Document Yerington_doc_240ab6bc8d

CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2018 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA CITY OFFICIALS City Council Members - George Dini, Mayor - Selena Catalano - John Garry - Larry Reynolds - Terceira Schunke City Manager - Dan Newell ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2018 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 31-62 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS PAGE NO. Required Supplementary Information Schedules of OPEB Funding Progress and Employer Contributions 63 Schedules of Net Pension Liability and Employer Contributions 64 Supplementary Information Major Capital Projects Funds: Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual: Fixed Asset Acquisition Fund 65-66 Enterprise Funds: Water Utility Fund Schedule of Net Position 67 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 68 Schedule of Cash Flows - Budget and Actual 69-70 Sewer Utility Fund Schedule of Net Position 71 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 72 Schedule of Cash Flows - Budget and Actual 73-74 Clear Water Utility Fund Schedule of Net Position 75 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 76 Schedule of Cash Flows - Budget and Actual 77-78 III. Other Supplementary Information Schedule of Property Tax Rates and Assessed Valuations - Last Twenty Years 79 Governmental Revenues and Other Financial Sources – Last Ten Years 80 Governmental Expenditures by Function – Last ten years 81 Graphical Presentations: Net Position – Last Ten Years 82 All Governmental Funds, Fund Balance - Last Ten Years 83 General Fund – Budget Basis: Fund Balance - Last Ten Years 84 Revenues, Expenditures, and Fund Balance – Last Ten Years 85 Revenues by Source 86 Expenditures by Function 87 Expenditures by Object 88 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2018 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 89-90 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 91-92 Schedule of Expenditures of Federal Awards 93 Notes to Schedule of Expenditures of Federal Awards 94 Schedule of Findings and Questioned Costs 95-96 Status of Prior Year Findings and Questioned Costs 97 Independent Accountant’s Report on Nevada Revised Statutes Chapter 354.6241 98 INDEPENDENT AUDITOR'S COMMENTS Prior Year Recommendations 99 Current Year Recommendations 99 ---PAGE BREAK--- To th City o We h the b and f which the ta Man Mana statem State contr free f Audit Our r We c Unite Gove Thos assur An au disclo judgm statem consi finan circum the e inclu reaso evalu We b provi 30 he Honorable of Yerington have audited usiness-type for the year h collectivel able of conte agement’s R agement is r ments in ac s of Americ rol relevant from materia tor’s Respon responsibility conducted ou ed States of ernment Aud e standards rance about w udit involve osures in the ment, includ ments, wheth iders interna ncial stateme mstances, bu entity’s inter des evalua onableness o uating the ov believe that ide a basis fo Broadway Av INDE e Mayor and n, Nevada d the accomp e activities, a ended June ly comprise t ents. Responsibili responsible cordance w a; this inclu to the prepa al misstatem nsibility y is to expre ur audit in a f America an diting Standa require th whether the s performing e financial s ding the asse her due to f al control rel ents in orde ut not for th rnal control. ating the a of significan verall present the audit e or our audit o venue, Yeringt A Profess EPENDENT d City Counc panying fina and each ma 30, 2018, a the City of Y ity for the F for the prep ith accounti udes the desi aration and f ment, whether ess opinions accordance w nd the stand ards, issued b hat we plan financial sta g procedures statements. T essment of th fraud or erro levant to the er to design he purpose o . According appropriaten nt accountin tation of the evidence we opinions. ton, NV 89447 sional Corpora T AUDITOR cil ancial statem ajor fund of and the relat Yerington’s Financial St paration and ing principle gn, impleme fair presenta r due to frau on these fin with auditing dards applica by the Comp n and perfo atements are s to obtain a The procedu he risks of m or. In making e entity’s pre n audit proc of expressin ly, we expr ness of ac ng estimates financial sta have obtai │ 775-463- ation R'S REPORT ments of the the City of Y ted notes to basic financ tatements d fair presen es generally entation, and ation of fina ud or error. nancial statem g standards able to finan ptroller Gen orm the aud free from m audit evidenc ures selected material miss g those risk eparation an cedures tha ng an opinion ress no such ccounting p s made by m atements. ined is suffi -4100 │ 775 T e governmen Yerington, N the financia cial statemen ntation of th y accepted i d maintenan ancial statem ments based generally ac ncial audits neral of the U dit to obtai material miss ce about the d depend on statement of k assessment nd fair presen at are appro n on the eff h opinion. A policies us managemen icient and a 5-463-3334 │ S ntal activitie Nevada, as o al statement nts as listed i hese financia in the Unite nce of interna ments that ar d on our audi ccepted in th contained i United State in reasonabl tatement. amounts an the auditor f the financia ts, the audito ntation of th opriate in th fectiveness o An audit als ed and th nt, as well a appropriate t Sciarani.com s, of ts, in al ed al re it. he in s. le nd ’s al or he he of so he as to ---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, 2018, 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 Change in Accounting Principle As discussed in Note 10 to the financial statements, in 2018 the City adopted new accounting guidance, GASB Statement No.75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions and GASB Statement No. 82, Pension Issues. Our opinion is not modified with respect to these 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 63-64 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 2017 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 October 21, 2017. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2017, 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. ---PAGE BREAK--- Other Our a that c The prese finan The i respo accou inform finan recon to pre and o in the referr statem The proce not ex Othe In acc Nove contr of law that r repor intern of an City o Yerin Nove r Informatio audit was co collectively individual f ented for pu ncial stateme individual fu onsibility of unting and mation has b ncial statem nciling such epare the ba other additio e United Sta red to above ments as a w other suppl edures applie xpress an op er Reporting cordance wi ember 29, 2 rol over finan ws, regulatio report is to rting and com nal control o n audit perfor of Yerington ngton, Nevad ember 29, 20 on onducted for comprise th fund financi urposes of a nts. und financia managemen other recor been subject ments and c information asic financia nal procedur ates of Amer e are fairly st whole. ementary in ed in the aud pinion or pro g Required ith Governm 018, on our ncial reporti ons, contrac describe th mpliance and over financia rmed in acco n, Nevada’s da 018 the purpose he City of Y ial statemen dditional an al statements nt and were d rds used to ed to the aud certain add n directly to t al statements res in accord rica. In our tated in all m nformation s dit of the ba ovide any ass by Governm ent Auditing r considerati ing and on o cts, and gran he scope of d the results al reporting ordance with internal con e of forming Yerington, N nts, and sup nalysis and a s referred to derived from prepare th diting proced itional proc the underlyin s or to the ba dance with a opinion, the material resp section has asic financia surance on th ment Auditin g Standards, ion of the C our tests of it nt agreement f our testing s of that testi or on compl h Governme ntrol over fin g opinions on Nevada’s ba pplementary are not a re o in the prec m and relate d he basic fin dures applie cedures, inc ng accountin asic financia auditing stan e individual pects in relat not been s al statements hem. ng Standard we have als City of Yerin ts complianc ts and other g of interna ing, and not liance. That ent Auditing nancial repor n the financi asic financia information equired part ceding parag directly to th nancial state ed in the aud cluding com ng and other al statement ndards gener fund financi tion to the b subjected to s and, accord ds so issued ou ngton, Neva ce with certa r matters. Th al control o to provide a t report is an Standards in rting and com ial statement al statement n section ar t of the basi graph are th he underlyin ements. Suc it of the basi mparing an r records use s themselve rally accepte ial statement basic financia the auditin dingly, we d ur report date ada’s interna ain provision he purpose o over financia an opinion o n integral pa n considerin mpliance. ts ts. re ic he ng ch ic nd ed s, ed ts al ng do ed al ns of al on art ng ---PAGE BREAK--- CITY OF YERINGTON, NEVADA MANAGEMENT’S DISCUSSION AND ANALYSIS FOR FISCAL YEAR ENDED JUNE 30, 2018 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, 2018. 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 $2,178,894 to $6,262,871 from $4,083,977 in 2017. The City’s governmental net investment in capital assets is $6,700,793 in 2018 compared to $4,256,815 in 2017. • The City’s business-type activity net position increased by $237,360 to $31,576,135 from $31,338,775 in 2017. The City’s business-type activity net investment in capital assets is $25,418,733 in 2018 compared to $25,196,128 in 2017. • The business-type activities recognized capital contributions totaled $136,080 in 2018 compared to $1,432,735 in 2017. This decrease in capital contributions is largely attributable to the completion of the ARCO Sunset Hills water system project year 2017. • The City’s total revenues were $6,851,666 consisting of $4,209,918 in governmental activities and $2,641,748 in business-type activities. Business-type activities revenues of $2,641,748 included grants and contributions totaling $369,535. User fee charges were $2,272,213 and account for 86.0% of total revenue sources. • The City’s total expenses were $4,435,412 consisting of $2,031,024 in governmental activities and $2,404,388 in business-type expenses. • The City’s primary revenue sources (besides grants and contributions) are charges for services of $2,272,213 and consolidated taxes of $453,142. These two revenue sources comprise 33.1% and 6.6%, 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 ---PAGE BREAK--- statements. By doing so, readers may better understand the long-term effect of the government’s 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 $37,839,006 ($6,292,871 in governmental activities and $31,576,135 in business-type activities) as of June 30, 2018. By far, the largest portion of the City’s net position (84.9%) 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; ---PAGE BREAK--- consequently, these assets are not available for future spending. Although the City’s investments 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 2018 compared to 2017. Net position increased by $2,416,254 to $37,839,006 in 2018 from $35,422,752 in 2017. 2018 2017 2018 2017 2018 2017 Assets Current Assets 1,791,783 $ 1,648,933 $ 7,660,361 $ 7,569,830 $ 9,452,144 $ 9,218,763 $ Restricted Cash - - 202,861 179,533 202,861 179,533 Capital Assets, Net 6,700,793 4,256,815 25,418,733 25,196,128 32,119,526 29,452,943 Total Assets 8,492,576 5,905,748 33,281,955 32,945,491 41,774,531 38,851,239 Deferred Outflow Of Resources Post Measurement Date Employer Contributions 96,403 88,359 54,390 60,488 150,793 148,847 Deferred Pension Outflow 168,988 134,192 115,315 101,930 284,303 236,122 Deferred OPEB Outflow 18,820 - 18,549 - 37,369 - Total Deferred Outflows 284,211 222,551 188,254 162,418 472,465 384,969 Liabilities Current Liabilities 503,909 118,384 376,805 229,737 880,714 348,121 Long-Term Liabilities Due After One Year 1,748,519 1,751,899 1,308,937 1,407,199 3,057,456 3,159,098 Total Liabilities 2,252,428 1,870,283 1,685,742 1,636,936 3,938,170 3,507,219 Deferred Inflow Of Resources Unearned revenue - - 1,000 - 1,000 - Deferred Pension Inflow 166,178 174,039 113,397 132,198 279,575 306,237 Deferred OPEB Inflow 95,310 - 93,935 - 189,245 - Total Deferred Inflows 261,488 174,039 208,332 132,198 469,820 306,237 Net Position Invested in Capital Assets, Net of Debt 6,700,793 4,256,815 25,418,733 25,196,128 32,119,526 29,452,943 Restricted Position - - 1,292,691 171,873 1,292,691 171,873 Unrestricted (437,922) (172,838) 4,864,711 5,970,774 4,426,789 5,797,936 Total Net Position 6,262,871 $ 4,083,977 $ 31,576,135 $ 31,338,775 $ 37,839,006 $ 35,422,752 $ 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 $2,178,894 for governmental activities and an increase of $237,360 for business-type activities in fiscal year 2018. In the year 2017, the total increase in net positon was $981,070. • The governmental activities total revenues in 2018 increased by $2,434,445 from $1,775,473 in 2017 to $4,209,918 in 2018. This large increase in revenue is largely attributable to the FFA airport runway construction grant of $2,541,028. 