Document Yerington_doc_2119e10a9c

CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS PAGE NO. I. Introduction Section List of City Officials II. Financial Section Independent Auditor’s Report on Financial Statements and Supplementary Data 1-3 Management’s Discussion and Analysis 4-11 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position 12-13 Statement of Activities 14 Governmental Activities: Balance Sheet 15 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 16 Statement of Revenues, Expenditures and Changes in Fund Balances 17 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 18 Statement of Revenues, Expenses and Changes in Fund Balance - Budget and Actual: General Fund 19-23 Municipal Court Administrative Assessment Fund 24 Special Revenue Fund 25 Business-Type Activities: Statement of Net Position 26-27 Statement of Revenues, Expenses and Changes in Net Position 28 Statement of Cash Flows 29-30 Notes to Financial Statements 31-60 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS PAGE NO. Required Supplementary Information Schedules of OPEB Funding Progress and Employer Contributions 61 Schedules of Net Pension Liability and Employer Contributions 62 Supplementary Information Major Capital Projects Funds: Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual: Fixed Asset Acquisition Fund 63-64 Enterprise Funds: Water Utility Fund Schedule of Net Position 65 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 66 Schedule of Cash Flows - Budget and Actual 67-68 Sewer Utility Fund Schedule of Net Position 69 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 70 Schedule of Cash Flows - Budget and Actual 71-72 III. Other Supplementary Information Schedule of Property Tax Rates and Assessed Valuations - Last Twenty Years 73 Governmental Revenues and Other Financial Sources – Last Ten Years 74 Governmental Expenditures by Function – Last ten years 75 Graphical Presentations: Net Position – Last Ten Years 76 All Governmental Funds, Fund Balance - Last Ten Years 77 General Fund – Budget Basis: Fund Balance - Last Ten Years 78 Revenues, Expenditures, and Fund Balance – Last Ten Years 79 Revenues by Source 80 Expenditures by Function 81 Expenditures by Object 82 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS PAGE NO. IV. Compliance Section Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 83-84 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 85-86 Schedule of Expenditures of Federal Awards 87 Notes to Schedule of Expenditures of Federal Awards 88-89 Schedule of Findings and Questioned Costs 90-91 Status of Prior Year Findings and Responses 92 Independent Accountant’s Report on Nevada Revised Statutes Chapter 354.6241 93 INDEPENDENT AUDITOR'S COMMENTS Prior Year Recommendations 94 Current Year Recommendations 95 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA CITY OFFICIALS City Council Members - John Garry, Mayor - Selena Catalano - Jerry Bryant - Shane Martin - Terceira Schunke City Manager - Robert Switzer ---PAGE BREAK--- A Professional Corporation INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and City Council City of Yerington, Nevada We have audited the accompanying financial statements of the governmental activities, the business-type activities, and each major fund of the City of Yerington, Nevada, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City of Yerington’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. 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- 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, and each major fund of the City of Yerington, Nevada, as of June 30, 2021 and the respective changes in financial position, and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund, Municipal Administrative Assessment Fund, and Special Revenue Fund 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, and the Schedule of Total OPEB Liability and Related Ratios and the Schedule of the City’s Proportionate Share of the Net Pension Liability on pages 4-11 and 61-62 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Prior-Year Comparative Information We have previously audited the City’s 2020 financial statements, and we expressed unmodified audit opinions on the respective financial statements of the governmental activities, the business-type activities, and each major fund in our report dated November 25, 2020. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived, restated for the changes in accounting principles described above. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Yerington, Nevada’s basic financial statements. The individual fund financial statements, and supplementary information section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. ---PAGE BREAK--- The individual fund financial statements and the schedule of expenditures of federal awards referred to in the preceding paragraph are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the individual fund financial statements and the schedule of expenditures of federal awards referred to above are fairly stated in all material respects in relation to the basic financial statements as a whole. The other supplementary information section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 9, 2021, on our consideration of the City of Yerington, Nevada’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 City of Yerington, Nevada’s internal control over financial reporting and compliance. Yerington, Nevada December 9, 2021 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA MANAGEMENT’S DISCUSSION AND ANALYSIS FOR FISCAL YEAR ENDED JUNE 30, 2021 As financial management of the City of Yerington (the “City”), we offer the readers of these financial statements this narrative overview and analysis of the financial activities of the City for fiscal year ended June 30, 2021. This discussion and analysis is designed to assist the reader in focusing on the significant financial issues, provide an overview of the City’s financial activities, identify any significant changes in financial position, and to identify individual issues and concerns. We encourage readers to consider the information presented herein, in conjunction with the financial statements and notes to gain a more complete picture of the information presented. Financial Highlights  The City’s governmental net position increased by $1,742,433 to $8,161,150 from $6,418,717 in 2020. The City’s governmental net investment in capital assets is $6,025,031 in 2021 compared to $6,248,763 in 2020.  The City’s business-type activity net position increased by $292,137 to $32,262,208 from $31,970,071 in 2020. The City’s business-type activity net investment in capital assets is $24,569,889 in 2021 compared to $26,102,921 in 2020.  The business-type activities recognized capital contributions totaled $192,395 in 2021 compared to $35,200 in 2020. This increase in capital contributions is attributable to the connection fees in both the water and sewer systems and the Colony grant revenues on the water and sewer line replacement project.  The City’s total revenues were $7,029,768 consisting of $4,214,851 in governmental activities and $2,814,917 in business-type activities. Business-type activities revenues of $2,814,917 included grants and contributions totaling $192,395. User fee charges were $2,620,909 and account for 93.1% of total revenue sources.  The City’s total expenses were $4,995,198 consisting of $2,472,418 in governmental activities and $2,522,780 in business-type expenses.  The City’s primary revenue sources (besides grants and contributions) are charges for services of $2,813,724, property taxes of $694,101 and consolidated taxes of $546,288. These three revenue sources comprise 40.3 9.8%, and 7.8%, respectively, of total revenues. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s financial statements, which are comprised of the basic financial statements and the notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the basic financial statements. ---PAGE BREAK--- Government-wide Financial Statements Government-wide financial statements are designed to provide an overview of the City’s financial position by governmental and business-type activities, as well as the government as a whole. The Statement of Net Position combines and consolidates all of the City’s current financial resources with capital assets, deferred outflows of resources, long-term obligations, and deferred inflows of resources, distinguishing between governmental and business-type activities. The end result is net position which is segregated into three components: net investment in capital assets; restricted and unrestricted position. The Statement of Activities is focused on both the gross and net cost of governmental and business-type activities. Program revenue which directly offsets costs of specific functions is allocated to those functions, resulting in net expenses for governmental and business-type activities. The City’s general revenues offset remaining costs resulting in the annual increase or decrease in net position. This statement is intended to summarize the user’s analysis of the net cost of various governmental services that are supported by general revenues. Governmental activities reflect the City’s basic services on a functional basis. Departments included within those functions are identified in the fund financial statements. Ad valorem taxes, consolidated taxes, and other identified general revenues support the majority of these services. Business-type activities reflect enterprise operations where a fee for service typically funds all or most of the cost of operations, including depreciation. 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 objects. The City, 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 can be divided into two categories: governmental funds and proprietary funds. Fund financial statements provide detailed information about the City’s major funds. Based on restrictions placed on the use of monies, the City has established many funds that account for the multitude of services provided to our residents. Governmental Funds – Governmental funds are used to account for essentially the same functions reported as governmental activities on the governmental-wide financial statements. The City’s major governmental funds are the General, Municipal Court Administrative Assessment, Special Revenue, and Fixed Asset Acquisition. Most of the City’s basic services are reported in these funds that focus on how money flows into and out of the funds and the year- end balances available for spending. These funds are reported on the modified accrual basis of accounting that measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services being provided, along with the financial resources available. Because the focus of the 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 on the government-wide financial statements. By doing so, readers may better understand the long-term effect of the government’s ---PAGE BREAK--- short-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 the comparison between governmental funds and governmental activities. The City maintains a multitude of individual governmental funds. Information is presented separately on the governmental fund balance sheet and on the governmental fund statement of revenues, expenditures, and changes in fund balance for the major funds, which were identified earlier. Proprietary Funds – The City maintains one proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities on the government-wide financial statements. The City uses enterprise funds to account for water and sewer operations provided to citizens within the City and nearby service areas. The City’s major proprietary funds are: Water Utility Fund, Sewer Utility Fund, and Clear Water Utility Fund. Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided on the government-wide and fund financial statements. Other Information – In addition to the basic financial statements and accompanying notes, this financial statement also presents individual fund statements and schedules. The City adopts an annual budget for all of its governmental and business-type individual funds. Budgetary comparison schedules have been provided for the General Fund and each major special revenue fund to demonstrate compliance with the budget and are presented as required supplementary information. Financial Analysis of the City One of the most important questions asked about the City’s finances is “Is the City as a whole better off or worse off as a result of this year’s activities?” The Statement of Net Position and the Statement of Revenues, Expenses, and Changes in Net Position report information about the City’s activities in a way that will help answer this question. These two statements report the net position of the City and the changes in them. One can think of the City’s net position – the difference between assets, deferred outflows, liabilities, and deferred inflows – as one way to measure financial health or financial position. Over time, increases and decreases in the City’s net position are one indicator of whether its financial health is improving or deteriorating. However, one will need to consider other non-financial factors such as changes in economic conditions, population growth, and new or changed government legislation. Net Position 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, net position was $38,388,788 ($8,161,150 in governmental activities and $32,262,208 in business-type activities) as of June 30, 2021. By far, the largest portion of the City’s net position (84.3%) reflects its net investment in capital assets (e.g. land, buildings, equipment and infrastructure, less any related debt used to acquire those assets that is still outstanding). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investments ---PAGE BREAK--- in its capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Table 1 provides a summary of the City’s net position for 2020 compared to 2019. Net position increased by $2,034,570 $40,423,358 in 2021 from $38,388,788 in 2020. 2021 2020 2021 2020 2021 2020 Assets Current Assets 2,213,016 $ 1,794,571 $ 8,681,473 $ 6,836,902 $ 10,894,489 $ 8,631,473 $ Restricted Cash - - 22,007,231 249,901 22,007,231 249,901 Capital Assets, Net 7,795,544 6,248,763 37,230,044 26,128,148 45,025,588 32,376,911 Total Assets 10,008,560 8,043,334 67,918,748 33,214,951 77,927,308 41,258,285 Deferred Outflow Of Resources Post Measurement Date Employer Contributions 117,519 102,194 62,452 60,795 179,971 162,989 Deferred Pension Outflow 130,396 140,425 77,447 61,633 207,843 202,058 Deferred OPEB Outflow 15,336 16,974 15,646 53,560 30,982 70,534 Total Deferred Outflows 263,251 259,593 155,545 175,988 418,796 435,581 Liabilities Current Liabilities 243,349 128,254 1,719,403 142,929 1,962,752 271,183 Long-Term Liabilities Due After One Year 1,564,863 1,495,529 33,962,205 1,080,236 35,527,068 2,575,765 Total Liabilities 1,808,212 1,623,783 35,681,608 1,223,165 37,489,820 2,846,948 Deferred Inflow Of Resources Unearned revenue 109,967 - - - 109,967 - Deferred Pension Inflow 154,581 209,997 91,811 51,234 246,392 261,231 Deferred OPEB Inflow 37,901 50,430 38,666 146,469 76,567 196,899 Total Deferred Inflows 302,449 260,427 130,477 197,703 432,926 458,130 Net Position Invested in Capital Assets, Net of Debt 7,795,544 6,248,763 24,677,083 26,102,921 32,472,627 32,351,684 Restricted Position - - 264,069 241,025 264,069 241,025 Unrestricted 365,606 169,954 7,321,056 5,626,125 7,686,662 5,796,079 Total Net Position 8,161,150 $ 6,418,717 $ 32,262,208 $ 31,970,071 $ 40,423,358 $ 38,388,788 $ Governmental Activities Business-Type Activities Total Table 1 Statement of Net Position ---PAGE BREAK--- Governmental Activities While the Statement of Net Position shows the change in financial position of net position, the Statement of Activities provides answers as to the nature and scope of these changes. As can be seen in Table 2 above, changes in net position were an increase of $1,742,433 for governmental activities and an increase of $292,137 for business-type activities in fiscal year 2020. In the year 2020, the total increase in net positon was $679,038.  The governmental activities total revenues in 2021 increased from $2,173,026 in 2020 to $4,214,851 in 2021. This increase in revenue of $2,041,825 is largely attributable to $1,215,223 in the contributed value of the armory complex and several federal grants. 2021 2020 2021 2020 2021 2020 Program Revenues: Charges for Services 192,815 $ 328,234 $ 2,620,909 $ 2,562,403 $ 2,813,724 $ 2,890,637 $ Operating Grants and Contributions 693,708 127,168 - - 693,708 127,168 Capital Grants and Contributions 1,436,118 - 192,395 35,200 1,628,513 35,200 2,322,641 455,402 2,813,304 2,597,603 5,135,945 3,053,005 General Revenues: Property taxes 694,010 443,540 - - 694,010 443,540 Other taxes 259,871 296,536 - - 259,871 296,536 Franchise fees 262,896 221,603 - - 262,896 221,603 Consolidated taxes 546,288 499,898 - - 546,288 499,898 Unrestricted grants 200,000 200,000 - - 200,000 200,000 investment earnings 20,769 75,673 1,108 - 21,877 75,673.00 Other 47,799 22,009 505 - 48,304 22,009 Loss on asset disposal (139,423) (41,635) - - (139,423) (41,635.00) Total Revenues 4,214,851 2,173,026 2,814,917 2,597,603 7,029,768 4,770,629 Expenses: General government 729,225 493,967 - - 729,225 493,967 Judicial 80,245 52,384 - - 80,245 52,384 Public safety 1,089,766 1,098,468 - - 1,089,766 1,098,468 Public works 482,904 281,227 - - 482,904 281,227 Health 15,620 14,034 - - 15,620 14,034 Cultural and recreation 74,658 60,724 - - 74,658 60,724 Utilities - - 2,522,780 2,090,787 2,522,780 2,090,787 Total Expenses 2,472,418 2,000,804 2,522,780 2,090,787 4,995,198 4,091,591 Change in Net Positio 1,742,433 172,222 292,137 506,816 2,034,570 679,038 Beginning Net Position 6,418,717 6,246,495 31,970,071 31,463,255 38,388,788 37,709,750 Ending Net Position 8,161,150 $ 6,418,717 $ 32,262,208 $ 31,970,071 $ 40,423,358 $ 38,388,788 $ Governmental Activities Business-Type Activities Total Table 2 Changes in Net Position ---PAGE BREAK---  Governmental activities 2021 expenses of $2,472,418increased by $471,614 compared to $2,000,804 in year 2020. Business-Type Activities  The business-type activities charges for service revenues increased $58,506 from $2,562,403 in 2020 to $2,620,909 in 2021.  The business type activities total expenditures were $2,813,304 in 2021 compared to $2,597,603 in 2020 or an increase of $217,301 mainly due the interest on Zion Bancorp interest expense on interim debenture loan.  