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38 CITY OF LARAMIE, WYOMING BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2009 Wyoming Specific Territorial Non-Major Total Purpose Prison Governmental Governmental General Tax Debt Service Funds Funds ASSETS Cash 12,623,078 $ - $ - $ 6,372,761 $ 18,995,839 $ Investments 4,324,603 - - 2,533,711 6,858,314 Prepaid items - - - - - Receivables: Accounts, customers 18,772 - - - 18,772 Notes - - - 560,000 560,000 Accrued interest 16,639 - - 26,057 42,696 Operating 2,447,820 112 - 352,564 2,800,496 Restricted assets Cash and cash equivalents 278,539 9,344,443 - - 9,622,982 Investments - - 8,554,700 2,291,361 10,846,061 Total Assets 19,709,451 $ 9,344,555 $ 8,554,700 $ 12,136,454 $ 49,745,160 $ LIABILITIES Accounts payable 1,329,773 $ 368,498 $ - $ 627,942 $ 2,326,213 $ Unearned revenue 1,213,234 - - 900,240 2,113,474 Accrued vacation and - compensatory time 170,762 - - 7,647 178,409 Total Liabilities 2,713,769 368,498 - 1,535,829 4,618,096 FUND BALANCES Reserved for: Capital projects 273,344 - - 6,237,277 6,510,621 Recreation center endowment - - - 2,230,951 2,230,951 Recreation center scholarships - - - 60,410 60,410 Debt service - 8,976,057 8,554,700 717,693 18,248,450 Unreserved Special revenue funds - - - 1,354,294 1,354,294 General fund 16,722,338 - - - 16,722,338 Total Fund Balances 16,995,682 8,976,057 8,554,700 10,600,625 45,127,064 Total Liabilities and Fund Balances 19,709,451 $ 9,344,555 $ 8,554,700 $ 12,136,454 $ 49,745,160 $ See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 39 CITY OF LARAMIE, WYOMING RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS – GOVERNMENTAL FUNDS June 30, 2009 Fund balances- total governmental funds 45,127,064 $ Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets 99,287,891 $ Less accumulated depreciation (36,178,363) 63,109,528 Long-term receivables applicable to governmental activities and not due and collectible in the current period and therefore are not reported in fund balance in the governmental funds. Long-term liabilities are not due and payable on the current period and therefore are not reported in the governmental funds. Governmental notes payable (10,108,367) Governmental leases payable (9,609,312) Compensated absences (650,706) Accrued interest on long-term debt (192,970) (20,561,355) The internal service fund is used by management to charge the cost of certain activities to individual funds. The assets and liabilities of internal service fund are included in governmental activities in the statement of net assets. 3,283,553 Net assets of governmental activities 90,958,790 $ See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 40 CITY OF LARAMIE, WYOMING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS For the Year Ended June 30, 2009 Wyoming Specific Territorial Non-Major Total Purpose Prison Governmental Governmental General Tax Debt Service Funds Funds REVENUES: Taxes and special assessments 3,368,276 $ 3,653,890 $ - $ 119,000 $ 7,141,166 $ Licenses and permits 112,886 - - - 112,886 Intergovernmental 20,053,117 - - 2,842,351 22,895,468 Charges for services 1,798,557 - - 1,105,182 2,903,739 Fines and forfeitures 839,015 - - 839,015 Investment income 286,870 78,322 638,700 188,558 1,192,450 Miscellaneous 123,774 - - 73,296 197,070 Total Revenues 26,582,495 3,732,212 638,700 4,328,387 35,281,794 EXPENDITURES: Current operating: General government 6,016,598 3,040,064 - 1,431,313 10,487,975 Public safety 12,457,295 - - 1,167,656 13,624,951 Health and welfare 675,244 - - - 675,244 Highways and streets 3,212,981 - - 2,175,990 5,388,971 Culture and recreation 2,275,039 - - 1,923,881 4,198,920 Debt service: Principal retirement 641,628 2,032,137 - 76,682 2,750,447 Interest 83,608 343,658 - 10,903 438,169 Total Expenditures 25,362,393 5,415,859 - 6,786,425 37,564,677 Excess (deficiency) of revenues over (under) expenditures 1,220,102 (1,683,647) 638,700 (2,458,038) (2,282,883) OTHER FINANCING SOURCES AND (USES): Issuance of debt 206,402 - - 794,375 1,000,777 Transfers in 1,279,922 - - 3,581,701 4,861,623 Transfers out (2,983,864) (1,125,838) - (400,000) (4,509,702) Total Other Financing Sources and (uses) (1,497,540) (1,125,838) - 3,976,076 1,352,698 Net Change in Fund Balance (277,438) (2,809,485) 638,700 1,518,038 (930,185) Fund Balances- Beginning 17,273,120 11,785,542 7,916,000 9,082,587 46,057,249 Fund Balances- Ending 16,995,682 $ 8,976,057 $ 8,554,700 $ 10,600,625 $ 45,127,064 $ See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 41 CITY OF LARAMIE, WYOMING RECONCILIATION OF THE STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES – GOVERNMENTAL FUNDS For the Year Ended June 30, 2009 Net change in fund balances- total governmental funds (930,185) $ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives. Expenditures for capital assets 11,667,825 $ Less current year depreciation (3,245,206) 8,422,619 Capital lease proceeds provide current resources to governmental funds, but issuing debt increases long-term debt liabilities in the statement of net assets. Repayment of loan principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the amount by which proceeds exceed repayments. The construction period interest expense for construction projects in progress is an expenditure in the governmental funds but the interest is capitalized as construction in progress in the statement of net assets. Long-term debt principal payments 2,750,475 Proceeds from capital lease (1,000,777) 1,749,698 Some expenses reported in the statement of activities do not require current financial resources and therefore are not reported as expenditures in governmental funds. Change in accrued interest payable (49,449) Change in long-term compensated absences 69,235 19,786 Transfer of asset constructed in the governmental fund then transferred to the busines-type activity fund. The construction costs are expenditures in the fund basis financial statements and capitalized in the government-wide financial statements. 32,297 Internal service fund is used by management to charge the cost of certain activities to individual funds. The net revenue of the internal service fund is included in governmental activities in the statement of net assets. 638,585 Change in net assets of governmental activities 9,932,800 $ See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 42 CITY OF LARAMIE, WYOMING STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2009 Governmental Activity- Waste Solid Internal Water Water Waste Total Service Fund ASSETS Current Assets Cash 7,145,453 $ 4,956,551 $ 2,539,037 $ 14,641,041 $ 1,810,868 $ Investments 405,052 2,277,176 894,344 3,576,572 1,843,698 Receivables: Accounts, customers 450,024 267,638 189,604 907,266 - Accrued interest 4,157 30,543 9,258 43,958 12,101 Operating 82,073 - - 82,073 22,005 Total current assets 8,086,759 7,531,908 3,632,243 19,250,910 3,688,672 Noncurrent Assets Restricted investments 317,287 - - 317,287 - Capital assets Land 3,026,954 119,142 211,970 3,358,066 - Water rights 87,685 - - 87,685 - Construction in progress 420,397 168,727 - 589,124 - Buildings 13,576,108 16,796,795 71,400 30,444,303 - Improvements 51,540,019 11,490,928 - 63,030,947 - Furniture and equipment 5,510,917 1,500,794 2,547,002 9,558,713 - Infrastructure - 1,476,603 - 1,476,603 - Accumulated depreciation (28,414,702) (10,716,123) (1,387,720) (40,518,545) - Total noncurrent assets 46,064,665 20,836,866 1,442,652 68,344,183 - Total Assets 54,151,424 $ 28,368,774 $ 5,074,895 $ 87,595,093 $ 3,688,672 $ LIABILITIES Current Liabilities Accounts payable 858,237 $ - $ 179,424 $ 1,037,661 $ 125,009 $ Accrued interest payable 135,547 133,942 509 269,998 - Compensated absences 94,060 31,965 46,006 172,031 - Unearned income 42,650 - - 42,650 - Benefit claims incurred but not reported - - - - 280,110 Revenue bonds- current 390,000 - - 390,000 - Notes payable- current 687,029 728,534 80,882 1,496,445 - Total current liabilities 2,207,523 894,441 306,821 3,408,785 405,119 Business-Type Activities- Enterprise Funds (Continued) See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 43 CITY OF LARAMIE, WYOMING STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2009 (Continued) Governmental Activity- Waste Solid Internal Water Water Waste Total Service Fund Noncurrent Liabilities Revenue bonds payable 4,235,000 - - 4,235,000 - Landfill closure costs - - 1,936,566 1,936,566 - Notes payable 2,402,389 7,202,340 217,356 9,822,085 - Total noncurrent liabilities 6,637,389 7,202,340 2,153,922 15,993,651 - Total Liabilities 8,844,912 8,096,781 2,460,743 19,402,436 405,119 NET ASSETS Invested in capital assets (net of related debt) 38,032,960 12,905,992 1,144,414 52,083,366 - Restricted for capital projects 317,287 - - 317,287 - Unrestricted 6,956,265 7,366,001 1,469,738 15,792,004 3,283,553 Total Net Assets 