2018 2017 2018 2017 2018 2017 Program Revenues: Charges for Services 170,708 $ 208,021 $ 2,272,213 $ 1,980,479 $ 2,442,921 $ 2,188,500 $ Operating Grants and Contributions 124,547 124,911 233,455 1,033,213 358,002 1,158,124 Capital Grants and Contributions 2,583,760 183,197 136,080 1,432,735 2,719,840 1,615,932 2,879,015 516,129 2,641,748 4,446,427 5,520,763 4,962,556 General Revenues: Property taxes 258,079 242,334 - - 258,079 242,334 Other taxes 216,917 200,767 - - 216,917 200,767 Franchise fees 190,160 178,049 - - 190,160 178,049 Consolidated taxes 453,142 427,786 - - 453,142 427,786 Unrestricted grants 200,000 200,000 - - 200,000 200,000 Other 12,605 10,408 - - 12,605 10,408 Total Revenues 4,209,918 1,775,473 2,641,748 4,446,427 6,851,666 6,221,900 Expenses: General government 515,246 495,129 - - 515,246 495,129 Judicial 89,016 90,536 - - 89,016 90,536 Public safety 1,009,456 970,324 - - 1,009,456 970,324 Public works 327,379 291,627 - - 327,379 291,627 Health 18,635 14,546 - - 18,635 14,546 Cultural and recreation 71,292 99,831 - - 71,292 99,831 Utilities - - 2,404,388 3,278,837 2,404,388 3,278,837 Total Expenses 2,031,024 1,961,993 2,404,388 3,278,837 4,435,412 5,240,830 Change in Net Position 2,178,894 (186,520) 237,360 1,167,590 2,416,254 981,070 Beginning Net Position 4,083,977 4,270,497 31,338,775 30,171,185 35,422,752 34,441,682 Ending Net Position 6,262,871 $ 4,083,977 $ 31,576,135 $ 31,338,775 $ 37,839,006 $ 35,422,752 $ Governmental Activities Business-Type Activities Total Table 2 Changes in Net Position ---PAGE BREAK--- • Governmental activities expenses of $2,031,024 in 2018 increase by $69,031 or 3.5% in year 2018 compared to $1,961,993. Business-Type Activities • The business-type activities charges for service revenues increased $84,452 from $1,980,476 in 2017 to $2,272,213 in 2018. • The business type activities total expenditures were $2,404,388 in 2018 compared to $3,278,837 in 2017 or a decrease of $874,449 mainly due to ARCO customer hookup expenses of $931,618 deemed not capitalizable as expenses occurred on private property of the owner in year 2017. • The business-type activities capital contributions totaled $136,080 in 2018 compared to $1,432,735 in 2017. Year 2017 capital contribution was largely attributable to the ARCO Sunset Hills water system project which was completed in late August 2016. 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 $1,280,684 which is a decrease of $244,588 compared to the prior year amount of $1,525,272. This decrease is largely attributable to the General Fund incurring a reduction of fund balance of $106,776 and the Fixed Asset Acquisition Fund reduction of fund balance of $151,256 due to FFA matching grant funding requirements of $162,511. 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 $285,410 while the 2017 fund balance was $392,186. Fund balance represents approximately 17.4% of the total General Fund expenditures and transfers out. The City’s General Fund ending fund balance decreased $106,776 in 2018 while the fiscal year 2017 decrease was $100,361. ---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 over spending by individual departments. In summary, the noted differences and explanations are as follows: • General Fund total revenues of $1,534,429 were $9,656 over budget and reflected a modest increase of $13,319 over 2017 total revenues of $1,521,110. • General Fund total charges for services revenues of $99,180 were under budget by $47,120 consisting largely of airport fuel charges decreasing from $71,229 in 2017 to $65,345 in 2018. • The General Fund total expenditures of $1,640,190 were under budgeted appropriations of $1,708,867 by $68,677. 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, 2018 is $32,322,387 (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 2018. Major capital asset events during the current year include the following: • The Governmental Funds had $2,692,921 in asset additions for the year. Major additions were a completion of the City’s airport resurfacing project at current year costs of $2,692,921 associated with resurfacing of the City’s airport runway. 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 $1,316,524 for the year. New asset additions consisted of largely $64,295 on rehabilitation of California Street well, $1,023,387 in preliminary engineering design costs associated with upcoming City water line and sewer lines project. The City also incurred $63,348 in preliminary design costs associated with upcoming Yerington Colony water line and sewer line replacement project. The City also incurred $233,455 in construction costs associated with Phase II hook up of eleven new customers the to the Sunset Hills service area. ARCO reimbursed the City $273,469 under an agreement to cover all construction costs. These construction costs of $233,455 were associated hookup costs occurring on customer’s private property and not subject to capitalization since ownership of such improvement belongs to the private parties. ---PAGE BREAK--- -11- Long-Term Debt: Governmental Activities: There are no governmental activity or business-type activity debt obligations in 2019. The City’s long-term obligations include compensated absences. 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 Years Budget The City Council and the management of the City consider many factors when setting the fiscal year 2019 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 2019 budget. In conjunction with the current economic factors, the City limited its anticipated spending for 2019, 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, 2018 (With Comparative Totals for June 30, 2017) BUSINESS-TYPE ACTIVITIES ACTIVITIES Current Assets Cash and investments - Note 2 $ 1,195,748 $ 7,384,239 Taxes receivable, secured roll 7,190 - Use fees receivable, net of allowances for uncollectibles - 234,153 Due from other governments 502,364 18,833 Other receivables 72,062 - Inventory 14,419 23,136 Total Current Assets 1,791,783 7,660,361 Noncurrent Assets Restricted cash and investments - Note 2 - 202,861 Capital Assets - Note 3 Land, improvements, and construction in progress 639,763 1,797,621 Other capital assets, net of depreciation 6,061,030 23,621,112 Total Noncurrent Assets 6,700,793 25,621,594 Total Assets 8,492,576 33,281,955 Deferred Outflow of Resources Post measurenment date employer contributions - Note 7 96,403 54,390 Deferred pension outflow - Note 7 168,988 115,315 Deferred OPEB outflows - Note 8 18,820 18,549 Total Deferred Outflow of Resources 284,211 188,254 GOVERNMENTAL STATEMENT OF NET POSITION ---PAGE BREAK--- 2018 2017 $ 8,579,987 $ 8,620,960 7,190 5,306 234,153 227,362 521,197 213,604 72,062 119,766 37,555 31,765 9,452,144 9,218,763 202,861 179,533 2,437,384 1,591,757 29,682,142 27,861,186 32,322,387 29,632,476 41,774,531 38,851,239 150,793 148,847 284,303 236,122 37,369 - 472,465 ` 384,969 TOTAL -12- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA JUNE 30, 2018 (With Comparative Totals for June 30, 2017) BUSINESS-TYPE ACTIVITIES ACTIVITIES Current Liabilities Accounts payable $ 218,642 $ 307,776 Construction contracts payable 238,442 - Accrued salaries and benefits 46,160 42,071 Due to other governments 25 19,024 Customers' deposits - 7,934 Bail deposits 640 - Total Current Liabilities 503,909 376,805 Long-term liabilities Compensated absences - Note 5 39,116 29,658 Accrued OPEB liability - Note 4, 5 & 8 372,053 366,690 Net pension liability - Note 7 1,337,350 912,589 Total Long-term Liabilities 1,748,519 1,308,937 Total Liabilities 2,252,428 1,685,742 Deferred Inflow of Resources Unearned revenues - 1,000 Deferred pension inflows - Note 7 166,178 113,397 Deferred OPEB inflows - Note 8 95,310 93,935 Total Deferred Inflow of Resources 261,488 208,332 Net Position Net investment in capital assets 6,700,793 25,418,733 Restricted - Note 9 - 1,292,691 Unrestricted (437,922) 4,864,711 Total Net Position $ 6,262,871 $ 31,576,135 STATEMENT OF NET POSITION GOVERNMENTAL ---PAGE BREAK--- 2018 2017 $ 526,418 $ 179,334 238,442 52,496 88,231 78,763 19,049 29,228 7,934 7,660 640 640 880,714 348,121 68,774 76,694 738,743 919,183 2,249,939 2,163,221 3,057,456 3,159,098 3,938,170 3,507,219 1,000 - 279,575 306,237 189,245 - 469,820 306,237 32,119,526 29,452,943 1,292,691 171,873 4,426,789 5,797,936 $ 37,839,006 $ 35,422,752 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 $ 515,246 $ - $ - $ - Judicial 89,016 55,315 - - Public safety 1,009,456 19,166 - 34,742 Public works 327,379 94,269 84,547 2,549,018 Health 18,635 1,958 - - Culture and recreation 71,292 - 40,000 - Total Governmental Activities 2,031,024 170,708 124,547 2,583,760 Business-Type Activities: Water Utilities 1,681,950 1,414,081 233,455 91,794 Sewer Utilities 722,438 858,132 - 44,286 Total Business-type Activities 2,404,388 2,272,213 233,455 136,080 Total City $ 4,435,412 $ 2,442,921 $ 358,002 $ 2,719,840 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 Total General Revenues Change in Net Position Net Position - Beginning - Note 10 Net Position - Ending CONTRIBUTIONS FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) CITY OF YERINGTON, NEVADA STATEMENT OF ACTIVITIES PROGRAM REVENUE CAPITAL GRANTS AND ---PAGE BREAK--- 2018 $ (515,246) $ - $ (515,246) $ (495,129) (33,701) - (33,701) (33,029) (955,548) - (955,548) (966,892) 2,400,455 - 2,400,455 121,618 (16,677) - (16,677) (12,601) (31,292) - (31,292) (59,831) 847,991 - 847,991 (1,445,864) - 57,380 57,380 1,092,186 - 179,980 179,980 75,404 - 237,360 237,360 1,167,590 847,991 237,360 1,085,351 (278,274) 258,079 - 258,079 242,334 216,917 - 216,917 200,767 190,160 - 190,160 178,049 453,142 - 453,142 427,786 637 - 637 730 11,968 - 11,968 9,678 200,000 - 200,000 200,000 1,330,903 - 1,330,903 1,259,344 2,178,894 237,360 2,416,254 981,070 4,083,977 31,338,775 35,422,752 34,441,682 $ 6,262,871 $ 31,576,135 $ 37,839,006 $ 35,422,752 Net (Expenses) Revenues and Changes in Net Position 2017 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, 2018 (With Comparative Totals for June 30, 2017) ASSESSMENT REVENUE FUND FUND FUND Assets Cash and investments - Note 2 $ 195,011 $ 17,236 $ 79,795 Taxes receivable, secured roll 7,190 - - Accounts receivable 64,229 - 7,833 Due from other governments 90,334 - 7,990 Advance to other funds - - Fuel Inventory 14,419 - - Total Assets $ 371,183 $ 17,236 $ 95,618 Liabilities Accounts payable $ 31,783 $ 75 $ 28,116 Construction contracts payable - - - Accrued compensation 46,160 - - Due to other governments - 25 - Consumer / bail deposits and restitution 640 - - Total Liabilities 78,583 100 28,116 Deferred Inflow of Resources Unavailable taxes receivable 7,190 - - Fund Balances - Note 9 Nonspendable 14,419 - - Committed 33,007 17,136 67,502 Assigned 10,387 - - Unassigned 227,597 - - Total Fund Balances 285,410 17,136 67,502 Total Liabilities, Deferred Inflows and Fund Balances $ 371,183 $ 17,236 $ 95,618 SPECIAL GENERAL ADMINISTRATIVE MUNICIPAL COURT ---PAGE BREAK--- ACQUISITION TOTALS 2018 $ 903,706 $ 1,195,748 $ 1,476,357 - 7,190 5,306 - 72,062 50,213 404,040 502,364 103,390 - - - - 14,419 13,667 $ 1,307,746 $ 1,791,783 $ 1,648,933 $ 158,668 $ 218,642 $ 71,967 238,442 238,442 - - 46,160 45,753 - 25 25 - 640 640 397,110 503,909 118,385 - 7,190 5,276 - 14,419 13,667 910,636 1,028,281 1,167,108 - 10,387 184,064 - 227,597 160,433 910,636 1,280,684 1,525,272 $ 1,307,746 $ 1,791,783 $ 1,648,933 2017 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 $ 1,280,684 $ 1,525,272 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. 15,008,528 12,280,865 Accumulated depreciation has not been included in the governmental fund financial statements. (8,307,735) (8,024,050) Revenue reported as deferred revenue in the governmental fund financial statements is recorded as revenue in the government-wide financial statements. 7,190 5,276 The net pension liability is not due and payable in the current period and therefore is not reported in the governmental funds (1,337,350) (1,229,391) 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. 