CITY OF JASPER Jasper, Alabama. Financial Statements and Supplemental Information. September 30, 2016

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1 CITY OF JASPER Jasper, Alabama Financial Statements and Supplemental Information

2 Table of Contents Page(s) INDEPENDENT AUDITORS' REPORT 1 3 MANAGEMENT'S DISCUSSION AND ANALYSIS 4 11 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 12 Statement of Activities 13 Fund Financial Statements Balance Sheet Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 16 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities 17 General Fund Statement of Revenues, Expenditures, and Encumbrances Budget to Actual for the Year Ended 18 Statement of Fund Net Position Proprietary Funds 19 Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds 20 Statement of Cash Flows Proprietary Funds Statement of Net Position Fiduciary Funds 23 NOTES TO BASIC FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Changes in Net Pension Liability 50 Schedule of Employer Contributions 51 OTHER SUPPLEMENTARY INFORMATION Combining Balance Sheet All Nonmajor Governmental Funds 52 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Nonmajor Governmental Funds 53 Combining Balance Sheet Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds Combining Balance Sheet Nonmajor Capital Project Funds Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Nonmajor Capital Project Funds Combining Balance Sheet Nonmajor Debt Service Funds 62 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Nonmajor Debt Service Funds 63 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 for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance SUPPLEMENTAL SCHEDULES Schedule of Expenditures of Federal Awards 68 Notes to Schedule of Expenditures of Federal Awards 69 Schedule of Findings and Questioned Costs 70 71

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4 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Jasper, Alabama, as of, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Schedule of Changes in Net Pension Liability, and the Schedule of Employer Contributions as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We and other auditors have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Jasper, Alabama's basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole.

5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 4, 2017, on our consideration of the City of Jasper, Alabama's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Jasper, Alabama's internal control over financial reporting and compliance. Kellum, Wilson & Associates, P.C. August 4, 2017

6 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 As management of the City of Jasper, Alabama (the City"), we present this narrative overview and analysis designed to assist readers of the City's financial statements for the fiscal year ended September 30, Our discussion and analysis focuses on significant financial issues, provides an overview of the City's financial activity, identifies changes in the City's financial position, identifies any material deviations from the financial plan (the approved budget), and identifies individual fund issues or concerns. Financial Highlights The assets of the City s Governmental Activities exceed its liabilities at the close of the fiscal year ended, by $11,458,797 (net position). The portion of net position that may be used to meet the City's ongoing obligations to citizens and creditors (unrestricted net position) reflects a deficit of ($7,303,340). The deficit is primarily the result of the reporting of the OPEB obligation as required by GASB No. 45 and the pension requirements of GASB 68 (Note 9). The City's total net position increased by $1,045,688 in fiscal The factor that most influenced this increase was the City's success in reducing operational costs, expansion of sales tax revenue, and obtaining grant revenue. The City's total net capital assets increased by $30,909,066 in fiscal This increase was mainly attributable to ongoing construction of the new high school. As of the close of the current fiscal year, the City's governmental funds reported combined fund balances of $4,853,317, a decrease of $29,663,921 from the prior year. Of this amount, $(232,553) is available for spending at the City's discretion (unassigned fund balances). The 2014 bond issue funds are to be used to pay the construction liabilities. At the end of the current fiscal year, the unassigned fund balance of the General Fund (the City's primary operating fund) was $1,015,560. The City's net long-term debt decreased by $577,861, or 0.42%, primarily from the new 2015 bond issue. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's financial statements, which is comprised of the basic financial statements and the notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves

7 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with an overview of the City's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. This statement combines governmental funds' current financial resources with capital assets and long-term obligations. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information focused on functions and shows how the City's net position changed during the most recent fiscal year. This is intended to summarize and simplify the user's analysis of revenue and expenses of various governmental services and/or subsidies to various business-type activities. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused employee leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to typically recover all or a significant portion of the cost of operation, including depreciation, through user fees and charges for services (business-type activities). The governmental activities of the City include general government, public safety, public works, recreation and cultural services, and non-departmental. The business-type activities of the City reflect private sector type operations and include cemeteries and garbage services. The government-wide financial statements include not only the City itself (known as the primary government), but also the activities of its component units, the Jasper City Board of Education and the Industrial Development Board of the City of Jasper, Alabama. A component unit is a legally separate organization over which the City can exercise influence and/or may be obligated to provide financial subsidies. The focus of the statements is clearly on the primary government and the presentation allows the readers to address the City's relative relationship with the component units. The Board of Education and the Industrial Development Board issue complete financial statements, which may be obtained by contacting the entities directly. Fund Financial Statements Traditional users of governmental financial statements will find the Fund Financial Statements presentation more familiar. The focus is on the City's major funds rather than the City as a whole. 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 City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental, proprietary, and fiduciary are the three categories of fund types

