Roosevelt City Corporation Duchesne County, Utah

Transcription

1 Duchesne County, Utah ANNUAL FINANCIAL REPORT For the Year Ended

2

3 TABLE OF CONTENTS Beginning on page INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS 13 Government-wide Financial Statements: Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements: Balance Sheet - Governmental Funds 18 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 19 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21 Statement of Net Position - Proprietary Funds 22 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 23 Statement of Cash Flows - Proprietary Funds 24 Notes to Financial Statements 26 REQUIRED SUPPLEMENTARY INFORMATION 47 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund Schedule of the Proportianate Share of the Net Pension Liability Schedule of Contributions (Continued on next page)

4 TABLE OF CONTENTS (Continued from previous page) Beginning on page SUPPLEMENTARY INFORMATION 53 Impact Fees and Insurance Coverage 55 COMPLIANCE REPORTS 57 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 58 Independent Auditor's Report in Accordance with the State Compliance Audit Guide 59

5 Aycock, Miles & Associates, CPAs, P.C. Certified Public Accountants 58 East 100 North (83-13) Roosevelt, Utah Phone (435) Fax (435) Roosevelt City Town Council Roosevelt, Utah Independent Auditors Report We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of Roosevelt City, as of and for the year ended June 30, 2016, which collectively comprise Roosevelt City s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of Roosevelt City as of, and the respective changes in financial position and, if applicable, cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. 1

6 Aycock, Miles & Associates, CPAs, P.C. Certified Public Accountants 58 East 100 North (83-13) Roosevelt, Utah Phone (435) Fax (435) Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis, budget comparison, and pension schedules 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 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. Supplementary & Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Roosevelt City s basic financial statements. The supplemental schedule of impact fees and insurance coverage is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplemental schedule of impact fees and insurance coverage has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2016 on our consideration of Roosevelt City 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 Roosevelt City s internal control over financial reporting and compliance. Aycock, Miles & Associates, CPAs October 27,

7 MANAGEMENT'S DISCUSSION AND ANALYSIS 3

8 This page intentionally left blank. 4

9 Management's Discussion and Analysis As management of Roosevelt City Corporation (the City), we offer readers of the City's financial statements this narrative overview and analysis of financial activities of the City for the fiscal year ended FINANCIAL HIGHLIGHTS *Total net position for the City as a whole increased by $6,358,250 *Total unrestricted net position for the City as a whole increased by $17,677 *Total net position for governmental activities increased by $2,929,655 *Total net position for business-type activities increased by $3,428,595 BASIC FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the basic financial statements of Roosevelt City Corporation. The basic financial statements comprise three components: (1) government wide financial statements, (2) fund financial statements, and (3) notes to the financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad 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, deferred outflows, liabilities, and deferred inflows, with the difference between the two reported as net position. 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 showing how the City's net position changed during the fiscal year reported. 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. 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 recover all or a significant portion of their costs through user fees and charges (business-type activities). The statement of activities is presented on two pages. The first page reports the extent to which each function or program is self-supporting through fees and intergovernmental aid. The second page identifies the general revenues of the City available to cover any remaining costs of the functions or programs. 5

10 Management's Discussion and Analysis Fund financial statements. 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 also uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. These funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. Governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. 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 government 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 government's near-term financing decisions. Both the government fund balance sheet and the government fund statement of the revenues, expenditures, and changes in fund balances provide reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains two major governmental funds, the general fund and the capital projects fund. The City adopts an annual appropriated budget for all its funds A budgetary comparison schedule has been provided to demonstrate legal compliance with the adopted budget for the general fund. The basic governmental fund financial statements can be found later in this report; see Table of Contents. Proprietary funds. The City maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses three enterprise funds to account for the operations of the water, sewer, and garbage utilities. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The enterprise funds are considered major funds of the City. The proprietary fund financial statements can be found later in this report; see Table of Contents. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements are reported later in this report; see Table of Contents. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City. 6