45,306,512 $ 20,271,993 $ 2,614,152 $ 68,192,657 $ 3,283,553 $ Business-Type Activities- Enterprise Funds See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 44 CITY OF LARAMIE, WYOMING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS For the Year Ended June 30, 2009 Governmental Activity- Waste Solid Internal Water Water Waste Total Service Fund OPERATING REVENUES: Charges for services 5,586,644 $ 3,532,497 $ 2,163,035 $ 11,282,176 $ 2,381,769 $ Other income 115,105 6,664 50,021 171,790 - Total operating revenues 5,701,749 3,539,161 2,213,056 11,453,966 2,381,769 OPERATING EXPENSES Personal services 1,342,638 786,476 1,131,096 3,260,210 - Contractual services 667,128 649,367 227,010 1,543,505 - Materials and supplies 1,252,215 921,211 231,861 2,405,287 - Landfill closure costs - - 489,202 489,202 - Depreciation 1,759,254 792,209 221,871 2,773,334 - Benefit payments - - - - 1,918,563 Total operating expenses 5,021,235 3,149,263 2,301,040 10,471,538 1,918,563 Operating income (loss) 680,514 389,898 (87,984) 982,428 463,206 NONOPERATING REVENUES (EXPENSES): Investment income (loss) 73,347 (346,793) 61,762 (211,684) 143,379 Plant investment fees 284,148 258,009 - 542,157 - Interest expense (371,551) (200,110) (6,095) (577,756) - Total nonoperating revenue (expenses) (14,056) (288,894) 55,667 (247,283) 143,379 Income (loss) before transfers and capital contributions 666,458 101,004 (32,317) 735,145 606,585 TRANSFERS AND CONTRIBUTIONS Capital Contributions: Capital grants 179,374 1,382,930 - 1,562,304 - Transfers: Transfers in 32,297 - - 32,297 32,000 Transfers (out) (187,108) (102,732) (94,082) (383,922) - 24,563 1,280,198 (94,082) 1,210,679 32,000 Change in net assets 691,021 1,381,202 (126,399) 1,945,824 638,585 Net assets at beginning of year 44,615,491 18,890,791 2,740,551 66,246,833 2,644,968 Net assets at end of year 45,306,512 $ 20,271,993 $ 2,614,152 $ 68,192,657 $ 3,283,553 $ Business-Type Activities- Enterprise Funds See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 45 CITY OF LARAMIE, WYOMING STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended June 30, 2009 Governmental Activity- Waste Solid Internal Water Water Waste Total Service Fund INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS: CASH FLOWS FROM OPERATIONS: Receipts from customers 7,193,082 $ 4,066,219 $ 2,122,974 $ 13,382,275 $ 2,398,649 $ Other operating cash receipts 115,105 6,664 50,021 171,790 - Payments to suppliers (1,989,264) (1,570,578) (458,258) (4,018,100) (1,865,300) Payments to employees (1,344,856) (786,476) (1,126,933) (3,258,265) - Net cash from operating activities 3,974,067 1,715,829 587,804 6,277,700 533,349 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in 32,297 - - 32,297 32,000 Transfers (out) (187,108) (102,732) (94,082) (383,922) - Net cash from noncapital financing activities (154,811) (102,732) (94,082) (351,625) 32,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets (2,170,062) (1,775,769) (754,502) (4,700,333) - Interest paid on long-term debt (416,325) (196,323) (6,604) (619,252) - Principal payments on long-term debt (2,705,281) (681,653) (40,628) (3,427,562) - Plant investment fees 284,148 258,009 - 542,157 - Grant revenue 179,374 1,382,930 - 1,562,304 - Proceeds from long-term debt 2,040,000 234,919 338,865 2,613,784 - Net cash from capital and related financing activities (2,788,146) (777,887) (462,869) (4,028,902) - CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investments (731,000) (1,070,739) (593,704) (2,395,443) (982,179) Proceeds from sale of investments 402,442 1,285,227 554,029 2,241,698 915,445 Interest earned on investments 73,633 187,014 65,412 326,059 79,509 Net cash from investing activities (254,925) 401,502 25,737 172,314 12,775 Business-Type Activities- Enterprise Funds (Continued) See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 46 CITY OF LARAMIE, WYOMING STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended June 30, 2009 (Continued) Governmental Activity- Waste Solid Internal Water Water Waste Total Service Fund Net change in cash and cash equivalents 776,185 1,236,712 56,590 2,069,487 578,124 Cash, beginning 6,369,268 3,719,839 2,482,447 12,571,554 1,232,744 Cash, ending 7,145,453 $ 4,956,551 $ 2,539,037 $ 14,641,041 $ 1,810,868 $ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FROM OPERATING ACTIVITIES: Income (loss) from operations 680,514 $ 389,898 $ (87,984) $ 982,428 $ 463,206 $ Adjustments to reconcile income (loss) from operations to net cash from operating activities Depreciation 1,759,254 792,209 221,871 2,773,334 - (Increase) decrease in accounts receivable 1,563,788 533,722 (40,061) 2,057,449 16,880 Increase (decrease) in accounts payable (69,471) - 8,939 (60,532) 75,982 (Decrease) in compensated absences payable (2,668) - (4,163) (6,831) - Increase in unearned income 42,650 - - 42,650 - Increase in landfill closure costs - - 489,202 489,202 - Increase in benefit claims incurred but not reported payable - - - - (22,719) Net cash from operating activities 3,974,067 $ 1,715,829 $ 587,804 $ 6,277,700 $ 533,349 $ Business-Type Activities- Enterprise Funds See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 47 CITY OF LARAMIE, WYOMING STATEMENT OF FIDUCIARY NET ASSETS June 30, 2009 Cemetery Trust Fund ASSETS Cash 7,988 $ Interest receivable 2,874 Investments 595,544 Total Assets 606,406 $ LIABILITIES Accounts payable - $ Total Liabilities - NET ASSETS Restricted for cemetery perpetual care 606,406 Total Net Assets 606,406 606,406 $ See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 48 CITY OF LARAMIE, WYOMING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS For the Year Ended June 30, 2009 Cemetery Trust Fund ADDITIONS: Revenue Cemetery lot sales 8,960 $ Investment income 30,689 Total Additions 39,649 DEDUCTIONS: Operating expended 46,772 Total Deductions 46,772 Net decrease (7,123) Net assets- Beginning of Year 613,529 Net assets- End of Year 606,406 $ See Accompanying Notes to the Basic Financial Statements. ---PAGE BREAK--- 49 CITY OF LARAMIE, WYOMING NOTES TO BASIC FINANCIAL STATEMENTS INDEX NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Financial Reporting Entity B. Basis of Presentation C. Measurement Focus and Basis of Accounting D. Assets, Liabilities, and Equity E. Revenues, Expenditures, and Expenses F. Budgetary Data NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Fund Accounting Requirements B. Compliance with Finance Related and Legal Contractual Provisions C. Excess of Expenditures over Appropriation in Individual Funds NOTE 3. DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS A. Cash and Investments B. Restricted Assets C. Accounts Receivable D. Capital Assets E. Accounts Payable F. Long-term Debt G. Landfill Closure and Postclosure Costs H. Interfund Transactions and Balances I. Fund Equity NOTE 4. OTHER NOTES A. Employee Pension Plans B. Risk Management – Claims and Judgments C. Commitments and Contingencies ---PAGE BREAK--- 50 CITY OF LARAMIE, WYOMING NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City complies with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the government-wide financial statements and the fund financial statements for the proprietary funds, Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, have been applied unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. For enterprise funds, GASB Statement Nos. 20 and 34 provide the City the option of electing to apply FASB pronouncements issued after November 30, 1989. The City has elected not to apply those pronouncements. The accounting and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this Note. The City has implemented the financial reporting requirements of GASB Statement Nos. 33 and 34. 1.A. FINANCIAL REPORTING ENTITY The City’s financial reporting entity comprises the following: Primary Government: City of Laramie Discretely Presented Component Units: Downtown Development Authority In determining the financial reporting entity, the City complies with the provisions of GASB Statement No. 14, The Financial Reporting Entity, and includes all component units of which the City appointed a voting majority of the units’ board; the City is either able to impose its will on the unit or a financial benefit or burden relationship exists. Discretely Presented Component Units The discretely presented component unit is a separate legal entity that meets the component unit criteria described above but does not meet the criteria for blending. The component unit that is directly presented is described below: The Downtown Development Authority created to administer funds collected for the purpose of the beautification of the downtown area of the City of Laramie. The Authority was funded by a mill levy for the downtown area and is subject to approval by the property owners in the business district. This levy was not renewed, however, the Authority has funds remaining to be used for the specific purpose of the Authority. The Downtown Development Authority’s governing board was appointed by the City Council and the City maintains the books for the Authority, collected revenues and paid expenditures. This component unit is discretely presented in the financial statements. Separate financial statements are not issued. ---PAGE BREAK--- 51 NOTES TO BASIC FINANCIAL STATEMENTS Blended Component Units Currently, the City has no blended presented component units. 