Document Yerington_doc_5bf142f6c3

CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2025 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2025 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 25-26 Business-Type Activities: Statement of Net Position 27-28 Statement of Revenues, Expenses and Changes in Net Position 29 Statement of Cash Flows 30-31 Notes to Financial Statements 32-62 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2025 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 Enterprise Funds: Water Utility Fund Schedule of Net Position 66 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 67 Schedule of Cash Flows - Budget and Actual 68-69 Sewer Utility Fund Schedule of Net Position 70 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual 71 Schedule of Cash Flows - Budget and Actual 72-73 III. Other Supplementary Information Schedule of Property Tax Rates and Assessed Valuations - Last Twenty Years 74 Governmental Revenues and Other Financial Sources – Last Ten Years 75 Governmental Expenditures by Function – Last ten years 76 Graphical Presentations: Net Position – Last Ten Years 77 All Governmental Funds, Fund Balance - Last Ten Years 78 General Fund – Budget Basis: Fund Balance - Last Ten Years 79 Revenues, Expenditures, and Fund Balance – Last Ten Years 80 Revenues by Source 81 Expenditures by Function 82 Expenditures by Object 83 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2025 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 84-85 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 86-88 Schedule of Expenditures of Federal Awards 89 Notes to Schedule of Expenditures of Federal Awards 90-91 Schedule of Findings and Questioned Costs 92-94 Status of Prior Year Findings and Responses 95 Management’s Corrective Action Plan 96-97 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--- CITY OF YERINGTON, NEVADA CITY OFFICIALS City Council Members - John Garry, Mayor - Nick Beaton - Matthew Galvin - Omar Lopez - Shane Martin City Manager - Jerry Bryant ---PAGE BREAK--- A Professional Corporation INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and City Council City of Yerington, Nevada Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Yerington, Nevada, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City of Yerington, Nevada’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of City of Yerington, Nevada, as of June 30, 2025, and the respective changes in financial position, and where applicable, cash flows, thereof and the respective budgetary comparisons for the General Fund, Municipal Administrative Assessment Fund, and Special Revenue Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinions on Each Major Federal Program We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City of Yerington, Nevada and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Yerington, Nevada ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Yerington, Nevada’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Yerington, Nevada’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. 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 is the responsibility of management, and 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. ---PAGE BREAK--- Prior-Year Comparative Information We have previously audited the City’s 2024 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 January 6, 2025. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2024, 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Yerington, Nevada’s basic financial statements. The budgetary comparison financial statements for the major capital projects fund, combining and individual nonmajor fund financial statements, and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the other supplementary section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated January 6, 2026, on our consideration of City of Yerington, Nevada’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City of Yerington, Nevada’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Yerington, Nevada’s internal control over financial reporting and compliance. Yerington, Nevada January 6, 2026 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA MANAGEMENT’S DISCUSSION AND ANALYSIS FOR FISCAL YEAR ENDED JUNE 30, 2025 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, 2025. This discussion and analysis is designed to assist the reader in focusing on the significant financial issues, provide an overview of the City’s financial activities, identify any significant changes in financial position, and to identify individual issues and concerns. We encourage readers to consider the information presented herein, in conjunction with the financial statements and notes to gain a more complete picture of the information presented. Financial Highlights  The City’s governmental net position increased by $1,334,773 to $11,094,788 from $9,760,015 in 2025. The City’s governmental net investment in capital assets is $10,706,149 in 2025 compared to $9,408,565 in 2024.  The City’s business-type activity net position decreased by $1,239,792 to $32,263,810 from $33,503,602 in 2025. The City’s business-type activity net investment in capital assets is $25,552,552 in 2025 compared to $24,451,985 in 2024.  The business-type activities recognized capital contributions totaled $39,800 in 2025 compared to $1,712,348 in 2024. This decrease in capital contributions which were attributable to the connection fees in both the water and sewer systems and the Colony grant revenues on the water and sewer line replacement project in year 2024.  The City’s total revenues were $6,446,960 consisting of $5,365,048 in governmental activities and $2,936,047 in business-type activities. Business-type activities operating revenues totaled $2,894,053 while total capital contributions totaled $39,800.  The City’s total expenses were $8,206,114 consisting of $4,030,275 in governmental activities and $4,175,839 in business-type expenses.  The City’s primary revenue sources (besides grants and contributions) are charges for services of $413,095, property taxes of $671,572 and consolidated taxes of $864,517. These three revenue sources comprise 7.7%, 12.5%, and 16.11%, respectively, of total revenues. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s financial statements, which are comprised of the basic financial statements and the notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the basic financial statements. ---PAGE BREAK--- Government-wide Financial Statements Government-wide financial statements are designed to provide an overview of the City’s financial position by governmental and business-type activities, as well as the government as a whole. The Statement of Net Position combines and consolidates all of the City’s current financial resources with capital assets, deferred outflows of resources, long-term obligations, and deferred inflows of resources, distinguishing between governmental and business-type activities. The end result is net position which is segregated into three components: net investment in capital assets; restricted and unrestricted position. The Statement of Activities is focused on both the gross and net cost of governmental and business-type activities. Program revenue which directly offsets costs of specific functions is allocated to those functions, resulting in net expenses for governmental and business-type activities. The City’s general revenues offset remaining costs resulting in the annual increase or decrease in net position. This statement is intended to summarize the user’s analysis of the net cost of various governmental services that are supported by general revenues. Governmental activities reflect the City’s basic services on a functional basis. Departments included within those functions are identified in the fund financial statements. Ad valorem taxes, consolidated taxes, and other identified general revenues support the majority of these services. Business-type activities reflect enterprise operations where a fee for service typically funds all or most of the cost of operations, including depreciation. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objects. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Fund financial statements provide detailed information about the City’s major funds. Based on restrictions placed on the use of monies, the City has established many funds that account for the multitude of services provided to our residents. Governmental Funds – Governmental funds are used to account for essentially the same functions reported as governmental activities on the governmental-wide financial statements. The City’s major governmental funds are the General, Municipal Court Administrative Assessment, Special Revenue, and Fixed Asset Acquisition. Most of the City’s basic services are reported in these funds that focus on how money flows into and out of the funds and the year- end balances available for spending. These funds are reported on the modified accrual basis of accounting that measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services being provided, along with the financial resources available. Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities on the government-wide financial statements. By doing so, readers may better understand the long-term effect of the government’s ---PAGE BREAK--- short-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities. The City maintains a multitude of individual governmental funds. Information is presented separately on the governmental fund balance sheet and on the governmental fund statement of revenues, expenditures, and changes in fund balance for the major funds, which were identified earlier. Proprietary Funds – The City maintains one proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities on the government-wide financial statements. The City uses enterprise funds to account for water and sewer operations provided to citizens within the City and nearby service areas. The City’s major proprietary funds are: Water Utility Fund and Sewer 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 $43,263,617 ($9,760,015 in governmental activities and $33,503,602 in business-type activities) as of June 30, 2025. By far, the largest portion of the City’s net position (78.3%) reflects its net investment in capital assets (e.g. land, buildings, equipment and infrastructure, less any related debt used to acquire those assets that is still outstanding). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investments ---PAGE BREAK--- in its capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Table 1 provides a summary of the City’s net position for 2025 compared to 2024. Net position increased by $94,981 in 2025 to balance of $43,358,598 from $45,263,617 in 2024. This small increase in net position is largely attributable to $2,021,799 in capital grant programs largely in the public works function. 2025 2024 2025 2024 2025 2024 Assets Current Assets 2,272,213 $ 2,552,370 $ 7,983,403 $ 10,334,259 $ 10,255,616 $ 12,886,629 $ Restricted Cash - - 429,476 344,155 429,476 344,155 Capital Assets, Net 10,706,149 9,408,565 56,921,469 56,436,155 67,627,618 65,844,720 Total Assets 12,978,362 11,960,935 65,334,348 67,114,569 78,312,710 79,075,504 Deferred Outflow Of Resources Post Measurement Date Employer Contributions 204,892 176,295 104,423 89,848 309,315 266,143 Deferred Pension Outflow 882,462 950,391 453,999 460,173 1,336,461 1,410,564 Deferred OPEB Outflow 26,264 29,302 19,018 27,047 45,282 56,349 Total Deferred Outflows 1,113,618 1,155,988 577,440 577,068 1,691,058 1,733,056 Liabilities Current Liabilities 176,271 227,873 1,162,665 488,899 1,338,936 716,772 Long-Term Liabilities Due After One Year 2,320,037 2,707,993 32,247,890 33,672,258 34,567,927 36,380,251 Total Liabilities 2,496,308 2,935,866 33,410,555 34,161,157 35,906,863 37,097,023 Deferred Inflow Of Resources Unearned revenue 46,662 375,222 - - 46,662 375,222 Deferred Pension Inflow 436,386 35,129 224,507 17,010 660,893 52,139 Deferred OPEB Inflow 17,836 10,691 12,916 9,868 30,752 20,559 Total Deferred Inflows 500,884 421,042 237,423 26,878 738,307 447,920 Net Position Invested in Capital Assets, Net of Debt 10,706,149 9,408,565 25,552,552 24,451,985 36,258,701 33,860,550 Restricted Position - - 356,245 333,201 356,245 333,201 Unrestricted 388,639 351,450 6,355,013 8,718,416 6,743,652 9,069,866 Total Net Position 11,094,788 9,760,015 $ 32,263,810 $ 33,503,602 $ 43,358,598 $ 43,263,617 $ 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 was an increase of $1,334,773 for governmental activities and a decrease of $1,239,792 for business-type activities in fiscal year 2025. In the year 2025, the total increase in net position was $94,981.  The governmental activities total revenues increased from $4,011,632 in 2024 to $5,365,048 in 2025 largely attributable to an increase in RTC revenue of $759,706 associated with the Goldfield paving project. 2025 2024 2025 2024 2025 2024 Program Revenues: Charges for Services 413,095 $ 234,599 $ 2,894,053 $ 2,679,444 $ 3,307,148 $ 2,914,043 $ Operating Grants and Contributions 144,438 430,128 - - 144,438 430,128 Capital Grants and Contributions 2,021,799 749,083 39,800 1,712,348 2,061,599 2,461,431 2,579,332 1,413,810 2,933,853 4,391,792 5,513,185 5,805,602 General Revenues: Property taxes 671,572 484,543 - - 671,572 484,543 Other taxes 373,853 300,153 - - 373,853 300,153 Franchise fees 348,056 396,365 - - 348,056 396,365 Consolidated taxes 864,517 635,117 - - 864,517 635,117 Unrestricted grants - 200,000 - - - 200,000 Investment earnings 464,821 570,234 1,223 10,041 466,044 580,275 Other 62,897 17,071 971 5,000 63,868 22,071 Loss on asset disposal - (5,661) - (1,971,505) - (1,977,166) Total Revenues 5,365,048 4,011,632 2,936,047 2,435,328 8,301,095 6,446,960 Expenses: General government 651,964 610,018 - - 651,964 610,018 Judicial 111,476 115,973 - - 111,476 115,973 Public safety 2,255,428 1,972,479 - - 2,255,428 1,972,479 Public works 874,089 1,258,428 - - 874,089 1,258,428 Health 28,631 23,425 - - 28,631 23,425 Cultural and recreation 108,687 131,823 - - 108,687 131,823 Utilities - - 4,175,839 4,104,710 4,175,839 4,104,710 Total Expenses 4,030,275 4,112,146 4,175,839 4,104,710 8,206,114 8,216,856 Change in Net Position 1,334,773 (100,514) (1,239,792) (1,669,382) 94,981 (1,769,896) Beginning Net Position 9,760,015 9,860,529 33,503,602 35,172,984 43,263,617 45,033,513 Ending Net Position 11,094,788 9,760,015 $ 32,263,810 $ 33,503,602 $ 43,358,598 $ 43,263,617 $ Governmental Activities Business-Type Activities Total Table 2 Changes in Net Position ---PAGE BREAK---  The governmental activities 2025 expenses of $4,030,275 decreased by $81,871 compared to $4,112,146 in year 2024. Business-Type Activities  The business-type activities charges for service revenues had an increase of $214,609 from $2,679,444 in 2024 to $2,894,053 in 2025.  The business type activities total expenditures were $4,175,839 in 2025 compared to $4,104,710 in 2024 or an increase of $71,129 mainly due to an increase in depreciation expense of $196,968 with the new water and sewer line project going on line on October 23, 2023.  The business-type activities capital contributions totaled $39,800 in 2025 compared to $1,712,348 in 2024. The 2024 capital contributions were comprised totally of connection fees of $44,322, and $1,511,908 in USDA Rural Development grants on Colony water and sewer replacement project, and $156,118 on ARP Rescue grants capital related items. 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 $2,042,488 which is a small increase of $100,409 compared to the prior year amount of $16,972. This increase is largely attributable to the General Fund incurring an increase in fund balance of $45,621 and the Special Revenue Fund had an increase of $52,916. While the bulk of the governmental fund balances are not reserved in the governmental fund statements, they may lead to restricted net position on the Statement of Net Position due to being restricted for use for a particular purpose mandated by the sources of the resources, such as state statutes. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the fund balance of the General Fund was $1,515,804 while the 2024 fund balance was $1,470,183. Fund balance represents approximately 38.2% of the total General Fund expenditures. The City’s General Fund ending fund balance increased by $45,621 in 2025 while the fiscal year 2024 increased by $46,796. The City’s General Fund investment earnings totaled $464,821 in year 2025 compared to $570,234 in year 2024 which reflects lower cash investment balances over the prior year. ---PAGE BREAK--- -10- General Fund Budgetary Highlights The City’s budget is prepared according to Nevada law and is based on generally accepted accounting principles. The City adopts an annual budget following budget workshops and a public hearing. The budget provides proposed expenditures and the means of financing them. The most significant budgeted fund is the General Fund. With the General Fund supporting many of our major activities such as our public safety programs, as well as most legislative, judicial and executive activities the General Fund is monitored closely looking for possible revenue shortfall or overspending by individual departments. In summary, the noted differences and explanations are as follows:  General Fund total revenues of $4,016,267 were $77,504 under budget and reflected an increase in total revenue of $1,038,256 over 2024 total revenues of $2,977,011. The General Fund budgeted $560,770 for ad valorem tax revenue while actual collections were $671,976. RTC funds budgeted for in year 2025 was $950,000 compared to actual receipts of $869,386 for the Goldfield paving project.  The General Fund total expenditures of $3,970,646 were under budgeted appropriations of $4,037,632 by $66,986. This variance was fairly evenly spread among the various expenditures functions. 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, 2025 is $36,258,701 (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 2025. Major capital asset events during the current year include the following:  The Governmental Funds had $1,978,472 in asset additions in year 2025. Assets included two vehicles acquired totaling $107,941, an airport paving of the taxi approach totaling $330,905, East Goldfield Avenue paving project totaling $926,179 and $571,687 for the Kiss and Drop project at Yerington Elementary School. 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 $1,870,087 in fiscal year 2025. This addition is total comprised on capital expenditures associated with the California Well Rehabilitation Project. ---PAGE BREAK--- -11- Long-Term Debt: The City currently has no governmental activity debt obligations at June 30, 2025. The City’s Water proprietary fund and Sewer proprietary fund had outstanding USDA loan notes payable totaling $16,096,634 and $15,272,283, respectively as detail in Note 5. The 2026 fiscal year debt service requirement to service the two debt obligations is $1,044,924. The City’s long-term obligations include compensated absences, net pension liability and OPEB liability. Additional information on the City’s long-term debt can be found in Notes 4 and 5 of this financial report. Economic Factors and Next Year’s Budget The City Council and the management of the City consider many factors when setting the fiscal year 2026 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 2026 budget. In conjunction with the current economic factors, the City limited its anticipated spending for 2026, 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, 2025 (With Comparative Totals for June 30, 2024) BUSINESS-TYPE ACTIVITIES ACTIVITIES Current Assets Cash and investments - Note 2 $ 1,228,989 $ 7,527,716 Taxes receivable, secured roll 6,792 - Use fees receivable, net of allowances for uncollectibles - 300,077 Due from other governments 871,298 - Other receivables 137,763 113,314 Inventory 27,371 42,296 Total Current Assets 2,272,213 7,983,403 Noncurrent Assets Restricted cash and investments - Note 2 - 429,476 Capital Assets - Note 3 Land, improvements, and construction in progress 852,232 2,187,600 Other capital assets, net of depreciation 9,853,917 54,733,869 Total Noncurrent Assets 10,706,149 57,350,945 Total Assets 12,978,362 65,334,348 Deferred Outflow of Resources Post-measurenment date pension contributions - Note 7 204,892 104,423 Deferred pension outflow - Note 7 882,462 453,999 Deferred OPEB outflows - Note 8 26,264 19,018 Total Deferred Outflow of Resources 1,113,618 577,440 GOVERNMENTAL STATEMENT OF NET POSITION ---PAGE BREAK--- 2025 2024 $ 8,756,705 $ 12,073,673 6,792 7,196 300,077 260,195 871,298 200,873 251,077 275,785 69,667 68,907 10,255,616 12,886,629 429,476 344,155 3,039,832 1,307,059 64,587,786 64,537,661 68,057,094 66,188,875 78,312,710 79,075,504 309,315 266,143 1,336,461 1,410,564 45,282 56,349 1,691,058 1,733,056 TOTAL -12- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA JUNE 30, 2025 (With Comparative Totals for June 30, 2024) BUSINESS-TYPE ACTIVITIES ACTIVITIES Current Liabilities Accounts payable $ 110,076 $ 118,030 Accrued salaries and benefits 65,895 53,725 Due to other governments 100 11,055 Accrued interest - 293,023 Customers deposits - 73,231 Bail deposits 200 - Current portion notes payable - 613,601 Total Current Liabilities 176,271 1,162,665 Long-term liabilities Compensated absences - Note 4 & 5 49,945 25,816 USDA Rural Development bonds payable - 30,755,316 Net pension liability - Note 7 2,125,642 1,315,294 Accrued OPEB liability - Note 4, 5 & 8 144,450 151,464 Total Long-term Liabilities 2,320,037 32,247,890 Total Liabilities 2,496,308 33,410,555 Deferred Inflow of Resources Unearned revenues 46,662 - Deferred pension inflows - Note 7 436,386 224,507 Deferred OPEB inflows - Note 8 17,836 12,916 Total Deferred Inflow of Resources 500,884 237,423 Net Position Net investment in capital assets 10,706,149 25,552,552 Restricted - Note 10 - 356,245 Unrestricted 388,639 6,355,013 Total Net Position $ 11,094,788 $ 32,263,810 STATEMENT OF NET POSITION GOVERNMENTAL ---PAGE BREAK--- 2025 2024 $ 228,106 $ 218,568 119,620 99,074 11,155 31,949 293,023 300,015 73,231 65,099 200 2,067 613,801 615,253 1,339,136 1,332,025 75,761 98,796 30,755,316 31,368,917 3,440,936 3,971,694 295,914 325,591 34,567,927 35,764,998 35,907,063 37,097,023 46,662 375,222 660,893 52,139 30,752 20,559 738,307 447,920 36,258,701 33,860,550 356,245 333,201 6,743,652 9,069,866 $ 43,358,598 $ 43,263,617 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 $ 651,964 $ - $ - $ 328,560 Judicial 111,476 72,648 - - Public safety 2,255,428 105,193 - - Public works 874,089 233,751 102,557 1,693,239 Health 28,631 1,503 1,881 - Culture and recreation 108,687 - 40,000 - Total Governmental Activities 4,030,275 413,095 144,438 2,021,799 Business-Type Activities: Water utilities 2,561,947 1,660,194 - 36,000 Sewer utilities 1,613,892 1,233,859 - 3,800 Total Business-type Activities 4,175,839 2,894,053 - 39,800 Total City $ 8,206,114 $ 3,307,148 $ 144,438 $ 2,061,599 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 Gain on disposal of assets Total General Revenues Change in Net Position Net Position - Beginning Net Position - Ending CONTRIBUTIONS FOR THE YEAR ENDED JUNE 30, 2025 (With Comparative Totals for the Year Ended June 30, 2024) CITY OF YERINGTON, NEVADA STATEMENT OF ACTIVITIES PROGRAM REVENUE CAPITAL GRANTS AND ---PAGE BREAK--- 2025 $ (323,404) $ - $ (323,404) $ (549,174) (38,828) - (38,828) (88,170) (2,150,235) - (2,150,235) (1,840,792) 1,155,458 - 1,155,458 (231,384) (25,247) - (25,247) (20,492) (68,687) - (68,687) 31,676 (1,450,943) - (1,450,943) (2,698,336) - (865,753) (865,753) (796,033) - (376,233) (376,233) 1,083,115 - (1,241,986) (1,241,986) 287,082 (1,450,943) (1,241,986) (2,692,929) (2,411,254) 671,572 - 671,572 484,543 373,853 - 373,853 300,153 348,056 - 348,056 396,365 864,517 - 864,517 635,117 464,821 1,223 466,044 580,275 62,897 971 63,868 22,071 - - - 200,000 - - - (1,977,166) 2,785,716 2,194 2,787,910 641,358 1,334,773 (1,239,792) 94,981 (1,769,896) 9,760,015 33,503,602 43,263,617 45,033,513 $ 11,094,788 $ 32,263,810 $ 43,358,598 $ 43,263,617 Net (Expenses) Revenues and Changes in Net Position 2024 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, 2025 (With Comparative Totals for June 30, 2024) ASSESSMENT REVENUE FUND FUND FUND Assets Cash and investments - Note 2 $ 946,597 $ 28,099 $ - Taxes receivable, secured roll 6,792 - - Accounts receivable 90,884 - 46,879 Due from other governments 254,572 - 616,726 Due form other funds 321,654 - - Fuel inventory 27,371 - - Total Assets $ 1,647,870 $ 28,099 $ 663,605 Liabilities Accounts payable $ 59,179 $ - $ 50,897 Accrued compensation 65,895 - - Due to other governments - 100 - Due to other funds - - 321,654 Consumer / bail deposits and restitution 200 - - Unearned revenue - - - Total Liabilities 125,274 100 372,551 Deferred Inflow of Resources Unavailable taxes receivable 6,792 - - Fund Balances - Note 10 Nonspendable 27,371 - - Restricted - - - Committed - 27,999 291,054 Assigned - - - Unassigned 1,488,433 - - Total Fund Balances 1,515,804 27,999 291,054 Total Liabilities, Deferred Inflows and Fund Balances $ 1,647,870 $ 28,099 $ 663,605 SPECIAL GENERAL ADMINISTRATIVE MUNICIPAL COURT ---PAGE BREAK--- ACQUISITION TOTALS 2025 $ 254,293 $ 1,228,989 $ 2,194,576 - 6,792 7,196 - 137,763 116,071 - 871,298 200,873 - 321,654 200,873 - 27,371 33,654 $ 254,293 $ 2,593,867 $ 2,753,243 $ - $ 110,076 $ 137,224 - 65,895 68,351 - 100 20,231 - 321,654 - - 200 2,067 46,662 46,662 375,222 46,662 544,587 603,095 - 6,792 7,196 - 27,371 33,654 - - - 207,631 526,684 471,896 - - - - 1,488,433 1,436,529 207,631 2,042,488 1,942,079 $ 254,293 $ 2,593,867 $ 2,552,370 2024 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 $ 2,042,488 $ 1,942,079 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. 21,827,850 19,849,378 Accumulated depreciation has not been included in the governmental fund financial statements. (11,121,701) (10,440,813) Revenue reported as deferred revenue in the governmental fund financial statements is recorded as revenue in the government-wide financial statements. 6,792 7,196 The net pension liability is not due and payable in the current period and therefore is not reported in the governmental funds (2,125,642) (2,494,397) 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. 650,968 1,091,557 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. 8,428 18,611 Compensated absences have not been reflected in the governmental fund financial statements. (49,945) (51,789) Post-employment health insurance that is not due and payable in the current period and therefore is not reported in the governmental funds. (144,450) (161,807) Net Position of Governmental Activities $ 11,094,788 $ 9,760,015 2025 2024 CITY OF YERINGTON, NEVADA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2025 (With Comparative Totals for June 30, 2024) 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) GENERAL ASSESSMENT REVENUE FUND Revenues Taxes $ 671,976 $ - $ 178,757 Licenses and permits 614,780 - - Intergovernmental revenues 2,009,146 - 1,166,675 Charges for services 120,794 - - Fines and forfeits 71,853 795 - Other revenues 527,718 - 1,881 Total Revenues 4,016,267 795 1,347,313 Expenditures Current: General government 318,737 - 95,635 Judicial 109,196 - - Public safety 2,173,739 - - Public works 1,258,023 - 1,193,333 Health 22,754 - 5,429 Culture and recreation 88,197 - - Total Expenditures 3,970,646 - 1,294,397 Excess (Deficiency) of Revenues over Expenditures 45,621 795 52,916 Fund Balance, July 1 1,470,183 27,204 238,138 Fund Balance, June 30 $ 1,515,804 $ 27,999 $ 291,054 SPECIAL MUNICPAL COURT ADMINISTRATIVE FUND FUND ---PAGE BREAK--- $ - $ 850,733 $ 589,134 - 614,780 584,696 - 3,175,821 2,130,468 - 120,794 94,968 - 72,648 27,803 1,077 530,676 587,186 1,077 5,365,452 4,014,255 - 414,372 412,238 - 109,196 117,877 - 2,173,739 1,896,540 - 2,451,356 1,437,850 - 28,183 22,670 - 88,197 110,108 - 5,265,043 3,997,283 1,077 100,409 16,972 206,554 1,942,079 1,925,107 $ 207,631 $ 2,042,488 $ 1,942,079 2024 FIXED ASSET FUND 2025 ACQUISITION TOTALS The accompanying notes are an integral part of these financial statements. -17- ---PAGE BREAK--- Net Change in Fund Balances - Total Governmental Funds $ 100,409 $ 16,972 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. 1,978,472 667,738 Contributed capital in the statement of activties that does not provide current resoures and is not reported as revenue in the governmental funds. - - 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. (680,888) (574,404) Reductions in capital assets carrying value is recognized as an expense in the statement of activities but not recorded in the governmental fund statements - (5,661) because it does not use current financial resources. Revenues from property taxes and other revenues is deferred in the fund financial statements until they are considered available to finance current expenditures, but such revenues are recognized when assessed in the government-wide financial statements. (404) 3,038 Compensated absences are not due and payable in the current period and therefore are not reported in the governmental fund financial statements. 1,844 14,609 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. 7,174 14,977 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. 28,597 9,378 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. (100,431) (247,161) Change in Net Position of Governmental Activities $ 1,334,773 $ (100,514) RECONCILIATION OF THE STATEMENT OF REVENUES, CITY OF YERINGTON, NEVADA 2025 2024 FOR THE YEAR ENDED JUNE 30, 2025 TO THE STATEMENT OF ACTIVITIES EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (With Comparative Totals for the Year Ended June 30, 2024) 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Revenues Taxes Ad valorem taxes $ 560,770 $ 560,770 $ 671,976 $ 111,206 $ 481,505 Licenses, Permits and Fees Business licenses 120,500 120,500 118,148 (2,352) 106,503 Franchise taxes Natural gas 110,000 110,000 78,633 (31,367) 119,525 Electric 240,000 240,000 213,324 (26,676) 210,500 Cable television 34,000 34,000 22,090 (11,910) 31,504 Sanitation 42,000 42,000 34,009 (7,991) 34,836 426,000 426,000 348,056 (77,944) 396,365 Non-business licenses and permits Animal licenses 200 200 77 (123) 33 Building permits 85,000 85,000 144,099 59,099 75,695 Planning and zoning 4,000 4,000 4,400 400 6,100 Other 1,000 1,000 - (1,000) - 90,200 90,200 148,576 58,376 81,828 Total Licenses and Permits 636,700 636,700 614,780 (21,920) 584,696 Intergovernmental Revenues State and federal shared revenues Motor vehicle fuel tax 68,208 68,208 64,295 (3,913) 77,241 Consolidated tax distribution 656,993 656,993 864,517 207,524 635,117 ARPA Rescue Grant - - - - - FAA grant revenue - - - - - 725,201 725,201 928,812 203,611 712,358 Other local government shared revenues County road ad valorem tax 20,000 20,000 20,000 - 20,000 County ad valorem agreement 200,000 200,000 - (200,000) 200,000 School resource officer 70,000 70,000 70,000 - 30,000 County gaming licenses 65,000 65,000 38,880 (26,120) 41,535 RTC shared revenue 950,000 950,000 869,386 (80,614) 109,680 1,305,000 1,305,000 998,266 (306,734) 401,215 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Payments in lieu of taxes County parks agreement $ 40,000 $ 40,000 $ 40,000 $ - $ 40,000 County airport contribution 4,000 4,000 4,000 - 4,000 Yerington Paiute Tribe - marijuana compact 30,000 30,000 38,068 8,068 44,486 State rural housing 2,500 2,500 - (2,500) 5,200 76,500 76,500 82,068 5,568 93,686 Total Intergovernmental Revenues 2,106,701 2,106,701 2,009,146 (97,555) 1,207,259 Charges for Services Airport charges 16,500 16,500 16,448 (52) 14,194 Airport fuel charges 122,500 122,500 67,727 (54,773) 75,274 Animal shelter 3,500 3,500 1,426 (2,074) 2,900 Police services: Night in the Country 25,000 25,000 32,978 7,978 - Other charges for services 5,000 5,000 2,215 (2,785) 2,600 Total Charges for Services 172,500 172,500 120,794 (51,706) 94,968 Fines and Forfeits Municipal court fines 27,500 27,500 23,001 (4,499) 15,063 Other court fees 1,000 1,000 38,127 37,127 - Municipal judges services - - 10,725 10,725 11,700 Total Fines and Forfeits 28,500 28,500 71,853 43,353 26,763 Other Revenues K-9 donations 1,000 1,000 8,867 7,867 - Investment earnings 550,000 550,000 464,821 (85,179) 570,234 Highlands tower lease 12,000 12,000 9,000 (3,000) 7,315 Other income 25,600 25,600 45,030 19,430 4,271 Total Other Revenues 588,600 588,600 527,718 (60,882) 581,820 Total Revenues 4,093,771 4,093,771 4,016,267 (77,504) 2,977,011 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) ORIGINAL FINAL VARIANCE 2024 Operating Expenditures General Government Mayor and Council Salaries and wages $ 26,984 $ 26,984 $ 24,721 $ 2,263 $ 24,274 Employee benefits 9,786 9,786 10,530 (744) 9,345 Services and supplies 2,000 2,000 - 2,000 1,781 Total Mayor and Council 38,770 38,770 35,251 3,519 35,400 Management and Administration Salaries and wages 77,232 77,232 73,981 3,251 79,072 Employee benefits 45,445 45,445 44,219 1,226 45,009 Services and supplies 179,524 179,524 165,286 14,238 138,039 Capital outlay 12,000 12,000 - 12,000 - Total Management and Administration 314,201 314,201 283,486 30,715 262,120 Total General Government Function 352,971 352,971 318,737 34,234 297,520 Judicial Municipal Court Salaries and wages 30,576 30,576 24,891 5,685 26,057 Employee benefits 21,805 21,805 21,639 166 22,285 Services and supplies 76,755 76,755 62,666 14,089 69,535 Total Judicial Function 129,136 129,136 109,196 19,940 117,877 Public Safety Police Department Salaries and wages 825,572 825,572 851,466 (25,894) 683,675 Employee benefits 567,128 567,128 559,315 7,813 420,954 Services and supplies 260,039 260,039 307,352 (47,313) 217,573 Total Police Department 1,652,739 1,652,739 1,718,133 (65,394) 1,322,202 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL 2024 Fire Department Services and supplies Contractual agreement $ 455,606 $ 455,606 $ 455,606 $ - $ 551,032 Total Public Safety Function 2,108,345 2,108,345 2,173,739 (65,394) 1,873,234 Public Works Building Department Salaries and wages 61,395 61,395 60,841 554 58,479 Employee benefits 30,140 30,140 30,819 (679) 32,923 Services and supplies 7,500 7,500 4,647 2,853 4,329 Total Building Department 99,035 99,035 96,307 2,728 95,731 Street Department Salaries and wages 29,757 29,757 32,793 (3,036) 30,119 Employee benefits 15,893 15,893 21,019 (5,126) 17,497 Services and supplies 85,120 85,120 84,435 685 120,921 Capital outlay 950,000 950,000 885,715 64,285 113,538 Total Street Department 1,080,770 1,080,770 1,023,962 56,808 282,075 Airport Salaries and wages 4,262 4,262 4,010 252 3,223 Employee benefits 2,725 2,725 2,189 536 2,039 Services and supplies 160,740 160,740 131,555 29,185 128,421 Total Airport 167,727 167,727 137,754 29,973 133,683 Total Public Works Function 1,347,532 1,347,532 1,258,023 89,509 511,489 Health Animal Control Salaries and wages 6,450 6,450 2,753 3,697 4,435 Employee benefits 3,777 3,777 1,956 1,821 3,006 Services and supplies 13,050 13,050 18,045 (4,995) 11,690 Total Health Function 23,277 23,277 22,754 523 19,131 Culture and Recreation Parks and recreation Salaries and wages 17,183 17,183 19,061 (1,878) 17,564 Employee benefits 9,918 9,918 11,800 (1,882) 9,582 Services and supplies 49,270 49,270 57,336 (8,066) 60,512 p y Total Culture and Recreation Function 76,371 76,371 88,197 (11,826) 87,658 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL VARIANCE 2024 Total Expenditures $ 4,037,632 $ 4,037,632 $ 3,970,646 $ 66,986 $ 2,906,909 Excess (Deficiency) of Revenues over Expenditures 56,139 56,139 45,621 (10,518) 70,102 Fund Balance, July 1 2,732,044 2,732,044 1,470,183 (1,261,861) 1,400,081 Fund Balance - Budget Basis, June 30 $ 2,788,183 $ 2,788,183 1,515,804 $ (1,272,379) 1,470,183 RECONCILIATION TO GAAP BASIS Expenditures General Government $ - $ - - $ - (23,306) Fund Balance, July 1 23,306 23,306 - (23,306) 23,306 Fund Balance, June 30 $ 23,306 $ 23,306 - $ (23,306) - Fund Balance - GAAP Basis, June 30 $ 1,515,804 $ 1,470,183 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) BUDGET ACTUAL VARIANCE 2024 Revenues Fines and Forfeits Municipal Court assessments $ 1,025 $ 1,025 $ 225 $ (800) $ 428 Special facility assessments 1,000 1,000 570 (430) 612 Total Revenues 2,025 2,025 795 (1,230) 1,040 Expenditures Judicial Capital outlay Court assessments - - - - - Administrative assessments - - - - - Total Expenditures - - - - - Excess (Deficiency) of Revenues over Expenditures 2,025 2,025 795 (1,230) 1,040 Fund Balance, July 1 27,939 27,939 27,204 (735) 26,164 Fund Balance, June 30 $ 29,964 $ 29,964 $ 27,999 $ (1,965) $ 27,204 ORIGINAL BUDGETED AMOUNT The accompanying notes are an integral part of these financial statements. -24- ---PAGE BREAK--- Revenues Room taxes $ 215,000 $ 215,000 $ 178,757 $ (36,243) $ 107,629 Intergovernmental FAA ARPA Rescue 2,500 2,500 14,262 11,762 28,516 FAA Master Plan - - - 946 FAA aviation BIL grant 385,000 385,000 297,031 (87,969) 98,714 FAA aviation runlight project - - - - 156,929 CDBG Project 100,000 100,000 - (100,000) - DOT Ped School Safety 598,000 598,000 526,822 (71,178) - ARPA Grant 839,832 839,832 328,560 (511,272) 637,819 USDA Uranium Water Project 1,000,000 1,000,000 - (1,000,000) - Travel Nevada downtowm develop - - - - 285 2,925,332 2,925,332 1,166,675 (1,758,657) 923,209 Other revenues Donations 33,000 33,000 1,881 (31,119) 4,894 Total Revenues 3,173,332 3,173,332 1,347,313 (1,826,019) 1,035,732 Expenditures General Government CDBG Project expense 100,000 100,000 - 100,000 - Master Plan consultant 105,000 105,000 - 105,000 34,278 Travel Nevada grant - - 30,000 (30,000) 15,000 Main Street committee 37,000 37,000 - 37,000 8,796 ARPA Grant - - - - Room tax distributions 30,000 30,000 44,151 (14,151) 35,770 Room tax State remittance 7,000 7,000 7,852 (852) 7,828 Room tax County remittance 11,825 11,825 13,632 (1,807) 13,046 Total General Government 290,825 290,825 95,635 195,190 114,718 Public Works FAA Master Plan - - - - 946 FAA- ARPA Rescue Grant 2,500 2,500 - 2,500 28,516 FAA Run Light Project - - - - 156,929 ARPA Grant 619,107 619,107 328,560 290,547 641,256 ARPA - backflow device program 60,000 60,000 - 60,000 - FAA Bil Grant 385,000 385,000 310,224 74,776 98,714 Pedestrian Xing Pearl & Main 75,000 75,000 - 75,000 - USDA Uranium water project 1,000,000 1,000,000 - 1,000,000 - DOT Ped School safety 715,000 715,000 554,549 160,451 - Total Public Works 2,856,607 2,856,607 1,193,333 1,663,274 926,361 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) 2024 VARIANCE ACTUAL FINAL ORIGINAL BUDGETED AMOUNT -25- ---PAGE BREAK--- Health Animal shelter $ 3,000 $ 3,000 $ 5,429 $ (2,429) $ 3,539 Culture and Recreation ARPA Grant - - - - 11,223 Total Expenditures 3,150,432 3,150,432 1,294,397 1,856,035 1,055,841 Excess of Revenues over Expenditures 22,900 22,900 52,916 30,016 (20,109) Fund Balance, July 1 470,451 470,451 238,138 (232,313) 258,247 Fund Balance, June 30 $ 493,351 $ 493,351 $ 291,054 $ (202,297) $ 238,138 2024 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) BUDGETED AMOUNT ORIGINAL FINAL ACTUAL VARIANCE The accompnaying notes are an integral part of these financial statements. -26- ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2025 (With Comparative Totals for June 30, 2024) Current Assets Unrestricted Cash - Note 2 $ 4,867,333 $ 2,660,383 Accounts receivables, net of allowance for doubtful accounts of $17,220 185,517 114,560 Due from other governments - - Advance to Sewer Fund 130,000 - Other receivables 113,314 - Inventory of materials and supplies 38,393 3,903 Restricted Cash - Note 2 Customer deposits 70,549 2,682 AB 198 capital reserve 356,245 - Total Current Assets 5,761,351 2,781,528 Property, Plant and Equipment - Note 3 Land and water rights 307,393 10,120 Construction in progress - Note 16 1,870,087 - Building, wells, tanks, and distribution system 40,961,114 - Treatment plant and collection system - 23,947,263 Vehicles 63,758 49,407 Maintenance equipment 2,520,257 506,206 Office equipment 22,165 - 45,744,774 24,512,996 Accumulated depreciation (9,231,120) (4,105,181) Total Property, Plant and Equipment 36,513,654 20,407,815 Total Assets 42,275,005 23,189,343 Deferred Outlfow of Resources Post measurement date pension contributions - Note 7 57,534 46,889 Deferred pension outflow of resources - Note 7 250,142 203,857 Deferred OPEB outflow of resources - Note 8 9,509 9,509 Total Deferred Outflow of Resources 317,185 260,255 UTILITY FUND UTILITY FUND (Page 1 of 2) UTILITY ENTERPRISE FUNDS WATER SEWER ---PAGE BREAK--- TOTALS 2025 2024 $ 7,527,716 $ 9,824,952 300,077 260,195 - - 130,000 130,000 113,314 159,714 42,296 35,253 73,231 65,099 356,245 333,201 8,542,879 10,808,414 317,513 317,513 1,870,087 - 40,961,114 40,961,114 23,947,263 23,947,263 113,165 113,165 3,026,463 3,026,463 22,165 22,165 70,257,770 68,387,683 (13,336,301) (11,951,528) 56,921,469 56,436,155 65,464,348 67,244,569 104,423 89,848 453,999 460,173 19,018 27,047 577,440 577,068 -26- ---PAGE BREAK--- Liabilities Current Liabilities Accounts payable and accrued liabilities $ 94,078 $ 23,952 Accrued salaries and wages 29,712 24,013 Due to other governments 7,488 3,567 Accrued interest 150,342 142,681 Advance from Water Utility Fund - 130,000 Customer deposits 70,549 2,682 Current portion note payable 314,694 298,907 Total Current Liabilities 666,863 625,802 Long-term liabilities: Accrued compensated absences 14,339 11,477 USDA Rural Development Bonds 15,781,940 14,973,376 Net pension liability 714,363 600,931 OPEB liability 81,809 69,655 Total Long-Term Liabilities 16,592,451 15,655,439 Total Liabilities 17,259,314 16,281,241 Deferred Inflow of Resources Deferred pension inflows - Note 7 123,697 100,810 Deferred OPEB inflows - Note 8 6,458 6,458 Total Deferred Inflow of Resources 130,155 107,268 Net Position Net Investment in capital assets 20,417,020 5,135,532 Restricted - loan reserves - Note 10 356,245 - Unrestricted 4,429,456 1,925,557 Total Net Position $ 25,202,721 $ 7,061,089 CITY OF YERINGTON, NEVADA PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2025 (With Comparative Totals for June 30, 2024) (Page 2 of 2) UTILITY ENTERPRISE FUNDS WATER SEWER UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2025 2024 $ 118,030 $ 81,344 53,725 30,723 11,055 11,718 293,023 300,015 130,000 130,000 73,231 65,099 613,601 615,253 1,292,665 1,234,152 25,816 47,007 30,755,316 31,368,917 1,315,294 1,477,297 151,464 163,784 32,247,890 33,057,005 33,540,555 34,291,157 224,507 17,010 12,916 9,868 237,423 26,878 25,552,552 24,451,985 356,245 333,201 6,355,013 8,718,416 $ 32,263,810 $ 33,503,602 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) Operating Revenues Use fees, net of bad debts $ 1,513,822 $ 1,202,224 Operating Expenses Salaries and wages 366,479 305,903 Employee benefits 222,856 194,810 Service and supplies 745,642 484,552 Bad debt expense 48,146 - Depreciation 956,896 427,877 Total Operating Expenses 2,340,019 1,413,142 Operating Income (Loss) (826,197) (210,918) Nonoperating Revenue (Expenses) Late fees / administrative fees 14,239 2,635 Water tank lease 16,633 - Willowcreek agreement 19,000 29,000 Nevada Copper water reservation fee 87,500 - Water rights revenue 9,000 - Miscellaneous revenues 768 203 Investment income 1,223 - Interest expense (221,928) (200,750) Total Nonoperating Revenue (Expenses) (73,565) (168,912) Income (Loss) before Contributions (899,762) (379,830) Capital Contributions Connection fees from customers 36,000 3,800 ARP Rescue Grant - - USDA Rural Development - Sewer Grants - - USDA Rural Development - Colony Water/Sewer Grant - - Total Capital Contributions 36,000 3,800 Special Item: Loss on disposal of assets - - Change in Net Position (863,762) (376,030) Net Position, July 1 - Note 10 26,066,483 7,437,119 Net Position, June 30 $ 25,202,721 $ 7,061,089 UTILITY ENTERPRISE FUNDS WATER SEWER UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2024 $ 2,716,046 $ 2,501,084 672,382 711,809 417,666 481,973 1,230,194 1,234,604 48,146 - 1,384,773 1,187,805 3,753,161 3,616,191 (1,037,115) (1,115,107) 16,874 16,612 16,633 17,248 48,000 48,000 87,500 87,500 9,000 9,000 971 5,000 1,223 10,041 (422,678) (488,519) (242,477) (295,118) (1,279,592) (1,410,225) 39,800 44,322 - 156,118 - 1,480,889 - 31,019 39,800 1,712,348 - (1,971,505) (1,239,792) (1,669,382) 33,503,602 35,172,984 $ 32,263,810 $ 33,503,602 2025 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) Cash Flows From Operating Activities Receipts from customers $ 1,617,077 $ 1,227,022 Payments to Lyon County (71,096) (42,970) Payments of personnel costs (573,973) (478,414) Payments for service and supplies (713,546) (487,005) Net Cash Provided (Used) by Operating Activities 258,462 218,633 Cash Flows From Noncapital Financing Activities Water tank lease income 16,633 - Water rights revenue 9,000 - Willow Creek agreement revenues 19,000 29,000 Nevada Copper reservation fee 39,354 - Administrative fees 14,239 - Miscellaneous income 768 2,635 Net Cash Provided by Noncapital Financing Activities 98,994 31,635 Cash Flows From Capital and Related Financing Activities Capital contributed from customers 36,000 3,800 Capital contributed from USDA - Colony - 203 Capital contributed from USDA - City Sewer - - Capital contributed from ARPA Rescue grant - - Acquisition of capital assets (1,870,087) - Interim debenture bond refund - - Principal paid on note payabe (310,536) (304,717) Interest paid on long-term debt (225,487) (204,183) Net Cash Provided (Used) by Capital and Related Financing Activities (2,370,110) (504,897) Cash Flows From Capital and Related Financing Activities Investment income 1,223 - Net Increase (Decrease) in Cash and Cash Equivalents (2,011,431) (254,629) Cash and Cash Equivalents, July 1 7,305,558 2,917,694 Cash and Cash Equivalents, June 30 $ 5,294,127 $ 2,663,065 UTILITY ENTERPRISE FUNDS WATER SEWER UTILITY FUND UTILITY FUND ---PAGE BREAK--- 2025 2024 $ 2,844,099 $ 2,596,544 (114,066) (120,626) (1,052,387) (1,075,727) (1,200,551) (1,188,975) 477,095 211,216 16,633 17,248 9,000 9,000 48,000 48,000 39,354 43,750 14,239 14,227 3,403 7,385 130,629 139,610 39,800 44,322 203 122,023 - 1,480,889 - 156,118 (1,870,087) (4,103,541) - (845,860) (615,253) - (429,670) (277,419) (2,875,007) (3,423,468) 1,223 10,041 (2,266,060) (3,062,601) 10,223,252 13,285,853 $ 7,957,192 $ 10,223,252 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ (826,197) $ (210,918) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 956,896 427,877 Bad debt expense 48,146 - Deferred