8 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Fund Financial Statements Continued Governmental Funds The City of Jasper maintains six individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Walker High Construction Fund, 2014 Bond Issue Fund, IDB Debt Service Fund, Alcohol Fund, and the One Cent Sales Tax Fund. Data from other governmental funds are combined into a single nonmajor governmental funds aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. For management control of expenditures, the City adopts an annual appropriated budget for all funds. A budgetary comparison statement has been provided for the City's major governmental funds to demonstrate compliance with their budgets. Proprietary Funds The City of Jasper maintains three proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to provide for separate information for the two cemeteries and the garbage services, each of which is considered a major fund of the City. 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 the resources of those funds are not available to support City programs. 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 basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning budgetary comparisons and the City's progress in funding its obligations to provide pension benefits to its employees. The combining fund statements and schedules are presented immediately following the required supplementary information and the single audit section represents the last section of this report

9 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Condensed Statements of Net Position and 2015 Total Governmental Business-Type Primary Activities Activities Government Current and Other Assets $ 8,173,740 $ 43,541,898 $ 346,993 $ 543,956 $ 8,520,733 $ 44,085,854 Capital Assets (Net) 79,136,757 48,227, ,820 1,013,313 80,124,577 49,241,004 Total Assets 87,310,497 91,769,589 1,334,813 1,557,269 88,645,310 93,326,858 Deferred Outflows of Resources 1,808,071 1,105, ,188 78,193 1,956,259 1,183,637 Other Liabilities 3,580,420 9,273, , ,293 3,805,926 9,531,740 Long-Term Liabilities 74,078,588 72,690,535 1,671,642 1,732,130 75,750,230 74,422,665 Total Liabilities 77,659,008 81,963,982 1,897,148 1,990,423 79,556,156 83,954,405 Deferred Inflows Of Resources ,221 (763) 51, ,365 Net Position: Net Investment in Capital Assets 14,416,019 (13,797,875) 265,619 98,546 14,681,638 (13,699,329) Restricted 4,346,118 31,651, ,346,118 31,651,681 Unrestricted (Deficit) (7,303,340) (7,447,976) (679,003) (504,651) (7,982,343) (7,952,627) Total Net Position $ 11,458,797 $ 10,405,830 $ (413,384) $ (406,105) $ 11,045,413 $ 9,999,725 The City's total assets were $88,645,310 as of. Of this amount, $80,124,577 is accounted for by capital assets, which includes infrastructure. Of the remaining City assets, $7,404,635 is accounted for in cash and cash equivalents, $629,946 in accounts receivable, $24,300 in liens receivable, and the remainder spread among miscellaneous assets. At, the City had outstanding liabilities of $79,556,156, of which $75,750,230 was long-term. Long-term liabilities include warrants and notes payable, compensated absences, accrued landfill closure and post closure care costs, pension liabilities, and the OPEB obligation. Of the total amount outstanding, approximately $3,163,064 was due within one year, with the remainder due at various dates before Included in other liabilities in the above table are $3,089,667 in accounts payable (most of which will be paid from bond funds) and $259,997 in accrued interest payable. The largest portion of the City's net position reflects its investment in capital assets, less any outstanding related debt used to acquire those assets. The City's capital assets are used to provide services to citizens. Consequently, investments in capital assets are not available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The remaining unrestricted net position reflect a deficit of ($7,982,343). This deficit is primarily the result of recording the OPEB obligation of $890,480 and pension liability of $10,307,291 (See Note 9)

10 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Condensed Statement of Activities For the Years Ended and 2015 Total Governmental Business-Type Primary Activities Activities Government Revenues Program Revenues: Charges for Services $ 284,674 $ 283,705 $ 1,708,872 $ 1,713,807 $ 1,993,546 $ 1,997,512 Grants/Contributions 1,833, , ,833, ,081 General Revenues: Property Taxes 3,364,269 2,960, ,364,269 2,960,211 Sales Taxes 14,301,769 13,776, ,301,769 13,776,113 Other Taxes 2,034,652 2,288, ,034,652 2,288,527 Licenses and Permits 3,600,496 3,437, ,600,496 3,437,835 Other General Revenue 1,177, ,348 1,410 1,128 1,179, ,476 Total Revenues 26,597,540 24,284,820 1,710,282 1,714,935 28,307,822 25,999,755 Expenses Governmental Activities: General Government 1,672,736 3,034, ,672,736 3,034,631 Public Safety 6,902,986 5,914, ,902,986 5,914,277 Public Works 4,716,000 4,305, ,716,000 4,305,441 Recreation and Cultural 2,833,098 2,589, ,833,098 2,589,877 Nondepartmental 6,322,795 5,731, ,322,795 5,731,566 Interest on Long-Term Debt 2,385,219 2,353, ,385,219 2,353,378 Business-Type Activities: Cemeteries - - 5,822 8,755 5,822 8,755 Garbage Collection - - 1,684,355 1,577,399 1,684,355 1,577,399 Other ,234 11,948 19,234 11,948 Total Expenses 24,832,834 23,929,170 1,709,411 1,598,102 26,542,245 25,527,272 Net Increase (Decrease) 1,764, , ,833 1,765, ,483 Transfers (711,739) - (8,150) - (719,889) - Change in Net Position $ 1,052,967 $ 355,650 $ (7,279) $ 116,833 $ 1,045,688 $ 472,483 Total revenues for the City were $28,307,822 for the year ended. Governmental activities provided $26,597,540 or 93.96%, while $1,710,282 of business-type activities revenue was provided by charges for services and interest income. The governmental activities received $14,301,769, or 50.52% of total revenue, from sales taxes and $3,600,496, or 12.72% of total revenue, from business licenses and permits