1.B. BASIS OF PRESENTATION Government-wide Financial Statements The Statement of Net Assets and Statement of Activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Fund Financial Statements Fund financial statements of the reporting entity are organized into funds, each of which is considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: 1. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and 2. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. The funds of the financial reporting entity are described below: Governmental Funds General Fund The General Fund is the primary operating fund of the City and always classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds. Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue ---PAGE BREAK--- 52 sources that are legally restricted to expenditures for certain purposes. NOTES TO BASIC FINANCIAL STATEMENTS Capital Project Funds The Capital Project Fund is used to account for resources restricted for the acquisition or construction of specific capital projects or items. The reporting entity includes the following four Capital Project Funds. Council Construction Fund is used to account for the design and construction of various city projects. Parks and Recreation Development Fund is used to account for costs of acquiring land for and developing new parks and recreation facilities and the improvements to existing parks. Special Purpose Tax Fund is used to account for the construction and improvements for the City projects in the 2001 Special Purpose Tax. The City projects are as follows: City Hall remodeling and boiler replacement, Community Recreation Center construction, furnishing and equipment, acquisition and construction enhancements of an indoor ice rink, acquisition and/or construction of an outdoor swimming pool, street and water line reconstruction, Historic Downtown Laramie streetscape and construction of the East Side water tank project. West Laramie Capital Projects Fund is used to account for the remaining funds from a Special Assessments District and is to be used for capital improvements within the district. Debt Service Fund The Debt Service Fund accounts for the accumulation of financial resources for the payment of interest and principle on the general long-term debt of the City other than debt service payments made by enterprise funds. Proprietary Fund Enterprise Funds Enterprise Funds are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes the Waterworks and Waste Water Utilities Fund and the Solid Waste Fund. Internal Service Fund The Internal Service Fund is used to account for the financing of employee health insurance. ---PAGE BREAK--- 53 NOTES TO BASIC FINANCIAL STATEMENTS Fiduciary Funds Fiduciary Funds are used to report assets held in a trust or agency capacity for others and therefore are not available to support City programs. The reporting focus is on net assets and changes in net assets and is reported using accounting principles similar to proprietary funds. The City’s fiduciary fund is presented in the fiduciary fund financial statements. Since by definition these assets are being held for the benefit of third parties and cannot be used to address activities or obligations of the government, these funds are not incorporated in the government-wide financial statements. The City’s fiduciary fund is the Cemetery Perpetual Care Fund, which is a private purpose trust fund for the benefit of the cemetery users. The fund is used to report cemetery lot sales and related expenses associated with the cemetery lots and lot development. Major and Nonmajor Funds The funds are further classified as major or nonmajor as follows: Fund Brief Description Major Funds: General See above description Capital Projects: Special Purpose Tax Fund See above description Debt Service Fund: Wyoming Territorial Prison Debt Service Fund Accounts for the accumulation of resources for, and the payment of, general long-term debt, interest and related costs. Proprietary: Waterworks and Waste Water Accounts for revenue and expenditures of providing water and sewer services on a user charge basis to the general public. Solid Waste Fund Accounts for revenue and expenditures of providing refuse collection and disposal services on a user charge basis to the general public. Nonmajor Funds: Capital Projects Fund: ---PAGE BREAK--- 54 Council Construction Fund See above description Parks and Recreation NOTES TO BASIC FINANCIAL STATEMENTS Development Fund See above description West Laramie Capital Projects See above description Proprietary Funds: Solid Waste Fund Accounts for revenue and expenditures of providing refuse collection and disposal services on a user charge basis to the general public Internal Service Fund See above description 1.C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. Measurement Focus On the government-wide Statement of Net Assets and the Statement of Activities, both governmental and business-like activities are presented using the economic resources measurement focus as defined in item 2 below. In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used as appropriate: 1. All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets and liabilities are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. 2. The proprietary fund utilizes an “economic resources” measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net assets. 3. Fiduciary funds are being reported using the economic resources measurement focus method. Basis of Accounting ---PAGE BREAK--- 55 In the government-wide Statement of Net Assets and Statement of Activities, both governmental and business-like activities are presented using the accrual basis of NOTES TO BASIC FINANCIAL STATEMENTS accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and available.” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days after year end. Major revenue sources accrued generally consist of property taxes, sales and use taxes and grants. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are reported when due. All proprietary funds and fiduciary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. 1.D. ASSETS, LIABILITIES, AND EQUITY Cash and Investments For the purpose of the Statement of Net Assets, “cash, including time deposits” includes all demand, savings accounts, and certificates of deposits of the City. For the purpose of the proprietary fund Statement of Cash Flows, “cash and cash equivalents” include all demand and savings accounts, and certificates of deposit or short-term investments with an original maturity of three months or less. Investments of the promissory note trustee accounts are not considered cash equivalents. Investments are carried at fair value except for short-term U.S. Treasury obligations with a remaining maturity at the time of purchase of one year or less. Those investments are reported at amortized cost. Fair value is based on quoted market price. Additional cash and investment disclosures are presented in Note 3.A. Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds that may result in amounts owed between funds. Those related to goods and services type transactions are classified as “due to and from other funds.” Short-term interfund loans are reported as “interfund receivables and payables.” Long-term interfund loans (noncurrent portion) are reported as “advances from and to other funds.” Interfund receivables and payables between funds within governmental activities are eliminated in the Statement of Net Assets. See Note 3.H. for details of interfund transactions, including receivables and payables at year-end. ---PAGE BREAK--- 56 NOTES TO BASIC FINANCIAL STATEMENTS Receivables In the government-wide statements, receivables consist of all revenues earned at year- end and not yet received. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. Major receivable balances for the governmental activities include sales and use taxes, franchise taxes, grants, police fines, and ambulance fees. Business-type activities report utilities and interest earnings as their major receivables. In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are deferred in the fund financial statements in accordance with modified accrual, but not deferred in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and available. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Utility accounts receivable and interest earnings compose the majority of proprietary fund receivables. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. Capital Assets The accounting treatment over property, plant, and equipment depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of three years. Government-wide Statements In the government-wide financial statements, capital assets are accounted for as capital assets. All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated fixed assets which are recorded at their estimated fair value at the date of donation. Estimated historical cost was used to value the majority of the assets acquired prior to June 30, 2003. Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets’ estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows: – Buildings 25–40 years ---PAGE BREAK--- 57 – Improvements 10–40 years – Machinery and Equipment 5–20 years NOTES TO BASIC FINANCIAL STATEMENTS – Utility System 25–40 years – Infrastructure 20–40 years Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide statements. Restricted Assets Restricted assets include cash and investments of the Special Purpose Tax Fund that are legally restricted as to their use. The restricted assets are related to proceeds from the issuance of long-term debt that are restricted for capital construction projects and capital facilities sales tax funds restricted for the purchase and/or repayment of debt associated with the construction. Long-term Debt The accounting treatment of long-term debt depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements. All long-term debt to be repaid from governmental and business-type resources is reported as liabilities in the government-wide statements. The long-term debt consists primarily of notes payable, accrued compensated absences, and a court-assessed judgment. Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principle and interest reported as expenditures. The accounting for proprietary fund is the same in the fund statements as it is in the government-wide statements. Compensated Absences The City’s policies regarding vacation time permit employees to accumulate earned but unused vacation leave. The liability for these compensated absences is recorded as long-term debt in the government-wide statements. The current portion of this debt is estimated based on historical trends. In the fund financial statements, governmental funds report only the compensated absence liability payable from expendable available financial resources as they are considered matured, while the proprietary funds report the liability as it is incurred. Deferred Revenue ---PAGE BREAK--- 58 Deferred revenues arise when potential revenue does not meet both the measurable and NOTES TO BASIC FINANCIAL STATEMENTS available criteria for recognition in the current period. Deferred revenues also arise when resources are received by the City before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, the liability for deferred revenue is removed and the revenue is recognized. Equity Classifications Government-wide Statements Equity is classified as net assets and displayed in three components: 1. Invested in capital assets, net of related debt—Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. 2. Restricted net assets—Consists of net assets with constraints placed on the use either by external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or law through constitutional provisions or enabling legislation. 3. Unrestricted net assets—All other net assets that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.” Fund Statements Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved, with unreserved further split between designated and undesignated. Proprietary fund equity is classified the same as in the government-wide statements. See Note 3.H. for additional disclosures. 1.E. REVENUES, EXPENDITURES, AND EXPENSES Sales Tax The City presently levies a four-cent sales tax on taxable sales within the City. The sales tax is collected by the Wyoming Department of Revenue and remitted to the City in the month following receipt by the Department of Revenue. The Department of Revenue receives the sales tax approximately one month after collection by vendors. The sales tax is recorded entirely in the General Fund. Sales taxes collected by the State in June and July (which represent sales for May and June) and received by the City in July and August have been accrued and are included under the caption “Due from other governments.” Use Tax ---PAGE BREAK--- 59 The City levies a four-cent use tax on personal property purchased outside the city limits NOTES TO BASIC FINANCIAL STATEMENTS but stored, used, or consumed within the city. The use tax is collected by the Wyoming Department of Revenue and remitted to the City in the month following receipt by the Department of Revenue, which is one month after the tax is received from the vendors. The use taxes are allocated entirely to the General Fund. Use taxes collected by the State in June and July and received by the City in July and August are included under the caption “Due from other governments.” Specific Purpose Tax On August 1, 2002, the residents of Albany County approved a 1% specific purpose tax to fund several capital projects for Albany County, the City of Laramie and the Town of Rock River. The tax is in the form of sales and use tax and is collected by the Wyoming Department of Revenue and remitted to the Albany County Treasurer who in turn distributes the funds to the participating organizations in proportion to their participation in the projects. A joint powers board was formed to administer to funds and finance the projects. Upon collection of the $41,601,181 approved by the voters, the tax will lapse which is projected to be fulfilled during the fiscal year ended June 30, 2011. Property Tax Property taxes are levied in the first week of August of each year and are collectible in two installments. Installments are due on September 1 and March 1 and are collectible on November 10 and May 10. If the first installment is made after November 10, the entire amount is due by December 31. Property taxes attach an enforceable lien on the property if the payment is not made by November 10 and May 10. The City can request a tax not in excess of eight mills plus an additional amount (currently 0.75 mil) for the extinguishment of general obligation debt in any one year for the purpose of paying the costs incurred in performing the governmental functions essential to the convenience, safety and happiness of the citizens. The Office of the Albany County Treasurer bills and collects the property taxes and remits to the City its portion. In the fund financial statements, property taxes are recorded as revenue in the period levied to the extent they are collected within 60 days of year- end. For the amount of any additional property taxes receivable after the 60-day period, an additional accrual is made in the government-wide financial statements. Operating Revenues and Expenses Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services. It also includes all revenue and expenses not related to capital and related financing, noncapital financing, or investing activities. Expenditures/Expenses In the government-wide financial statements, expenses are classified by function for both ---PAGE BREAK--- 60 governmental and business-type activities. NOTES TO BASIC FINANCIAL STATEMENTS In the fund financial statements, expenditures are classified as follows: Governmental Funds—By Character: Current (further classified by function) Debt Service Capital Outlay Proprietary Fund—By Operating and Nonoperating In the fund financial statements, governmental funds report expenditures of financial resources. Proprietary funds report expenses relating to use of economic resources. Interfund Transfers Permanent reallocation of resources between funds of the reporting entity are classified as interfund transfers. For the purposes of the Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. Use of Estimates Management uses estimates and assumptions in preparing the financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. 