Shawano, Wisconsin FINANCIAL STATEMENTS Including Independent Auditors Report
TABLE OF CONTENTS Independent Auditors' Report i iii Basic Financial Statements Statement of Net Position 1 Statement of Activities 2 Balance Sheet Governmental Funds 3 4 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 5 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds 6 7 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 8 Statement of Net Position Proprietary Funds 9 10 Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds 11 12 Statement of Cash Flows Proprietary Funds 13 14 Statement of Assets and Liabilities Agency Fund 15 Notes to Financial Statements 16 58 Required Supplementary Information Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund 59 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Human Services 60 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual County Roads and Bridges 61 Schedule of Proportionate Share of the Net Pension (Asset)/Liability Wisconsin Retirement System 62 Schedule of Employer Contributions Wisconsin Retirement System 62 Other Postemployment Benefits Plan Schedule of Funding Progress 63 Notes to Required Supplementary Information 64
TABLE OF CONTENTS (cont.) Supplementary Information Detailed Comparison of Budgeted and Actual Revenues General Fund 65 67 Detailed Comparison of Budgeted and Actual Expenditures General Fund 68 70 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Debt Service 71 Combining Balance Sheet Nonmajor Governmental Funds 72 73 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds 74 75 Combining Statement of Net Position Internal Service Funds 76 77 Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds 78 79 Combining Statement of Cash Flows Internal Service Funds 80 81
INDEPENDENT AUDITORS' REPORT To the County Board Shawano County Shawano, Wisconsin Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Shawano County, Wisconsin, as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise Shawano County'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 auditors' 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 over financial reporting relevant to Shawano County'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 Shawano County'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 opinions. Page i
To the County Board Shawano County 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 business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Shawano County, Wisconsin, as of December 31, 2016 and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We 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. Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinions on the basic financial statements are not affected by this missing information. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Shawano County's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole. Page ii
STATEMENT OF NET POSITION As of December 31, 2016 (With summarized financial information as of December 31, 2015) Governmental Activities Primary Government Businesstype Totals Component Unit Activities 2016 2015 2016 2015 ASSETS Cash and investments $ 27,727,232 $ 5,593,822 $ 33,321,054 $ 29,466,052 $ 108,789 $ 123,834 Receivables Taxes 15,545,534-15,545,534 15,404,954 - - Delinquent taxes 2,025,647-2,025,647 2,064,925 - - Accounts 928,304 120,601 1,048,905 2,357,023 - - Loans 658,292 4,266 662,558 695,869 74,208 21,630 Other 829,018-829,018 832,154 - - Due from other governments 1,547,304 803,074 2,350,378 2,104,328 - - Inventories and prepaid items 572,537 746,799 1,319,336 1,466,110 - - Restricted Assets Net pension asset - - - 2,933,022 - - Capital Assets, Nondepreciable Land 6,828,832 505,202 7,334,034 7,320,409 - - Construction in progress 1,024,296 23,750 1,048,046 1,110,991 - - Capital Assets, Depreciable Land improvements 3,048,035 664,099 3,712,134 3,567,606 - - Buildings and improvements 21,700,001 2,943,852 24,643,853 24,604,496 - - Machinery and equipment 8,649,336 16,814,748 25,464,084 25,050,640 12,918 12,918 Intangibles 3,824,837-3,824,837 3,922,110 - - Infrastructure 76,078,903-76,078,903 73,531,574 - - Less: Accumulated depreciation (58,470,764) (12,538,091) (71,008,855) (68,103,458) (12,918) (12,918) Total Assets 112,517,344 15,682,122 128,199,466 128,328,805 182,997 145,464 DEFERRED OUTFLOWS OF RESOURCES Pension related amounts 8,866,758 1,738,687 10,605,445 2,982,112 - - LIABILITIES Accounts payable 910,864 174,076 1,084,940 951,058 - - Accrued and other current liabilities 2,361,901 23,789 2,385,690 2,033,128 - - Due to other governments 3,264,700 1,696 3,266,396 3,587,341 - - Unearned revenues 266,947 