Document Evanston_doc_1b11edba64

CITY OF EVANSTON, WYOMING FINANCIAL REPORT June 30, 2015 ---PAGE BREAK--- ii CONTENTS Introductory Section Title page i Table of contents ii Letter of transmittal iv Financial Section Independent Auditor’s Report 1 Management’s Discussion and Analysis (Unaudited) 4 Basic Financial Statements 12 Government-wide Financial Statements Statement of Net Position 13 Statement of Activities 15 Fund Financial Statements Balance Sheet - Governmental Funds 17 Reconciliation of Governmental Funds Fund Balances to Net Position of Governmental Activities 18 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 19 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Statement of Net Position - Proprietary Funds 21 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds 25 Statement of Cash Flows - Proprietary Funds 27 Notes to Financial Statements 31 ---PAGE BREAK--- iii CONTENTS (Continued) Required Supplementary Information 52 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund 53 Schedule of Changes in Net Pension Liability and Related Ratios (Unaudited) 57 Schedule of City Contributions (Unaudited) 59 Combining Fund Information and Other Supplementary Information 61 Combining and Individual Fund Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds 63 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 64 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual – Special Revenue Fund - Lodging Tax 65 Schedule of Revenues, Expenditures and Changes in Fund Balance - 66 Budget and Actual – Special Revenue Fund – Economic Development Compliance Section 67 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 68 ---PAGE BREAK--- iv December 14, 2015 To the Honorable Mayor, Members of the Governing Council, and Citizens of the City of Evanston. State law requires that all general-purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principle (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Evanston for the fiscal year ended June 30, 2015. This report consists of management’s representations concerning the finances of the City of Evanston. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Evanston has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Evanston’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Evanston’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we attest that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Evanston’s financial statements have been audited by Porter, Muirhead, Cornia, & Howard, CPAs, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Evanston, for the fiscal year ended June 30, 2015, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering and unqualified opinion that the City of Evanston’s financial statements for the fiscal year ended June 30, 2015, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The City of Evanston did not require a federally mandated “Single Audit.” We had several grants but did not exceed the standards governing the Single Audit requirement. The independent audit requires reporting not only on the fair presentation of the financial statements, but also on the internal controls and compliance with legal requirements involving the administration of federal awards. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Evanston’s MD&A can be found immediately following the report of the independent auditors. Profile of the Government The government, located in the extreme southwest corner of the State of Wyoming, was incorporated June 23, 1888. The government has the power to extend its corporate limits by annexation, which is done periodically when deemed appropriate by the governing council and initiated and approved by a majority of the property owners to be annexed. The government has operated under the mayor-council form of government since incorporated. Policy making and legislative authority are vested in the governing council, which consists of a mayor and a six-member council. The governing council is responsible, among other things, for passing ordinances, adopting the budget, and appointing committees and heads of the government’s departments. The council is elected on a non- partisan basis. ---PAGE BREAK--- v Council members are elected to four-year staggered terms with three council members elected every two years. The mayor is elected to a four-year term. The six council members are elected from within their respective wards. There are three wards within the city limits and the mayor is elected at large. The City of Evanston and Uinta County continue to show a population growth as evident by the 2010 census figures which were released recently. Evanston’s 2010 population is 12,359 which reflect a 7.4 percent increase from the 2000 census. Uinta County’s population is 21,118 and also reflects a 7.0 percent increase during the past decade. The City of Evanston’s percentage to total county population did change a little at 58.5 percent, thus the formula used to calculate the sales tax distribution for Evanston changed from the previous year. This will help with inflation costs we have tried to absorb in our department budgets. The local economy continues to be driven by the oil and gas industry, and it is anticipated that this industry will remain the major player in Evanston’s economy for the next several years. The continued expansion of the medical professional staffing in the community has a large economical effect. The City of Evanston provides a full range of services, including police, maintenance of streets, recreational activities, water, wastewater, environmental service, and community development. The annual budget serves as the foundation for the City of Evanston’s planning and control. All agencies of the City of Evanston are required to submit requests for appropriation to the government before the First Monday in May of each year. The government uses these requests as the starting point for developing a proposed budget. The government then presents this proposed budget to the council for review. The council is required to hold public hearings on the proposed budget and to adopt a final budget by the third Tuesday in June. The appropriated budget is prepared by fund function and department. Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments, however, require the special approval of the governing council. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Evanston operates. Local Economy: The Cities economy continues to be driven by the mineral industry and medical profession fields. The location to the Wasatch Front and no state tax helps Evanston remains a prime location for businesses to move to Wyoming if the economy would get better. The mineral/oil industry has had huge impacts on the economy of Evanston this last year. People are just maintaining instead of spending much money. The decline has affected our sales tax and the economy in our community. Many other companies have had reductions in workforce or some businesses have closed all together and this is not helping our flow of cash in our community therefore, everyone feels the crunch. Evanston is becoming a retirement location and there have been many employees transferred from our area with the oil companies making changes because of the economy. This year we saw a decline in the housing market in general. This is not indicative of activity in Evanston but the entire country. Economic development is a high priority within the City to recruit new business adding diversity to the economic picture of our mineral and oil industry presently affecting our community. This year the economy has had a large effect on our government. We continue to try to attract new business to increase our tax basis. Long-term financial planning: Declining revenues continue to dictate the City’s approach towards capital construction and restricts a conservative approach for operating budgets. This is a difficult challenge, especially with the escalating costs of health insurance and the slower returns on investments. ---PAGE BREAK--- vi The increase costs of fuel, housing materials, and other utilities, have required the city to evaluate many policies and operating efficiencies. The declining sales tax has had a large impact on our budgets. We continue to maintain services but capital construction is only accomplished with the funding coming from grants. However, we maintain a positive attitude toward the long term effect on our community and continue to do long term planning. The City of Evanston continues to move forward with technology, training, and the demand of services. A continued search for grants remains our top focus. The economy of the country with the oil and gas prices fluctuating continues to affect our capital projects. Cash management policies and practices: Cash temporarily idle during the year was invested in WYO- STAR investment pool, Wyoming Government Investment Fund, and GNMA bonds. The maturity of the investments depends on the type of investment. The government’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by Federal Depository Insurance or collateralized. All collateral on deposits was held either by the government, its agent or a fiscal institution’s trust department in the government’s name. Risk management: The government continued a limited risk management program with various control techniques, including employee accident prevention training. This training is intended to minimize accident- related losses. The risk management objectives of the City of Evanston are the contiguity of essential services to the city, the safety of City employees and the public and the avoidance of unnecessary and unreasonable liability exposure. Pension and other post-employment benefits: The City of Evanston participates in several single-employer defined benefit pension plans for its employees. The City became involved with the Wyoming Retirement System to help secure employee’s retirement. Our health premiums have increased by 50% due to continued health care expenses. During the fiscal year we made several changes to our insurance by increasing the deductible amount to help maintain good effective insurance coverage for our employees. Awards and Acknowledgment The City of Evanston received the Government Finance Officers Association award of Certificate of Achievement for Excellence in Financial Reporting for thirteen years. Recent changes to the statistical section requirements to meet GASB standards have required the Evanston City Council to reassess demand on time and record keeping, prompting the city to no longer participate in this reporting. However, this does not lower the level of efficiency in the organization to achieve the highest level of accounting reporting possible by the City of Evanston staff. We maintain the generally accepted accounting principles and applicable legal requirements necessary for detailed financial accountability. The preparation of this report could not have been accomplished without the dedicated services of the entire staff of the finance department. The members of other departments of the City of Evanston need to be thanked for their contribution in helping the financial department accomplish accurate reports. Sincere appreciation is expressed to the Mayor and the City Council for their continued interest and support in conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Kathy Defa, City Treasurer ---PAGE BREAK--- FINANCIAL SECTION ---PAGE BREAK--- 1 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Evanston, Wyoming Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Evanston, Wyoming (“City”), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Evanston, Wyoming 2 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, each major fund, and the aggregate remaining fund information of the City of Evanston, Wyoming, as of June 30, 2015and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis. budgetary comparison information, and pension schedules 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 management’s discussion and analysis and pension schedules 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 the 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. The budgetary comparison information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The budgetary information has been subjected to the auditing procedures applied during 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 financial statements, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary comparison is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Evanston’s basic financial statements. The other 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. The other supplementary information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The other supplementary 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 financial statements, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole. The letter of transmittal 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. ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Evanston, Wyoming 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated December 14, 2015 on our consideration of the City of Evanston’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Evanston’s internal control over financial reporting and compliance. Porter, Muirhead, Cornia & Howard Certified Public Accountants Casper, Wyoming December 14, 2015 ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 4 As management of the City of Evanston, Wyoming, we offer readers of the City of Evanston, Wyoming’s financial statements this narrative overview and analysis of the financial activities of the City of Evanston, Wyoming’s for the fiscal year ended June 30, 2015. Financial Highlights • The assets of the City of Evanston, Wyoming exceeded its liabilities at the close of the most recent fiscal year by $105,875,597 (net position). Of this amount, $36,505,176 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors. • The government’s total net position increased by $1,430,814. • As of the close of the current fiscal year, the City of Evanston, Wyoming’s governmental funds reported combined ending fund balances of $10,916,225. • At the end of the current fiscal year, fund balance for the general fund was $8,929,398. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Evanston, Wyoming’s basic financial statements. The City of Evanston, Wyoming’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Evanston, Wyoming’s finances, in a manner similar to a private- sector business. The statement of net position presents information on all of the City of Evanston, Wyoming’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Evanston, Wyoming is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Evanston, Wyoming that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges. (business-type activities). The governmental activities of the City of Evanston, Wyoming include general government, public safety, highways, streets, and culture and recreation. The business-type activities of the City of Evanston, Wyoming include water, sewer, environmental service and other non-major enterprise operations. The government-wide financial statements can be found on pages 13-16 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Evanston, Wyoming like other state and local governments uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the City of Evanston, Wyoming can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 5 Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government–wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Evanston, Wyoming maintains four individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund which is considered to be a major fund, data from the other three governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Evanston, Wyoming adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 17-20 of this report. Proprietary funds. The City of Evanston, Wyoming maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government- wide financial statements. The City of Evanston, Wyoming uses enterprise funds to account for its Water, Sewer and Environmental Service operation. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Evanston, Wyoming’s various functions. The City of Evanston, Wyoming uses an internal service fund to account for its fleet of vehicles. Because this service predominantly benefits governmental rather than business-type functions, it has been included within governmental activities in the government-wide statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, and Environmental Service operation, all of which are considered to be major funds of the City of Evanston, Wyoming. The basic proprietary fund financial statements can be found on 21-30 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on page 31-51 of this report. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Evanston, Wyoming’s progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on page 53-60 of this report. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 6 The combining statements for the non-major governmental funds can be found on pages 63-66 of this report. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City of Evanston, Wyoming’s net position reflect its investment in capital assets land, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The City of Evanston, Wyoming uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Evanston, Wyoming’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Evanston, Wyoming Net Position Restated 2014 2015 Restated 2014 2015 Restated 2014 2015 Current assets $ 11,333,532 $ 12,509,736 $ 29,638,648 $ 29,590,754 $ 40,972,180 $ 42,100,490 Capital assets Net Accum. Dep 38,487,026 37,635,113 31,254,944 31,006,564 69,741,970 68,641,677 Total assets 49,820,558 50,144,849 60,893,592 60,597,318 110,714,150 110,742,167 Deferred outflows of resources 199,851 406,999 77,177 175,731 277,028 582,730 Current Liabilities 1,236,782 825,169 526,848 273,301 1,763,630 1,098,470 Total Non-Current Liabilities 632,292 2,090,251 369,457 1,609,068 1,001,749 3,699,319 Deferred property taxes 642,360 651,511 - - 642,360 651,511 Total deferred inflows of resources 642,360 651,511 - - 642,360 651,511 Invested in capital assets, net of related debt 38,487,026 37,635,113 31,171,925 30,810,795 69,658,951 68,445,908 Restricted 205,847 205,847 653,948 - 859,795 205,847 Unrestricted 8,616,251 9,143,957 28,171,414 28,079,885 36,787,665 37,223,842 Total net position $ 47,309,124 $ 46,984,917 $ 59,997,287 $ 58,890,680 $ 107,306,411 $ 105,875,597 Governmental Business-type 1,882,369 Total Liabilities 2,068,925 2,915,420 Total Activities Activities 896,305 2,965,230 4,797,789 An additional portion of the City of Evanston, Wyoming’s net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position $37,223,842 may be used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Evanston, Wyoming is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 7 Governmental activities. Governmental activities for the City of Evanston, Wyoming are provided in the following table. City of Evanston, Wyoming’s Changes in Net Position 2014 2015 2014 2015 2014 2015 Revenues: Program revenues: Charges for services $ 390,451 $ 678,287 $ 4,605,956 $ 4,495,080 $ 4,996,407 $ 5,173,367 Operating grants and contributions General revenues: Property taxes 871,456 911,679 - - 871,456 911,679 Other taxes 5,166,424 5,571,210 - - 5,166,424 5,571,210 Grants and contributions not restricted to specific specific programs Unrestricted investment earnings Miscellaneous revenue 195,144 267,816 - 66,027 195,144 333,843 Transfers (632,600) (490,000) 632,600 490,000 - - Total revenues 11,408,463 12,102,448 5,296,485 5,117,134 16,704,948 17,219,582 Expenses: General government 4,847,287 4,219,476 - - 4,847,287 4,219,476 Public safety 2,927,354 2,990,753 - - 2,927,354 2,990,753 Public Works 1,322,342 2,202,338 - - 1,322,342 2,202,338 Recreation 1,616,708 1,519,799 - - 1,616,708 1,519,799 Interest on long-term debt 4,009 3,915 - - 4,009 3,915 Water - - 2,498,716 2,632,092 2,498,716 2,632,092 Sewer - - 791,096 842,214 791,096 842,214 Golf - - 943,565 864,434 943,565 864,434 Environmental services - - 943,995 1,093,371 943,995 1,093,371 Total expenses 10,717,700 10,936,281 5,177,372 5,432,111 15,895,072 16,368,392 Change in net position 690,763 1,126,963 119,113 (307,504) 809,876 819,459 Net position – 6/30/14 46,063,510 47,309,124 59,878,174 59,997,287 105,941,684 107,306,411 Prior period adjustment 554,851 (1,451,170) - (799,103) 554,851 (2,250,273) Net position – 6/30/15 $ 47,309,124 $ 46,984,917 $ 59,997,287 $ 58,890,680 $ 107,306,411 $ 105,875,597 - - 2,386,618 2,213,177 Activities Activities 2,386,618 2,213,177 Governmental Business-type Total 239,895 267,816 57,929 66,027 297,824 333,843 2,791,078 2,682,463 - - 2,791,078 2,682,463 ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 8 The City of Evanston, Wyoming is very active in searching and obtaining grants to maintain the level of service and living conditions for our residents. We have received Homeland Security grants along with Alcohol and Tobacco Grants, and the Selective Traffic Enforcement Grant. Other awarded grants, to the City of Evanston, Wyoming furnished resources to support functions such as the Strand Cultural Center, Rail Access Business Plan, Early Childhood Building Expansion and the Bear River Greenway Project. Expenses and Program Revenues – Governmental Activities General Government is our major expense. This division is comprised of City Council, Judicial, Executive, Attorney, Community Development, Treasurer/Clerk, Urban Renewal, General Services, and Youth Services. Our Public Works Departments include Engineering, Administration, and Street Divisions. For the most part, expenses closely paralleled inflation and growth in the demand for services. To monitor the expense of services to the community, The City of Evanston, Wyoming has structured the divisions to better analyze our expenses. Therefore, the City of Evanston, Wyoming can review the cost of specific services to provide a more fiscal responsibility. Revenues by Source – Governmental Activities Revenues were monitored closely during the fiscal year due to sales tax, mineral royalties, and interest income. Business-type activities. Business-type activities increased City of Evanston, Wyoming assets as follows. With the completion of the new water treatment plant, the City of Evanston, Wyoming feels confident that it will help monitor the water flow to improve service and reduce the negative impact when drought conditions exist. Revenues were increased to help maintain expenses for the water/sewer services. Financial Analysis of the Government’s Funds As noted earlier, the City of Evanston, Wyoming uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus on the City of Evanston, Wyoming’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Evanston, Wyoming’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. The general fund is the chief operating fund of the City of Evanston, Wyoming. At the end of the current fiscal year, unreserved fund balance of the general fund was $8,929,398 while total fund balance reached $10,916,225 As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. The general fund balance of the City of Evanston, Wyoming increased by $1,355,238 during the current fiscal year. • Sales tax rate increased tax revenues by $394,346. • Property tax increased by $11,496. • Transfer of funds to Golf and Cemetery Fund of $711,500. • Investments were increased by $147,555. • Charges for Services increased by $81,133. • Miscellaneous revenue increased by $72,675. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 9 The long-term liability ($3,832,726) including accrued compensated absences and pension obligation , are not due and payable in the current period and therefore are not reported in the funds. Proprietary funds. The City of Evanston, Wyoming’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the Water, Sewer, Sanitation and other Enterprise Funds at the end of the year amounted to $27,361,219. The total growth in unrestricted net position for these funds was $810,195. Other factors concerning the finances of these funds have already been addressed in the discussion of the City of Evanston, Wyoming’s business-type activities. General Fund Budgetary Highlights Differences between the original and the final amended budget was a $305,014 increase in appropriations. There were a few unexpected expenditures or grants that were approved during the fiscal year and a brief summary follows: • $69,410 capital outlay for grants and proposed capital projects. • $16,000 department budgets for miscellaneous expenses during the fiscal year. • $58,941 general government adjustments for Boys and Girls Club and Treasurer Department. • $15,000 for Police Department Grants. • $36,000 for Public Works Administration. • $109,663 for Street Department expenses. Capital Asset and Debt Administration Capital assets. The City of Evanston, Wyoming’s investment in capital assets for its governmental and business type activities as of June 30, 2015 amounts to $68,641,677 (net of accumulated depreciation). This investment in capital assets included land, buildings and system, improvements, machinery and equipment, park facilities, roads, highways, and bridges. Major capital asset events during the current fiscal year included the following: • Airport Planning Grant • Bear River Greenway • Emergency Detention Furniture • Water Treatment Plant Tank Replacement • Waste Water Treatment Plant Upgrades • Rail Access Business Plan • Community Garden • Early Childhood Building Expansion • Strand Theater Cultural Center Renovation ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 10 City of Evanston, Wyoming’s Capital Assets (Net of Depreciation) Restated 2014 2015 2014 2015 2014 2015 Land $ 11,329,898 $ 11,329,897 $ 733,694 $ 733,694 $ 12,063,592 $ 12,063,591 Construction in Progress 2,157,740 876,844 291,945 - 2,449,685 876,844 Buildings and Systems 40,289,062 42,440,578 66,135,209 67,370,419 106,424,271 109,810,997 Machinery and Equipment 4,963,597 4,913,237 2,615,375 2,598,990 7,578,972 7,512,227 Infrastructure 17,588,070 17,588,070 - - 17,588,070 17,588,070 Total Accum. Depreciation (38,366,246) (39,513,513) (38,521,279) (39,696,539) (76,887,525) (79,210,052) Total $ 37,962,121 $ 37,635,113 $ 31,254,944 $ 31,006,564 $ 69,217,065 $ 68,641,677 Governmental Business-type Total Activities Activities Additional information on the City of Evanston, Wyoming’s capital assets can be found in Note 3 on pages 41- 43 of this report. Long-term debt. At the end of the current fiscal year, the City of Evanston, Wyoming had total debt outstanding of $3,832,726. City of Evanston’s Outstanding Debt Restated 2014 2015 Restated 2014 2015 2014 2015 Accrued Compensated Absences $ 665,571 $ 638,825 $ 238,695 $ 284,832 $ 904,266 $ 923,657 Lease Purchase Obligation - 46,548 271,446 338,465 271,446 385,013 Pension Obligation 1,126,116 1,444,679 876,280 1,079,377 2,002,396 2,524,056 Total $ 1,791,687 $ 2,130,052 $ 1,386,421 $ 1,702,674 $ 3,178,108 $ 3,832,726 Governmental Business-type Total The City of Evanston, Wyoming’s total debt is $13,832,726 for the current fiscal year. Additional information on the City of Evanston, Wyoming’s long-term debt can be found in Note 3 on pages 43-45 of this report. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2015 (Unaudited) 11 Economic Factors and Next Year’s Budgets and Rates • The unemployment rate for the City of Evanston, Wyoming is currently 4.2 percent, which is a decrease from a rate of 5.1 percent a year ago. This compares to the state’s average unemployment rate of 4.1 percent and the national average rate of 5.1 percent. Across Wyoming, county unemployment rates followed a seasonal pattern and fell or were unchanged. The unemployment rate fell by one percentage point in Uinta County. The local economy continues to suffer driven by the mineral industry and decline of construction. All businesses are just trying to hold on and brave the economic storm. All of these factors were considered in preparing the City of Evanston, Wyoming budget for the 2015 fiscal year. Requests for Information The financial report is designed to provide a general overview of the City of Evanston, Wyoming’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Treasurer, 1200 Main Street, City of Evanston, Wyoming, 82930. ---PAGE BREAK--- 12 BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- See accompanying notes to the financial statements 13 Primary Government Governmental Business-type Activities Activities Total ASSETS Pooled cash and investments 11,922,551 $ 27,495,571 $ 39,418,122 $ Investments at fair value - 3,419 3,419 Receivables (net of allowance for uncollectibles) Accounts receivable 1,319,966 467,455 1,787,421 Accrued interest 25,142 - 25,142 Property taxes 675,151 - 675,151 Internal balances (1,572,556) 1,572,556 - Inventory 7,960 51,753 59,713 Prepaid expenses 131,522 - 131,522 Capital assets not being depreciated Land 11,329,897 733,694 12,063,591 Construction in progress 876,844 - 876,844 Capital assets being depreciated Buildings and systems 42,440,578 67,370,419 109,810,997 Machinery and equipment 4,913,237 2,598,990 7,512,227 Infrastructure 17,588,070 - 17,588,070 77,148,626 70,703,103 147,851,729 Less accumulated depreciation (39,513,513) (39,696,539) (79,210,052) Total capital assets (net of accumulated depreciation) 37,635,113 31,006,564 68,641,677 Total assets 50,144,849 60,597,318 110,742,167 DEFERRED OUTFLOWS OF RESOURCES Pension plan items 406,999 175,731 582,730 CITY OF EVANSTON, WYOMING STATEMENT OF NET POSITION June 30, 2015 ---PAGE BREAK--- 14 Primary Government Governmental Business-type Activities Activities Total LIABILITIES Accounts payable 383,636 $ 65,917 $ 449,553 $ Accrued payroll 134,488 62,049 196,537 Accrued liabilities 107,163 - 107,163 Court bonds payable 14,475 - 14,475 Unearned rent revenue 7,647 - 7,647 Unearned - cash in lieu of land development 137,958 - 137,958 Deposits payable - 51,730 51,730 Long-term liabilities Due in one year 39,802 93,605 133,407 Due in more than one year 645,572 529,691 1,175,263 Net pension liability 1,444,679 1,079,377 2,524,056 Total liabilities 2,915,420 1,882,369 4,797,789 DEFERRED INFLOWS OF RESOURCES Deferred property taxes 651,511 - 651,511 Total deferred inflows of resources 651,511 - 651,511 NET POSITION Invested in capital assets, net of related debt 37,635,113 30,810,795 68,445,908 Restricted for Perpetual fund Expendable 105,847 - 105,847 Nonexpendable 100,000 - 100,000 Unrestricted 9,143,957 28,079,885 37,223,842 Total net position 46,984,917 $ 58,890,680 $ 105,875,597 $ ---PAGE BREAK--- See accompanying notes to the financial statements 15 CITY OF EVANSTON, WYOMING STATEMENT OF ACTIVITIES Program Revenues Operating Capital Charges for Grants and Grants and Function/Programs Expenses Services Contributions Contributions Governmental activities: General government 4,219,476 $ 186,946 $ 2,213,177 $ - $ Public safety 2,990,753 457,254 - - Public works 2,202,338 - - - Health, welfare, and recreation 1,519,799 34,087 - 16,729 Interest on long-term debt 3,915 - - - Total governmental activities 10,936,281 678,287 2,213,177 16,729 Business-type activities: Water fund 2,632,092 2,019,579 - - Sewer fund 842,214 1,008,914 - - Golf fund 864,434 410,055 - - Environmental service fund 1,093,371 1,056,532 - - Total business-type activities 5,432,111 4,495,080 - - Total primary government 16,368,392 $ 5,173,367 $ 2,213,177 $ 16,729 $ General revenues Property taxes and other taxes Sales tax Franchise taxes Motor vehicle taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Miscellaneous revenue Transfers Total general revenues and transfers Change in net position Net position - beginning of year, as previously reported Prior period adjustment Net position - beginning of year, as restated Net position - end of year Year Ended June 30, 2015 ---PAGE BREAK--- 16 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-type Activities Activities Total (1,819,353) $ - $ (1,819,353) $ (2,533,499) - (2,533,499) (2,202,338) - (2,202,338) (1,468,983) - (1,468,983) (3,915) - (3,915) (8,028,088) - (8,028,088) - (612,513) (612,513) - 166,700 166,700 - (454,379) (454,379) - (36,839) (36,839) - (937,031) (937,031) (8,028,088) (937,031) (8,965,119) 911,679 - 911,679 5,098,631 - 5,098,631 185,045 - 185,045 287,534 - 287,534 2,682,463 - 2,682,463 211,883 73,500 285,383 267,816 66,027 333,843 (490,000) 490,000 - 9,155,051 629,527 9,784,578 1,126,963 (307,504) 819,459 47,309,124 59,997,287 107,306,411 (1,451,170) (799,103) (2,250,273) 45,857,954 59,198,184 105,056,138 46,984,917 $ 58,890,680 $ 105,875,597 $ ---PAGE BREAK--- See accompanying notes to the financial statements 17 BALANCE SHEET Other Total General Governmental Governmental Fund Funds Funds ASSETS Pooled cash and investments 9,847,430 $ 1,961,089 $ 11,808,519 $ Prepaid expenses 131,522 - 131,522 Receivables (net of allowance for uncollectibles) Accounts receivable 1,250,464 69,502 1,319,966 Accrued interest 25,142 - 25,142 Property taxes 675,151 - 675,151 Total assets 11,929,709 $ 2,030,591 $ 13,960,300 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts payable 347,520 $ 36,117 $ 383,637 $ Accrued payroll 153,872 - 153,872 Accrued liabilities 107,163 - 107,163 Court bonds payable 14,475 - 14,475 Unearned rent revenue - 7,647 7,647 Unearned - cash in lieu of land development 137,958 - 137,958 Current portion of advance payable to water fund 246,213 - 246,213 Total current liabilities 1,007,201 43,764 1,050,965 Noncurrent portion of advance payable to water fund 1,326,343 - 1,326,343 Total noncurrent liabilities 1,326,343 - 1,326,343 Total liabilities 2,333,544 43,764 2,377,308 Deferred inflows of resources Deferred property taxes 666,767 - 666,767 Total deferred inflows of resources 666,767 - 666,767 Fund balances Nonspendable Permanent fund principal - 100,000 100,000 Restricted, cemetery perpetual care - 1,532,358 1,532,358 Assigned, emergency repairs 5,500,000 - 5,500,000 Unassigned 3,429,398 354,469 3,783,867 Total fund balances 8,929,398 1,986,827 10,916,225 Total liabilities, deferred inflows of resources and fund balances 11,929,709 $ 2,030,591 $ 13,960,300 $ CITY OF EVANSTON, WYOMING Governmental Funds June 30, 2015 ---PAGE BREAK--- See accompanying notes to the financial statements 18 Total governmental fund balances 10,916,225 $ Amounts reported for governmental activities in the statement of net assets are different because: Long-term liabilities, including accrued compensated absences, are not due and payable in the current period and therefore, are not reported in the funds: Accrued compensated absences (638,825) $ Less accrued compensated absences recorded in governmental funds 19,384 Lease purchase obligation (46,548) Pension liability (1,444,679) (2,110,668) Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds. 37,635,113 Deferred outflows are not available to pay for current period expenditures and therefore the underlying resources Pension plan items 209,681 Difference in investment returns 197,318 406,999 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds: Deferred property taxes in governmental funds 666,767 Deferred property taxes in governmental activities (651,511) 15,256 Internal service funds are used by management to charge the costs of certain activities, such as motor vehicle costs to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. This is the amount of unrestricted net position of the internal service funds: Motor Vehicle Fund Unrestricted net position 121,992 Net position of governmental activities 46,984,917 $ CITY OF EVANSTON, WYOMING RECONCILIATION OF GOVERNMENTAL FUNDS FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES June 30, 2015 ---PAGE BREAK--- See accompanying notes to the financial statements 19 CITY OF EVANSTON, WYOMING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Governmental Funds Other Total General Governmental Governmental Fund Funds Funds Revenues Taxes 6,214,052 $ 267,757 $ 6,481,809 $ Licenses and permits 388,319 - 388,319 Fines and forfeitures 151,153 - 151,153 Intergovernmental revenues 4,973,944 - 4,973,944 Charges for services 83,115 34,087 117,202 Interest and miscellaneous 273,907 205,792 479,699 Total revenues 12,084,490 507,636 12,592,126 Expenditures Current General government 2,497,655 - 2,497,655 Public safety and transportation 2,902,008 - 2,902,008 Public works 1,016,745 - 1,016,745 Health, welfare and recreation 1,057,017 515,337 1,572,354 Capital outlay 1,814,143 - 1,814,143 Debt service - interest 3,915 - 3,915 Intergovernmental expenditures 772,816 - 772,816 Total expenditures 10,064,299 515,337 10,579,636 Excess (deficiency) of revenues over expenditures 2,020,191 (7,701) 2,012,490 Other financing sources (uses) Proceeds from lease purchase obligation 46,548 - 46,548 Transfers in - 213,000 213,000 Transfers out (711,500) - (711,500) Total other financing sources (uses) (664,952) 213,000 (451,952) Net change in fund balances 1,355,239 205,299 1,560,538 Fund balances - beginning of year 7,574,159 1,781,528 9,355,687 Fund balances - end of year 8,929,398 $ 1,986,827 $ 10,916,225 $ Year Ended June 30, 2015 ---PAGE BREAK--- See accompanying notes to the financial statements 20 CITY OF EVANSTON, WYOMING RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds 1,560,538 $ Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period: General government Additional capital assets 1,008,847 $ Depreciation expense (1,335,854) (327,007) The changes in long-term liabilities does not require the use of current financial resources of governmental funds. Thus the change is not recorded in governmental funds. This is the net effect of these differences in the treatment. Proceeds from capital lease (46,548) Compensated absences as of June 30, 2014 665,571 Accrued compensated absences as of June 30, 2015 (638,825) Less accrued compensated absences recorded in governmental funds 19,384 (418) Pension expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures governmental funds: Pension liability as of June 30, 2014 1,126,116 Pension liability as of June 30, 2015 (1,444,679) Deferred outflows - pension contributions and differences in investment returns as of June 30, 2014 (199,851) Deferred outflows - pension contributions and differences in investment returns as of June 30, 2015 406,999 (111,415) Internal service activities are accounted for in a separate fund. However, in the statement