1.F. BUDGETARY DATA Budgetary Policy The City annually adopts the Budget Resolution for the General Fund, Debt Service Fund and Capital Projects Funds. The budget and related appropriations are prepared on the encumbrance basis, whereas the City’s governmental financial statements are prepared on the modified accrual basis of accounting and the City’s government-wide financial statements are prepared on the accrual basis of accounting. Budgetary Control Each fund’s appropriated budget is prepared on a detailed line item basis. Revenues are budgeted by source. Expenditures are budgeted by department and character (personal services, materials and supplies, contractual services, capital outlay, and debt service). The legal level of spending control is at the department level. Budgets may be amended by the City Council through a public hearing process required by state statute. All budget amendments are handled in this manner. City management may not transfer appropriations without council approval. All budget appropriations lapse following the close of the budget year to the extent that they are not expended or encumbered. There were four material budget amendments for the year ended June 30, 2009 and is summarized as follows: ---PAGE BREAK--- 61 NOTES TO BASIC FINANCIAL STATEMENTS Expenditures General Fund Decrease in administrative services expenditures (1,204) $ Increase in other general government expenditures 66,578 Increase in judicial expenditures 626 Increase in police expenditures 90,964 Increase in fire department expenditures 248,000 Increase in highway and streets expenditures 79,279 NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY By its nature as a local government unit, the City and its component units are subject to various federal, state and local laws and contractual regulations. An analysis of the City’s compliance with significant laws and regulations and demonstration of its stewardship over the City include the following: 2.A. FUND ACCOUNTING REQUIREMENTS The City complies with all state and local laws and regulations requiring the use of separate funds. The legally required funds used by the City include the following: Fund Required By Cemetery Trust Fund State Law Wyoming Territorial Prison Debt Service Fund Loan Agreement Specific Purpose Tax Fund Trust Indenture 2.B. COMPLIANCE WITH FINANCE RELATED AND LEGAL CONTRACTUAL PROVISIONS The City has no material violations of finance related legal contractual provisions. 2.C EXCESS OF EXPENDITURES OVER APPROPRIATIONS IN INDIVIDUAL FUNDS The City has no material excess of expenditures over appropriations in individual funds. NOTE 3. DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS 3.A CASH AND INVESTMENTS Effective July 1, 2004 the City adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 40, Deposit and Investment Risk Disclosures. This statement establishes financial reporting standards for all state and local governments pertaining to the presentation and disclosure requirement of deposits and investment risks related to credit risk, inherent rate risk and foreign currency risk. Adoption of this accounting standard had no impact on total net assets. ---PAGE BREAK--- 62 NOTES TO BASIC FINANCIAL STATEMENTS Wyoming Statute 9-4-817 authorizes agencies of the State to deposit public funds in financial institutions authorized to do business in the state of Wyoming. These deposits must be fully insured by the Federal Deposit Insurance Corporation (FDIC) or secured by a pledge of assets including bonds, debentures and other securities in which the State Treasurer may by law invest in. Alternatively, a depository may pledge to deposits with conventional real estate mortgages and loans connected with mortgages at a ratio of one and one half (1 ½ of the value of public funds secured by the securities. The City investment policy specifies that internally invested funds may be invested in a combination of fixed-income, minimal risk instruments and money market funds. Investment goals for internally invested funds are designed to achieve a return to provide income, protect assets from risk and maintain liquidity to meet spending requirements. Investments are limited to collateralized bank certificates of deposits, money market funds or federally guaranteed or insured securities. Custodial services are utilized to safeguard the assets and provide reports. Deposits At June 30, 2009, the carrying amount of the City’s demand deposits in financial institutions was $40,601,955. The demand deposits were fully insured with a combination of FDIC insurance and pledged collateral held in the name of the City. All deposits qualified were held by a qualified depository as outlined in the state statutes. At June 30, 2009, the City had $4,676,897 on deposit with the State Treasurer. Detailed information on the State Treasurer’s pooled cash and investments is available from that office. Investments As of June 30, 2009, the City had investments with weighted average maturities as shown in the following table: ---PAGE BREAK--- 63 Weighted Carrying Average Maturity Investment Type Amount Fair Value in Years Federal Home Loan Mortgage Corporation 2,395,000 $ 2,378,808 $ 4.64 Federal National Mortgage Association 1,808,000 1,798,349 7.72 Federal Farm Credit Bank 424,421 421,087 17.65 Government National Mortgage Association 525,884 557,362 24.79 U.S. Treasury Strips 8,554,700 8,554,700 5.38 Federal Home Loan Bank 1,965,000 2,001,288 3.89 Certificates of deposit 3,607,184 3,607,184 0.51 State of Wyoming Investment Pool 4,676,897 4,676,897 Money Market 41,798 41,798 Total 23,998,884 $ 24,037,473 $ NOTES TO BASIC FINANCIAL STATEMENTS 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 does not have a formal policy for interest rate risk. However, the City does manage its exposure to fair value loss arising from interest rate changes on internally invested funds by reviewing the portfolio ongoing basis for changes in effective yields amounts. Within the U.S. Government Agency Securities Discount Notes category are Federal Home Loan, Fannie Mae securities and GNMA securities that are highly sensitive to changes in interest rates. The City does not have a formal policy for interest rate risk. However, the risk is mitigated by the review the portfolio ongoing basis for changes in effective yields amounts. Credit Risk Credit risk is the risk that an insurer or other counterparty to an investment will not fulfill its obligations. The table below shows quality ratings and insured status of investments that are not rated: ---PAGE BREAK--- 64 Federal Home Loan Mortgage Corporation 2,378,808 $ 2,378,808 $ - $ - $ Federal National Mortgage Association 1,798,349 1,798,349 - - Federal Farm Credit Bank 421,087 421,087 Government National Mortgage Association 557,362 - 557,362 - U.S. Treasury Strips 8,554,700 8,554,700 - - Federal Home Loan Bank 2,001,288 2,001,288 - - Certificates of Deposit 3,607,184 - - 3,607,184 State of Wyoming Investment Pool 4,676,897 - - 4,676,897 Money Market 41,798 - - 41,798 Total 24,037,473 $ 15,154,232 $ 557,362 $ 8,325,879 $ Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the City will not be able to recover the value of the investments or collateral securities that are in possession of an outside party. The City does not have a formal policy for custodial credit risk. Investments are held in safekeeping by external custodians in the City’s name. NOTES TO BASIC FINANCIAL STATEMENTS Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of the City’s investment in a single issuer. Concentration of risk is not addressed in the internal investment policy. At June 30, 2009, the City held securities from the following issuers in excess of 5% of the total portfolio: 1,798,349 U.S. Treasury 8,554,700 Federal Home Loan Bank 2,001,288 US Bank- Certificates of Deposit 2,230,951 Total 16,964,096 $ Federal National Mortgage Association Foreign Currency Risk Foreign currency risk is the risk that changes in foreign exchange rates will adversely affect the fair value of an investment or a deposit. The City’s policy is not to invest in ---PAGE BREAK--- 65 foreign current which mitigates their exposure to foreign currency risk. 3.B. RESTRICTED ASSETS The amounts reported as restricted assets or cash, investments and accrued interest are held by the trustee on behalf of the City. These amounts are restricted for use in the construction and financing of projects approved by the voters of the City of Laramie and Albany County. There is an additional amount restricted as an “endowment” fund for the recreation center operations. The restricted net assets as of June 30, 2009 are as follows: Fund Amount Recreation Center Fund 2,291,361 $ General fund 273,344 Emergency 911 Fund 717,693 City Council Construction Fund 5,857,889 Parks and Recreation Construction Fund 273,725 West Laramie Construction Fund 105,663 Specific Purpose Tax Fund 8,976,057 Water Fund 317,287 Wyoming Territorial Prison Debt Service Fund 8,554,700 Total restricted net assets 27,367,719 $ 3.C. ACCOUNTS RECEIVABLE Accounts receivable of the business-type activities consists of utilities receivable. Accounts NOTES TO BASIC FINANCIAL STATEMENTS receivable of the governmental activities consists of franchise taxes, property taxes, sales taxes, use taxes, state grants, federal grants and other miscellaneous receivables. The allowance for doubtful accounts for the business-type activities and governmental activities is as of June 30, 2009. 