce City Building Department. Source: Adams County Assessor's Office. (3) Actual value in the above table is defined as base year for assessment purposes. The base year is from 6 to 9 years prior to the collection year. Current market values are considerably higher than the actual values shown in the above table. Table 16 93

100 ADAMS COUNTY SCHOOL DISTRICT 14 CITY of COMMERCE CITY, COLORADO PRINCIPAL EMPLOYERS For the Calendar Years Ended December 21, 2009 and 2002 (Unaudited) Name of Employer (1) Industry (1) December 31, 2009 December 31, 2002 Number of Employees (1) Rank Percentage to Total County Employment Number of Employees (1) Rank Percentage to Total County Employment United Parcel Service Parcel Delivery Service 2, % 2, % Adams County School District 14 Public School District 1, % % FedEX Ground Package System INC Parcel Delivery Service % United Food Service, Inc. Food Service Distribution % % City of Commerce City City Government % % Suncor Energy USA INC Refinery % FedEx Freight Trucking % Waste Management of Colorado INC Waste Removal % Earl F. Douglass Roofing Company Manufacturer % Wal-Mart Supper Center Retail % % Navajo Express, Inc. Trucking % BWI Waste Systems of North America Waste Removal % Safeway Steel Products, Inc. Manufacturer % United States Postal Service Postal Service % Laidlaw Transit Inc. Transportation % Total 6, % 6, % Total Employers' Employees 29,404 8,497 (2) Sources: (1) Commerce City Economic Development Department (2) US 2000 Census Note: Normally data for the period nine years prior to the current period is presented, however, this information is unavailable. Table 17 94

101 OPERATING INFORMATION Operating Information These schedules contain service data to help the reader understand how the information in the District s financial report relates to the services the District provides and activities it performs. Table 18 Table 19 Table 20 Full-time Equivalent Employees by Fund Miscellaneous Statistical Data Capital Asset Statistics by Function/Program