The business-type activities capital contributions totaled $192,395 in 2021 compared to $35,200 in 2020. The capital contributions were comprised totally of connection fees of $115,500 and $76,895 in USDA Rural Development grants on Colony water and sewer replacement project. Financial Analysis of the City’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds: The focus of the City’s governmental funds is to provide information on the near-term inflow, outflow, and balances of spendable resources. Such information is useful in assessing the City’s financial requirements. In particular, unrestricted fund balance may serve as a useful measure of the City’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $1,851,869 which is an increase of $191,010 compared to the prior year amount of $1,660,859. This increase is largely attributable to the General Fund incurring an increase in fund balance of $388,534 and the Fixed Asset Acquisition Fund reduction of fund balance of $217,433 due to various capital outlay projects. While the bulk of the governmental fund balances are not reserved in the governmental fund statements, they may lead to restricted net position on the Statement of Net Position due to being restricted for use for a particular purpose mandated by the sources of the resources, such as state statutes. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the fund balance of the General Fund was $1,194,508 while the 2020 fund balance was $805,974. Fund balance represents approximately 60.4% of the total General Fund expenditures and transfers out. The City’s General Fund ending fund balance increased by $388,534 in 2021 while the fiscal year 2020 has an increase was $297,201. ---PAGE BREAK--- -10- General Fund Budgetary Highlights The City’s budget is prepared according to Nevada law and is based on generally accepted accounting principles. The City adopts an annual budget following budget workshops and a public hearing. The budget provides proposed expenditures and the means of financing them. The most significant budgeted fund is the General Fund. With the General Fund supporting many of our major activities such as our public safety programs, as well as most legislative, judicial and executive activities the General Fund is monitored closely looking for possible revenue shortfall or overspending by individual departments. In summary, the noted differences and explanations are as follows:  General Fund total revenues of $2,367,721 were $59,712 under budget but reflected a significant increase of $270,686 over 2020 total revenues of $2,097,035. The General Fund budgeted for RCT shared revenues of $350,000 which were not requested since the street project was move into fiscal year 2021.  The General Fund total expenditures of $1,759,187 were under budgeted appropriations of $2,188,095 by $488,908. This variance was largely due to the Street budget including capital outlay for new street expenditures of $350,000 while such expenditures were delayed until 2022. Capital Assets and Debt Administration Capital Assets: The City’s investment in capital assets, net of depreciation, for its governmental and business-type activities as of June 30, 2020 is $32,472,627 (net of accumulated depreciation and related debt). This investment in capital assets includes land, buildings and systems, improvements, equipment, vehicles, and roads and highways. In the notes to the financial statements, Note 3 (Capital Assets) provides capital asset activity during 2021. Major capital asset events during the current year include the following:  The Governmental Funds had $2,080,273 in asset additions for the year. Major additions include the acquisition of the armory complex with a cost of $1,619,083 of which $1,215,273 was the contributed value from the National Guard. Other assets acquired include the park restroom facility totaling $131,005, vacuum excavator totaling $71,341, two vehicles with a total cost of $70,865. The City is following a 5-year capital improvement plan and limits the purchase of new assets as deemed necessary. The Business Type Funds had net asset additions of $11,931,591for the year. New asset additions consisted of largely $6,443,391 in construction costs and engineering inspection in the water fund and $5,488,200 in construction costs and engineering inspection costs associated with City sewer line project. The construction projected awarded the bid contract in August 2020 with construction beginning in September 2020. ---PAGE BREAK--- -11- Long-Term Debt: The City currently has no governmental activity debt obligations at June 30, 2021. On November 23, 2020, the City of Yerington Interim Debentures Series 2020 Bonds were issued in the amount of $32,830,000 for construction costs associated with the Water/Sewer Replacement Line Project. The City executed a three year interim debenture loan with Zion Bancorp to cover project costs during the construction phase. The City’s long-term obligations include compensated absences, net pension liability and OPEB liability. Additional information on the City’s long-term debt can be found in Notes 4 and 5 of this financial report. Economic Factors and Next Year’s Budget The City Council and the management of the City consider many factors when setting the fiscal year 2022 budget, tax rates, user fees and other charges. Some of those factors are the local economy and the impact taxes, charges and rates have on the customers. The City of Yerington population growth has been very flat over the past several years with an estimated population of 3,095. Current economic indicators have suggested that the current economy will remain in a low growth mode for at least another year. The City remains optimistic that the Nevada Copper mining operations currently under the construction phase will have positive impact on future City revenues. Given these conditions, the City maintains a conservative approach to spending while maximizing its local revenues. All of these factors were considered in the preparation of the City’s 2022 budget. In conjunction with the current economic factors, the City limited its anticipated spending for 2022, and asked department heads to limit spending and capital outlay. Requests for Information This financial report is designed to provide our customers and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning any of the information provided in this report or request for additional financial information should be directed to the City Manager of the City of Yerington, 102 South Main Street, Yerington, Nevada, 89447. ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- CITY OF YERINGTON, NEVADA JUNE 30, 2021 (With Comparative Totals for June 30, 2020) BUSINESS-TYPE ACTIVITIES ACTIVITIES Current Assets Cash and investments - Note 2 $ 1,966,426 $ 8,335,174 Taxes receivable, secured roll 7,831 - Use fees receivable, net of allowances for uncollectibles - 269,907 Due from other governments 154,739 22,842 Other receivables 69,414 7,776 Inventory 14,606 45,774 Total Current Assets 2,213,016 8,681,473 Noncurrent Assets Restricted cash and investments - Note 2 - 22,007,231 Capital Assets - Note 3 Land, improvements, and construction in progress 832,875 15,972,236 Other capital assets, net of depreciation 6,962,669 21,257,808 Total Noncurrent Assets 7,795,544 59,237,275 Total Assets 10,008,560 67,918,748 Deferred Outflow of Resources Post-measurenment date pension contributions - Note 7 117,519 62,452 Deferred pension outflow - Note 7 130,396 77,447 Deferred OPEB outflows - Note 8 15,336 15,646 Total Deferred Outflow of Resources 263,251 155,545 GOVERNMENTAL STATEMENT OF NET POSITION ---PAGE BREAK--- 2021 2020 $ 10,301,600 $ 7,983,816 7,831 5,458 269,907 238,844 177,581 221,720 77,190 141,646 60,380 39,989 10,894,489 8,631,473 22,007,231 249,901 16,805,111 4,680,408 28,220,477 27,696,503 67,032,819 32,626,812 77,927,308 41,258,285 179,971 162,989 207,843 202,058 30,982 70,534 418,796 435,581 TOTAL -12- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA JUNE 30, 2021 (With Comparative Totals for June 30, 2020) BUSINESS-TYPE ACTIVITIES ACTIVITIES Current Liabilities Accounts payable $ 161,531 $ 78,430 Construction contracts payable - 1,439,521 Accrued salaries and benefits 63,802 42,787 Due to other governments 17,991 43,148 Accrued interest - 88,915 Customers deposits - 26,602 Bail deposits 25 - Total Current Liabilities 243,349 1,719,403 Long-term liabilities Compensated absences - Note 5 53,300 33,860 Zion Bancorp interim construction loan - Note 4 - 32,830,000 Net pension liability - Note 7 1,323,199 906,897 Accrued OPEB liability - Note 4, 5 & 8 188,364 191,448 Total Long-term Liabilities 1,564,863 33,962,205 Total Liabilities 1,808,212 35,681,608 Deferred Inflow of Resources Unearned revenues 109,967 - Deferred pension inflows - Note 7 154,581 91,811 Deferred OPEB inflows - Note 8 37,901 38,666 Total Deferred Inflow of Resources 302,449 130,477 Net Position Net investment in capital assets 7,795,544 24,677,083 Restricted - Note 9 - 264,069 Unrestricted 365,606 7,321,056 Total Net Position $ 8,161,150 $ 32,262,208 STATEMENT OF NET POSITION GOVERNMENTAL ---PAGE BREAK--- 2021 2020 $ 239,961 $ 120,336 1,439,521 25,227 106,589 78,967 61,139 37,627 26,602 8,876 25 150 1,873,837 271,183 87,160 72,030 32,830,000 - 2,230,096 2,146,974 379,812 356,761 35,527,068 2,575,765 37,400,905 2,846,948 109,967 - 246,392 261,231 76,567 196,899 432,926 458,130 32,472,627 32,351,684 264,069 241,025 7,686,662 5,796,079 $ 40,423,358 $ 38,388,788 TOTAL The accompanying notes are an integral part of these financial statements -13- ---PAGE BREAK--- OPERATING CHARGES FOR GRANTS AND EXPENSES SERVICES CONTRIBUTIONS Governmental Activities: General government $ 729,225 $ - $ 291,558 $ 977,277 Judicial 80,245 20,153 - - Public safety 1,089,766 3,587 94,840 - Public works 482,904 165,920 264,970 341,940 Health 15,620 3,155 - - Culture and recreation 74,658 - 42,340 116,901 Total Governmental Activities 2,472,418 192,815 693,708 1,436,118 Business-Type Activities: Water utilities 1,635,666 1,526,685 - 139,279 Sewer utilities 887,114 1,094,224 - 53,116 Total Business-type Activities 2,522,780 2,620,909 - 192,395 Total City $ 4,995,198 $ 2,813,724 $ 693,708 $ 1,628,513 General Revenues: Property taxes, levied for general purposes Other taxes Franchise fees Consolidated taxes Unrestricted investment earnings Miscellaneous income Grants not restricted to a specific program Loss on disposal of assets Total General Revenues and Special Item Change in Net Position Net Position - Beginning Net Position - Ending CONTRIBUTIONS FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) CITY OF YERINGTON, NEVADA STATEMENT OF ACTIVITIES PROGRAM REVENUE CAPITAL GRANTS AND ---PAGE BREAK--- 2021 $ 539,610 $ - $ 539,610 $ (493,967) (60,092) - (60,092) (17,035) (991,339) - (991,339) (1,067,682) 158,921 - 158,921 63,043 118,540 - 118,540 (9,228) 84,583 - 84,583 (20,533) (149,777) - (149,777) (1,545,402) - 30,298 30,298 77,020 - 260,226 260,226 429,796 - 290,524 290,524 506,816 (149,777) 290,524 140,747 (1,038,586) 694,010 - 694,010 443,540 259,871 - 259,871 296,536 262,896 - 262,896 221,603 546,288 - 546,288 499,898 20,769 1,108 21,877 75,673 47,799 505 48,304 22,009 200,000 - 200,000 200,000 (139,423) - (139,423) (41,635) 1,892,210 1,613 1,893,823 1,717,624 1,742,433 292,137 2,034,570 679,038 6,418,717 31,970,071 38,388,788 37,709,750 $ 8,161,150 $ 32,262,208 $ 40,423,358 $ 38,388,788 Net (Expenses) Revenues and Changes in Net Position 2020 ACTIVITIES ACTIVITIES TYPE BUSINESS- GOVERNMENTAL TOTALS The accompanying notes are an integral part of these financial statements. -14- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2021 (With Comparative Totals for June 30, 2020) ASSESSMENT REVENUE FUND FUND FUND Assets Cash and investments - Note 2 $ 1,183,543 $ 23,508 $ 280,050 Taxes receivable, secured roll 7,831 - - Accounts receivable 52,960 - 16,454 Due from other governments 154,739 - - Fuel inventory 14,606 - - Total Assets $ 1,413,679 $ 23,508 $ 296,504 Liabilities Accounts payable $ 129,622 $ 89 $ 30,850 Accrued compensation 63,802 - - Due to other governments 17,891 100 - Consumer / bail deposits and restitution 25 - - Unearned revenue - - 109,967 Total Liabilities 211,340 189 140,817 Deferred Inflow of Resources Unavailable taxes receivable 7,831 - - Fund Balances - Note 9 Nonspendable 14,606 - - Restricted - - - Committed 23,306 23,319 155,687 Assigned - - - Unassigned 1,156,596 - - Total Fund Balances 1,194,508 23,319 155,687 Total Liabilities, Deferred Inflows and Fund Balances $ 1,413,679 $ 23,508 $ 296,504 SPECIAL GENERAL ADMINISTRATIVE MUNICIPAL COURT ---PAGE BREAK--- ACQUISITION TOTALS 2021 $ 479,325 $ 1,966,426 $ 1,481,741 - 7,831 5,458 - 69,414 94,691 - 154,739 202,887 - 14,606 9,794 $ 479,325 $ 2,213,016 $ 1,794,571 $ 970 $ 161,531 $ 63,409 - 63,802 47,660 - 17,991 17,035 - 25 150 - 109,967 - 970 353,316 128,254 - 7,831 5,458 - 14,606 9,794 - - - 478,355 680,667 878,191 - - 63,577 - 1,156,596 709,297 478,355 1,851,869 1,660,859 $ 479,325 $ 2,213,016 $ 1,794,571 2020 ASSET FIXED FUND The accompanying notes are an integral part of these financial statements. -15- ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- Total Fund Balance - Governmental Funds $ 1,851,869 $ 1,660,859 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental funds are not current financial resources and therefore not reported in the governmental fund financial statements. 16,723,600 15,277,844 Accumulated depreciation has not been included in the governmental fund financial statements. (8,928,056) (9,029,081) Revenue reported as deferred revenue in the governmental fund financial statements is recorded as revenue in the government-wide financial statements. 7,831 5,458 The net pension liability is not due and payable in the current period and therefore is not reported in the governmental funds (1,323,199) (1,275,570) Deferred pension inflows and outflows of resources represent changes in the net pension liability that are to be amortized over future periods. They will not require current financial resources and are therefore not reported in the governmental funds. 93,334 32,622 Deferred OPEB inflows and outflows of resources represent changes in the OPEB liability that will be amortized over future periods. They will not require current financial resources and are therefore not reported in the governmental funds. (22,565) (33,456) Compensated absences have not been reflected in the governmental fund financial statements. (53,300) (43,005) Post-employment health insurance that is not due and payable in the current period and therefore is not reported in the governmental funds. (188,364) (176,954) Net Position of Governmental Activities $ 8,161,150 $ 6,418,717 2021 2020 CITY OF YERINGTON, NEVADA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2021 (With Comparative Totals for June 30, 2020) The accompanying notes are an integral part of these financial statements. -16- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) GENERAL ASSESSMENT REVENUE FUND Revenues Taxes $ 691,637 $ - $ 93,807 Licenses and permits 425,935 - - Intergovernmental revenues 1,051,636 - 671,140 Charges for services 111,461 - - Fines and forfeits 18,484 1,669 - Other revenues 68,568 - 2,341 Total Revenues 2,367,721 1,669 767,288 Expenditures Current: General government 226,589 - 329,418 Judicial 80,920 - - Public safety 1,171,829 - - Public works 216,353 - 418,336 Health 14,291 - 1,294 Culture and recreation 49,205 - - Total Expenditures 1,759,187 - 749,048 Excess (Deficiency) of Revenues over Expenditures 608,534 1,669 18,240 Other Financing Sources (Uses) Transfers In - - - Transfers Out (220,000) - - Total Other Financing Sources (Uses) (220,000) - - Excess (Deficiency) of Revenues and Other Financing Sources over Expenditures and Other Financing Uses 388,534 1,669 18,240 Fund Balance, July 1 805,974 21,650 137,447 Fund Balance, June 30 $ 1,194,508 $ 23,319 $ 155,687 SPECIAL MUNICPAL COURT ADMINISTRATIVE FUND FUND ---PAGE BREAK--- $ - $ 785,444 $ 547,337 - 425,935 494,095 - 1,722,776 899,132 - 111,461 139,161 - 20,153 35,349 - 70,909 97,577 - 3,136,678 2,212,651 357,561 913,568 288,698 - 80,920 71,462 37,316 1,209,145 1,254,707 33,249 667,938 297,821 - 15,585 16,417 9,307 58,512 53,917 437,433 2,945,668 1,983,022 (437,433) 191,010 229,629 220,000 220,000 - - (220,000) - 220,000 - - (217,433) 191,010 229,629 695,788 1,660,859 1,431,230 $ 478,355 $ 1,851,869 $ 1,660,859 2020 FIXED ASSET FUND 2021 ACQUISITION TOTALS The accompanying notes are an integral part of these financial statements. -17- ---PAGE BREAK--- Net Change in Fund Balances - Total Governmental Funds $ 191,010 $ 229,629 Amounts reported for governmental activities in the statement of activities are different because: Current year capital outlays are expenditures in the governmental fund financial statements, but they are shown as increases in capital assets in the government-wide financial statements. 865,050 159,254 Contributed capital in the statement of activties that does not provide current resoures and is not reported as revenue in the governmental funds. 1,215,223 - Depreciation is not recognized as an expense in governmental funds, since it does not require the use of current financial resources. The effect on the current year's depreciation is to decrease net assets. (394,069) (382,986) Reductions in capital assets carrying value is recognized as an expense in the statement of activities but not recorded in the governmental fund statements (139,423) (41,635) because it does not use current financial resources. Revenues from property taxes and other revenues is deferred in the fund financial statements until they are considered available to finance current expenditures, but such revenues are recognized when assessed in the government-wide financial statements. 2,373 2,010 Compensated absences are not due and payable in the current period and therefore are not reported in the governmental fund financial statements. (10,295) (4,081) Future health insurance post-employment benefits are reported in the statement of activities but do not require the use of current financial resources and therefore are not reported as expenditures in the governmental fund financial statements. (519) 221,654 Pension contributions made after the measurement date of the pension liability are expensed in the governmental fund financial statements but deferred to the subsequent fiscal year in the statement of activities. 