114,186 381,133 481,743 - - Long-term Obligations Due within one year 1,506,744 261,791 1,768,535 2,029,729 - - Due in more than one year 3,974,209 496,230 4,470,439 3,283,823 - - Total Liabilities 12,285,365 1,071,768 13,357,133 12,366,822 - - DEFERRED INFLOWS OF RESOURCES Property taxes 15,545,534-15,545,534 15,400,972 - - Pension related amounts 3,346,358 650,425 3,996,783 - - - Total Deferred Inflows of Resources 18,891,892 650,425 19,542,317 15,400,972 - - NET POSITION Net investment in capital assets 60,827,912 8,413,560 69,241,472 68,675,434 - - Restricted 3,840,222-3,840,222 6,499,348 - - Unrestricted 25,538,711 7,285,056 32,823,767 28,368,341 182,997 145,464 TOTAL NET POSITION $ 90,206,845 $ 15,698,616 $ 105,905,461 $ 103,543,123 $ 182,997 $ 145,464 See accompanying notes to the financial statements. Page 1
STATEMENT OF ACTIVITIES For the Year Ended December 31, 2016 (With summarized financial information as of December 31, 2015) Net (Expense) Revenue Program Revenues and Changes in Net Position Operating Capital Grants Primary Government Component Unit Charges for Grants and and Governmental Business-type Totals Functions/Programs Expenses Services Contributions Contributions Activities Activities 2016 2015 2016 2015 Primary Government Governmental Activities General government $ 4,801,627 $ 2,184,355 $ 129,087 $ - $ (2,488,185) $ - $ (2,488,185) $ (2,713,077) $ - $ - Public safety 11,426,848 883,350 185,239 - (10,358,259) - (10,358,259) (9,733,286) - - Public works 4,536,048 17,901 1,918,314 664,572 (1,935,261) - (1,935,261) (2,003) - - Health and human services 13,641,053 3,065,477 8,543,784 - (2,031,792) - (2,031,792) (1,564,020) - - Culture and recreation 2,165,026 334,585 240,006 - (1,590,435) - (1,590,435) (1,534,940) - - Conservation and development 1,179,030 270,534 537,810 - (370,686) - (370,686) (401,778) - - Interest and fiscal charges 85,922 - - - (85,922) - (85,922) (119,980) - - Total Governmental Activities 37,835,554 6,756,202 11,554,240 664,572 (18,860,540) - (18,860,540) (16,069,084) - - Business-type Activities Highway 11,116,140 11,754,897 - - - 638,757 638,757 326,957 Utility 47,363 58,049 - - - 10,686 10,686 (26,486) Lakeland Industries 188,836 213,364 - - - 24,528 24,528 7,104 - - Total Business-type Activities 11,352,339 12,026,310 - - - 673,971 673,971 307,575 - - Total Primary Government $ 49,187,893 $ 18,782,512 $ 11,554,240 $ 664,572 (18,860,540) 673,971 (18,186,569) (15,761,509) - - Component Unit Economic Development $ 175,536 $ 86,455 $ 125,000 $ - - - - - 35,919 2,487 General Revenues Taxes Property taxes, levied for general purposes 14,749,309-14,749,309 14,233,342 - - Property taxes, levied for debt service 651,663-651,663 654,446 - - Sales tax 2,545,353-2,545,353 2,361,380 - - Interest on delinquent taxes and other taxes 549,712-549,712 526,075 - - Federal and state grants and other contributions not restricted to specific functions 1,318,057-1,318,057 1,312,032 - - Public gifts and grants 145,247-145,247 7,142 - - Interest and investment earnings 172,559 22,640 195,199 102,690 1,614 1,113 Gain on disposal of assets 123,522 19,435 142,957 78,454 - - Miscellaneous 251,410-251,410 59,915 - - Transfers (34,488) 34,488 - - - - Total General Revenues and Transfers 20,472,344 76,563 20,548,907 19,335,476 1,614 1,113 Change in net position 1,611,804 750,534 2,362,338 3,573,967 37,533 3,600 NET POSITION - Beginning 88,595,041 14,948,082 103,543,123 99,969,156 145,464 141,864 NET POSITION - ENDING $ 90,206,845 $ 15,698,616 $ 105,905,461 $ 103,543,123 $ 182,997 $ 145,464 See accompanying notes to the financial statements. Page 2
BALANCE SHEET GOVERNMENTAL FUNDS As of December 31, 2016 (With summarized financial information as of December 31, 2015) General Special Revenue Funds Human Human Services - Services - Fellman Lakeland ASSETS Cash and investments $ 17,268,789 $ - $ - Receivables Taxes 9,853,113 - - Delinquent taxes 2,025,647 - - Accounts 230,492 - - Loans - - - Long term 9,018 - - Due from other funds 157,774 - - Due from other governments 756,202 - - Inventories 9,035 - - Prepaid items 220,559 - - Advance to other funds 527,980 - - TOTAL ASSETS $ 31,058,609 $ - $ - LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable $ 377,483 $ - $ - Accrued and other current liabilities 1,853,805 - - Funds held in trust 38,903 - - Due to other funds - - - Due to other governments 143,721 - - Unearned revenues 110,405 - - Advance from other funds - - - Total Liabilities 2,524,317 - - Deferred Inflows of Resources Property taxes 9,853,113 - - Interest on delinquent taxes 246,248 - - Loans and long-term receivables 9,018 - - Other 45,714 - - Total Deferred Inflows of Resources 10,154,093 - - Fund Balances (Deficit) Nonspendable Inventories and prepaids 229,594 - - Delinquent property taxes 1,439,216 - - Long term advance to other funds 527,980 - - Restricted 331,707 - - Committed 2,362,635 - - Assigned 2,563,106 - - Unassigned (deficit) 10,925,961 - - Total Fund Balances (Deficit) 18,380,199 - - TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 31,058,609 $ - $ - Page 3