11 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Fund Financial Analysis Governmental Funds The General Fund is the chief operating fund of the City. The total general fund balance increased by $146,121 in 2016 to $1,419,560. At the end of the current fiscal year, the unassigned fund balance was $1,015,560. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. This is very useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. Unassigned fund balance represents approximately 5.48% of total general fund expenditures, while total fund balance represents 7.66% of the total general fund expenditures. Enterprise Funds The City operates the New Prospect Cemetery and the North Oakhill Cemetery. Lots are sold for $250 each at New Prospect and $600 each at North Oakhill. The City normally charges New Prospect $1,000 for each mowing. The cemeteries will generally operate with a small profit each year, largely as a result of interest income from a certificate of deposit owned by North Oakhill Cemetery. This year New Prospect Cemetery recorded income from operations of $1,610 and North Oakhill Cemetery recorded income from operations of $16,272. The City also operates a garbage collection service for the citizens of the City. Current year income from operations was $1,848. Budgetary Highlights The following is a brief review of the budgeting changes from the original to the final budget for the General Fund. Certain departments increased repairs and maintenance due to overages. Sales tax revenue was increased due to the passing of an additional one-cent tax. Capital Assets Capital Assets As of and 2015 (Net of Depreciation) Total Governmental Business-Type Primary Activities Activities Government Land $ 1,746,973 $ 1,746,973 $ 122,500 $ 122,500 $ 1,869,473 $ 1,869,473 Construction in Process 55,655,922 31,146, ,655,922 31,146,526 Buildings 6,717,670 4,850, , ,210 6,895,171 5,042,523 Equipment 3,175,386 3,072, , ,603 3,863,205 3,770,777 Infrastructure 11,840,806 7,411, ,840,806 7,411,705 Total $ 79,136,757 $ 48,227,691 $ 987,820 $ 1,013,313 $ 80,124,577 $ 49,241,

12 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Capital Assets Continued This investment in capital assets includes land, buildings, improvements other than buildings, system improvements (drainage and streets), machinery and equipment, park facilities, roads, highways, and bridges. The total increase in the City's investment in capital assets for the current fiscal year was $30,883,573 (an increase of $30,909,066 for governmental activities and a decrease of $(25,493) for business-type activities). Major capital asset events during the current fiscal year included the following: Construction of the new high school totaling $52,291,502. Purchase of the Jasper Civic Center in the amount of $2,200,000. Purchase of a garbage truck totaling $148,750. Development of sidewalks, lighting, and streets in the amount of $2,375,918. Debt Administration As of year-end, the City had $62,362,472 in debt (bonds, notes, etc.) outstanding compared to $62,940,333 at the end of last year, a $577,861 decrease. Outstanding Debt at Year-End Governmental: Note Payable $ 1,809,543 $ B Bond Issue 51, , Bond Issue 131, , Bond Issue 49,325,000 50,050, C Bond Issue 37,589 55, Bond Issue 1,420,000 2,135, Bond Issue 769,160 1,004, Bond Issue 4,125,093 4,294,776 Deferred Amounts 3,971,285 4,132,302 Business-Type: Bank Loans 142, , Bond Issue 419, , Bond Issue 148, , B Bond Issue 11,727 33,378 Total Debt $ 62,362,472 $ 62,940,333 The City issued a general obligation warrant during 2014 in the amount of $50,760,000 to construct a new high school for the Jasper City Board of Education. In 2015, the City issued warrants in the amount of $4,780,000 for additional construction and a garbage truck (Business-Type). Current year activity consists of the proceeds for the purchase of a garbage truck and the Jasper Civic Center and payment of principal on all others