15,325 12,931 Changes in net pension liability resulting from differences in actual and projected earnings, experience and changes in proportionate share do not affect current financial resources and are not reported in the governmental funds. (2,242) (24,554) Change in Net Position of Governmental Activities $ 1,742,433 $ 172,222 RECONCILIATION OF THE STATEMENT OF REVENUES, CITY OF YERINGTON, NEVADA 2021 2020 FOR THE YEAR ENDED JUNE 30, 2021 TO THE STATEMENT OF ACTIVITIES EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (With Comparative Totals for the Year Ended June 30, 2020) The accompanying notes are an integral part of these financial statements. -18- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Revenues Taxes Ad valorem taxes $ 312,579 $ 312,579 $ 691,637 $ 379,058 $ 441,530 Licenses, Permits and Fees Business licenses 120,000 120,000 101,838 (18,162) 118,768 Franchise taxes Natural gas 37,000 37,000 52,216 15,216 53,938 Electric 130,000 130,000 146,329 16,329 123,556 Cable television 8,000 8,000 24,555 16,555 14,514 Sanitation 27,000 27,000 39,796 12,796 29,595 202,000 202,000 262,896 60,896 221,603 Non-business licenses and permits Animal licenses 200 200 161 (39) 214 Building permits 119,902 119,902 58,340 (61,562) 146,234 Planning and zoning 2,000 2,000 2,700 700 7,276 122,102 122,102 61,201 (60,901) 153,724 Total Licenses and Permits 444,102 444,102 425,935 (18,167) 494,095 Intergovernmental Revenues State and federal shared revenues Motor vehicle fuel tax 61,986 61,986 59,273 (2,713) 60,673 Consolidated tax distribution 510,193 510,193 546,288 36,095 499,898 Coronavirus Relief Fund grant - 94,840 94,840 - - FAA CARES Act grant - 23,009 23,009 - - 572,179 690,028 723,410 33,382 560,571 Other local government shared revenues County road ad valorem tax 20,000 20,000 20,000 - 20,000 County ad valorem agreement 200,000 200,000 200,000 - 200,000 County gaming licenses 18,000 18,000 34,690 16,690 31,275 RTC shared revenue 350,000 350,000 - (350,000) - 588,000 588,000 254,690 (333,310) 251,275 BUDGETED AMOUNT ORIGINAL -19- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Payments in lieu of taxes County parks agreement $ 40,000 $ 40,000 $ 40,000 $ - $ 40,000 County airport contribution 4,000 4,000 4,000 - 4,000 Yerington Paiute Tribe - marijuana compact 30,000 30,000 29,536 (464) 40,686 State rural housing 2,000 2,000 - (2,000) 2,600 76,000 76,000 73,536 (2,464) 87,286 Total Intergovernmental Revenues 1,236,179 1,354,028 1,051,636 (302,392) 899,132 Charges for Services Airport charges 12,000 12,000 1,020 (10,980) 25,710 Airport fuel charges 81,700 81,700 102,113 20,413 80,377 Animal shelter 1,300 1,300 2,994 1,694 2,097 Weed abatement 300 300 1,747 1,447 - Police services: Night in the Country - - - - 29,207 Other charges for services 1,000 1,000 3,587 2,587 1,770 Total Charges for Services 96,300 96,300 111,461 15,161 139,161 Fines and Forfeits Municipal court fines 25,000 25,000 17,570 (7,430) 32,267 Other court fees 2,500 2,500 914 (1,586) 786 Total Fines and Forfeits 27,500 27,500 18,484 (9,016) 33,053 Other Revenues Investment earnings 60,000 60,000 20,769 (39,231) 75,673 Highlands tower lease 12,000 12,000 10,000 (2,000) 13,300 Other income 1,500 1,500 37,799 36,299 1,091 Total Other Revenues 73,500 73,500 68,568 (4,932) 90,064 Total Revenues 2,190,160 2,308,009 2,367,721 59,712 2,097,035 BUDGETED AMOUNT ORIGINAL -20- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) ORIGINAL FINAL VARIANCE 2020 Operating Expenditures General Government Mayor and Council Salaries and wages $ 22,000 $ 22,000 $ 21,591 $ 409 $ 21,591 Employee benefits 7,400 7,400 5,858 1,542 6,523 Services and supplies 3,000 3,000 1,194 1,806 1,703 Total Mayor and Council 32,400 32,400 28,643 3,757 29,817 Management and Administration Salaries and wages 41,957 41,957 64,940 (22,983) 56,211 Employee benefits 29,878 29,878 28,337 1,541 24,352 Services and supplies 94,618 114,618 104,669 9,949 96,694 Total Management and Administration 166,453 186,453 197,946 (11,493) 177,257 Total General Government Function 198,853 218,853 226,589 (7,736) 207,074 Judicial Municipal Court Salaries and wages 26,624 26,624 24,723 1,901 24,589 Employee benefits 14,111 14,111 15,671 (1,560) 13,633 Services and supplies 40,560 40,560 40,526 34 33,240 Total Judicial Function 81,295 81,295 80,920 375 71,462 Public Safety Police Department Salaries and wages 587,250 587,250 512,618 74,632 483,380 Employee benefits 327,750 327,750 337,603 (9,853) 279,131 Services and supplies 160,200 160,200 143,333 16,867 153,388 Capital outlay - - - - 51,521 Total Police Department 1,075,200 1,075,200 993,554 81,646 967,420 BUDGETED AMOUNT ACTUAL -21- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL 2020 Fire Department Services and supplies Contractual agreement $ 178,275 $ 178,275 $ 178,275 $ - $ 255,766 Total Public Safety Function 1,253,475 1,253,475 1,171,829 81,646 1,223,186 Public Works Building Department Salaries and wages 6,760 6,760 3,457 3,303 4,592 Employee benefits 3,906 3,906 2,276 1,630 1,089 Services and supplies 39,125 34,125 26,949 7,176 22,225 Total Building Department 49,791 44,791 32,682 12,109 27,906 Street Department Salaries and wages 13,215 13,215 12,948 267 12,013 Employee benefits 6,871 6,871 6,217 654 4,454 Services and supplies 66,909 66,909 44,886 22,023 62,388 Capital outlay 350,000 315,000 17,561 297,439 - Total Street Department 436,995 401,995 81,612 320,383 78,855 Airport Salaries and wages 2,838 2,838 3,150 (312) 2,965 Employee benefits 2,227 2,227 4,383 (2,156) 1,262 Services and supplies 89,300 109,300 94,526 14,774 118,833 Total Airport 94,365 114,365 102,059 12,306 123,060 Total Public Works Function 581,151 561,151 216,353 344,798 229,821 Health Animal Control Salaries and wages 3,337 3,337 3,646 (309) 3,718 Employee benefits 3,850 3,850 2,192 1,658 1,802 Services and supplies 9,500 9,500 8,453 1,047 8,854 Total Health Function 16,687 16,687 14,291 2,396 14,374 BUDGETED AMOUNT VARIANCE ORIGINAL -22- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL VARIANCE 2020 Culture and Recreation Parks and recreation Salaries and wages $ 8,164 $ 8,164 $ 8,766 $ (602) $ 17,556 Employee benefits 8,270 8,270 4,004 4,266 8,005 Services and supplies 40,200 40,200 36,435 3,765 28,356 Total Culture and Recreation Function 56,634 56,634 49,205 7,429 53,917 Total Expenditures 2,188,095 2,188,095 1,759,187 428,908 1,799,834 Excess (Deficiency) of Revenues over Expenditures 2,065 119,914 608,534 488,620 297,201 Other Financing (Uses) Contingency (68,207) (65,642) - 65,642 - Transfers out - Fixed Acquisition Fund - (220,000) (220,000) - - Total Other Financing Sources (Uses) (68,207) (285,642) (220,000) 65,642 - Excess (Deficiency) of Revenues and Other Financing Sources over Expenditures and Other Financing Uses (66,142) (165,728) 388,534 554,262 297,201 Fund Balance, July 1 796,230 796,230 782,668 (13,562) 485,467 Fund Balance - Budget Basis, June 30 $ 730,088 $ 630,502 1,171,202 $ 540,700 782,668 RECONCILIATION TO GAAP BASIS Expenditures General Government $ - $ - - $ - - Fund Balance, July 1 24,321 24,321 23,306 (1,015) 23,306 Fund Balance, June 30 $ 24,321 $ 24,321 23,306 $ (1,015) 23,306 Fund Balance - GAAP Basis, June 30 $ 1,194,508 $ 805,974 BUDGETED AMOUNT ORIGINAL The Compensated Absence Fund is included within the General Fund for GAAP basis reporting. The following items from this fund reconcile the budget to GAAP basis. ACTUAL The accompanying notes are an integral part of these financial statements. -23- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA MUNICIPAL COURT ADMINISTRATIVE ASSESSMENT FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) BUDGET ACTUAL VARIANCE 2020 Revenues Fines and Forfeits Municipal Court assessments $ 1,000 $ 1,000 $ 754 $ (246) $ 959 Special facility assessments 1,500 1,500 915 (585) 1,337 Total Revenues 2,500 2,500 1,669 (831) 2,296 Expenditures Judicial Capital outlay Court assessments - - - - - Administrative assessments - - - - - - Total Expenditures - - - - - Excess (Deficiency) of Revenues over Expenditures 2,500 2,500 1,669 (831) 2,296 Fund Balance, July 1 21,854 21,854 21,650 (204) 19,354 Fund Balance, June 30 $ 24,354 $ 24,354 $ 23,319 $ (1,035) $ 21,650 ORIGINAL BUDGETED AMOUNT The accompanying notes are an integral part of these financial statements. -24- ---PAGE BREAK--- Revenues Room taxes $ 110,000 $ 110,000 $ 93,807 $ (16,193) $ 105,807 Intergovernmental Lyon County Park revenue - - 66,901 66,901 - FAA Master Plan 300,000 300,000 151,697 (148,303) - FAA CARES ACT Funding 30,000 30,000 6,991 (23,009) - USDA Facility Grant - 50,000 50,000 - - CDBG CV 2020-21 - 8,485 8,485 - - Coronavirus Relief Fund - 497,013 387,066 (109,947) - 330,000 885,498 671,140 (214,358) - Other revenues Animal shelter donations 3,200 3,200 2,341 (859) 2,495 Total Revenues 443,200 998,698 767,288 (231,410) 108,302 Expenditures General Government Coronavirus Relief Fund - 393,019 283,072 109,947 - CDBG CV 2020-21 - 8,485 8,485 - - Room tax distributions 91,667 91,667 23,000 68,667 63,989 Room tax State reimttance 6,875 6,875 5,573 1,302 6,613 Room tax County remittance 11,458 11,458 9,288 2,170 11,022 Total General Government 110,000 511,504 329,418 182,086 81,624 Public Works FAA Master Plan 330,000 330,000 151,648 178,352 - FAA Care's Act 30,000 30,000 6,991 23,009 - Armory HVAC - - 24,698 (24,698) - USDA Facility Grant - 116,901 131,005 (14,104) - Coronavirus Relief Fund - 103,994 103,994 - - Total Public Works 360,000 580,895 418,336 (15,793) - Health Animal shelter 3,200 3,200 1,294 1,906 2,043 Total Health 3,200 3,200 1,294 1,906 2,043 Total Expenditures 473,200 1,095,599 749,048 168,199 83,667 Excess of Revenues over Expenditures (30,000) (96,901) 18,240 (63,211) 24,635 Fund Balance, July 1 112,812 112,812 137,447 24,635 112,812 Fund Balance, June 30 $ 82,812 $ 15,911 $ 155,687 $ (38,576) $ 137,447 Total Intergovernmental CITY OF YERINGTON, NEVADA SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) 2020 VARIANCE ACTUAL FINAL ORIGINAL BUDGETED AMOUNT The accompanying notes are an integral part of these financial statements. -25- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2021 (With Comparative Totals for June 30, 2020) Current Assets Unrestricted Cash - Note 2 $ 6,123,437 $ 2,211,737 Accounts receivables, net of allowance for doubtful accounts 173,075 96,832 Due from other governments 13,133 9,709 Advance to Sewer Fund 130,000 - Other receivables 7,776 - Inventory of materials and supplies 34,785 10,989 Restricted Cash - Note 2 Customer deposits 24,288 2,314 AB 198 capital reserve 264,069 - Zion Bancorp escrow acquisition account 10,735,251 9,647,528 Zion Bancorp escrow interest account 701,569 632,212 Total Current Assets 18,207,383 12,611,321 Property, Plant and Equipment - Note 3 Land and water rights 307,393 10,120 Construction in progress - Note 16 8,455,728 7,198,995 Building, wells, tanks, and distribution system 24,840,288 - Treatment plant and collection system - 6,032,050 Vehicles 68,558 46,009 Maintenance equipment 2,810,777 423,632 Office equipment 82,846 45,080 36,565,590 13,755,886 Accumulated depreciation (8,849,750) (4,241,682) Total Property, Plant and Equipment 27,715,840 9,514,204 Total Assets 45,923,223 22,125,525 Deferred Outlfow of Resources Post measurement date pension contributions - Note 7 34,394 28,058 Deferred pension outflow of resources - Note 7 42,578 34,869 Deferred OPEB outflow of resources - Note 8 8,527 7,119 Total Deferred Outflow of Resources 85,499 70,046 UTILITY FUND UTILITY FUND (Page 1 of 2) UTILITY ENTERPRISE FUNDS WATER SEWER ---PAGE BREAK--- TOTALS 2021 2020 $ 8,335,174 $ 6,502,075 269,907 238,844 22,842 18,833 130,000 130,000 7,776 46,955 45,774 30,195 26,602 8,876 264,069 241,025 20,382,779 - 1,333,781 - 30,818,704 7,216,803 317,513 317,513 15,654,723 3,723,132 24,840,288 24,840,288 6,032,050 6,032,050 114,567 114,567 3,234,409 3,234,409 127,926 127,926 50,321,476 38,389,885 (13,091,432) (12,261,737) 37,230,044 26,128,148 68,048,748 33,344,951 62,452 60,795 77,447 61,633 15,646 53,560 155,545 175,988 -26- ---PAGE BREAK--- Liabilities Current liabilities payable from unrestricted assets: Accounts payable and accrued liabilities $ 41,796 $ 36,634 Construction contracts payable 830,639 608,882 Accrued salaries and wages 23,502 19,285 Due to other governments 28,256 14,892 Accrued interest 46,769 42,146 Advance from Water Utility Fund - 130,000 Current liabilities payable from restricted assets: Customer deposits 24,288 2,314 Total Current Liabilities 995,250 854,153 Long-term liabilities: Accrued compensated absences 18,553 15,307 Zion Bancorp interim construction loan 17,253,000 15,577,000 Net pension liability 509,427 397,470 OPEB liability 104,160 87,288 Total Long-Term Liabilities 17,885,140 16,077,065 Total Liabilities 18,880,390 16,931,218 Deferred Inflow of Resources Deferred pension inflows - Note 7 50,475 41,336 Deferred OPEB inflows - Note 8 21,073 17,593 Total Deferred Inflow of Resources 71,548 58,929 Net Position Net Investment in capital assets 21,069,021 3,608,062 Restricted - loan reserves - Note 9 264,069 - Unrestricted 5,723,694 1,597,362 Total Net Position $ 27,056,784 $ 5,205,424 CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2021 (With Comparative Totals for June 30, 2020) (Page 2 of 2) UTILITY ENTERPRISE FUNDS WATER SEWER UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2021 2020 $ 78,430 $ 56,927 1,439,521 25,227 42,787 31,307 43,148 20,592 88,915 - 130,000 130,000 26,602 8,876 1,849,403 272,929 33,860 29,025 32,830,000 - 906,897 871,404 191,448 179,807 33,962,205 1,080,236 35,811,608 1,353,165 91,811 146,469 38,666 51,234 130,477 197,703 24,677,083 26,102,921 264,069 241,025 7,321,056 5,626,125 $ 32,262,208 $ 31,970,071 TOTALS The accompanying notes are an integral part of these financial statements. -27- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) Operating Revenues Use fees, net of bad debts $ 1,367,112 $ 1,063,572 Operating Expenses Salaries and wages 265,973 220,286 Employee benefits 129,414 116,995 Service and supplies 409,448 239,769 Depreciation 667,140 162,555 Total Operating Expenses 1,471,975 739,605 Operating Income (Loss) (104,863) 323,967 Nonoperating Revenue (Expenses) Late fees / administrative fees 14,255 1,652 Water tank lease 13,668 - Willowcreek agreement 19,000 29,000 Nevada Copper water reservation fee 87,500 - Water rights revenue 25,150 - Miscellaneous revenues 399 106 Investment income 583 525 Interest expense (163,691) (147,509) Total Nonoperating Revenue (Expenses) (3,136) (116,226) Income (Loss) before Contributions (107,999) 207,741 Capital Contributions Connection fees from customers 77,500 38,000 USDA Rural Development - Colony Water/Sewer Grant 61,779 15,116 Total Capital Contributions 139,279 53,116 Change in Net Position 31,280 260,857 Net Position, July 1 - Note 10 27,025,504 4,944,567 Net Position, June 30 $ 27,056,784 $ 5,205,424 UTILITY ENTERPRISE FUNDS WATER SEWER UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2020 $ 2,430,684 $ 2,346,616 486,259 487,565 246,409 17,038 649,217 737,665 829,695 848,519 2,211,580 2,090,787 219,104 255,829 15,907 12,882 13,668 14,562 48,000 48,000 87,500 87,500 25,150 11,000 505 41,843 1,108 - (311,200) - (119,362) 215,787 99,742 471,616 115,500 35,200 76,895 - 192,395 35,200 292,137 506,816 31,970,071 31,463,255 $ 32,262,208 $ 31,970,071 2021 TOTALS The accompanying notes are an integral part of these financial statements. -28- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) Cash Flows From Operating Activities Receipts from customers $ 1,292,165 $ 1,111,105 Payments to Lyon County 80,987 (44,354) Payments of personnel costs (391,595) (324,407) Payments for service and supplies (413,726) (221,412) Net Cash Provided by Operating Activities 567,831 520,932 Cash Flows From Noncapital Financing Activities Water tank lease income 13,668 - Water rights revenue 25,150 - Willow Creek agreement revenues 19,000 29,000 Nevada Copper reservation fee 126,679 - Administrative fees 10,931 - Miscellaneous income 3,723 1,758 Net Cash Provided by Noncapital Financing Activities 199,151 30,758 Cash Flows From Capital and Related Financing Activities Capital contributed from customers 77,500 38,000 Capital contributed from USDA - Colony 58,114 14,772 Acquisition of capital assets (5,637,978) (4,887,473) Proceeds from Interim construction loan 17,253,000 15,577,000 Interest paid on long-term debt (116,923) (105,363) Net Cash Provided (Used) by Capital and Related Financing Activities 11,633,713 10,636,936 Cash Flows From Capital and Related Financing Activities Investment income 583 525 Net Increase (Decrease) in Cash and Cash Equivalents 12,401,278 11,189,151 Cash and Cash Equivalents, July 1 5,447,336 1,304,640 Cash and Cash Equivalents, June 30 $ 17,848,614 $ 12,493,791 UTILITY ENTERPRISE FUNDS WATER SEWER UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2021 2020 $ 2,403,270 $ 2,330,230 36,633 30,074 (716,002) (737,557) (635,138) (738,823) 1,088,763 883,924 13,668 14,562 25,150 11,000 48,000 48,000 126,679 87,500 10,931 9,868 5,481 47,653 229,909 218,583 115,500 35,200 72,886 - (10,525,451) (1,134,341) 32,830,000 - (222,286) - 22,270,649 (1,099,141) 1,108 - 23,590,429 3,366 6,751,976 6,748,610 $ 30,342,405 $ 6,751,976 TOTALS The accompanying notes are an integral part of these financial statements. -29- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ (202,809) $ 319,395 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 767,585 169,304 Deferred OPEB expense 406 269 Deferred pension expense (7,959) 2,959 Changes in assets and liabilities: Decrease (increase) in accounts receivable (26,166) (4,897) Decrease in inventory (4,590) (10,989) Increase in consumer deposits 17,596 130 Increase in accounts payable and accrued liabilities 23,768 44,761 Net Cash Provided by Operating Activities $ 567,831 $ 520,932 UTILITY ENTERPRISE FUNDS UTILITY FUND WATER SEWER UTILITY FUND ---PAGE BREAK--- $ 116,586 $ 255,829 936,889 848,519 675 (212,429) (5,000) 18,592 (31,063) 12,153 (15,579) 7,221 17,726 471 68,529 (46,432) $ 1,088,763 $ 883,924 TOTALS 2020 2021 The accompanying notes are an integral part of these financial statements. -30- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -31- Note 1 - Summary of Significant Account Policies: The City of Yerington (the “City”) is an incorporated city operated under the applicable laws and regulations of the State of Nevada. The financial statements of the City of Yerington have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards, which along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units in addition to other authoritative sources issued by the American Institute of Certified Public Accountants. GASB Statement No. 34 established a financial reporting model for state and local governments that included the addition of a management’s discussion and analysis, government- wide financial statements, required supplementary information and the elimination of the effects of internal service activities and the use of account groups. The GASB determined that fund accounting has and will continue