ADMINISTRATIVE STAFF REPORT 891. Section familiarizes the reader with the Town and includes the Transmittal. directory

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1 ADMINISTRATIVE STAFF REPORT 891 TO: Mayor and Town Council November 15, 2016 SUBJECT: Resolution No , accepting the Fiscal Year 2015/ 16 Audited Comprehensive Annual Financial Report for the Town of Danville BACKGROUND Pun Group, LLP, has completed its examination of the financial statements for the Town of Danville and have approved the draft financial reports, including unqualified opinions, as to their accuracy. The Town Council is now being accept the FY 2015/ 16 Comprehensive Annual Financial Report (CAFR). asked to review and FORMAT OF TOWN' S FINANCIAL REPORT The CAFR is presented in compliance with Government Accounting Standards Board GASB) Statement 31, Statement 34, Statement 40, Statement 44 and Statement 54. The CAFR is composed of three sections: Introductory, Introductory Financial and Statistical. The Section familiarizes the reader with the Town and includes the Transmittal Letter,, the Town' s organizational chart and a directory of public officials. The Financial Section includes the Independent Auditor' s Report, Management' s Discussion and Analysis, Basic Financial Statements, Notes to the Basic Financial Statements, Required Supplementary Information. Information ( unaudited) and Supplemental GASB 34 presents financial information from two perspectives. The first perspective, the Government -Wide Financial Statements, located at the beginning of the Financial Section,, groups the Town' s funds into major and non -major funds and presents them in this condensed format. The value of the Town' s long-term debt and the Town' s infrastructure,, net of depreciation, is included in the Government -Wide Statement of Net Assets and the Statement of Activities and Changes in Net Assets. The second perspective, the Fund Financial Statements, includes the Governmental Funds Balance Sheet and the Statement of Revenues, Expenditures and Changes in Fund Balance, but omits long-term debt and the value of infrastructure. Reconciliation of the Government -Wide Financial Statements and the Fund Financial Statements are presented after each of the Fund Financial Statements.

2 Based on GASB criteria, the Town' s major funds are the General Fund, Regional Traffic Impact Fees Special Revenue Fund, the Capital Improvement Project Fund and the Civic Facilities Capital Projects Fund. Landscape Special Revenue Fund as a major fund. The Town has chosen to present the Lighting and The Statistical Section schedules are designed to show trends in five areas: financial, revenue capacity, debt capacity, demographic and economic information and operating information. Highlights of the Town' s accomplishments and fiscal activities are presented in the Transmittal Letter and Management Discussion and Analysis. ECONOMIC CONDITION OF DANVILLE'S GENERAL FUND General Fund The General Fund realized a net increase in fund balance of $2,682,365, this increase is due to the of posting the full amount (principal and interest) of the Cooperative Loan Agreement approved by the Department of Finance. Revenues exceeded expenditures by $ 6,528,305 with net operating transfers to other funds of $7,339,097. Actual revenues exceeded final budgeted revenues by $ expenditures were below budget by $ 2,214,894 with cost savings in all departments. 1, 885,531. General Fund Note 10 of the Notes to Basic Financial Statements details the reserves and designations against the June 30, 2016, Fund Balance. The recommended designated reserves, described in detail below, were reviewed and approved by the Finance Committee on October 18, 2016, and require appropriation by the Town Council. TOWN FUND BALANCE It is recommended that the Town Council approve the balance reserves, which are reflected in the FY 2015/ 16 CAFR. adjustments to fund General Fund - Amount reserved for proceeds sale and rental of the 115 Hartz Avenue proper! y At the November 8, 2016 Study Session, the Town Council recommended that Reserves and Designations for future uses of the proceeds from the sale of the 115 Hartz Avenue property be reduced by $ 193,674, a leaving balance of $31, 036. This $193,674 will be transferred to the Capital Improvement Projects Fund. Financial Report FY 2015/ 16 2 November 15, 2016

