APRIL 30,2006 Under provisions of state law. this report is a public document. A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. Release Date n&. P&N Postlethwaite & Netterville A Professional Accounting Corporation www.pncpa.com
2006 Financial Statements
FINANCIAL STATEMENTS APRIL 30.2006
TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORTS Independent Auditors' Report 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 Page No. 12 34 REQUIRED SUPPLEMENTARY INFORMATION Part I Management's Discussion and Analysis 512 BASIC FINANCIAL STATEMENTS GovernmentWide Financial Statements (GWFS): Statement of Net Assets Statement of Activities 13 1415 Fund Financial Statements (FFS): Governmental Funds: Balance Sheet Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 16 17 18 19 Proprietary Funds: Statement of Net Assets Statement of Revenues, Expenses, and Changes in Fund Net Assets Statement of Cash Flows Notes to the Financial Statements 20 21 2223 2438
TABLE OF CONTENTS REQUIRED SUPPLEMENTARY INFORMATION Part E Budgetary Comparison Schedules: General Fund 3941 Debt Service Fund 42 Road Maintenance Fund 43 OTHER SUPPLEMENTARY INFORMATION Schedule of Findings and Questioned Cost 4445 Summary Schedule of Prior Audit Findings and Questioned Costs 46 Corrective Action Plan 4748 PERFORMANCE AND STATISTICAL DATA InsuranceinForce 49 Public Utility System Operations (without audit) 50 51 Statements of Net Assets as of April 30. 2006 and 2005 Water Fund 52 Sewer Fund 53 Statements of Revenues. Expenses and Changes in Fund Net Assets for the years ended April 30. 2006 and 2005 Water Fund 54 Sewer Fund 55 Statements of Cash Flows for the years ended April 30. 2006 and 2005 Water Fund 5657 Sewer Fund 5859 Schedule of Principal Officials and Salaries 60
P&N Fostlethwaite & Netterville A Professional Accounting Corporation Associated Offices in Principal Cities of the United States www.pncpa.com INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the Board of Aldermen Town of We have audited the accompanying financial statements of the governmental activities, the businesstype activities and each major fund of Town of, as of and for the year ended April 30, 2006, which collectively comprise the Town's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Town of 's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businesstype activities and each major fund of the Town of Lutcher, Louisiana, as of April 30, 2006, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 13,2006, on our consideration of the Town of '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 the internal control over financial ^reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 215 St. Patrick St. P.O. Box 1190 1 Donaldsonville, LA 70346 Tel: 225.473.4179 Fax: 225.473.7204
The management's discussion and analysis and budgetary comparison information on pages 5 through 12 and 39 through 43, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of 's basic financial statements. The performance and statistical data section is presented for purposes of additional analysis and is not a required part of the basic financial statements. The performance and statistical data section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. Donaldsonville, Louisiana October 13, 2006
P&N Postlethwalte &Netterville A Professional Accounting Corporation Associated Offices in Principal Cities of the United States www.pncpa.com 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 To the Honorable Mayor and Members of the Board of Aldermen Town of We have audited the financial statements of the governmental activities, the businesstype activities and each major fund of Town of, as of and for the year ended April 30,2006, which collectively comprise the Town of Lutcher, Louisiana's basic financial statements and have issued our report thereon dated October 13,2006. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Town of 's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the Town of Lutcher, Louisiana's ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. A reportable condition is described in the accompanying schedule of findings and questioned costs as item 061. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider the reportable condition described above, item 061, to be a material weakness. 215 St. Patrick St. P.O. Box 1190 3 Donaidsonville, LA 70346 Tel: 225.473.4179 Fax: 225.473.7204
Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of 's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as items 062 and 063. This report is intended solely for the information and use of the Board of Aldermen, management, others within the organization, federal awarding agencies and passthrough entities, and the Legislative Auditor and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Under Louisiana Revised Statue 24:513, this report is distributed by the Legislative Auditor as a public document. Donaldsonville, Louisiana October 13,2006 P&N
TOWNOFLUTCHER Lutchen Louisiana MANAGEMENT'S DISCUSSION AND ANALYSIS April 30, 2006 This section of Town's annual financial report presents our discussion and analysis of the Town's financial performance during the fiscal year that ended on April 30, 2006. Please read it in conjunction with the Town's financial statements, which follow this section. FINANCIAL HIGHLIGHTS The Town's combined total net assets increased by $503,208 or 15.75% over the course of this year's operations. Net assets of our governmental activities increased approximately $607,370 or 68.06% and decreased approximately $104,162 or 4.52% in the net assets of our businesstype activities. During the year, the Town's expenses were $607,370 less than the $1,344,315 generated in charges for services, taxes, and other revenue. In the Town's businesstype activities, expenses were $104,162 more than the $847,787 generated in revenues. The general fund reported a $520,436 fund balance for the year. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of three parts management's discussion and analysis (this section), the basic financial statements, and required supplementary information. The basic financial statements include two kinds of statements that present different views of the Town: The first two statements are governmentwide financial statements that provide both longterm and shortterm information about the Town's overall financial status. The remaining statements are fund financial statements that focus on individual parts of the Town's government, reporting the Town's operations in more detail than the governmentwide statements. The governmental funds statements tell how general government services, like public safety, were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short and longterm financial information about the activities the government operates like businesses, such as the water and sewer system. Trie financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. Figure Al shows how the required parts of this annual report are arranged and relate to one another. Figure Al summarizes the major features of the Town's financial statements, including the portion of the Town's government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure of contents of each of the statements.