99,213 48,512 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. (76,490) - Compensated absences have not been reflected in the governmental fund financial statements. (39,116) (48,903) Post-employment health insurance that is not due and payable in the current period and therefore is not reported in the governmental funds. (372,053) (473,605) Net Position of Governmental Activities $ 6,262,871 $ 4,083,976 2018 2017 CITY OF YERINGTON, NEVADA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2018 (With Comparative Totals for June 30, 2017) 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) GENERAL ASSESSMENT REVENUE FUND Revenues Taxes $ 256,165 $ - $ 81,407 Licenses and permits 299,664 - - Intergovernmental revenues 825,283 - 7,990 Charges for services 99,180 - - Fines and forfeits 47,544 7,771 - Other revenues 6,593 - - Total Revenues 1,534,429 7,771 89,397 Expenditures Current: General government 273,897 - 75,550 Judicial 88,099 - - Public safety 967,571 - - Public works 242,072 - 8,174 Health 18,485 - - Culture and recreation 51,081 - - Total Expenditures 1,641,205 - 83,724 Excess (Deficiency) of Revenues over Expenditures (106,776) 7,771 5,673 Other Financing Sources (Uses) Transfers in - - - Transfers out - - - Total Other Financing Sources (Uses) of Funds - - - Excess (Deficiency) of Revenues and Other Financing Sources over Expenditures and Other Uses (106,776) 7,771 5,673 Fund Balance, July 1 392,186 9,365 61,829 Fund Balance, June 30 $ 285,410 $ 17,136 $ 67,502 SPECIAL MUNICPAL COURT ADMINISTRATIVE FUND FUND ---PAGE BREAK--- $ - $ 337,572 $ 312,558 - 299,664 335,821 2,575,770 3,409,043 975,377 - 99,180 89,170 - 55,315 57,507 637 7,230 6,633 2,576,407 4,208,004 1,777,066 - 349,447 330,854 - 88,099 89,928 34,742 1,002,313 951,671 2,692,921 2,943,167 415,725 - 18,485 15,461 - 51,081 119,457 2,727,663 4,452,592 1,923,096 (151,256) (244,588) (146,030) - - 52,442 - - (52,442) - - - (151,256) (244,588) (146,030) 1,061,892 1,525,272 1,671,302 $ 910,636 $ 1,280,684 $ 1,525,272 2017 FIXED ASSET FUND 2018 ACQUISITION TOTALS The accompanying notes are an integral part of these financial statements. -17- ---PAGE BREAK--- Net Change in Fund Balances - Total Governmental Funds $ (244,588) $ (146,030) 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. 2,727,663 248,091 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. (283,685) (287,786) 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. 1,914 (1,593) Compensated absences are not due and payable in the current period and therefore are not reported in the governmental fund financial statements. 9,787 (5,230) 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. 25,062 71 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. 8,043 901 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. (65,302) 5,056 Change in Net Position of Governmental Activities $ 2,178,894 $ (186,520) RECONCILIATION OF THE STATEMENT OF REVENUES, CITY OF YERINGTON, NEVADA 2018 2017 FOR THE YEAR ENDED JUNE 30, 2018 TO THE STATEMENT OF ACTIVITIES EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (With Comparative Totals for the Year Ended June 30, 2017) 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Revenues Taxes Ad valorem taxes $ 246,529 $ 246,529 $ 256,165 $ 9,636 $ 243,891 Licenses, Permits and Fees Business licenses 94,000 94,000 93,291 (709) 96,428 Franchise taxes Natural gas 35,000 35,000 38,320 3,320 34,414 Electric 130,000 130,000 122,518 (7,482) 113,642 Cable television 7,000 7,000 6,726 (274) 7,175 Sanitation 20,000 20,000 22,596 2,596 22,818 192,000 192,000 190,160 (1,840) 178,049 Non-business licenses and permits Animal licenses - - 188 . 188 95 Building permits 32,425 32,425 14,875 (17,550) 60,799 Planning and zoning 2,450 2,450 1,150 (1,300) 450 34,875 34,875 16,213 (18,662) 61,344 Total Licenses and Permits 320,875 320,875 299,664 (21,211) 335,821 Intergovernmental Revenues State and federal shared revenues Motor vehicle fuel tax 58,498 58,498 60,547 2,049 60,911 Consolidated tax distribution 425,571 425,571 453,142 27,571 427,786 484,069 484,069 513,689 29,620 488,697 Other local government shared revenues County road ad valorem tax - - 20,000 20,000 20,000 County ad valorem agreement 200,000 200,000 200,000 - 200,000 County gaming licenses 34,500 34,500 31,272 (3,228) 35,708 234,500 234,500 251,272 16,772 255,708 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 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 Piaute Tribe - marijuana compact - - 10,947 10,947 - State rural housing 2,500 2,500 5,375 2,875 3,775 46,500 46,500 60,322 13,822 47,775 Total Intergovernmental Revenues 765,069 765,069 825,283 60,214 792,180 Charges for Services Airport charges 12,000 12,000 12,676 676 12,208 Airport fuel charges 110,000 110,000 65,345 (44,655) 71,229 Animal shelter 1,300 1,300 1,770 3,070 1,850 Weed abatement 2,000 2,000 223 (1,777) 451 Police services: Night in the Country 18,000 18,000 15,881 (2,119) - Other charges for services 3,000 3,000 3,285 285 3,432 Total Charges for Services 146,300 146,300 99,180 (47,120) 89,170 Fines and Forfeits Municipal court fines 36,000 36,000 43,514 7,514 45,203 Other court fees 2,500 2,500 4,030 1,530 8,942 Total Fines and Forfeits 38,500 38,500 47,544 9,044 54,145 Other Revenues Highlands tower lease 6,000 6,000 - (6,000) - Annexation - - 6,000 6,000 - Other income 1,500 1,500 593 (907) 5,903 Total Other Revenues 7,500 7,500 6,593 (907) 5,903 Total Revenues 1,524,773 1,524,773 1,534,429 9,656 1,521,110 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) ORIGINAL FINAL VARIANCE 2017 Operating Expenditures General Government Mayor and Council Salaries and wages $ 21,600 $ 21,600 $ 21,300 $ 300 $ 21,300 Employee benefits 4,029 4,029 6,201 (2,172) 4,867 Services and supplies 2,350 2,350 650 1,700 1,843 Total Mayor and Council 27,979 27,979 28,151 (172) 28,010 Management and Administration Salaries and wages 67,556 67,556 65,970 1,586 61,130 Employee benefits 29,630 29,630 30,524 (894) 29,867 Services and supplies 105,446 118,217 148,237 (30,020) 136,715 Total Management and Administration 202,632 215,403 244,731 (29,328) 227,712 Total General Government Function 230,611 243,382 272,882 (29,500) 255,722 Judicial Municipal Court Salaries and wages 29,012 29,012 28,683 329 27,659 Employee benefits 17,462 17,462 16,537 925 16,729 Services and supplies 35,183 52,183 42,879 9,304 42,538 Total Judicial Function 81,657 98,657 88,099 10,558 86,926 Public Safety Police Department Salaries and wages 451,713 451,713 457,588 (5,875) 412,299 Employee benefits 286,556 286,556 256,449 30,107 243,379 Services and supplies 126,931 126,931 110,255 16,676 111,647 Total Police Department 865,200 865,200 824,292 40,908 767,325 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL 2017 Fire Department Services and supplies Contractual agreement $ 143,279 $ 143,279 $ 143,279 $ - $ 140,270 Total Public Safety Function 1,008,479 1,008,479 967,571 40,908 907,595 Public Works Building Department Salaries and wages - - - - 256 Employee benefits - - - - 113 Services and supplies 41,125 41,125 21,018 20,107 30,087 Total Building Department 41,125 41,125 21,018 20,107 30,456 Street Department Salaries and wages 26,554 26,554 28,423 (1,869) 19,903 Employee benefits 6,598 6,598 10,096 (3,498) 6,580 Services and supplies 71,913 81,913 96,954 (15,041) 58,870 Total Street Department 105,065 115,065 135,473 (20,408) 85,353 Airport Salaries and wages 3,456 3,456 2,853 603 3,372 Employee benefits 2,819 2,819 1,467 1,352 1,630 Services and supplies 103,970 103,970 81,261 22,709 86,061 Total Airport 110,245 110,245 85,581 24,664 91,063 Total Public Works Function 256,435 266,435 242,072 24,363 206,872 Health Animal Control Salaries and wages 4,598 4,598 5,100 (502) 4,702 Employee benefits 3,852 3,852 2,836 1,016 2,809 Services and supplies 8,023 18,023 10,549 7,474 7,950 Total Health Function 16,473 26,473 18,485 7,988 15,461 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL VARIANCE 2017 Culture and Recreation Parks and recreation Salaries and wages $ 20,875 $ 20,875 $ 14,034 $ 6,841 $ 22,413 Employee benefits 9,208 9,208 5,496 3,712 8,416 Services and supplies 35,328 35,328 31,551 3,777 65,624 Total Culture and Recreation Function 65,411 65,411 51,081 14,330 96,453 Total Expenditures 1,659,066 1,708,837 1,640,190 68,647 1,569,029 Excess (Deficiency) of Revenues over Expenditures (134,293) (184,064) (105,761) 78,303 (47,919) Other Financing (Uses) Contingency (49,771) - - - - Transfer to Fixed Asset Acquisition Fund - - - - (52,442) Total Other Financing Sources (Uses) (49,771) - - - (52,442) Excess (Deficiency) of Revenues and Other Financing Sources over Expenditures and Other Financing Uses (184,064) (184,064) (105,761) 78,303 (100,361) Fund Balance, July 1 375,615 375,615 360,061 (15,554) 460,422 Fund Balance - Budget Basis, June 30 $ 191,551 $ 191,551 254,300 $ 62,749 360,061 RECONCILIATION TO GAAP BASIS Expenditures General Government $ (32,125) $ (32,125) (1,015) $ (31,110) - Fund Balance, July 1 32,125 32,125 32,125 - 32,125 Fund Balance, June 30 $ - $ - 31,110 $ 31,110 32,125 Fund Balance - GAAP Basis, June 30 $ 285,410 $ 392,186 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) BUDGET ACTUAL VARIANCE 2017 Revenues Fines and Forfeits Municipal Court assessments $ 800 $ 800 $ 3,544 $ 2,744 $ 1,299 Special facility assessments 1,200 1,200 4,227 3,027 2,063 Total Revenues 2,000 2,000 7,771 5,771 3,362 Expenditures Judicial Capital outlay Court assessments 4,000 4,000 - 4,000 7 Administrative assessments 5,000 5,000 - 5,000 2,995 Total Expenditures 9,000 9,000 - 9,000 3,002 Excess (Deficiency) of Revenues over Expenditures (7,000) (7,000) 7,771 14,771 360 Fund Balance, July 1 8,005 8,005 9,365 1,360 9,005 Fund Balance, June 30 $ 1,005 $ 1,005 $ 17,136 $ 16,131 $ 9,365 ORIGINAL BUDGETED AMOUNT The accompanying notes are an integral part of these financial statements. -24- ---PAGE BREAK--- Revenues Room taxes $ 60,000 $ 60,000 $ 81,407 $ 21,407 $ 68,631 Intergovernmental Community Development Block Grant - 7,990 7,990 - - Nevada Department of Transportaion - Safe Schools Grant 450,000 450,000 - (450,000) - 450,000 457,990 7,990 (450,000) - Total Revenues 510,000 517,990 89,397 (428,593) 68,631 Expenditures General Government Room tax distributions 50,000 50,000 61,968 (11,968) 63,020 Intergovernmental, room tax 10,000 10,000 13,582 (3,582) 12,112 Total General Government 60,000 60,000 75,550 (15,550) 75,132 Public Safety Safe schools grant 450,000 450,000 - 450,000 - Total Public Safety 450,000 450,000 - 450,000 - Public Works CDBG, Pumpkin Hallow - 7,990 8,174 (184) - Total Public Works - 7,990 8,174 (184) - Total Expenditures 510,000 517,990 83,724 434,266 75,132 Excess of Revenues over Expenditures - - 5,673 5,673 (6,501) Fund Balance, July 1 66,330 66,330 61,829 (4,501) 68,330 Fund Balance, June 30 $ 66,330 $ 66,330 $ 67,502 $ 1,172 $ 61,829 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) 2017 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, 2018 (With Comparative Totals for June 30, 2017) Current Assets Unrestricted Cash - Note 2 $ 5,623,086 $ 1,761,153 $ - Accounts receivables, net of allowance for doubtful accounts 152,870 81,283 - Due from other governments 9,468 9,365 - Other receivables - - - Inventory of materials and supplies 23,136 - - Advance to Clear Water Fund - - - Restricted Cash - Note 2 Customer deposits 5,976 1,958 - AB 198 capital reserve 194,927 - - Total Current Assets 6,009,463 1,853,759 - Property, Plant and Equipment - Note 3 Land and water rights 307,393 10,120 - Construction in progress - Note 16 809,803 670,305 - Building, wells, tanks, and distribution system 24,655,373 - - Treatment plant and collection system - 6,032,049 - Vehicles 68,558 46,009 - Maintenance equipment 2,810,777 423,632 - Office equipment 82,846 45,080 - 28,734,750 7,227,195 - Accumulated depreciation (6,810,387) (3,732,825) - Total Property, Plant and Equipment 21,924,363 3,494,370 - Total Assets 27,933,826 5,348,129 - Deferred Outlfow of Resources Post measurement date employer pension contributions - Note 7 30,255 24,135 - Deferred pension outflow of resources - Note 7 66,549 48,766 - Deferred OPEB outflow of resources - Note 8 10,265 8,284 - Total Deferred Outflow of Resources 107,069 81,185 - UTILITY FUND UTILITY FUND WATER FUND (Page 1 of 2) UTILITY ENTERPRISE FUNDS WATER SEWER CLEAR ---PAGE BREAK--- TOTALS 2018 2017 $ 7,384,239 $ 7,144,603 234,153 227,362 18,833 110,214 - 69,553 23,136 18,098 - 187,037 7,934 7,660 194,927 171,873 7,863,222 7,936,400 317,513 317,513 1,480,108 425,628 24,655,373 24,591,078 6,032,049 6,032,049 114,567 114,567 3,234,409 3,234,409 127,926 127,926 35,961,945 34,843,170 (10,543,212) (9,647,042) 25,418,733 25,196,128 33,281,955 33,132,528 54,390 60,488 115,315 101,930 18,549 - 188,254 162,418 -26- ---PAGE BREAK--- Liabilities Current liabilities payable from unrestricted assets: Accounts payable and accrued liabilities $ 164,573 $ 143,203 $ - Construction contracts payable - - - Accrued salaries and wages 23,147 18,924 - Due to other governments 11,506 7,518 - Advance from Water Utility Fund - - - Current liabilities payable from restricted assets: Customer deposits 5,976 1,958 - Total Current Liabilities 205,202 171,603 - Long-term liabilities: Accrued compensated absences 16,807 12,851 - Accrued OPEB payable 202,928 163,762 - Net Pension Liability - Note 7 526,661 385,928 - Total Long-Term Liabilities 746,396 562,541 - Total Liabilities 951,598 734,144 - Deferred Inflow of Resources Unearned revenue 1,000 - - Deferred pension inflows - Note 7 65,442 47,955 - Deferred OPEB inflows - Note 8 51,984 41,951 - Total Deferred Inflow of Resources 118,426 89,906 - Net Position Net Investment in capital assets 21,924,363 3,494,370 - Restricted - loan reserves - Note 9 194,927 - - Restricted by debt covenant 724,088 373,676 - Unrestricted 4,127,493 737,218 - Total Net