11 Management's Discussion and Analysis FINANCIAL ANALYSIS Roosevelt City's Net Position Governmental Activities Business-type Activities Total Total Current Previous Current Previous Current Previous Year Year Year Year Year Year Current and other assets $ 6,024,229 8,236,024 6,030,303 3,741,723 12,054,531 11,977,747 Net capital assets 26,441,643 19,479,028 34,248,387 32,156,467 60,690,030 51,635,496 Deferred outflows of resources 473, , ,953 60, , ,635 Total assets and deferred outflows $ 32,939,856 27,871,928 40,462,643 35,958,949 73,402,499 63,830,878 Long-term debt outstanding $ 2,512,658 1,047,046 6,125,727 6,248,174 8,638,384 7,295,220 Other liabilities 2,407,539 1,711,119 1,676, ,035 4,084,136 2,195,153 Deferred inflows of resources 1,044,923 1,068,682 52,156 47,173 1,097,079 1,115,855 Total liabilities and deferred inflows 5,965,119 3,826,847 7,854,480 6,779,382 13,819,599 10,606,228 Net position: Net investment in capital assets 23,928,985 18,431,983 28,122,660 25,908,293 52,051,645 44,340,276 Restricted 2,550,693 5,276,564 2,316, ,581 4,867,349 6,238,145 Unrestricted 495, ,535 2,168,847 2,309,694 2,663,906 2,646,229 Total net position $ 26,974,737 24,045,082 32,608,163 29,179,568 59,582,900 53,224,650 As noted earlier, net position may serve over time as a useful indicator of financial position. Total assets and deferred outflows of resources exceeded total liabilities and deferred inflow of resources at the close of the year by $59,582,900, an increase of $6,358,250 from the previous year. This change is equivalent to the net income for the year, in private sector terms. Total unrestricted net position at the end of the year are $2,663,906 which represents an increase of $17,677 from the previous year. Unrestricted net position are those resources available to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements. The amount of current and other assets represent the amounts of cash and receivables on hand at the end of each year. Other liabilities are the amounts of current and other liabilities due, at year end, for goods and services acquired. Changes in capital assets are the result of the difference, in the current year, of the cost of acquisition of capital assets and any depreciation charges on capital assets.change in long-term debt is the difference in the amount of debt issued and that which has been paid during the year. 7

12 Management's Discussion and Analysis FINANCIAL ANALYSIS (continued) Roosevelt City's Change in Net Position Governmental Business-type Activities Activities Total Total Current Previous Current Previous Current Previous Year Year Year Year Year Year Program revenues: Charges for services $ 1,307,474 1,138,728 3,997,735 3,981,241 5,305,210 5,119,969 Operating grants 375, , , ,167 Capital grants 3,190,544 1,852,311 2,832, ,518 6,023,535 2,578,828 General revenues: Property taxes 1,071,616 1,004, ,071,616 1,004,656 Sales tax 2,043,446 2,730, ,043,446 2,730,570 Other taxes 666, , , ,810 Other revenues (1,707) 1,778,852 5,956 5,804 4,249 1,784,656 Total revenues 8,653,066 9,694,094 6,836,682 4,713,563 15,489,748 14,407,656 Expenses: General government 771, , , ,845 Public safety 1,783,148 1,710, ,783,148 1,710,117 Highways and improvements 1,114,041 1,357, ,114,041 1,357,153 Parks and recreation 2,033,860 1,719, ,033,860 1,719,066 Interest on long-term debt 20,559 12,167 40,699 41,816 61,258 53,983 Water - - 1,822,136 1,848,936 1,822,136 1,848,936 Sewer , , , ,525 Garbage , , , ,781 Total expenses 5,723,411 5,635,348 3,408,087 3,463,058 9,131,498 9,098,406 Change in net position $ 2,929,655 4,058,746 3,428,595 1,250,505 6,358,250 5,309,250 For the City as a whole, total revenues increased by $1,082,092 compared to the previous year, while total expenses increased by $33,092 The total net change of $6,358,250 is, in private sector terms, the net income for the year which is $1,049,000 more than the previous year. Governmental activities revenues of $8,653,066 is a decrease of $1,041,028 from the previous year. While charges for services and capital grants increased, sales tax and revenues from contributions decreased. Total grant revenue, operating and capital, increased by $3,388,577. Governmental activities expenses of $5,723,411 is an increase of $88,063 from the previous year. While public safety, and parks and recreation expenses increased, general government, and highways and improvements expenses decreased. Business-type activities revenue of $6,836,682 is an increase of $2,123,119 from the previous year. Service revenues increased by $16,494 and capital grants increased by $2,106,473. Business-type activities expenses of $3,408,087 is a decrease of $54,971 from the previous year. This is due to an overall decrease in operation expenses. 8