3.D. CAPITAL ASSETS Capital asset activity for the year ended June 30, 2009 was as follows: ---PAGE BREAK--- 66 Balance at Balance at June 30, 2008 Additions Disposals June 30, 2009 Governmental activities: Non-depreciable assets Land 1,266,693 $ 345,485 $ - $ 1,612,178 $ Construction in progress 446,295 1,660,008 332,988 1,773,315 Depreciable assets Buildings 25,418,155 4,260,611 - 29,678,766 Infrastructure 46,931,152 3,262,048 - 50,193,200 Improvements 3,624,183 356,439 3,980,622 Furniture and equipment 10,039,194 2,350,511 339,895 12,049,810 Total at historical cost 87,725,672 12,235,102 672,883 99,287,891 Less accumulated depreciation Buildings (5,505,981) (620,486) - (6,126,467) Infrastructure (20,349,717) (1,326,433) - (21,676,150) Improvements (820,426) (182,649) - (1,003,075) Furniture and equipment (6,430,341) (1,284,504) (342,174) (7,372,671) Total accumulated depreciation (33,106,465) (3,414,072) (342,174) (36,178,363) Governmental activities capital assets, net 54,619,207 $ 8,821,030 $ 330,709 $ 63,109,528 $ Business-type activities: Non-depreciable assets Land 3,358,066 $ - $ - $ 3,358,066 $ Water rights 87,685 - - 87,685 Construction in progress 1,250,083 539,708 1,200,667 589,124 Depreciable assets Buildings 30,752,408 1,261,648 1,569,753 30,444,303 Infrastructure - 1,476,603 - 1,476,603 Improvements 61,274,133 3,575,265 1,818,451 63,030,947 Furniture and equipment 9,010,097 794,770 246,154 9,558,713 Total at historical cost 105,732,472 7,647,994 4,835,025 108,545,441 Less accumulated depreciation Buildings (14,724,211) (611,942) (1,026,388) (14,309,765) Infrastructure - (18,457) - (18,457) Improvements (19,284,828) (1,453,291) (57,655) (20,680,464) Furniture and equipment (5,063,369) (692,644) (246,154) (5,509,859) Total accumulated depreciation (39,072,408) (2,776,334) (1,330,197) (40,518,545) Business-type activities capital assets, net 66,660,064 $ 4,871,660 $ 3,504,828 $ 68,026,896 $ ---PAGE BREAK--- 67 NOTES TO BASIC FINANCIAL STATEMENTS Depreciation expense was charged to governmental activities as follows: General government: Administrative services 50,375 $ Other general government 179,732 Public safety: Police 538,527 Fire 330,061 Engineering and code administration 8,721 Health and welfare: Animal control 17,238 Mosquito control 12,954 Culture and recreation: Parks 276,743 Recreation 417,686 Cemetery 22,652 Highways and streets 1,559,383 Total depreciation expense 3,414,072 $ 3.E. ACCOUNTS PAYABLE Payables in the general fund and nonmajor governmental funds are composed of payables to vendors and accrued salaries and benefits. Payables of the Enterprise Funds are composed of payables to vendors and accrued salaries and benefits. 3.F. LONG-TERM DEBT The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. The liability for compensated absences has historically been paid for by the fund which incurred the liability for the compensated absences. The following is a summary of changes in long-term debt obligations of the City at June 30, 2009: Long-term Long-term Obligations at Obligations at Due Within June 30, 2008 Additions Deletions June 30, 2009 One Year Loans Payable: WTP note payable 10,000,000 $ - $ - $ 10,000,000 $ - $ Pension buy out 140,074 - 31,707 108,367 33,809 Capital Leases: Animal shelter building 403,053 - 93,814 309,239 98,254 Road grader 72,964 - 72,964 - - Zamboni 21,944 - 21,944 - - Street sweeper 102,261 - 50,101 52,160 52,160 Police cars 686,679 - 161,512 525,167 168,103 Road grader II 149,346 - 97,983 51,363 51,363 Governmental Activities: (Continued) ---PAGE BREAK--- 68 NOTES TO BASIC FINANCIAL STATEMENTS Long-term Long-term Obligations at Obligations at Due Within June 30, 2008 Additions Deletions June 30, 2009 One Year Governmental Activities: Two dump trucks - 206,530 68,857 137,673 67,662 E911 consoles - 794,375 76,682 717,693 150,051 WAM Energy lease 35,000 - 6,250 28,750 5,000 Street sweeper II 119,515 - 38,001 81,514 39,813 City Hall remodel 549,423 - 114,636 434,787 119,069 Recreation Center construction 5,455,816 - 1,138,550 4,317,266 1,182,583 Ice Rink construction 659,188 - 137,563 521,625 142,883 East Side tank construction 3,073,463 - 641,388 2,432,075 666,193 Other long-term debt Compensated absences 759,878 791,858 722,623 829,113 829,113 22,228,604 $ 1,792,763 $ 3,474,575 $ 20,546,792 $ 3,606,056 $ Long-term Long-term Obligations at Obligations at Due Within June 30, 2008 Additions Deletions June 30, 2009 One Year Revenue Bonds: Water refunding bonds 2,850,000 $ - $ 265,000 $ 2,585,000 $ 275,000 $ Water refunding bonds - 2,040,000 - 2,040,000 115,000 Loans Payable: WWDC Spur Well loan 757,675 - 45,569 712,106 47,392 WWDC Water projects loan 1,438,747 - 80,234 1,358,513 82,240 WWDC Soldier Springs Well loan 533,886 - 35,531 498,355 36,952 WWDC Laramie North 1,760,796 - 1,760,796 - - WSLIB Main Lift Station Project 524,682 234,918 - 759,600 29,839 WSLIB Wastewater Treatment Facility loan 7,181,354 - 640,999 6,540,355 657,024 WSLIB Wastewater Treatment Facility loan 671,574 - 40,655 630,919 41,671 Capital Leases: Water meter replacement 1,020,924 - 500,479 520,445 520,445 Tractor lease 17,674 - 17,674 - - Landfill dozer and ripper - 338,865 40,628 298,237 80,882 Other long-term debt Landfill closure and post closure costs payable 1,447,364 489,202 - 1,936,566 - Compensated absences 178,861 165,852 172,682 172,031 172,031 18,383,537 $ 3,268,837 $ 3,600,247 $ 18,052,127 $ 2,058,476 $ Business-Type Activities: ---PAGE BREAK--- 69 NOTES TO BASIC FINANCIAL STATEMENTS Governmental Activities: As of June 30, 2009, the governmental long-term debt of the financial reporting entity consisted of the following: LOANS: A note payable to the Investment Fund Committee of the State of Wyoming, interest only payable at 1.5% interest through December 1, 2014 when total principal and remaining accrued interest are due. U.S. securities and a portion of 1% sales tax are collateral for this loan. 10,000,000 $ A note payable to the State of Wyoming Retirement System, due in annual installments of $40,991, including interest at 6.6275% though July 1, 2011, unsecured. 108,367 CAPITAL LEASES: Capital lease payable , due in semi-annual installments of $93,819, including interest at 4.04% to March 2012, collateralized by equipment with an aggregate carrying value of $619,375 525,167 Capital lease payable to WAM, due in semi-annual installments of $2,500, at zero interest to June 2016, unsecured. 28,750 Note payable to Security First Bank, due in annual installments of $87,586, including interest at 3.10% to 4.25%, secured by radios and equipment with a carrying value of $635,500 717,693 Capital lease payable to the Albany County Improvements Statutory Trust, due in semi-annual variable installments ranging from $64,420 to $68,584, including variable interest ranging from 3.00% to 4.00%, to July 2012, secured by real estate with an aggregate carrying value of $2,160,557. 521,625 Capital lease payable to the Albany County Improvements Statutory Trust, due in semi-annual variable installments ranging from $639,911 to $682,382, including variable interest ranging from 3.00% to 4.00%, to July 2012, secured by real estate recreation center with an aggregate carrying value of $11,981,239. 4,317,266 Capital lease payable to the Albany County Improvements Statutory Trust, due in semi-annual variable installments ranging from $81,139 to $164,746, including variable interest ranging from 3.00% to 4.00%, to July 2012, secured by real estate with an aggregate carrying value of $1,099,795. 434,787 Capital lease payable to the Albany County Improvements Statutory Trust, due in semi-annual variable installments ranging from $360,429 to $384,400, including variable interest ranging from 3.00% to 4.00%, to July 2012, secured by real estate and water tank project with a carrying value of $10,408,663. 2,432,075 ---PAGE BREAK--- 70 NOTES TO BASIC FINANCIAL STATEMENTS Capital lease payable, due in annual installments of $54,304, including interest at 4.11% to August, 2009, collateralized by equipment with an aggregate carrying $133,190. 52,160 Capital lease payable, due in semi-annual variable installments ranging from $56,079 to $56,854, including interest at 5.15% to June, 2012 collateralized by a building with an aggregate carrying value of $535,376. 309,239 Capital lease payable, due in semi-annual installments of $53,745, including interest at 4.36% to July, 2010, collateralized by equipment with an aggregate carrying $156,629. 51,363 Capital lease payable, due in annual installments of $43,452, including interest at 4.13% to September, 2010, collateralized by equipment with an aggregate carrying $168,076. 81,514 Capital lease payable, due in annual installments ranginf from $73,887 to $72,649 including interest at 3.62% to May, 2011, collateralized by equipment with an aggregate carrying $196,204. 