Position $ 26,970,871 $ 4,605,264 $ - WATER FUND CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2018 (With Comparative Totals for June 30, 2017) (Page 2 of 2) UTILITY ENTERPRISE FUNDS WATER SEWER CLEAR UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2018 2017 $ 307,776 $ 107,368 - 52,496 42,071 33,010 19,024 29,203 - 187,037 7,934 7,660 376,805 416,774 29,658 27,791 366,690 445,578 912,589 933,830 1,308,937 1,407,199 1,685,742 1,823,973 1,000 - 113,397 132,198 93,935 - 208,332 132,198 25,418,733 25,196,128 194,927 171,873 1,097,764 - 4,864,711 5,970,774 $ 31,576,135 $ 31,338,775 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) Operating Revenues Use fees, net of bad debts $ 1,267,441 $ 828,947 $ - Operating Expenses Salaries and wages 238,646 193,293 - Employee benefits 90,441 94,625 - Service and supplies 396,852 260,905 - Depreciation 722,556 173,615 - Total Operating Expenses 1,448,495 722,438 - Operating Income (Loss) (181,054) 106,509 - Nonoperating Revenue (Expenses) Late fees / administrative fees 18,775 185 - Water tank lease 15,640 - - Willowcreek agreement 19,000 29,000 - Nevada Copper water reservation fee 87,500 - - Water rights revenue 3,000 - - Miscellaneous revenues 2,725 - - CDBG - water resource project - - - CDBG - water resource project - - - Atlantic Richfield Co. - customer hookup revenues 233,455 - - Atlantic Richfield Co. - customer hookup expenses (233,455) - Interest expense - - - Total Nonoperating Revenue (Expenses) 146,640 29,185 - Income (Loss) before Contributions (34,414) 135,694 - Capital Contributions Atlantic Richfield Co. - Sunset Hills Project 40,014 - - U.S.D.A. grant 39,465 44,286 - Connect fees 12,315 - - Total Capital Contributions 91,794 44,286 - Special Item Transfer of operations - Note 13 2,683,287 - (2,683,287) Change in Net Position 2,740,667 179,980 (2,683,287) Net Position, July 1 - Note 10 24,230,204 4,425,284 2,683,287 Net Position, June 30 $ 26,970,871 $ 4,605,264 $ - WATER FUND UTILITY ENTERPRISE FUNDS WATER SEWER CLEAR UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2017 $ 2,096,388 $ 1,810,079 431,939 479,469 185,066 240,652 657,757 626,063 896,171 888,019 2,170,933 2,234,203 (74,545) (424,124) 18,960 15,950 15,640 12,070 48,000 48,000 87,500 87,500 3,000 6,880 2,725 - - 101,595 - (101,638) 233,455 931,618 (233,455) (931,618) - (11,378) 175,825 158,979 101,280 (265,145) 40,014 1,276,197 83,751 91,484 12,315 65,054 136,080 1,432,735 - - 237,360 1,167,590 31,338,775 30,171,185 $ 31,576,135 $ 31,338,775 2018 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) Cash Flows From Operating Activities Receipts from customers $ 1,331,822 $ 868,451 $ - Payments to Lyon County (66,388) (46,124) - Payments of personnel costs (363,870) (293,038) - Payments for service and supplies (297,854) (164,533) - Net Cash Provided by Operating Activities 603,710 364,756 - Cash Flows From Noncapital Financing Activities Water tank lease income 15,640 - - Water rights revenue 3,000 - - Payments for water resource and sewer line video projects - - - Willow Creek agreement revenues 19,000 29,000 - Nevada Copper reservation fee 87,500 - - Administrative fees 15,299 - - Insurance recovery - POOL/PACT - - - ARCO reimbursements 233,455 - - Sunset Hills customer connections (233,455) - - Miscellaneous income 6,201 185 - Net Cash Provided by Noncapital Financing Activities 146,640 29,185 - Cash Flows From Capital and Related Financing Activities Capital contributed from customers 12,315 - - Transfer of Clear Water Utility Fund 104,099 - (104,099) Capital contributed by ARCO 102,498 - - Capital contributed by USDA 82,165 92,967 - Acquisition of capital assets (626,414) (544,858) - Principal paid on long-term debt - - - Interest paid on long-term debt - - - Net Cash Provided (Used) by Capital and Related Financing Activities (325,337) (451,891) (104,099) Net Increase (Decrease) in Cash and Cash Equivalents 425,013 (57,950) (104,099) Cash and Cash Equivalents, July 1 5,398,976 1,821,061 104,099 Cash and Cash Equivalents, June 30 $ 5,823,989 $ 1,763,111 $ - WATER FUND UTILITY ENTERPRISE FUNDS WATER SEWER CLEAR UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2018 2017 $ 2,200,273 $ 1,895,003 (112,512) (90,580) (656,908) (711,858) (462,387) (550,526) 968,466 542,039 15,640 11,695 3,000 6,880 - (101,638) 48,000 48,000 87,500 87,500 15,299 12,836 - 114,800 233,455 931,618 (233,455) (931,618) 6,386 3,489 175,825 183,562 12,315 65,054 - - 102,498 2,736,888 175,132 - (1,171,272) (1,054,905) - (466,881) - (11,596) (881,327) 1,268,560 262,964 1,994,161 7,324,136 5,329,975 $ 7,587,100 $ 7,324,136 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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ (181,054) $ 106,509 $ - Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 722,556 173,615 - Deferred OPEB expense (10,290) 8,325 - Deferred pension expense (28,474) (18,855) - Changes in assets and liabilities: Decrease (increase) in accounts receivable 2,255 (1,977) - Decrease in inventory (5,038) - - Increase in consumer deposits 209 65 - Increase in deferred lease revenue 1,000 - - Increase in accounts payable and accrued liabilities 102,546 97,074 - Net Cash Provided by Operating Activities $ 603,710 $ 364,756 $ - UTILITY ENTERPRISE FUNDS WATER FUND CLEAR UTILITY FUND WATER SEWER UTILITY FUND ---PAGE BREAK--- $ (74,545) $ (420,624) 896,171 888,019 (1,965) - (47,329) (3,773) 278 (11,318) (5,038) (4,512) 274 1,081 1,000 - 199,620 93,166 $ 968,466 $ 542,039 TOTALS 2017 2018 The accompanying notes are an integral part of these financial statements. -30- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -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 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -32- governmental and business-type activities columns are presented on a consolidated basis by 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, 2018 -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, 2018 -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, 2018 -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 Enterprise Funds (Water, Sewer, and Clear Water 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, 2018 -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 Enterprise 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, 2018 -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, 2017 for all Enterprise Funds is $15,925. 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. Enterprise funds account for inventories using the "consumption method" which reclassifies inventories as expenditures when they are used. Enterprise 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, 2018 -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, 2018 -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, 2018 -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. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -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 enterprise 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, 2017 audit report. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -42- Note 2 - Cash and Investments: The City of Yerington maintains all of its cash and investments in bank accounts and time certificates of deposits. The City's cash balance is maintained at Wells Fargo Bank and at Financial Horizons Credit Union, both of which are fully covered by FDIC insurance and collateral pledged to the City of Yerington accounts. The collateral pledged consists of obligations insured or guaranteed by the U.S. Government and its agencies. The following schedule summarizes cash and investments for the City of Yerington at June 30, 2018: Cash and Investment Balance Held By: General Activities: General Fund $ 195,011 Municipal Court Administrative Assessment Fund 17,236 Special Revenue Fund 79,795 Fixed Asset Acquisition Fund 903,706 Total General Activities Cash and Investments $ 1,195,748 Business Type Activities: Water Utility Fund 5,823,989 Sewer Utility Fund 1,763,111 Total Business-Type Activities Cash and Investments 7,587,100 Total Cash and Investments $ 8,782,848 Cash Balances Classified By Depository: Cash on Hand $ 300 Commercial Account: Wells Fargo Bank 8,696,829 Financial Horizons Credit Union 85,719 Subtotal Cash $ 8,782,848 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -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) 335,693 335,693 Uninsured but collateralized by securities held in the name of the City by its agent 8,446,855 8,447,356 $8,782,848 $8,783,049 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 Clear Water System received grant financing totaling $2,760,986 through the Nevada Division of Environmental Protection’s Board of Financing Water Projects for a line extension and new water system. Under the Board for Financing Water Projects Policy, the grantee must guarantee that funds will be available in the future for the replacement of capital improvement projects financed with grant funds based on the life of the projects. The City 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, 2018, cash reserve balances were $194,927 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, 2018 are $5,976 and $1,958 respectively. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -44- Note 3 - Capital Assets: A summary of changes in capital assets is as follows: Balance Balance July 1, 2017 Additions Deletions June 30, 2018 Governmental Activities: Capital assets, not being depreciated: Land and improvements $ 639,763 $ - $ - $ 639,763 Construction in progress 208,853 2,692,921 2,901,774 - Total capital assets, not being depreciated 848,616 2,692,921 2,901,774 639,763 Capital assets being depreciated: Land improvements 2,839,694 2,901,774 - 5,741,468 Buildings and improvements 979,025 - - 979,025 Equipment and vehicles 2,529,208 34,742 - 2,563,950 Infrastructure 5,084,322 - - 5,084,322 Total capital assets being depreciated 11,432,249 2,936,516 - 14,368,765 Less accumulated depreciation for: Land improvements 1,983,592 67,884 - 2,051,476 Buildings and improvements 662,503 22,847 - 685,350 Equipment and vehicles 1,297,404 108,321 - 1,405,725 Infrastructure 4,080,551 84,633 - 4,165,184 Total accumulated depreciation 8,024,050 283,685 - 8,307,735 Total capital assets being depreciated, net 3,408,199 2,652,831 - 6,061,030 Governmental activities capital assets, net $ 4,256,815 $ 5,345,752 $2,901,774 $ 6,700,793 Depreciation expense was charged to the following functions of the City: Governmental Activities: General Government $ 12,154 Judicial 787 Public safety 23,882 Public works 77,853 Culture and recreation 18,017 Infrastructure 150,992 Total Depreciation Expense – Governmental Activities $ 283,685 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -45- Note 3 - Capital Assets (continued): Balance Balance July 1, 2017 Additions Deletions June 30, 2018 Business-type Activities: Capital assets, not being depreciated: Land and improvements $ 317,513 $ - $ - $ 317,513 Construction in progress 425,628 1,352,229 297,749 1,480,108 743,141 1,352,229 297,749 1,797,621 Capital assets being depreciated: Buildings, wells, tanks and distribution system 24,591,078 64,295 - 24,655,373 Treatment plant and collection system 6,032,049 - - 6,032,049 Vehicles 114,567 - - 114,567 Maintenance equipment 3,234,409 - - 3,234,409 Office Equipment 127,926 - - 127,926 Total capital assets being depreciated 34,100,029 64,295 - 34,164,324 Less accumulated depreciation for: Buildings, wells, tanks and distribution system 4,981,786 548,426 - 5,530,211 Treatment plant and collection system 3,215,003 131,285 - 3,346,288 Vehicles 109,100 702 - 109,802 Maintenance equipment 1,224,309 213,542 - 1,437,851 Office Equipment 116,844 2,216 - 119,060 Total accumulated depreciation 9,647,042 896,171 - 10,543,212 Total capital assets being depreciated, net 24,452,987 (831,875) - 23,621,112 Business-type activities capital assets, net $25,196,128 $ 520,354 $ 297,749 $25,418,733 Depreciation expense of $896,171 was charged to the public works - utilities function of the City. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -46- Note 4 – Enterprise Fund Obligations: The following are the long-term obligations of the enterprise funds outstanding at June 30, 2018. Changes in Business-Type Activities Long-term Obligations: Balance Balance July 1, Obligations Obligations June 30, Due Within 2017 Issued Retired 2018 One Year Long-Term Debt: Compensated absences $ 27,791 $ 1,867 $ - $ 29,658 $ - Net Pension Liability 933,830 - 21,241 912,589 OPEB liability 445,578 - 78,888 366,690 - Total Long-Term Obligations $1,407,1995 $ 1,867 $ 100,129 $1,308,937 $ - Note 5 - General Long-Term Debt: Governmental Activities: The estimated value of the accrued compensated absences liability at June 30, 2018 was $39,116. 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 2017 Issued Retired 2018 One Year Long-Term Debt: Compensated absences $ 48,903 $ - $ 9,787 $ 39,116 $ - Net Pension Liability 1,229,391 107,959 - 1,337,350 - OPEB liability 473,605 - 101,552 372,053 - Total Long-Term Obligations $1,751,899 $ 107,959 $ 111,339 $1,748,519 $ - The lawful City general obligation debt limit at June 30, 2018 was $19,257,903 (NRS 266.600), which leaves a statutorily-available borrowing capacity of $19,257,903 since the City does not have any general obligation bonds outstanding. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -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 2017 was $140,270 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 2017 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, 2018 -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, 2018 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. 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, 2018 -49- Note 7 – Defined Benefits Pension Plan (continued): 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 elected the EPC plan for all employees. The City’s contribution to the plan was $303,070 for the year ended June 30, 2018. The respective rates on which contributions for EPC plans were based were 40.5% of covered compensation for police/fire members and 28.0% for other members. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2018, the City reported a liability of $2,249,939 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, 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 participating entities for the year ended June 30, 2017. At June 30, 2017, the City’s proportion of the plan was .01692% while the prior year’s proportionate rate was .01607%. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -50- Note 7 – Defined Benefits Pension Plan (continued): For the year ended June 30, 2017, the City recognized pension expense of $153,640 and $117,519 in its governmental and business-type activities respectively. At June 30, 2018, 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 $ - $ - $ 87,757 $ 59,885 Net difference between projected and actual earnings on pension plan investments 8,683 5,924 - - Changes in assumptions 88,720 60,542 - - Changes in proportion and differences between City contributions and proportionate share of contributions 71,585 48,849 78,421 53,512 $168,988 $115,315 $166,178 $113,397 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: 2019 $ (25,660) $ (17,510) 2020 29,379 20,048 2021 5,843 3,987 2022 (28,040) (19,134) 2023 12,104 8,259 Thereafter 9,184 6,268 $ 2,810 $ 1,918 In addition, $96,403 and $54,390 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, 2019. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -51- Note 7 – Defined Benefits Pension Plan (continued): Actuarial assumptions: The total pension liability at June 30, 2017 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% Payroll growth assumption for future years including inflation Investment rate of return 7.50% Productivity pay increases: 0.5% Plus Salary increases Regular: 4.25% to 9.15% Police/Fire: 4.55% to 13.90% vary by service, including inflation Consumer Price Index 2.75% Other assumptions Same as those used in the June 30, 2017 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, 2017 are included in the following table: Target Long-Term Geometric Asset Class Allocation Expected Real Rate of Return* Domestic Equity 42% 5.50% International Equity 18% 5.75% Domestic Fixed Income 30% 0.25% Private Markets 10% 6.80% *As of June 30, 2017, 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, 2017. 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, 2018 -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%) $3,401,280 $2,249,939 $1,293,733 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, 2016. 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 bythe 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, 2017, 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, 2018 -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 18 activity employees under this plan Total OPEB Liability: Following is the City’s total OPEB liability that was measured as of May 31, 2018, and was determined by an actuarial valuation as of July 1, 2017. $ 738,743 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, 2018 -54- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): Significant methods and assumptions used to value both plans are as follows: Valuation date July 1, 2017 Funding method Entry Age Normal Cost, ((AMM) Asset valuation method N/A - No trust established Discount rate (S & P General 3.27% as of May 31, 2018 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 3.5% (N/A for PEBP) Assumed wage inflation 3.0% (N/A for PEBP) General inflation rate 2.75% Healthcare cost trend rates 7.8% in 2018 to 5% in 2028 and thereafter Mortality: The mortality table reflects recent rates developed by the Society of Actuaries and used the RP-2014 Combined Mortality Table for males and females. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -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, 2017 $ 473,605 $ 445,578 $ 919,183 Changes for the year: Service cost 2,710 2,670 5,380 Interest 14,823 14,609 29,432 Expected verse actual experience (60,435) (59,563) (119,998) Changes in assumptions 9,842 9,701 19,543 Other changes (38,543) (37,988) (76,531) Benefit payments (19,272) (18,994) (38,266) Change in inter-fund proportion (10,677) 10,677 - Net Change (101,552) (78,888) (180,440) Balance at June 30, 2018 $ 372,053 $ 366,690 $ 738,743 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 3.62 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 (2.62%) or 1-percentage-point higher (4.62%) than the current rate: Current 1% Decrease Discount Rate 1% Increase (2.27%) (3.27%) (4.27%) $ 659,613 $ 738,742 $ 834,196 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: Current 1% Decrease Trend Rate 1% Increase $ 832,389 $ 738,742 $ 659,651 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -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, 2018, the City recognized OPEB expense of $9,703. At June 30, 2018, the City reported deferred outflows resources of $37,369 and deferred inflows of resources $189,245 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 $ - $ - $ 51,860 $ 51,113 Changes in assumptions 18,820 18,549 43,450 42,822 $ 18,820 $ 18,549 $ 95,310 $ 93,935 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: 2019 $ 12,646 $ 12,463 2020 12,646 12,463 2021 12,646 12,463 2022 12,646 12,463 2023 12,646 12,463 2024 12,646 12,463 2025 614 608 $ 76,490 $ 75,386 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -57- Note 9- Fund Equity: Net position includes the following restricted amounts at June 30, 2018. United States Department of Agriculture – Rural Development loans require the City to expend specified amounts on the City’s utility line replacement projects before it is eligible to request loan advances. As of June 30, 2018 the following amounts were yet to be expended. Water line project $ 724,088 Sewer line project 373,676 Nevada Division of Environmental Protection grant (AB-198) requires annual contributions of $23,044 to a Capital Reserve account held for future improvements. 194,927 $ 1,292,691 At June 30, 2018, the governmental funds had the following fund balance classified as follows. Part of the General Fund’s year-end balance is represents fuel inventory and therefore non-spendable. $ 14,419 Part of the City Governmental Funds’ year-end balances are committed for: General Fund – Drug forfeiture monies $ 1,897 General Fund – Compensated absences 31,110 Municipal Court Administrative Assessments 17,136 Special Revenue Fund 67,502 Fixed Asset Acquisition Fund 910,636 $ 1,028,281 Part of the General Fund’s year-end balance fund balance been assigned as a financial resource for the subsequent year’s appropriations. $ 10,387 Note 10 – Accounting Changes and Restatements: In June 2015, the Governmental Accounting Standards Board (GASB) issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which changes how governments report other postemployment benefits (OPEB) expense and liability. The provisions of Statement No. 75 became effective for financial statements for fiscal years beginning after June 15, 2017. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -58- Note 10 – Accounting Changes and Restatements (continued): In March 2016, the Governmental Accounting Standards Board (GASB) issued Statement No. 82, Pension Issues, which clarified how governments report pension contributions made on behalf of employees. The provisions of Statement No. 82 became effective for financial statements for fiscal years beginning after June 15, 2016. The District did not implement the Statement until this year because the information to implement the Statement was not available at the time the 2017 report was issued. The June 30, 2017 net position for the District has been restated to reflect the amounts that would have been reported if the provisions of the Statements had been effective at that date. Governmental Business-Type Activities Activities June 30, 2017 net position as previously reported $4,498,770 $31,702,193 Net OPEB liability: Previously reported 170,249 160,174 Restated (473,605) (445,578) Deferred pension outflows: Previously reported (157,268) (119,459) Restated 134,192 101,930 Post measurement date pension contributions: Previously reported (176,721) (120,972) Restated 88,359 60,487 June 30, 2017 net position as restated $4,083,976 $31,338,775 The prior year information presented for comparison purposes has also been restated. Note 11– Tax Abatements: City consolidated tax distributions were reduced by $213 under 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. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -59- 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 2.1%. FY 2018 FY 2018 Over Adjusted Percent Maximum Actual (Under) Base Increase Allowed Revenue Allowable 6-30-17 CPI Index Revenue Received Amount Business Licenses $127,323 X 2.10% = $129,996 $ 92,267 $ (37,731) Note 13– Transfers In and Out: The Clear Water System was previously accounted for in a separate enterprise fund. The City adopted a resolution transferring the operations, including all assets and liabilities, into the Water Utility Fund effective July 1, 2017. The transfer of the net position of the Clear Water Fund is reported as a special item in the respective funds. Transfers – In Transfers – Out Clear Water Fund $ - $ 2,683,287 Water Utility Fund 2,683,287 - $ 2,683,287 $ 2,683,287 Note 14 - 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, 2018, there were funds in the amount of $616,738 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 $74,160 for the benefit of the City. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -60- Note 15 - 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 City pays an annual premium and specific deductibles, as necessary, to the Pool for its general insurance coverage. The Pool is considered a self-sustaining risk pool that will provide property loss coverage for its members up to $200,000 per insured event. The Pool obtains independent coverage for insured events in excess of the $200,000 limit. The Pool also is considered a self-sustaining risk pool that will provide coverage for its members up to $500,000 per casualty insured event. The Pool obtains independent coverage for insured events in excess of the $500,000 limit. 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 16 - 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 $1,476,000 and $1,248,000, respectively. Farr West Engineering was awarded a $350,750 preliminary design and engineering contract with cost incurred at June 30, 2018 of $151,972 leaving a remaining contract balance of $198,778. These two USDA Rural Development grant awards provide for 100% funding of said project costs with construction anticipated in the fall of 2019. 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. The estimated total cost of the City Water and Sewer Line Replacement Project is $35.8 million dollars. 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 $741,000 in grant funding. The terms of the loan require payments of both interest and principal at1.375% over a forty year period. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -61- Note 16 - Major Commitments (continued): 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 rate increases, effective July 1, 2017, for both water and sewer customers. The water rate increased $2.38 from $29.00 to $31.38 and the sewer rate increased $3.79 from $28.00 to $31.79. Farr West Engineering was awarded a $5,592,136 preliminary design and engineering contract with cost incurred at June 30, 2018 of $1,166,235 leaving a remaining contract balance of $4,425,901. Before the City is eligible to begin drawing USDA Rural Development Loan funding, the City first must incur initial costs of $1,311,000 and $953,000 on the City Water and City Sewer projects respectively. As of June 30, 2018, the City has incurred preliminary engineering cost of $724,088 and $373,676 for the City Water and City Sewer projects respectively. 