13 MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2016 Economic Factors The City of Jasper is largely dependent upon its sales tax revenue for growth in income. In periods of economic decline, the City is faced with increasing taxes, licenses, or user charges as a means to increase revenue or reducing expenses in the form of reductions in services or employee reductions. Financial Contact The City's financial statements are designed to present users (citizens, taxpayers, customers, investors, and creditors) with a general overview of the City's finances and to demonstrate the City's accountability. If you have questions about the report or need additional financial information, contact the City Clerk on the second floor of City Hall, 400 West 19th Street, Post Office Box 1589, Jasper, Alabama

14 Statement of Net Position ASSETS Governmental Activities Primary Government Business-Type Activities Total Jasper City Board of Education Component Units Industrial Development Board of the City of Jasper, Alabama Cash and Cash Equivalents $ 6,707,756 $ 696,879 $ 7,404,635 $ 9,734,306 $ 695,588 Investments ,024,005 - Due from Primary Government ,009,847 Receivables, Net 557,828 72, ,946 2,920,333 45,523 Liens Receivable 24,300-24, Internal Balances 453,631 (443,918) 9, Inventories and Prepaids 430,225 21, ,139 39,380 - Capital Assets, Net - Nondepreciable 57,402, ,500 57,525,395 6,190,359 - Depreciable 21,733, ,320 22,599,182 11,586,256 5,275,497 TOTAL ASSETS 87,310,497 1,334,813 88,645,310 37,494,639 7,026,455 DEFERRED OUTFLOWS OF RESOURCES Deferred Charge on Refunding 378, , Deferred Outflows Related to Pension Liability ,745,000 - Contributions to Pension Plan 1,429, ,188 1,578,068 1,720,155 - TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,808, ,188 1,956,259 3,465,155 - LIABILITIES Accounts Payable 3,088,094 1,573 3,089,667 3,555,771 - Due to Component Unit Deposit - 111, , Deferred Revenue 232, , ,232 38,171 - Accrued Interest Payable 259, ,997 46,195 - NONCURRENT LIABILITIES Due Within One Year 3,011, ,515 3,163, , ,160 Due in More Than One Year 61,709, ,686 62,279,875 7,170,873 1,308,762 Net Pension Obligation 9,357, ,441 10,307,291 24,707,000 - TOTAL LIABILITIES 77,659,008 1,897,148 79,556,156 36,092,126 1,889,922 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue ,722,297 - Pension Deferrals 763 (763) - 248,000 - TOTAL DEFERRED INFLOWS OF RESOURCES 763 (763) - 1,970,297 - NET POSITION Invested in Capital Assets 14,416, ,619 14,681,638 10,165,134 3,385,575 Restricted for: Capital Projects 4,346,118-4,346, ,876 - Other Purposes ,833,992 - Unrestricted (7,303,340) (679,003) (7,982,343) (15,790,631) 1,750,958 TOTAL NET POSITION $ 11,458,797 $ (413,384) $ 11,045,413 $ 2,897,371 $ 5,136,533 The notes to the financial statements are an integral part of this statement

15 Statement of Activities Expenses Charges for Services Net (Expenses) Revenues and Changes in Net Position Program Revenues Primary Government Component Units Program Grants and Contributions Capital Grants and Contributions Governmental Activities Business-Type Activities Total Jasper City Board of Education Industrial Development Board of the City of Jasper, Alabama FUNCTIONS PRIMARY GOVERNMENT Governmental Activities General Government $ (1,672,736) $ 2,350 $ 22,815 $ - $ (1,647,571) $ - $ (1,647,571) $ - $ - Public Safety (6,902,986) 12,120 4,773 6,095 (6,879,998) - (6,879,998) - - Public Works (4,716,000) 37,095 1,800,043 - (2,878,862) - (2,878,862) - - Recreation and Cultural Services (2,833,098) 233, (2,599,989) - (2,599,989) - - Nondepartmental (6,322,795) (6,322,795) - (6,322,795) - - Interest on Long-Term Debt (2,385,219) (2,385,219) - (2,385,219) - - Total Governmental Activities (24,832,834) 284,674 1,827,631 6,095 (22,714,434) - (22,714,434) - - Business-Type Activities Cemeteries (5,822) 23, ,882 17, Garbage Collection (1,684,355) 1,685, Interest on Long-term Debt (19,234) (19,234) (19,234) - - Total Business-Type Activities (1,709,411) 1,708, (539) (539) - - TOTAL PRIMARY GOVERNMENT $ (26,542,245) $ 1,993,546 $ 1,827,631 $ 6,095 (22,714,434) (539) (22,714,973) - - COMPONENT UNITS Jasper City Board of Education $ (27,252,082) $ 2,373,101 $ 15,768,606 $ 762,851 (8,347,524) Industrial Development Board (1,976,824) (1,976,824) TOTAL COMPONENT UNITS $ (29,228,906) $ 2,373,101 $ 15,768,606 $ 762,851 GENERAL REVENUES Sales and Use Taxes 14,301,769-14,301,769 6,221,414 - Property Tax 3,364,269-3,364,269 1,710,929 - Licenses and Permits 3,600,496-3,600, ,985 Other Taxes 2,034,652-2,034, ,252 - Investment Earnings 12, ,922 20, Other General Revenues 1,158,967 1,035 1,160, ,563 - Gain on Disposal of Assets 6,440-6, Total General Revenues 24,479,140 1,410 24,480,550 8,926, ,314 Transfers (711,739) (8,150) (719,889) - - Changes in Net Position 1,052,967 (7,279) 1,045, ,597 (1,675,510) NET POSITION BEGINNING OF YEAR 10,405,830 (406,105) 9,999,725 2,318,774 6,812,043 NET POSITION END OF YEAR $ 11,458,797 $ (413,384) $ 11,045,413 $ 2,897,371 $ 5,136,533 The notes to the financial statements are an integral part of this statement