13 Management's Discussion and Analysis BALANCES AND TRANSACTIONS OF INDIVIDUAL FUNDS Some of the more significant changes in fund balances and fund net assets and any restrictions on those amounts is described below: General Fund The fund balance of $1,376,972 reflects an increase of $10,445 from the previous year. Total revenues decreased by $471,442. Tax revenues, including property taxes and sales taxes decrease by $605,460. All other revenues increased by a total of $134,017. Total expenditures increased by $102,818. General government expenditures increased by $25,490; public safety expenditures increased by $48,690; streets and highways expenditures decreased by $282,424; and parks and recreation expenditures increased by $311,175. There was $650,000 transferred to the capital projects fund and $50,000 to the debt service fund making a total of $700,000 transfered from the general fund to other funds. Fund balance restricted for construction amounts to $115,406, resulting in an unassigned fund balance of $1,261,566. Water Fund The change in net position (net income) was $3,551,171, which included capital grants of $2,832,991. The amounts restricted are: $327,660 for debt service, and $1,548,330 for construction. Unrestricted net position amounts to $1,296,343. Sewer Fund The change in net position (net loss) was $122,494. The amounts restricted for debt service was $440,666. Unrestricted net position amounts to $872,391. GENERAL FUND BUDGETARY HIGHLIGHTS Revenues for the current year, exclusive of transfers and fund balance appropriations, were originally budgeted in the amount of $5,331,055. This amount was amended in the final budget to $5,621,645. Actual revenues, excluding transfers, amounted to $5,579,841. Expenditures for the current year, excluding transfers, were originally budgeted in the amount of $5,069,000. This amount was amended in the final budget to $5,556,256. Actual expenditures amounted to $4,869,396. Transfers out for the year were originally budgeted in the amount of $450,000. The final budget for transfers out was for the amount of $65,389. Actual net transfers out were made in the amount of $700,000. 9

14 Management's Discussion and Analysis CAPITAL ASSETS AND DEBT ADMINISTRATION Roosevelt City's Capital Assets (net of depreciation) Governmental Business-type Activities Activities Total Total Current Previous Current Previous Current Previous Year Year Year Year Year Year Net Capital Assets: Land and water rights $ 1,222,680 1,222,680 1,409,807 1,409,807 2,632,487 2,632,487 Buildings 10,945,590 2,569, ,878 10,945,590 3,145,282 Improvements other than buildings 6,326,776 6,476, ,326,776 6,476,866 Equipment 1,263,874 1,388, ,578 1,263,874 1,699,053 Infrastructure 6,682,723 7,066, ,682,723 7,066,518 Water system ,545,645 13,657,860 20,545,645 13,657,860 Sewer system - - 9,532,518 9,710,601 9,532,518 9,710,601 Work in progress - 755,084 2,760,417 6,491,745 2,760,417 7,246,829 Totals $ 26,441,643 19,479,027 34,248,386 32,156,469 60,690,029 51,635,496 The total amount of capital assets, net of depreciation, of $60,690,029 is an increase of $9,054,533 from the previous year. Governmental activities capital assets, net of depreciation, of $26,441,643 is an increase of $6,962,616 from the previous year. Business-type activities capital assets, net of depreciation, of $34,248,386 is an increase of $2,091,917 from the previous year. Additional information regarding capital assets may be found in the notes to financial statements. 10

15 Management's Discussion and Analysis Roosevelt City's Outstanding Debt - Revenue Bonds Current Year Previous Year Governmental activities: 2015 MBA Lease Revenue $ 1,600, Golf Cart Lease 3,658 9, Street Revenue 519, ,000 MBA Lease , ,000 Golf Clubhouse 2001B 260, ,000 Total governmental $ 2,512,658 1,047,046 Business-type activities: Water 1999A $ 232, ,000 Water 1999B 49,000 61,000 Water , ,000 Water 2000A 26,000 30,000 Water 2005A 585, ,000 Water , ,000 Water , ,000 Water 2011B 467, ,000 Water , ,000 Sewer , ,174 Sewer 2005B 180, ,000 Sewer , ,000 Sewer , ,000 Sewer 2009B 2,162,000 2,306, Utility Improvements 307,000 - Total business-type $ 6,125,727 6,248,174 Total outstanding debt $ 8,638,384 7,295,220 Additional information regarding the long-term liabilities may be found in the notes to financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES As mentioned in the 2015 FY Financial Statement, we have seen the economy deepen and settle into the lower portion of an economic cyclical trough position largely due to impacts of energy prices and the ramifications of such. It is expected that we have reached the bottom of this trough and our now planning a rather stagnant to minor growth mode during the 2017 fiscal year. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the Roosevelt City Corporation's finances for all those with an interest in the City's finances. Questions concerning any information provided in this report or requests for additional financial information should be addressed to the Office of the City Recorder, 255 South State Street, Roosevelt, UT