Special Revenue Funds Human Services Capital Projects Fund County Roads and Bridges Debt Service Nonmajor Governmental Funds Total Governmental Funds 2016 2015 $ 3,457,649 $ 2,258,913 $ 21,018 $ 1,713,603 $ 24,719,972 $ 22,807,044 1,420,429 2,937,000 583,132 751,860 15,545,534 15,400,972 - - - - 2,025,647 2,064,925 660,864 2,489-26,334 920,179 1,976,436 - - - 658,292 658,292 690,119 - - 820,000-829,018 832,154 - - - - 157,774 108,478 415,312 32,538-343,252 1,547,304 1,095,768 - - - - 9,035 10,152 20,588 - - 11,161 252,308 266,284 - - - - 527,980 250,000 $ 5,974,842 $ 5,230,940 $ 1,424,150 $ 3,504,502 $ 47,193,043 $ 45,502,332 $ 233,390 $ - $ - $ 220,182 $ 831,055 $ 758,456 - - - - 1,853,805 1,508,833 3,186 - - - 42,089 33,713 - - - 157,774 157,774 108,478 3,120,979 - - - 3,264,700 3,585,287 147,535 - - 9,007 266,947 431,368 - - 277,980-277,980-3,505,090-277,980 386,963 6,694,350 6,426,135 1,420,429 2,937,000 583,132 751,860 15,545,534 15,400,972 - - - - 246,248 260,617 - - 757,500 658,293 1,424,811 1,500,619 - - - - 45,714 80,493 1,420,429 2,937,000 1,340,632 1,410,153 17,262,307 17,242,701 20,588 - - 11,161 261,343 276,436 - - - - 1,439,216 1,472,726 - - - - 527,980 250,000 1,028,735 - - 1,245,856 2,606,298 2,061,695-2,293,940-438,437 5,095,012 4,970,417 - - - - 2,563,106 3,060,116 - - (194,462) 11,932 10,743,431 9,742,106 1,049,323 2,293,940 (194,462) 1,707,386 23,236,386 21,833,496 $ 5,974,842 $ 5,230,940 $ 1,424,150 $ 3,504,502 $ 47,193,043 $ 45,502,332 See accompanying notes to the financial statements. Page 4
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION As of December 31, 2016 (With summarized financial information as of December 31, 2015) 2016 2015 Total Fund Balances - Governmental Funds $ 23,236,386 $ 21,833,496 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds. 61,813,480 61,487,875 Some receivables that are not currently available are reported as unavailable revenues in the fund financial statements but are recognized as revenue when earned in the government-wide statements. 1,716,773 1,841,729 The net pension liability/(asset) does not relate to current financial resources and is not reported in the governmental funds (1,590,109) 2,440,659 Deferred outflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds. 8,866,758 2,487,212 Deferred inflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds. (3,346,358) - Internal service funds are reported in the statement of net position as governmental activities 3,431,846 3,400,993 Some liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Bonds and notes payable (2,630,564) (3,463,934) Compensated absences (1,260,280) (1,391,581) Accrued interest on long-term obligations (31,087) (41,408) NET POSITION OF GOVERNMENTAL ACTIVITIES $ 90,206,845 $ 88,595,041 See accompanying notes to the financial statements. Page 5
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2016 (With summarized financial information as of December 31, 2015) Special Revenue Funds Human Services - Human Services - Human General Fellman Lakeland Services REVENUES Taxes $ 12,715,010 $ - $ - $ 1,379,459 Intergovernmental 2,689,240 - - 4,909,814 Licenses and permits 177,117 - - - Fines and forfeits 339,687 - - 44,346 Public charges for services 1,344,795 - - 2,559,556 Intergovernmental charges for services 1,480,760 - - 45,510 Miscellaneous 642,015 - - 239,680 Total Revenues 19,388,624 - - 9,178,365 EXPENDITURES Current General government 4,455,261 - - - Public safety 10,200,874 - - - Public works 5,722 - - - Health and human services 587,359 - - 9,036,046 Culture and recreation 1,432,098 - - - Conservation and development 984,733 - - - Capital Outlay - - - - Debt Service Principal - - - - Interest and fiscal charges - - - - Total Expenditures 17,666,047 - - 9,036,046 Excess of Revenues Over (Under) Expenditures 1,722,577 - - 142,319 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - - 65,204 Transfers in 28,315 - - 841,800 Transfers out (664,166) (87,322) (464,796) - Total Other Financing Sources (Uses) (635,851) (87,322) (464,796) 907,004 Net Change in Fund Balances 1,086,726 (87,322) (464,796) 1,049,323 FUND BALANCES - Beginning 17,293,473 87,322 464,796 - FUND BALANCES - ENDING (DEFICIT) $ 18,380,199 $ - $ - $ 1,049,323 See accompanying notes to the financial statements. Page 6