137,673 Total Governmental Activity Debt 19,717,679 $ Business-type Activities: As of June 30, 2009, the governmental long-term debt of the financial reporting entity consisted of the following: BONDS: A series of refunding water bonds, due in annual installments through December 1, 2015 with semi-annual interest payments at 2.70% to 4.65%. These bonds are callable after December 1, 2009. Secured by revenues generated by the Municipal Water System. 2,585,000 $ A series of refunding water bonds, due in annual installments through December 1, 2017 with semi-annual interest payments at 2.90% to 4.30%. These bonds are callable after December 1, 2009. Secured by revenues generated by the Municipal Water 2,040,000 System. LOANS: Note payable to the State of Wyoming, Wyoming Water Development Commission due in annual installments from $150,256 to $116,203 including interest at 2.5% secured by revenues generated by the Municipal Water System. 1,358,513 Note payable to the State of Wyoming, Wyoming Water Development Commission due in annual installments of $75,873 including interest at 4.0% secured by revenues generated by the Municipal Water System. 712,106 ---PAGE BREAK--- 71 NOTES TO BASIC FINANCIAL STATEMENTS Development Commission due in annual installments of $56,887 including interest at 4.0% secured by revenues generated by the Municipal Water System. 498,355 Note payable to Sun Trust Leasing Corporation, due in annual installments of $541,213, including interest at 3.99% secured by equipment with a carrying value of $2,025,661. 520,445 Note payable to the Wyoming State Land and Investment Board, due in annual installments of $913,741, including interest at 4.0%, secured by revenues generated by the Wastewater Treatment Facility. 6,540,355 Note payable to the Wyoming State Land and Investment Board, due in annual installments of $48,569, including interest at 2.50%, secured by revenues generated by the Wastewater Treatment Facility. 759,600 Note payabel to Wyoming Bank & Trust due in semi-annual installments of $46,214 including interest at 4.15% to December 2012, secured by equipment with a carrying value of $304,979 298,237 Note payable to the Wyoming State Land and Investment Board, due in annual installments of $66,224, including interest at 4.0%, secured by revenues generated by the Wastewater Treatment Facility. 630,919 Total Business-Type Activity Debt 15,943,530 $ Annual Debt Service Requirements The annual requirements to amortize all debt outstanding as of June 30, 2009, excluding obligations associated with compensated absences and Landfill Closure and Post- closure costs are as follows: Principal Interest Principal Interest Principal Interest 2010 2,776,943 $ 515,574 $ 1,886,445 $ 505,393 $ 4,663,388 $ 1,020,967 $ 2011 2,778,840 403,811 1,388,026 440,762 4,166,866 844,573 2012 2,720,850 290,409 1,430,832 397,320 4,151,682 687,729 2013 1,346,533 182,263 1,413,233 352,130 2,759,766 534,393 2014 90,763 151,822 1,418,569 308,043 1,509,332 459,865 2015-2019 10,003,750 75,000 6,481,576 823,179 16,485,326 898,179 2020-2024 - - 1,698,985 191,182 1,698,985 191,182 2025-2026 - - 225,864 16,979 225,864 16,979 19,717,679 $ 1,618,879 $ 15,943,530 $ 3,034,988 $ 35,661,209 $ 4,653,867 $ Governmental Activities Business-Type Activities Government-Wide ---PAGE BREAK--- 72 NOTES TO BASIC FINANCIAL STATEMENTS 3.G. LANDFILL CLOSURE AND POSTCLOSURE COSTS State and federal laws require the City of Laramie to place a final cover on its municipal landfill site when it stops accepting waste and to perform certain monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $1,936,566 reported as landfill closure and postclosure care liability at June 30, 2009 represents the cumulative amount reported to date based on 52.26 percent of the estimated usage of the landfill. The City will recognize the remaining estimated costs of closure and postclosure care of $3,705,445 as the remaining capacity is filled. These amounts are based on what it would cost to perform all closure and postclosure care in 2008. The City expects to close the landfill in the year 2034. Actual costs may be higher due to inflation, changes in technology or changes in regulations. 3.H. INTERFUND TRANSACTIONS AND BALANCES The City transfers amounts between funds to pay for operating expenses. The transfers are budgeted for by the City Council to supplement the operating costs for the respective funds for matching funds required by capital grants. The transfers for the year ended June 30, 2009 were as follows: Transfers In Transfers Out General Fund: Capital Projects Funds Recreation Center Fund - $ 157,316 $ Council Counstruction Fund - 2,749,548 Parks and Recreation Construction Fund - 45,000 Specific Purpose Tax Fund 896,000 - Internal Service Funds Health Insurance Trust - 32,000 Enterprise Funds Water 187,108 - Waste Water 102,732 - Solid Waste 94,082 - Total General Fund 1,279,922 2,983,864 Recreation Center Fund Specific Purpose Tax Fund 13,947 General Fund 157,316 - Total Recreation Center Fund 171,263 - West Laramie Construction Fund Council Counstruction Fund - 400,000 ---PAGE BREAK--- 73 NOTES TO BASIC FINANCIAL STATEMENTS Specific Purpose Tax Fund Recreation Center Fund - 13,947 Council Counstruction Fund - 215,890 General Fund - 896,000 Total Council Construction Fund - 1,125,837 Council Counstruction Fund West Laramie Construction Fund 400,000 - Specific Purpose Tax Fund 215,890 - General Fund 2,749,548 - Total Council Construction Fund 3,365,438 - Parks and Recreation Construction Fund General Fund 45,000 - Health Insurance Trust General Fund 32,000 - Water Fund General Fund - 187,108 Total Water Fund - 187,108 Waste Water Fund General Fund - 102,732 Solid Waste Fund General Fund - 94,082 Grand Totals 4,893,623 $ 4,893,623 $ Interfund loan amounts are temporary in nature and are repaid by the respective funds on a current basis. As of June 30, 2009 there were no interfund loan balances. ---PAGE BREAK--- 74 NOTES TO BASIC FINANCIAL STATEMENTS 3.I. FUND EQUITY The summary of fund balance designations and reserves at June 30, 2009 are as follows: Reserved for Capital Projects General fund 273,344 $ City Council Construction Fund 5,857,889 Parks and Recreation Construction Fund 273,725 Water Fund 317,267 West Laramie Development Fund 105,663 Total Restricted for Capital Projects 6,827,888 $ Reserved for Debt Service Wyoming Territorial Prison Debt Service Fund 8,554,700 $ Specific Purpose Tax Fund 8,976,057 Emergency 911 Fund 717,693 Total reserved for debt service 18,248,450 $ Endowment Reserves Recreation Center Fund 2,230,951 $ Reserved for recreation scholarships Recreation Center Fund 60,410 $ NOTE 4. OTHER NOTES 4.A. EMPLOYEE PENSION PLANS Wyoming Retirement System All City full-time or regular part-time employees, other than policemen and firemen, participate in the Wyoming Retirement System (“System”), a cost sharing multiple- employer defined benefits pension plan. The payroll for employees covered by the System for the year ended June 30, 2009 was $7,419,824; the City’s total payroll was $15,175,793. All City full-time or regular part-time employees, other than policemen and firemen, are eligible to participate in the System. Employees who retire at or after age 60 with four years of credited service are entitled to a retirement benefit according to predetermined formulas and allowed to select one of five optional methods for receiving benefits. Early retirement is allowed provided the employee has completed four years of service and attained age 50, but will result in a reduction of benefits based on the length of time remaining to normal retirement age. The System also provides death and disability ---PAGE BREAK--- 75 benefits. Benefits are established by State statutes. NOTES TO BASIC FINANCIAL STATEMENTS The System statutorily requires 11.25% of the covered employees’ salary to be contributed to the plan, of which 2.50% is paid by the employee and the remaining 8.75% is paid by the City. The contribution requirement for the year ended June 30, 2009 was $854,039 which consisted of $209,239 from employees and $644,800 from the City. 100% of the required amount was contributed for the year ended June 30, 2009. The required contribution amount of $768,236 for June 30, 2008 and $727,459 for June 30, 2007 were also 100% contributed for the two prior years, respectively. Historical trend information showing the System’s progress in accumulating sufficient assets to pay benefits when due is presented in the System’s December 31, 2008 annual financial report for the periods for which the information is available. Paid Fireman’s Pension Fund All full-time paid employees of the Fire Department participate in the Paid Fireman’s Pension Fund (“Fund”), a cost sharing multiple-employer defined benefit pension plan which is part of the Wyoming Retirement System. Within the Paid Fireman’s Pension Fund, there are two funds, Plan A and Plan B. Plan A is for those employees employed prior to July 1, 1981 and Plan B is for those employees employed after June 30, 1981. The payroll for employees covered by Plan A was $205,129 and Plan B was $2,716,684 for the year ended June 30, 2009; the City’s total payroll was $15,175,793. All City full-time employees of the Fire Department are eligible to participate in the Fund. Under Plan A, to qualify for normal retirement benefits at any age, at 50 percent of the maximum salary of a Fireman First Class, a paid fireman must have 20 years of credited service in a regularly constituted fire department. After July 1, 1981, a fireman who works beyond 20 years will receive additional benefits at the rate of 1 percent per year to a maximum of 60 percent of a fireman first class salary. The retirement benefit will be increased or decreased proportionally as the active firemen’s first class salary is increased or decreased. Under Plan B, to qualify for a service pension, a fireman must have 10 years of service credit and must be at least 55 years old. A fireman may take an early retirement, with 10 years of service credit, at age 50 but the allowance will be actuarially reduced. To qualify for full retirement at age 55, at 60 percent of the final average salary, a fireman must work 32 ½ years. A maximum of 4% non-compounded, annual increase, not to exceed the consumer price index, may be granted to all retirees that have been retired for at least 12 months and are 55 years old. The Fund also provides death and disability benefits. Benefits are established by State statute. Plan A was actuarially determined to be fully funded in April, 1997. No further contributions to this fund are required. Plan B statutorily requires 18% of the covered employees’ salary to be contributed to the Plan, of which 1% is paid by the employee and the remaining 17% is paid by the City. The contribution requirement for the year ended June 30, 2009 was $587,498, which consisted of $96,408 from employees and $491,090 from the City. 100% of the required amount was contributed for the year ended June 30, 2009. The required contribution amounts of $451,379 for June 30, 2008 and $422,354 for June 30, 2007 were also contributed for the two prior years, respectively. ---PAGE BREAK--- 76 NOTES TO BASIC FINANCIAL STATEMENTS Actuarial valuations are performed annually with the most recent valuation date of January 1, 2008. The Entry Age Normal Actuarial Cost Method is used by the plan for determining the plan obligation. For valuing the Plan Assets, the Plan uses adjusted market value that immediately recognizes interest and dividends. The procedure recognizes 20% of each plan year’s total appreciation (depreciation) in excess of the expected return on market value. After five years, the appreciation (depreciation) is fully recognized. Historical trend information showing the Fund’s progress in accumulating sufficient assets to pay benefits when due, including actuarial valuation information is presented in the Wyoming Retirement System’s December 31, 2008 annual financial report for the periods for which the information is available. State of Wyoming Police Pension Fund Plan Description: The City of Laramie contributes to the State of Wyoming Police Pension Fund (“Fund”), an agent multiple-employer public employee retirement fund that acts as a common investment and administrative agent for several cities in the State. All City policemen are eligible to participate in the Fund. Benefits vest after 10 years of service. Any police officer who retires at age 60 or with 20 years of credited service is entitled to an annual retirement benefit, payable for life, in an amount equal to 2.5 percent of their average salary during their highest paid five year period multiplied by the number of years of service (up to a maximum of 62.5 percent).The Fund also provides death and disability benefits to participating employees. Benefit provisions and all other requirements are established by state statute. Actuarial valuations are performed annually with the most recent valuation date of January 1, 2008. The Entry Age Normal Actuarial Cost Method is used by the plan for determining the plan obligation. For valuing the Plan Assets, the Plan uses adjusted market value that immediately recognizes interest and dividends. The procedure recognizes 20% of each plan year’s total appreciation (depreciation) in excess of the expected return on market value. After five years, the appreciation (depreciation) is fully recognized. The state of Wyoming Retirement System audit report is available by contacting the Wyoming Retirement System at 6101 Yellowstone Road, Suite 500, Cheyenne, WY 82002 or at the website at http://retirement.state.wy.us. The report includes historical tend information. Funding Policy: The Fund statutorily requires 17.36% of the covered employees’ salary to be contributed to the fund, of which 6.00% is paid by the employee and the remaining 11.36% is paid by the City. The contribution requirement for the year ended June 30, 2009 was $591,654, which consisted of $195,739 from employees and $395,915 from the City. The required contribution amounts of $578,846 for June 30, 2008 and $555,328 for June 30, 2007, were also contributed for the two prior years. 4.B RISK MANAGEMENT- CLAIMS AND JUDGEMENTS Self-Insured Health Plan Description The City’s risk management activities are recorded in the Employers Plan Services (EPS) fund. The purpose of this fund is to administer employee health insurance. ---PAGE BREAK--- 77 NOTES TO BASIC FINANCIAL STATEMENTS This fund accounts for the financing activities of the City but does not constitute a transfer of risk from the City. An excess coverage insurance policy covers individual claims in excess of $85,000 for each insured during the policy year. The City is exposed to various risk of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government covers commercial insurance. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. Claims Liabilities The City records an estimated liability for health care claims against the City. Claims liabilities are based on estimates of the ultimate cost of reported claims (including future claim adjustment expenses) and an estimate for claims incurred but not reported based on historical experience. Unpaid Claims Liabilities The fund establishes a liability for both reported and unreported events, which includes estimates of both future payments of losses and related claim adjustment expenses. The following represents the changes in approximate aggregate liabilities for the City from July 1, 2006 to June 30, 2009: Liability balance, June 30, 2006 278,314 $ Claims and changes in estimates 2,112,050 Claims payments (2,080,948) Liability balance, June 30, 2007 309,416 Claims and changes in estimates 2,064,584 Claims payments (2,022,144) Liability balance, June 30, 2008 351,856 Claims and changes in estimates 1,918,563 Claims payments (1,865,300) Liability balance, June 30, 2009 405,119 $ Assets available to pay claims at June 30, 2009 3,688,672 $ ---PAGE BREAK--- 78 NOTES TO BASIC FINANCIAL STATEMENTS Premiums are paid into the internal service fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. These interfund premiums are reported as premium income of the internal service fund. Other Liabilities 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. The City has joined together with other cities in the state to form Wyoming Association of Risk Management (WARM), a public entity risk pool currently operating as a common risk management and insurance program. The City pays an annual premium to WARM for its general insurance coverage. The agreement for formation of the WARM provides that WARM will be self- sustaining through member premiums and will reinsure through commercial companies for claims in excess of $250,000 for each insured event. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years. 4.C COMMITMENTS AND CONTINGENCIES After year end, the City has been named as defendant in a lawsuit from a former employee for wrongful termination. Although the outcome of the lawsuit is not presently determinable, the City is vigorously contesting the claim ad in the opinion of the City’s legal council the resolution of these matters will not have a material adverse effect on the financial condition of the City. The City has several construction projects in progress at year end and has remaining commitments as follows: Remaining Commitment Street projects 943,585 Water storage and transmission projects 2,179,118 Parks and lighting 411,058 Fire Station Building 3,670,987 Fox Theatre abatement 973,212 Other project & contracts 369,494