16 This page intentionally left blank. 12

17 BASIC FINANCIAL STATEMENTS 13

18 This page intentionally left blank. 14

19 STATEMENT OF NET POSITION ASSETS AND DEFERRED OUTFLOWS OF RESOURCES: Assets: Current assets: Cash and cash equivalents 3,394,529 Governmental Business-type Activities Activities Total $ 3,143,981 6,538,510 Accounts receivable, net 1,550, ,002 1,979,436 Other current assets 633,374 76, ,244 Total current assets 5,578,336 3,649,854 9,228,190 Non-current assets: Restricted cash and cash equivalents 408,857 2,379,706 2,788,563 Receivables due after one year 35,115-35,115 Capital assets: Not being depreciated 1,222,680 4,170,224 5,392,904 Net of accumulated depreciation 25,218,963 30,078,163 55,297,126 Net pension assets 1, ,664 Total non-current assets 26,887,535 36,628,836 63,516,371 Total assets 32,465,872 40,278,689 72,744,561 Deferred outflows of resources - pensions 473, , ,938 Total assets and deferred outflows of resources $ 32,939,856 40,462,643 73,402,499 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES: Liabilities: Current liabilities: Accounts payable $ 771,936 1,132,760 1,904,697 Unearned Revenue 435, ,000 Customer security deposits ,050 63,800 Accrued interest payable 23,839 6,149 29,988 Revenue bonds due within one year 200, , ,566 Capital leases due within one year 3,658-3,658 Total current liabilities 1,435,183 1,633,526 3,068,709 Non-current liabilities: Compensated absences 228, , ,115 Revenue bonds due after one year 2,309,000 5,694,160 8,003,160 Net pension liability 947, ,199 1,314,536 Total non-current liabilities 3,485,013 6,168,798 9,653,811 Total liabilities 4,920,196 7,802,324 12,722,520 Deferred inflows of resources - property taxes 910, ,300 Deferred inflows of resources - pensions 134,623 52, ,779 Total liabilities and deferred inflows of resources 5,965,119 7,854,480 13,819,599 NET POSITION: Net investment in capital assets 23,928,985 28,122,660 52,051,645 Restricted for: Debt service 156, , ,679 Construction 252,504 1,548,330 1,800,834 Unrestricted 2,636,895 2,168,847 4,805,742 Total net position 26,974,737 32,608,163 59,582,900 Total liabilities, deferred inflows of resources and net position $ 32,939,856 40,462,643 73,402,499 The notes to the financial statements are an integral part of this statement. 15

20 FUNCTIONS/PROGRAMS: Roosevelt City Corporation STATEMENT OF ACTIVITIES Net (Expense) Charges Operating Capital Revenue for Grants and Grants and (To Next Expenses Services Contributions Contributions Page) Primary government: Governmental activities: Administration $ 771, ,396 55,549 - (440,857) Public safety 1,783, ,477 71,316 - (1,521,355) Streets and highways 828, ,172 - (580,617) Airport 285, , (154,080) Culture and recreation: Parks, recreation, cemetery 891, ,540-3,190,544 2,531,407 Golf 1,142, , (664,294) Interest on long-term debt 20, (20,559) Total governmental activities 5,723,411 1,307, ,037 3,190,544 (850,355) Business-type activities: Water 1,855,145 2,569,786-2,832,991 3,547,632 Sewer 770, , (124,911) Garbage 782, , (82) Total business-type activities 3,408,087 3,997,735-2,832,991 3,422,639 Total primary government $ 9,131,498 5,305, ,037 6,023,535 2,572,283 (continued on next page) The notes to the financial statements are an integral part of this statement. 16