Capital Projects Fund County Roads and Bridges Debt Service Nonmajor Governmental Funds Total Governmental Funds 2016 2015 $ 2,977,000 $ 651,633 $ 772,935 $ 18,496,037 $ 17,775,243 2,498,132 5,107 1,996,313 12,098,606 16,958,367 - - - 177,117 171,533 - - 57,719 441,752 422,954 - - 44,826 3,949,177 4,551,527-62,500 89,111 1,677,881 1,455,244 6,628 193 102,546 991,062 846,597 5,481,760 719,433 3,063,450 37,831,632 42,181,465 - - - 4,455,261 4,545,725 - - 67,927 10,268,801 9,940,930 5,587,161-69,866 5,662,749 4,482,122 - - 2,119,364 11,742,769 17,300,246 - - 626,753 2,058,851 2,080,121 - - 67,037 1,051,770 1,028,056 - - 289,645 289,645 - - 833,370-833,370 815,209-96,242-96,242 120,851 5,587,161 929,612 3,240,592 36,459,458 40,313,260 (105,401) (210,179) (177,142) 1,372,174 1,868,205 - - - 65,204 1,745 - - 383,549 1,253,664 1,145,132 - - (71,868) (1,288,152) (1,480,408) - - 311,681 30,716 (333,531) (105,401) (210,179) 134,539 1,402,890 1,534,674 2,399,341 15,717 1,572,847 21,833,496 20,298,822 $ 2,293,940 $ (194,462) $ 1,707,386 $ 23,236,386 $ 21,833,496 See accompanying notes to the financial statements. Page 7
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2016 (With summarized financial information for the year ended December 31, 2015) 2016 2015 Net change in fund balances - total governmental funds $ 1,402,890 $ 1,534,674 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 net position the cost of these assets is capitalized and they are depreciated over their estimated useful lives with depreciation expense reported in the statement of activities. Capital assets are reported as an expenditure in the fund financial statements but are capitalized in the government-wide financial statements 4,425,538 6,517,985 Depreciation is reported in the government-wide statements - less internal service funds (3,696,817) (4,739,001) Net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins) is to decrease net position. (403,115) (171,642) Receivables not currently available are reported as deferred revenue in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. (124,956) (548,899) Debt proceeds provide current financial resources to governmental funds, but issuing these obligations increases long-term liabilities in the statement of net position. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal payments 833,370 815,209 Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences 131,301 (49,353) Accrued interest on debt 10,320 871 Net pension liability/ (asset) (4,030,768) (1,537,017) Deferred outflows of resources related to pensions 6,379,546 1,552,019 Deferred inflows of resources related to pensions (3,346,358) - Internal service funds are used by management to charge the costs of technology services, workers compensation, collision insurance, property insurance, and extended leave costs to individual funds. The change in net position of the internal service funds is reported with governmental activities. 30,853 (604,794) CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 1,611,804 $ 2,770,052 See accompanying notes to the financial statements. Page 8
STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2016 (With summarized financial information for the year ended December 31, 2015 Business-type Activities - Enterprise Funds Highway Water and Sewer Utility Nonmajor Lakeland Industries ASSETS Current Assets Cash and investments $ 5,336,274 $ 44,195 $ 213,353 Receivables Accounts 104,750 4,490 11,361 Loans 4,266 - - Due from other governments 803,074 - - Inventories 746,139 - - Prepaid items 660 - - Total Current Assets 6,995,163 48,685 224,714 Noncurrent Assets Restricted assets Net pension asset - - - Capital Assets, Nondepreciable Land 503,012 2,190 - Construction in progress 23,750 - - Capital Assets, Depreciable Land improvements 566,524 97,575 - Buildings 2,637,746 225,908 80,198 Intangible Assets - - - Machinery and equipment 16,634,137 26,914 153,697 Less: Accumulated depreciation (12,044,441) (260,556) (233,094) Net Capital Assets 8,320,728 92,031 801 Total Noncurrent Assets 8,320,728 92,031 801 Total Assets 15,315,891 140,716 225,515 DEFERRED OUTFLOWS OF RESOURCES Pension related amounts 1,738,687 - - LIABILITIES Current Liabilities Accounts payable 166,547 757 6,772 Accrued liabilities - - - Due to other governments 1,696 - - Funds held in trust - - 23,789 Unearned revenues 114,186 - - Current maturities of compensated absences 261,791 - - Total Current Liabilities 544,220 757 30,561 Noncurrent Liabilities Advance from other funds - - - Net pension liability 309,067 - - Compensated absences 187,163 - - Total Noncurrent Liabilities 496,230 - - Total Liabilities 1,040,450 757 30,561 DEFERRED INFLOWS OF RESOURCES Pension related amounts 650,425 - - NET POSITION Net investment in capital assets 8,320,728 92,031 801 Restricted for pension - - - Unrestricted 7,042,975 47,928 194,153 TOTAL NET POSITION $ 15,363,703 $ 139,959 $ 194,954 See accompanying notes to the financial statements. Page 9