to be essential in helping governments to achieve fiscal accountability and should, therefore, be retained. The GASB also determined that government-wide financial statements are needed to allow the users of the financial reports to assess a government’s operational accountability. The GASB model integrates fund-based financial reporting and government-wide financial reporting as complementary components of a single comprehensive financial reporting model. Reporting Entity The City, for financial purposes, includes all of the funds relevant to the operations of the City of Yerington. The financial statements of the City of Yerington include those organizations that are controlled by or dependent on the City and fall under the direct jurisdiction of the Mayor and City Council, which is a separately elected body by the citizens of the City. The Mayor and City Council are legally separate and fiscally independent from other governing bodies, with decision-making authority, authority to levy taxes, authority to prepare its own budget, the power to designate management, the ability to significantly influence operations and is accountable for fiscal matters. Therefore, the City is a primary government and is not reported as a component unit by any other entity; nor is the City accountable for any other entity required to be included in the City's annual financial report. Basic Financial Statements: The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The reporting model's focus is on either the City as a whole or major individual funds (within the fund financial statements). Both the government- wide and fund financial statements categorize activities as either governmental activities or business-type activities. In the government-wide Statement of Net Position, both the governmental and business-type activities columns are presented on a consolidated basis by ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -32- column, and are reflected, on a full accrual, economic resource basis, which incorporates long-term assets and receivables as well as long-term debt and obligations. The government-wide Statement of Activities reflects both the gross and net cost per functional category (public safety, public works, etc.) which are otherwise being supported by general government revenues (property, sales and use taxes, certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. The program revenues must be directly associated with the function or a business-type activity. Program revenues include revenues from fines and forfeitures, licenses and permits fees, service assessments, and charges for services. The operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. The net costs (by function or business-type activity) are normally covered by general revenue (property, sales or gas taxes, intergovernmental revenues, interest income, etc.). Historically, the previous model did not summarize or present net cost by function or activity. This government-wide focus is more on the substantiality of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. For the most part, the effect of interfund activity has been removed from the government-wide statements. Interfund activities relating to services provided and used between functions are not eliminated. The fund financial statements' emphasis is on the major funds in either the governmental or business-type categories. Any non-major funds (by category) or fund type would be summarized into a single column. The governmental major fund financial statements and the individual fund financial statements are presented on a current financial resource and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to demonstrate legal and covenant compliance, demonstrate the source and use of liquid resources, and demonstrate how the City's actual experience conforms to the budget or fiscal plan. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements’ governmental column, a reconciliation is presented on the page following each statement which briefly explains the adjustments necessary to transform the fund based financial statements into the governmental column of the government-wide presentation. The focus of the model is on the City as a whole and the fund financial statements, including the major individual funds of the governmental and business-type categories, (by category). Each presentation provides valuable information that can be analyzed and compared (between years and between governments) to enhance the usefulness of the information. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -33- Basis of Presentation: The accounts of the City of Yerington are organized on the basis of funds, 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, net position, revenues, and expenditures (or expenses, as appropriate). Resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are reported by generic classification within the financial statements. The model, as defined in GASB Statement No. 34, establishes criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or the governmental and enterprise combined) for the determination of major funds. Management may also elect to designate a fund, which does not meet the criteria, as a major fund. When applicable, nonmajor funds are be combined in a single column in the fund financial statements. Since the City has a limited number of funds, all of the City’s funds are considered major funds as follows: Major Funds: Governmental Major Funds The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in other funds. The Municipal Court Administrative Assessment Fund accounts for a special court assessment for the use in the court system. Special Revenue Fund is used to account for the proceeds from specific revenue sources that are legally restricted to expenditures for specific purposes. The Fixed Asset Acquisition Fund is used to accumulate resources for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds). Proprietary Major Funds The Water Utility Fund accounts for water utility activities within the City limits of Yerington, Town of Mason, and surrounding areas. The Sewer Utility Fund accounts for sewer utility activities within the City limits of Yerington. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -34- Basis of Accounting: Basis of accounting refers to the point at which revenues and expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurements made, regardless of the measurement focus applies. The Government-wide Financial Statements and the Proprietary Combining Financial Statements are presented on an accrual basis of accounting. The Governmental Funds in the Fund Financial Statements are presented on a modified accrual basis. Governmental Funds: The City of Yerington maintains its accounting records for all Governmental Funds on the modified accrual basis of accounting as defined by the Governmental Accounting Standards Board (GASB). This method provides for recognizing expenditures, other than accrued interest on general long-term obligations, at the time liabilities are incurred, while revenues are recorded when measurable and available to finance expenditures of the fiscal period. Available is defined as being due and collected within the current period or within 60 days after year-end. When revenues are due, but will not be collected within this 60-day period, the receivable is recorded and an offsetting deferred revenue account is established. Most major sources of revenues reported in Governmental Funds in the Governmental Fund Financial Statements are susceptible to accrual under the modified accrual basis of accounting. A summary of revenue recognition policies for all major revenue sources is as follows: Financial Reporting Income Recognition Policies Accrued When Available To Recognized Accrued Finance Current When When Type of Revenue Operations Received Earned Property Taxes X Consolidated Tax Distribution X Licenses and Permits X Fines and Forfeits X Motor Vehicle Fuel Taxes X State Gaming License Fees X Interest X Grants X Miscellaneous Revenue X ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -35- Governmental funds in the Governmental Fund Financial Statements are accounted for on a spending or “financial flow” measurement focus. As such, only current assets and current liabilities are generally included on their balance sheets. Proprietary Funds: The Proprietary Funds (Water and Sewer Utility Funds) are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Private–sector standards of accounting and financial reporting issued prior to December 1, 1989, are generally followed in proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board (GASB). Governments also have the option of following subsequent private-sector guidance for their business-type activities, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. Budgets and Budgetary Accounting Budget Policies: The City of Yerington adheres to the Local Government Budget Act incorporated within state statutes, which includes the following major procedures to establish the budgetary data, which is reflected in these financial statements. 1. On or before April 15 of each year, the budget officer shall prepare, or the governing body shall cause to be prepared, on appropriate forms prescribed by the Department of Taxation for the use of local governments, a tentative budget for the ensuing fiscal year. The tentative budget must be filed for public record and inspection. 2. Public hearings on the tentative budget are held not sooner than the third Monday in May and not later than the last day in May. 3. Prior to June 1, at a public hearing, the Council indicates changes, if any, to be made to the tentative budget and adopts a final budget by the favorable vote of a majority of the members of the Council. The final budget must then be forwarded to the Nevada Tax Commission to approve the requested ad valorem tax rate. 4. Formal budgetary integration in the financial records of all funds is employed to enhance management control during the year. 5. Budgets for all funds are adopted on a basis consistent with Generally Accepted Accounting Principles (GAAP) other than the City's election to account and budget for activities required to be reported within the General Fund in two separate funds. Appropriations lapse at year-end. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -36- 6. Budget amounts within funds, and between funds, may be transferred if amounts do not exceed the original budget. Such transfers are to be approved by the budget officer and/or the City Council, depending on established criteria. Budget augmentations in excess of original budgetary amounts may not be made without prior approval of the City Council, following a scheduled and noticed public hearing. During the year, the City Council approved one budget augmentation. 7. The above dates may be modified as necessary during years when the Nevada Legislature is in session. In accordance with state statutes, actual expenditures may not exceed budget appropriations of the various governmental functions of the General Fund, or total appropriations of the individual Special Revenue and Capital Projects Funds. In Proprietary Funds, actual expenses may not exceed the sum of budgeted operating and nonoperating expenses. Cash and Investments Cash balances from all funds are combined and, to the extent practicable, invested as permitted by NRS 355.170. Investments are stated at fair market value. Pursuant to NRS 355.170, the City may only invest in the following types of securities: - United States bonds and debentures maturing within ten (10) years from the date of purchase. - Certain farm loan bonds. - Securities of the United States Treasury, United States Postal Service or the Federal National Mortgage Association maturing within ten (10) years from the date of purchase. - Negotiable certificates of deposit from commercial banks and insured savings and loan associations within the State of Nevada. - Certain securities issued by local governments of the State of Nevada. - Other securities expressly provided by other statutes, including repurchase agreements. - Certain short-term commercial paper issued by U. S. Corporations. - Certain "AAA" rated mutual funds that invest in Federal securities. Cash Restrictions Restricted cash balances represent cash held by the entity for specific purposes. Cash and Cash Equivalents For purposes of the statement of cash flows, the Enterprise Funds consider all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -37- Allowance for Doubtful Accounts: Each year, the year-end accounts receivable balances in the enterprise funds are reviewed and accounts believed to be uncollectible are identified. The allowance for doubtful accounts is then adjusted to equal the anticipated loss and bad debt expense is charged for estimated losses arising from the current year’s operation. Subsequently, the governing board reviews this list of uncollectible accounts and if they agree the accounts are uncollectible and should be written off, the receivable is charged against the allowance for doubtful accounts. Allowance for doubtful accounts at June 30, 2021 for all Proprietary Funds is $17,220. Interest Earned on Investments Interest earned is allocated to the utility funds based upon the proportions of the utility funds' cash balances to the total City cash. All other interest income is recognized in the Fixed Asset Acquisition Fund. Inventory of Consumable Supplies All funds, except the enterprise funds, account for materials and supplies inventories as expenditures using the "purchase method", whereby inventories are recorded as expenditures when they are purchased. Proprietary Fund account for inventories using the "consumption method" which reclassifies inventories as expenditures when they are used. Proprietary Fund inventories are valued at cost, on a first-in first-out basis as identified by a physical inventory count at year-end. Capital Assets Capital assets purchased in all governmental funds are recorded in the Governmental Fund Financial Statements as expenditures at the time of purchase and capitalized at historical cost in the government-wide financial statements. Proprietary funds capitalize fixed assets at historical cost. Interest costs incurred during the construction of capital assets are capitalized as part of the cost of construction (if material). Donated assets are recorded at their estimated fair market value on the date of donation. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Public domain (infrastructure) fixed assets, consisting of improvements such as curbs and gutters, streets and sidewalks, and bridges are valued at historical cost or estimated historical cost. The capitalization threshold for all types of fixed assets is $5,000. Depreciation is provided in an amount sufficient to allocate the cost of the depreciable assets to operations over their estimated service lives on the straight-line basis. The service lives by type are as follows: ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -38- Capital Assets (continued) Buildings and other improvements 10-50 years Wells and distribution systems 20-60 years Treatment and collection systems 10-50 years Equipment 5-20 years Streets 25 years Sidewalks, curb & gutter, storm drains, and traffic signals 50 years Property Taxes All real property in the City of Yerington is assigned a parcel number by the County Assessor in accordance with state laws, with each parcel being subject to physical reappraisal every five years. A factoring system is used to adjust the appraised value during the years between physical appraisals. The property and its improvements are assessed at 35% of "taxable value" as defined by statute. The amount of tax levied is developed by multiplying the assessed value by the City's tax rate. The maximum tax rate was established in the State Constitution at $5.00 per hundred dollars of assessed valuation; however, as a result of the 1979 legislature session, the tax rate was further limited to $3.64 per hundred dollars of assessed valuation unless an additional rate is approved by the electorate. Taxes on real property are a lien on the property and attached on July 1 of the year for which taxes are levied. Taxes may be paid in four installments payable on the third Monday in August, and the first Mondays in October, January, and March to the Treasurer of Lyon County in which the City of Yerington is located. Penalties are assessed if a taxpayer fails to pay an installment within ten days of the installment due date. After a two-year waiting period, if the taxes remain unpaid, a tax deed is issued conveying the property to the County with a lien for back taxes and accumulated charges. Redemption may be made by the owner and such persons as described by statute by paying all back taxes and accumulated penalties, interest and costs before sale. Taxes on personal property are collected currently. Personal property declarations are mailed out annually by the County and the tax is computed using percentages of taxable values established by the Department of Taxation and tax rates described above. The major classifications of personal property are commercial, mobile homes, aircraft and agricultural. Taxes Receivable, delinquent Secured roll property taxes receivable reflect only those taxes receivable from the delinquent roll years. No provision for uncollectible accounts has been established since management does not anticipate any material collection loss in respect to the remaining balances. Amounts not collected within 60 days after year-end have been recorded as deferred revenue. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -39- Long-Term Debt In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities column in the statement of net assets. In the fund financial statements, governmental fund types recognize bond issuance costs during the current period. The face amount of the debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance cost, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Compensated Absence Benefits Governmental Fund Types: The costs involved in vacation time and sick leave benefits are not accrued as earned but are recorded as payroll costs only when the time is actually used or accumulated benefits are paid or accrued as the result of a termination of services. The liability for accrued vacation and sick leave benefits is recorded in the government-wide financial statements. Proprietary Fund Types: These costs are recognized as expenses when the benefits are earned. The City of Yerington has established a compensated absence fund to accumulate resources to pay the cost of accumulated leave due upon employee retirement. The City has suspended its annual contributions to the fund. Net Position Net Position represents the difference between assets and deferred outflow of resources, and liabilities and deferred inflow of resources. Net positions comprise various net earnings from operating and non-operating revenues and expenses, and contributions of capital. Net positions are classified in the following three components: net investment in capital assets, restricted and unrestricted net position. Investment in capital assets consists of all capital assets, net of accumulated depreciation, reduced by outstanding debt that is attributable to the acquisition, construction and improvement of those assets; debt related to unspent proceeds or other restricted cash and investments is excluded from that determination. Restricted net position consists of assets for which constraints are placed thereon by external parties, such as lenders, grantors, contributors, regulations and enabling legislation, including self-imposed legal mandates, less any related liabilities. Unrestricted consists of all other net position not included in the above categories. The City applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -40- Fund Balance In the governmental fund financial statements, governmental funds report up to five components of fund balance, as applicable. These five classifications are: nonspendable, restricted, committed, assigned, and unassigned. Nonspendable fund balance is reserved for portions of net resources that cannot be spent because of their form, such as inventories or prepaid items, or that cannot be spent because they must be kept intact. Restricted fund balance is reserved for the portion of net resources that have externally enforceable limitation on use, such as those imposed by creditors, grantors, contributors, or laws enacted by external entities. Committed fund balance is reserved for the portion of net resources that have had self-imposed limitations set in place by formal action of the governing board. Assigned fund balance is reserved for the portion of net resources that have an intended use established by the governing board or a designated official. Unassigned fund balance is for that portion of net resources that does not meet the criteria to be placed in any of the other four components of fund balance. Capital Contributions Contributions are recognized in the Statement of Revenues, Expenses and Changes in Net Position when earned. Contributions normally include capital grants and customer funded system improvements. Operating Revenues and Expenses Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. For the City, these revenues are charges for services for water and sewer activities. Operating expenses are necessary costs incurred to provide the goods or services which is the primary activity of the fund. Revenues and expenses which do not meet these criteria are considered non-operating and are reported as such. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Grant Revenue Grant revenues received before the revenue recognition criteria established by the Governmental Accounting Standards Board have been met are reported as deferred inflow of resources. Interest Capitalization The City has implemented GASB Statement No 89, Accounting for Interest Costs Incurred before the end of a Construction Period which required governmental entities to recognize interest costs incurred during construction as an expense or expenditure. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -41- Cost Allocations A number of employees provide service to multiple departments and funds. The City allocates the respective labor cost based on management's estimates established at the beginning of each fiscal year. Public works employees are the primary group whose costs are allocated. These employees serve the various enterprise funds as well as the public works departments within the general fund. The City also allocates administrative employee costs to proprietary funds. 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 Nevada Public Employees Retirement System (PERS) and additions to/deductions from PERS’s fiduciary net position have been determined on the same basis as they are reported by PERS. 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. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of resources or deferred outflow of resources depending on the nature of the change. The changes in net pension liability that are recorded as deferred inflow of resources or deferred outflow of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred. Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflow of resources or deferred outflow of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred. Each subsequent year will incorporate an additional closed basis five-year period or recognition. Deferred Inflows and Outflows of Resources Transactions that result in the consumption or acquisition of net assets in one period that are applicable to future periods are reported as either a deferred inflow of resources or deferred outflow of resources in the statement of net position. Comparative Data The basic financial statements include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Such information can only be obtained by referring to the June 30, 2020 audit report. ---PAGE BREAK--- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -43- Note 2 – Cash and Investments (continued): The following is a list of cash and deposits indicating collateral or insurance on these deposits: Carrying Bank Amount Balance Cash on Hand $ 300 $ - Insured (FDIC) 500,000 500,000 Uninsured but collateralized by securities held in the name of the City by its agent 25,712,815 26,289,762 $ 26,213,115 $26,789,762 Investment At June 30, 2021, the average weighted maturity of the Nevada Local Government Investment Pool was 143 days. The fair value of $6,095,716 is determined according to the following hierarchy determined by availability of market pricing used to determine the fair value. Level I – Based on quoted prices in active market for identical assets $ 1,992,080 Level II – Based on significant other observable inputs $ 4,103,636 Interest Rate Risk: The City does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk: State law limits types of allowable investments under Nevada Revised Statutes 355.170 as listed in the accompanying Note 1. Concentration of Credit Risk: The City places no limit on the amount that may invest in any one issuer. Cash Restrictions: The City’s water utility system previously received grant financing totaling $2,760,986 and is required to annually deposit into a cash reserve account $23,044 in the City Water Fund to cover future capital costs. At June 30, 2021, cash reserve balances were $264,069 for the City Water Fund. Cash received from customers as security deposits by the City's Water Utility Fund and Sewer Utility Fund are restricted for future refund or forfeit. The amounts at June 30, 2021 are $24,288 and $2,314 respectively. On November 23, 2020, the City executed $32,830,000 in Interim Debentures Series 2020 with Zions Bancorporation. At June 30, 2021, Zion Bancorp is holding $20,382,779 in a restricted escrow acquisition account and $1,333,791 in a restricted escrow capital interest account. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -44- Note 3 - Capital Assets: A summary of changes in capital assets is as follows: Balance Balance July 1, 2020 Additions Deletions June 30, 2021 Governmental Activities: Capital assets, not being depreciated: Land and improvements $ 639,763 $ 237,946 $ 44,834 $ 832,875 Total capital assets, not being depreciated 639,763 237,946 44,834 832,875 Capital assets being depreciated: Land improvements 5,741,468 - - 5,741,468 Buildings and improvements 994,531 1,548,786 306,626 2,236,691 Equipment and vehicles 2,817,760 293,541 283,057 2,828,244 Infrastructure 5,084,322 - - 5,084,322 Total capital assets being depreciated 14,638,081 1,842,327 589,683 15,890,725 Less accumulated depreciation for: Land improvements 2,366,752 149,834 - 2,516,586 Buildings and improvements 698,318 34,506 217,068 515,756 Equipment and vehicles 1,629,564 129,562 278,026 1,481,100 Infrastructure 4,334,447 80,167 - 4,414,614 Total accumulated depreciation 9,029,081 394,069 495,094 8,928,056 Total capital assets being depreciated, net 5,609,000 1,448,258 94,589 6,962,669 Governmental activities capital assets, net $ 6,248,763 $ 1,686,204 $ 139,423 $ 7,795,544 Depreciation expense was charged to the following functions of the City: Governmental Activities: General Government $ 20,858 Judicial 422 Public safety 41,491 Public works 83,732 Culture and recreation 17,774 Infrastructure 229,792 Total Depreciation Expense – Governmental Activities $ 394,069 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -45- Note 3 - Capital Assets (continued): Balance Balance July 1, 2020 Additions Deletions June 30, 2021 Business-type Activities: Capital assets, not being depreciated: Land and improvements $ 317,513 $ - $ - $ 317,513 Construction in progress 3,723,132 11,931,591 - 15,654,723 4,040,645 11,931,591 - 15,972,236 Capital assets being depreciated: Buildings, wells, tanks and distribution system 24,840,288 - - 24,840,288 Treatment plant and collection system 6,032,050 - - 6,032,050 Vehicles 114,567 - - 114,567 Maintenance equipment 3,234,409 - - 3,234,409 Office equipment 127,926 - - 127,926 Total capital assets being depreciated 34,349,240 - - 34,349,240 Less accumulated depreciation for: Buildings, wells, tanks and distribution system 6,625,943 545,618 - 7,171,561 Treatment plant and collection system 3,608,047 122,626 - 3,730,673 Vehicles 111,206 702 - 111,908 Maintenance equipment 1,793,049 158,531 - 1,951,580 Office equipment 123,493 2,216 - 125,710 Total accumulated depreciation 12,261,737 829,695 - 13,091,432 Total capital assets being depreciated, net 22,087,503 (829,695) - 21,257,808 Business-type activities capital assets, net $26,128,148 $11,101,896 $ - $37,230,044 Depreciation expense of $829,695 was charged to the public works - utilities function of the City. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -46- Note 4 – Enterprise Fund Obligations: The following are the long-term obligations of the enterprise funds outstanding at June 30, 2021. Changes in Business-Type Activities Long-term Obligations: Balance Balance July 1, Obligations Obligations June 30, Due Within 2020 Issued Retired 2021 One Year Long-Term Debt: Compensated absences $ 29,025 $ 4,835 $ - $ 33,860 $ - Zion interim debenture bonds - 32,830,000 - 32,830,000 - Net Pension Liability 871,404 35,493 - 906,897 - OPEB liability 179,807 11,641 - 191,448 - Total Long-Term Obligations $1,080,236 $32,881,969 $ - $33,962,205 $ - Note 5 - General Long-Term Debt: Governmental Activities: The estimated value of the accrued compensated absences liability at June 30, 2021 was $53,300. This balance includes the value of the general government's annual leave and sick leave, which is earned at a rate based upon an employee's longevity with the City. An employee may carry forward unused annual leave, not exceeding 30 days as of the employee's anniversary date, to the next year. The City has adopted a sick leave payback policy based on several factors; ten years of continuous service and employees' vesting in the PERS retirement system with amounts paid for those employees in excess of 30 days upon retirement, not to exceed $1,000. Changes in Governmental Activities Long-term Debt: Balance Balance July 1, Obligations Obligations June 30, Due Within 2020 Issued Retired 2021 One Year Long-Term Debt: Compensated absences $ 43,005 $ 10,295 $ - $ 53,300 $ - Net Pension Liability 1,275,570 47,629 - 1,323,199 - OPEB liability 176,954 11,410 - 188,364 - Total Long-Term Obligations $1,495,529 $ 69,334 $ - $1,564,863 $ - The lawful City general obligation debt limit at June 30, 2021 was $15,974,505 (NRS 266.600), which leaves a statutorily-available borrowing capacity of $15,974,505 since the City does not have any general obligation bonds outstanding. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -47- Note 6 - Contracts and Agreements: The City has entered into several inter-local government agreements. Brief descriptions of the agreements are provided below. Lyon County Ad Valorem Tax Agreement In accordance with an agreement dated July 1, 2007, between the City and Lyon County, $200,000 of the County's annual consolidated tax revenue shall be paid to the City of Yerington in consideration for the City's previous surrender of ad valorem tax rate to the County. The agreement was renewed July 1, 2010, and shall automatically renew on each subsequent three year term thereafter unless terminated by either party upon 60 days notice. The amount is reported as intergovernmental revenue in the General Fund. Fire Protection and Ambulance Service Fire protection, emergency medical, and other related services are provided to the City of Yerington by the Mason Valley Fire Protection District in accordance with an agreement effective July 1, 1993. The fee for such service is determined each fiscal year and based on the preceding year’s fee adjusted by changes in the City's assessed valuation and Mason Valley Fire Protection District's ad valorem tax rate. The amount paid for fiscal year 2021 was $178,275 and is reported within the General Fund's public safety function. County Parks Agreement Park and recreation facilities located within the City of Yerington were previously provided jointly by Lyon County and the City. Effective April 16, 1992, the City agreed to provide all the services, personnel and equipment which are necessary to operate and maintain the parks and the County agrees to pay the City an amount agreed to by both entities each year. The amount should equal, as nearly as possible, the percentage of budgeted appropriation allocated by the County for parks that the assessed value of the property in the City and Mason Valley Fire Protection District bears to the assessed value of all property in the County. If no agreement is reached, then the amount will be the amount provided in the previous fiscal year. The amount received in fiscal year 2021 was $40,000. Water and Wastewater Agreements with Willowcreek General Improvement District Effective January 1, 2005, the City of Yerington began overseeing daily operations of the water and wastewater systems owned by the Willowcreek General Improvement District. In accordance with the agreement, the City bills and collects fees and is responsible for most system repairs and maintenance. User fees are remitted to the District and the District compensates the City a fixed amount each six months. The City received $19,000 and $29,000 for operating the water and sewer wastewater systems respectively. Compensation and costs associated with operating the District's utility systems are included within the City's Water Utility Fund and Sewer Utility Fund. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -48- Note 6 - Contracts and Agreements (continued): In addition to agreements with other local governments, the City has the following agreements outstanding at June 30, 2021 with private companies. Nevada Copper Inc. - Water Service Agreement The City of Yerington has entered into an agreement with Nevada Copper, Inc. to reserve 3,500 acre feet of water for future use in a proposed mining operation in exchange for semi-annual payments of $43,750 until such time that Nevada Copper, Inc. begins using the water. The agreement also specifies the future use fees to be charged. The agreement, dated August 10, 2009, is for a period of thirty years and revenues are credited to the Water Utility Fund. Note 7 - Defined Benefit Pension Plan: General Information about the Pension Plan Plan description: All permanent full-time employees are provided pensions through the Public Employees Retirement Plan (PERS). The plan is a cost-sharing multiple-employer defined benefit pension plan administered by the Public Employees Retirement System of Nevada. Chapter 286 of the Nevada Revised Statutes (NRS) establishes a governing board, appointed by the Governor that is responsible for managing the System, including arranging for a biennial actuarial valuation and adoption of actuarial tables and formulas prepared and recommended by the actuary. Benefits provided: Benefits, as required by the Nevada Revised Statutes (NRS or statute), are determined by the number of years of accredited service at time of retirement and the member’s highest average compensation in any 36 consecutive months with special provisions for members entering the System on or after January 1, 2010. Benefit payments to which participants or their beneficiaries may be entitled under the plan include pension benefits, disability benefits, and survivor benefits. benefit allowances for members are computed at 2.5% of average compensation for each accredited year of service prior to July 1, 2001. For service earned on and after July 1, 2001, this multiplier is 2.67% of average compensation. For members entering the System on or after January 1, 2010, there is a 2.5% multiplier and for regular members entering the System on or after July1, 2015, there is a 2.25% factor. The System offers several alternatives to the unmodified service retirement allowance which, in general, allow the retired employee to accept a reduced service retirement allowance payable during his or her lifetime and various optional payments to a named beneficiary after his or her death. Post-retirement increases are provided by authority of NRS 286.575–.579. Regular members are eligible for retirement at age 65 with five years of service, at age 60 with ten years of service, or at any age with thirty years of service. Regular members entering the System on or after January 1, 2010, are eligible for retirement at age 65 with five years of service, or age 62 with ten years of service, or any age with thirty years of service. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -49- Note 7 – Defined Benefits Pension Plan (continued): Regular members who enter the system on or after July 1, 2019 are eligible for retirement at age 65 with 5 years of service, or at age 62 with 10 years of service or at age 55 with 30 years of serve or any age with 33 1/3 years of service. Police/Fire members are eligible for retirement at age 65 with five years of service, at age 55 with ten years of service, at age 50 with twenty years of service, or at any age with twenty- five years of service. Police/Fire members entering the System on or after January 1, 2010, are eligible for retirement at age 65 with five years of service, or age 60 with ten years of service, or age 50 with twenty years of service, or at any age with thirty years of service. Only service performed in a position as a police officer or firefighter may be counted towards eligibility for retirement as Police/Fire accredited service. The normal ceiling limitation on benefit allowances is 75% of average compensation. However, a member who has an effective date of membership before July 1, 1985, is entitled to a benefit of up to 90% of average compensation. Both Regular and Police/Fire members become fully vested as to benefits upon completion of five years of service. Contributions: The authority for establishing and amending the obligation to make contributions, and member contribution rates, is set by statute. The contribution rates are based on biennial actuarial valuations and expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.. New hires, in agencies which did not elect the Employer-Pay Contribution (EPC) plan prior to July 1, 1983 have the option of selecting one of two contribution plans. One plan provides for matching employee and employer contributions (EEC), while the other plan provides for employer-pay contributions only. Under the matching Employee/Employer Contribution plan a member may, upon termination of service for which contribution is required, withdraw employee contributions which have been credited to their account. All membership rights and active service credit in the System are canceled upon withdrawal of contributions from the member’s account. If EPC was elected, the member cannot convert to the Employee/Employer Contribution plan. The City has both the EPC plan and the EEC plan for its employees. The City’s contribution to both plans was $359,955 for the year ended June 30, 2021. The respective rates on which contributions for EPC plans were based were 42.5% of covered compensation for police/fire members and 29.25% for other members and 15.25% or other member under EEC plan. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2021, the City reported a liability of $2,230,096 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the plan’s net pension liability was based on the City’s share of contributions to the pension plan relative to the contributions of all ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -50- Note 7 – Defined Benefits Pension Plan (continued): participating entities for the year ended June 30, 2020. At June 30, 2020, the City’s proportion of the plan was .01601% while the prior year’s proportionate rate was .01574%. For the year ended June 30, 2020, the City recognized pension expense of $106,924 and $63,508 in its governmental and business-type activities respectively. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Governmental Business-Type Governmental Business-Type Activities Activities Activities Activities Difference between expected and actual experience $ 43,470 $ 25,818 $ 18,066 $ 10,730 Net difference between projected and actual earnings on pension plan investments - - 52,853 31,391 Changes in assumptions 39,299 23,342 - - Changes in proportion and differences between City contributions and proportionate share of contributions 47,627 28,287 83,662 49,690 $ 130,396 $ 77,447 $ 154,581 $ 91,811 The amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Governmental Business-Type Activities Activities Year Ended June 30: 2022 $ (15,724) $ (9,339) 2023 (8,549) (5,078) 2024 (3,403) (2,021) 2025 [PHONE REDACTED] 2,398 1,424 Thereafter 404 240 $ (24,185) $ (14,364) In addition, $117,525 and $62,452 are reported as deferred outflows of resources related to pensions in the governmental and business-type activities and represent the City’s contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability reported as of June 30, 2021. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -51- Note 7 – Defined Benefits Pension Plan (continued): Actuarial assumptions: The total pension liability at June 30, 2020 was determined by an actuarial valuation as of that date. The total pension liability was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.75% Investment rate of return 7.50% Productivity pay increases: 0.50% Salary increases Regular: 4.25% to 9.15%, depending on service Police/Fire: 4.55% to 13.90%, depending on service Rates include inflation and productivity increases Other assumptions Same as those used in the June 30, 2020 funding actuarial valuation Investments: The Board evaluates and establishes expected real rates of return (expected returns, net of investment expenses and inflation) for each asset class. The Board reviews these capital market expectations annually. The PERS’s current long-term geometric expected real rates of return for each asset class included in the plan’s investment portfolio as of June 30, 2020 are included in the following table: Target Long-Term Geometric Asset Class Allocation Expected Real Rate of Return* Domestic Stock 42% 5.50% International Stock 18% 5.50% U.S. Bonds 28% 0.75% Private Markets 12% 6.65% *As of June 30, 2020, the PERS’ long-term inflation assumption was 2.75%. Discount Rate: The discount rate used to measure the total pension liability was 7.50% as of June 30, 2021. The projection of cash flows used to determine the discount rate assumed plan contributions will be made in amounts consistent with statutory provisions and recognizing the plan’s current funding policy and cost-sharing mechanism between employers and members. For this purpose, all contributions that are intended to fund benefits for all plan members and their beneficiaries are included, except that projected contributions that are intended to fund the service costs for future plan members and their beneficiaries are not included. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -52- Note 7 – Defined Benefits Pension Plan (continued): Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate: The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.5 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 (6.50%) or 1-percentage-point higher (7.50%) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.50%) (7.50%) (8.50%) $3,477,824 $2,230,096 $1,192,393 Note 8 – Postemployment Benefits Other Than Pensions (OPEB): The City offers post-employment health benefits to its retirees under two plans on the pay-as-you-go basis. Accordingly, the City has implemented GASB No. 75 prospectively beginning with the year ended June 30, 2018. Actuarial studies are done periodically to determine the OPEB liability. The most recent valuation was performed for June 30, 2021. Plan Information Nevada Public Employees' Benefits Program: The City contributes to an agent multiple-employer defined healthcare plan, Nevada Public Employees’ Benefits Program (PEBP). PEBP is administered by the State of Nevada pursuant to NRS 287. City retirees previously had the option to join the PEBP offered by the State of Nevada. Local Governments are required to pay the same portion of cost of coverage for their retirees joining PEBP that the State of Nevada pays for those persons retired from state service. As of June 30, 2021, twelve City retirees were covered by this benefit plan. The PEBP issues a publicly available report that includes financial statements and required supplementary information. That report may be obtained by writing to Public Employees' Benefit Program, 901 South Stewart Street, Suite 1001, Carson City, Nevada 89701. The information is also available on their website at www.pebp.state.nv.us or by calling (800)326-5496. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -53- Note 8– Postemployment Benefits Other Than Pensions (continued): Funding Policy: Nevada Public Employees' Benefits Program: The contributions to Nevada Public Employees' Benefits Program are established and may be amended by the Board of the Public Employee's Benefits Program. The amount of subsidy for City retirees is billed Amounts contributed by retirees are paid directly to the State of Nevada and, as such, are not available. The required contribution is based on projected pay-as-you-go financing requirements. The City has not elected the option to pay additional amounts into a qualified trust to prefund benefits. There are twelve past employees under this plan. City of Yerington Health Care Plan: The City pays the full cost of active employee coverage. Employees pay the full cost of any optional dependent coverage and retirees pay the full cost of their personal and dependent coverage. Claims experience of employees and retirees are pooled when determining premiums and retiree and active employees pay the same rates. Therefore, an "implicit" subsidy of retirees cost by active employees could results. A separate report is not issued for the plan. There are 12 active employees under this plan Total OPEB Liability: Following is the City’s total OPEB liability that was measured as of June 30, 2021, and was determined by an actuarial valuation as of June 30, 2020. District Plan $ 66,509 PEBP Plan 313,303 Total Both Plans $ 379,812 Actuarial Methods and Assumptions Projections of benefits are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits in force at the valuation date and the pattern of sharing benefit costs between the City and the plan members to that point. Projections of benefits for financial reported purposes do not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long- term perspective and employ methods and assumptions that are designed to reduce short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -54- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): Significant methods and assumptions used to value both plans are as follows: Valuation date June 30, 2020 Funding method Entry Age Normal Cost, (AMM) Asset valuation method N/A - No trust established Discount rate (S & P General 2.66% as of June 30, 2020 and 2.18% as of June 30, 2021 Obligation Municipal Bond 20 Year High Grade Rate Index) Participants valued – PEBP Only current PEBP retirees are valued – City Plan Only current active employees and retired participants and covered spouses are valued. No future entrants are considered Actuarial assumptions: Projected salary increases – PEBP N/A – City Plan 3.0% General inflation rate 2.5% Healthcare cost trend rates 5.4% in 2021 to 4% in 2076 and thereafter Mortality: The rate described below were described in the June 30, 2019 actuarial valuation of the Nevada PERS program as being reasonably representative of mortality experience as the that measurement date. Non-disabled life rates for Regular and Safety employees: Males and Females: Headcount-Weighted RP-2014 Healthy Annuitant Table Pre-retirement life rates for Regular and Safety employees: Males and Females: Headcount-Weighted RP-2014 Employee Table Mortality Improvement: The mortality rates above were adjusted to anticipate future morality improvement by applying MacLoed Watts Scale 2020. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -55- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): Changes in Total OPEB Liability Governmental Business-Type Activities Activities Total Balance at June 30, 2020 $ 176,954 $ 179,807 $ 356,761 Changes for the year: Service cost 4,449 4,538 8,987 Interest 4,708 4,803 9,511 Changes in assumptions 10,349 10,559 20,908 Plan experience - - - Benefit payments (8,096) (8,259) (16,355) Net Change 11,410 11,641 23,051 Balance at June 30, 2021 $ 188,364 $ 191,448 $ 379,812 Sensitivity of the total OPEB liability to changes in the discount rate: The following presents the City’s total OPEB liability calculated using the discount rate of 2.18 percent, as well as what the City’s OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (1.18%) or 1-percentage-point higher (3.18%) than the current rate: Current 1% Decrease Discount Rate 1% Increase (1.18%) (2.18%) (3.18%) $ 429,385 $ 379,812 $ 338,106 Sensitivity of the total OPEB liability to changes in the healthcare cost trend: The following presents the City’s total OPEB liability of the City as well as what the City’s OPEB liability would be if it were calculated using a healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current rates: Decrease Current Increase - 1% rend Rate + 1% $ 336,698 $ 379,812 $ 430,962 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -56- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2021, the City recognized OPEB expense of $7,004 for the PEBS Plan and a OPEB benefit of $10,538 for the City Health Plan. At June 30, 2021, the City reported deferred outflows resources of $30,981 and deferred inflows of resources $76,568 related to OPEB from changes in assumptions and differences between expected and actual expenses. Deferred Outflows Deferred Inflows of Resources of Resources Governmental Business-Type Governmental Business-Type Activities Activities Activities Activities Difference between expected and actual experience $ 1,636 $ 1,670 $ 25,697 $ 26,217 Changes in assumptions 13,700 13,975 12,204 12,450 $ 15,336 $ 15,645 $ 37,901 $ 38,667 The amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Governmental Business-Type Activities Activities Year Ended June 30: 2022 $ (9,137) $ (9,321) 2023 (9,137) (9,321) 2024 (9,137) (9,321) 2025 2,670 2,724 2026 [PHONE REDACTED] 1,662 1,693 $ (22,565) $ (23,022) ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -57- Note 9- Fund Equity: Net position includes the following restricted amounts at June 30, 2021. Business-Type Funds: Nevada Division of Environmental Protection grant (AB-198) requires annual contributions of $23,044 to a Capital Reserve account held for future improvements in the Water Utility Fund. 264,069 $ 264,069 At June 30, 2021, the governmental funds had the following fund balance classified as follows. Part of the General Fund’s year-end balance is represented by fuel inventory and therefore non-spendable. $ 14,606 Part of the City Governmental Funds’ year-end balances are committed for: General Fund – Compensated absences $ 23,306 Municipal Court Administrative Assessments 23,319 Special Revenue Fund 155,687 Fixed Asset Acquisition Fund 478,355 $ 680,667 Part of the General Fund’s year-end balance fund balance been assigned as a financial resource for the subsequent year’s appropriations. $ - Note 10– Tax Abatements: City had no tax abatements imposed under the consolidated tax distributions agreements entered into by the State of Nevada. The agreements provide for a partial abatement of sales and use taxes imposed on eligible machinery or equipment used by certain new or expanded businesses. Note 11– Advances to Sewer Fund From Water Fund: On June 22, 2020, City Council approved Resolution 2020-02 authorizing an interim loan of $130,000 from the Water Fund to the Sewer Fund as part of the pre-construction phase of the Water and Sewer Line Replacement project. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -58- Note 12 - Business License Fees: The following schedule summarizes all fees imposed by the City of Yerington, which are subject to the provisions of NRS 354.5989. The City's basic business license fee did not increase from the previous year. The population index had no increase and the consumer price index increased by 1.9%. FY 2021 FY 2021 Over Adjusted Percent Maximum Actual (Under) Base Increase Allowed Revenue Allowable 6-30-20 CPI Index Revenue Received Amount Business Licenses $135,513 X 2.30% = $138,630 $ 98,803 $ (39,827) Note 13 - Regional Highways and Street Revenues: The City participates in the optional nine-cent gasoline tax to fund Lyon County’s Regional Highway and Street Fund. The Fund is administered by a Regional Transportation Commission composed of a five-member board of which the City has one representative. The revenues derived from this fund are remitted to Lyon County for proper accounting. The City receives an allocation of the nine-cent tax revenue based on its total assessed valuation compared with the total assessed valuation of the County. Nevada Revised Statutes 373.150 requires any funds not disbursed currently in aid of an approved project shall remain in the fund to the credit of the City. At June 30, 2021, there were funds in the amount of $996,7935 reserved in Lyon County's Regional Highway and Street Fund for the sole use by the City of Yerington. The Regional Transportation Commission must first approve a project plan before any funds will be released to the City. The City recognizes these revenues only upon meeting the revenue recognition criteria as stated in Note 1. In addition, Lyon County holds Road Construction Tax totaling $154,782 for the benefit of the City. Note 14 - 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 as are all entities. The City has joined together with similar public entities (cities, counties, school districts, and special districts) throughout the State of Nevada to create a pool under the Nevada Inter-local Cooperation Act. The Nevada Public Agency Insurance Pool (Pool) is a public-entity risk pool currently operating as a common-risk management and insurance program for 106 members. The District pays an annual premium and is subject to a $25,000 deductible per occurrence. The Pool is considered a self-sustaining risk pool that will provide liability coverage for its members for up to $10,000,000 per event and a $13,000,000 general aggregate per member. Property, crime and equipment breakdown coverage is provided to its members up to $300,000,000 per loss with various sublimits established for earthquake, flood, equipment breakdown, and money and securities. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -59- The City has joined together with similar public entities (cities, counties, school districts, and special districts) throughout the State of Nevada to create a pool under the Public Agency Compensation Trust. The Pool is considered a public-entity risk pool currently operating as a common-risk management and insurance program providing workman’s compensation benefits for its 76 members. The City continues to carry commercial insurance for other risks of loss such as employee health and accident insurance. Settled claims from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. Note 15 - Major Commitments: On March 27, 2017, the City was awarded two USDA Rural Development Grants on the Yerington Colony Tribe Water and Sewer Line Replacement project in the amount of $1,941,000 and $1,248,000, respectively. These two USDA Rural Development grant awards provide for 100% funding of said project costs with construction anticipated in the spring of 2022. On March 27, 2017, the City signed a letter of intent with USDA Rural Development to obligate financing with both loan and grant funding for the City Water and Sewer Line Replacement Project. USDA Rural Development has obligated $17,253,000 for the City Water Line Project in two separate loans of $9,901,000 and $7,352,000. USDA Rural Development has obligated $15,577,000 for the City Sewer Line Project in two separate loans of $8,577,000 and $7,000,000 along with $2,004,000 in grant funding. The terms of the loan require payments of both interest and principal at 1.375% over a forty-year period. The four USDA Rural Development loans will be issued as revenue bonds for which the City pledges to generate sufficient user fee revenues to meet debt service requirements. In anticipation of these loans, the City Council authorized utility water and sewer rate increases sufficient to meet debt service requirements. On November 23, 2020, the City executed $32,830,000 in Interim Debentures Series 2020 with Zions Bancorporation. Interest is payable semi-annually on May 1 and November 1, beginning on May 1, 2020. Principal of the 2020 Interim Debentures to be redeemed by the USDA Rural Development on November 1, 2023, upon certification of the substantial completion of the Capital Improvement project, with such completion estimated on or about November 1, 2022. On August 10, 2020, the City awarded the City Water and Sewer Line Replacement Project to Q & D Construction with contract price of $26,704,189 consisting of $14,207,552 on the water project and $12,496,637 on the sewer project. As of June 30, 2021, construction costs were incurred of $5,901,410 and $4,942,161, respectfully, leaving a remaining contract balance of $15,860,618. Farr West Engineering was awarded a design and inspection contract on said projects with an estimated cost of $6,186,497. As of June 30, 2021, design and inspection costs were incurred of $2,337,669 on the water project and $2,178,851 on the sewer project leaving a remaining contract balance of $1,669,977. Before the City is eligible to begin drawing USDA Rural Development Loan funding, the City first must incur initial costs of $1,811,000 and $953,000 on the City Water and City Sewer projects respectively. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 -60- Note 16 - Major Commitments: (continued) Following is a summary of projects. City of Yerington Yerington Colony Tribe Water Line Sewer Line Water Line Sewer Line Loan A $ 9,901,000 $ 8,577,000 $ - $ - Loan B 7,352,000 7,000,000 - - Grants - 2,204,000 1,941,000 1,248,000 City contribution 1,811,000 953,000 - - Total estimated cost $19,064,000 $18,734,000 $ 1,941,000 $ 1,248,000 Note 17 - Contingencies: Federal and State Grants The City received grants from the Federal government, passed through State agencies. These grants may be subject to compliance audits by the grantor agencies and ultimate retention of these monies is contingent upon satisfying the grantors that proper procedures were followed and that the resources were spent in accordance with grant requirements. Claims and Lawsuits Lawsuits are occasionally filed against the City of Yerington. The financial impact of these actions, if any, is not determinable at June 30, 2021. However, the City believes it has adequate insurance to cover any potential judgments should a judgement ever arise. Note 18 - Subsequent Event: Management has evaluated subsequent events through December 9, 2021, which is the date the financial statements were available to be issued. Note 19 - Compliance with Nevada Revised Statutes: The City conformed to all significant statutory constraints on its financial administration during the year as detailed in the Independent Accountant’s Report on Nevada Revised Statutes Chapter 354 Compliance Examination Report found on page 93 except for expenses exceeding budgeted appropriations in the General Fund general government function and the Water Utility Fund which is an apparent violation of NRS 354.626. ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- 2018 2019 2020 2021 City of Yerington Health Benefits Plan Total OPEB Liability Service cost 5,380 $ 5,392 $ 5,910 $ 8,987 $ Interest 29,432 23,644 21,315 9,511 Difference between expected and actual experience (119,998) - - - Change in assumptions 19,543 41,632 (35,829) 20,908 Benefit payments (38,266) (42,176) (18,322) (16,355) Plan experience (76,531) - (383,548) - Net Change in total OPEB Liability (180,440) 28,492 (410,474) 23,051 Total Liability, July 1 919,183 738,743 767,235 356,761 Total Liability, June 30 738,743 $ 767,235 $ 356,761 $ 379,812 $ Covered employee payroll 880,285 $ 1,067,723 $ 1,260,950 $ 542,315 $ Total liability as a percentage of covered-employee payroll 83.9% 71.9% 28.3% 70.0% Notes to Schedule: Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period. Applicable discount rates 3.27% 2.79% 2.66% 2.18% CITY OF YERINGTON, NEVADA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN TOTAL OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY AND RELATED RATIOS -61- ---PAGE BREAK--- 2015 2016 2017 Schedule of Proportionate Share of the Net Pension Liability City's proportion of the net pension liability 0.01716% 0.01755% 0.01607% City's proportionate share of the net pension liability 1,788,913 $ 2,011,063 $ 2,163,221 $ City's covered-employee payroll 854,015 $ 867,725 $ 855,015 $ City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 74.3% 231.8% 253.0% Plan fiduciary net position as a percentage of the total pension liability 76.3% 75.1% 72.2% * The above amounts presented for each fiscal year have a measurement date of June 30 of the preceding year. Schedule of Employer Contributions Statutorily required employer contribution 136,442 $ 136,805 $ 143,690 $ Contributions in relation to the statutorily required contribution 136,442 136,805 143,690 Contribution deficiency - $ - $ - $ City's covered-employee payroll 867,725 $ 855,015 $ 878,891 $ Contributions as a percentage of covered payroll 15.7% 16.0% 16.3% JUNE 30, 2021 CITY OF YERINGTON, NEVADA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AND EMPLOYER CONTRIBUTIONS NEVADA PUBLIC EMPLOYEES RETIREMENT SYSTEM ---PAGE BREAK--- 2018 2019 2020 2021 0.01692% 0.01621% 0.01574% 0.01601% 2,249,939 $ 2,210,324 $ 2,146,974 $ 2,230,096 $ 878,891 $ 880,285 $ 931,454 $ 974,311 $ 256.0% 251.1% 230.5% 228.9% 74.4% 75.1% 76.5% 77.0% 151,535 $ 152,524 $ 162,989 $ 179,968 $ 151,535 152,524 162,989 179,968 - $ - $ - $ - $ 880,285 $ 931,454 $ 974,311 $ 1,053,709 $ 17.2% 16.4% 16.7% 17.1% -62- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FIXED ASSET ACQUISITION FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Revenues Taxes County capital project tax $ 32,000 $ 32,000 $ - $ (32,000) $ - Other Revenue Miscellaneous income 50,000 50,000 - (50,000) - Park Income - - - - 5,018 Total Other Revenues 50,000 50,000 - (50,000) 5,018 Total Revenues 82,000 82,000 - (82,000) 5,018 Expenditures General Government Capital outlay 100,000 196,200 213,087 (16,887) - Capital outlay, city hall 220,000 114,250 105,750 - Capital outlay, charging station - - 30,224 (30,224) - Total General Government 100,000 416,200 357,561 58,639 - Public Safety Capital outlay - vehicle 59,500 59,500 37,316 22,184 31,330 Total Public Safety 59,500 59,500 37,316 22,184 31,330 Public Works Capital outlay - - - - 68,000 Capital outlay - vehicle 9,000 9,000 33,249 (24,249) - 9,000 9,000 33,249 (24,249) 68,000 Street and Roads Capital outlay, street lights 25,000 25,000 9,307 15,693 - 25,000 25,000 9,307 15,693 - Culture and Recreation Capital outlay, building 32,000 32,000 - 32,000 191 Total Culture and Recreation 32,000 32,000 - 32,000 191 Total Expenditures 225,500 541,700 437,433 88,574 99,521 BUDGETED AMOUNT ORIGINAL -63- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FIXED ASSET ACQUISITION FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Excess (Deficiency) of Revenues over Expenditures $ (143,500) $ (459,700) $ (437,433) $ 22,267 $ (94,503) Other Financing Sources Transfer in - General Fund - 220,000 220,000 - - Total Other Financing Sources (Uses) - 220,000 220,000 - - Excess of Revenues and Other Financing Sources, over Expenditures (143,500) (239,700) (217,433) 22,267 (94,503) Fund Balance, July 1 599,588 695,788 695,788 - 790,291 Fund Balance, June 30 $ 456,088 $ 456,088 $ 478,355 $ 22,267 $ 695,788 BUDGETED AMOUNT ORIGINAL -64- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND 2021 2020 Current Assets Unrestricted Cash $ 6,123,437 $ 5,199,619 Accounts receivable, net of allowance for doubtful accounts of $7,060 and $7,060 respectively 173,075 146,909 Due from other governments 13,133 9,468 Advance to Sewer Fund 130,000 130,000 Other receivables 7,776 46,955 Inventory of materials and supplies 34,785 30,195 Restricted Cash Customer deposits 24,288 6,692 AB 198 capital reserve 264,069 241,025 Zion Bancorp escrow acquisition account 10,735,251 - Zion Bancorp escrow interest account 701,569 - Total Current Assets 18,207,383 5,810,863 Property, Plant And Equipment Land & water rights 307,393 307,393 Construction in progress 8,455,728 2,012,337 Building, wells, tanks and distribution system 24,840,288 24,840,288 Vehicles 68,558 68,558 Maintenance equipment 2,810,777 2,810,777 Office equipment 82,846 82,846 36,565,590 30,122,199 Accumulated depreciation (8,849,750) (8,182,610) Total Capital Assets 27,715,840 21,939,589 Total Assets 45,923,223 27,750,452 Deferred Outflow of Resources Post valuation employer contributions 34,394 33,413 Deferred pension outflow of resources 42,578 53,768 Deferred OPEB outflow or resources 8,527 9,383 Total Deferred Inflows of Resources 85,499 96,564 SCHEDULE OF NET POSITION JUNE 30, 2021 (With Comparative Totals for June 30, 2020) ---PAGE BREAK--- 2021 2020 Liabilities Current liabilities payable from unrestricted assets: Accounts payable $ 41,796 $ 41,484 Construction payable 830,639 25,227 Accrued salaries and benefits 23,502 17,228 Due to other governments 28,256 13,646 Accrued interest 46,769 - Current liabilities payable from restricted assets: Customer deposits 24,288 6,692 Total Current Liabilities 995,250 104,277 Long-term liabilities: Accrued compensated absences 18,553 15,981 Zion Bancorp interim construction loan 17,253,000 - Net pension liability 509,427 495,165 OPEB liability 104,160 97,816 Total Long-term Liabilities 17,885,140 608,962 Total Liabilities 18,880,390 713,239 Deferred Inflow of Resources Deferred pension inflows 50,475 80,406 Deferred OPEB inflows 21,073 27,867 Total Deferrred Inflow of Resources 71,548 108,273 Net Position Net investment in capital assets 21,069,021 21,914,362 Restricted for AB 198 capital reserves 264,069 241,025 Unrestricted 5,723,694 4,870,117 Total Net Position $ 27,056,784 $ 27,025,504 -65- ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Operating Revenues Water use fees $ 1,362,662 $ 1,362,662 $ 1,306,780 $ (55,882) $ 1,268,341 Meter replacement / Other charges 25,005 25,005 60,332 35,327 26,693 Less bad debts 5,000 5,000 - (5,000) (6,823) Total Operating Revenues 1,392,667 1,392,667 1,367,112 (25,555) 1,288,211 Operating Expenses Salaries and wages 262,619 262,619 265,973 (3,354) 266,099 Employee benefits 136,431 136,431 129,414 7,017 (12) Services and supplies 411,500 411,500 409,448 2,052 457,283 Depreciation 649,312 649,312 667,140 (17,828) 675,773 Total Operating Expenses 1,459,862 1,459,862 1,471,975 (12,113) 1,399,143 Operating Income (Loss) (67,195) (67,195) (104,863) (37,668) (110,932) Nonoperating Revenues (Expenses) Late fees 15,000 15,000 3,324 (11,676) 1,936 Administrative fee 12,100 12,100 10,931 (1,169) 9,868 Willow Creek agreement 19,000 19,000 19,000 - 19,000 Water tank lease 16,000 16,000 13,668 (2,332) 14,562 Water rights revenue 19,500 19,500 25,150 5,650 11,000 Nevada Copper reservation fee 87,500 87,500 87,500 - 87,500 USDA - Water Line Project - revenues 9,000,000 9,000,000 - - USDA - Water Line Project - expenses (9,000,000) (9,000,000) - - ARCO - customer hookup revenue 21,000 21,000 - (21,000) - Investment income 100 100 583 483 - Miscellaneous income 1,200 1,200 399 (801) 16,486 Interest expense (117,590) (117,590) (163,691) (46,101) - Total Nonoperating Revenues (expenses) 73,810 73,810 (3,136) (76,946) 160,352 Income (loss) before contributions 6,615 6,615 (107,999) (114,614) 49,420 Capital Contributions Connection fees from customers - - 77,500 77,500 27,600 USDA Rural Development - Colony Water Grant - - 61,779 61,779 - Total Capital Contributions - - 139,279 139,279 27,600 Change in Net Position $ 6,615 $ 6,615 31,280 $ 24,665 77,020 Net Position, July 1 27,025,504 26,948,484 Net Position, June 30 $ 27,056,784 $ 27,025,504 ORIGINAL BUDGETED AMOUNT -66- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Cash Flows From Operating Activities Receipts from customers $ 1,392,667 $ 1,392,667 $ 1,292,165 $ (100,502) $ 1,222,983 Payments to Lyon County (399,050) (399,050) 80,987 480,037 72,257 Payments of personnel costs (411,500) (411,500) (391,595) 19,905 (400,918) Payments for service and supplies (60,000) (60,000) (413,726) (353,726) (458,859) Net Cash Provided by Operating Activities 522,117 522,117 567,831 45,714 435,463 Cash Flows From Noncapital Financing Activities Water tank lease income 16,000 16,000 13,668 (2,332) 14,562 Water right revenue 19,500 19,500 25,150 5,650 11,000 Willowcreek revenue 19,000 19,000 19,000 - 19,000 Nevada Copper reservation fee 87,500 87,500 126,679 39,179 87,500 Administrative fees 12,100 12,100 10,931 (1,169) 9,868 USDA - Water Line Project revenue 9,000,000 9,000,000 - (9,000,000) - USDA - Water Line Project expenses (9,000,000) (9,000,000) - 9,000,000 - Miscellaneous income 1,200 1,200 3,723 2,523 21,218 Net Cash Provided Non-Capital Financing Activities 155,300 155,300 199,151 43,851 163,148 Cash Flows From Capital And Related Financing Activities Capital contributions by customers 25,500 25,500 77,500 52,000 27,600 Capital contributions by USDA (Tribe) 500,000 500,000 58,114 (441,886) - Interim debenture bond proceeds 17,000,000 17,000,000 17,253,000 253,000 - Acquisition of capital assets (17,580,000) (17,580,000) (5,637,978) 11,942,022 (538,643) Advance to Sewer Fund - - - - (130,000) Principal paid on long-term debt (162,909) (162,909) - 162,909 - Interest paid on long-term debt (117,590) (117,590) (116,923) 667 - Net Cash (Used) by Capital and Related Financing Activities (334,999) (334,999) 11,633,713 11,968,712 (641,043) Cash Flows From Investing Activities Interest income - - 583 583 - Net Increase (Decrease) In Cash and Cash Equivalents 342,418 342,418 12,401,278 12,058,860 (42,432) Cash and Cash Equivalents, July 1 6,087,526 6,087,526 5,447,336 (640,190) 5,489,768 Cash and Cash Equivalents, June 30 $ 6,429,944 $ 6,429,944 $ 17,848,614 $ 11,418,670 $ 5,447,336 ORIGINAL BUDGETED AMOUNT -67- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) ACTUAL VARIANCE 2020 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ (67,195) $ (67,195) $ (104,863) $ (37,668) $ (110,932) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 649,312 649,312 667,140 17,828 675,773 Net change deferred pension expense - - (5,460) (5,460) 5,592 Net change deferred OPEB expense - - 406 406 (119,729) Changes in assets and liabilities Decrease (increase) in accounts receivable (60,000) (60,000) (26,166) 33,834 4,827 Decrease (increase) in inventory - - (4,590) (4,590) 7,221 Increase (decrease) in consumer deposits - - 17,596 17,596 358 (Decrease) increase in accounts payable - and accrued liabilities - - 23,768 23,768 (27,647) Net Cash Provided by Operating Activities $ 522,117 $ 522,117 $ 567,831 $ 45,714 $ 435,463 BUDGETED AMOUNT ORIGINAL FINAL -68- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF NET POSITION JUNE 30, 2021 (With Comparative Totals for June 30, 2020) 2021 2020 Current Assets Unrestricted Cash $ 2,211,737 $ 1,302,456 Accounts receivable, net of allowance for doubtful accounts of $10,160 and $10,160 respectively 96,832 91,935 Grant Receivable - USDA 9,709 9,365 Inventory of materials and supplies 10,989 - Restricted Cash Customer deposits 2,314 2,184 Zion Bancorp escrow acquisition account 9,647,528 - Zion Bancorp escrow interest account 632,212 - Total Current Assets 12,611,321 1,405,940 Property, Plant And Equipment Land 10,120 10,120 Treatment plant and collection systems 6,032,050 6,032,050 Vehicles 46,009 46,009 Maintenance equipment 423,632 423,632 Office equipment 45,080 45,080 Construction in progress 7,198,995 1,710,795 13,755,886 8,267,686 Accumulated depreciation (4,241,682) (4,079,127) Total Capital Assets 9,514,204 4,188,559 Total Assets 22,125,525 5,594,499 Deferred Outflow of Resources Post valuation pension contributions 28,058 27,382 Deferred pension inflow of resources 34,869 44,177 Deferred OPEB inflow or resources 7,119 7,865 Total Deferred Outflow of Resources 70,046 79,424 ---PAGE BREAK--- 2021 2020 Liabilities Current liabilities payable from unrestricted assets: Accounts payable $ 36,634 $ 7,288 Construction payable 608,882 8,155 Accrued salaries and benefits 19,285 14,079 Due to other governments 14,892 6,946 Accrued interest payable 42,146 Advance from Water Fund 130,000 130,000 Current liabilities payable from restricted assets: Customer deposits 2,314 2,184 Total Current Liabilities 854,153 168,652 Long-term liabilities: Accrued compensated absences 15,307 13,044 Zion Bancorp interim constructon loan 15,577,000 - Net pension liability 397,470 376,239 OPEB liability 87,288 81,991 16,077,065 471,274 Total Liabilities 16,931,218 639,926 Deferred Inflow of Resources Deferred pension inflows 41,336 66,063 Deferred OPEB inflows 17,593 23,367 Total Deferred Inflow of Resources 58,929 89,430 Net Position Net investment in capital assets 3,608,062 4,188,559 Unrestricted 1,597,362 756,008 Total Net Position $ 5,205,424 $ 4,944,567 -69- ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Operating Revenues Sewer use fees $ 1,066,378 $ 1,066,378 $ 1,063,572 $ (2,806) $ 1,062,007 Bad debts - - - - (3,602) $ 1,066,378 $ 1,066,378 $ 1,063,572 $ (2,806) $ 1,058,405 Operating Expenses Salaries and wages 225,010 225,010 220,286 4,724 221,466 Employee benefits 139,802 139,802 116,995 22,807 17,050 Services and supplies 275,177 275,177 239,769 35,408 280,382 Depreciation 170,000 170,000 162,555 7,445 172,746 Total Operating Expenses 809,989 809,989 739,605 70,384 691,644 Operating Income (Loss) 256,389 256,389 323,967 67,578 366,761 Nonoperating Revenues (Expenses) Late fees 2,000 2,000 1,652 (348) 1,078 Willowcreek agreement 29,000 29,000 29,000 - 29,000 Connection fees ARCO Weed Heights 834,000 834,000 - (834,000) - USDA - Sewer Line Project revenue 9,000,000 9,000,000 - (9,000,000) - USDA - Sewer Line Project expenses (9,000,000) (9,000,000) - 9,000,000 - Miscellaneous income - - 106 106 25,357 Investment income - - 525 525 - Interest expense (104,402) (104,402) (147,509) (43,107) - Total Nonoperating Revenues (Expenses) 760,598 760,598 (116,226) (876,824) 55,435 Income (Loss) before Contributions and Special Item 1,016,987 1,016,987 207,741 (809,246) 422,196 Capital Contributions Connection fees from customers - - 38,000 38,000 7,600 USDA Rural Development - Colony Sewer Grant - - 15,116 15,116 - Total Capital Contributions - - 53,116 53,116 7,600 Change in Net Position $ 1,016,987 $ 1,016,987 260,857 $ (703,014) 429,796 Net Position, July1 4,944,567 4,514,771 Net Position, June 30 $ 5,205,424 4,944,567 ORIGINAL BUDGET AMOUNT -70- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) FINAL ACTUAL VARIANCE 2020 Cash Flows From Operating Activities Receipts from customers $ 1,066,378 $ 1,066,378 $ 1,111,105 $ 44,727 $ 1,107,247 Payments to Lyon County (40,000) (40,000) (44,354) (4,354) (42,183) Payments of personnel costs (364,812) (364,812) (324,407) 40,405 (336,639) Payments for service and supplies (275,177) (275,177) (221,412) 53,765 (279,964) Net Cash Provided by Operating Activities 386,389 386,389 520,932 134,543 448,461 Cash Flows From Noncapital Financing Activities Miscellaneous income 2,000 2,000 1,758 (242) 26,435 Willowcreek agreement 29,000 29,000 29,000 - 2,900 Net Cash Provided by Non-Capital Financing Activities 31,000 31,000 30,758 (242) 29,335 Cash Flows From Capital And Related Financing Activities Capital contributions by customers 20,000 20,000 38,000 18,000 7,600 Capital contributions by grantor (USDA) 741,000 741,000 14,772 (726,228) - Capital contributions by Weed Heights 834,000 834,000 - (834,000) - Captial contributions from USDA (Tribe) 1,248,000 1,248,000 - (1,248,000) - Captial contributions from USDA (City) 15,068,000 15,068,000 15,577,000 509,000 - Acquisition of capital assets USDA (Tribe) (1,248,000) (1,248,000) - 1,248,000 - Acquisition of capital assets USDA (City) (15,068,000) (15,068,000) (4,887,473) 10,180,527 (595,698) Acquisition of capital assets (150,000) (150,000) - 150,000 - Advance from Water Fund - - - - 130,000 Principal paid on long-term debt (144,638) (144,638) - 144,638 - Interest paid on long-term debt (104,402) (104,402) (105,363) (961) - Net Cash (Used) by Capital and Related Financing Activities 1,195,960 1,195,960 10,636,936 9,440,976 (458,098) Cash Flows From Investing Activities Interest income - - 525 525 - Net Increase (Decrease) in Cash and Cash Equivalents 1,613,349 1,613,349 11,189,151 9,575,277 45,798 Cash and Cash Equivalents, July 1 1,268,320 1,268,320 1,304,640 36,320 1,258,842 Cash and Cash Equivalents, June 30 $ 2,881,669 $ 2,881,669 $ 12,493,791 $ 9,611,597 $ 1,304,640 ORIGINAL BUDGETED AMOUNT -71- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2021 (With Comparative Totals for the Year Ended June 30, 2020) ACTUAL VARIANCE 2020 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ 256,389 $ 256,389 $ 319,395 $ 63,006 $ 366,761 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 170,000 170,000 169,304 (696) 172,746 Net deferred OPEB expense - - 269 269 (92,700) Net deferred pension expense - - 2,959 2,959 13,000 Changes in assets and liabilities Decrease (increase) in accounts receivable (40,000) (40,000) (4,897) 35,103 7,326 Increase (decrease) in inventory - - (10,989) (10,989) - Increase (decrease) in consumer deposits - - 130 130 113 (Decrease) increase in accounts payable and accrued liabilities - - 44,761 44,761 (18,785) Net Cash Provided by Operating Activities $ 386,389 $ 386,389 $ 520,932 $ 134,543 $ 448,461 BUDGETED AMOUNT ORIGINAL FINAL -72- ---PAGE BREAK--- FISCAL YEAR 2020-21 $ .4044 $ 79,872,527 2019-20 .4044 74,598,100 2018-19 .4044 70,107,341 2017-18 .4044 64,193,011 2016-17 .4044 62,844,811 2015-16 .4044 60,903,135 2014-15 .4044 57,524,066 2013-14 .4044 56,732,755 2012-13 .4044 53,647,403 2011-12 .4044 55,656,691 2010-11 .4044 58,857,733 2009-10 .4044 64,470,671 2008-09 .4044 62,852,734 2007-08 .4044 57,998,651 2006-07 .4044 52,378,316 2005-06 .4044 42,627,093 2004-05 .4044 41,425,164 2003-04 .4044 41,832,125 2002-03 .4044 41,803,125 2001-02 .4044 41,796,083 Source: Nevada Department of Taxation Property Tax Rates for Nevada Local Governments TAX RATE CITY ASSESSED VALUATION CITY OF YERINGTON, NEVADA Schedule of Property Tax Rates and Assessed Valuations (Unaudited) Last Twenty Years -73- ---PAGE BREAK--- Other Fiscal Year Licenses and Intergovernmental Charges For Other Financing Ending June 30 Taxes Permits Revenues Services Revenues Sources Totals 2021 785,444 $ 425,935 $ 1,722,776 $ 111,461 $ 91,062 $ - $ 3,136,678 $ 2020 547,337 494,095 899,132 139,161 132,926 - 2,212,651 2019 387,175 519,595 989,512 121,772 51,067 - 2,069,121 2018 337,572 299,664 3,409,043 99,180 62,545 - 4,208,004 2017 312,558 335,821 975,377 89,170 64,140 - 1,777,066 2016 295,252 316,683 929,979 141,187 2,064,209 - 3,747,308 2015 307,099 297,192 1,188,242 139,547 1,171,605 - 3,103,683 2014 295,033 333,179 849,934 189,037 40,287 - 1,707,470 2013 289,584 305,453 930,448 207,627 39,240 - 1,772,352 2012 273,462 287,970 1,984,277 216,665 34,992 6,079 2,803,445 This Schedule includes revenues of the General Fund, Special Revenue Funds, and Capital Projects Fund. Significant contributions from Atlantic Richfield Company and Nevada Copper, Inc are included. CITY OF YERINGTON, NEVADA Governmental Revenues and Other Financing Sources by Source Last Ten Years (Unaudited) -74- ---PAGE BREAK--- Fiscal Year General Public Public Culture and Debt Ending June 30 Government Judicial Safety Works Recreation Health Service Totals 2021 913,568 $ 80,920 $ 1,209,145 $ 667,938 $ 58,512 $ 15,585 $ - $ 2,945,668 $ 2020 288,698 71,462 1,254,516 297,821 16,417 54,108 - 1,983,022 2019 317,252 79,604 1,087,655 311,725 109,214 13,125 - 1,918,575 2018 349,447 88,099 1,002,313 2,943,167 51,081 18,485 - 4,452,592 2017 330,854 89,928 951,671 415,725 119,457 15,461 - 1,923,096 2016 2,352,006 75,397 906,068 382,133 99,828 11,036 - 3,826,468 2015 429,264 95,885 928,787 677,111 56,505 13,447 - 2,200,999 2014 286,085 49,772 799,852 344,146 44,512 14,950 - 1,539,317 2013 252,402 51,054 728,799 534,752 54,904 10,882 - 1,632,793 2012 235,120 42,045 786,894 1,657,718 58,104 13,621 - 2,793,502 This Schedule includes expenditures of the General Fund, Special Revenue Funds, and Capital Projects Fund. CITY OF YERINGTON, NEVADA Governmental Expenditures by Function Last Ten Years (Unaudited) -75- ---PAGE BREAK--- Last Ten Years (Unaudited) CITY OF YERINGTON, NEVADA NET POSITION Year 2014 net position was restated by $1,146,798 for governmental activities and $846,696 business-type activities as required by GASB 68. $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Governmental 4,911,928 4,781,104 3,763,251 4,887,314 4,666,325 4,083,977 6,262,871 6,246,495 6,418,717 8,161,150 Business-Type 23,131,459 23,067,097 22,262,413 23,725,350 30,531,103 31,338,775 31,576,135 31,463,255 31,970,071 32,262,208 23,131,459 23,067,097 22,262,413 23,725,350 30,531,103 31,338,775 31,576,135 31,463,255 31,970,071 32,262,208 -76- ---PAGE BREAK--- (Unaudited) CITY OF YERINGTON, NEVADA ALL GOVERNMENTAL FUNDS FUND BALANCE - LAST TEN YEARS $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 540,062 679,621 847,774 1,750,460 1,671,302 1,525,272 1,280,684 1,431,230 1,660,859 1,851,869 Years -77- ---PAGE BREAK--- (Unaudited) CITY OF YERINGTON, NEVADA GENERAL FUND - BUDGET BASIS FUND BALANCE - LAST TEN YEARS -$100,000 $100,000 $300,000 $500,000 $700,000 $900,000 $1,100,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 242,728 384,792 564,093 546,656 460,422 360,061 254,300 485,467 782,668 1,171,202 Years -78- ---PAGE BREAK--- (Unaudited) REVENUES, EXPENDITURES, AND FUND BALANCE - LAST TEN YEARS GENERAL FUND - BUDGET BASIS CITY OF YERINGTON, NEVADA $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Years Revenues Expenses Fund Balance -79- ---PAGE BREAK--- GENERAL FUND - BUDGET BASIS REVENUES BY SOURCE (Unaudited) FOR THE YEAR ENDED JUNE 30, 2021 CITY OF YERINGTON, NEVADA Taxes 29.2% License and permits 18.0% Intergovernmental revenues 44.4% Charges for services 4.7% Fines and forfeits 0.8% Other revenues 2.9% -80- ---PAGE BREAK--- GENERAL FUND - BUDGET BASIS EXPENDITURES BY FUNCTION FOR THE YEAR ENDED JUNE 30, 2021 (Unaudited) CITY OF YERINGTON, NEVADA General Government 12.9% Public Works 12.3% Public Safety 66.6% Judicial 4.6% Culture & Recreation 2.8% Health 0.8% -81- ---PAGE BREAK--- (Unaudited) FOR THE YEAR ENDED JUNE 30, 2021 CITY OF YERINGTON, NEVADA GENERAL FUND - BUDGET BASIS EXPENDITURES BY OBJECT Salaries, 655,839 , 37.3% Employee Benefits, 406,541 , 23.1% Services & Supplies, 679,246 , 38.6% Capital Outlay, 17,561 , 1.0% -82- ---PAGE BREAK--- -83- A Professional Corporation INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Council City of Yerington, Nevada 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, business-type activities, each major fund of the City of Yerington, Nevada, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City of Yerington’s basic financial statements and have issued our report thereon dated December 9, 2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Yerington, Nevada’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 Yerington, Nevada’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Yerington, Nevada’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 a 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 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- -84- Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Yerington, Nevada’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Yerington, Nevada December 9, 2021 ---PAGE BREAK--- -85- A Professional Corporation INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY UNIFORM GUIDANCE To the Honorable Mayor and City Council City of Yerington, Nevada Report on Compliance of Each Major Federal Program We have audited the City of Yerington, Nevada’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City of Yerington, Nevada’s major federal programs for the year ended June 30, 2021. City of Yerington, Nevada’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statues, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City of Yerington, Nevada’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Yerington, Nevada’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- -86- We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City of Yerington, Nevada’s compliance. Opinion on Each Major Federal Program In our opinion, the City of Yerington, Nevada, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021. Report on Internal Control Over Compliance Management of the City of Yerington, Nevada, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City of Yerington, Nevada’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Yerington, Nevada’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Yerington, Nevada December 9, 2021 ---PAGE BREAK--- Pass-Through Federal Entity Passed Federal Grantor/Pass-through Grantor/ CFDA Identifying Through to Federal Program or Cluster Title Number Number Subrecipients Expenditures U.S. Department of Agriculture: Direct Programs: Water and Waste Disposal Systems for Rural Communities: Water Loan - Yerington Water Lines 10.760 PWP-LY-2020-01 $ 6,931,573 Sewer Loan - Yerington Sewer Lines 10.760 PWP-LY-2020-01 6,165,705 Water and Waste Disposal Loans and Grants: Water Grant - Indian Colony 10.770 PWP-LY-2020-01 61,779 Sewer Grant - Indian Colony 10.770 PWP-LY-2020-01 15,116 Total Water/Sewer Loan Program $ 13,174,173 Community Facilities Loans and Grants: USDA Facility Grant 10.766 3570-3 50,000 Total U.S. Department of Agriculture 13,224,173 U.S. Department of Housing and Urban Development: Pass-through program from State Commission on Economic Development: Community Development Block Grant Boys & Girls Club Grant 14.228 CDBG-CV20/PS/09 8,485 Total U.S. Department of Housing and Urban Development 8,485 U.S. Department of Transportation: Federal Aviation Administration Direct Program: Airport Improvement Program 20.106 151,697 FAA Cares Act 20.106 30,000 Total U.S. Department of Transportation 181,697 U.S. Department of the Treasury: Pass-through program from the State of Nevada, Governor's Finance Office Coronavirus Relief Fund 21.019 N/A 481,906 Total U.S. Department of the Treasury 481,906 Total Expenditures of Federal Awards $ 13,896,261 CITY OF YERINGTON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2021 3-32-0022-018-2020 3-32-0022-019-2020 -87- ---PAGE BREAK--- -88- CITY OF YERINGTON, NEVADA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2021 Note A- Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Yerington, Nevada under programs of the federal government for the year ending June 30, 2021. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule present only a selected portion of the operations of the City of Yerington, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City of Yerington. Note B- Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for Audits of State, Local, and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowed or are limited as reimbursement. When applicable, negative amount shown on the Schedule represent adjustments or credits made in the normal course of business as expenditures in prior years. Indirect Costs The City did not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note C – Commodity Food Distributions Received The City does not participate in any commodities consumed programs. Note D – Subrecipients The City of Yerington did not pass any federal awards received to any other government or not-for-profit agencies. Note E – Matching Requirements Certain Federal programs require the City of Yerington to contribute non-Federal funds (matching funds) to support the Federally Funded programs. City of Yerington has met its matching requirements. The Schedule does not include the expenditure for non-Federal matching funds. ---PAGE BREAK--- -89- CITY OF YERINGTON, NEVADA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2021 Note F – Federally Funded Loan Programs The City of Yerington executed a letter of award with USDA Rural Development to finance with loan and grant funding for the City Water and Sewer Line Replacement Project. The City executed a $32,830,000 Interim Debentures Series 2020 with Zion Bancorporation for construction costs incurred during the construction process. Upon certification of substantial completion of the construction project, USDA Rural Development will issue revenue bonds to redeem the interim debentures. Beginning Beginning CFDA Balance of Balance of Loan as of Loan as of New Loans Number Program Name July 1, 2020 June 30, 2021 Processed 10.760 - $ 6,931,573 $ 6,931,573 $ 10.760 - 6,165,705 6,165,705 Total New Loans Processed - $ 13,097,278 $ 13,097,278 $ Water and Waste Disposal System for Rural Communities - Sewer Water and Waste Disposal System for Rural Communities - Water Reconciliation to Financial Statements: Water Sewer Actual loan draws at June 30, 2021 $ 6,104,599 $ 5,557,167 June 2021 accounts payable process in August 531,904 361,430 Retainage on construction work completed 295,070 247,108 Total New Loan Proceeds $ 6,931,573 $ 6,165,705 ---PAGE BREAK--- -90- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONS COSTS FOR THE YEAR ENDED JUNE 30, 2021 A. Summary of Auditor’s Results: Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:  Material weakness(es) identified? No  Significant deficiency(ies) identified? No Noncompliance material to financial statements noted? No Federal Awards Internal control over major federal programs:  Material weakness(es) identified? No  Significant deficiency(ies) identified? No Type of auditor’s report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to No be reported in accordance with 2 CFR 200.516(a)? Identification of major federal programs: CFDA# Name of Federal Program or Cluster 10.760 Water & Waste Disposal System for Rural Communities – Water and Sewer Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? No ---PAGE BREAK--- -91- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2021 B. Findings – Financial Statement Audit No audit findings were reported. C. Findings and Questioned Costs – Major Federal Award Program Audit No audit findings were reported. ---PAGE BREAK--- -92- CITY OF YERINGTON, NEVADA STATUS OF PRIOR YEAR FINDINGS AND RESPONSES FOR THE YEAR ENDED JUNE 30, 2021 B. Findings – Financial Statement Audit No prior year audit findings were reported. ---PAGE BREAK--- A Professional Corporation -93- INDEPENDENT ACCOUNTANT’S REPORT ON NEVADA REVISED STATUTES 354.6241 To the Honorable Mayor and City Council City of Yerington, Nevada We have reviewed management’s assertion made in accordance with Nevada Revised Statute 354-624(5)(a) with respect to the funds of the City of Yerington as of and for the year ended June 30, 2021 that:  The identified funds are being used expressly for the purposes for which that were created.  The Funds are administered in accordance with accounting principles generally accepted in the United States of America.  The restricted fund balance/net position in the funds were reasonable and necessary to carry out the purposes of the funds at June 30, 2021 (based on the interpretation of reasonable and necessary provided by the Legislative Counsel Bureau).  The sources of revenues, including transfers, available for the funds are as noted in the financial statements.  The funds conform to significant statutory and regulatory constraints on their financial statements administration during the year ended June 30, 2021 except for the two instances of expenses in excess of budget appropriations as described in Note 19. This assertion is the responsibility of the management of the City of Yerington. Our review was conducted in accordance with attestation standard established by the American Institute of Certified Public Accountants. A review is substantially less in scope that an examination, the objective of which is the expression of an opinion on management’s assertion. Accordingly, we do not express such an opinion. Based on our review, nothing came to our attention that caused us to believe that management’s assertion referred to above is not fairly stated in all material respects. Yerington, Nevada December 9, 2021 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- -94- INDEPENDENT AUDITOR'S COMMENTS JUNE 30, 2021 Statute Compliance The required disclosure on compliance with Nevada Revised Statutes and the Nevada Administrative Code is contained in Note 19 to the financial statements. Prior Year Audit Recommendation There were no specific recommendations made in the audit report for the fiscal year ended June 30, 2020. Current Year Audit Recommendations The Schedule of Findings and Responses included in this audit report provides a listing of our current year recommendations.