3 Capital Improvement Projects Fund As mentioned above, the Town Council recommended that the Unreserved/ Undesignated amount to be transferred to the Capital Improvement Projects Fund be increased by 193, 674, from $3, 806,326 to $ 4, 000, 000. The recommended transfer of $ 4, 000, 000 to the Capital Improvement Projects Fund will assist with the funding determined by the Town Council. of future projects as Other Reserves Against Fund Balance In addition to the above -designated reserves that require Town Council action to implement, the reserves/ designations are reflected in the CAFR. A number of these are carried over from prior fiscal years and are statutorily restricted. Table 1 General Fund Balance Analysis As of June 30, 2016 Total pre -audit Fund Balance at 6/ 30/ 16 Adjusted for unrealized market value reported per GASB 31 Fund Balance without unrealized market value 29,956, ,338) 29,607,618 Less Reserves/Designations against Fund Balance for: Operating Reserve Receivable from former CDA Compensated Absences/ Personnel Reserved for Debt Service Contingency Encumbrances General Fund Public Safety Drought/ Water Reserve 115 Hartz Avenue - proceeds from sale and rent Reward Fund Reserved for SB 1186 CASP (Certified Access Specialist Program) Reserve for unrealized market value per GASB 31 11, 111, ,359, , , , , , ,000 31, , 000 7,005 Total Reserves/ Designations against Fund Balance Current Unreserved/ Undesignated Fund Balance at 6/ 30/ 16 25, 607, Recommended Fund Balance Options: CIP - Capital Improvement Projects Financial Report FY 2015/ 16 3 November 15, 2016

4 When the operating transfers are combined with the above reserves and the designations requiring Town Council action, the entire excess of revenues and other sources over expenditures and other uses in the General Fund for the 2015/ 16 fiscal year will have been designated for specific purposes. PUBLIC CONTACT Posting of the meeting agenda for the Town Council on meeting November 15, 2016, as well Session on November as the Finance Committee meeting on October 18, 2016 and the Study 8, 2016, serves as notice to the general public. FISCAL IMPACT Approval of the recommendations made in this report will increase the Fiscal Year 2015/ 16 net designations in the General Fund by $ 4,000,000. RECOMMENDATION Adopt Resolution No , accepting the Fiscal Year 2015/ 16 audited Comprehensive Annual Financial Report for the Town of Danville. Prepared by: Lani Ha Finance Manager/ Treasurer Attachments: A - Resolution No B - Comprehensive Annual Financial Report for the Town of Danville for Fiscal Year 2015/ 16, ( Copies were distributed to the Town Council, Town Manager and City Clerk. Copies are available upon request at the City Clerk' s Office.) Financial Report FY 2015/ 16 4 November 15, 2016

5 RESOLUTION NO ACCEPTING THE FISCAL YEAR 2015/ 16 AUDITED COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE TOWN OF DANVILLE WHEREAS, the Town of Danville' s independent auditor has completed its annual examination of the Towns financial statements and has issued a draft report with an unqualified opinion as to their accuracy; and WHEREAS, the audited financial statements have been combined with introductory and statistical information into the Town' s Comprehensive Annual Financial Report; and WHEREAS, the Town Council has reviewed the draft Comprehensive Annual Financial Report; now, therefore, be it RESOLVED, that the Danville Town Council accepts and approves the Fiscal Year 2015/ 16 audited Comprehensive Annual Financial Report as presented; and, be it further RESOLVED, that the amount be designated against the General Fund as of June 30, 2016: 31, 036 for future use of the proceeds from the sale and rental revenues of the Hartz Avenue property RESOLVED, that the June 30, 2016, and appropriated as transfers during amount be designated against the General Fund as of Fiscal Year 2015/ 16: 4, 000, 000 for CIP Capital Improvement Projects Fund APPROVED by the Danville Town Council at a regular meeting held on November 15, 2016, by the vote: AYES: NOES: ABSTAINED: MAYOR ABSENT: APPROVED AS TO FORM: ATTEST: e13 CITY ATTORNEY 0 00* CITY CLERK

ORANGE WATER AND SEWER AUTHORITY. GASB34 - Before and After: Comparative Presentation of Pro Forma Financial Statements

ORANGE WATER AND SEWER AUTHORITY GASB34 - Before and After: Comparative Presentation of Pro Forma Financial Statements Degree of Effort to Convert Proprietary Fund Accounting Governmental Fund Accounting