Governmental Activities - Total Enterprise Funds Internal Service Funds 2016 2015 2016 2015 $ 5,593,822 $ 3,832,062 $ 3,007,260 $ 2,826,946 120,601 378,734 8,125 5,835 4,266 5,750 - - 803,074 1,008,560 - - 746,139 847,715 - - 660 6,315 311,194 335,644 7,268,562 6,079,136 3,326,579 3,168,425-492,363 - - 505,202 508,752 - - 23,750 23,281 68,400 87,329 664,099 629,611 - - 2,943,852 2,943,853 - - - - 3,548,250 3,634,096 16,814,748 16,459,872 4,391 4,391 (12,538,091) (12,029,856) (2,751,045) (2,744,836) 8,413,560 8,535,513 869,996 980,980 8,413,560 9,027,876 869,996 980,980 15,682,122 15,107,012 4,196,575 4,149,405 1,738,687 494,900 - - 174,076 118,739 79,712 73,863 - - 435,017 424,549 1,696 2,054 - - 23,789 24,625 - - 114,186 50,375 - - 261,791 268,174 - - 575,538 463,967 514,729 498,412 - - 250,000 250,000 309,067 - - - 187,163 189,863 - - 496,230 189,863 250,000 250,000 1,071,768 653,830 764,729 748,412 650,425 - - - 8,413,560 8,535,513 869,996 980,980-492,363 - - 7,285,056 5,920,206 2,561,850 2,420,013 $ 15,698,616 $ 14,948,082 $ 3,431,846 $ 3,400,993 See accompanying notes to the financial statements. Page 10
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2016 (With summarized financial information as of December 31, 2015) Business-type Activities - Enterprise Funds Highway Water and Sewer Utility Nonmajor Lakeland Industries OPERATING REVENUES Public charges for services $ 5,217,172 $ 54,983 $ 211,905 Interdepartmental charges for services 6,470,253 - - Other operating revenues 67,472 3,066 1,459 Total Operating Revenues 11,754,897 58,049 213,364 OPERATING EXPENSES Operation and maintenance 10,066,956 40,929 188,736 Depreciation 1,049,184 6,434 100 Total Operating Expenses 11,116,140 47,363 188,836 Operating Income (Loss) 638,757 10,686 24,528 NONOPERATING REVENUES (EXPENSES) Interest income 22,640 - - Gain (loss) on disposal of capital assets 19,435 - - Total Nonoperating Revenues (Expenses) 42,075 - - Income (loss) before Transfers 680,832 10,686 24,528 TRANSFERS Transfers in 34,488 - - Transfers out - - - Change in Net Position 715,320 10,686 24,528 NET POSITION - Beginning 14,648,383 129,273 170,426 NET POSITION - ENDING $ 15,363,703 $ 139,959 $ 194,954 See accompanying notes to the financial statements. Page 11
Total Enterprise Funds Governmental Activities - Internal Service Funds 2016 2015 2016 2015 $ 5,484,060 $ 5,980,432 $ 401,522 $ 301,234 6,470,253 5,249,454 1,319,133 957,248 71,997 47,949-9,500 12,026,310 11,277,835 1,720,655 1,267,982 10,296,621 9,960,345 1,418,382 1,503,668 1,055,718 1,009,915 276,980 252,082 11,352,339 10,970,260 1,695,362 1,755,750 673,971 307,575 25,293 (487,768) 22,640 5,374 5,971 2,696 19,435 36,401 (411) (433) 42,075 41,775 5,560 2,263 716,046 349,350 30,853 (485,505) 34,488 484,565 - (119,289) - (30,000) - - 750,534 803,915 30,853 (604,794) 14,948,082 14,144,167 3,400,993 4,005,787 $ 15,698,616 $ 14,948,082 $ 3,431,846 $ 3,400,993 See accompanying notes to the financial statements. Page 12
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2016 (With summarized financial information as of December 31, 2015) Business-type Activities - Enterprise Funds Nonmajor Highway Water and Sewer Utility Lakeland Industries CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 12,285,127 $ 58,461 $ 210,500 Cash payments to suppliers (3,505,735) (40,631) (185,431) Cash payments to employees and for employee benefits (6,203,329) - - Net Cash Provided by Operating Activities 2,576,063 17,830 25,069 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in (out) 34,488 - - Net Cash Provided (Used) by Noncapital Financing Activities 34,488 - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets (914,331) - - Net Cash Used by Capital and Related Financing Activities (914,331) - - CASH FLOWS FROM INVESTING ACTIVITIES Interest income received 22,641 - - Change in Cash and Cash Equivalents 1,718,861 17,830 25,069 CASH AND CASH EQUIVALENTS - Beginning 3,617,413 26,365 188,284 CASH AND CASH EQUIVALENTS - ENDING $ 5,336,274 $ 44,195 $ 213,353 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ 638,757 $ 10,686 $ 24,528 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 1,049,184 6,434 100 Changes in assets, deferred outflows, liabilities and deferred inflows Accounts receivable 256,951 412 (2,864) Due from other governments 209,468 - - Inventories 101,576 - - Prepaid items 5,567-88 Accounts payable 52,123 298 4,053 Due to other governments (358) - - Accrued liabilities (9,084) - - Deferred inflow of resources 63,811 - - Funds held in trust - - (836) Pension related deferrals and liabilities 208,068 - - NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,576,063 $ 17,830 $ 25,069 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Noncash asset retirement $ 104,781 $ - $ - See accompanying notes to the financial statements. Page 13