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 - 741,000 1,476,000 1,248,000 City contribution 1,311,000 953,000 - - Total estimated cost $18,564,000 $17,271,000 $ 1,476,000 $ 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, 2018. However, the City believes it has adequate insurance to cover any potential judgments should a judgement ever arise. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 -62- Note 18 - Subsequent Event: On September 24, 2018, the City awarded a $357,420 contract to Clean Harbors Environmental Services for sewer pond sludge removal. Management has evaluated subsequent events through November 29, 2018, 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 98 except for expenditures exceeded budgeted appropriations in the General Fund government function and Special Revenue Fund general government function. ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- 2018 City of Yerington Health Benefits Plan Total OPEB Liability Service cost 5,380 $ Interest 29,432 Difference between expected and actual experience (119,998) Change in assumptions 19,543 Benefit payents (38,266) Other changes (76,531) Net Change in total OPEB Liability (180,440) Total Liability, July 1 919,183 Total Liability, June 30 738,743 $ Covered employee payroll 880,285 $ Total liability as a percentage of covered-employee payroll 83.9% 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% CITY OF YERINGTON, NEVADA SCHEDULE OF CHANGES IN TOTAL OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY AND RELATED RATIOS REQUIRED SUPPLEMENTARY INFORMATION -63- ---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, 2018 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 0.01692% 2,249,939 $ 878,891 $ 256.0% 74.4% 151,535 $ 151,535 - $ 880,285 $ 17.2% -64- ---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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Revenues Taxes County capital project tax $ 500 $ 500 $ - $ (500) $ 36 Other Local Revenues Interest income 750 750 637 (113) 730 Total Other Revenues 750 750 637 (113) 730 Intergovernmental Nevada O.H.V. Program - 34,742 34,742 - - FAA grant 3,456,750 3,456,750 2,541,028 (915,722) 183,197 Total Intergovernmental Revenues 3,456,750 3,491,492 2,575,770 (915,722) 183,197 Total Revenues 3,458,000 3,492,742 2,576,407 (916,335) 183,963 Expenditures General Government Capital outlay, City Hall 450,000 450,000 - 450,000 - Capital outlay 40,000 40,000 - 40,000 - Total General Government 490,000 490,000 - 490,000 - Public Safety Capital outlay, vehicle - 34,742 34,742 - 6,007 Capital outlay, safety complex - - - - 9,819 Capital outlay, radios - - - - 28,250 Total Public Safety - 34,742 34,742 - 44,076 Public Works Capital outlay, airport 3,456,750 3,456,750 2,692,921 763,829 208,853 Culture and Recreation Capital Outlay, mower - - - - 23,004 Total Culture and Recreation - - - - 23,004 Total Expenditures 3,946,750 3,981,492 2,727,663 1,253,829 275,933 BUDGETED AMOUNT ORIGINAL -65- ---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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Excess (Deficiency) of Revenues over Expenditures $ (488,750) $ (488,750) $ (151,256) $ 337,494 $ (91,970) Other Financing Sources Transfers in - General Fund - - - - 52,442 Excess of Revenues and Other Financing Sources, over Expenditures (488,750) (488,750) (151,256) 337,494 (39,528) Fund Balance, July 1 985,101 985,101 1,061,892 76,791 1,101,420 Fund Balance, June 30 $ 496,351 $ 496,351 $ 910,636 $ 414,285 $ 1,061,892 BUDGETED AMOUNT ORIGINAL -66- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND 2018 2017 Current Assets Unrestricted Cash $ 5,623,086 $ 5,325,435 Accounts receivable, net of allowance for doubtful accounts 152,870 147,482 Due from other governments 9,468 52,168 Other receivables - 62,484 Inventory of materials and supplies 23,136 18,098 Advance to Clear Water Fund - 187,037 Restricted Cash Customer deposits 5,976 5,767 AB 198 capital reserve 194,927 67,774 Total Current Assets 6,009,463 5,866,245 Property, Plant And Equipment Land & water rights 307,393 307,393 Construction in progress 809,803 300,180 Building, wells, tanks and distribution system 24,655,373 21,128,558 Vehicles 68,558 68,558 Maintenance equipment 2,810,777 2,810,777 Office equipment 82,846 82,846 28,734,750 24,698,312 Accumulated depreciation (6,810,387) (5,385,646) Total Capital Assets 21,924,363 19,312,666 Total Assets 27,933,826 25,178,911 Deferred Outflow of Resources Post valuation employer contributions 30,255 34,792 Deferred OPEB outflow or resources 10,265 - Deferred pension outflow of resources 66,549 59,055 Total Deferred Inflows of Resources 107,069 93,847 SCHEDULE OF NET POSITION JUNE 30, 2018 (With Comparative Totals for June 30, 2017) ---PAGE BREAK--- 2018 2017 Liabilities Current liabilities payable from unrestricted assets: Accounts payable $ 164,573 $ 60,388 Construction payable - 52,496 Accrued salaries and benefits 23,147 18,175 Due to other governments 11,506 16,977 Current liabilities payable from restricted assets: Customer deposits 5,976 5,767 Total Current Liabilities 205,202 153,803 Long-term liabilities: Accrued compensated absences 16,807 16,194 Accrued OPEB payable 202,928 254,937 Net pension liability 526,661 541,029 Total Long-term Liabilities 746,396 812,160 Total Liabilities 951,598 965,963 Deferred Inflow of Resources Unearned revenue 1,000 - Deferred OPEB inflows 51,984 - Deferred pension inflows 65,442 76,591 Total Deferrred Inflow of Resources 118,426 76,591 Net Position Net investment in capital assets 21,924,363 19,312,666 Restricted for AB 198 capital reserves 194,927 67,774 Restricted by debt covenant 724,088 - Unrestricted (Restated) 4,127,493 4,849,764 Total Net Position $ 26,970,871 $ 24,230,204 -67- ---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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Operating Revenues Water use fees $ 1,289,779 $ 1,289,779 $ 1,240,452 $ (49,327) $ 1,055,569 Meter replacement / Other charges 22,505 22,505 26,989 4,484 25,075 Less bad debts - - - - (4,834) Total Operating Revenues 1,312,284 1,312,284 1,267,441 (44,843) 1,075,810 Operating Expenses Salaries and wages 280,348 280,348 238,646 41,702 274,256 Employee benefits 149,533 149,533 90,441 59,092 135,306 Services and supplies 383,129 383,129 396,852 (13,723) 396,194 Depreciation 778,635 778,635 722,556 56,079 630,412 Total Operating Expenses 1,591,645 1,591,645 1,448,495 143,150 1,436,168 Operating Income (Loss) (279,361) (279,361) (181,054) 98,307 (360,358) Nonoperating Revenues (Expenses) Late fees 4,000 4,000 3,476 (524) 1,929 Administrative fee 12,100 12,100 15,299 3,199 12,461 Willow Creek agreement 19,000 19,000 19,000 - 19,000 Water tank lease 12,320 12,320 15,640 3,320 11,695 Water rights revenue 1,000 1,000 3,000 2,000 6,880 Nevada Copper reservation fee 87,500 87,500 87,500 - 87,500 CDBG grant - water resource project - - - - 101,595 CDBG grant - water resource project - - - - (101,638) ARCO - customer hookup revenue - - 233,455 233,455 931,618 ARCO - customer hookup expenses - - (233,455) (233,455) (931,618) Miscellaneous income 1,200 1,200 2,725 1,525 - Total Nonoperating Revenues (expenses) 137,120 137,120 146,640 9,520 139,422 Income (loss) before contributions (142,241) (142,241) (34,414) 107,827 (220,936) Capital Contributions ARCO - Sunset Hills Project - - 40,014 40,014 1,276,197 U.S.D.A. grant - - 39,465 39,465 42,803 Connect fees - - 12,315 12,315 38,908 Total Capital Contributions - - 91,794 91,794 1,357,908 Special Items Transfer of Clear Water Fund - - 2,683,287 (2,683,287) - Change in Net Position $ (142,241) $ (142,241) 2,740,667 $ 2,882,908 1,136,972 Net Position, July 1 24,230,204 23,093,232 Net Position, June 30 $ 26,970,871 $ 24,230,204 ORIGINAL BUDGETED AMOUNT -68- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Cash Flows From Operating Activities Receipts from customers $ 1,312,284 $ 1,312,284 $ 1,331,822 $ 19,538 $ 1,127,569 Payments to Lyon County (55,000) (55,000) (66,388) (11,388) (54,797) Payments of personnel costs (429,881) (429,881) (363,870) 66,011 (405,245) Payments for service and supplies (383,129) (383,129) (297,854) 85,275 (354,781) Net Cash Provided by Operating Activities 444,274 444,274 603,710 159,436 312,746 Cash Flows From Noncapital Financing Activities Water tank lease income 12,320 12,320 15,640 3,320 11,695 Water right revenue 1,000 1,000 3,000 2,000 6,880 Willowcreek revenue 19,000 19,000 19,000 - 19,000 Nevada Copper reservation fee 87,500 87,500 87,500 - 87,500 Administrative fees 12,100 12,100 15,299 3,199 12,461 CDBG grant - water resource project costs - - - - (101,638) CDBG grant revenue - - - - 114,800 ARCO reimbursements - - 233,455 233,455 931,618 Sunset Hills customer connections - - (233,455) (233,455) (931,618) Miscellaneous income 1,200 1,200 6,201 5,001 1,929 Net Cash Provided Non-Capital Financing Activities 133,120 133,120 146,640 13,520 152,627 Cash Flows From Capital And Related Financing Activities Advance to Clear Water Fund - - - - (187,037) Transfer of Clear Water Utility Fund - - 104,099 104,099 - Capital contributions by customers 8,900 8,900 12,315 3,415 38,908 Capital contributions by ARCO - - 102,498 102,498 2,736,888 Capital contributions by USDA 17,253,000 17,253,000 82,165 (17,170,835) - Acquisition of capital assets (17,253,000) (17,253,000) (626,414) 16,626,586 (794,838) Net Cash (Used) by Capital and Related Financing Activities 8,900 8,900 (325,337) (334,237) 1,793,921 Net Increase (Decrease) In Cash and Cash Equivalents 586,294 586,294 425,013 (161,281) 2,259,294 Cash and Cash Equivalents, July 1 4,632,374 4,632,374 5,398,976 766,602 3,139,682 Cash and Cash Equivalents, June 30 $ 5,218,668 $ 5,218,668 $ 5,823,989 $ 605,321 $ 5,398,976 ORIGINAL BUDGETED AMOUNT -69- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) ACTUAL VARIANCE 2017 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ (279,361) $ (279,361) $ (181,054) $ 98,307 $ (358,509) Adjustments to reconcile operating income to net cash provided by operating activities Depreciation 778,635 778,635 722,556 (56,079) 630,412 Net change deferred OPEB expense - (10,290) (10,290) - Net change deferred pension expense - (28,474) (28,474) (2,681) Changes in assets and liabilities Decrease (increase) in accounts receivable (55,000) (55,000) 2,255 57,255 (8,446) Decrease (increase) in inventory - - (5,038) (5,038) (4,512) Increase (decrease) in consumer deposits - - 209 209 826 Increase in deferred lease revenue - - 1,000 1,000 - (Decrease) increase in accounts payable and accrued liabilities - - 102,546 102,546 55,656 Net Cash Provided by Operating Activities $ 444,274 $ 444,274 $ 603,710 $ 159,436 $ 312,746 BUDGETED AMOUNT ORIGINAL FINAL -70- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF NET POSITION JUNE 30, 2018 (With Comparative Totals for June 30, 2017) 2018 2017 Current Assets Unrestricted Cash $ 1,761,153 $ 1,819,168 Accounts receivable, net of allowance for doubtful accounts of $420 and $420 respectively 81,283 72,237 Grant Receivable - USDA 9,365 58,046 Other receivables - 7,069 Restricted Cash Customer deposits 1,958 1,893 Total Current Assets 1,853,759 1,958,413 Property, Plant And Equipment Land 10,120 10,120 Treatment plant and collection systems 6,032,049 6,032,049 Vehicles 46,009 46,009 Maintenance equipment 423,632 423,632 Office equipment 45,080 45,080 Construction in progress 670,305 125,448 7,227,195 6,682,338 Accumulated depreciation (3,732,825) (3,559,211) Total Capital Assets 3,494,370 3,123,127 Total Assets 5,348,129 5,081,540 Deferred Outflow of Resources Post valuation employer contributions 24,135 25,696 Deferred OPEB inflow or resources 8,284 - Deferred pension inflow of resources 48,766 42,875 Total Deferred Outflow of Resources 81,185 68,571 ---PAGE BREAK--- 2018 2017 Liabilities Current liabilities payable from unrestricted assets: Accounts payable $ 143,203 $ 46,831 Accrued salaries and benefits 18,924 14,824 Due to other governments 7,518 12,226 Current liabilities payable from restricted assets: Customer deposits 1,958 1,893 Total Current Liabilities 171,603 75,774 Long-term liabilities: Accrued compensated absences 12,851 11,541 Accrued OPEB payable 163,762 189,104 Net pension liability 385,928 392,801 562,541 593,446 Total Liabilities 734,144 669,220 Deferred Inflow of Resources Deferred OPEB inflows 41,951 - Deferred pension inflows 47,955 55,607 Total Deferred Inflow of Resources 89,906 55,607 Net Position Net investment in capital assets 3,494,370 3,123,127 Restricted by debt covenant 373,676 - Unrestricted 737,218 1,302,157 Total Net Position $ 4,605,264 $ 4,425,284 -71- ---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, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Operating Revenues Sewer use fees $ 837,639 $ 837,639 $ 828,947 $ (8,692) $ 680,330 Bad debts - - - - (9,740) $ 837,639 $ 837,639 $ 828,947 $ (8,692) $ 670,590 Operating Expenses Salaries and wages 219,884 219,884 193,293 26,591 204,045 Employee benefits 114,377 114,377 94,625 19,752 104,719 Services and supplies 223,918 223,918 260,905 (36,987) 228,140 Depreciation 180,000 180,000 173,615 6,385 163,669 Total Operating