21 STATEMENT OF ACTIVITIES (continued) CHANGES IN NET POSITION: Governmental Business-type Activities Activities Total Net (expense) revenue (from previous page) $ (850,355) 3,422,639 2,572,283 General revenues: Property taxes 1,071,616-1,071,616 Sales tax 2,043,446-2,043,446 Other taxes 666, ,656 Unrestricted investment earnings 65,094 5,956 71,050 Gain (loss) on sales of capital assets (232,868) - (232,868) Special assessments 11,786-11,786 Miscellaneous 154, ,280 Total general revenues 3,780,011 5,956 3,785,967 Change in net position 2,929,655 3,428,595 6,358,250 Net position - beginning restated 24,045,082 29,179,568 53,224,650 Net position - ending $ 26,974,737 $ 32,608,163 59,582,900 The notes to the financial statements are an integral part of this statement. 17

22 BALANCE SHEET - GOVERNMENTAL FUNDS Capital Non-Major Total General Projects Debt Service Governmental Fund Fund Fund Funds ASSETS Cash and cash equivalents $ 816,142 2,578,387-3,394,529 Accounts receivable, net of allowances 1,582,839 2,709-1,585,548 Other assets 121, , ,374 Restricted cash and cash equivalents 115, , , ,857 TOTAL ASSETS $ 2,635,979 3,229, ,353 6,022,308 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES Liabilities: Accounts payable $ 256, ,043-1,207,686 Total liabilities 256, ,043-1,207,686 Deferred inflows of resources: Deferred inflows of resources - property tax 960, ,298 Deferred inflows of resources - special assessments 42, ,065 Total deferred inflows of resources 1,002, ,002,363 TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 1,259, ,043-2,210,049 FUND BALANCES: Nonspendable for prepaids - 76,782-76,782 Restricted for: Construction 115, , ,504 Debt service , ,353 Assigned for: Construction - 2,065,054-2,065,054 Debt service Unassigned 1,261, ,261,566 TOTAL FUND BALANCES 1,376,972 2,278, ,353 3,812,258 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 2,635,979 3,229, ,353 6,022,308 The notes to the financial statements are an integral part of this statement. 18

23 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended Capital Non-Major Total General Projects Debt Service Governmental Fund Fund Fund Funds REVENUES: Taxes: Property $ 1,071, ,071,616 Sales 2,043, ,043,446 Other taxes 666, ,656 License and permits 150, ,818 Intergovernmental revenues 375,037 3,190,544-3,565,581 Charges for services 1,043,231-54,023 1,097,254 Fines and forfeitures 59, ,166 Interest 33,247 31, ,094 Miscellaneous revenue 124,838 83, ,124 Total revenues 5,568,055 3,305,510 54,192 8,927,756 EXPENDITURES: Current: General government 749, ,148 Public safety 1,710, ,710,202 Highways and public improvements 577, ,869 Parks, recreation and public property 1,795, ,795,859 Capital outlay - 8,235,141-8,235,141 Debt service: Principal 35,388-99, ,388 Interest 930-2,743 3,673 Total expenditures 4,869,396 8,235, ,743 13,206,280 Excess (Deficiency) of Revenues over (Under) Expenditures 698,659 (4,929,632) (47,551) (4,278,524) Other Financing Sources and (Uses): Bond Proceeds - 1,600,000-1,600,000 Special assessment fees 11, ,786 Transfers in - 650,000 50, ,000 Transfers (out) (700,000) - - (700,000) Total other financing sources and (uses) (688,214) 2,250,000 50,000 1,611,786 Net Change in Fund Balances 10,445 (2,679,632) 2,449 (2,666,737) Fund balances - beginning of year 1,366,527 4,958, ,904 6,478,996 Fund balance - end of year $ 1,376,972 2,278, ,353 3,812,258 The notes to the financial statements are an integral part of this statement. 19

24 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION Total Fund Balance for Governmental Funds $ 3,812,258 Total net assets reported for governmental activities in the statement is different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds: Capital assets, at cost 40,540,995 Less accumulated depreciation (14,099,352) Net capital assets 26,441,643 Net pension assets are not financial resources and, therefore, are not reported in the funds. 1,921 Deferred outflows of resources - pensions, a consumption of net position that applies to future periods, is not shown in the funds statements. 473,985 Long-term liabilities, for funds other than enterprise funds, are recorded in the government-wide statements but not in the fund statements. General long-term debt (2,512,658) Interest accrued but not yet paid on long-term debt (23,839) Compensated absences (228,676) Net pension liability (947,337) Deferred inflows of resources - pensions (134,623) Certain revenue is deferred in governmental funds but not in the statement of net position because it qualifies for recognition under the economic resources measurement focus. Special assessments deferred 42,065 Delinquent property tax deferred 49,998 Total Net Position of Governmental Activities $ 26,974,737 The notes to the financial statements are an integral part of this statement. 20

25 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended Net Change in Fund Balances - Total Governmental Funds $ (2,666,737) 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, assets with a material cost are capitalized and the cost so allocated over their estimated useful lives and reported as depreciation expenses. Capital outlays 8,235,141 Depreciation expense (985,814) Net 7,249,327 The Statement of Activities show pension benefits and pension expenses from the adoption of GASB 68 that are not shown in the fund statements. 60,372 Cost of retired assets sold is not reported in government fund statements, while it is reported in the statement of activities. Book cost of assets retired (286,712) Bond proceeds are reported as financing sources in government funds. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Debt issued - bonds (1,600,000) Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Long-term debt principal repayments 134,388 Accrued interest for long-term debt is not reported as expenditure for the current period, while it is recorded in the statement of activities. Change in accrued interest (16,886) Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and are not reported as expenditures in governmental funds. Change in compensated absence liability 55,668 Governmental funds do not report certain deferred inflows as revenue because these revenues are not available for current period expenses. Change in special assessments receivable (12,960) Change in delinquent property tax 13,195 Change in Net Position of Governmental Activities $ 2,929,655 The notes to the financial statements are an integral part of this statement. 21

26 STATEMENT OF NET POSITION - PROPRIETARY FUND ASSETS AND DEFERRED OUTFLOWS OF RESOURCES: Assets: Current assets: Cash and cash equivalents 2,234,428 Total Water Sewer Sanitation Proprietary Fund Fund Fund Funds $ 910,066 (513) 3,143,981 Accounts receivable, net 287,880 78,054 63, ,002 Due from other funds Other current assets 71,528 5,343-76,871 Total current assets 2,593, ,463 62,556 3,649,854 Non-current assets: Restricted cash and cash equivalents 1,939, ,666-2,379,706 Capital assets: Not being depreciated 4,011, ,905-4,170,224 Net of accumulated depreciation 20,545,645 9,532,518-30,078,163 Net pension assets Total non-current assets 26,496,505 10,132,331-36,628,836 Total assets 29,090,340 11,125,794 62,556 40,278,689 Deferred outflows of resources - pensions 126,462 57, ,953 Total assets and deferred outflows of resources $ 29,216,802 11,183,285 62,556 40,462,643 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES: Liabilities: Current liabilities: Accounts payable $ 1,065,667 4,650 62,443 1,132,760 Customer security deposits 63, ,050 Due to other funds Accrued interest payable 6, ,149 Revenue bonds, current portion 208, , ,566 Total current liabilities 1,342, ,217 62,443 1,633,526 Non-current liabilities: Compensated absences 66,734 40, ,439 Revenue bonds, long-term 2,651,000 3,043,160-5,694,160 Net pension liability 250, , ,199 Total non-current liabilities 2,968,177 3,200,621-6,168,798 Total liabilities 4,311,044 3,428,837 62,443 7,802,324 Deferred inflows of resources - pensions 35,461 16,695-52,156 Total liabilities and deferred inflows of resources 4,346,505 3,445,532 62,443 7,854,480 NET POSITION: Net investment in capital assets 21,697,964 6,424,696-28,122,660 Restricted for: Debt service 327, , ,326 Construction 1,548, ,548,330 Unrestricted 1,296, , ,168,847 Total net position $ 24,870,297 7,737, ,608,163 Total liabilities, deferred inflows of resources and net position $ 29,216,802 11,183,285 62,556 40,462,643 The notes to the financial statements are an integral part of this statement. 22

27 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUND Total Water Sewer Sanitation Proprietary Fund Fund Fund Funds Operating income: Charges for sales and service $ 2,310, , ,770 3,674,790 Connection fees 151,235 30, ,235 Other operating income 107,945 5,418 28, ,710 Total operating income 2,569, , ,118 3,997,735 Operating expenses: Purchased product 194, ,521 Personnel services 746, ,610-1,080,705 Utilities 4,664 23,303-27,967 Repair and maintenance 80,417 11,356-91,773 Contractual services , ,852 Other supplies and expenses 171,645 42,981 28, ,973 Insurance expense 30,680 32,074-62,754 Depreciation expense 594, , ,842 Total operating expense 1,822, , ,200 3,367,387 Net operating income (loss) 747,650 (117,221) (82) 630,348 Non-operating income (expense): Interest income 3,539 2,417-5,956 Interest on long-term debt (33,009) (7,690) - (40,699) Total non-operating income (expense) (29,470) (5,273) - (34,743) Income (loss) before transfers and capital contributions 718,180 (122,494) (82) 595,604 Capital contributions 2,832, ,832,991 Change in net position 3,551,171 (122,494) (82) 3,428,595 Net position - beginning 21,319,126 7,860, ,179,568 Net position - ending $ 24,870,297 7,737, ,608,163 The notes to the financial statements are an integral part of this statement. 23

28 STATEMENT OF CASH FLOWS For the Year Ended Total Water Sewer Sanitation Proprietary Fund Fund Fund Funds Cash flows from operating activities: Cash received from customers - service $ 2,516, , ,270 3,933,025 Cash paid to suppliers (571,026) (105,989) (719,756) (1,396,772) Cash paid to employees (740,019) (330,190) - (1,070,209) Net cash provided (used) in operating activities 1,205, ,288 62,514 1,466,044 Cash flows from noncapital financing activities: Interfund balances Change in customer deposits (14,150) - - (14,150) Net cash provided (used) in noncapital financing activities (14,150) - - (14,150) Non-operating income (expense): related financing activities: Cash received from capital grants 2,832, ,832,991 Cash received from bond proceeds 307, ,000 Cash payments for capital assets (1,925,897) (18,973) - (1,944,870) Cash payments for long-term debt principal (206,000) (223,448) - (429,448) Cash payments for long-term debt interest (34,156) (7,690) - (41,846) Net cash provided (used) in capital and related financing activities 973,938 (250,111) - 723,827 Cash flows from investing activities: Cash received from interest earned 3,539 2,417-5,956 Net cash provided (used) in investing activities 3,539 2,417-5,956 Net increase (decrease) in cash 2,168,570 (49,406) 62,514 2,181,677 Cash balance, beginning 2,004,898 1,400,138 (63,026) 3,342,010 Cash balance, ending $ 4,173,468 1,350,732 (513) 5,523,687 Cash reported on the statement of net position: Cash and cash equivalents $ 2,234, ,066 (513) 3,143,981 Non-current restricted cash 1,939, ,666-2,379,706 Total cash and cash equivalents $ 4,173,468 1,350,732 (513) 5,523,687 The notes to the financial statements are an integral part of this statement. 24

29 STATEMENT OF CASH FLOWS (continued) For the Year Ended Reconciliation of Operating Income to Net Cash Provided (Used) in Operating Activities: Total Water Sewer Sanitation Proprietary Fund Fund Fund Funds Net operating income (expense) $ 747,650 $ (117,221) $ (82) 630,348 Adjustments to reconcile operating income or (loss) to net cash provided (used)in operating activities: Depreciation and amortization 594, , ,842 Changes in assets and liabilities: (Increase) decrease in receivables (53,498) (11,364) 152 (64,710) (Increase) decrease in inventory (41,724) (698) - (42,422) (Increase) decrease in non-current assets (Increase) decrease in deferred outflows (85,228) (37,967) - (123,194) Increase (decrease) in payables 18,021 33,554 62, ,018 Increase (decrease) in compensated absences 22,302 11,648-33,950 Increase (decrease) in deferred inflows 3,447 1,536-4,983 Net cash provided (used) in operating activities $ 1,205, ,288 62,514 1,466,044 The notes to the financial statements are an integral part of this statement. 25

30 NOTES TO FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1-A. Reporting entity Roosevelt City Corporation (the City), is a municipal corporation located in Duchesne County, Utah. The City operates under a Six Member Council form of government with a six elected council members. The accompanying financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The City's Redevelopment Agency has no operations; thus the City has determined that there are no separately administered organizations that are controlled by or are dependent upon the City included in this report. Control or dependence is determined on the basis of financial interdependence, selection of governing authority, designation of management ability to significantly influence operations and accountability for fiscal matters. 1-B. Government-wide and fund financial statements Government-wide Financial Statements The government-wide financial statements, consisting of the statement of net assets and the statement of changes in net assets report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of inter-fund activity has been removed from these 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 statement of activities reports the expenses of a given function offset by program revenues directly connected with the functional program. A function is an assembly of similar activities and may include portions of a fund or summarize more than one fund to capture the expenses and program revenues associated with a distinct functional activity. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are not allocated. All expenses are included in the applicable function. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privilege 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. Fund Financial Statements Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, if any, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statement. 26

31 NOTES TO FINANCIAL STATEMENTS 1-C. Measurement focus, basis of accounting and financial statement presentation The financial statements of the City are prepared in accordance with generally accepted accounting principles (GAAP). The government-wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, generally including the reclassification of internal activity (between or within funds). However, internal eliminations do not include utility services provided to City departments or payments to the general fund by other funds for providing administrative and billing services for such funds. Reimbursements are reported as reductions to expenses. Proprietary and any fiduciary fund financial statements are also reported using this same focus and basis of accounting although internal activity is not eliminated in these statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property tax revenues are recognized in the year for which they are levied while grants are recognized when the grantor eligibility requirements are 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 to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. 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, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, intergovernmental revenues, 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. Only the portion of special assessments, if any, receivable within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating income and expense reported in proprietary fund financial statements include those revenues and expenses related to the primary, continuing operations of the fund. Principal operating revenues for proprietary funds are charges to customers for sales or services. Principal operating expenses are the costs of providing goods or services, including administrative expenses and depreciation of capital assets. Other revenues and expenses are classified as non-operating in the financial statements. Policy regarding use of restricted resources When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as needed. Restricted assets and liabilities payable from restricted assets current in nature are reported with current assets and current liabilities. Restricted assets, non-current reports assets restricted for acquisition or construction of non-current assets, or are restricted for liquidation of long-term debt. 27

32 NOTES TO FINANCIAL STATEMENTS 1-D. Fund types and major funds Governmental funds The City reports the following major governmental fund: The general fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The capital projects fund accounts for financial resources used for the acquisition or construction of the capital facilities of the City (other than those of the enterprise funds). The City reports the following as non-major governmental funds: The debt service fund accounts for the payment of the general long-term debt of the government. Proprietary funds The City reports the following major proprietary funds: The water fund is used to account for the activities of the culinary and secondary water distribution. The sewer fund is used to account for the operations of the sewer system. The City reports the following non-major proprietary funds: The garbage fund is used to account for the operations of the garbage system. 1-E. Assets, Liabilities, and Net Position or Equity 1-E-1. Deposit and Investments Investments are reported at fair value. Deposits are reported at cost, which approximates fair value. Investments of the City are accounts at the Utah Public Treasurers Investments Fund. Additional information is contained in Note 2. 1-E-2. Cash and Cash Equivalents The City'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. 1-E-3. Receivables and Payables Accounts receivable other than property taxes and intergovernmental receivables are from customers primarily for utility services. Property tax and intergovernmental receivables are considered collectible. Customer accounts are reported net of an allowance for uncollectible accounts. The allowance amount is estimated using accounts receivable past due more than 90 days. 28

33 NOTES TO FINANCIAL STATEMENTS 1-E-3. Receivables and Payables (continued) During the course of operations, there may be transactions occur between funds that are representative of lending/borrowing arrangements outstanding at year-end. These are reported as either due to or due from other funds. Property taxes are assessed and collected for the City by Duchesne County and remitted to the City shortly after collection. Property taxes become a lien on January 1 and are levied on the first Monday in August. Taxes are due and payable on November 1, and are delinquent after November 30. All dates are in the year of levy. 1-E-4. Restricted Assets In accordance with certain revenue bond covenants, resources may be required to be set aside for the repayment of such bonds, and, on occasion, for the repair and maintenance of the assets acquired with the bond proceeds. These resources are classified as restricted assets on the balance sheet because of their limited use. Most capital grant agreements mandate that grant proceeds be spent only on capital assets. Unspent resources of this nature are also classified as restricted. The limited use resources described above involve a reported restriction of both cash and net assets. Unspent proceeds of bonds issued to finance capital assets are also reported as restricted cash 1-E-5. Inventories and Prepaid items Aviation fuel and golf shop inventory are the only inventories reported in governmental funds. Other inventories, which mainly consist of immaterial amounts of expendable supplies for consumption, are not reported. Such supplies are acquired as needed. Proprietary fund inventories, where material, are stated at the lower of cost or market, using the first-in, first-out basis. Prepaid items record payments to vendors that benefit future reporting and are reported on the consumption basis. Both inventories and prepayments are similarly reported in government-wide and fund financial statements. 1-E-6. Capital Assets Capital assets includes property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years. Such assets are recorded at historical cost or at estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Infrastructure is depreciated. 29