Governmental Activities - Total Enterprise Funds Internal Service Funds 2016 2015 2016 2015 $ 12,554,088 $ 10,593,193 $ 1,718,365 $ 1,269,788 (3,731,797) (5,034,718) (851,595) (786,919) (6,203,329) (4,840,730) (526,020) (513,791) 2,618,962 717,745 340,750 (30,922) 34,488 454,565 - (119,289) 34,488 454,565 - (119,289) (914,331) (1,650,183) (166,407) (440,646) (914,331) (1,650,183) (166,407) (440,646) 22,641 5,374 5,971 2,696 1,761,760 (472,499) 180,314 (588,161) 3,832,062 4,304,561 2,826,946 3,415,107 $ 5,593,822 $ 3,832,062 $ 3,007,260 $ 2,826,946 $ 673,971 $ 307,575 $ 25,293 $ (487,768) 1,055,718 1,009,915 276,980 252,082 254,499 (77,518) (2,290) 1,873 209,468 (587,617) - - 101,576 119,964 - - 5,655 (88) 24,450 (75,268) 56,474 (17,712) 5,849 1,538 (358) 358 - - (9,084) (22,753) 10,468 276,688 63,811 (19,507) - (67) (836) 1,299 - - 208,068 3,829 - - $ 2,618,962 $ 717,745 $ 340,750 $ (30,922) $ 104,781 $ 57,643 $ 37,920 $ 8,384 See accompanying notes to the financial statements. Page 14
STATEMENT OF ASSETS AND LIABILITIES AGENCY FUND December 31, 2016 (With summarized financial information as of December 31, 2015) 2016 2015 ASSETS Cash and cash equivalents $ 1,313,010 $ 1,332,887 LIABILITIES Accounts payable $ 1,313,010 $ 1,332,887 See accompanying notes to the financial statements. Page 15
INDEX TO NOTES TO FINANCIAL STATEMENTS NOTE Page I. Summary of Significant Accounting Policies 17 A. Reporting Entity 17 B. Government-Wide and Fund Financial Statements 18 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 21 D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position or Equity 22 1. Deposits and Investments 22 2. Receivables 24 3. Inventories and Prepaid Items 25 4. Capital Assets 26 5. Deferred Outflows of Resources 26 6. Compensated Absences 27 7. Long-Term Obligations 27 8. Deferred Inflows of Resources 28 9. Equity Classifications 28 10. Summarized Comparative Information 29 11. Pension 29 II. Stewardship, Compliance, and Accountability 30 A. Excess Expenditures and Other Financing Uses Over Appropriations 30 B. Deficit Balances 30 C. Limitations on the County s Tax Levy 30 III. Detailed Notes on All Funds 31 A. Deposits and Investments 31 B. Receivables 34 C. Capital Assets 37 D. Interfund Receivables/Payables, Advances and Transfers 39 E. Long-Term Obligations 41 F. Net Position/Fund Balances 44 G. Minimum Fund Balance Policy 47 H. Component Unit Shawano County Economic Progress, Inc. 48 IV. Other Information 48 A. Employees Retirement System 48 B. Risk Management 54 C. Commitments and Contingencies 55 D. Other Postemployment Benefits 56 E. Effect of New Accounting Standards on Current-Period Financial Statements 58 Page 16
NOTES TO FINANCIAL STATEMENTS NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Shawano County, Wisconsin ( county ) conform to generally accepted accounting principles as applicable to governmental units. The accepted standard-setting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (GASB). A. REPORTING ENTITY This report includes all of the funds of the Shawano County. The reporting entity for the county consists of the primary government, governed by an elected 27 member board and its component unit. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity s financial statements to be misleading. The primary government is financially accountable if (1) it appoints a voting majority of the organization s governing body and is able to impose its will on that organization; (2) it appoints a voting majority of the organization s governing body and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government; (3) the organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. Certain legally separate, tax exempt organizations should also be reported as a component unit if all of the following criteria are met: (1) the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents; (2) the primary government, or its component units, is entitled to, or has the ability to access, a majority of the economic resources received or held by the separate organization; and (3) the economic resources received or held by an individual organization that the primary government, or its component units, is entitled to, or had the ability to otherwise access, are significant to the primary government. Component units are reported using one of two methods, discrete presentation or blending. Generally, component units should be discretely presented in a separate column in the financial statements. A component unit should be reported as part of the primary government using the blending method if it meets any one of the following criteria: (1) the primary government and its component unit have substantively the same governing body and a financial benefit or burden relationship exists; (2) the primary government and the component unit have substantially the same governing body and management of the primary government has operational responsibility for the component unit; (3) the component unit serves or benefits, exclusively or almost exclusively, the primary government rather than its citizens; or (4) the total debt of the component unit will be paid entirely or almost entirely from resources of the primary government. Discretely Presented Component Unit Shawano County Economic Progress, Inc., (SCEPI) The government-wide financial statements include the SCEPI as a component unit. SCEPI is a legally separate organization established to foster economic development in Shawano County. It is funded by contributions from the county, county municipalities, and various businesses. SCEPI is included because the county contributes a substantial amount of funding towards their operations. As a component unit, SCEPI s financial statements have been presented as a discrete column in the financial statements. Separately issued financial statements are not issued. Page 17
NOTES TO FINANCIAL STATEMENTS NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Government-Wide Financial Statements In February 2015, the GASB issued Statement No. 72 Fair Value Measurement and Application. This statement addresses accounting and financial reporting issues related to fair value measurements. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard was implemented January 1, 2016. The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The county does not allocate indirect expenses to functions in the statement of activities. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function 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 included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. Fund Financial Statements Financial statements of the county are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position/fund balance, revenues, and expenditures/expenses. Separate financial statements are provided for governmental funds and proprietary funds, and fiduciary funds, 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 statements. Funds are organized as major funds or nonmajor funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the county or meets the following criteria: a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type, and Page 18
NOTES TO FINANCIAL STATEMENTS NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) b. The same element of the individual governmental fund or enterprise fund that met the 10% test is at least 5% of the corresponding total for all governmental and enterprise funds combined. c. In addition, any other governmental or enterprise fund that the county believes is particularly important to financial statement users may be reported as a major fund. The county reports the following major governmental funds: General accounts for the county s primary operating activities. It is used to account for and report all financial resources except those accounted for and reported in another fund. Human Services Special Revenue Fund Fellman this fund is used to account for programs operated by the county s Department of Social Services. This fund was closed into the Human Services Fund in 2016. Human Services Special Revenue Fund Lakeland this fund is used to account for programs operated by the county s Department of Community Programs. This fund was closed into the Human Services Fund in 2016. Human Services Special Revenue Fund Used to account for and report grants and local revenues legally restricted or committed to supporting expenditures for the Human Services related programs. County Roads and Bridges Fund Capital Projects Fund this fund is used to account for the maintenance and construction of the county s roads and bridges. Significant revenues include state and federal aids and a portion of the local tax levy. Debt Service Fund used to account for and report financial resources that are restricted, committed, or assigned to expenditure for the payment of general long-term debt principal, interest, and related costs, other than enterprise debt. The county reports the following major enterprise funds: Highway Fund the highway fund is used to support the maintenance of County, State and Federal highways on a cost reimbursement basis. Water and Sewer Utility Fund the water and sewer utility fund accounts for utilities provided to the nursing home previously owned by the county. Page 19