16 Balance Sheet Governmental Funds General Fund Walker High Construction Fund 2014 Bond Issue Major Funds IDB Debt Service Alcohol Fund One-Cent Sales Tax Other Governmental Funds Total Governmental Funds ASSETS Cash and Cash Equivalents $ 560,436 $ 897,349 $ 933,417 $ 991,094 $ 209,575 $ 2,227,976 $ 887,909 $ 6,707,756 Receivable, Net 443, , ,828 Liens Receivable 24, ,300 Due from Other Funds 566, , ,978 Inventories and Prepaids 404, , ,225 TOTAL ASSETS $ 1,998,760 $ 897,349 $ 933,417 $ 991,094 $ 209,575 $ 2,227,976 $ 1,109,916 $ 8,368,087 LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable $ 346,871 $ 2,145,462 $ - $ - $ 100,000 $ - $ 495,761 $ 3,088,094 Due to Other Funds , ,347 Deferred Revenue 232, ,329 TOTAL LIABILITIES 579,200 2,145, , ,108 3,514,770 FUND BALANCES Unreserved Nonspendable Fund Balance 404, , ,225 Restricted Fund Balance , , ,575 2,227,976 84,056 4,346,118 Committed Fund Balance , ,294 Assigned Fund Balance , ,233 Unassigned Fund Balance 1,015,560 (1,248,113) (232,553) TOTAL FUND BALANCES 1,419,560 (1,248,113) 933, , ,575 2,227, ,808 4,853,317 TOTAL LIABILITIES AND FUND BALANCES $ 1,998,760 $ 897,349 $ 933,417 $ 991,094 $ 209,575 $ 2,227,976 $ 1,109,916 $ 8,368,087 The notes to the financial statements are an integral part of this statement

17 Balance Sheet Continued Fund Balances Total Governmental Funds $ 4,853,317 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet. Governmental Capital Assets $ 106,753,685 Less Accumulated Depreciation (27,616,928) 79,136,757 Deferred outflows of resources related to pensions are not reported in the funds 1,429,880 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental funds balance sheet. Governmental Bonds Payable and Loans Payable (61,640,271) Current Year Accrued Interest (259,997) Accrued Landfill Closure and Post Closure Costs (186,669) Net Pension Obligation (9,357,850) Compensated Absences (2,003,318) OPEB Obligation (890,480) (74,338,585) Deferred inflows of resources related to pensions are not reported in the funds (763) Advance bond refunding gains and losses cannot be expensed, but must be deferred and amortized over the remaining life of the old debt or the life of the new debt, whichever is shorter. Advance Refunding Call Premium 378, ,191 Net Position of Governmental Activities $ 11,458,797 The notes to the financial statements are an integral part of this statement

18 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended General Fund Walker High Construction Fund 2014 Bond Issue Major Funds IDB Debt Service Alcohol Fund One-Cent Sales Tax Other Governmental Funds Total Governmental Funds REVENUES Taxes $ 18,957,752 $ - $ - $ - $ 645,189 $ - $ 97,749 $ 19,700,690 Interest 1, , ,547 Licenses and Permits 3,570, , ,600,496 Fines and Forfeitures 291, , ,071 Intergovernmental 62, , ,284 Charges and Fees 284, ,674 Rental Income 104, ,076 Grant Proceeds and Donations 2, ,831,726 1,833,726 Miscellaneous 29,951 (803) , ,373 TOTAL REVENUES 23,304,481 (489) 10, ,703-2,333,425 26,323,937 EXPENDITURES Current General Government 1,340,299 38, ,889 1,569,268 Public Safety 6,282, ,373 6,292,366 Public Works 2,890, ,352,218 4,242,386 Recreation and Cultural Services 2,220, ,746 2,360,812 Nondepartmental 3,000, , ,050,749 Intergovernmental 2,741, ,019 2,756,570 Debt Service Principal , ,308,823 2,033,823 Interest and Other Charges - - 2,321, ,628 2,508,535 Capital Outlay 54,240 25,651, ,587 6,406,816 32,271,153 TOTAL EXPENDITURES 18,530,066 25,690,041 3,046,907-50, ,587 9,609,512 57,085,662 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 4,774,415 (25,690,530) (3,036,294) ,154 (158,587) (7,276,087) (30,761,725) OTHER FINANCING SOURCES (USES) Proceeds of Long-Term Debt ,809,543 1,809,543 Transfers In 176,603 29,500,000 3,046, ,000-3,475,000 1,770,769 38,469,279 Transfers Out (4,804,897) - (29,500,000) (719,889) (615,000) (3,307,779) (233,453) (39,181,018) TOTAL OTHER FINANCING SOURCES (USES) (4,628,294) 29,500,000 (26,453,093) (219,889) (615,000) 167,221 3,346,859 1,097,804 NET CHANGE IN FUND BALANCES 146,121 3,809,470 (29,489,387) (219,685) 10,154 8,634 (3,929,228) (29,663,921) FUND BALANCES BEGINNING OF YEAR 1,273,439 (5,057,583) 30,422,804 1,210,779 99,421 2,219,342 4,349,036 34,517,238 FUND BALANCES END OF YEAR $ 1,419,560 $ (1,248,113) $ 933,417 $ 991,094 $ 109,575 $ 2,227,976 $ 419,808 $ 4,853,317 The notes to the financial statements are an integral part of this statement

19 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities NET CHANGE IN FUND BALANCES TOTAL GOVERNMENTAL FUNDS $ (29,663,921) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is depreciated over their estimated useful lives. Expenditures for Capital Assets $ 32,271,153 Depreciation (1,362,085) Amortization of Bond Discount 161,017 Advanced and Current Refundings (26,489) Contributions to pension plan in current fiscal year are not included on the Statement of Activities $ 31,043, ,127 Some expenses reported in the Statement of Activities differ from amounts reported as expenditures in governmental funds. Compensated Absences (423,219) Change in OPEB Obligations (39,890) Accrued Interest (11,214) Pension Expense (832,125) Accrued Closure and Post Closure Costs (26,667) (1,333,115) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases longterm liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces longterm liabilities in the Statement of Net Position. This is the amount by which proceeds exceed repayments. Bond and Loan Proceeds (1,809,543) Principal Payments 2,033, ,280 30,716,888 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 1,052,967 The notes to the financial statements are an integral part of this statement

20 Statement of Revenues, Expenditures, and Encumbrances Budget to Actual General Fund For the Year Ended Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 18,222,000 $ 18,858,000 $ 18,957,752 $ 99,752 Interest 1,000 1,000 1, Licenses and Permits 3,356,700 3,551,825 3,570,011 18,186 Fines and Forfeitures 380, , ,759 (41,241) Intergovernmental 84,200 84,200 62,976 (21,224) Charges and Fees 646, , ,674 17,124 Rental Income 34,000 91, ,076 12,126 Grant Proceeds and Donations - - 2,000 2,000 Miscellaneous 15,500 15,500 29,951 14,451 TOTAL REVENUES 22,740,000 23,203,025 23,304, ,456 EXPENDITURES Current General Government 1,393,800 1,354,323 1,340,299 14,024 Public Safety 6,040,870 6,204,800 6,282,993 (78,193) Public Works 2,739,430 2,842,114 2,890,168 (48,054) Recreation and Cultural Services 2,130,350 2,174,495 2,220,066 (45,571) Nondepartmental 3,044,000 3,140,100 3,000, ,351 Intergovernmental 2,644,300 2,719,275 2,741,551 (22,276) Capital Outlay 12,000 62,574 54,240 8,334 TOTAL EXPENDITURES 18,004,750 18,497,681 18,530,066 (32,385) Excess of Revenues Over Expenditures 4,735,250 4,705,344 4,774,415 69,071 OTHER FINANCING SOURCES (USES) Transfers In 160, , ,603 (12,000) Transfers Out (4,795,250) (4,804,897) (4,804,897) - TOTAL OTHER FINANCING SOURCES (USES) (4,635,250) (4,616,294) (4,628,294) (12,000) NET CHANGE IN FUND BALANCE 100,000 89, ,121 57,071 FUND BALANCE BEGINNING 1,273,439 1,273,439 1,273,439 - FUND BALANCE ENDING $ 1,373,439 $ 1,362,489 $ 1,419,560 $ 57,071 The notes to the financial statements are an integral part of this statement

21 Statement of Net Position Proprietary Funds Proprietary Funds New North Total Prospect Oakhill Garbage Business-Type Cemetery Cemetery Collection Activities ASSETS Current Assets Cash and Cash Equivalents $ 248,920 $ 40,350 $ 407,609 $ 696,879 Accounts Receivable, Net ,118 72,118 Inventory ,914 21,914 TOTAL CURRENT ASSETS 248,920 40, , ,911 Noncurrent Assets Capital Assets Land 122, ,500 Equipment and Improvements 30, ,427 2,967,139 3,175, , ,427 2,967,139 3,297,713 Less: Accumulated Depreciation (30,647) (63,249) (2,215,997) (2,309,893) TOTAL NONCURRENT ASSETS 122, , , ,820 TOTAL ASSETS 371, ,528 1,252,783 1,778,731 DEFERRED OUTFLOWS OF RESOURCES Contributions to Pension Plan , ,188 LIABILITIES Current Liabilities Accounts Payable - - 1,573 1,573 Deposit , ,030 Due to Other Funds - 7, , ,918-7, , ,521 Noncurrent Liabilities Due Within One Year Bonds and Note Payable - 11, , ,515 Due in More Than One Year Deferred Revenue 112, ,903 Net Pension Obligation , ,441 Bonds and Note Payable , ,686 TOTAL LIABILITIES 112,903 19,219 2,208,944 2,341,066 DEFERRED INFLOWS OF RESOURCES Pension Deferrals - - (763) (763) NET POSITION Invested in Capital Assets 122, ,451 40, ,619 Unrestricted 136,017 32,858 (847,878) (679,003) TOTAL NET POSITION $ 258,517 $ 135,309 $ (807,210) $ (413,384) The notes to the financial statements are an integral part of this statement

22 Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For the Year Ended Proprietary Funds New North Total Prospect Oakhill Garbage Business-Type Cemetery Cemetery Collection Activities OPERATING REVENUES Sales of Lots $ - $ 22,000 $ - $ 22,000 Collection Fees - - 1,685,168 1,685,168 Annual Upkeep 1, ,704 Miscellaneous - - 1,035 1,035 TOTAL OPERATING REVENUES 1,704 22,000 1,686,203 1,709,907 OPERATING EXPENSES Personnel , ,806 Vehicle Expenses , ,714 Repairs and Maintenance , ,490 Depreciation - 5, , ,243 Other , ,396 Supplies ,968 77,968 Utilities ,560 30,560 TOTAL OPERATING EXPENSES 94 5,728 1,684,355 1,690,177 OPERATING INCOME (LOSS) 1,610 16,272 1,848 19,730 NONOPERATING REVENUES (EXPENSES) Interest Expense - (998) (18,236) (19,234) Interest Income Transfers In Transfers Out - (8,150) - (8,150) TOTAL NONOPERATING REVENUES (EXPENSES) - (9,148) (17,861) (27,009) CHANGE IN NET POSITION 1,610 7,124 (16,013) (7,279) NET POSITION BEGINNING OF YEAR 256, ,185 (791,197) (406,105) NET POSITION END OF YEAR $ 258,517 $ 135,309 $ (807,210) $ (413,384) The notes to the financial statements are an integral part of this statement

23 Statement of Cash Flows Proprietary Funds For the Year Ended Proprietary Funds New North Total Prospect Oakhill Garbage Business-Type Cemetery Cemetery Collection Activities CASH FLOWS FROM OPERATING ACTIVITIES Cash Receipts from Citizens $ - $ 22,000 $ 1,729,084 $ 1,751,084 Cash Receipts for Annual Upkeep 1, ,704 Cash Paid to Employees for Services - - (974,980) (974,980) Cash Paid to Suppliers (94) - (565,628) (565,722) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,610 22, , ,086 CASH FLOWS FROM INVESTING ACTIVITIES Cash Received from Interest Earnings NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal Payments on Long-Term Debt - (21,651) (170,913) (192,564) Payments to Other Funds - (17,726) - (17,726) Purchase of Capital Assets - - (148,750) (148,750) Cash Paid for Interest Expense - (998) (18,221) (19,219) NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES - (40,375) (337,884) (378,259) NET INCREASE (DECREASE) IN CASH 1,610 (18,375) (149,033) (165,798) CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 247,310 58, , ,677 CASH AND CASH EQUIVALENTS END OF YEAR $ 248,920 $ 40,350 $ 407,609 $ 696,879 The notes to the financial statements are an integral part of this statement

24 Statement of Cash Flows Continued Proprietary Funds For the Year Ended Proprietary Funds New North Total Prospect Oakhill Garbage Business-Type Cemetery Cemetery Collection Activities RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) $ 1,610 $ 16,272 $ 1,848 $ 19,730 Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Depreciation and Amortization - 5, , ,243 Pension Expense ,536 81,536 Change in Accounts Receivable ,792 24,792 Change in Inventory - - (6,738) (6,738) Change in Deferred Outflows and Inflows - - (121,902) (121,902) Change in Accounts Payable - - (50,875) (50,875) Change in Customer Deposits - - (18,089) (18,089) Change in Net Pension Liability , ,076 Due to Other Funds - - (22,687) (22,687) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 1,610 $ 22,000 $ 188,476 $ 212,086 The notes to the financial statements are an integral part of this statement

25 Statement of Net Position Fiduciary Funds Private Purpose Trust ASSETS Cash and Cash Equivalents $ 25,527 Accounts Receivable - TOTAL ASSETS 25,527 LIABILITIES Due to Other Funds 18,663 NET POSITION Held in Trusts for Individual $ 6,864 The notes to the financial statements are an integral part of this statement

26 Notes to Financial Statements NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The City of Jasper, Alabama (the "City'), operates under a Mayor-Council form of government. The City's major operations include police and fire protection, parks, library and recreation, public works, and general administrative services. In addition, the City owns and operates two cemeteries. The City's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP') as applied to governmental units. The Governmental Accounting Standards Board ("GASB") is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes the ultimate authority on GAAP for state and local governmental units. The more significant accounting policies established by GAAP and used by the City are discussed below. As required by GAAP, these financial statements present the City and its component units, legally separate entities for which the City is considered to be financially accountable. The City has no blended component units. On the other hand, the City does have two discretely presented component units. The Jasper City Board of Education has a September 30 yearend, and the Industrial Development Board of the City of Jasper, Alabama, has a December 31 year-end. Jasper City Board of Education Five members of the Board of Education are appointed by the City and the Board of Education as an agency of the State of Alabama under the general supervision and financial jurisdiction of the Alabama State Department of Education. The City is obligated in some manner for the debt of the Board of Education and the City levies a sales tax specifically for operations of the Board of Education. Complete financial statements for the Jasper City Board of Education may be obtained at the following administrative office: Jasper City Board of Education, th Street West, P.O. Box 500, Jasper, Alabama Industrial Development Board of the City of Jasper, Alabama The Industrial Development Board members are appointed by the City and the City is obligated in some manner for the debt of the Industrial Development Board. Complete financial statements for the Industrial Development Board may be obtained at the following administrative office: Industrial Development Board, P.O. Box 972, Jasper, Alabama Related Organizations The City is also responsible for appointing a voting majority of the boards of other organizations, but the City's financial accountability for these organizations does not extend beyond making the appointments, or the financial resources and obligations of these organizations are immaterial. The City appointed a voting majority of the following boards: Jasper Water Works and Sewer Board, Inc., City of Jasper Library Board, City of Jasper Housing Authority, City of Jasper Board of Zoning Adjustments, City of Jasper Housing Authority, and City of Jasper Medical and Public Building Authority. These organizations are related organizations, which have not been included in the reporting entity

27 Notes to Financial Statements NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Government-Wide and Fund Financial Statements The City's basic financial statements include both government-wide and fund financial statements. Government-wide financial statements focus on the City as a whole and are designed to allow the users of financial reports to assess the City's operational accountability. The fund financial statements focus on major individual funds and are designed to demonstrate the City's fiscal accountability. Operational accountability refers to the City's responsibility to report the extent to which it has met its operating objectives efficiently and effectively, using all resources available for that purpose, and whether it can continue to meet those objectives for the foreseeable future. Fiscal accountability is the City's responsibility to demonstrate that its actions in the current period have complied with public decisions concerning the raising and spending of public money in the short-term (usually one budgetary cycle or one year). For the most part, the effect of interfund activity has been removed from the governmentwide financial statements. 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. The government-wide statement of activities reflects both the gross and net costs per functional category (i.e., general government, public safety, etc.) by offsetting direct expenses with program revenues. Direct expenses are those that are clearly identifiable with a specific program. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) operating or capital grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenue. The fund financial statements provide separate financial statements for governmental funds, proprietary funds, and fiduciary funds (even though fiduciary funds are excluded from the government-wide financial statements). The emphasis of the fund financial statements is on the City's major funds, and each major fund is reported in a separate column. Nonmajor funds of each type are summarized into a single column. 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 and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when the related liability is incurred. Property taxes are recognized as revenues in the year they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 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 available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due