of activities the activity of the Internal Service Fund has been eliminated and the excess revenue over expenditures has been recognized. Internal service fund changes in net position 4,186 Certain revenues are not recognized as current financial resources and, therefore, are not reported as revenues in governmental funds: Deferred property taxes in governmental funds as of June 30, 2014 (656,536) Deferred property taxes in governmental activities as of June 30, 2014 642,359 Deferred property taxes in governmental funds as of June 30, 2015 666,767 Deferred property taxes in governmental activities as of June 30, 2015 (651,511) 1,079 Change in net position of governmental activities 1,126,963 $ Year Ended June 30, 2015 ---PAGE BREAK--- See accompanying notes to the financial statements 21 Water Sewer Golf Fund Fund Fund ASSETS Current assets Pooled cash and investments 12,435,334 $ 10,457,285 $ 1,778,891 $ Investments 3,419 - - Accounts receivable (net of allowance for uncollectibles) 248,037 109,141 - Inventory - - 51,753 Current portion of advance receivable from general fund 246,213 - - Total current assets 12,933,003 10,566,426 1,830,644 Noncurrent assets Long term portion of advance receivable from general fund 1,326,343 - - Total noncurrent assets 1,326,343 - - Capital assets Land 161,500 240,005 312,189 Buildings and systems 45,443,156 15,574,053 6,267,611 Machinery and equipment 435,453 386,303 692,207 46,040,109 16,200,361 7,272,007 Less accumulated depreciation 22,435,359 13,879,111 2,506,345 Total capital assets (net of accumulated depreciation) 23,604,750 2,321,250 4,765,662 Total assets 37,864,096 12,887,676 6,596,306 DEFERRED OUTFLOWS OF RESOURCES Pension plan items 59,878 42,821 - June 30, 2015 Business-type Activities - Enterprise Funds CITY OF EVANSTON, WYOMING STATEMENT Of NET POSITION Proprietary Funds ---PAGE BREAK--- 22 Governmental Other Nonmajor Activities Enterprise fund Environmental Internal Service Service Fund Totals Fund 2,824,061 $ 27,495,571 $ 114,032 $ - 3,419 - 110,277 467,455 - - 51,753 7,960 - 246,213 - 2,934,338 28,264,411 121,992 - 1,326,343 - - 1,326,343 - 20,000 733,694 - 85,599 67,370,419 278,623 1,085,027 2,598,990 29,661 1,190,626 70,703,103 308,284 875,724 39,696,539 307,973 314,902 31,006,564 311 3,249,240 60,597,318 122,303 73,032 175,731 - (Continued) Business-type Activities - Enterprise Funds ---PAGE BREAK--- See accompanying notes to the financial statements 23 Water Sewer Golf Fund Fund Fund LIABILITIES Current liabilities Accounts payable 51,167 $ 3,959 $ 9,229 $ Accrued payroll 30,827 10,834 - Deposits payable 51,730 - - Total current liabilities 133,724 14,793 9,229 Noncurrent liabilities Due within one year 6,885 3,254 32,728 Due in more than one year 130,823 61,831 163,041 Net pension liability 384,152 278,348 - Total noncurrent liabilities 521,860 343,433 195,769 Total liabilities 655,584 358,226 204,998 NET POSITION Net investment in capital assets 23,604,750 2,321,250 4,569,893 Unrestricted 13,663,640 10,251,021 1,821,415 Total net position 37,268,390 $ 12,572,271 $ 6,391,308 $ June 30, 2015 Business-type Activities - Enterprise Funds CITY OF EVANSTON, WYOMING STATEMENT OF NET POSITION (CONTINUED) Proprietary Funds ---PAGE BREAK--- 24 Business-type Activities - Enterprise Funds Governmental Other Nonmajor Activities Enterprise fund Environmental Internal Service Service Fund Totals Fund 1,562 $ 65,917 $ - $ 20,388 62,049 - - 51,730 - 21,950 179,696 - 50,738 93,605 - 173,996 529,691 - 416,877 1,079,377 - 641,611 1,702,673 - 663,561 1,882,369 - 314,902 30,810,795 311 2,343,809 28,079,885 121,992 2,658,711 $ 58,890,680 $ 122,303 $ ---PAGE BREAK--- See accompanying notes to the financial statements 25 Water Sewer Golf Fund Fund Fund Operating revenues Charges for services 2,019,579 $ 1,008,914 $ 410,055 $ Miscellaneous 31,962 13,414 - Total operating revenues 2,051,541 1,022,328 410,055 Operating expenses Personnel services 979,102 410,678 - Contractual services 53,361 - 378,790 Repairs and maintenance 107,615 50,383 113,910 Supplies 350,704 60,471 134,390 Miscellaneous 5,938 21,322 28,414 Capital outlay 3,808 18,509 - Depreciation 1,001,477 163,699 205,021 Utilities 130,087 117,152 - Total operating expenses 2,632,092 842,214 860,525 Operating income (loss) (580,551) 180,114 (450,470) Nonoperating revenues and expenses Interest income 39,215 27,529 - Gain on cancellation of debt - - 52,886 Interest expense - - (3,909) Loss on disposal of assets (2,035) - (34,418) Total nonoperating revenues 37,180 27,529 14,559 Income (loss) before contributions and transfers (543,371) 207,643 (435,911) Transfers in - - 490,000 Transfers out - - - Net transfers and contributions - - 490,000 Change in net position (543,371) 207,643 54,089 Total net position - beginning of year, as previously reported 38,098,972 12,573,330 6,337,219 Prior period adjustment (287,211) (208,702) - Total net position - beginning of year, as restated 37,811,761 12,364,628 6,337,219 Total net position - end of year 37,268,390 $ 12,572,271 $ 6,391,308 $ CITY OF EVANSTON, WYOMING CHANGES IN FUND NET POSITION Business-type Activities - Enterprise Funds STATEMENT OF REVENUES, EXPENSES, AND Proprietary Funds Year Ended June 30, 2015 ---PAGE BREAK--- 26 Governmental Other Nonmajor Activities Enterprise Fund Environmental Internal Service Service Fund Totals Fund 1,056,532 $ 4,495,080 $ 52,379 $ 4,218 49,594 - 1,060,750 4,544,674 52,379 662,289 2,052,069 - - 432,151 - 65,983 337,891 - 274,469 820,034 56,693 13,649 69,323 - - 22,317 - 73,250 1,443,447 - - 247,239 - 1,089,640 5,424,471 56,693 (28,890) (879,797) (4,314) 6,756 73,500 - - 52,886 - (3,731) (7,640) - - (36,453) - 3,025 82,293 - (25,865) (797,504) (4,314) 340,746 830,746 8,500 (340,746) (340,746) - - 490,000 8,500 (25,865) (307,504) 4,186 2,987,766 59,997,287 118,117 (303,190) (799,103) - 2,684,576 59,198,184 118,117 2,658,711 $ 58,890,680 $ 122,303 $ Business-type Activities - Enterprise Funds ---PAGE BREAK--- See accompanying notes to the financial statements 27 Water Sewer Golf Fund Fund Fund Cash flows from operating activities Receipts from customers 2,092,175 $ 1,010,603 $ 410,055 $ Receipts from other funds - - - Payments to suppliers for services (838,526) (267,687) (659,679) Payments to employees for services (938,661) (384,781) - Net cash and cash equivalents provided (used) by operating activities 314,988 358,135 (249,624) Cash flows from noncapital financing activities Transfers from other funds - - 490,000 Repayments on long-term debt - - - Interest paid on notes - - (3,909) Net cash and cash equivalents provided (used) by noncapital financing activities - - 486,091 Cash flows from capital and related financing activities Principal payments - - (35,472) Proceeds from sales of property and equipment 1,282 - - Acquisitions of property and equipment (1,031,694) - - Net cash and cash equivalents used by capital and related financing activities (1,030,412) - (35,472) Cash flows from investing activities Interest received on advance to general fund 39,085 - - Interest received on investments 39,749 27,531 - Net cash and cash equivalents provided by investing activities 78,834 27,531 - Net increase in cash and cash equivalents (636,590) 385,666 200,995 Cash and cash equivalents - beginning of year 13,071,924 10,071,619 1,577,896 Cash and cash equivalents - end of year 12,435,334 $ 10,457,285 $ 1,778,891 $ Business-type Activities - Enterprise Funds CITY OF EVANSTON, WYOMING STATEMENT OF CASH FLOWS Proprietary Funds Year Ended June 30, 2015 ---PAGE BREAK--- 28 Governmental Other Nonmajor Activities Enterprise fund Environmental Internal Service Service Fund Totals Fund 1,040,613 $ 4,553,446 $ - $ - - 52,499 (357,108) (2,123,000) (56,591) (590,001) (1,913,443) - 93,504 517,003 (4,092) - 490,000 8,500 (45,731) (45,731) - (3,731) (7,640) - (49,462) 436,629 8,500 - (35,472) - - 1,282 - - (1,031,694) - - (1,065,884) - - 39,085 - 6,757 74,037 - 6,757 113,122 - 50,799 870 4,408 2,773,262 27,494,701 109,624 2,824,061 $ 27,495,571 $ 114,032 $ (Continued) Business-type Activities - Enterprise Funds ---PAGE BREAK--- See accompanying notes to the financial statements 29 Water Sewer Golf Fund Fund Fund Reconciliation of operating income (loss) to net cash and cash equivalents provided (used) by operating activities Operating income (loss) (580,551) $ 180,114 $ (450,470) $ Adjustments to reconcile operating income (loss) to net cash and cash equivalents provided (used) by operating activities Depreciation 1,001,477 163,699 205,021 Amortization of differences on pension plan investment earnings 7,523 5,380 - Increase (decrease) in cash and cash equivalents resulting from changes in operating assets, deferred outflows and liabilities Accounts receivable 40,634 (11,725) - Inventory - - 374 Deferred outflows - pension plan items (39,663) (28,046) - Accounts payable (202,452) (6,520) (4,549) Accrued payroll 3,379 (926) - Accrued liabilities 17,434 6,670 - Deposits payable (1,995) - - Net pension liability 69,202 49,489 - Net cash and cash equivalents provided (used) by operating activities 314,988 $ 358,135 $ (249,624) $ Supplemental Information Non-cash investing, capital and related financing activities: Net increase in the fair value of investments 533 $ - $ - $ Capital assets acquired with capital lease - $ - $ 201,108 $ Year Ended June 30, 2015 Business-type Activities - Enterprise Funds CITY OF EVANSTON, WYOMING STATEMENT OF CASH FLOWS (CONTINUED) Proprietary Funds ---PAGE BREAK--- 30 Governmental Other Nonmajor Activities Enterprise fund Environmental Internal Service Service Fund Totals Fund (28,890) $ (879,797) $ (4,314) $ 73,250 1,443,447 - 9,176 22,079 - (20,137) 8,772 120 - 374 102 (52,927) (120,636) (3,007) (216,528) - 31,634 34,087 - - 24,104 - - (1,995) - 84,405 203,096 - 93,504 $ 517,003 $ (4,092) $ Business-type Activities - Enterprise Funds ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 31 Note 1. Summary of Significant Accounting Policies Reporting Entity The financial statements of the City of Evanston, Wyoming (“the City”) include the accounts of all City operations. The City provides a broad range of services to citizens, including general government, public safety, streets, sanitation and health, cultural and park facilities and social services. It also operates the water, sewer and other sanitation utilities and several recreational facilities. The City of Evanston is a municipal corporation governed by an elected mayor and six elected council members. The City serves as the nucleus for the reporting entity under the provisions of GASB Statement No. 14, as amended by GASB Statements No. 39 and No. 61, for its basic financial statements. Using this premise, the City is not financially accountable for any other organizations and thus, includes only the financial activity of the various funds of the City within its basic financial statements. The City of Evanston has no component units nor is it considered a component unit of any other government. The Housing Authority of the City of Evanston, Airport Joint Powers Board, and the City of Evanston- Uinta County Human Services Building Joint Powers Board are all related organization to which the City appoints board members but for which the City has no significant financial accountability. All transactions with each of these organizations are conducted in the ordinary course of business. Further financial information is available from each organization. The accounting policies of the City of Evanston conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant policies: Government-Wide and Fund Financial Statements The government-wide financial statements the statement of net position and the statement of changes in net position) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 32 Note 1. Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in the individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The City reports the following major governmental funds: The general fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Drug Court is included as part of the general fund of the City. The City reports the following major proprietary funds: The water fund accounts for the activities of the City’s water distribution system. The sewer fund accounts for the activities of the City sewage treatment plant and collection system. The golf fund accounts for the activities of the City’s golf course. The environmental service fund accounts for the activities of the City’s sanitation and storm water. Additionally, the City reports the following fund types: The special revenue funds are used to account for the proceeds of designated specific revenue sources that are restricted to expenditures for specified purposes. The permanent fund is used to account for resources legally restricted for use in the care and maintenance of the City’s cemetery. The internal service fund is used for motor vehicle services provided to other departments or agencies of the City, or to other governments, on a cost reimbursement basis. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the government’s water and sewer function 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. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 33 Note 1. Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 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 City’s enterprise funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise 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. Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Net Position or Equity Cash and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the types of investments in which the City may invest. Among these authorized investments are certificates of deposit, money market funds, commercial paper, obligations of the U.S. Treasury, agencies and instrumentalities of the U.S. Government, mortgage backed securities, guaranteed investment contracts, mutual funds and repurchase agreements with banks with the underlying securities being obligations of the U.S. Treasury or agencies and instrumentalities of the U.S. Government. Investments for the City are reported at fair value. Fair value is determined using the latest bid price or by the closing exchange price at the statement of net position date. A significant portion of the City’s investment activity is conducted in a pooled investment account with the State of Wyoming, State Treasurer’s office. The WYO-STAR investment pools were established on or after July 1, 1996 according to the Wyoming Statutory Trust Act. Shares of the fund are offered exclusively to Wyoming governmental entities. Separate accounts are maintained for each entity. These pools invest in obligations of the U.S. Treasury and other investments as authorized by the Wyoming Statutes. The reported value of the pool is the same as the fair value of the pool shares. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” the current portion of interfund loans) or “advances to/from other funds” the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” All trade and property tax receivables are shown net of an allowance for uncollectibles. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 34 Note 1. Summary of Significant Accounting Policies (Continued) Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Net Position or Equity (Continued) Property Taxes Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on or about August 1 and payable in two installments on September 1 and March 1. Uinta County bills and collects its own property taxes and also the taxes for all municipalities and political subdivisions within the County, including the City. City property tax revenues are recognized when levied to the extent that they result in current receivables, which means when collected within the current period or expected to be collected within 60 days of the fiscal year end to be used to pay liabilities of the current period. The City is permitted by Wyoming Statutes to levy taxes up to 8 mills of assessed valuation for all purposes, exclusive of state revenue, except for the payment of public debt and interest thereon. The combined tax rate to finance general government services other than the payment of principal and interest on long-term debt for the year ended June 30, 2015, was 8 mills which mean that the City has levied to the maximum amount available. Inventories and Prepaid Items All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Compensated Absences Benefits It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and sick leave is accrued when incurred in the government-wide, and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost. In the initial capitalization of general infrastructure assets those reported by governmental activities), the City chose to include all such items regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through back trending estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). As the City constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations, the City values these capital assets at the estimated fair value of the item at the date of its donation. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 35 Note 1. Summary of Significant Accounting Policies (Continued) Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Net Position or Equity (Continued) Capital Assets (Continued) Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the City, is depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 50 Building improvements 20 Infrastructure 30-50 Machinery and equipment 5 Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Wyoming Retirement System (“WRS”) plans and additions to/deductions from WRS’s fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Deferred Outflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government only has one item that qualifies for reporting in this category. It is the pension plan items reported in the government-wide and proprietary funds statement of net position. The pension plan items are the result of differences between projected and actual earning on pension plan items, as well as, the District’s contributions subsequent to the measurement date used by the Wyoming Retirement System for the pension plan liability. Deferred Inflows of Resources In addition to liabilities, the statement of net position and governmental funds balance sheet sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The government has one item that qualifies for reporting in the category. Unavailable revenue is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and grants. These amounts are deferred and recognized as inflow of resources in the period that the amounts become available. In the government-wide statement of net position, only property taxes are reported as a deferred inflow of resources. Property taxes are recognized as in inflow of resources in the year they are levied. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 36 Note 1. Summary of Significant Accounting Policies (Continued) Assets, Liabilities, Deferred Outflows and Deferred Inflows of Resources and Net Position or Equity (Continued) Long-Term Obligations In the government-wide financial statements and proprietary fund type fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, and proprietary fund type statement of net position. Fund Balance/Net Position Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned or unassigned. Nonspendable fund balance cannot be spent because of its form. Restricted fund balance has limitations imposed by creditors, grantors, or contributors or by enabling legislation or constitutional provisions. Committed fund balance is a limitation imposed by the City’s council through approval of resolutions. Assigned fund balances are an agreement between the mayor and City management. Unassigned fund balance in the general fund is the net resources in excess of what can be properly classified in one of the above four categories. Negative unassigned fund balance in other governmental funds represents excess expenditures incurred over the amounts restricted, committed, or assigned to those purposes. Proprietary fund equity is classified the same as in the government-wide statements. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted fund balance. Furthermore, committed fund balances are reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used. For the government-wide financial statements, net position are reported as restricted when constraints placed on net position are either: externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of the governments or imposed by law through constitutional provision or enabling legislation. Use of Estimates 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 expenses during the reporting period. Actual results could differ from those estimates. Note 2. Stewardship, Compliance, and Accounting Budgets and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. Prior to May 15, the City Treasurer submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. 2. A public hearing is conducted on the third Tuesday in June to obtain public comments. 3. The budget is adopted no later than twenty-four hours after the third Tuesday in June. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 37 Note 2. Stewardship, Compliance, and Accounting (Continued) Budgets and Budgetary Accounting (Continued) 4. At the request of the City Treasurer or upon its own motion after publication of notice, the City Council may by resolution transfer any unencumbered or unexpended appropriation balance or part thereof from one fund or department to another. Management may amend the budget at the object line item level without seeking Council approval provided the fund or department's total budget is not modified. 5. No officer or employee of the City shall make any expenditure or encumbrance in excess of the total appropriation for any department. 6. All appropriations excluding appropriations for capital projects shall lapse following the close of the budget year to the extent they are not expended. 7. The appropriated budget is prepared by fund, function, and department using the accrual basis of accounting. The government’s department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the council. The legal level of budgetary control the level at which expenditures may not legally exceed appropriations) is the department level. 8. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is not employed as an extension of formal budgetary integration. Note 3. Detailed Notes on all Funds Deposits and Investments As of June 30, 2015, the City had the following investments: Fair Interest Less More Investment Investment Type Value Rate Than 1 1-5 6-10 Than 10 Ratings GNMA - MBS 21,451 $ 5.00-5.50% - $ - $ - $ 21,451 $ Not Rated FNMA - Notes 9,635,427 1.00-1.25% - 9,635,427 - - AA+/Aaa * Certificates of deposit 667,467 .55-.75% 667,467 - - - Not Rated Money market 307 0.01% 307 - - - Not Rated State Treasurer's investment pool (WYO-STAR) 23,358,371 23,358,371 - - - Not Rated 33,683,023 $ 24,026,145 $ 9,635,427 $ - $ 21,451 $ * These investments were rated as AA+ by Standard & Poor's and Aaa by Moody's Investors Service Investment Maturities (In Years) Reported in the following classifications Pooled cash and investments Less pooled cash Pooled investments ` 39,418,122 $ 5,735,099 33,683,023 $ ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 38 Note 3. Detailed Notes on all Funds (Continued) Deposits and Investments (Continued) Interest rate risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City’s investments are held in an external pooled investment account, and as a means of limiting its exposure to fair value losses arising from rising interest rates, the City attempts to match its investment maturities to expected cash flow needs. With this investment focus, investments are expected to reach maturity with limited gains or losses. Credit risk. State law does not allow governments to invest in commercial paper and corporate bonds. Therefore, the City’s investments have limited exposure to credit risk. As of June 30, 2015, the State Treasurer’s Investment Pool (WYO-STAR) did not have a quality service credit rating. Concentration of credit risk. The City does not have a formal policy that mandates or limits an investment in any one issuer as a specified percentage of the City’s total investments. The composition of the investment portfolio of City at June 30, 2015 is as follows: Fair Percent of Deposit and Investment Types Value Portfolio GNMA - MBS 21,451 $ 0.06% FHLB - Notes 9,635,427 28.61% Certificate of deposits Bank Hapoalim 243,592 0.72% Bank of Baroda 91,889 0.27% Bank of North America 91,948 0.27% Goldman Sachs Bank 240,038 0.71% Money market 307 0.00% WYO-STAR Investment Pool 23,358,371 69.35% 33,683,023 $ 99.99% Custodial credit risk – deposits. In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City does not have a formal policy for custodial credit risk; however, State statutes require that the City’s deposits in excess of the Federal depository insurance amount be collateralized. At June 30, 2015, City deposits of $29,386 were not fully insured or collateralized as required by statutes. Custodial credit risk – investments. For an investment, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City does not have a formal policy for custodial credit risk; however, all City investments were held by brokers or the Treasurer of the State of Wyoming in the City’s name. Equity in Pooled Cash and Investments - Interfund Balances Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” the current portion of interfund loans) or “advances to/from other funds (i.e. the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 39 Note 3. Detailed Notes on all Funds (Continued) Equity in Pooled Cash and Investments - Internal Balances (Continued) The following is a detailed reconciliation of the City’s individual fund level financial statement balances for the year ended June 30, 2015, to the government-wide statements. Advances to/from other funds Governmental activities General fund - $ 1,572,556 $ Business-type activities Water fund 1,572,556 - 1,572,556 $ 1,572,556 $ During 2009, the water fund advanced $2,000,000 to the general fund for the purpose of paying the construction costs incurred for the Restoration of Section One of the Roundhouse Project. Interest was calculated on the outstanding balance at the rate of .2429%, which was the rate of return on WYO-STAR at June 30, 2015. Year ending June 30, Principal Interest 2016 246,213 $ 3,915 $ 2017 246,806 3,317 2018 247,400 2,718 2019 247,996 2,117 2020 248,593 1,515 Thereafter 335,548 1,217 1,572,556 $ 14,799 $ Water Fund Advance Payable ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 40 Note 3. Detailed Notes on all Funds (Continued) Receivables As of year-end, the City’s accounts receivable, including the applicable allowances for uncollectible accounts, are as follows: Environmental Nonmajor Water Sewer Service and Other General Fund Fund Fund Funds Total Receivables Customer - $ 248,037 $ 109,141 $ 110,277 $ - $ 467,455 $ Grants 168,090 - - - - 168,090 Franchise fees 40,581 - - - - 40,581 Sales and use tax 968,372 - - - - 968,372 Pari-mutual 34,971 34,971 Municipal court 400,678 - - - - 400,678 Miscellaneous - - - - 69,502 69,502 Allowance for bad debts (362,228) - - - - (362,228) 1,250,464 $ 248,037 $ 109,141 $ 110,277 $ 69,502 $ 1,787,421 $ Interfund Transfers The following is a detailed reconciliation of the City's interfund transfers for the year ended June 30, 2015. Transfers Transfers In Out Governmental Activities: General Fund - $ 711,500 $ Special Revenue Fund Envionmental Services Fund 340,746 340,746 Permanent Fund Cemetery Fund 213,000 - Internal Service Fund Motor Vehicle Fund 8,500 - Total governmental activities 562,246 1,052,246 Business-type Activities: Golf Fund 490,000 - Total business-type activities 490,000 - Total governmental wide 1,052,246 $ 1,052,246 $ Transfers are used to 1) move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due, 2) move restricted amounts from borrowings to the debt service fund to establish mandatory reserve accounts, 3) move unrestricted general fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various grant programs. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 41 Note 3. Detailed Notes on all Funds (Continued) Capital Assets Capital asset activity for the year ended June 30, 2015 was as follows: Restated Beginning Ending Balance Additions Deletions Transfer Balance Governmental activities Capital assets not being depreciated Land 11,329,897 $ - $ - $ - $ 11,329,897 $ Construction in progress 2,157,740 870,620 - (2,151,516) 876,844 Total capital assets not being depreciated 13,487,637 870,620 - (2,151,516) 12,206,741 Capital assets being depreciated Buildings and systems 40,289,062 - - 2,151,516 42,440,578 Machinery and equipment 4,963,597 138,227 182,554 (6,033) 4,913,237 Infrastructure 17,588,070 - - - 17,588,070 Total capital assets being depreciated 62,840,729 138,227 182,554 2,145,483 64,941,885 Less accumulated depreciation for Buildings and systems 16,797,572 1,124,709 - - 17,922,281 Machinery and equipment 4,364,544 161,485 182,554 (6,033) 4,337,442 Infrastructure 17,204,130 49,660 - - 17,253,790 Total accumulated depreciation 38,366,246 1,335,854 182,554 (6,033) 39,513,513 Total capital assets, being depreciated, net 24,474,483 (1,197,627) - 2,151,516 25,428,372 Governmental activities capital assets, net 37,962,120 $ (327,007) $ - $ - $ 37,635,113 $ Machinery and equipment that was purchased through a lease purchase obligation is included in machinery and equipment of the governmental activities. The purchase price of that equipment was $46,548 with current year depreciation expense of $306 was expensed in governmental activities. Depreciation expense was charged to functions/programs of the City as follows: Governmental activities General government 1,111,817 $ Public safety 107,760 Public works, including depreciation of general infrastructure assets 85,523 Capital assets held in the permanent fund 30,754 Total depreciation expense for governmental activities 1,335,854 $ ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 42 Note 3. Detailed Notes on All Funds (Continued) Capital Assets (Continued) Beginning Ending Balance Additions Deletions Transfer Balance Business-type activities Capital assets not being depreciated Land 733,694 $ - $ - $ - $ 733,694 $ Construction in progress 291,945 943,265 - (1,235,210) - Total capital assets not being depreciated 1,025,639 943,265 - (1,235,210) 733,694 Capital assets being depreciated Buildings and systems 66,135,209 - - 1,235,210 67,370,419 Machinery and equipment 2,615,375 289,537 311,955 6,033 2,598,990 Total capital assets being depreciated 68,750,584 289,537 311,955 1,241,243 69,969,409 Less accumulated depreciation for Buildings and systems 36,590,011 1,301,279 - - 37,891,290 Machinery and equipment 1,931,268 142,168 274,220 6,033 1,805,249 Total accumulated depreciation 38,521,279 1,443,447 274,220 6,033 39,696,539 Total capital assets, being depreciated, net 30,229,305 (1,153,910) 37,735 1,235,210 30,272,870 Business-type activities capital assets, net 31,254,944 $ (210,645) $ 37,735 $ - $ 31,006,564 $ Machinery and equipment that was purchased through a lease purchase obligation is included in machinery and equipment of the business-type activities. The purchase price of that equipment was $201,108 with accumulated depreciation of $12,750; current year depreciation of $28,543 was expensed in business-type activities. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 43 Note 3. Detailed Notes on All Funds (Continued) Long-Term Debt The changes on long-term debt for the year ended June 30, 2015 were as follows: Balance Balance Due July 1, June 30, Within 2014 Additions Reductions 2015 One Year Governmental activities Compensated absences 665,571 $ - $ 26,746 $ 638,825 $ 31,941 $ Lease purchase obligations - 46,548 - 46,548 7,861 Pension obligation 1,126,116 318,563 - 1,444,679 - Governmental activities long-term liabilities 1,791,687 $ 365,111 $ 26,746 $ 2,130,052 $ 39,802 $ For the governmental activities, compensated absences are generally liquidated by the general fund. Business-type activities Compensated absences 238,695 $ 46,137 $ - $ 284,832 $ 14,242 $ Lease purchase obligation 271,445 201,108 134,088 338,465 79,363 Pension obligation 876,280 203,097 - 1,079,377 - Business-type activities long-term liabilities 1,386,420 $ 450,342 $ 134,088 $ 1,702,674 $ 93,605 $ Debt outstanding, (excluding accrued compensated absences) at June 30, 2015 is comprised of the following issues: Governmental Activities: $46,548 lease purchase obligation, interest rate 5.517%, payable principal and interest payments of $853 through September 2020, serviced by the General Fund. 46,548 $ Future minimum lease payments under all debt except compensated absences outstanding as of June 30, 2015 are as follows: Year ending June 30, 2016 10,232 $ 2017 10,232 2018 10,232 2019 10,232 2020 10,232 Thereafter 2,558 53,718 Less amount representing interest (7,170) Net present value of minimum lease payment 46,548 $ ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 44 Note 3. Detailed Notes on All Funds (Continued) Long-Term Debt (Continued) Long-Term Debt – Business-type Activities Debt outstanding, (excluding accrued compensated absences) at June 30, 2015 is comprised of the following issues: Business-type Activities: $201,108 lease purchase obligation, interest rate 3.8%, payable principal and interest payments of $3,282 through June 2019, serviced by the Golf Fund. 195,769 $ $237,430 lease purchase obligation, interest rate 1.98%, payable annually, principal and interest payments of $49,461 through February 2018, serviced by the Environmental Service Fund. 142,695 338,464 $ Future minimum lease payments under all debt except compensated absences outstanding as of June 30, 2015 are as follows: Year ending June 30, 2016 88,842 $ 2017 88,842 2018 88,842 2019 96,705 363,231 Less amount representing interest (24,767) Net present value of minimum lease payment 338,464 $ ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 45 Note 3. Detailed Notes on All Funds (Continued) Long-Term Debt (Continued) Assigned Fund Balances The City Council has established tentative plans for financial resources to be utilized in future periods. Such plans or intent are subject to change and may never be legally authorized or result in expenditures. As of June 30, 2015 the City Council had established plans for emergency building repairs as follows: City Hall 1,000,000 $ Police and Fire Buildings 1,500,000 Public Works Buildings 1,000,000 Recreation Center 2,000,000 5,500,000 $ Construction Commitments The City has several outstanding construction projects as of June 30, 2015. The projects include street improvements, stabilization of the machine shop, improvements to the recreation center, and the completion of the water treatment facilities. At year end, the City’s commitments with contractors are as follows: Original Contract Expended Remaining Project Name Amount To Date Commitment Governmental activities General Fund Bear Meadow Enhancement Phase I 498,655 $ 46,621 $ 452,034 $ Early Childhood Building Expansion 832,817 830,223 2,594 Total governmental activities 1,331,472 876,844 454,628 Total primary government 1,331,472 $ 876,844 $ 454,628 $ Contingencies There are several lawsuits pending against the City for various reasons. The outcome and eventual liability to the City, if any, in these cases is not known at this time; however, management and legal counsel estimate the potential claims against the City, not covered by insurance, resulting from such litigation would not materially affect the basis financial statements of the City. Risk Management The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, injuries to employees and natural disasters. During the year ended June 30, 2015 the City contracted with various insurance companies for property insurance (including boiler and machinery), general liability insurance, professional insurance and vehicle insurance. Settlements have not exceeded coverage in any of the past three fiscal years. The government has had no significant reductions in insurance coverage from coverage in the prior years. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 46 Note 3. Detailed Notes on All Funds (Continued) Risk Management (Continued) The City also participates in two other risk management programs: Workers' Compensation Act and Unemployment Compensation Act. Wyoming Statute 27-14-101 created the Wyoming Workers' Compensation Act, which is administered as an enterprise fund by the State of Wyoming. All employers within the State of Wyoming are participants of this plan unless the employer elects not to be covered under the plan. This Act requires the City to obtain liability coverage for payment of benefits to employees for job-related injuries and diseases through the Workers' Compensation Fund. This Act provides general protection from suits filed by employees against the City. The City makes payments to the Department of Employment, State of Wyoming. This amount is based on salaries and a split rate between hazardous and non-hazardous positions. Amounts paid by the City to the State for Workers' Compensation during fiscal year 2015 were approximately $124,000. Wyoming Statute 27-3-101 created the Unemployment Compensation Act. This Act requires the City to pay the cost of actual claims incurred. Changes in the balances of claims liabilities during fiscal year 2015 and 2014 were as follows for the City's participation in the Unemployment Compensation Act Program: Fiscal Year Ended Fiscal Year Ended 2015 2014 Unpaid claims, beginning of year - $ - $ Incurred claims 1,663 1,564 Claim payments (1,663) (1,564) Unpaid claims, end of year - $ - $ Pension Plan Fiduciary Net Position The Wyoming Retirement System issues a publicly available financial report which includes audited financial statements and required supplementary information for each plan. Detailed information about the pension plans’ fiduciary net position is available in separately issued Wyoming Retirement System financial report. The report may be obtained from the Wyoming Retirement System website at http://retirement.state.wy.us. All eligible City employees are covered under one of the two following retirement plans: Public Employees’ Pension Plan The City participates in the Public Employees’ Pension Plan ("PEPP"), a statewide cost-sharing multiple- employer public employee retirement system administered by the State of Wyoming Retirement System Board. Substantially all city full-time employees are eligible to participate. The PEPP provides retirement, disability and death benefits according to predetermined formulas. Benefits are established by Title 9, Chapter 3 of the Wyoming Statutes. PEPP members are required to contribute 8.25% of their annual covered salary and the City is required to contribute 7.62% of the annual covered payroll. Legislation enacted in 1979 allows the employer to pay any or all of the employees’ contribution in addition to the matching contribution. The City currently pays 11.94% of the required total contributions and the employees contribute the remaining portion, 3.38% of the required total contribution. Contribution rates are established by Title 9, Chapter 3 of the Wyoming Statutes. The City’s contributions to the PEPP for the years ended June 30, 2015, 2014, and 2013, were $273,488 and $245,762 and $239,740 respectively and the employees’ contributions were $90,018 and $66,330 and $59,568, respectively, equal to the required contribution for the year. July 1, 2015, the employer contribution rate will increase by 0.75% from 7.625% to 8.375%. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 47 Note 3. Detailed Notes on All Funds (Continued) Wyoming Law Enforcement Retirement Plan The City participates in the Wyoming Law Enforcement Retirement Plan ("WLERP"), a state-wide, cost- sharing, multiple-employer public employee retirement plan administered by the State of Wyoming Retirement System Board. The WLERP is a defined benefit, contributory plan covering any county sheriff, deputy county sheriff, municipal police officer, Wyoming correctional officer, Wyoming law enforcement academy instructor, University of Wyoming campus police officer, detention officer or dispatcher for law enforcement agencies and certain investigators of the Wyoming Livestock Board. The WLERP statutorily provides retirement, disability and death benefits according to predetermined amounts primarily determined by salary, age and years of service of the participant. The WLERP also statutorily provides for a percentage increase in the benefit amounts beginning July 1, after two full years of retirement by 2% each year. State statutes provide for future annual percent increases in the benefit amount to be the greater of the cost of living as determined by the Board or the percentage determined actuarially sound by the System's actuary, up to 2% each year. Participants may withdraw from the WLERP at any time and receive refunds of participant contributions plus accumulated interest. The WLERP is funded by amounts withheld from participating employees' salaries and by contributions from the City. These contributions are determined by state statutes and, as of June 30, 2015, the percentages to be contributed on compensation were 8.60% for the employees and the same for the City. The City currently pays 11.94% of the required total contributions and the police officers contribute the remaining portion, 5.26% of the required total contribution. For the years ended June 30, 2015, 2014, and 2013 the contributions to the Wyoming Law Enforcement Retirement Plan were $226,679, $229,649 and $219,395 respectively. The City’s portion of these contributions were $157,357, $152,716 and $145,923, respectively, and the employees’ contributions were $69,322, $73,472 and $77,869, respectively, equal to the required contributions for each year. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015, the City reported a total liability of $2,524,056 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation January 1, 2014. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating governmental entities, actuarially determined. At December 31, 2014, the City’s liability as well as their proportion and increase from its proportion measured at December 31, 2013 was as follows for each plan in which the City participates: Pension liability at December 31, 2014 Proportion at December 31, 2014 Increase (decrease) from December 31, 2013 Public Employees' Pension Plan 2,272,616 $ 0.128782567% 0.007490475% Wyoming Law Enforcement Retirement Plan 251,440 0.853389620% -0.013406582% $ 2,524,056 ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 48 Note 3. Detailed Notes on All Funds (Continued) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) For the year ended June 30, 2015, the City recognized pension expense of $257,241. At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Net difference between projected and actual earnings on pension plan investments 285,637 $ City contributions subsequent to the measurement date 297,093 Total 582,730 $ The City reported $297,093 as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows or resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Outflows Year ended June 30: 2016 71,409 $ 2017 71,409 2018 71,409 2019 71,410 285,637 $ Actuarial Assumptions The total pension liability in the December 31, 2014 measurement date was determined using the following actuarial assumptions, applied to all periods included in the measurement: Valuation date 1/1/2014 Actuarial cost method Individual Entry Age Normal Amortization method Level percent open Remaining amortization period 30 years Asset valuation method 5-year Actuarial assumptions: Projected salary increases 4.25% to 8.00% Assumed inflation rate 3.25% Mortality RP-2000 Combined Mortality Table, fully generational Actuarial Assumptions and Methods The current actuarial assumptions and methods used in the January 1, 2014 valuation were based upon an experience study that covered a five-year period ending December 31, 2011. Differences between assumptions and actual experience since the prior valuation are identified as actuarial gains and losses. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 49 Note 3. Detailed Notes on All Funds (Continued) Actuarial Assumptions (Continued) These gains and losses impact the unfunded actuarial liability and future funding requirements determined in subsequent valuations. The long term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and adding expected inflation. For each major asset class that is included in the pension plans’ target allocation as of January 1, 2014, these best estimates are summarized in the following table: Asset Class Target Allocation Long-Term Expected Real Rate of Return Cash 2.50% 0.50% Fixed income 15.00% 0.98% Equity 55.00% 6.66% Marketable alternatives 15.50% 4.19% Private markets 12.00% 7.13% Total 100.00% Discount Rate The discount rate used to measure the total pension liability was 7.75 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions for participating governmental entities will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following table presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.75 percent, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the current rate. Pension Plan 1% Decrease (6.75%) Current Discount Rate (7.75%) 1% Increase (8.75%) Public Employees' Pension Plan $ 3,551,409 $ 2,272,616 $ 1,198,724 Wyoming Law Enforcement Retirement Plan 877,949 251,440 (265,577) Payables to the pension plan – At June 30, 2015, the City reported no payables to the pension plans. ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 50 Note 3. Detailed Notes on All Funds (Continued) Prior Period Adjustment As part of implementing the requirements of Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27 and Governmental Accounting Standards Board Statement No. 71, Pensions Transition for Contributions Made Subsequent to the Measurement Date (an amendment of GASB Statement No. 68), the City adjusted its statements of net position for the portion of the pension liability attributable to periods before the year ended June 30, 2014. In the prior year, certain planning expenditures were recorded as construction in progress, however, it was subsequently determined the project was not going to continue and therefore the expenditure should have been expensed. The table below illustrates the construction in progress, deferred outflows, net pension liability, and net position as originally stated and restated: As Originally Stated June 30, 2014 Adjustments As Restated June 30, 2014 Construction in progress - $ (524,905) $ (524,905) $ Deferred outflows - 199,851 199,851 Net pension liability - 1,126,116 1,126,116 Net position 47,309,124 (1,451,170) 45,857,954 As Originally Stated June 30, 2014 Adjustments As Restated June 30, 2014 Deferred outflows - $ 77,177 $ 77,177 $ Net pension liability - 876,280 876,280 Net position 59,997,287 (799,103) 59,198,184 Governmental Activities Business-type Activities Operating Lease – Lessor Under a month to month agreement, the City leased a building to a tenant at the rate of $8,000 per month for the first year and increasing $1,000 per month for each subsequent year. As of June 30, 2015, the rate was $10,000 per month. The cost of the leased property is $3,617,843 with accumulated depreciation of $542,924. Rental income from this lease was $110,000 for the year ending June 30, 2015. During 2014, the City entered into an agreement with a non-profit organization to lease certain real estate to the entity for one dollar per square foot ($7,647 per month) for a term of five years at which time the organization has the option to purchase the property for its fair market value. The fair market value is to be modified by reducing the price by $1,000,000 which the non-profit paid as an investment towards the construction of the subject property and by the rental payments made through the date the purchase option is executed. Since the non-profit organization currently provides out-patient mental health services pursuant to an annual contract awarded by the State of Wyoming, Department of Health, and their ability to continue operations without the State contract would be difficult, the non-profit organization has the right to terminate the lease should the State discontinue its funding. In the event the lease is terminated due to the lack of funding from the State, the City must return the organization’s initial investment of $1,000,000 by making four payments of $250,000 each, with ---PAGE BREAK--- CITY OF EVANSTON, WYOMING NOTES TO THE FINANCIAL STATEMENTS June 30, 2015 51 Note 3. Detailed Notes on All Funds (Continued) Operating Lease – Lessor (Continued) the first payment due 120 days after the date of termination of the lease and the subsequent payments due every 120 days thereafter until the entire amount is paid in full. The City received $84,564 for rent in the current fiscal year under the terms of the lease. Implementation of Governmental Accounting Standards Board Statements 68 and 71 Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27 and Governmental Accounting Standards Board Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date (an amendment of GASB Statement No. 68) were issued to improve accounting and financial reporting by state and local governments for pensions. They also improve information provided by state and local governmental employers about financial support for pensions that is provided by other entities. These Statements result from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. Accounting Standards Issued, But Not Implemented As of June 30, 2015, the Governmental Accounting Standards Board has issued the following standards which the City may implement in its next fiscal year. Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application, defines fair value and describes how fair value should be measured, what assets and liabilities should be measured at fair value, and what information about fair value should be disclosed in the notes to the financial statements. Management has not concluded its assessment of the effect of implementing this guidance. ---PAGE BREAK--- 52 REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- 53 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) PROPERTY TAXES AND OTHER TAXES Property taxes 536,000 $ 536,000 $ 642,842 $ 106,842 $ Motor vehicle tax 250,000 250,000 287,016 37,016 Sales and use taxes 4,375,000 4,375,000 5,098,631 723,631 Franchise fees 161,500 161,500 185,045 23,545 Car company tax 500 500 518 18 5,323,000 5,323,000 6,214,052 891,034 LICENSES AND PERMITS 106,100 106,100 388,319 282,219 INTERGOVERNMENTAL REVENUES State gasoline tax 475,000 475,000 555,193 80,193 Severance tax 460,300 460,300 455,393 (4,907) Cigarette tax 107,000 107,000 94,030 (12,970) State funding 932,488 932,488 932,764 276 Grants 2,991,972 2,994,972 2,213,177 (781,795) Mineral royalties 641,821 641,821 647,449 5,628 Pari-Mutual Tax 25,000 25,000 75,938 50,938 5,633,581 5,636,581 4,973,944 (662,637) CHARGES FOR SERVICES Public safety fees 25,700 25,700 83,115 57,415 25,700 25,700 83,115 57,415 FINES AND FORFEITURES 149,200 149,200 151,153 1,953 MISCELLANEOUS REVENUES Interest earnings 135,000 135,000 210,655 75,655 Miscellanous revenues 31,400 31,400 56,570 25,170 Gain on sale of fixed assets 1,000 1,000 6,682 5,682 167,400 167,400 273,907 106,507 Total revenues 11,404,981 11,407,981 12,084,490 676,491 (Continued) Year Ended June 30, 2015 CITY OF EVANSTON, WYOMING General Fund SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL ---PAGE BREAK--- 54 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) GENERAL GOVERNMENT City Council Salaries and benefits 140,271 $ 140,271 $ (6,468) $ 146,739 $ Contractual 101,653 117,653 99,126 18,527 241,924 257,924 92,658 165,266 Attorney Contractual 157,000 157,000 125,706 31,294 157,000 157,000 125,706 31,294 Judicial Salaries and benefits 67,094 67,094 64,194 2,900 Contractual 74,827 74,827 106,927 (32,100) 141,921 141,921 171,121 (29,200) Mayor Contractual 6,100 6,100 110 5,990 6,100 6,100 110 5,990 Community Development Salaries and benefits 253,640 253,640 225,813 27,827 Contractual 55,554 55,554 34,971 20,583 309,194 309,194 260,784 48,410 Administrative Salaries and benefits 150,728 150,728 137,449 13,279 Contractual 138,906 138,906 67,104 71,802 289,634 289,634 204,553 85,081 Treasury Salaries and benefits 252,185 311,126 301,303 9,823 Contractual 117,325 117,325 91,055 26,270 369,510 428,451 392,358 36,093 Clerk Salaries and benefits 253,156 253,156 240,658 12,498 Contractual 80,084 80,084 44,037 36,047 333,240 333,240 284,695 48,545 Emergency Reserve Contractual 93,000 93,000 22,690 70,310 93,000 93,000 22,690 70,310 Urban Renewal Salaries and benefits 68,361 68,361 65,505 2,856 Contractual 43,735 43,735 12,181 31,554 112,096 112,096 77,686 34,410 Economic Development Contractual 21,250 21,250 12,293 8,957 21,250 21,250 12,293 8,957 (Continued) Year Ended June 30, 2015 CITY OF EVANSTON, WYOMING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED) General Fund ---PAGE BREAK--- 55 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) GENERAL GOVERNMENT (Continued) Youth Services Contractual 75,000 $ 75,000 $ 63,697 $ 11,303 $ 75,000 75,000 63,697 11,303 General Services Salaries and benefits 529,008 529,008 461,932 67,076 Contractual 443,513 443,513 327,372 116,141 972,521 972,521 789,304 183,217 Total general government 3,122,390 3,197,331 2,497,655 699,676 PUBLIC SAFETY AND TRANSPORTATION Police Administrative Salaries and benefits 120,500 120,500 113,068 7,432 Contractual 296,834 296,834 167,543 129,291 417,334 417,334 280,611 136,723 Police Detective Salaries and benefits 848,395 848,395 546,978 301,417 Contractual 32,810 32,810 21,872 10,938 881,205 881,205 568,850 312,355 Police Patrol Salaries and benefits 1,570,709 1,585,709 1,469,251 116,458 Contractual 97,200 97,200 82,596 14,604 1,667,909 1,682,909 1,551,847 131,062 Support Salaries and benefits 441,790 441,790 417,427 24,363 Contractual 22,358 22,358 14,306 8,052 464,148 464,148 431,733 32,415 Police Grants Salaries and benefits 42,481 42,481 41,291 1,190 Contractual 58,003 58,003 27,676 30,327 100,484 100,484 68,967 31,517 Total public safety and transportation 3,531,080 3,546,080 2,902,008 644,072 (Continued) Year Ended June 30, 2015 CITY OF EVANSTON, WYOMING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED) General Fund ---PAGE BREAK--- 56 Variance with Final Budget Positive Original Final Actual (Negative) HEALTH, WELFARE AND RECREATION Administrative Contractual 1,259,266 $ 1,259,266 $ 1,057,017 $ 202,249 $ 1,259,266 1,259,266 1,057,017 202,249 Total health, welfare and recreation 1,259,266 1,259,266 1,057,017 202,249 PUBLIC WORKS Administrative Salaries and benefits 129,669 165,669 135,172 30,497 Contractual 53,266 53,266 23,588 29,678 182,935 218,935 158,760 60,175 Engineering Salaries and benefits 62,782 62,782 57,748 5,034 Contractual 37,717 37,717 9,875 27,842 100,499 100,499 67,623 32,876 Streets Salaries and benefits 151,430 261,095 180,696 80,399 Contractual 1,148,162 1,148,160 609,666 538,494 1,299,592 1,409,255 790,362 618,893 Total public works 1,583,026 1,728,689 1,016,745 711,944 INTERGOVERNMENTAL EXPENDITURES 863,960 863,960 776,731 87,229 CAPITAL OUTLAY 3,612,412 3,681,822 1,814,143 1,867,679 Total expenditures 13,972,134 14,277,148 10,064,299 4,212,849 Excess (deficiency) of revenues over expenditures (2,567,153) (2,869,167) 2,020,191 4,889,358 Other financing sources (uses) Proceeds from lease purchase obligation - - 46,548 46,548 Transfers (out) (1,138,824) (1,138,824) (711,500) 427,324 Total other financing (uses) (1,138,824) (1,138,824) (664,952) 473,872 Net change in fund balance (3,705,977) (4,007,991) 1,355,239 5,363,230 Fund balance - beginning of year 7,574,159 7,574,159 7,574,159 - Fund balance - end of year 3,868,182 $ 3,566,168 $ 8,929,398 $ 5,363,230 $ IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED) Year Ended June 30, 2015 Budgeted Amounts CITY OF EVANSTON, WYOMING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES General Fund ---PAGE BREAK--- 57 2015 2014 2013 2012 Public Employees Pension Plan 0.128782567% * * * 2,272,616 $ * * * 2,201,425 $ * * * 103.23% * * * 79.08% * * * Wyoming Law Enforcement Retirement Plan 0.853389620% * * * 251,440 $ * * * 1,261,232 $ * * * 19.94% * * * 94.76% * * * The amounts presented for each fiscal year were determined as of 12/31. City's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll City's covered-employee payroll City's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pensionliability City's proportion of the net pension liability (asset) City's proportionate share of the net pension liability (asset) City's covered-employee payroll Plan fiduciary net position as a percentage of the total pensionliability (Unaudited) * Information for years prior to 2015 is not available; the schedule will be completed as information becomes available. CITY OF EVANSTON, WYOMING SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 fiscal years City's proportion of the net pension liability (asset) City's proportionate share of the net pension liability (asset) ---PAGE BREAK--- 58 2011 2010 2009 2008 2007 2006 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ---PAGE BREAK--- 59 2015 2014 2013 2012 Public Employees Pension Plan Contractually required contribution 341,370 $ * * * Contributions in relation to the contractually required contribution (341,370) * * * Contribution deficiency (excess) - $ * * * City's covered-employee payroll 2,201,425 $ * * * Contributions as a percentage of covered- employee payroll 15.51% * * * Contractually required contribution 227,193 $ * * * Contributions in relation to the contractually required contribution (227,193) * * * Contribution deficiency (excess) - $ * * * City's covered-employee payroll 1,261,232 $ * * * Contributions as a percentage of covered- employee payroll 18.01% * * * * Information for years prior to 2015 is not available; the schedule will be completed as information becomes available. Wyoming Law Enforcement Retirement Plan SCHEDULE OF CITY CONTRIBUTIONS Last 10 fiscal years CITY OF EVANSTON, WYOMING (Unaudited) ---PAGE BREAK--- 60 2011 2010 2009 2008 2007 2006 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ---PAGE BREAK--- 61 COMBINING FUND INFORMATION AND OTHER SUPPLEMENTARY INFORMATION ---PAGE BREAK--- 62 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for the proceeds of designated specific revenue sources that are restricted to expenditure for specified purposes. ● The Lodging Tax Fund is used to account for the special 3% lodging tax that is restricted for the purpose of promoting tourism within the City. ● The Economic Development Fund is used to account for the lease with Clean Energy that is restricted for the purpose of economic development of the City. PERMANENT FUND Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for the purposes that support the reporting government’s programs. ● Permanent Fund - Cemetery Fund - This fund is used to account for the assets held by the City for the ongoing maintenance of the public cemetery. ---PAGE BREAK--- 63 Permanent Special Revenue Funds Fund Total Lodging Economic Nonmajor Tax Development Cemetery Governmental Fund Fund Total Fund Funds ASSETS Pooled cash and investments 936,909 $ 467,591 $ 1,404,500 $ 556,589 $ 1,961,089 $ Accounts receivable 55,152 10,000 65,152 4,350 69,502 Total assets 992,061 $ 477,591 $ 1,469,652 $ 560,939 $ 2,030,591 $ LIABILITIES Accounts payable 35,494 $ - $ 35,494 $ 623 $ 36,117 $ Deferred rent revenue - 7,647 7,647 - 7,647 Total liabilities 35,494 7,647 43,141 623 43,764 FUND BALANCES Nonspendable Permanent fund principal - - - 100,000 100,000 Restricted 956,567 469,944 1,426,511 105,847 1,532,358 Unassigned - - - 354,469 354,469 Total fund balances 956,567 469,944 1,426,511 560,316 1,986,827 Total liabilities and fund balances 992,061 $ 477,591 $ 1,469,652 $ 560,939 $ 2,030,591 $ June 30, 2015 CITY OF EVANSTON, WYOMING COMBINING BALANCE SHEET Nonmajor Governmental Funds ---PAGE BREAK--- 64 Permanent Special Revenue Funds Fund Total Lodging Economic Nonmajor Tax Development Cemetery Governmental Fund Fund Total Fund Funds Revenues Lodging tax 267,757 $ - $ 267,757 $ - $ 267,757 $ Charges for services - - - 34,087 34,087 Rental income - 204,564 204,564 - 204,564 Interest and miscellaneous 73 - 73 1,155 1,228 Total revenues 267,830 204,564 472,394 35,242 507,636 Expenditures Current Health, welfare and recreation 236,878 58,308 295,186 220,151 515,337 Total expenditures 236,878 58,308 295,186 220,151 515,337 Excess (deficiency) of revenues over expenditures 30,952 146,256 177,208 (184,909) (7,701) Other Financing Sources Transfers in - - - 213,000 213,000 Total other financing sources - - - 213,000 213,000 Net change in fund balances 30,952 146,256 177,208 28,091 205,299 Fund balances - beginning of year 925,615 323,688 1,249,303 532,225 1,781,528 Fund balances - end of year 956,567 $ 469,944 $ 1,426,511 $ 560,316 $ 1,986,827 $ Year Ended June 30, 2015 CITY OF EVANSTON, WYOMING COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Nonmajor Governmental Funds ---PAGE BREAK--- 65 Variance with final Budget Positive Original Final Actual (Negative) Revenues Rental income 225,000 $ 225,000 $ 267,757 $ 42,757 $ Contributions of surplus - 50,000 - (50,000) Interest 50 50 73 23 Total revenues 225,050 275,050 267,830 (7,220) Expenditures General expenses 650 500 78 422 Marketing and promotion 183,350 233,350 200,636 32,714 Matching fund/grants 22,000 19,200 14,164 5,036 Contractual services 19,050 22,000 22,000 - Total expenditures 225,050 275,050 236,878 38,172 Excess of revenues over expenditures - - 30,952 30,952 Fund balance - beginning of year 925,615 925,615 925,615 - Fund balance - end of year 925,615 $ 925,615 $ 956,567 $ 30,952 $ Budgeted Amounts Year Ended June 30, 2015 CITY OF EVANSTON, WYOMING Special Revenue Fund - Lodging Tax SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL ---PAGE BREAK--- 66 Variance with final Budget Positive Original Final Actual (Negative) Revenues Rental income 205,000 $ 205,000 $ 204,564 $ (436) $ Total revenues 205,000 205,000 204,564 (436) Expenditures General expenses 205,000 205,000 58,308 146,692 Total expenditures 205,000 205,000 58,308 146,692 Excess of revenues over expenditures - - 146,256 146,256 Fund balance - beginning of year 323,688 323,688 323,688 - Fund balance - end of year 323,688 $ 323,688 $ 469,944 $ 146,256 $ CITY OF EVANSTON, WYOMING SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Special Revenue Fund - Economic Development Year Ended June 30, 2015 Budgeted Amounts ---PAGE BREAK--- 67 COMPLIANCE SECTION ---PAGE BREAK--- 68 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR’S REPORT Honorable Mayor and Members of the City Council City of Evanston, Wyoming We have audited, in accordance with the 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, the financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Evanston, Wyoming, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City of Evanston’s basic financial statements and have issued our report thereon dated December 14, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Evanston, Wyoming's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Evanston, Wyoming's internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Evanston, Wyoming's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be a material weakness. However, material weaknesses may exist that have not been identified. ---PAGE BREAK--- 69 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Evanston, Wyoming’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 no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Evanston, Wyoming’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Porter, Muirhead, Cornia & Howard Certified Public Accountants Casper, Wyoming December 14, 2015