NOTES TO FINANCIAL STATEMENTS NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) The county reports the following nonmajor governmental and enterprise funds: Special Revenue Funds used to account for and report the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes (other than debt service or capital projects). Public Health City-County Library Jail Assessment Crime Prevention Wisconsin Farmers Wisconsin Development CDBG Housing Loans Environmental Impact Fee Projects Wolf River ADRC Aging Transportation Airport Capital Projects Funds used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Mielke Theater Expansion Capital Improvement Projects Enterprise Funds the Lakeland Industries fund accounts for client workshop and resale programs of the Community Programs department. In addition, the county reports the following fund types: Internal service funds are used to account for technology systems, self-funded workers compensation, collision and property insurance services provided by one department or agency to other departments or agencies of the county, or to other governmental units, on a cost-reimbursement basis. Agency funds are used to account for the receipt and disbursement of various taxes, deposits and assessments held by the county in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. Page 20
NOTES TO FINANCIAL STATEMENTS NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION Government-Wide Financial Statements The government-wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider are met. Unbilled receivables are recorded as revenues when services are provided. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges for actual services between the county s funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the county considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences, and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are recorded in the year levied as receivables and unearned revenues. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. Intergovernmental aids and grants are recognized as revenues in the period the county is entitled to the resources and the amounts are available. Amounts owed to the county which are not available are recorded as receivables and unavailable revenues. Amounts received before eligibility requirements (excluding time requirements) are met and recorded as liabilities. Amounts received in advance of meeting time requirements are recorded as deferred inflows. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. Proprietary and fiduciary fund financial statements (other than agency funds) are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. Agency funds follow the accrual basis of accounting and do not have a measurement focus. Page 21
NOTES TO FINANCIAL STATEMENTS NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) Fund Financial Statements (cont.) The proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the Highway, Water and Sewer Utility, and Lakeland Industries are charges to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. All Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY 1. Deposits and Investments For purposes of the statement of cash flows, the county considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. Investment of County funds is restricted by state statutes. Available investments are limited to: a. Time deposits in any credit union, bank, savings bank or trust company maturing in three years or less. b. Bonds or securities of any County, city, drainage district, technical college district, village, town, or school district of the state. Also, bonds issued by a local exposition district, a local professional baseball park district, a local professional football stadium district, a local cultural arts district, the University of Wisconsin Hospitals and Clinics Authority, or the Wisconsin Aerospace Authority. c. Bonds or securities issued or guaranteed by the federal government. d. The local government investment pool. e. Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency. Page 22