Expenses 738,179 738,179 722,438 15,741 700,573 Operating Income (Loss) 99,460 99,460 106,509 7,049 (29,983) Nonoperating Revenues (Expenses) Late fees - - 185 185 1,560 Willowcreek agreement 29,000 29,000 29,000 - 29,000 Total Nonoperating Revenues (Expenses) 29,000 29,000 29,185 185 30,560 Income (Loss) before contributions 128,460 128,460 135,694 7,234 577 Capital Contributions U.S.D.A. grant - - 44,286 44,286 48,681 Connect fees - - - - 26,146 Total Capital Contributions - - 44,286 44,286 74,827 Change in Net Position $ 128,460 $ 128,460 179,980 $ 95,806 75,404 Net Position, July1 4,425,284 4,349,880 Net Position, June 30 $ 4,605,264 4,425,284 ORIGINAL BUDGET AMOUNT -72- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Cash Flows From Operating Activities Receipts from customers $ 837,639 $ 837,639 $ 868,451 $ 30,812 $ 702,828 Payments to Lyon County (38,000) (38,000) (46,124) (8,124) (35,783) Payments of personnel costs (334,261) (334,261) (293,038) 41,223 (304,720) Payments for service and supplies (223,918) (223,918) (164,533) 59,385 (194,007) Net Cash Provided by Operating Activities 241,460 241,460 364,756 123,296 168,318 Cash Flows From Noncapital Financing Activities Miscellaneous income - - 185 185 1,560 Willowcreek agreement 29,000 29,000 29,000 - 29,000 Net Cash Provided by Non-Capital Financing Activities 29,000 29,000 29,185 185 30,560 Cash Flows From Capital And Related Financing Activities Capital contributions by customers 20,000 20,000 - (20,000) 26,146 Captial contributions by grantors 741,000 741,000 - (741,000) - Captial contributions from USDA (Tribe) 1,248,000 1,248,000 92,967 (1,155,033) - Captial contributions from USDA (City) 15,577,000 15,577,000 - (15,577,000) - Acquisition of capital assets (17,566,000) (17,566,000) (544,858) 17,021,142 (260,067) Net Cash (Used) by Capital and Related Financing Activities 20,000 20,000 (451,891) (471,891) (233,921) Net Increase (Decrease) in Cash and Cash Equivalents 290,460 290,460 (57,950) (348,410) (35,043) Cash and Cash Equivalents, July 1 1,721,085 1,721,085 1,821,061 99,976 1,856,104 Cash and Cash Equivalents, June 30 $ 2,011,545 $ 2,011,545 $ 1,763,111 $ (248,434) $ 1,821,061 ORIGINAL BUDGETED AMOUNT -73- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) ACTUAL VARIANCE 2017 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ 99,460 $ 99,460 $ 106,509 $ 7,049 $ (28,332) Adjustments to reconcile operating income to net cash provided by operating activities Depreciation 180,000 180,000 173,615 (6,385) 163,669 Net deferred OPEB expense - - 8,325 8,325 - Net deferred pension expense - - (18,855) (18,855) (1,092) Changes in assets and liabilities Decrease (increase) in accounts receivable (38,000) (38,000) (1,977) 36,023 (3,799) Increase (decrease) in consumer deposits - - 65 65 255 (Decrease) increase in accounts payable and accrued liabilities - - 97,074 97,074 37,617 Net Cash Provided by Operating Activities $ 241,460 $ 241,460 $ 364,756 $ 123,296 $ 168,318 BUDGETED AMOUNT ORIGINAL FINAL -74- ---PAGE BREAK--- 2018 2017 Current Assets Unrestricted Accounts receivable $ - $ 7,643 Restricted Cash AB 198 capital reserve - 104,099 Total Current Assets - 111,742 Property, Plant And Equipment Land & water rights - 295,900 Building, wells, tanks and distribution - 3,166,620 - 3,462,520 Accumulated depreciation - (702,185) Total Capital Assets - 2,760,335 Total Assets - 2,872,077 CITY OF YERINGTON, NEVADA CLEAR WATER UTILITY FUND SCHEDULE OF NET POSITION JUNE 30, 2018 (With Comparative Totals for June 30, 2017) ---PAGE BREAK--- 2018 2017 Liabilities Current liabilities payable from unrestricted assets: Accounts payable $ - $ 149 Accrued wages and benefits - 11 Advance from Water Utility Fund - 187,037 Total Current Liabilities - 187,197 Long-term liabilities: Accrued compensated absences - 56 Accrued OPEB payable - 1,537 Total Long-term Liabilities - 1,593 Total Liabilities - 188,790 Net Position Net investment in capital assets - 2,760,335 Restricted for reserves - 104,099 Unrestricted - (181,147) Total Net Position $ - $ 2,683,287 -75- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA CLEAR WATER UTILITY FUND SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) ACTUAL VARIANCE Operating Revenues Water use fees $ - $ - $ - $ - $ 63,949 Water meter replacement/Other Charges - - - - 1,025 Bad debts - - - - (1,295) Total Operating Revenues - - - - 63,679 Operating Expenses Salaries and wages - - - - 1,168 Employee benefits - - - - 627 Services and supplies - - - - 1,729 Depreciation - - - - 93,938 Total Operating Expenses - - - - 97,462 Operating Income (loss) - - - - (33,783) Nonoperating Revenues (Expenses) Administrative fees/ Other Income - - - - 375 Interest expense - - - - (11,378) Total Nonoperating Revenues (Expenses) - - - - (11,003) Special Items Transfer of fund operations - - (2,683,287) (2,683,287) - Change in Net Position $ - $ - (2,683,287) $ (2,683,287) (44,786) Net Position, July 1 2,683,287 2,728,073 Net Position, June 30 $ - $ 2,683,287 2017 FINAL ORIGINAL BUDGETED AMOUNT -76- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA CLEAR WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) FINAL ACTUAL VARIANCE 2017 Cash Flows From Operating Activities Receipts from customers $ - $ - $ - $ - $ 64,606 Payments of personnel costs - - - - (1,893) Payments for service and supplies - - - - (1,738) Net Cash Provided by Operating Activities - - - - 60,975 Cash Flows From Noncapital Financing Activities Advance from Water Utility Fund - - - - - Administration fees - - - - 375 Net Cash Provided (Used) by Non-Capital Financing Activities - - - - 375 Cash Flows From Capital And Related Financing Activities Transfer to Water Utility Fund - - (104,099) (104,099) - Advance from Water Utility Fund - - - - 187,037 Principal paid on long-term debt - - - - (466,881) Interest paid on long-term debt - - - - (11,596) Net Cash Provided (Used) by Capital and Related Financing Activities - - (104,099) (104,099) (291,440) Cash Flows From Investing Activities Interest income - - - - - Net Increase In Cash and Cash Equivalents - - (104,099) (104,099) (230,090) Cash And Cash Equivalents, July 1 - - 104,099 104,099 334,189 Cash And Cash Equivalents, June 30 $ - $ - $ - $ - $ 104,099 BUDGETED AMOUNT ORIGINAL -77- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA CLEAR WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2018 (With Comparative Totals for the Year Ended June 30, 2017) ACTUAL VARIANCE 2017 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ - $ - $ - $ - $ (33,783) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation - - - - 93,938 Changes in assets and liabilities Decrease (increase) in accounts receivable - - - - 927 (Decrease) increase in accounts payable and accrued liabilities - - - - (107) Net Cash Provided by Operating Activities $ - $ - $ - $ - $ 60,975 BUDGETED AMOUNT ORIGINAL FINAL -78- ---PAGE BREAK--- FISCAL YEAR 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 2000-01 .3407 38,116,242 1999-00 .3236 37,951,799 1998-99 .2944 36,990,742 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 -79- ---PAGE BREAK--- Other Fiscal Year Licenses and Intergovernmental Charges For Other Financing Ending June 30 Taxes Permits Revenues Services Revenues Sources Totals 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 2011 224,021 284,437 1,213,410 207,546 57,512 - 1,986,926 2010 245,629 291,418 1,492,058 204,772 41,249 - 2,275,126 2009 257,917 293,438 1,047,513 185,083 53,925 - 1,837,876 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) -80- ---PAGE BREAK--- Fiscal Year General Public Public Culture and Debt Ending June 30 Government Judicial Safety Works Recreation Health Service Totals 2017 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 2011 242,827 48,938 791,991 900,016 59,046 13,518 - 2,056,336 2010 297,916 49,934 883,107 1,027,487 58,669 14,951 49,655 2,381,719 2009 242,929 50,202 762,346 639,472 52,425 11,505 61,913 1,820,792 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) -81- ---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 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Series1 4,531,416 4,575,697 4,430,364 4,911,928 4,781,104 3,763,251 4,887,314 4,666,325 4,083,977 6,262,871 Series2 12,603,523 19,165,004 22,304,972 23,131,459 23,067,097 22,262,413 23,725,350 30,531,103 31,338,775 31,576,135 -82- ---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 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 663,916 594,279 530,119 540,062 679,621 847,774 1,750,460 1,671,302 1,525,272 1,280,684 Years -83- ---PAGE BREAK--- (Unaudited) CITY OF YERINGTON, NEVADA GENERAL FUND - BUDGET BASIS FUND BALANCE - LAST TEN YEARS $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 487,083 370,127 245,208 242,728 384,792 564,093 546,656 460,422 360,061 254,300 Years -84- ---PAGE BREAK--- (Unaudited) REVENUES, EXPENDITURES, AND FUND BALANCE - LAST TEN YEARS GENERAL FUND - BUDGET BASIS CITY OF YERINGTON, NEVADA $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 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Years Revenues Expenses Fund Balance -85- ---PAGE BREAK--- GENERAL FUND - BUDGET BASIS REVENUES BY SOURCE (Unaudited) FOR THE YEAR ENDED JUNE 30, 2018 CITY OF YERINGTON, NEVADA Taxes 16.7% License and permits 19.5% Intergovernmental revenues 53.8% Charges for services 6.5% Fines and forfeits 3.1% Other revenues 0.4% -86- ---PAGE BREAK--- GENERAL FUND - BUDGET BASIS EXPENDITURES BY FUNCTION FOR THE YEAR ENDED JUNE 30, 2018 (Unaudited) CITY OF YERINGTON, NEVADA General Government 16.6% Public Works 14.8% Public Safety 59.0% Judicial 5.4% Culture & Recreation 3.1% Health 1.1% -87- ---PAGE BREAK--- (Unaudited) FOR THE YEAR ENDED JUNE 30, 2018 CITY OF YERINGTON, NEVADA GENERAL FUND - BUDGET BASIS EXPENDITURES BY OBJECT Salaries 38.0% Employee Benefits 20.1% Services & Supplies 41.9% Capital Outlay 0.0% -88- ---PAGE BREAK--- INDEP REPOR To the H City of We have America issued by activities, year ende the City o 29, 2018. Internal In plann Yeringto audit pro opinions effectiven an opinio A deficie managem prevent, deficienc possibilit or detect combinat importan Our cons of this se material deficienc not ident However 30 PENDENT A RTING AND OF FINAN Honorable Ma f Yerington, audited, in a and the stand y the Comptr business-typ ed June 30, 20 of Yerington Control Ov ing and per n, Nevada’s ocedures tha on the fina ness of the C on on the eff ency in inter ment or emp or detect a cy, or a com ty that a mat ted and cor tion of defic nt enough to sideration of ection and w weaknesses cies may exi tify any def r, material w Broadway Av AUDITOR’S D ON COMP NCIAL STAT GOVE ayor and Cit , Nevada accordance w dards applica roller General pe activities, 018, and the ’s basic finan ver Financia rforming our s internal con at are appro ancial statem City of Yerin fectiveness o rnal control ployees, in and correct, mbination of terial misstat rrected on a ciencies, in i merit attenti f internal con was not desig or significa ist that were ficiencies in weaknesses m venue, Yeringt A Profess S REPORT O PLIANCE A TEMENTS P ERNMENT A ty Council with the auditi able to financ l of the Unit each major f related notes ncial statemen al Reportin r audit of th ntrol over fi opriate in th ments, but no ngton, Nevad of the City of exists when the normal misstateme deficiencies tement of th a timely ba internal cont ion by those ntrol was for gned to iden ant deficienc not identifi n internal co may exist tha ton, NV 89447 sional Corpora -89- ON INTERN AND OTHER PERFORME AUDITING ing standards cial audits co ted States, th fund of the C s to the financ nts and have g he financial inancial repo e circumstan ot for the p da’s internal f Yerington, n the design course of p ents on a ti s, in internal he entity’s fin sis. A signi trol that is le charged wit r the limited ntify all defic ies and there ied. Given th ontrol that w at have not b │ 775-463- ation NAL CONT R MATTER ED IN ACC STANDARD s generally ac ontained in G he financial s City of Yering cial statemen e issued our r l statements orting (intern ances for the purpose of e l control. Ac Nevada’s in or operation performing imely basis. l control, su nancial state ificant defic ess severe th th governanc d purpose de ciencies in i efore, mater hese limitati we consider been identifie -4100 │ 775 TROL OVER RS BASED O CORDANCE DS ccepted in th Government A statements of gton, Nevada nts, which col report thereon , we consid rnal control) e purpose o expressing an ccordingly, w nternal contr n of a contro their assign . A materia uch that ther ements will n ciency is a han a materi ce. escribed in th internal cont rial weaknes ions, during to be mate ed. 5-463-3334 │ S R FINANCIA ON AN AUD E WITH he United Sta Auditing Stan f the governm a, as of and fo llectively com n dated Nove dered the Ci to determin of expressing n opinion o we do not ex rol. ol does not a ned function al weakness re is a reason not be preve deficiency, ial weaknes he first parag trol that mig sses or signif our audit w erial weakne