OPEB expense (978) (265) Deferred pension expense 15,605 21,488 Changes in assets and liabilities: Decrease (increase) in accounts receivable 23,970 (17,452) Decrease (increase) in inventory (7,043) - Increase in consumer deposits 8,155 (23) Increase (decrease) in accounts payable and accrued liabilities 39,908 (2,074) Net Cash Provided by Operating Activities $ 258,462 $ 218,633 UTILITY ENTERPRISE FUNDS UTILITY FUND WATER SEWER UTILITY FUND ---PAGE BREAK--- $ (1,037,115) $ (1,115,107) 1,384,773 1,187,805 48,146 - (1,243) (12,668) 37,093 107,975 6,518 (28,309) (7,043) 20,814 8,132 10,366 37,834 40,340 $ 477,095 $ 211,216 TOTALS 2024 2025 The accompanying notes are an integral part of these financial statements. -30- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -32- Note 1 - Summary of Significant Account Policies: The City of Yerington (the “City”) is an incorporated city operated under the applicable laws and regulations of the State of Nevada. The financial statements of the City of Yerington have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards, which along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units in addition to other authoritative sources issued by the American Institute of Certified Public Accountants. GASB Statement No. 34 established a financial reporting model for state and local governments that included the addition of a management’s discussion and analysis, government- wide financial statements, required supplementary information and the elimination of the effects of internal service activities and the use of account groups. The GASB determined that fund accounting has and will continue to be essential in helping governments to achieve fiscal accountability and should, therefore, be retained. The GASB also determined that government-wide financial statements are needed to allow the users of the financial reports to assess a government’s operational accountability. The GASB model integrates fund-based financial reporting and government-wide financial reporting as complementary components of a single comprehensive financial reporting model. Reporting Entity The City, for financial purposes, includes all of the funds relevant to the operations of the City of Yerington. The financial statements of the City of Yerington include those organizations that are controlled by or dependent on the City and fall under the direct jurisdiction of the Mayor and City Council, which is a separately elected body by the citizens of the City. The Mayor and City Council are legally separate and fiscally independent from other governing bodies, with decision-making authority, authority to levy taxes, authority to prepare its own budget, the power to designate management, the ability to significantly influence operations and is accountable for fiscal matters. Therefore, the City is a primary government and is not reported as a component unit by any other entity; nor is the City accountable for any other entity required to be included in the City's annual financial report. Basic Financial Statements: The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The reporting model's focus is on either the City as a whole or major individual funds (within the fund financial statements). Both the government- wide and fund financial statements categorize activities as either governmental activities or business-type activities. In the government-wide Statement of Net Position, both the governmental and business-type activities columns are presented on a consolidated basis by 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. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -33- 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, 2025 -34- 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, 2025 -35- 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 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. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -36- Proprietary Funds: The Proprietary Funds (Water and Sewer Utility Funds) are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Private–sector standards of accounting and financial reporting issued prior to December 1, 1989, are generally followed in proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board (GASB). Governments also have the option of following subsequent private-sector guidance for their business-type activities, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. Budgets and Budgetary Accounting Budget Policies: The City of Yerington adheres to the Local Government Budget Act incorporated within state statutes, which includes the following major procedures to establish the budgetary data, which is reflected in these financial statements. 1. On or before April 15 of each year, the budget officer shall prepare, or the governing body shall cause to be prepared, on appropriate forms prescribed by the Department of Taxation for the use of local governments, a tentative budget for the ensuing fiscal year. The tentative budget must be filed for public record and inspection. 2. Public hearings on the tentative budget are held not sooner than the third Monday in May and not later than the last day in May. 3. Prior to June 1, at a public hearing, the Council indicates changes, if any, to be made to the tentative budget and adopts a final budget by the favorable vote of a majority of the members of the Council. The final budget must then be forwarded to the Nevada Tax Commission to approve the requested ad valorem tax rate. 4. Formal budgetary integration in the financial records of all funds is employed to enhance management control during the year. 5. Budgets for all funds are adopted on a basis consistent with Generally Accepted Accounting Principles (GAAP) other than the City's election to account and budget for activities required to be reported within the General Fund in two separate funds. Appropriations lapse at year-end. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -37- 6. Budget amounts within funds, and between funds, may be transferred if amounts do not exceed the original budget. Such transfers are to be approved by the budget officer and/or the City Council, depending on established criteria. Budget augmentations in excess of original budgetary amounts may not be made without prior approval of the City Council, following a scheduled and noticed public hearing. During the year, the City Council approved one budget augmentation. 7. The above dates may be modified as necessary during years when the Nevada Legislature is in session. In accordance with state statutes, actual expenditures may not exceed budget appropriations of the various governmental functions of the General Fund, or total appropriations of the individual Special Revenue and Capital Projects Funds. In Proprietary Funds, actual expenses may not exceed the sum of budgeted operating and nonoperating expenses. Cash and Investments Cash balances from all funds are combined and, to the extent practicable, invested as permitted by NRS 355.170. Investments are stated at fair market value. Pursuant to NRS 355.170, the City may only invest in the following types of securities: - United States bonds and debentures maturing within ten (10) years from the date of purchase. - Certain farm loan bonds. - Securities of the United States Treasury, United States Postal Service or the Federal National Mortgage Association maturing within ten (10) years from the date of purchase. - Negotiable certificates of deposit from commercial banks and insured savings and loan associations within the State of Nevada. - Certain securities issued by local governments of the State of Nevada. - Other securities expressly provided by other statutes, including repurchase agreements. - Certain short-term commercial paper issued by U. S. Corporations. - Certain "AAA" rated mutual funds that invest in Federal securities. Cash Restrictions Restricted cash balances represent cash held by the entity for specific purposes. Cash and Cash Equivalents For purposes of the statement of cash flows, the Enterprise Funds consider all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -38- 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, 2025 for all Proprietary Funds is $17,220. Interest Earned on Investments Interest earned is allocated to the utility funds based upon the proportions of the utility funds' cash balances to the total City cash. All other interest income is recognized in the Fixed Asset Acquisition Fund. Inventory of Consumable Supplies All funds, except the enterprise funds, account for materials and supplies inventories as expenditures using the "purchase method", whereby inventories are recorded as expenditures when they are purchased. Proprietary Fund account for inventories using the "consumption method" which reclassifies inventories as expenditures when they are used. Proprietary Fund inventories are valued at cost, on a first-in first-out basis as identified by a physical inventory count at year-end. Capital Assets Capital assets purchased in all governmental funds are recorded in the Governmental Fund Financial Statements as expenditures at the time of purchase and capitalized at historical cost in the government-wide financial statements. Proprietary funds capitalize fixed assets at historical cost. Interest costs incurred during the construction of capital assets are capitalized as part of the cost of construction (if material). Donated assets are recorded at their estimated fair market value on the date of donation. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Public domain (infrastructure) fixed assets, consisting of improvements such as curbs and gutters, streets and sidewalks, and bridges are valued at historical cost or estimated historical cost. The capitalization threshold for all types of fixed assets is $5,000. Depreciation is provided in an amount sufficient to allocate the cost of the depreciable assets to operations over their estimated service lives on the straight-line basis. The service lives by type are as follows: ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -39- 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, 2025 -40- 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, 2025 -41- Fund Balance In the governmental fund financial statements, governmental funds report up to five components of fund balance, as applicable. These five classifications are: nonspendable, restricted, committed, assigned, and unassigned. Nonspendable fund balance is reserved for portions of net resources that cannot be spent because of their form, such as inventories or prepaid items, or that cannot be spent because they must be kept intact. Restricted fund balance is reserved for the portion of net resources that have externally enforceable limitation on use, such as those imposed by creditors, grantors, contributors, or laws enacted by external entities. Committed fund balance is reserved for the portion of net resources that have had self-imposed limitations set in place by formal action of the governing board. Assigned fund balance is reserved for the portion of net resources that have an intended use established by the governing board or a designated official. Unassigned fund balance is for that portion of net resources that does not meet the criteria to be placed in any of the other four components of fund balance. Capital Contributions Contributions are recognized in the Statement of Revenues, Expenses and Changes in Net Position when earned. Contributions normally include capital grants and customer funded system improvements. Operating Revenues and Expenses Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. For the City, these revenues are charges for services for water and sewer activities. Operating expenses are necessary costs incurred to provide the goods or services which is the primary activity of the fund. Revenues and expenses which do not meet these criteria are considered non-operating and are reported as such. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Grant Revenue Grant revenues received before the revenue recognition criteria established by the Governmental Accounting Standards Board have been met are reported as deferred inflow of resources. Interest Capitalization The City has implemented GASB Statement No 89, Accounting for Interest Costs Incurred before the end of a Construction Period which required governmental entities to recognize interest costs incurred during construction as an expense or expenditure. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -42- Cost Allocations A number of employees provide service to multiple departments and funds. The City allocates the respective labor cost based on management's estimates established at the beginning of each fiscal year. Public works employees are the primary group whose costs are allocated. These employees serve the various enterprise funds as well as the public works departments within the general fund. The City also allocates administrative employee costs to proprietary funds. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Nevada Public Employees Retirement System (PERS) and additions to/deductions from PERS’s fiduciary net position have been determined on the same basis as they are reported by PERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of resources or deferred outflow of resources depending on the nature of the change. The changes in net pension liability that are recorded as deferred inflow of resources or deferred outflow of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred. Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflow of resources or deferred outflow of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred. Each subsequent year will incorporate an additional closed basis five-year period or recognition. Deferred Inflows and Outflows of Resources Transactions that result in the consumption or acquisition of net assets in one period that are applicable to future periods are reported as either a deferred inflow of resources or deferred outflow of resources in the statement of net position. Comparative Data The basic financial statements include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Such information can only be obtained by referring to the June 30, 2024 audit report. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -43- Note 2 - Cash and Investments: The City's cash balance is maintained at Wells Fargo Bank which is 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 investments are held at Nevada Local Investment Pool and Moreton Capital Markets. The following schedule summarizes cash and investments for the City of Yerington at June 30, 2025: Cash and Investment Balance Held By: General Activities: General Fund $ 946,597 Municipal Court Administrative Assessment Fund 28,099 Special Revenue Fund - Fixed Asset Acquisition Fund 254,293 Total General Activities Cash and Investments $ 1,228,989 Business Type Activities: Water Utility Fund 5,294,127 Sewer Utility Fund 2,663,065 Total Business-Type Activities Cash and Investments 7,957,192 Total Cash and Investments $ 9,186,181 Cash Balances Classified By Depository: Cash on Hand $ 300 Commercial Account: Wells Fargo Bank 2,218,831 Subtotal Cash 2,219,131 Investments: Nevada State Local Government Investment Pool 5,718,375 Moreton Capital Markets 1,248,675 Subtotal Investments 6,967,050 Total Cash and Investments $ 9,186,181 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -44- 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) 250,000 250,000 Uninsured but collateralized by securities held in the name of the City by its agent 1,968,831 2,261,913 $ 2,219,131 $ 2,511,913 Cash Restrictions: The City’s water utility system previously received grant financing totaling $2,760,986 and is required to annually deposit into a cash reserve account $23,044 in the City Water Fund to cover future capital costs. At June 30, 2025, cash reserve balances were $356,245 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, 2025 are $70,549 and $2,682 respectively. Investments The following is the fair value of the investments categorized by maturity: At June 30, 2025, the average weighted maturity of the Nevada Local Government Investment Pool was 49.5 days. The fair value of $5,718,375 is determined according to the following hierarchy determined by availability of market pricing used to determine the fair value. Level I – Based on quoted prices in active market for identical assets $ 2,280,307 Level II – Based on significant other observable inputs $ 3,438,068 Investment Maturities in (in Years) Fair Value Less than 1 1 to 5 Investments: NV Local Government Investment Pool 5,718,375 $ 5,718,375 $ - $ Moreton Capital Markets Money Market Mutual Funds 3,202 3,202 - Negotiable Certificates of Deposit 1,245,473 750,453 495,020 Total Investments 6,967,050 $ 6,472,030 $ 495,020 $ ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -45- 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. Concentration of Credit Risk: The City places no limit on the amount that may invest in any one issuer. Credit Risk: Credit risk is defined as the risk that another party to a deposit or investment transaction (counterparty) will not fulfill its obligations. The City uses investment ratings as a tool in evaluating its investments in regard to credit risks. State law limits types of allowable investments under Nevada Revised Statutes 355.170 as listed in the accompanying Note 1. As of June 30, 2025, the City’s investments are rated as follows: Fair Value Aaa-m Aaa Aa Unrated Investments: NV Local Gov't Investment Pool 5,718,375 $ - $ - $ - $ 5,718,375 $ Moreton Capital Markets Money Market Mutual Funds 3,202 3,202 - - Negotiable CD's 1,245,473 - - - 1,245,473 Total Investments 6,967,050 $ 3,202 $ - $ - $ 6,963,848 $ Quality Ratings by Moody's Investment Services ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -46- Note 3 - Capital Assets: A summary of changes in capital assets is as follows: Balance Balance July 1, 2024 Additions Deletions June 30, 2025 Governmental Activities: Capital assets, not being depreciated: Land and improvements $ 832,875 $ - $ - $ 832,875 Construction in progress 156,671 13,768 151,082 19,357 Total capital assets, not being depreciated 989,546 13,768 151,082 852,232 Capital assets being depreciated: Land improvements 6,007,592 330,905 - 6,338,497 Buildings and improvements 2,593,778 40,687 - 2,634,465 Equipment and vehicles 3,469,583 124,401 - 3,593,984 Infrastructure 6,788,879 1,619,793 - 8,408,672 Total capital assets being depreciated 18,859,832 2,115,786 - 20,975,618 Less accumulated depreciation for: Land improvements 2,959,495 183,733 - 3,143,228 Buildings and improvements 683,256 67,520 - 750,776 Equipment and vehicles 2,057,507 262,367 - 2,319,874 Infrastructure 4,740,555 167,268 - 4,907,823 Total accumulated depreciation 10,440,813 680,888 - 11,121,701 Total capital assets being depreciated, net 8,419,019 1,434,898 - 9,853,917 Governmental activities capital assets, net $ 9,408,565 $1,448,666 $ 151,082 $10,706,149 Depreciation expense was charged to the following functions of the City: Governmental Activities: General Government $ 68,812 Judicial 513 Public safety 81,520 Public works 330,529 Culture and recreation 32,246 Infrastructure 167,268 Total Depreciation Expense – Governmental Activities $ 680,888 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -47- Note 3 - Capital Assets (continued): Balance Balance July 1, 2024 Additions Deletions June 30, 2025 Business-type Activities: Capital assets, not being depreciated: Land and improvements $ 317,513 $ - $ - $ 317,513 Construction in progress - 1,870,087 - 1,870,087 317,513 1,870,087 - 2,187,600 Capital assets being depreciated: Buildings, wells, tanks and distribution system 40,961,114 - - 40,961,114 Treatment plant and collection system 23,947,263 - - 23,947,263 Vehicles 113,165 - - 113,165 Maintenance equipment 3,026,463 - - 3,026,463 Office equipment 22,165 - - 22,165 Total capital assets being depreciated 68,070,170 - - 68,070,170 Less accumulated depreciation for: Buildings, wells, tanks and distribution system 6,588,467 837,138 - 7,425,605 Treatment plant and collection system 3,188,824 401,029 - 3,589,853 Vehicles 91,405 4,580 - 95,986 Maintenance equipment 2,060,667 141,982 - 2,202,650 Office equipment 22,165 - - 22,165 Total accumulated depreciation 11,951,528 1,384,730 - 13,336,301 Total capital assets being depreciated, net 56,118,642 (1,384,730) - 54,733,869 Business-type activities capital assets, net $56,436,155 $ 485,314 $ - $56,921,469 Depreciation expense of $1,384,730 was charged to the public works - utilities function of the City. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -48- Note 4 - General Long-Term Debt: Governmental Activities: The estimated value of the accrued compensated absences liability at June 30, 2025 was $49,945. 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 2024 Issued Retired 2025 One Year Long-Term Debt: Compensated absences $ 51,789 $ - $ 1,844 $ 49,945 $ - Net Pension Liability 2,494,397 - 368,755 2,125,642 - OPEB liability 161,807 - 17,357 144,450 - Total Long-Term Obligations $2,707,993 $ - $ 387,956 $2,320,037 $ - The lawful City general obligation debt limit at June 30, 2025 was $29,062,562 (NRS 266.600), which leaves a statutorily-available borrowing capacity of $29,062,562 since the City does not have any general obligation bonds outstanding. Note 5 – Enterprise Fund Obligations: The following are the long-term obligations of the enterprise funds outstanding at June 30, 2024. Changes in Business-Type Activities Long-term Obligations: Balance Balance July 1, Obligations Obligations June 30, Due Within 2024 Issued Retired 2025 One Year Long-Term Debt: Compensated absences $ 47,007 $ - $ 21,192 $ 25,815 $ - USDA – Water loan 2023A 9,055,170 - 171,436 8,883,734 173,673 USDA – Water loan 2023B 7,352,000 - 139,100 7,212,900 141,021 USDA – Sewer loan 2023A 8,577,000 - 162,277 8,414,723 164,502 USDA – Sewer loan 2023B 7,000,000 - 142,440 6,857,560 134,405 Net Pension Liability 1,477,297 - 162,003 1,315,294 - OPEB liability 163,784 - 12,320 151,464 - Total Long-Term Obligations $33,672,258 $ - $ 810,768 $32,861,490 $ 613,601 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -49- On October 25, 2023, the City executed four revenue bond agreements with USDA – Rural Development for permanent funding on the City Water and Sewer Line Replacement Project. USDA Rural Development executed Water Utility Fund loans totaling $16,407,170 consisting of loan 2023A in the amount of $9,055,170 and loan 2023B in the amount of $7,352,000. USDA Rural Development also executed Sewer Utility Fund loans totaling $15,577,000 consisting of loan 2023A in the amount of $8,577,000 and loan 2023B in the amount of $7,000,000. The terms of the loans require annual; payments of both interest and principal at 1.375% over a forty-year period. The four USDA Rural Development loans were issued as revenue bonds for which the City pledges to generate sufficient user fee revenues to meet debt service requirements. In anticipation of these loans, the City Council authorized utility water and sewer rate increases sufficient to meet debt service requirements. The following schedule details the future debt service requirements on the USDA Water and Sewer Bonds: 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 now combined with consolidated tax revenue in the General Fund. Year Ending June 30 Interest Principal Total Interest Principal Total 2026 221,329 $ 314,694 $ 536,023 $ 209,994 $ 298,907 $ 508,901 $ 2027 217,002 319,021 536,023 205,884 303,017 508,901 2028 212,615 323,408 536,023 201,717 307,184 508,901 2029 208,168 327,855 536,023 197,494 311,407 508,901 2030 203,660 332,363 536,023 193,212 315,689 508,901 2031-2035 948,481 1,731,634 2,680,115 899,742 1,644,763 2,544,505 2036-2040 826,113 1,854,003 2,680,116 783,512 1,760,993 2,544,505 2041-2045 695,097 1,985,018 2,680,115 659,069 1,885,436 2,544,505 2046-2050 554,822 2,125,293 2,680,115 525,829 2,018,676 2,544,505 2051-2055 404,634 2,275,481 2,680,115 383,177 2,161,329 2,544,506 2056-2060 243,832 2,436,283 2,680,115 230,442 2,314,063 2,544,505 2061-2064 71,680 2,071,581 2,143,261 67,159 1,950,819 2,017,978 Totals 4,807,433 $ 16,096,634 $ 20,904,067 $ 4,557,231 $ 15,272,283 $ 19,829,514 $ USDA - Water Utility Bonds USDA - Sewer Utility Bonds ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -50- Note 6 - Contracts and Agreements (continued): 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 2025 was $455,606 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 2025 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. In addition to agreements with other local governments, the City has the following agreements outstanding at June 30, 2025 with private companies. Southwest Critical Minerals. - Water Service Agreement The City of Yerington has entered into an agreement with Southwest Critical Minerals. 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 Southwest Critical Minerals 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. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -51- Note 7 - Defined Benefit Pension Plan: General Information about the Pension Plan Plan description: All permanent full-time employees are provided pensions through the Public Employees Retirement Plan (PERS). The plan is a cost-sharing multiple-employer defined benefit pension plan administered by the Public Employees Retirement System of Nevada. Chapter 286 of the Nevada Revised Statutes (NRS) establishes a governing board, appointed by the Governor that is responsible for managing the System, including arranging for a biennial actuarial valuation and adoption of actuarial tables and formulas prepared and recommended by the actuary. Benefits provided: Benefits, as required by the Nevada Revised Statutes (NRS or statute), are determined by the number of years of accredited service at time of retirement and the member’s highest average compensation in any 36 consecutive months with special provisions for members entering the System on or after January 1, 2010. Benefit payments to which participants or their beneficiaries may be entitled under the plan include pension benefits, disability benefits, and survivor benefits. benefit allowances for members are computed at 2.5% of average compensation for each accredited year of service prior to July 1, 2001. For service earned on and after July 1, 2001, this multiplier is 2.67% of average compensation. For members entering the System on or after January 1, 2010, there is a 2.5% multiplier and for regular members entering the System on or after July1, 2015, there is a 2.25% factor. The System offers several alternatives to the unmodified service retirement allowance which, in general, allow the retired employee to accept a reduced service retirement allowance payable during his or her lifetime and various optional payments to a named beneficiary after his or her death. Post-retirement increases are provided by authority of NRS 286.575–.579. Regular members are eligible for retirement at age 65 with five years of service, at age 60 with ten years of service, or at any age with thirty years of service. Regular members entering the System on or after January 1, 2010, are eligible for retirement at age 65 with five years of service, or age 62 with ten years of service, or any age with thirty years of service. Regular members who enter the system on or after July 1, 2019 are eligible for retirement at age 65 with 5 years of service, or at age 62 with 10 years of service or at age 55 with 30 years of serve or any age with 33 1/3 years of service. Police/Fire members are eligible for retirement at age 65 with five years of service, at age 55 with ten years of service, at age 50 with twenty years of service, or at any age with twenty- five years of service. Police/Fire members entering the System on or after January 1, 2010, are eligible for retirement at age 65 with five years of service, or age 60 with ten years of service, or age 50 with twenty years of service, or at any age with thirty years of service. Only service performed in a position as a police officer or firefighter may be counted towards eligibility for retirement as Police/Fire accredited service. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -52- Note 7 – Defined Benefits Pension Plan (continued): The normal ceiling limitation on benefit allowances is 75% of average compensation. However, a member who has an effective date of membership before July 1, 1985, is entitled to a benefit of up to 90% of average compensation. Both Regular and Police/Fire members become fully vested as to benefits upon completion of five years of service. Contributions: The authority for establishing and amending the obligation to make contributions, and member contribution rates, is set by statute. The contribution rates are based on biennial actuarial valuations and expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.. New hires, in agencies which did not elect the Employer-Pay Contribution (EPC) plan prior to July 1, 1983 have the option of selecting one of two contribution plans. One plan provides for matching employee and employer contributions (EEC), while the other plan provides for employer-pay contributions only. Under the matching Employee/Employer Contribution plan a member may, upon termination of service for which contribution is required, withdraw employee contributions which have been credited to their account. All membership rights and active service credit in the System are canceled upon withdrawal of contributions from the member’s account. If EPC was elected, the member cannot convert to the Employee/Employer Contribution plan. The City has both the EPC plan and the EEC plan for its employees. The City’s contribution to both plans was $618,629 for the year ended June 30, 2025. The respective rates on which contributions for EPC plans were based were 50.0% of covered compensation for police/fire members and 33.5% for other members and 17.50% or other member under EEC plan. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2025, the City reported a liability of $3,440,936 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2024, 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, 2024. At June 30, 2024, the City’s proportion of the plan was .01904% while the prior year’s proportionate rate was .02176%. For the year ended June 30, 2025, the City recognized pension expense of $281,264 and $144,701 in its governmental and business-type activities respectively. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -53- Note 7 – Defined Benefits Pension Plan (continued): Deferred Outflows Deferred Inflows of Resources of Resources Governmental Business-Type Governmental Business-Type Activities Activities Activities Activities Difference between expected and actual experience $ 482,005 $ 247,977 $ - $ - Net difference between projected and actual earnings on pension plan investments - - 223,825 115,151 Changes in assumptions 146,607 75,424 - - Changes in proportion and differences between City contributions and proportionate share of contributions 253,850 130,598 212,561 109,356 $ 882,462 $ 453,999 $ 436,386 $ 224,507 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: 2026 $ 75,771 $ 38,982 2027 313,678 161,378 2028 46,886 24,122 2029 (7,734) (3,979) 2030 17,475 8,989 Thereafter - - $ 446,076 $ 229,492 In addition, $204,892 and $104,423 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, 2025. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -54- Note 7 – Defined Benefits Pension Plan (continued): Actuarial assumptions: The total pension liability at June 30, 2024 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 2.50% Investment rate of return 7.25% Productivity pay increases: 0.50% Salary increases Regular: 4.20% to 9.10%, depending on service Police/Fire: 4.60% to 14.50%, depending on service Rates include inflation and productivity increases Other assumptions Same as those used in the June 30, 2024 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, 2024 are included in the following table: Target Long-Term Geometric Asset Class Allocation Expected Real Rate of Return* U.S. Stocks 34% 5.50% International Stocks 14% 5.50% U.S. Bonds 28% 2.25% Private Markets 12% 6.65% Short-term Investments 12% 0.50% *As of June 30, 2024, the PERS’ long-term inflation assumption was 2.50%. Discount Rate: The discount rate used to measure the total pension liability was 7.25% as of June 30, 2024. 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, 2025 -55- 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 7.25 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 (6.25%) or 1-percentage-point higher (8.25%) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.25%) (7.25%) (8.25%) $5,532,138 $3,440,936 $ 1,714,192 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, 2024. Plan Information Nevada Public Employees' Benefits Program: The City contributes to an agent multiple-employer defined healthcare plan, Nevada Public Employees’ Benefits Program (PEBP). PEBP is administered by the State of Nevada pursuant to NRS 287. City retirees previously had the option to join the PEBP offered by the State of Nevada. Local Governments are required to pay the same portion of cost of coverage for their retirees joining PEBP that the State of Nevada pays for those persons retired from state service. As of June 30, 2024, eleven 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. 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. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -56- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): City of Yerington Health Care Plan: The City pays the full cost of active employee coverage. Employees pay the full cost of any optional dependent coverage and retirees pay the full cost of their personal and dependent coverage. Claims experience of employees and retirees are pooled when determining premiums and retiree and active employees pay the same rates. Therefore, an "implicit" subsidy of retirees cost by active employees could results. A separate report is not issued for the plan. There are 12 active employees under this plan. Total OPEB Liability: Following is the City’s total OPEB liability as of June 30, 2025 as determined by an actuarial valuation as of June 30, 2024. District Plan $ 118,563 PEBP Plan 177,351 Total Both Plans $ 295,914 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. Significant methods and assumptions used to value both plans are as follows: Valuation date June 30, 2024 Funding method Entry Age Normal Cost, (AMM) Asset valuation method N/A - No trust established Discount rate (S & P General 3.93% as of June 30, 2025 and 5.20% as of Obligation Municipal Bond 20 June 30, 2024 Year High Grade Rate Index) ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -57- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): Participants valued – PEBP Only current PEBP retirees are valued – City Plan Only current active employees and retired participants and covered spouses are valued. No future entrants are considered Actuarial assumptions: Projected salary increases – PEBP N/A – City Plan 3.0% General inflation rate 2.5% Healthcare cost trend rates 6.0 in 2026 to 3.9% in 2075 and thereafter Mortality: The rate described below were described in the September 2021 actuarial valuation of the Nevada PERS program as being reasonably representative of mortality experience as the that measurement date. Non-disabled life rates for Regular and Safety employees: Males and Females: Pub-2010 General Healthy Retiree Amount- Weighted Above-Median Mortality Table with rates increased by 30% and 15% Pre-retirement life rates for Regular and Safety employees: Males and Females: Pub-2010 General Employee Amount-Weighted Above-Median Mortality Table Mortality Improvement: MacLeod Watts Scale 2022 applied generationally from 2010 Changes in Total OPEB Liability PEBS City Plan Plan Total Balance at June 30, 2024 $ 203,789 $ 121,802 $ 325,591 Changes for the year: Service cost - 6,704 6,704 Interest 7,742 5,050 12,792 Changes in assumptions (20,572) (14,993) (35,565) Plan experience - - - Benefit payments (13,608) - (13,608) Net Change (26,438) (3,239) (29,677) Balance at June 30, 2025 $ 177,351 $ 118,563 $ 295,914 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -58- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): Governmental Business-Type Activities Activities Total Balance at June 30, 2024 $ 161,807 $ 163,784 $ 325,591 Changes for the year: Service cost 3,922 2,782 6,704 Interest 7,419 5,373 12,792 Changes in assumptions (20,806) (14,759) (35,565) Plan experience - - - Benefit payments (7,893) (5,715) (13,608) Net Change (17,357) (12,320) (29,677) Balance at June 30, 2025 $ 144,450 $ 151,464 $ 295,914 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 5.20 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 (2.93%) or 1-percentage-point higher (4.93%) than the current rate: Current 1% Decrease Discount Rate 1% Increase (3.20%) (5.20%) (6.20%) $ 323,421 $ 295,914 $ 271,708 Sensitivity of the total OPEB liability to changes in the healthcare cost trend: The following presents the City’s total OPEB liability of the City as well as what the City’s OPEB liability would be if it were calculated using a healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current rates: Decrease Current Increase - 1% Trend Rate + 1% $ 267,954 $ 295,914 $ 328,164 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB: ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -59- Note 8 – Postemployment Benefits Other Than Pensions (OPEB) (continued): For the year ended June 30, 2024, the City recognized OPEB expense(income) of ($8,383) for the PEBS Plan and a OPEB benefit of $12,320 for the City Health Plan. At June 30, 2025, the City reported deferred outflows resources of $30,752 and deferred inflows of resources $45,282 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 $ 24,322 $ 17,612 $ 2,217 $ 1,605 Changes in assumptions 1,942 1,406 15,619 11,311 $ 26,264 $ 19,018 $ 17,836 $ 12,916 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: 2026 $ 1,109 $ 803 2027 [PHONE REDACTED] [PHONE REDACTED] [PHONE REDACTED] [PHONE REDACTED] 3,571 2,587 $ 8,428 $ 6,102 Note 9 – Interfund Balances: Interfund balances between governmental funds are eliminated on the district- wide financial statements to cover state and federal grant expenditures awaiting grantor reimbursements. Due From Due to Other Other Funds Funds General Fund $ 321,654 $ - Special Revenue - 321,654 $ 321,654 $ 321,654 ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -60- Note 10- Fund Equity: Net position includes the following restricted amounts at June 30, 2025. Business-Type Funds: Nevada Division of Environmental Protection grant (AB-198) requires annual contributions of $23,044 to a Capital Reserve account held for future improvements in the Water Utility Fund. $ 356,245 At June 30, 2025, the governmental funds had the following fund balance classified as follows. Part of the General Fund’s year-end balance is represented by fuel inventory and therefore non-spendable. $ 27,371 Part of the City Governmental Funds’ year-end balances are committed for: Municipal Court Administrative Assessments $ 27,999 Special Revenue Fund 291,054 Fixed Asset Acquisition Fund 207,631 $ 526,684 Part of the General Fund’s year-end balance fund balance been assigned as a financial resource for the subsequent year’s appropriations. $ - Note 11– Tax Abatements: City had tax abatements of $14 imposed under the consolidated tax distributions agreements entered into by the State of Nevada. The agreements provide for a partial abatement of sales and use taxes imposed on eligible machinery or equipment used by certain new or expanded businesses. Note 12– Advances to Sewer Fund From Water Fund: On June 22, 2020, City Council approved Resolution 2020-02 authorizing an interim loan of $130,000 from the Water Fund to the Sewer Fund as part of the pre-construction phase of the Water and Sewer Line Replacement project. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -61- Note 13 - 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 3.40%. FY 2025 FY 2025 Over Adjusted Percent Maximum Actual (Under) Base Increase Allowed Revenue Allowable 6-30-24 CPI Index Revenue Received Amount Business Licenses $170,846 X 3.40 % = $ 176,655 $ 114,146 $ (62,509) 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, 2025, there were funds in the amount of $724,429 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 $4,600 for the benefit of the City. 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 District pays an annual premium and is subject to a $25,000 deductible per occurrence. The Pool is considered a self-sustaining risk pool that will provide liability coverage for its members for up to $10,000,000 per event and a $13,000,000 general aggregate per member. Property, crime and equipment breakdown coverage is provided to its members up to $300,000,000 per loss with various sublimits established for earthquake, flood, equipment breakdown, and money and securities. ---PAGE BREAK--- CITY OF YERINGTON, NEVADA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 -62- Note 15 - Risk Management: (continued) 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 - 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, 2025. However, the City believes it has adequate insurance to cover any potential judgments should a judgement ever arise. Note 17 - Subsequent Event: Management has evaluated subsequent events through January 6, 2026, which is the date the financial statements were available to be issued. Note 18 - 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 expenses exceeding budgeted appropriations in the two functions in the General Fund, Water Utility Fund and Sewer Utility Fund which are an apparent violations of NRS 354.626. ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- 2018 2019 2020 Public Employees Benefit Plan (PEBP) Total OPEB Liability Service cost - $ - $ - $ Interest - - 20,022 Difference between expected and actual experience - - - Change in assumptions - - (36,632) Benefit payments - - (18,322) Plan experience - - (387,580) Net Change in total OPEB Liability - - (422,512) Total Liability, July 1 - - 726,792 Total Liability, June 30 - $ - $ 304,280 $ Covered employee payroll n/a n/a n/a City of Yerington Employee Health Benefits Plan Total OPEB Liability Service cost 5,380 $ 5,392 $ 5,910 $ Interest 29,432 23,644 1,293 Difference between expected and actual experience (119,998) - - Change in assumptions 19,543 41,632 803 Benefit payments (38,266) (42,176) - Plan experience (76,531) - 4,032 Net Change in total OPEB Liability (180,440) 28,492 12,038 Total Liability, July 1 919,183 738,743 40,443 Total Liability, June 30 738,743 $ 767,235 $ 52,481 $ Covered employee payroll 880,285 $ 1,067,723 $ 1,260,950 $ Total liability as a percentage of covered-employee payroll 83.9% 71.9% 4.2% Notes to Schedule: Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period. Applicable discount rates 3.27% 2.79% 2.66% CITY OF YERINGTON, NEVADA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN TOTAL OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY AND RELATED RATIOS ---PAGE BREAK--- 2021 2022 2023 2024 2025 - $ - $ - $ - $ - $ 7,876 6,652 9,161 9,026 7,742 - - - - - 17,502 (66,095) (863) 3,732 (20,572) (16,355) (16,366) (13,815) (13,676) (13,608) - (6,597) - (20,673) - 9,023 (82,406) (5,517) (21,591) (26,438) 304,280 313,303 230,897 225,380 203,789 313,303 $ 230,897 $ 225,380 $ 203,789 $ 177,351 $ n/a n/a n/a n/a n/a 8,987 $ 10,007 $ 7,175 $ 7,339 $ 6,704 $ 1,635 1,668 2,442 2,859 5,050 - - 48,746 - 3,406 (19,852) (267) 983 (14,993) - - - - - - (5,806) - - - 14,028 (13,983) 9,350 59,927 (3,239) 52,481 66,509 52,525 61,875 121,802 66,509 $ 52,526 $ 61,875 $ 121,802 $ 118,563 $ 542,315 $ 1,216,102 $ 1,611,779 $ 1,313,788 $ 1,444,990 $ 12.3% 4.3% 3.8% 9.3% 8.2% 2.18% 4.09% 4.13% 3.93% 3.93% -63- ---PAGE BREAK--- 2016 2017 2018 Schedule of Proportionate Share of the Net Pension Liability City's proportion of the net pension liability 0.01755% 0.01607% 0.01692% City's proportionate share of the net pension liability 2,011,063 $ 2,163,221 $ 2,249,939 $ City's covered-employee payroll 867,725 $ 855,015 $ 878,891 $ City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 231.8% 253.0% 256.0% Plan fiduciary net position as a percentage of the total pension liability 75.1% 72.2% 74.4% * The above amounts presented for each fiscal year have a measurement date of June 30 of the preceding yea Schedule of Employer Contributions Statutorily required employer contribution 136,805 $ 143,690 $ 151,535 $ Contributions in relation to the statutorily required contribution 136,805 143,690 151,535 Contribution deficiency - $ - $ - $ City's covered-employee payroll 855,015 $ 878,891 $ 880,285 $ Contributions as a percentage of covered payroll 16.0% 16.3% 17.2% JUNE 30, 2025 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--- 2019 2020 2021 2022 2023 2024 2025 0.01621% 0.01574% 0.01601% 0.01748% 0.01972% 0.02176% 0.01904% 2,210,324 $ 2,146,974 $ 2,230,096 $ 1,594,027 $ 3,559,918 $ 3,971,694 $ 3,440,936 $ 880,285 $ 931,454 $ 974,311 $ 1,053,709 $ 1,233,150 $ 1,411,449 $ 1,386,499 $ 251.1% 230.5% 228.9% 151.3% 288.7% 281.4% 248.2% 75.1% 76.5% 77.0% 86.5% 75.1% 72.1% 78.1% 152,524 $ 162,989 $ 179,968 $ 211,006 $ 245,068 $ 266,144 $ 309,315 $ 152,524 162,989 179,968 211,006 245,068 266,144 309,315 - $ - $ - $ - $ - $ - $ - $ 931,454 $ 974,311 $ 1,053,709 $ 1,233,150 $ 1,411,449 $ 1,386,499 $ 1,544,702 $ 16.4% 16.7% 17.1% 17.1% 17.4% 19.2% 20.0% -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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Revenues Other Revenue Sale of fixed assets $ 25,000 $ 25,000 $ - $ (25,000) $ - NV Energy Charge Point Grant - - 1,077 1,077 472 Total Revenues 25,000 25,000 1,077 (23,923.00) 472 Expenditures Culture and Recreation Capital outlay 1,500 1,500 - 1,500 11,227 Total Culture and Recreation 1,500 1,500 - 1,500 11,227 Total Expenditures 1,500 1,500 - 1,500 11,227 Excess (Deficiency) of Revenues over Expenditures 23,500 23,500 1,077 (25,423) (10,755) Fund Balance, July 1 217,512 217,512 206,554 (10,958) 217,309 Fund Balance, June 30 $ 241,012 $ 241,012 $ 207,631 $ (36,381) $ 206,554 BUDGETED AMOUNT ORIGINAL -65- ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND 2025 2024 Current Assets Unrestricted Cash $ 4,867,333 $ 6,909,963 Accounts receivable, net of allowance for doubtful accounts of $7,060 and $7,060 respectively 185,517 163,087 Due from other governments - - Advance to Sewer Fund 130,000 130,000 Other receivables 113,314 159,714 Inventory of materials and supplies 38,393 31,350 Restricted Cash Customer deposits 70,549 62,394 AB 198 capital reserve 356,245 333,201 Total Current Assets 5,761,351 7,789,709 Property, Plant And Equipment Land & water rights 307,393 307,393 Construction in progress 1,870,087 - Building, wells, tanks and distribution system 40,961,114 40,961,114 Vehicles 63,758 63,758 Maintenance equipment 2,520,257 2,520,257 Office equipment 22,165 22,165 45,744,774 43,874,687 Accumulated depreciation (9,231,120) (8,274,224) Total Capital Assets 36,513,654 35,600,463 Total Assets 42,275,005 43,390,172 Deferred Outflow of Resources Post valuation employer contributions 57,534 49,504 Deferred pension outflow of resources 250,142 254,585 Deferred OPEB outflow or resources 9,509 14,822 Total Deferred Inflows of Resources 317,185 318,911 SCHEDULE OF NET POSITION JUNE 30, 2025 (With Comparative Totals for June 30, 2024) ---PAGE BREAK--- 2025 2024 Liabilities Current Liabilities Accounts payable $ 94,078 $ 54,939 Accrued salaries and benefits 29,712 17,625 Due to other governments 7,488 7,454 Accrued interest 150,342 153,901 Customer deposits 70,549 62,394 Current portion notes payable 314,694 310,536 Total Current Liabilities 666,863 606,849 Long-term liabilities: Accrued compensated absences 14,339 25,691 USDA Rural Development Bonds 15,781,940 16,096,634 Net pension liability 714,363 809,457 OPEB liability 81,809 89,150 Total Long-term Liabilities 16,592,451 17,020,932 Total Liabilities 17,259,314 17,627,781 Deferred Inflow of Resources Deferred pension inflows 123,697 9,411 Deferred OPEB inflows 6,458 5,408 Total Deferrred Inflow of Resources 130,155 14,819 Net Position Net investment in capital assets 20,417,020 19,193,293 Restricted for AB 198 capital reserves 356,245 333,201 Unrestricted 4,429,456 6,539,989 Total Net Position $ 25,202,721 $ 26,066,483 -66- ---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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Operating Revenues Water use fees $ 1,599,516 $ 1,599,516 $ 1,448,698 $ (150,818) $ 1,355,390 Meter replacement / Other charges 30,000 30,000 65,124 35,124 78,567 Total Operating Revenues 1,629,516 1,629,516 1,513,822 (115,694) 1,433,957 Operating Expenses Salaries and wages 389,500 389,500 366,479 23,021 385,944 Employee benefits 226,800 226,800 222,856 3,944 261,355 Services and supplies 691,950 691,950 745,642 (53,692) 700,962 Bad debt expense - - 48,146 (48,146) - Depreciation 164,072 164,072 956,896 (792,824) 860,065 Total Operating Expenses 1,472,322 1,472,322 2,340,019 (867,697) 2,208,326 Operating Income (Loss) 157,194 157,194 (826,197) (983,391) (774,369) Nonoperating Revenues (Expenses) Late fees 3,500 3,500 4,549 1,049 4,131 Administrative fee 10,000 10,000 9,690 (310) 10,096 Willow Creek agreement 19,000 19,000 19,000 - 19,000 Water tank lease 18,500 18,500 16,633 (1,867) 17,248 Water rights revenue 12,000 12,000 9,000 (3,000) 9,000 Nevada Copper reservation fee 87,500 87,500 87,500 - 87,500 Investment income - - 1,223 1,223 5,199 Miscellaneous income 12,000 12,000 768 (11,232) 5,000 Interest expense (536,011) (536,011) (221,928) 314,083 (247,440) Total Nonoperating Revenues (expenses) (373,511) (373,511) (73,565) 299,946 (90,266) Income (loss) before contributions (216,317) (216,317) (899,762) (683,445) (864,635) Capital Contributions Connection fees from customers 50,000 50,000 36,000 (14,000) 36,722 APR Rescue Grant - - - - 28,185 USDA Rural Development: Colony Water Grant - - - - 13,894 Total Capital Contributions 50,000 50,000 36,000 (14,000) 78,801 Special Item: Loss on disposal of assets - - - - (1,671,887) Change in Net Position $ (166,317) $ (166,317) (863,762) $ (697,445) (2,457,721) Net Position, July 1 26,066,483 28,524,204 Net Position, June 30 $ 25,202,721 $ 26,066,483 ORIGINAL BUDGETED AMOUNT -67- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA WATER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Cash Flows From Operating Activities Receipts from customers $ 1,629,516 $ 1,629,516 $ 1,617,077 $ (12,439) $ 1,492,306 Payments to Lyon County (80,000) (80,000) (71,096) 8,904 (78,642) Payments of personnel costs (616,300) (616,300) (573,973) 42,327 (590,735) Payments for service and supplies (691,950) (691,950) (713,546) (21,596) (671,905) Net Cash Provided by Operating Activities 241,266 241,266 258,462 17,196 151,024 Cash Flows From Noncapital Financing Activities Water tank lease income 18,500 18,500 16,633 (1,867) 17,248 Water right revenue 12,000 12,000 9,000 (3,000) 9,000 Willowcreek revenue 19,000 19,000 19,000 - 19,000 Nevada Copper reservation fee 87,500 87,500 39,354 (48,146) 43,750 Administrative fees 10,000 10,000 14,239 4,239 14,227 Miscellaneous income - - 768 768 5,000 Net Cash Provided Non-Capital Financing Activities 147,000 147,000 98,994 (48,006) 108,225 Cash Flows From Capital And Related Financing Activities Capital contributions by customers 50,000 50,000 36,000 (14,000) 36,722 Capital contributions by USDA (Tribe) - - - - 60,236 Interim debenture bond refund - - - - (845,860) Acquisition of capital assets - - (1,870,087) (1,870,087) (1,574,206) Capital contrubitions by ARP Rescue grant - - - - 28,185 Principal paid on long-term debt - - (310,536) (310,536) - Interest paid on long-term debt (536,011) (536,011) (225,487) 310,524 (140,308) Net Cash (Used) by Capital and Related Financing Activities (486,011) (486,011) (2,370,110) (1,884,099) (2,435,231) Cash Flows From Investing Activities Interest income - - 1,223 1,223 5,199 Net Increase (Decrease) In Cash and Cash Equivalents (97,745) (97,745) (2,011,431) (1,913,686) (2,170,783) Cash and Cash Equivalents, July 1 10,182,422 10,182,422 7,305,558 (2,876,864) 9,476,341 Cash and Cash Equivalents, June 30 $ 10,084,677 $ 10,084,677 $ 5,294,127 $ (4,790,550) $ 7,305,558 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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) ACTUAL VARIANCE 2024 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ 157,194 $ 157,194 $ (826,197) $ (983,391) $ (774,369) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 164,072 164,072 956,896 792,824 860,065 Bad debt expense - - 48,146 48,146 - Net change deferred pension expense - - 15,605 15,605 56,523 Net change deferred OPEB expense - - (978) (978) (6,970) Changes in assets and liabilities Decrease (increase) in accounts receivable (80,000) (80,000) 23,970 103,970 (23,026) Decrease (increase) in inventory - - (7,043) (7,043) 10,627 Increase (decrease) in consumer deposits - - 8,155 8,155 10,245 (Decrease) increase in accounts payable - and accrued liabilities - - 39,908 39,908 17,929 Net Cash Provided by Operating Activities $ 241,266 $ 241,266 $ 258,462 $ 17,196 $ 151,024 BUDGETED AMOUNT ORIGINAL FINAL -69- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF NET POSITION JUNE 30, 2025 (With Comparative Totals for June 30, 2024) 2025 2024 Current Assets Unrestricted Cash $ 2,660,383 $ 2,914,989 Accounts receivable, net of allowance for doubtful accounts of $10,160 and $10,160 respectively 114,560 97,108 Grant Receivable - USDA - - Inventory of materials and supplies 3,903 3,903 Restricted Cash Customer deposits 2,682 2,705 Total Current Assets 2,781,528 3,018,705 Property, Plant And Equipment Land 10,120 10,120 Treatment plant and collection systems 23,947,263 23,947,263 Vehicles 49,407 49,407 Maintenance equipment 506,206 506,206 24,512,996 24,512,996 Accumulated depreciation (4,105,181) (3,677,304) Total Capital Assets 20,407,815 20,835,692 Total Assets 23,189,343 23,854,397 Deferred Outflow of Resources Post valuation pension contributions 46,889 40,344 Deferred pension inflow of resources 203,857 205,588 Deferred OPEB inflow or resources 9,509 12,225 Total Deferred Outflow of Resources 260,255 258,157 ---PAGE BREAK--- 2025 2024 Liabilities Current Liabilities Accounts payable $ 23,952 $ 26,405 Accrued salaries and benefits 24,013 13,098 Due to other governments 3,567 4,264 Accrued interest payable 142,681 146,114 Advance from Water Fund 130,000 130,000 Customer deposits 2,682 2,705 Current portion bonds paybable 298,907 304,717 Total Current Liabilities 625,802 627,303 Long-term liabilities: Accrued compensated absences 11,477 21,316 USDA Rural Development Bonds 14,973,376 15,272,283 Net pension liability 600,931 667,840 OPEB liability 69,655 74,634 15,655,439 16,036,073 Total Liabilities 16,281,241 16,663,376 Deferred Inflow of Resources Deferred pension inflows 100,810 7,599 Deferred OPEB inflows 6,458 4,460 Total Deferred Inflow of Resources 107,268 12,059 Net Position Net investment in capital assets 5,135,532 5,258,692 Unrestricted 1,925,557 2,178,427 Total Net Position $ 7,061,089 $ 7,437,119 -70- ---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, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Operating Revenues Sewer use fees $ 1,320,000 $ 1,320,000 $ 1,202,224 $ (117,776) $ 1,067,127 1,320,000 1,320,000 1,202,224 (117,776) 1,067,127 Operating Expenses Salaries and wages 331,790 331,790 305,903 25,887 325,865 Employee benefits 163,263 163,263 194,810 (31,547) 220,618 Services and supplies 430,170 430,170 484,552 (54,382) 533,642 Depreciation 155,770 155,770 427,877 (272,107) 327,740 Total Operating Expenses 1,080,993 1,080,993 1,413,142 (332,149) 1,407,865 Operating Income (Loss) 239,007 239,007 (210,918) (449,925) (340,738) Nonoperating Revenues (Expenses) Late fees 2,000 2,000 2,635 635 2,385 Willowcreek agreement 29,000 29,000 29,000 - 29,000 USDA - Sewer Line Project revenue - - 203 203 - Investment income - - - - 4,842 Interest expense (508,890) (508,890) (200,750) 308,140 (241,079) Total Nonoperating Revenues (Expenses) (477,890) (477,890) (168,912) 308,978 (204,852) Income (Loss) before Contributions (238,883) (238,883) (379,830) (140,947) (545,590) Capital Contributions Connection fees from customers 45,000 45,000 3,800 (41,200) 7,600 ARPA Grant - - - - 127,933 USDA Rural Development: Sewer Replacement Grant - - 1,451,000 Sewer Replacement Grant # 22 - - 29,889 Colony Sewer Grant - - - - 17,125 Total Capital Contributions 45,000 45,000 3,800 (41,200) 1,633,547 Special Item: Loss on disposal of assets - - - - (299,618) Change in Net Position $ (193,883) $ (193,883) (376,030) $ (182,147) 788,339 Net Position, July1 7,437,119 6,648,780 Net Position, June 30 $ 7,061,089 7,437,119 ORIGINAL BUDGET AMOUNT -71- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2025 (With Comparative Totals for the Year Ended June 30, 2024) FINAL ACTUAL VARIANCE 2024 Cash Flows From Operating Activities Receipts from customers $ 1,320,000 $ 1,320,000 $ 1,227,022 $ (92,978) $ 1,104,238 Payments to Lyon County (45,000) (45,000) (42,970) 2,030 (41,984) Payments of personnel costs (495,053) (495,053) (478,414) 16,639 (484,992) Payments for service and supplies (430,170) (430,170) (487,005) (56,835) (517,070) Net Cash Provided (Used) by Operating Activities 349,777 349,777 218,633 (131,144) 60,192 Cash Flows From Noncapital Financing Activities Miscellaneous income 2,000 2,000 2,635 635 2,385 Willowcreek agreement 29,000 29,000 29,000 - 29,000 Net Cash Provided by Non-Capital Financing Activities 31,000 31,000 31,635 635 31,385 Cash Flows From Capital And Related Financing Activities Capital contributions by customers 45,000 45,000 3,800 (41,200) 7,600 Capital contributions by USDA (Tribe) 175,000 175,000 - (175,000) 61,787 Capital contributions by USDA (City) - - - - 1,480,889 USDA Sewer Project grant - - 203 203 - USDA Sewer Project expenses - - - - (2,529,335) Acquisition of capital assets - - - - - ARPA Rescue Grant - - - - 127,933 Principal paid on long-term debt (304,717) (304,717) (304,717) - - Interest paid on long-term debt (204,173) (204,173) (204,183) (10) (137,111) Net Cash (Used) by Capital and Related Financing Activities (288,890) (288,890) (504,897) (216,007) (988,237) Cash Flows From Investing Activities Interest income - - - - 4,842 Net Increase (Decrease) in Cash and Cash Equivalents 91,887 91,887 (254,629) (346,516) (891,818) Cash and Cash Equivalents, July 1 9,958,108 9,958,108 2,917,694 (7,040,414) 3,809,512 Cash and Cash Equivalents, June 30 $ 10,049,995 $ 10,049,995 $ 2,663,065 $ (7,386,930) $ 2,917,694 ORIGINAL BUDGETED AMOUNT -72- ---PAGE BREAK--- CITY OF YERINGTON, NEVADA SEWER UTILITY FUND SCHEDULE OF CASH FLOWS - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2025 (With Comparative Totals for the Year Ended June 30, 2024) ACTUAL VARIANCE 2024 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income (loss) $ 239,007 $ 239,007 $ (210,918) $ (449,925) $ (340,738) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 155,770 155,770 427,877 272,107 327,740 Net deferred OPEB expense - - (265) (265) (5,698) Net deferred pension expense - - 21,488 21,488 51,452 Changes in assets and liabilities Decrease (increase) in accounts receivable (45,000) - (17,452) (17,452) (5,283) Decrease (increase) in inventory - - - - 10,187 Increase (decrease) in consumer deposits - - (23) (23) 121 (Decrease) increase in accounts payable and accrued liabilities - - (2,074) (2,074) 22,411 Net Cash Provided by Operating Activities $ 349,777 $ 394,777 $ 218,633 $ (176,144) $ 60,192 BUDGETED AMOUNT ORIGINAL FINAL -73- ---PAGE BREAK--- FISCAL YEAR 2024-25 $ .4044 $ 168,742,878 2023-24 .4044 204,085,803 2022-23 .4044 193,204,181 2021-22 .4044 126,406,597 2020-21 .4044 79,872,527 2019-20 .4044 74,598,100 2018-19 .4044 70,107,341 2017-18 .4044 64,193,011 2016-17 .4044 62,844,811 2015-16 .4044 60,903,135 2014-15 .4044 57,524,066 2013-14 .4044 56,732,755 2012-13 .4044 53,647,403 2011-12 .4044 55,656,691 2010-11 .4044 58,857,733 2009-10 .4044 64,470,671 2008-09 .4044 62,852,734 2007-08 .4044 57,998,651 2006-07 .4044 52,378,316 2005-06 .4044 42,627,093 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 -74- ---PAGE BREAK--- Other Fiscal Year Licenses and Intergovernmental Charges For Other Financing Ending June 30 Taxes Permits Revenues Services Revenues Sources Totals 2025 671,976 $ 614,780 $ 2,009,146 $ 120,794 $ 599,571 $ - $ 4,016,267 $ 2024 615,498 584,696 2,130,468 94,968 626,505 - 4,052,135 2023 741,582 621,116 3,080,845 106,238 411,598 - 4,961,379 2022 802,313 528,988 2,278,244 105,432 174,172 - 3,889,149 2021 785,444 425,935 1,722,776 111,461 91,062 - 3,136,678 2020 547,337 494,095 899,132 139,161 132,926 - 2,212,651 2019 387,175 519,595 989,512 121,772 51,067 - 2,069,121 2018 337,572 299,664 3,409,043 99,180 62,545 - 4,208,004 2017 312,558 335,821 975,377 89,170 64,140 - 1,777,066 2015 307,099 297,192 1,188,242 139,547 1,171,605 - 3,103,683 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) -75- ---PAGE BREAK--- Fiscal Year General Public Public Culture and Debt Ending June 30 Government Judicial Safety Works Recreation Health Service Totals 2025 318,737 $ 109,196 $ 2,173,739 $ 1,258,023 $ 22,754 $ 88,197 $ - $ 3,970,646 $ 2024 412,238 117,877 1,896,540 1,437,862 22,658 110,108 - 3,997,283 2023 365,680 119,364 2,074,582 2,341,861 22,445 52,787 - 4,976,719 2022 495,037 102,994 1,493,241 1,689,740 65,226 20,715 - 3,866,953 2021 913,568 80,920 1,209,145 667,938 58,512 15,585 - 2,945,668 2020 288,698 71,462 1,254,516 297,821 16,417 54,108 - 1,983,022 2019 317,252 79,604 1,087,655 311,725 109,214 13,125 - 1,918,575 2018 349,447 88,099 1,002,313 2,943,167 51,081 18,485 - 4,452,592 2017 330,854 89,928 951,671 415,725 119,457 15,461 - 1,923,096 2016 2,352,006 75,397 906,068 382,133 99,828 11,036 - 3,826,468 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) -76- ---PAGE BREAK--- (Unaudited) CITY OF YERINGTON, NEVADA ALL GOVERNMENTAL FUNDS FUND BALANCE - LAST TEN YEARS $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1,671,302 1,525,272 1,280,684 1,431,230 1,660,859 1,851,869 1,940,447 1,925,107 1,942,079 2,042,488 Years -78- ---PAGE BREAK--- (Unaudited) CITY OF YERINGTON, NEVADA GENERAL FUND - BUDGET BASIS 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 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 460,422 360,061 254,300 485,467 782,668 1,171,202 1,457,074 1,400,081 1,470,183 1,518,804 Years -79- ---PAGE BREAK--- (Unaudited) REVENUES, EXPENDITURES, AND FUND BALANCE - LAST TEN YEARS GENERAL FUND - BUDGET BASIS CITY OF YERINGTON, NEVADA $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Years Revenues Expenditures Fund Balance -80- ---PAGE BREAK--- GENERAL FUND - BUDGET BASIS REVENUES BY SOURCE (Unaudited) FOR THE YEAR ENDED JUNE 30, 2025 CITY OF YERINGTON, NEVADA Taxes 16.7% License and permits 15.3% Intergovernmental revenues 50.0% Charges for services 3.0% Fines and forfeits 1.8% Other revenues 13.1% -81- ---PAGE BREAK--- GENERAL FUND - BUDGET BASIS EXPENDITURES BY FUNCTION FOR THE YEAR ENDED JUNE 30, 2025 (Unaudited) CITY OF YERINGTON, NEVADA General Government 8.0% Public Works 31.7% Public Safety 54.7% Judicial 2.8% Culture & Recreation 2.2% Health 0.6% -82- ---PAGE BREAK--- (Unaudited) FOR THE YEAR ENDED JUNE 30, 2025 CITY OF YERINGTON, NEVADA GENERAL FUND - BUDGET BASIS EXPENDITURES BY OBJECT Salaries, 1,094,517 , 27.6% Employee Benefits, 703,486 , 17.7% Services & Supplies, 1,286,928 , 32.4% Capital Outlay, 885,715 , 22.3% -83- ---PAGE BREAK--- -84- A Professional Corporation INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Council City of Yerington, Nevada We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business-type activities, each major fund of the City of Yerington, Nevada, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City of Yerington’s basic financial statements and have issued our report thereon dated January 6, 2026. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Yerington, Nevada’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Yerington, Nevada’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Yerington, Nevada’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as item 2025-001 that we consider to be material weaknesses. 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- -85- Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Yerington, Nevada’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. City of Yerington, Nevada’s Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the City of Yerington, Nevada’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. City of Yerington, Nevada’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Yerington, Nevada January 6, 2026 ---PAGE BREAK--- -86- A Professional Corporation INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY UNIFORM GUIDANCE To the Honorable Mayor and City Council City of Yerington, Nevada Report on Compliance of Each Major Federal Program Opinion of Each Major Federal Program We have audited City of Yerington, Nevada’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of City of Yerington, Nevada’s major federal programs for the year ended June 30, 2025. City of Yerington, Nevada’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, City of Yerington, Nevada, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of City of Yerington, Nevada and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of City of Yerington, Nevada’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City of Yerington’s federal programs. ---PAGE BREAK--- -87- Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City of Yerington, Nevada’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about City of Yerington, Nevada’s compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City of Yerington, Nevada’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of City of Yerington, Nevada’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City of Yerington, Nevada’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control over Compliance Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be material weaknesses. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. ---PAGE BREAK--- -88- A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2025-002 to be material weaknesses. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. City of Yerington’s, Nevada’s Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on City of Yerington, Nevada’s response to the internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. City of Yerington’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Purpose of This Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Yerington, Nevada January 6, 2026 ---PAGE BREAK--- Pass-Through Assistance Entity Passed Federal Grantor/Pass-through Grantor/ Listing Identifying Through to Federal Program or Cluster Title Number Number Subrecipients Expenditures U.S. Department of Transportation: Federal Aviation Administration Direct Program: Airport Improvement Program: FAA BIL Grant 20.106 $ 297,031 Federal Highway Administration Pass-through program from the State of Nevada, Department of Transportation: Highway Planning and Construction: Kiss and Drop Project 20.205 N/A 526,822 Total U.S. Department of Transportation 823,853 U.S. Department of the Treasury: Direct program: Coronavirus Recovery Funds 21.027 N/A 7,000 $ 328,560 Total U.S. Department of the Treasury 7,000 328,560 Total Expenditures of Federal Awards 7,000 $ $ 1,152,413 3-32-0022-024-2023 CITY OF YERINGTON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2025 -89- ---PAGE BREAK--- -90- CITY OF YERINGTON, NEVADA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2025 Note A- Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Yerington, Nevada under programs of the federal government for the year ending June 30, 2025. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule present only a selected portion of the operations of the City of Yerington, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City of Yerington. Note B- Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for Audits of State, Local, and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowed or are limited as reimbursement. When applicable, negative amount shown on the Schedule represent adjustments or credits made in the normal course of business as expenditures in prior years. Indirect Costs The City did not elect to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note C – Non-Cash Distributions Received The City does not participate in any non-cash distributions grant programs. Note D – Subrecipients The City of Yerington passed $7,000 in federal awards received to two not-for-profit agencies. Note E – Matching Requirements Certain Federal programs require the City of Yerington to contribute non-Federal funds (matching funds) to support the Federally Funded programs. City of Yerington has met its matching requirements. The Schedule does not include the expenditure for non-Federal matching funds. ---PAGE BREAK--- -91- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONS COSTS FOR THE YEAR ENDED JUNE 30, 2025 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? Yes  Significant deficiency(ies) identified? No Noncompliance material to financial statements noted? No Federal Awards Internal control over major federal programs:  Material weakness(es) identified? Yes  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 Yes be reported in accordance with 2 CFR 200.516(a)? Identification of major federal programs: CFDA# Name of Federal Program or Cluster 20.205 Highway Planning and Construction - Kiss N Drop Project Grant Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? Yes ---PAGE BREAK--- -92- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2025 B. Findings – Financial Statement Audit Material Weakness 2025-001 Recognition and Recording of Certain Revenues Criteria: Management is responsible for establishing and maintaining an effective system of internal control over the cash receipts and revenue cycle. An effective system of internal control includes procedures to ensure the timely and accurate recognition of revenues in accordance with applicable accounting standards, as well as controls to identify when revenues should be recognized and properly recorded in the general ledger and related subsidiary records. Condition: During the audit, we noted the City implemented a new hybrid billing procedure within its Caselle accounting software system whereby accounts receivable billing notices were generated for certain non-typical general governmental revenues. However, the City did not establish adequate controls to ensure the effects of these billing notices were properly accounted for. Specifically, billing activity was not routinely reconciled to the general ledger or to the subsidiary accounts receivable ledger. Effect: As a result, the generation of billing notices resulted in revenues being recorded in the general ledger in certain instances prior to collection. In addition, subsequent collections did not consistently result in the proper relief of related accounts receivable balances. These conditions increased the risk that revenues and accounts receivable balances were misstated in the City’s financial records. Cause: City personnel did not fully understand the accounting implications and system-level effects associated with generating billing invoices within the Caselle system. In addition, personnel did not receive sufficient training during the implementation of the new billing process to ensure awareness of its impact on revenue recognition and the necessity of regularly reconciling the subsidiary accounts receivable ledger to the general ledger. Recommendation: Management should establish and document standard internal control procedures related to the implementation of new or modified accounting processes. Such procedures should include consultation with the software provider or qualified accounting professionals prior to implementation, adequate staff training, and the performance of regular reconciliations between subsidiary ledgers and the general ledger to ensure revenues and receivables are accurately recorded. ---PAGE BREAK--- -93- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2025 Management Response and Corrective Action Plan: Management Response and Corrective Action Plan: Management acknowledges the inherent and elevated risks associated with vacancies in key positions and limited experience among certain personnel. All key positions are currently filled, and staff are actively participating in additional training, including program compliance monitoring, technical assistance support, and evaluation activities along with enhanced communication with Caselle support staff. ---PAGE BREAK--- -94- CITY OF YERINGTON, NEVADA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2025 C. Findings and Questioned Costs – Major Federal Award Program Audit Department of Transportation Federal Aviation Administration Department of Treasury Questioned Costs 2025-002 Federal Financial Reporting None Material Weakness Criteria: Management is responsible for establishing and maintaining an effective system of internal control over financial reporting in accordance with 2 CFR §200.303. An effective system of internal control includes the preparation, subsequent review, approval, and retention of supporting documentation for federal grant reports submitted to grantor agencies. Condition: The District did not maintain adequate supporting documentation demonstrating that federal grant expenditure reports were prepared, reviewed, and approved by management prior to submission. In addition, grant reporting files did not consistently evidence management’s oversight of federal financial reporting. One instance was noted where the FAA grant request for reimbursement had not been timely completed with a grant request of $297,031. Effect of Condition: As a result of this condition, errors in federal grant financial reporting could occur and not be prevented or detected in a timely manner. Additionally, failure to prepare and submit accurate and timely reimbursement requests could result in delayed or lost grant funding. Cause of Condition: Due to illness, the City was operating without part of its management team for a second half of the fiscal year. Recommendation: We recommend that the District implement formal procedures to ensure that all federal grant reports are adequately supported by complete grant reporting files and are subject to documented review and approval by management prior to submission to grantor agencies. These procedures should be consistently applied and monitored. Management Response and Corrective Action Plan: Management acknowledges the inherent and elevated risks associated with vacancies in key positions and limited experience among certain personnel. All key positions are currently filled, and staff are actively participating in additional training, including program compliance monitoring, technical assistance support. ---PAGE BREAK--- -95- CITY OF YERINGTON, NEVADA STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2025 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--- ---PAGE BREAK--- ---PAGE BREAK--- THIS PAGE LEFT INTENTIONALLY BLANK ---PAGE BREAK--- A Professional Corporation -98- INDEPENDENT ACCOUNTANT’S REPORT ON NEVADA REVISED STATUTES 354.6241 To the Honorable Mayor and City Council City of Yerington, Nevada We have reviewed management’s assertion made in accordance with Nevada Revised Statute 354-624(5)(a) with respect to the funds of the City of Yerington as of and for the year ended June 30, 2025 that:  The identified funds are being used expressly for the purposes for which that were created.  The Funds are administered in accordance with accounting principles generally accepted in the United States of America.  The restricted fund balance/net position in the funds were reasonable and necessary to carry out the purposes of the funds at June 30, 2025 (based on the interpretation of reasonable and necessary provided by the Legislative Counsel Bureau).  The sources of revenues, including transfers, available for the funds are as noted in the financial statements.  The funds conform to significant statutory and regulatory constraints on their financial statements administration during the year ended June 30, 2025 except for the three instances of expenses in excess of budget appropriations as described in Note 19. This assertion is the responsibility of the management of the City of Yerington. Our review was conducted in accordance with attestation standard established by the American Institute of Certified Public Accountants. A review is substantially less in scope that an examination, the objective of which is the expression of an opinion on management’s assertion. Accordingly, we do not express such an opinion. Based on our review, nothing came to our attention that caused us to believe that management’s assertion referred to above is not fairly stated in all material respects. Yerington, Nevada January 6, 2026 30 Broadway Avenue, Yerington, NV 89447│ [PHONE REDACTED] │ [PHONE REDACTED] │ Sciarani.com ---PAGE BREAK--- -99- INDEPENDENT AUDITOR'S COMMENTS JUNE 30, 2025 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, 2024. Current Year Audit Recommendations The Schedule of Findings and Responses included in this audit report provides a listing of our current year recommendations.