TQWNQFLUTCHER Lutcher. Louisiana MANAGEMENT'S DISCUSSION AND ANALYSIS April 30, 2006 Figure Al Major Features of Town's Government and Fund Financial Statements Governmentwide Statements Governmental Funds Fund Statements Proprietary Funds Scope Entire Town government (except fiduciary funds) The activities of the Town that are not proprietary or fiduciary, such as police, drainage, and streets Activities the Town operates similar to private businesses: the water and sewer system Required financial statements Statement of net assets Statement of activities * Balance Sheet Statement of revenues, expenditures, and changes in fund balances Statement of net assets Statement of revenues, expense, and changes in net assets Statement of cash flows Accounting basis and measurements focus Accrual accounting and economic resources focus Modified accrual accounting and current financial resources focus Accrual accounting and economic resources focus Type of asset/liability information All assets and liabilities, both financial and capital, and shortterm and longterm Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included All assets and liabilities, both financial and capital, and shortt6rm and longterm Type of inflow/outflow information All revenues and expenses during year, regardless of when cash is received or paid Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter All revenues and expenses during year, regardless of when cash is received or paid
Governmentwide Statements TOWNOFLUTCHER MANAGEMENT'S DISCUSSION AND ANALYSIS April 30, 2006 The governmentwide statements report information about the Town as a whole using accounting methods similar to those used by privatesector companies. The statement of net assets includes all of the government's assets and liabilities. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two governmentwide statements report the Town's net assets and how they have changed. Net assets the difference between the Town's assets and liabilities is one way to measure the Town's financial health, or position. Over time, increases or decreases in the Town's net assets are an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the Town you need to consider additional nonfinancial factors such as changes in the Town's property tax base and the condition of the Town's roads. The governmentwide financial statements of the Town are divided into two categories: Governmental activities Most of the Town's basic services are included here, such as the police, streets and drainage, sanitation, and general administration. Property taxes, sales taxes, franchise fees and interest finance most of these activities. Businesstype activities The Town charges fees to customers to help it cover the costs of certain services it provides. The Town's water and sewer system are included here. Fund Financial Statements The fund financial statements provide more detailed information about the Town's most significant funds not the Town as a whole. Funds are accounting devices that the Town uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and by bond covenants. The Town has two kinds of funds: Governmental funds Most of the Town's basic services are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at yearend that are available for spending. Consequently, the governmental funds statements provide a detailed shortterm view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the Town's programs. Because this information does not encompass the additional longterm focus of the governmentwide statements, we provide additional information at the bottom of the governmental funds statement, or on the subsequent page, that explains the relationship (or differences) between them. 7
TOWNQFLUTCHER MANAGEMENT'S DISCUSSION AND ANALYSIS April 30, 2006 Proprietary funds Services for which the Town charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the governmentwide statements, provide both longand shortterm financial information. In fact, the Town's enterprise funds (one type of proprietary fund) are the same as its businesstype activities, but provide more detail and additional information, such as cash flows. FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE Net assets. The Town's combined net assets increased between fiscal years ended April 30,2005 and April 30, 2006 to approximately $3,697,947. (See Table Al.) Current and other assets Capital assets Restricted Assets Total assets Current liabilities Long term Liabilities Total liabilities Net assets Invested in capital assets, net of related debt Reserved for debt service Reserved for road maintenance Unrestricted (deficit) Total net assets Governmental Activities 2006 $ 912,203 774,590 231,076 1,917,869 112,126 306,000 418,126 774,590 290,420 373,228 61,505 $1,499,743 Table Al Town's Net Assets 2005 $726,231 432,174 212,948 1,371,353 1 114,980 364,000 478,980 430,744 277,418 385,537 ( 201,326) $ 892,373 2006 $ 550,926 2,093,862 98,128 2,851,507 407,470 245,833 653^03 1,889,189 29,868 279,147 $2,198,204 BusinessType Activities 2005 $ 463,462 2,308,820 145,284 2,917466 425,007 190,193 615,200 2,095,344 27,947 ' 179,075 $2302366 Net assets of the Town's governmental activities increased 68.06 percent to $1,499,743. Net assets of the Town's businesstype activities decreased 4.52 percent to approximately $2,198,204. Changes in net assets. The Town's total revenues for the year ended April 30,2006 increased by $556,286 to $2,192,102. Approximately 50.81 percent of the Town's revenue comes from charges for services, 15.42 percent comes from tax collections and 15.12 percent from capital grants and contributions. The Town's total expenses for the year ended April 30, 2006 decreased by $65,305 to $1,688,894. Approximately 56.37 percent of the Town's expenses come from its businesstype activities and 43.63 percent come from its governmental activities. (See Table A2)
MANAGEMENT'S DISCUSSION AND ANALYSIS April 30, 2006 Governmental Activities Revenues for the Town's governmental activities increased by $479,234 or 55.40 percent. Approximately 25.14 percent of these revenues come from taxes, 24.96 percent come from charges for services and 23.65 percent come from capital grants and contributions. Expenses for the Town's governmental activities decreased by $69,399 or 8.61 percent. Approximately 31.23 percent of these expenses come from streets and drainage activities and 30.30 percent come from general government activities. Revenues Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revalues Taxes Commissions Licenses and permits Fines and forfeitures Other revenues Total revenues Expenses General government Streets and Drainage Public Safety Sanitation Debt Service Water Sewer Total expenses Increase (decrease) in net assets Beginning Net Assets Ending Net Assets Table A2 Changes in Town's Net Assets Governmental Activities 2006 2005 $ 335,589 16,152 317,870 337,982 88,287 114,752 10,324 44,473 1,344,315 223,287 230,184 87,721 176,782 18,971 736,945 607370 892,373 $1,499,743 $ 279,142 21,271 26,702 310,301 79,102 100,258 14,267 34,038 865,081 242,927 210,460 142,493 189,284 21,180 806^44 58,737 833,636 $ 892^73 BusinessType Activities 2006 2005 $ 778,311 15,246 54,230 847,787 452,145 499,804 951,949 ( 104,162) 2,302,366 $2,198,204 $ 710,329 11,878 48,528 770,735. 478,950 468,905 947,855 ( 177,120) 2,479,486 $2302366 9
TOWNOFLUTCHER Lutcfaer, Louisiana MANAGEMENT'S DISCUSSION AND ANALYSIS April 30. 2006 Businesstype Activities Revenues for the Town's businesstype activities increased by $77,052 or 10.00 percent. Approximately 91.81 percent of these revenues come from charges for services. Expenses for the Town's businesstype activities increased by $4,094 or 0.43 percent. Approximately 52.50 percent of these expenses come from sewer activities and 47.50 percent comes from water activities. FINANCIAL ANALYSIS OF THE TOWN'S FUNDS As the Town completed the year, its governmental funds reported a combined fund balance of $ 1,090,656, an increase of $218,429 or 25.04 percent from last year. General Fund Budgetary Highlights The Town Council did not make amendments to the budget for fiscal year 20052006. However, some variances in the fund resulted from the following: Revenue Variances: o Actual grant funds exceeded the budgeted amount by $384,735. This increase is due to funding received for the King Avenue Drainage Project and hurricanes Katrina and Rita. Expense Variance: o Streets & Drainage The actual Street Drainage & Ditching expenses were below the budgeted amount by $27,036. The actual Capital Outlay expenses exceeded the budgeted amount by $239,253. This increase is due to the expenses of the King Avenue Drainage Project totaling $259,849. o Public Safety The actual total expenditures for Public Safety were below the budgeted amount by $63,681. This decrease in expenditures is due to the closure of the Police Department in September 2005. o Sanitation TheactiialSanitan'c«expenditureswerebelowthebudgetedamountby$35,618. Thisdecrease in expenditures is due to the discontinuation of recycling fees because of damage to the recycling center from hurricane Katrina. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. At the end of April 30, 2006, the Town had invested $2,934,362 in a broad range of capital assets, including police equipment, buildings, vehicles, and water and sewer systems. (See Table A3) This amount represents a net increase (including additions and deductions) of approximately $193,368, or 7.05 percent, over last year. More information about the Town's capital assets is presented in Note 2 to the financial statements. 10
MANAGEMENT'S DISCUSSION AND ANALYSIS April 30, 2006 Table A3 Town's Capital Assets Governmental Activities Business Activities Land and Improvements Buildings and Improvements Lutcher Park Streets Drainage Equipment Construction in Progress Water and Sewer Facility and System Less: Accumulated Depreciation Total 2006 $ 49,005 222,451 345,635 127,562 301,416 284,906 ( 556,385) $ 774,590 2005 $ 49,005 222,451 345,635 L 80,983 9,280 239,650 ( 514,830) $ 432,174 2006 $ 49,295 5,997,468 65,910 158,849 ( 4,111,750) $2,159,772 2005 $ 49,295 5,936,691.. 144,025 ( 3,821,191) $2,308,820 This year's major capital asset additions included: Culverts along King Avenue totaling $259,849 Improvements to the sewer oxidation pond totaling $65,910 Street overlay on West Lebray and Exchange Alley totaling $46,579 Culvert cleaner totaling $34,880 King Avenue catch basin and conflict box totaling $27,787 10 th Street pump station repairs totaling $22,441 The Town's fiscal year 20062007 capital budget estimates the spending of approximately $1,489,600 for capital projects, $639,600 for the completion of Oxidation Pond Improvements, including updates and repairs to the Sewer Treatment Facility and $850,000 for Water improvement Projects. The Town has received approval for the issuance of $840,000 in Debt Service Bonds, Series 2005 for the Oxidation Pond Improvements, of which $83,400 has already been disbursed to finance the project. The Town has applied for grant and loan funds in the amount of $850,000 for Water Improvement Projects which include improvements to the Water Treatment Facility, these funds have not been approved thus far. Longterm debt At the end of the current fiscal year, the Town had bonded debt outstanding of $634,583 as compared to $626,476 in the prior year, an increase of $8,107 or 1.30 percent. (See Table A4) This increase is due to the issuance of new debt. During the year ended April 30,2006, the Town was approved to issue $840,000 of sewer revenue bonds. These bonds were issued to perform improvements to the Town's Oxidation Pond, including updates and repairs to the Sewer Treatment Facility. More information about the Town' s longterm liabilities is presented in Note 3 to the financial statements. 11
Lntcher, Louisiana MANAGEMENT'S DISCUSSION AND ANALYSIS April 30,2006 Table A4 Town's Outstanding Debt Governmental Activities Business Activities General Obligation Bonds Sewer Revenue Bonds Total 2006 $ 364,000 $ 364,000 2005 $413,000 $413,000 2006 $ 270,583 $ 270,583 2005 $ 213,476 $ 213,476 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The Town's major sources of revenue for the general fund are comprised from taxes (sales & property), garbage fees, licenses and permits, and commissions by 35%, 30%, 15% and 10%, respectively. The economy is not expected to generate any significant growth. All expenditures are expected to be consistent with the current years. CONTACTING THE TOWN'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the Town's finances and to demonstrate the Town's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mrs. Kimberly Babin, Town Clerk, PO Box 456,Lutcher,LA 70071. 12
STATEMENT OF NET ASSETS APRIL 30. 2006 ASSETS Cash Certificates of deposit Receivables: Taxes Accounts, net Other receivables Due from other funds Prepaid insurance Restricted assets: Cash Certificates of deposit investments Capital assets (net) Bond issue costs (net) Total assets Governmental Activities $ 411,196 100,000 29,801 109,897 2,309 259,000 89,905 141,171 774,590 1,917,869 Primary Government BusinessType Activities $ 258,597 35 669,793 143,159 243,159 130,154 543 5,034 ' 87,128 11,000 42,681 2,159,772 13,439 2,851,507 Total 29,801 240,051 2,852 259,000 5,034 177,033 152,171 42,681 2,934,362 13,439 4,769,376 LIABILITIES Accounts payable Customer service meter deposits Accrued payables Due to other funds Longterm liabilities Due within one year Due in more than one year Total liabilities 43,043 11,083 58,000 306,000 418,126 26,103 82,055 15,562 259,000 24,750 245,833 653,303 69,146 82,055 26,645 259,000 82,750 551,833 1,071,429 NET ASSETS Invested in capital assets, net of related debt Restricted for Debt service Road maintenance Unrestricted Total net assets 774,590 290,420 373,228 61,505 1,889,189 279,147 2,663,779 320,288 373,228 340,652 The accompanying notes are an integral part of this statement. 13
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED APRIL 30,2006 Functions/Programs Functions: Governmental activities: General government Streets and drainage Public safety Sanitation Debt service Total governmental activities Businesstype activities: Sewer Water Total businesstype activities Total primary government Expenses $ 223,287 230,184 87,721 176,782 18,971 736,945 499,804 452,145 951,949 $ 1,688,894 $ Charges for Services 128,273 207,316 335,589 428,233 350,078 778,311 $ 1,113,900 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 6,317 78,886 9,835 95,038 li;791 3,455 15,246 $ 110,284 General revenues Taxes: Ad valorem Sales taxes Commissions Licenses and permits Fines and forfeitures Other revenue Total general revenues Change in net assets Net assets, beginning Net assets, ending $ 12,800 304,000 1,070 317,870 $ 317,870 The accompanying notes are an integral part of this statement. 14
Net (Expense) Revenue and Changes in Net Assets Governmental Businesstye Activities Activities Total $ (204,170) 280,975 (76,816) 30,534 (18,971) 11,552 $ $ (204,170) 280,975 (76,816) 30,534 (18,971) 11,552 _ 11,552 (59,780) (98,612) (158,392) (158,392) (59,780) (98,612) (158,392) (146,840) 164,713 173,269 88,287 114,752 10,324 44,473 595,818 607,370 892,373 $ 1,499,743 164,713 54,230 54,230 (104,162) 2,302,366 173,269 88,287 114,752 10,324 98,703 650,048 503,208 3,194,739 $ 2,198,204 JE 3,697,947 15
GOVERNMENTAL FUNDS BALANCE SHEET APRIL 30, 2006 ASSETS Cash Certificates of deposit Receivables: Taxes Interest Accounts, net Intergovernmental Due from other funds Restricted assets: Cash Certificates of deposit Total assets General $ 353,800 $ 100,000 Debt Service 25,843 3,958 1,097 306 75,032 906 19,250 8,000 89,905 141,171 $ 575,928 $ 243,340 Road Maintenance $ 57,396 34,865 243,000 $ 335,261 Total Governmental Funds $ 411,196 100,000 29,801 1,403 109,897 906 270,250 89,905 141,171 $ 1,154,529 LIABILITIES Accounts payable Accrued payables Due to other funds Total liabilities $ 41,808 $ 5,684 2,113 8,000 55,492 2,H3 $ 1,166 1,852 3,250 6,268 $ 42,974 9,649 11,250 63,873 FUND BALANCE Reserved for Debt service Road maintenance Unreserved, reported in General fund Total fund equity Total liabilities and fund balance 241,227 520,436 520,436 241,227 $ 575,928 $ 243,340 328,993 328,993 $ 335,261 241,227 328,993 520,436 1,090,656 $.1,154 29 The accompanying notes are an integral part of this statement. 16
Lutchen Louisiana RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS APRIL 30,2006 Total fund balances governmental funds $ 1,090,656 Cost of capital assets at April 30,2006 Less: accumulated depreciation as of April 30,2006 1,330,975 (556,385) 774,590 Insurance payable (69) Elimination of interfund assets and liabilities Due from other funds Due to other funds 11,250 (11,250) Longterm liabilities at April 30,2006 Bonds payable Accrued interest payable Total net assets at April 30, 2006 governmental activities (364,000) (1,434) (365,434) $ 1,499,743 The accompanying notes are an integral part of this statement. 17
Lutchen Louisiana STATEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS YEAR ENDED APRIL 30,2006 REVENUES Ad valorem taxes Taxes Commissions Garbage fees Licenses and permits Intergovernmental revenue Fines and forfeitures Interest revenue Other revenue Total revenues General $ 86,995 173,269 88,287 207,316 114,752 415,755 10,324 3,735 28,492 1,128,925 Debt Service $ 77,718 $. Road Maintenance 4,303 4,514 273 128,853 82,232 133,429 Total Governmental Funds $ 164,713 173,269 88,287 207,316 114,752 420,058 10,324 8,522 157,345 1,344,586 EXPENDITURES Current operating expenditures: General government Streets and drainage Public safety Sanitation Debt service expenditures: Principal retirement Interest Total expenditures 214,121 435,617 84,919 189,382 924,039 49,000 19,164 68,164 214,121 133,954 569,571 84,919 189,382 49,000 19,164 133,954 1,126,157 EXCESS OF REVENUES OVER EXPENDITURES 204,886 14,068 (525) 218,429 FUND BALANCE Beginning of year 315,550 227,159 329,518 872,227 End of year 520,436 $ 241,227 $ 328,993 $ 1,090,656 The accompanying notes are an integral part of this statement. 18
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED APRIL 30, 2006 Total net changes in fund balance governmental funds 218,429 Prepaid insurance: Excess of insurance paid over insurance accured (2,668) Capital assets: Capital outlay capitalized Basis of capital outlay disposals Depreciation expense for the year ended April 30, 2006 Longterm debt: Principal portion of debt service payments Excess of interest paid over interest acrued Change in net assets governmental activities 389,826 (1,341) ' (46,069) 49,000 193 342,416 49,193 607,370 The accompanying notes are an integral part of this statement. 19
PROPRIETARY FUNDS STATEMENT OF NET ASSETS APRIL 30, 2006 Sewer Fund Water Fund Total ASSETS CURRENT ASSETS Cash Certificates of deposit Accounts receivable (net of allow Other current assets Total current assets NONCURRENT ASSETS RESTRICTED ASSETS Cash Certificates of deposit Investments Total restricted assets Capital assets, net Bond issue costs (net) Total noncurrent assets s for uncollectibles) j> 135,056 113,159 80,546 5,166 333,927 56,548 ' 56,548 1,370,328 13,439 1,440,315 $ 123,541 30,000 49,608 411 203,560 30,580 11,000 42,681 84,261 789,444 873,705 $ 258,597 143,159 130,154 5,577 537,487 87,128 11,000 42,681 140,809 2,159,772 13,439 2,314,020 Total assets 1,774,242 1,077,265 2,851,507 LIABILITIES CURRENT LIABILITIES Accounts payable Customer meter deposits Accrued payables Due to other funds Revenue bonds payable Total current liabilities NONCURRENT LIABILITIES Revenue bonds payable Total noncurrent liabilities Total liabilities 17,042 6,974 243,000 24,750 291,766 245,833 245,833 ' 9,061 82,055 8,588 16,000 115,704 537,599 115,704 26,103 82,055 15,562 259,000 24,750 407,470 245,833 245,833 653,303 NET ASSETS Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets 1,099,745 789,444 1,889,189 29,868 29,868 107,030 172,117 279,147 $ 1,236,643 $ 961,561 $ 2,198,204 The accompanying notes are an integral part of this statement. 20
Lutcher. Louisiana PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN YEAR ENDED APRIL 30, 2006 FUND NET ASSETS OPERATING REVENUES Charges for service Sales Use of oxidation pond Delinquent charges Miscellaneous revenues Total operating revenues Sewer Fund $ 283,477 137,035 7,721 25,752 453,985 Water Fund $ 338,792 $ 11,286 36,416 386,494 Total 622,269 137,035 19,007 62,168 840,479 OPERATING EXPENSES Professional services Payroll taxes Retirement Insurance Office supplies and postage Miscellaneous Salaries Oxidation pond/water plant analysis and treatment Electricity Materials, supplies, and repairs Depreciation Total operating expenses OPERATING LOSS 11,006 7,364 ' 7,007 29,837 742 60,913 101,595 12,817 80,773 26,589 147,538 486,181 (32,196) 8,990 9,078 10,153 64,833 5,793 28,061 128,789 5,415 28,498 19,514 143,021 452,145 (65,651) 19,996 16,442 17,160 94,670 6,535 88,974 230,384 18,232 109,271 46,103 290,559 938,326 (97,847) NONOPERATING REVENUES {EXPENSES^ Interest revenue Interest expense Total nonoperating revenues (expenses) 4,128 (13,623) (9,495) 3,180 3,180 7,308 (13,623) (6,315) CHANGE IN NET ASSETS Net assets, beginning (41,691) 1,278,334 (62,471) 1,024,032 (104,162) 2,302,366 Net assets, ending $ 1,236,643 $ 961,561 $ 2,198,204 The accompanying notes are an integral part of this statement. 21
PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED APRIL 30, 2006 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers Cash paid to employees and suppliers Other receipts from operations Net cash provided by operating activities Sewer Fund $ 404,017 (349,986) 13,961 67,992 Water Fund $ 350,509 (317,234) 32,961 66,236 Total $ 754,526 $ (667,220) $ 46,922 134,228 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of certificates of deposit and investments Maturities of certificates of deposit and investments Interest and dividends from investments Net cash provided by (used in) investing activities '630 (113,733) 105,632 3,180 (4,921) (226,892) 215,293 7,308 (4,291) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets Proceeds from issuance of longterm debt Principal payments on longterm debt Interest paid on longterm debt Net cash used in capital and related financing activities (109,698) 80,390 (23,283) (13,623) (66,214) (31,813) (31,813) (141,511) 80,390 (23,283) (13,623) (98,027) Net increase in cash and cash equivalents 2,408 29,502 31,910 Cash and cash equivalents beginning of year 177,405 121,164 298,569 Cash and cash equivalents end of year 179,813 $ 150,666 $ 330,479 The accompanying notes are an integral part of this statement. 22
Lutcher. Louisiana PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED APRIL 30,2006 Sewer Fund Water Fund Total RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating loss Adjustments to reconcile operating loss to net cash provided by operating activities Depreciation Amortization of bond issue costs Changes in assets and liabilities (Increase) decrease in receivables (Increase) decrease in prepaid expenses and other assets Increase (decrease) in accounts payable and other liabilities Net cash provided by operating activities $ (32,196) $ (65,651) $ (97,847) 147,538 (10,483) 143,021 290,559 (10,483) (24,216) 127 (987) 431 9,907 (18,017) (23,785) 10,034 (19,004) 79,783 69,691 149,474 The accompanying notes are an integral part of this statement. 23
1. Summary of Significant Accounting Policies TOWN OF LUTCHER NOTES TO FINANCIAL STATEMENTS April 30,2006 The Town of was incorporated on March 13, 1912, and operates under a Mayor Board of Aldermen form of government. As authorized by its charter, the Town is responsible for public safety, highways and streets, sanitation, public improvements, and general administrative services. The accounting and reporting practices of the Town of Lutcher conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The Town's reporting entity applies all relevant Government Accounting Standards (GASB) pronouncements. The Town's proprietary fund applies all Financial Accounting Standards Board (F ASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30,1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB pronouncements prevail. Such accounting and reporting procedures conform to the requirements of Louisiana Revised Statute 24:517, to the guidance set forth in the Louisiana Governmental Accounting Guide, and to the industry audit guide, Audits of State and Local Governmental Units published by the American Institute of Certified Public Accountants. Financial Reporting Entity Statement No. 14 of the Governmental Accounting Standards Board (GASB), The Financial Reporting Entity, establishes criteria for determining the governmental reporting entity and component units that should be included within the reporting entity. Since the Town is a special purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments, it is considered a primary government under the provisions of this Statement. As used in GASB Statement No. 14, fiscally independent means that the Town may, without the approval or consent of another governmental entity, determine or modify its own budget, levy its own taxes or set rates or charges, and issue bonded debt. Additionally, the Town does not have any component units, which are defined by GASB Statement No. 14 as other legally separate organizations for which the elected officials are financially accountable. There are no other primary governments with which the Town has a significant relationship. The following is a summary of certain significant accounting policies and practices: Basis of Presentation. Basis of Accounting Governmentwide Statements: The statement of net assets and the statement of activities display information about the Town of Lutcher. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the doublecounting of internal activities. These statements distinguish between the governmental and businesstype activities of the Town. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Businesstype activities are financed in whole or in part by fees charged to external parties. 24
TOWNOFLUTCHER NOTES TO FINANCIAL STATEMENTS April 30,2006 1. Summary of Significant Accounting Policies (continued) The statement of activities presents a comparison between direct expenses and program revenues for the different businesstype activities of the Town and for each function of the Town's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees, fines, and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the Town's funds. Separate statements for each fund category governmental and proprietary arc presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each parry receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. The Town reports the following major governmental funds: a. General Fund This is the Town's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. b. Debt Service Fund This fund accounts for the resources accumulated and payments made for principal, interest and related costs on general longterm debt. c. Road Maintenance Fund This fund accounts for the proceeds of specific revenue sources that are legally restricted to expenditures for road maintenance. The Town reports the following major enterprise funds: a. Water Fund This fund is used to account for operations, (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing the goods or services to the general public on a continuing basis be financed or recovered through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. 25
Lutcber, Louisiana NOTES TO FINANCIAL STATEMENTS April 30,2006 1. Summary of Significant Accounting Policies (continued) b. Sewer Fund This fund is used to account for operations, (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing the goods or services to the general public on a continuing basis be financed or recovered through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Measurement Focus, Basis of Accounting Governmentwide, Proprietary, and Fiduciary Fund Financial Statements. The governmentwide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus. The governmentwide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Parish gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Town considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after yearend. Property taxes, sales taxes, franchise taxes, licenses, and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general longterm debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general longterm debt and acquisitions under capital leases are reported as other financing sources. Under the terms of grant agreements, the Town funds certain programs by a combination of specific costreimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Town's policy to first apply costreimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues. All governmental and businesstype activities of the Town follow FASB Statements and Interpretations issued on or before November 30,1989, Accounting Principles Board Opinions, and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements. 26
NOTES TO FINANCIAL STATEMENTS April 30, 2006 1 Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Budgets and Budgetary Accounting The Town follows these procedures in establishing the budgetary data reflected in these financial statements: 1. A proposed budget is prepared and submitted to the Mayor and Board of Aldermen prior to the beginning of each fiscal year. 2. The proposed budget is published in the official journal and made available for public inspection. A public hearing is held to obtain taxpayer comments. 3. The budget is adopted through the passage of an ordinance prior to the commencement of the fiscal year for which the budget is being adopted, 4. Budgetary amendments involving the transfer of funds from one department, program, or function to another or involving increases in expenditures resulting from revenues exceeding amounts originally estimated require the approval of the Board of Aldermen. 5. All budgetary appropriations lapse at the end of each fiscal year. 6. Budgets for the general, debt service, special revenue, and proprietary funds are adopted on bases consistent with accounting principles generally accepted in the United States of America (GAAP). 7. Louisiana R.S. 39:1310 requires budgets to be amended when revenue collections plus projected revenue collections for the remainder of a year, within a fund, are failing to meet estimated annual budgeted revenues by five percent or more or expenditures plus projected expenditures for the remainder of the year, within a fund, are exceeding estimated budgeted expenditures by five percent or more. The level of budgetary control is total appropriations. Budgeted amounts for the year ended April 30, 2006, are as originally adopted, with no subsequent amendments. 27
Lutcfaer, Louisiana NOTES TO FINANCIAL STATEMENTS April 30,2006 1. Summary of Significant Accounting Policies (continued) Cash and Investments Cash and investments, which include demand deposit accounts, interestbearing demand deposit accounts, certificates of deposit, and federal obligations are stated at market value. The Town considers all cash accounts and certificates of deposit with a maturity of three months or less when purchased to be cash and cash equivalents. Under Louisiana Revised Statutes 39:1271 and 33:2955, the Town may deposit funds in obligations of the U.S. Treasury and U.S. agencies, demand deposit accounts, interestbearing demand deposit accounts, money market accounts, and time certificates of deposit with state banks organized under Louisiana law and national banks having principal offices in Louisiana. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or businesstype activity columns in the governmentwide financial statements. Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated fixed assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized. The Town has elected not to report major general infrastructure assets retroactively. The Town began reporting infrastructure assets beginning May 1, 2005 Capital Assets are depreciated using the straightline method over the following estimated useful lives: Asset Class Buildings and Improvements Land Improvements Lutcher Park Streets Drainage Equipment Estimated Useful Lives 740 years 20 years 2040 years 20 years 2025 years 520 years The proprietary fund type operations are accounted for on a cost of services or "capital maintenance" measurement focus, and all assets and liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. 28