Sciarani.com AL DIT ates of ndards mental for the mprise ember ity of ne the g our on the xpress allow ns, to is a nable ented, or a s, yet graph ght be ficant we did esses. ---PAGE BREAK--- Complia As part financial certain p which co amounts. objective tests disc under Go Purpose The purp complianc entity’s in accordanc complianc Yeringto Novembe ance and Ot of obtainin statements provisions o ould have a . However e of our aud closed no in overnment A of this Rep pose of this ce and the re nternal contro ce with Gov ce. Accordin n, Nevada er 29, 2018 ther Matters ng reasonabl are free of m f laws, regu a direct and , providing dit, and acco nstances of n uditing Stan port report is so esults of that ol or on com vernment Au ngly, this com s le assurance material miss ulations, con d material e an opinion ordingly, we noncomplian ndards. olely to desc t testing, and mpliance. T diting Stand mmunication i -90- e about whe statement, w ntracts and effect on th on complia do not expr nce or other ribe the sco d not to prov This report is dards in con is not suitable ether the C we performed grant agree he determina ance with t ress such an matters tha ope of our te vide an opini s an integral nsidering the e for any othe City of Yeri d tests of its ements, non ation of fin those provis n opinion. T at are require esting of int ion on the ef part of an a entity’s int er purpose. ington, Nev compliance ncompliance nancial state sions was no The results o ed to be rep ternal contro ffectiveness o audit perform ternal contro vada’s e with with ement ot an of our ported ol and of the med in ol and ---PAGE BREAK--- R W d C Y t M M c A O f c U S U A G n m e o W f N IN PROG To the Hon City of Y Report on C We have aud described in City of Yer Yerington, N the accompa Managemen Management conditions of Auditor’s Re Our responsi federal progr conducted o United State Standards, is U.S. Code of Audit Requi Guidance re noncomplian material effe evidence abo other proced We believe federal prog Nevada’s com 30 Broa NDEPENDEN GRAM AND norable May Yerington, N Compliance dited City o the OMB C rington, Nev Nevada’s maj nying sched nt’s Respons t is responsib f its federal a esponsibility ibility is to e rams based ur audit of s of America ssued by the f Federal Re irements of quire that w nce with the ect on a ma out City of Y dures as we c that our aud gram. Howev mpliance. adway Avenu NT AUDITO D ON INTE yor and City Nevada of Each Ma of Yerington Compliance vada’s majo ajor federal p dule of findin ibility ble for comp awards appli y express an op on our aud compliance a; the standa e Comptrolle egulations Pa f Federal A we plan and types of com ajor federal Yerington, N considered ne dit provides ver, our aud ue, Yerington A Profess OR’S REPO ERNAL CON UNIFOR Council ajor Federa n, Nevada’s Supplement or federal p programs are ngs and ques pliance with icable to its pinion on co dit of the typ e in accorda ards applicab er General of art 200, Unif Awards (Un d perform th mpliance req program oc Nevada’s co ecessary in t a reasonabl dit does not n, NV 89447│ -91- sional Corporat ORT ON COM NTROL OVE RM GUIDAN al Program compliance that could h programs fo e identified in stioned costs federal statu federal prog ompliance fo pes of comp ance with au ble to financ f the United iform Admin iform Guid he audit to quirements r ccurred. An ompliance w the circumst le basis for t provide a │ 775-463 tion MPLIANCE ER COMPL NCE with the ty have a direc or the year n the summa s. ues, regulatio grams. or each of Ci pliance requ uditing stan cial audits co States; and nistrative Re dance). Tho obtain reaso referred to ab audit inclu with those req tances. our opinion legal deter 3-4100 │ 7 E FOR EAC LIANCE REQ ypes of comp ct and mater ended June ary of audito ons, and the ity of Yering uirements re ndards gener ontained in G the audit req quirements, se standard onable assur bove that co udes examin quirements a n on compli rmination of [PHONE REDACTED] H MAJOR QUIRED BY pliance requ rial effect on e 30, 2018. or’s results s terms and gton, Nevada ferred to ab rally accepte Government quirements o Cost Princip ds and the rance about uld have a d ning, on a te and perform iance for ea f City of Y │ Sciarani.c Y uirements n each of City of section of a’s major bove. We ed in the Auditing of Title 2 iples, and Uniform whether direct and est basis, ming such ch major Yerington, com ---PAGE BREAK--- O I c m R M i p c e c a n A c A c f f d r p i o m c O p c d m T t t Y N Opinion on E In our opin compliance r major federa Report on In Management nternal cont planning and control over each major circumstance and to test an not for the p Accordingly control over A deficiency compliance d functions, to federal prog deficiency, o reasonable p program will internal con over complia material wea charged with Our consider paragraph of compliance deficiencies material wea The purpose testing of int the Uniform Yerington, N November 29 Each Major ion, City o requirement al programs f nternal Con t of City of trol over co d performing compliance federal pr es for the pu nd report on purpose of e , we do not compliance. y in internal does not allo o prevent, or gram on a t or combinat possibility th l not be prev trol over co ance with a akness in int h governance ration of inte f this sectio that might in internal c aknesses may e of this rep ternal contro Guidance. A Nevada 9, 2018 r Federal Pr f Yerington ts referred to for the year e ntrol Over C f Yerington, ompliance w g our audit o e with the ty ogram to d urpose of ex internal con expressing an express an o . control ove ow managem detect and timely basis tion of defic hat material vented, or d ompliance is type of com ternal contro e. ernal contro on and was be material control over y exist that h ort on intern ol over comp Accordingly, rogram n, Nevada, o above that ended June 3 Compliance Nevada, is with the typ of complian ypes of requi determine t xpressing an ntrol over co n opinion on opinion on th er complianc ment or empl correct, non s. A materia ciencies, in noncomplian detected and a deficienc mpliance req ol over comp l over comp not designe weaknesses compliance have not bee nal control pliance and , this report -92- complied, i t could have 30, 2018. e responsible pes of comp ce, we cons irements tha the auditing opinion on ompliance in n the effecti he effectiven ce exists wh loyees, in the ncompliance al weakness internal con nce with a t corrected, o cy, or a com uirement of pliance, yet i pliance was f ed to identi s or signific e that we con n identified. over compli the results is not suitab in all mater e a direct an e for establi pliance requ sidered City at could hav g procedure compliance n accordance iveness of in ness of City hen the desig e normal cou with a type s in interna ntrol over c type of com on a timely b mbination of f a federal pr important en for the limit ify all defic cant deficie nsider to be . iance is sole of that testin ble for any ot rial respects nd material ishing and m uirements re of Yeringto ve a direct an es that are e for each m e with the Un nternal contr y of Yeringto gn or operati urse of perfo e of complian al control ov compliance, mpliance requ basis. A sign f deficiencie rogram that nough to me ted purpose ciencies in i encies. We d e material w ely to descr ng based on ther purpose s, with the effect on ea maintaining eferred to a on, Nevada’s nd material appropriate major federal niform Guid rol over com on, Nevada’s ion of a con orming their nce requirem ver complia such that th uirement of nificant defi s, in interna is less seve erit attention described in internal con did not iden eaknesses. H ribe the scop n the require e. types of ach of its effective above. In s internal effect on e in the program dance, but mpliance. s internal ntrol over assigned ment of a ance is a here is a a federal ciency in al control ere than a by those n the first ntrol over ntify any However, pe of our ements of ---PAGE BREAK--- Pass-Through Federal Entity Federal Grantor/Pass-through Grantor/ CFDA Identifying Federal Program or Cluster Title Number Number Expenditures U.S. Department of Agriculture: Direct Programs: Yerington Colony Water Line Grant 10.760 N/A $ 29,362 Yerington Colony Sewer Line Grant 10.760 N/A 34,286 Total U.S. Department of Agriculture $ 63,648 U.S. Department of Housing and Urban Development: Pass-through program from Nevada Governor's Office of Economic Development: Community Development Block Grant - Pumpkin Hollow Complex Feasibility Study 14.228 17/PCB/07 7,990 U.S. Department of Transportation: Federal Aviation Administration Direct Program: Airport Improvement Program 20.106 3-32-0022-016-2016 15,339 Airport Improvement Program 20.106 3-32-0022-017-2017 2,509,476 Total U.S. Department of Transportation 2,524,815 Total Expenditures of Federal Awards $ 2,596,453 CITY OF YERINGTON, NEVADA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2018 -93- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2018 -94- Note A- Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of City of Yerington under programs of the federal government for the year ending June 30, 2018. 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 City of Yerington, it is not intended to and does not present the financial position, changes in net position, or cash flows of City of Yerington. Note B- Summary of Significant Accounting Policies Basis of Accounting 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 has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note C – Subrecipients The City of Yerington did not pass any federal awards received to any other government or not-for profit agencies. Note D – Matching Requirements Certain Federal programs require 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--- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2018 -95- 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 20.106 Airport Improvement Program Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? No ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2018 -96- 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--- CITY OF YERINGTON, NEVADA STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2018 -97- Following is management’s summary schedule of prior audit findings required as required by §200.511 of the Uniform Guidance. Findings – Financial Statement Audit No prior year audit findings were reported. Findings and Questioned Costs – Major Federal Award Program Audit No prior year audit findings were reported as the no single audit was required. ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- To th City o We h Statu the ye  T c  T a  T n i B  T i  T f f i This Our r Amer scope mana Based mana Yerin Nove he Honorable of Yerington have reviewe ute 354-624( ear ended Ju The identifie created. The Funds a accepted in t The restrict necessary to interpretation Bureau). The sources in the financ The funds c financial sta for the two i in Note 19. assertion is t review was rican Institu e that an exa agement’s as d on our re agement’s as ngton, Nevad ember 29, 20 INDEPEN NEVA e Mayor and n, Nevada ed managem 5)(a) with re une 30, 2018 ed funds are are administ the United S ed fund ba o carry out t n of reasona of revenues cial statemen conform to atements adm instances of the responsib conducted i ute of Certifi amination, t ssertion. Ac eview, nothin ssertion refer da 018 A Profess NDENT ACC ADA REVIS d City Counc ment’s asserti espect to the 8 that: being used e tered in acco States of Am alance/net p he purposes able and ne s, including nts. significant ministration expenses in bility of the n accordanc ied Public A he objective cordingly, w ng came to rred to above sional Corpora -98- COUNTAN SED STATU cil ion made in e funds of th expressly fo ordance wit erica. position in s of the fund ecessary prov transfers, av statutory an during the n excess of b managemen ce with attes Accountants. e of which i we do not exp our attentio e is not fairly ation T’S REPOR UTES 354.62 n accordance he City of Y or the purpos th accountin the funds ds at June 3 vided by th vailable for nd regulatory year ended budget appro nt of the City station stand A review s the expres press such a on that caus y stated in a
RT ON 241 e with Nevad Yerington as ses for which ng principles were reaso 0, 2018 (ba he Legislativ the funds ar y constraint June 30, 20 opriations as y of Yeringto dard establish is substantia ssion of an o an opinion. sed us to be all material re da Revised of and for h that were s generally onable and ased on the ve Counsel re as noted ts on their 018 except s described on. hed by the ally less in opinion on elieve that espects. ---PAGE BREAK--- -99- INDEPENDENT AUDITOR'S COMMENTS JUNE 30, 2018 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, 2017. Current Year Audit Recommendations The Schedule of Findings and Questioned Costs included in this audit report provides a listing of our current year recommendations. ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK