City of Jennings...CITY OF JENNINGS, LOUISIANA Annual Financial Statements As of and for the Year Ended June 30,2007 With Supplemental Information Schedules CONTENTS Statement Page

CITY OF JENNINGS, LOUISIANA

Annual Financial Statements

As of June 30,2007 and for the Year Then Ended

Under provisions of state law, this report is a publicdocument Acopy cf the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office pf the parish clerk of court.

Release Date


Annual Financial StatementsAs of and for the Year Ended June 30,2007With Supplemental Information Schedules

CONTENTS

Statement Page

Independent Auditor's Report 1 -2

BASIC FINANCIAL STATEMENTS

Government-Wide Financial Statements

Statement of Net Assets A 4

Statement of Activities B 5

Fund Financial Statements:

Governmental Funds:

Balance Sheet C 6

Reconciliation of the Governmental Funds Balance Sheet tothe Government-Wide Financial Statement of Net Assets D 7

Statement of Revenues, Expenditures, and Changes in Fund Balances E 8

Reconciliation of the Statement of Revenues, Expenditures, andChanges in Fund Balances of Governmental Fundsto the Statement of Activities F 9

Proprietary Funds:

Statement of Net Assets G 10

Statement of Revenues, Expenses, and Changes in Fund Net Assets H 11

Statement of Cash Flows I 12

Notes to the Financial Statements 14-38

(i)

Table of Contents (Contd.)City of Jennings, Louisiana

Schedules Page

Required Supplemental Information (Part II)

Notes to Budgetary Comparison Schedules 40

Statement of Revenues, Expenditures, and Changes inFund Balances-Budget and Actual:

General Fund 1 41Street Fund 2 4219941% Sales Tax Fund 3 43

OTHER SUPPLEMENTAL SCHEDULES

Non-Major Governmental Funds:

Combining Balance Sheet 4 45

Combining Statement of Revenues, Expenditures and Changesin Fund Balance 5 46

OTHER REPORTS

Report on Internal Control Over Financial Reporting and on Complianceand other matters based on an audit of Financial Statements performedin Accordance with Government Auditing Standards 48-49

Corrective Action Plan for Current Year Audit Findings 50

(ii)

EDWARD L. KRIELOW(A PROFESSIONAL ACCOUNTING CORPORATION)

510 N. CUTTING

P.O. DRAWER918

JENNINGS, LA 70546

(337) 824-5007

INDEPENDENT AUDITOR'S REPORT

December 28,2007

The Honorable Terry W. Duhon, Mayorand the Members of the City CouncilCity of Jennings, Louisiana

I have audited the accompanying financial statements of the governmental activities, the business-type activities,each major fund, and the aggregate remaining fund information of the City of Jennings, as of and for the year endedJune 30,2007, which collectively comprise the basic financial statements of the City *s primary government as listedin the table of contents. These financial statements are the responsibility of the City of Jennings* management.My responsibility is to express opinions on these financial statements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in the United States of America andthe standards applicable to financial audits contained in Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. I believe that my audit provides a reasonable basis for my opinions.

The financial statements referred to above include only the primary government of the City of Jennings, whichconsist of all funds, organizations, institutions, agencies, departments, and offices that comprise the City's legalentity. The financial statements do not include financial data forthe City's legally separate component units, whichaccounting principles generally accepted in the United States of America require to be reported with the financialdata of the City's primary government. As a result, the primary government financial statements do not purport to,and do not, present fairly the financial position of the reporting entity of the City of Jennings, as of June 30,2007,the changes in its financial position, or, where applicable its cash flows, for the year then ended in conformity withaccounting principles generally accepted in the United States of America.

In my opinion, the financial statements referred to above present fairly, in all material respects, the respectivefinancial position of the governmental activities, the business-type activities, each major fund, and the remainingaggregate fund information for the primary government of the City of Jennings as of June 30,2007, and respectivechanges in financial position and, where applicable, cash flows thereof for the year ended in conformity withaccounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, I have also issued a report dated December 28,2007, on myconsideration of the City of Jennings* internal control over financial reporting and my tests of its compliance withcertain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of thatreport is to describe the scope of my testing of internal control over financial reporting and compliance and theresults of that testing, and not to provide an opinion on the internal control over financial reporting or oncompliance. That report is an integral part of an audit performed in accordance with Government AuditingStandards and should be considered in assessing the results of my audit.

The City of Jennings, Louisiana has not presented management's discussion and analysis that the GovernmentalAccounting Standards Board has determined is necessary to supplement, although not required to be part of thebasic financial statements.

1

I STATE ON THIS PAGE WHETHER AN AUDIT HAS BEEN MAM OF A SUFFICIENT SCOPE TO ENABLE ME TO EXPRESS AN OPINION ON THE ACCOMPANYING FINANCIALSTATEMENTS. OR IF PREPARED WITHOUT AUDIT FROM INFORMATION FURNISHED. THE PUBLICATION OF MY NAME IN CONNECTION WITH ANY EXCERPT FROM THIS REPORTMAY BE MADE ONLY WFTH MY CONSENT AND IN A FORM APPROVED BY ME.

The budgetary comparison information listed in the accompanying table of contents are not a required part of thebasic financial statements but are supplementary information required by accounting principles generally acceptedin the United States of America. I have applied certain limited procedures, which consisted principally of inquiresof management regarding the methods of measurement and presentation of the required supplemental information.However, I did not audit the information and express no opinion on it.

My audit was conducted for the purpose of forming an opinion on the primary government's basic financialstatements taken as a whole. The other supplementary information as listed in the table of contents is presentedfor purposes of additional analysis and is not a required part of the basic financial statements of the City ofJennings, Louisiana. The other supplementary information has been subj ected to the auditing procedures appliedin the audit of the primary government financial statements and, in my opinion, is fairly presented in all materialrespects in relation to the primary government's basic financial statements taken as a whole

Certified Public Accountants

Basic Financial Statements

STATEMENT ACITY OF JENNINGS, LOUISIANA

Statement of Net Assets

June 30,2007

ASSETSCash and cash equivalentsInvestmentsReceivables (net of allowances for

uncollectibles)Due from other fundsInventoryPrepaid ItemsRestricted cash and cash equivalentsRestricted InvestmentsOther assetsCapital assets (net)

TOTAL ASSETS

LIABILITIESAccounts, salaries, and other payablesContracts payableDue to other fundsAccrued interest payableCompensated absences payableCurrent portions of bonds payableBonds payable

TOTAL LIABILITIES

NET ASSETSInvested in capital assets, net of related debt

Restricted for capital projectsRestricted for debt serviceRestricted for depositsUnrestricted

TOTAL NET ASSETS

PRIMARY GOVERNMENTGOVERNMENTAL BUSINESS-TYPE

ACTIVITIES ACTIVITIES

$

$

$

$

$

Jss=5

3,126,736 S2,085,576

803,399668

9,51839,873

518,548-

9567,922,727

14,508,001 S

305,143 $25,973

-4.742

82,15327,000

447,000

892,01 1 S

7,922,727 $500,000

13,806-

5.179,457

13,615,990 $

558,676 S350,000

211,776-

3,94719,45316,094

734,004-

11,009,979

12,903,929 S

291,013 $-

66835.01 115,361

495,0003,095,000

3,932,053 $

7,914,979 $

--

2.2251,054,672

8,971,876 $

TOTAL

3.685,4122,435,576

1,015,175668

13,46559,326

534,642734,004

95618,932,706

27,411,930

596,156

25,973668

39.75397,514

522,0003,542,000

4,824,064

15,837,706500,000

13,8062,225

6,234,129

22,587,866~"

The accompanying notes are an integral part of this statement.

09

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STATEMENT C


Balance Sheet, Governmental Funds

June 30,2007

ASSETS

Cash and cash equivalentsInvestmentsReceivables (net of allowances for

uncollectibles)Due from other Hinds

Inventory

Other assetsRestricted cash and cash equivalents

TOTAL ASSETS

LIABILITIES AND FUND BALANCESLiabilities:

Accounts, salaries, and other payablesAccrued interest payable

Total Liabilities

Fund balances:Reserved for

Debt servicesCapital projects

Unreserved, reported in:General FundSpecial revenue funds

TOTAL LIABILITIES AND FUND BALANCES

1994 OTHER TOTALGENERAL STREET 1% SALES TAX GOVERNMENTAL GOVERNMENTAL

FUND FUND FUND FUNDS FUNDS

S

$

921,805 $

600,000

563,036668

9,518

956

2,095,983 $

382,637 $

300,000

15,368

-

-

698,005 $

1,152,252 $250,000

195,162

-

-

1,597,414 $

670,043 $

935,576

29,833

-

518,548

2,154,000 $

3,126,7372,085,576

803,399

6689,518

956518,548

6,545,402

S 189,576 S 10,692 S 106,070 S 24,778 S251

331,116

251189,576 $

1,906,407

2.095.983 $

10,692 $ 106,070 $

687,313

698.005 $

1,491.344

1.597,414 $

25,029

18,297

485,386

1.625,288

2.154.000 $

33U67

18,297

485386

1,906,4073.803.945

6,545,402


STATEMENT D


Reconciliation of The Governmental Funds Balance Sheetto The Government-Wide Financial Statement of Net Assets

June 30,2007

Amounts reported for governmental activities in the Statement of Net Assets are different because:

Fund Balances, Total Governmental Funds (Statement C)

Capital assets used in governmental activities are not financialresources and, therefore, are not reported in the governmental

funds.Capital AssetsLess: Accumulated Depreciation

Other assets used in governmental activities that arenot financial resources and, therefore, are notnot reported in the governmental funds.

Prepaid Items

Long-term liabilities including bonds payable are not due and

payable in the current period and, therefore, are not reportedin the governmental funds.

Compensated absencesAccrued interest payableBonds payable

12,777,355(4,854,628)

6,214,035

7,922,727

39,873

(82,153)(4,492)

(474,000)

Net Assets of Governmental Activities (Statement A) 13,615,990


STATEMENT E


Statement of Revenues, Expenditures andand Changes In Fund Balances

Governmental Funds

For the Year Ended June 30,2007

REVENUESTaxes:

Ad valoremSales and useOther taxes, penalties, interest, etc.

Licenses and permitsIntergovernmental revenues:

Federal grantsOther intergovernmental revenue

Fees, charges, and commissions for servicesFines and forfeituresInvestment earningsOther revenues

Total Revenues

EXPENDITURESGeneral governmentPublic safetyPublic worksCultural and recreationHealth & welfareCommunity developmentEconomic developmentCapital outlayOther

Total Expenditures

Excess (Deficiency) of Revenues Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)Transfers hiTransfers outSale of capital assets

Total Other Financing Sources and Uses

Net Change in Fund Balance

Fund balances ~ beginning, as restatedFund balances - ending

GENERAL

S

$

S

$$

$

$$

$

FUND

359,0251,965,064

786,803463,570

86,533601,725864326108,13859,264

102.8265,397,274

762,1723,167,901

801,994369325

---

6230664.047

5,227,745

169329

358,907(500,000)

-(141,093)

28,436

1.877.9711,906,407

S

$

$

f$

$

$

S

$

STREET 1% SALES TAXFUND

422,161 $---

-5,7321,509

-28,828

822459,052 J

- $-

561,736----

5535812351

629.645 $

(170.593) $

193,163 S--

193.163 S

22,570 $

664.743687313 $

FUND

2,195,602--

.150,000

--

46377111,088

2,503,067

------

870379-

870379

1,632,688

300,000(U 10.941)

200(910.741)

721.947

7693971,491.344

GOVERNMENTAL

$

S

S

$

$

S

S

$

S

FUNDS

188,936230338

1,120-

9,283458372

-975

8630840,729

1.016.461

7,01836,6372,703

217,6644,992

12,250100,137483,00252.219

916.622

99,839

119.640(96,631)

5,30428313

128,152

2.000.8192.128,971

GOVERNMENTAL

$

S

$

S

S

S

S

$

S

FUNDS

970,1224391,204

787,923463370

95,8161,216,029

865.835109,113220,777255,465

9375.S54

769,1903,2043381366,433

586,9894.992

12,250100,137

1,471 ,245128.617

7,644,391

1,731.463

971,710(1,807372)

5304(830358)

901,105

5312.9306.214.035


STATEMENT F


Reconciliation of The Statement of Revenues, Expenditures,and Changes in Fund Balances of Governmental FundsTo the Statement of Activities


Amounts reported for governmental activities in the Statement of Activities arc different because:

Net Change in Fund Balances, Total Governmental Funds, Statement E $ 901,1 OS

Governmental funds report capital outlays as expenditures. However, in thestatement of activities the cost of those assets is allocated over their estimateduseful lives and reported as depreciation expense.

Capital outlay which is considered expenditures on Statement of Revenues,Expenditures and Changes in Fund Balances $ 1,522,839Depreciation expense for the year ended June 30,2006 (642,697) 880,142

Governmental funds report bonded debt repayments, including interest, asexpenditures and bonded debt proceeds as revenue. However, principalrepayments and proceeds received do not appear in the statement ofactivities since they are recorded as reductions and additions to thebond payable account on the statement of net assets.

Bond redemptions 26,000

Some expenses and income reported in the statement of activities do not require the use ofor provide for current financial resources and, therefore, are not reported as expendituresor revenue in governmental funds.

Change in prepaid items 32,895Change in receivables (41,641) (8,746)

Change in Net Assets of Governmental Activities, Statement B $ 1,798,501


STATEMENT G


Statement of Net Assets, Proprietary Funds

June 30,2007

ASSETSCurrent Assets:

Cash and cash equivalentsInvestmentsReceivables (net of allowances for

uncollectibles)InventoryPrepaid itemsRestricted cashRestricted investmentsTotal Current Assets

Non-Current Assets:Capital assets (net of accumulated depreciation)

Total Non-Current Assets

TOTAL ASSETS

LIABILITIESCurrent Liabilities:

Accounts, salaries, and other payablesDue to other fundsMatured bonds and interest payableCompenstcd abscensesRevenue bonds (current portion)

Total Current Liabilities

Non Current Liabilities:Revenue bonds (net of unamortized discounts

(and deferred amount on refunding)Total Non-Current Liabilities

NET ASSETSInvested in capital assets, net of related debtRestricted for depositsUnrestricted

TOTAL NET ASSETS

BUSINESS-TYPE ACTIVITIES-ENTERPRISE FUNDSOTHER TOTAL

UTILITY ENTERPRISE ENTERPRISEFUND FUNDS FUNDS

$

$

$$

$

$

$

$$

$

$

471,717 $350,000

211,4413,947

17,58116,094

734,0041,804,784 $

10,929,850 $10,929,850 $

12,734,634 $

288,726 $668

35,01115,361

495,000834,766 $

3,095,000 $3,095,000 $

7,339,850 $2,225

1,462,793

8,804,868 $

86,959 $

334

1,872

89,165 $

80,129 $80,129 $

169,294 $

2,290 $

2,290 $

- $- $

80,129 $

86,875

167,004 $

558,676350,000

211,7753,947

19,45316,094

734,0041,893,949

11,009,97911,009,979

12,903,928

291,016668

35,01115,361

495,000837,056

3,095,0003,095,000

7,419,9792,225

1,549,668

8,971,872

The accompanying notes arc an integral part of this statement.

10

STATEMENT H


Statement of Revenues, Expenses and Changes in Net AssetsProprietary Funds


Operating RevenuesCharges for services:

Water salesSewer chargesRental servicesOther incomeOther services

Total Operating Revenues

Operating ExpensesCost of sales and servicesAdministrationDepreciation

Total Operating Expenses

Operating Income (Loss)

Nonoperating Revenues (Expenses)Interest earningsInterest expenseFederal grantsLoss on sale of fixed assets

Total Nonoperating Revenues (Expenses)

Income Before Contributions and Transfers

Transfers InTransfer Out

Change in Net Assets

Total Net Assets-BeginningTotal Net Assets-Ending

BUSINESS-TYPE ACTIVITIES-ENTERPRISE FUNDS

UTILITYFUND

$

$

$

$

$

$

$

$

$

$

$$

809,615660,77730,2604,894

21,0041,526,550

1,192,894241,048441,194

1,875,136

(348,586)

75,814(116,546)

1,014(635)

(40,353)

(388,939)

983,871(148,009)

446,923

8,357,9458,804,868

OTHERENTERPRISE

FUNDS

$

$

$

$

$

$

$

$

$

$

$$

87,8462,357

-90,203

66,3801,418

17,56985,367

4,836

2,436-

3,417-

5,853

10,689

-

10,689

156,315167,004

TOTALENTERPRISE

FUNDS

$

$

$

$

$

$

$

$

$

$

$$

809,615660,777118,106

7,25121,004

1,616,753

1,259,274242,466458,763

1,960,503

(343,750)

78,250(116,546)

4,431(635)

(34,500)

(378,250^

983,871(148,009)

457,612

8,514,2608,971,872


11

STATEMENT I


Statement of Cash Flows, Proprietary Funds


Cash Flows From Operating ActivitiesReceipts from customers and usersPayments to suppliers of goods and servicesPayments to employees for servicesOther receiptsNet Cash Provided by Operating Activities

Cash Flows From NonCapital Financing ActivitiesTransfer to other fundsTransfer from other funds

Net Cash Provided (used) by NoncapitalFinancing Activities

Cash Flows From Capital and Related Financing ActivitiesAcquisition and construction of capital assetsPrincipal paid on capital debtInterest paid on capital debtProceeds from sales of capital assets

Net Cash Provided (used) by Capitaland Related Financing Activities

Cash Flows From Investing ActivitiesProceeds from sales and maturities of investmentsInterest on investmentsNet Cash Provided (used) by Investing Activities

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of YearCash and Cash Equivalents, End of Year

Reconciliation of Operating Income to Net Cash Provided (used)by Operating Activities

Operating income (loss)

Depreciation expense(Increase) decrease in accounts receivable(Increase) decrease in inventories(Increase) decrease in prepaid inventoriesIncrease (decrease) in customer depositsIncrease (decrease) in accounts payableIncrease (decrease) in due to other fundsTotal Adjustments

Net Cash Provided by Operating Activities

Listing of Noncash Investing, Capital, and Financial ActivitiesPutchase of equipment on account

BUSINESS-TYPE ACTIVITIES-ENTERPRISE FUNDS

UTILITYFUND

S

S

s

S

s

$

$ss

s

s

$

$

1,517,512(764,136)(678^21)

4,89479,949

(148,009)983,871

835,862

(789,300)(525,000)(121,037)

900

(1.434,437)

300,00075,814

375,814

(142,812)

630,623487,811

(348,586)

441,194(7,294)2,943

(12,679)3,1501.472(251)

428,535

79,949

OTHERENTERPRISE

FUNDS

$

S

S

S

$

s

$ss

s

s

$

s

87,846(61,580)(7,234)2,357

2U89

-

-

2,4362,436

23,825

63,13486,959

4,836

17,569

(769)

(247)

16,553

21,389

TOTALENTERPRISE

FUNDS

S

$

S

s

s

$

ssj

$

$

$

s

1,605,358(825.716)(685,555)

7,251101,338

(148,009)983,871

835,862

(789,300)(525,000)(121,037)

900

(1,434,437)

300,00078,250

378,250

(118.987)

693.757574.770

(343,750)

458.763(7.294)2,943

(13,448)3,1501.225(251)

445,088

101,338

(79,877) S (79,877)

The accompanying notes are an integral part of mis statement.

12

Notes to the Financial Statements

13


NOTES TO FINANCIAL STATEMENTSAS OF AND FOR THE YEAR ENDED JUNE 30,2007

f n SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Jennings was incorporated May 2,1888 and has adopted a Home Rule Charter according toTitle 33 of the Louisiana Revised Statutes. The City operates under a Mayor-City Council form ofgovernment and provides the following services as authorized by its charter: public safety (police and fire),public works (streets and lighting), sanitation, health, culture-recreation, public improvements, planningand general administrative services.

The accounting and reporting policies of the City of Jennings conform to generally accepted accountingprinciples (GAAP) as applicable to governmental units. The Government Accounting Standards Board isthe accepted standard-setting body for establishing governmental accounting and financial reportingpolicies. The accounting and reporting framework and the more significant accounting policies arediscussed in subsequent subsections of this note.

A. FINANCIAL REPORTING ENTITY

The financial reporting entity consists of (a) the primary government (City), (b) organizations for whichthe primary government is financially accountable, and other organizations for which nature andsignificance of their relationship with the primary government are such that exclusion would cause thereporting entity's financial statements to be misleading or incomplete.

Governmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determiningwhich component units should be considered part of the City for financial reporting purposes. The basiccriterion for including a potential component unit within the reporting entity is the financial accountability.The GASB has set forth criteria to be considered in determining financial accountability. This criteriaincludes:

1. Appointing a voting majority of an organization's governing body, and

a. The ability of the City to impose its will on the organization and/or

b. The potential for the organization to provide specific financial benefits to or imposespecific financial burdens on the City.

2. Organizations for which the City does not appoint a voting majority but are fiscally dependent onthe City.

3. Organizations for which the reporting entity financial statements would be misleading if data ofthe organization is not included because of the nature or significance of the relationship.

Based on the previous criteria, the City has determined that the following component units are part of thereporting entity:

Fiscal CriteriaComponent Unit Year End Used

Industrial Development Board June 30 1, la and 3City Court and City Marshall June 30 2 and 3

14 (Continued)



The City has chosen to issue financial statements of the primary government (City) only; therefore, noneof the previously listed component units are included in the accompanying financial statements. Financialstatements for these component units can be obtained from the individual component units.

These primary government (City) financial statements include all maj or funds, aggregate non-major funds,and organizations for which the City maintains the accounting records.

G ASB Statement 14 provides for the issuance of primary government financial statements that are separatefrom those of the reporting entity. However, the primary government's (City) financial statements are nota substitute for the reporting entity's financial statements. The City has chosen to issue financial statementsof the primary government only. As such, these financial statements are not intended to and do not reporton the reporting entity but rather are intended to reflect only the financial statements of the primarygovernment (City).

Related Organization

Jennings Housing Authority - The Commissioners of the Authority are appointed by the Mayor, but the Citydoes not provide funding, has no obligation for the debt issued by the Authority, and cannot impose its will.This authority has not been included in the reporting entity.

Joint Venture

Jefferson Davis Parish Landfill Commission - A jointly owned commission with the Jefferson Davis ParishPolice Jury and the Towns of Welsh and Lake Arthur was formed to provide a solid waste disposal facilityfor its member-owners. This commission has not been included in the reporting entity. Financialstatements for this joint venture can be obtained from the Jefferson Davis Parish Landfill Commission.

Jefferson Davis Parish Economic Development Commission - A jointly owned commission with theJefferson Davis Parish Tourist Commission and the Town of Welsh was formed to enhance the economicdevelopment of Jefferson Davis Parish. This commission has not been included in the reporting entity.Financial statements for this joint venture were not available as of June 30,2007 since the commission wasestablished January 30,2007 and has not completed its first year of existence.

B. BASIS OF PRESENTATION

The government-wide financial statements include the statement of net assets and the statement of activities.For the most part, the effect of interfund activity has been removed from these statements. Governmentalactivities, which normally are supported by taxes and intergovernmental revenues, are reported separatelyfrom business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function orsegment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specificfunction or segment. Program revenues include 1) charges to customers or applicants who purchase, use ordirectly benefit from goods, services, or privileges provided by a given function or segment and 2) grants andcontributions that are restricted to meeting the operational or capital requirements of a particular function orsegment. Taxes and other items not properly included among program revenues are reported instead asgeneral revenues.

15 (Continued)



Separate financial statements are provided for governmental funds and proprietary funds. Major individualgovernmental funds and major proprietary funds are reported as separate columns in the fund financialstatements.

FUND FINANCIAL STATEMENTS (FFS)

The accounts of the City are organized on the basis of funds each of which is considered a separate accountingentity with a separate set of self-balancing accounts. The various funds of the City are classified into twocategories: governmental and proprietary. The emphasis on fund financial statements is on majorgovernmental and enterprise funds, each displayed in a separate column. Non-major funds (by category) aresummarized into a single column in the fund financial statements. A fund is considered major if it is theprimary operating fund of the City, the street fund or meets the following criteria:

a. Total assets, liabilities, revenues, or expenditures/expenses of that individualgovernmental or enterprise fund are at least 10 percent of the corresponding totalfor all funds of that category or type; and

b. Total assets, liabilities, revenues, or expenditures/expenses of the individualgovernmental or enterprise fund are at least 5 percent of the corresponding total forall governmental and enterprise funds combined.

The major funds of the City are described below:

MAJOR GOVERNMENTAL FUNDS

General Fund

The General Fund is the general operating fund of the City. It is used to account for all financial resourcesexcept those required to be accounted for in another fund.

Special Revenue Funds

-Street Fund-

The Street Fund is used to account for the receipt of 8.96 mill tax and the expenses related to streets,sidewalks, bridges, tree trimming, and other related items.

-1994 1% Sales Tax Fund-

The 1994 1 % Sales Tax Fund is used to account for the receipt of a 1 % sales tax which was authorized in1994. This tax is to be collected for a period not to exceed twenty-two (22) years. At least $500,000 annuallyis to be used for acquiring, constructing, extending, improving, maintaining and operating sewage collectionand disposal facilities for the City, and/or to pay any bonded or funded indebtedness of the City incurred forsewage collection and disposal facilities. The balance is to be used for street construction and maintenance,drainage, heavy equipment purchases, jail operations, and police pension payments. In 1998, a referendumwas approved to expand the authorized uses of excess funds over previous dedication to include acquiring,constructing, improving and/or maintaining the City's waterworks facilities. It further authorized the issuingof any bonded or funded indebtedness to accomplish the expanded purpose.

16 (Continued)



Major Proprietary Funds

-Utility Fund-

The Utility Fund is used to account for the operation of the City's water and sewer system, which aresupported by user charges and special taxes.

The Utility Fund is financed and operated in a manner similar to private business enterprises - where the intentof the governing body is that the costs of providing goods or services to the general public on a continuingbasis be financed or recovered primarily through user charges; or where the governing body has decided theperiodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capitalmaintenance, public policy, management control, accountability, or other purposes.

Private-sector standards of accounting and financial reporting issued prior to December 1,1989, generally arefollowed in both the government-wide and proprietary fund financial statements to the extent that thosestandards do not conflict with or contradict guidance of the Governmental Accounting Standards Board.Governments also have the option of following subsequent private-sector guidance for their business-typeactivities and proprietary funds, subject to this same limitation. The government has elected not to followsubsequent private-sector guidance.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenuesand expenses generally result from providing services and producing and delivering goods in connection witha proprietary fund's principal ongoing operations. Principal operating revenues are charges to customers forwater and sewer service. Operating expenses for enterprise funds include the cost of sales and services,administrative expense, and depreciation on capital assets. All revenues and expenses not meeting thisdefinition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the municipality's policy to userestricted resources first, then unrestricted resources as they are needed.

C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING

On the government-wide financial statements both governmental and business-type activities are reportedusing the economic resources measurement focus and the accrual basis of accounting. Revenues are recordedwhen earned and expenses are recorded when a liability is incurred, regardless of the timing of related cashflows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similaritems are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focusand the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurableand available. Revenues are considered to be measurable when the amount of the transaction can bedetermined. Revenues are considered to be available when they are collectible within the current period orsoon enough thereafter to pay liabilities of the current period. For this purpose, the government considersrevenues to be available if they are collected within 60 days of the end of the current fiscal period.Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debtservice expenditures, as well as expenditures related to compensated absences and claims and judgments, arerecorded only when payment is due.

(Continued)



With this measurement focus, only current assets and current liabilities are generally included on the balancesheet. Operating statements of these funds present increases and decrease in net current assets. Thegovernmental funds use the following practices in recording revenues and expenditures.

-Revenues-

Ad valorem taxes, franchise taxes, sales taxes, interest income, intergovernmental revenues and charges forservice are all considered to be susceptible to accrual and so have been recognized as revenues of the currentfiscal period. All other governmental fund revenue items are recognized when cash is received by thegovernment.

-Expenditures-

Expenditures are generally recognizedunder the modified accrual basis of accounting when the related fundliability is incurred, except for principal and interest on long-term obligations, which are recognized when due.

-Other Financing Sources (Uses)-

Sale of fixed assets, increases in capital lease purchases, and transfers between funds that are not expected tobe repaid are accounted for as other financing sources (uses) and are recognized when the underlying eventsoccur.

D. BUDGET AND BUDGETARY ACCOUNTING

The City follows these procedures in establishing the budgetary data reflected in these primary governmentfinancial statements:

1. The City Clerk prepares an operating departmentalized budget, a pay plan budget, and a capitalimprovements budget and submits these budgets to the Mayor and City Council no later than fifteendays prior to the beginning of each fiscal year.

2. A summary of the total proposed budgets is published and the public notified that the proposedbudgets are available for public inspection. At the same time, a public hearing is called.

3. A public hearing is held on the proposed budget at least ten days after publication of the call for thehearing.

4. After the holding of the public hearing and completion of all action necessary to finalize andimplement the budget, the budget is adopted through passage of an ordinance prior to thecommencement of the fiscal year for which the budget is being adopted.

5. The City Clerk is authorized to transfer budgeted amounts within departments, within any fund exceptfor salary items and capital improvement items which cannot be amended without City Councilapproval. Budgetary amendments involving the transfer of funds from one department, program orfunction to another or involving increases in expenditures resulting from revenues exceeding amountsestimated requires the approval of the City Council.

6. Formal budgetary integration is used as a management control device by all funds during the year.

18 (Continued)


NOTES TO FINANCIAL STATEMENTSAS OF AND FOR THE YEAR ENDED JUNE 30, 2007

7. Budgets for all funds are adopted on a basis consistent with generally accepted accounting principles(GAAP). Budgeted amounts shown on the financial statements were amended by the City Councilon October 10,2006. April 10,2007, and June 26,2007.

8. Ail budgetary appropriations lapse at the end of each fiscal year.

E. DEPOSITS AND INVESTMENTS

Under state law, the City may deposit funds with a fiscal agent organized under the laws of the State ofLouisiana, the law of any other state hi the union, or the laws of the United States. The City may invest ingovernment backed securities, commercial paper, the state sponsored investment pool, mutual funds consistingsolely of government backed securities, or certificates and time deposits of state banks organized underLouisiana Law and national banks having principal offices in Louisiana.

The municipality's cash and cash equivalents include demand deposit accounts (including restricted assets)with financial institutions and certificates of deposit with maturities less than 90 days.

Investments include certificates of deposit with maturities exceeding 90 days and are reported at cost whichapproximate fair value.

Further information regarding deposits and investments are disclosed in Note 3.

F. INTERFUND RECEIVABLES AND PAYABLES

Short-term cash loans between funds are considered temporary in nature. These amounts are reported as "duefrom/to other funds" on the balance sheet.

G. RECEIVABLES

In the government-wide statements, receivables consist of all revenues earned at year-end and not yetreceived. Major receivable balances for the governmental activities include sales and use taxes. Business-typeactivities report customer's utility service receivables as their major receivables. Uncollectible amounts duefor customers' utility receivables, since they are immaterial, are recognized as bad debts through a directwrite-offat the time information becomes available which would indicate the uncollectability of the particularreceivable. If ad valorem taxes become uncollectible, the property involved is seized and sold as of May 31of the effected fiscal year, and therefore, all material ad valorem taxes are collected as of the end of the currentfiscal year.

H. INVENTORY

Inventories in the General and Special Revenue Funds consist of expendable supplies held for consumption.

Inventory in the Enterprise Funds consist of trash bags held for sale to general public and for use by variouscity departments to assist hi the City's garbage collection function. Inventories are priced at cost (first-in,first-out).

(Continued)



I. PREPAID ITEMS

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaiditems. Prepaid items consist of unexpired portions of insurance premiums. Prepaid items in the enterprisefunds are recorded in both the government-wide financial statements and the fund financial statements.Prepaid items in the governmental funds are reported only on the government-wide financial statements.

J. RESTRICTED ASSETS

Certain proceeds of proprietary fund and governmental fund revenue bonds, as well as certain resources setaside for then- repayment, are classified as restricted assets on the balance sheet because their use is limitedby applicable bond covenants. Also, cash deposited in a special water and sewer deposit account has beenrestricted to provide for the return of customer utility deposits.

K. CAPITAL ASSETS

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges,sidewalks, and similar items) acquired after June 30,2003, are reported in the applicable governmental orbusiness-type activities columns in the government-wide financial statements and in the fund financialstatements for proprietary funds. In the fund financial statements, capital assets used in governmental fundoperations are reported as capital outlay expenditures of the governmental fund upon acquisition. Capitalassets used in proprietary fund operations are accounted for the same as in the government-wide statements.Capital assets are capitalized at historical cost or estimated cost if historical cost is not available. Donatedassets are recorded as capital assets at their estimated fair market value at the date of donation. Generally,the municipality maintains a threshold level of $1,000 or more for capitalizing capital assets. However, athreshold level of $5,000 or more is used for capitalizing major repair items.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extendassets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

All capital assets, other than land, are depreciated using the straight-line method over the following usefullives:

EstimatedDescription LivesRoads, bridges, & infrastructure 30 yearsInfrastructure Improvements 10 yearsBuilding improvements 10 yearsBuildings 30 yearsComputers & office equipment 5-10 yearsMachinery & equipment 5-15 yearsSewer & sewer improvements 10-40 years

20 (Continued)



L. CAPITALIZATION OF INTEREST COST

It is the policy of the City of Jennings to capitalize material amounts of interest resulting from borrowings inthe course of the construction of capital assets.

The amount of interest cost capitalized on major capital projects acquired/constructed with proceeds ofrestricted tax-exempt debt includes all interest cost of the borrowing less any interest earned on relatedinterest-bearing investments acquired with proceeds of the related tax-exempt borrowings from the date ofthe borrowing until the assets are ready for their intended use.

On April 1, 2006, the City issued $500,000 in revenue bonds for construction of a new addition to theCarnegie Library. Since the receipt of the bond proceeds, no construction cost has been incurred and thefunds have been invested at interest rates equal to or greater than the interest rates payable on the bonds.Therefore, no interest has been capitalized for the year ended June 30,2007.

M. COMPENSATED ABSENCES

The City provides leave for vacation, sickness and illness, personal business and as an award in their safetyprogram. Vacation leave is provided for all employees with one or more years of service. It ranges from 10to 20 days per year depending on length of service. Sickness and illness leave of 5 to 365 days is provideddepending on length of service and the department in which the employee serves. Three days of leave isprovided for personal business each year and two to four days of leave is awarded to employees annually forsafety on their job. It is the City's policy that leave does not accumulate except the amount earned in thecurrent calendar year. Any leave not utilized by December 31st is lost.

The entire accrued vacation leave liability for both governmental and proprietary fund employees are reportedon the government-wide financial statements. The accrued vacation leave as of the end of the fiscal year forproprietary fund employees are also recorded as a liability in the appropriate proprietary fund financialstatement. There are no accumulated and vested benefits relating to sick leave that require disclosure toconform with generally accepted accounting principles.

N. LONG-TERM OBLIGATIONS

In the government-wide financial statements, and the proprietary fund types in the fund financial statements,long-term debt and other long-term obligations are reported as liabilities in the applicable governmentalactivities, business-type activities, or proprietary fund type statement of net assets.

O. EQUITY CLASSIFICATIONS

In the government-wide statements, equity is classified as net assets and displayed in three components:

a. Invested in capital assets - Consists of capital assets including restricted capital assets, net ofaccumulated depreciation and related debt.

b. Restricted net assets - Consists of net assets with constraints placed on the use either by (l)extemalgroups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)law through constitutional provisions or enabling legislation.

c. Unrestrictednet assets - All other net assets that do not meet the definition of "restricted" or "investedin capital assets."

21 (Continued)



In the fund statements, governmental fund equity is classified as fond balance. Fund balance is furtherclassified as reserved and unreserved, with unreserved further split between designated and undesignated.

P. ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in theUnited States of America require management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues, expenditures, and expenses during the reporting period.Actual results could differ from those estimates.

Q. INTERFUND TRANSFERS

Permanent reallocations of resources between funds of the reporting entity are classified as interfund transfers.For the purposes of the statement of activities, all interfund transfers between individual governmental fundshave been eliminated.

m AD VALOREM TAXES

A. MILLAGE

Taxes are levied on November 15 and payable by December 31. The Jefferson Davis Parish Sheriffs Officebills and collects the property taxes on behalf of the City. The property tax millage in effect at June 30,2007according to Ordinance No. 1571, was as follows:

General Alimony 7.62 MillsStreet Maintenance 8.96Library Maintenance 4.01

Total 20.59 Mills

There are no material taxes receivables as of June 30,2007 as all taxes have either been collected or propertieshave been seized and sold.

m DEPOSITS AND INVESTMENTS

A. DEPOSITS

The year end balances of deposits are as follows:

Bank ReportedDeposit Type Balances Amount

Cash on hand $ - $ 1,5 HCash-demand deposits 3,652,352 3,368,544Time deposits (maturities less than 90 days) 851.283 850.000

S 4.220.055

22 (Continued)



Under state laws, these deposits (or the resulting bank balances) must be secured by federal depositinsurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledgedsecurities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscalagent. These securities are held in the name of the pledging fiscal agent bank in a holding or custodialbank.

Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, the City's depositsmay not be returned to it. The City's deposit policy for custodial credit risk requires that all uninsureddeposits must be secured with acceptable collateral as defined in LRS 38:1221 valued at market. As ofDecember 31,2007, the City had deposits (collected bank balances) totaling $4,503,635. Of these bankdeposit balances, $4,170,262 were exposed to custodial credit risk as follows: uninsured and collateral heldby pledging bank's agent not in the City of Jennings' name $4,170,262,

Even though pledged securities are considered subject to custodial credit risk under the provisions of G ASBStatement 40, Deposits and Investment Risk Disclosures. R.S. 39:1229 imposes a statutory requirement onthe custodial bank to advertise and sell the pledged securities within 10 days of being notified by the jurythat the fiscal agent has failed to pay deposited funds upon demand.

B. INVESTMENTS

At June 30,2007, the City had the following investments and maturities:

InvestmentsMaturities (in Years^

Investment Type Fair Value Less than 1 1-5

Certificates of deposits-(maturitiesexceeding90days) $3,169,580 $ 3,169,580 $

Credit Risk - Credit risk is defined as the risk that an issuer or other counterparty to an investment will notfulfill its obligations. The City does not have a written investment policy, but does adhere to state lawsregarding allowable investments. The above investments are not rated.

Custodial Credit Risk - For an investment, custodial credit risk is the risk that, in the event of the failureof the counterparty, the City will not be able to recover the value of its investments or collateral securitiesthat are in the possession of an outside party. Of the investments listed above, $3,169,580 were exposedto custodial credit risk as follows: Uninsured and collateral held by pledging institution's agent not in theCity of Jennings' name $3,169,580.

Concentration of Credit Risk • The City of Jennings places no limit on the amount it may invest in any oneissuer. More than 5 percent of the City of Jennings' investments at June 30, 2007 are invested incertificates of deposit held at First Guaranty Bank. These investments are 99.5% of the City of Jennings'total investments at June 30, 2007.

23 (Continued)



(4) RECEIVABLES

The receivables of $1,015,175 at June 30, 2007, are as follows:

Class of Receivable

Taxes:Ad ValoremSales & UseFranchise

Intergovernmental-grants:FederalState

Intergovernmental-other:StateLocal

AccountsOther

Total as reported on fund fmancials andgovernment-wide statements

INTERFUND RECEIVABLES/PA YABLES

BusinessGovernmental Type

Activities Activities

$ 21,596390,323149,412

6,55114,748

100,59051,67766,5022.000

$--

1,349-

--

210,427-

$ 803.399 $ 211.776

Details related to interfund receivables and payables balances as of June 30,2007, are presented as follows:

FundInterfund

ReceivableInterfundPayable Description

Major Governmental Activities:General Fund

Major Business Type Activities:Utility Fund

$ 668In the course of ordinaryoperations, the General Fundpays certain costs that are

668 reimbursed by the water &sewer deposit account, acomponent of the utility fund.The accompanying amountrepresents the reimbursementthat is due at year end.

24 (Continued)



(6) RESTRICTED ASSETS AND RESERVED RETAINED EARNINGS/FUND BALANCES

At June 30,2007 restricted assets consisted of the following:

Governmental Activities:

Cash Equivalent-Certificate of Deposit, LibraryAddition Bond Sinking Fund $ 18,548

Cash Equivalent-Certificate of Deposit, LibraryAddition Capital Projects Fund 500.000Total

Business Type Activities:

Cash-Water & Sewer Deposit Account $ 16,094Investment-Certificate of

Deposit, Water & Sewer Deposit Account 150,000Investment, Certificate of Deposit, Utility Fund 584.004

Total S 750.098

The Water and Sewer Deposit account assets, a component of the Utility Fund, are restricted to paycustomer deposits in the amount of $166,426 at June 30, 2007. When a customer withdraws from thesystem, this deposit is refunded less the amount of any charges outstanding against the account. Due to theshortage of restricted assets available to refund customer deposits, $2,225 of retained earnings has beenreserved, which represents the excess of customer deposits over assets restricted for that purpose.

During the fiscal year ended June 30,1996, the City issued a bond to the Department of EnvironmentalQuality (DEQ) of the State of Louisiana to acquire funds necessary to construct a new wastewater treatmentfacility. A requirement of the loan and pledge agreement was the establishment of a sinking fund andreserve fund to insure the payment of the bond principal and interest. Since the project was completed in1998, the permanent loan period has commenced. During this period, the agreement requires that anamount equal to the accrued interest and a prorata portion of the principal maturing must be established inthe Sinking Fund until paid. In addition, a sum equal to 25% of the amount established in the Sinking Fundmust be established in the Reserve Fund. Based on the current amortization schedule for principal andinterest, the City must establish a Sulking Fund in the amount of $138,811 and a reserve fund in theamount of $441,303; for an aggregate required reserve of $580,114. The City has restricted $584,004 ofinvestments in certificates of deposit that it has with First Guaranty Bank to comply with the terms of theagreement. Therefore, as of June 30,2007, the City has reserved $3,890 more than the amount required.

During the fiscal year ended June 30,2006, the City issued bonds to acquire funds necessary to construct anew addition to the Carnegie Library. The bond proceeds of $500,000 was recorded in the Library AdditionCapital Projects Fund and are restricted for the purpose of construction of a new addition to the CarnegieLibrary.

A requirement of the bond agreement was the establishment of a sinking fund and reserve fund to insure thepayment of the bond principal and interest. The bond agreement requires that the City transfer into the sinkingfund the amount necessary to pay the interest and principal on the bonds and outstanding parity bonds at leastone day before it becomes due. The City has restricted $ 18,548 of investments in certificates of deposit thatit has with First Guaranty Bank and was recorded to the Library Bond Sinking Fund.

25 (Continued)



m CAPITAL ASSETS

Capital assets and depreciation activity as of and for the year ended June 30,2007 for the City of Jennings isas follows:

BeginningBalance Additions Deletions

EndingBalance

Governmental activities:Capital assets, not being

depreciated:LandConstruction in progress

Total capital assets, notbeing depreciated

Capital assets being depreciatedBuildingsBuilding improvementsComputersOffice equipmentMachinery & equipmentVehiclesInfrastructure

Total capital assets beingdepreciated

Less accumulated deprecationfor:BuildingsBuilding improvementsComputersOffice equipmentMachinery & equipmentVehiclesInfrastructure

Total accumulateddepreciation

Total capital assets beingdepreciated, net

Business-type activities:Capital assets, not being

depreciatedLandConstruction in progress

Total capital assets, notbeing depreciated

$ 1,090,364154.543

$ 5.797.679

$ 211,02148.213

$ 28,681682.021 27.309

S 1.244.907 S 710.702

802.113

$ 1,119,045809.255

S 1.928.300

$ 3,982,742305,586192,658151,155

2,508,312815,500

1.870.948

$26,72031,11916,854574,49452,942134.445

$-

23,69030,638238,35658,533

-

$ 3,982,742332,306200,087137,371

2,844,450809,909

2.542.190

S 10.363.698 S 836.574 S 351.217 S 10.849.055

$ 1,684,856177,355121,329116,568

1,856,434525,57483.903

$ 132,75819,61832,66913,402202,773122,952118.525

$-

27,08625,736226,52474,742

-

$ 1,817,614196,973126,912104,234

1,832,683573,784202.428

$ 4.566.019 $ 642.697 $ 354.088 $ 4.854.628

$ 24.438 S 7.922.727

$ 211,021850.326

S 259.234 $ 802.113

26 (Continued)



Capital assets being depreciatedBuildingsBuilding improvementsComputersOffice equipmentMachinery & equipmentVehiclesInfrastructure

Total capital assets beingdepreciated

Less accumulated depreciationfor:BuildingsBuilding improvementsComputersOffice equipmentMachinery & equipmentVehiclesInfrastructure

Total accumulateddepreciation

BeginningBalance

$ 274,850732,09948,694

1,66012,258,975

149,9382.359.616

$ 15.825.832

$ 218,848246,75130,877

1,6604,219,899

107,132658.800

$ 5.483.967

Additions

$-

1,301-

65,762-.

$ 67.063

$ 9,16158,7267,114

-300,921

18,36164.480

$ 458.763

$ 21.417 $15.871.478

Total business-type assetsbeing depreciated, net $10.341.865 $ 410.413

3,6212,892

13,369

S 19.882

$ 1.535

$ 228,009301,85635,099

1,6604,420,820

112,124723.280

$ 5.922.848

$11.009.977

Depreciation expense of $1,101,460 for the year ended June 30, 2007 was charged to the followinggovernmental functions:

Culture & RecreationGeneral GovernmentPublic SafetyPublic WorksUtility SystemZigler Office Building

Total

Governmental Business-TypeActivities Activities

$ 89,80170,438

292,777189,381

$

441,19417.569

27 (Continued)



(ft CONSTRUCTION COMMITMENTS

The municipality has active construction projects as of June 30,2007. At year end the commitments with

contractors are as follows:

Project

Grand Marais Drainage Improvements2006 Street ImprovementsCarnegie Library AdditionWastewater Collection Sewer Rehabilitation

Spentto Date

$ 435,42242,016

RemainingCommitment

$ 305,112476,605546,514464,474

(9) ACCOUNTS. SALARIES, AND OTHER PAYABLES

The payables of $622,129 at June 30,2007, are as follows:

GovernmentalActivities

$ 63,320218,341

25,97323.482

BusinessType

Activities

$ 11,68770,983

166,42638,4763.441

Total

75,007289,324166,42664,44926.923

WithholdingsAccountsDue to CustomersRetainageOther

Total

LONG-TERM OBLIGATIONS

The following is a summary of the long-term obligation transactions for the year ended June 30,2007:

Governmental Activities Business Type Activities

$ 331.116 $ 291.013 $ 622.129

Revenue Total RevenueBonds Compensated Governmental Bonds

Payable Absences Activities Payable

TotalCompensated Business Type

Absences __ ActivitiesLong-term

obligations atbeginning of year $ 500,000 $

Deductions 26.000 __82,153 $ 582,153 $4,115,000 $

- 26.000 525.000 _15,361 $ 4,130,361

^ S25.00Q

Long-termobligationsat end of year 15.361 $ 3.605.361

28 (Continued)



The following is a summary of the current (due in one year or less) and the long-term (due in more than oneyear) portions of long-term obligations as of June 30,2007:

Governmental Activities Business Type ActivitiesRevenue Total Revenue TotalBonds Compensated Governmental Bonds Compensated Business Type

Payable Absences Activities Payable Absences Activities

Current portion $ 27,000 $Long-term portion 447.000 _

82,153 $ 109,153 $ 495,000 $- 447.000 3.095.000

15,361 $ 510,361- 3.095.000

Total 556.153 S3.5S 15.361 S 3.605.361

Bonds payable at June 30,2007, are comprised of the following individual issues:

Bond

FinalOriginal Interest Payment

Issue Rate Due

Interestto Principal Funding

Maturity Outstanding Source

GovernmentalActivities:Library Addition

Bonds-IberiaBank $ 425,000 4.25% 3-29-2021 $ 157,845 $ 414,000 Excess Revenue

of the City ofJennings

Library AdditionBonds-LPFA 75,000 0% 4-1-2011 60,000 Excess Revenue

of the City ofJennings

Business TypeActivities:DEQ PublicImprovementSales Tax Bond $6,500,000 2.95% 3-1-2016 $ 524,805 $3,410,000 19941% Sales

2003 RefundingBonds 850,000 2.85% 4-1-2008

Tax Revenue

5,130 180,000 Excess Revenueof the City ofJennings

On December 1, 1995, the City entered into a loan and pledge agreement with the Department ofEnvironmental Quality (DEQ) of the State of Louisiana and issued a Public Improvement Sales Tax Bondin the total amount of $6,500,000. The bond shall bear interest at a rate of two and forty-five one hundredthspercent (2.45%) per annum on the outstanding principal balance. In addition, an administrative fee of one-halfof one percent (0.5%) per annum on the outstanding principal balance; fora combine rate of two and ninety-five one hundredths percent (2.95%) per annum on the outstanding principal balance.

29 (Continued)



This bond was issued to provide funding necessary to construct a new wastewater treatment facility andimprove and repair existing lift stations and distribution system.

The project was completed and put into operation in 1998. The final bond proceeds were received and thepermanent loan period began and is scheduled to continue through March 1, 2016. During this period,scheduled payments of interest will be due on March 1 and September 1 and principal will be due on March1 of each year.

The agreement requires the pledge of the revenue derived from the 1994 1 % sales tax to insure repayment ofthe bond and its interest. In addition, the agreement requires that user charges be imposed on the recipientsof the wastewater treatment facilities sufficient to operate and maintain the system, including any necessaryreplacement of portions of the system. The proceeds received from this bond, as well as all future proceeds,were, and will be, deposited into the City's utility fund which is responsible for operating and maintaining thewastewater treatment system. Sales tax revenue sufficient to pay the principal and interest of this bond willbe transferred to the utility fund and this fund will be primarily responsible for making payments of interestand principal. As additional security, the agreement requires the establishment of a sinking and reserve fund(Note 6).

The City Council has authorized and issued Refunding Bonds, Series 2003 to Hancock Bank in the amountof $850,000. The proceeds of this issue were used to fund the premature redemption of the Certificate ofIndebtedness, together with accrued interest thereon, held by the Bank ofNew York and associated costs withthe issuance. During fiscal year ended June 30,2006, these bonds became outstanding parity bonds. Thesebonds, equally with the Library Bonds Series 2006 are secured by and payable from a pledge and dedicationof the excess of annual revenues of the City of Jennings, above statutory, necessary and usual charges in eachof the fiscal years during which the bonds are outstanding, and revenues from any source which may betransferred to the Utility Fund and General Fund of the City to pay the debt service on these bonds and theLibrary Bonds, Series 2006.

The bonds shall bear interest at the rate of two and eighty-five one-hundreds percent (2.85%) per annum.Interest shall be due and payable on October 1 and April 1 of each year beginning October 1, 2003. Theprincipal of the Bonds shall mature serially on April 1 of each year beginning on April 1,2004. The bondsare non-callable for early redemption.

During the fiscal year ended June 30, 2006, the City Council authorized and issued Library Bonds, Series2006 to Iberia Bank in the amount of $425,000 and to the Louisiana Public Facilities Authority (LPFA) in theamount of $75,000. The proceeds of this issue are to be used to fund a portion of the cost of constructing anaddition to the existing Carnegie Library and acquiring the necessary equipment and furnishings.

The bonds were issued on a parity with the Outstanding Parity Bonds (Refunding Bonds, Series 2003 toHancock Bank). The bonds, equally with the Outstanding Parity Bonds, are secured by and payable from apledge and dedication of the excess of annual revenues of the City of Jennings, above statutory, necessary andusual charges in each of the fiscal years during which the bonds are outstanding, and revenues from any sourcewhich may be transferred to the General Fund of the City to pay the debt service on these bonds and theOutstanding Parity Bonds.

The bonds purchased by Iberia Bank shall bear interest at the rate of four and twenty-five one-hundredspercent (4.25%) per annum. Interest shall be due and pay able on October land April 1 of each year beginningon October 1,2006. The bonds purchased by LPFA shall bear no interest.

(Continued)



The annual requirements to amortize all bonds payable as of June 30,2007 are as follows:

PrincipalPayments$ 522,000

377,000388,000399,000380,000

1,796,000202.000

InterestPayments$ 123,320

108,38897,55386,38074,870

179,37817.891

Total$ 645,320

485,388485,553485,380454,870

1,975,378219.891

Year Ending June 30.200820092010201120122013-20172018 to Maturity

Total

In accordance with R.S. 39:562, the municipality is legally restricted from incurring long-term bonded debtin excess of 35% of the assessed value of taxable property. At June 30, 2007, the statutory limit is$ 16,615,346 and the outstanding bonded debt funded by ad valorem taxes including interest, total $4,751,780.

In addition, the municipality is legally restricted from incurring long-term bonded debt secured by sales anduse taxes in excess of 75% of the avails of the tax. The municipality was within this 75% limitation when thesales tax bonds were issued.

(1 n INTERFUND TRANSFERS

Details related to interfund transfers as of June 30,2007 are presented as follows:

Transfer TransferFund In OutMajor Governmental Activities:

General Fund $ 358,907 $ 500,000Street Fund 193,16319941% Sales Tax Fund 300,000 1,210,941

Non-major Governmental Activities 119.640 96.631

Total Governmental Activities $ 971,710 $ 1,807,572

Major Business-Type ActivitiesUtility Fund 983.871 148.009

Total S 1.955.581 $ 1.955.581

The transfers are movements of money from one fund to another. These merely serve as a means to financeactivities in the receiving fund.

(12) PENSION PLANS

Substantially all employees of the City of Jennings, are members of the following statewide retirementsystems: Municipal Employees Retirement System of Louisiana, Municipal Police Employees RetirementSystem of Louisiana, Firefighters' Retirement System of Louisiana, or Louisiana State Employees RetirementSystem. These systems are cost-sharing, multiple-employer defined benefit pension plans administered byseparate boards of trustees. Pertinent information relative to each plan follows:

31 (Continued)



A. Municipal Employees Retirement System of Louisiana (System)

Plan Description. The System is composed of two distinct plans, Plan A and Plan B, with separateassets and benefit provisions. All employees of the municipality, except for policemen, firemen andthe City Judge, are members of Plan B.

All permanent employees working at least 35 hours per week who are not covered by another pensionplan and are paid wholly or in part from municipal funds are eligible to participate in the System.Under Plan B, employees who retire at or after age 60 with at least 10 years of creditable service ator after age 55 with at least 30 years of creditable service are entitled to a retirement benefit, payablemonthly for life, equal to 2 percent of their final-average monthly salary in excess of $ 100 for eachyear of creditable service. Furthermore employees with at least 10 years of creditable service, but lessthan 30 years, may take early retirement benefits commencing at or after age 60, with the basic benefitreduced 3 percent for each year retirement precedes age 62, unless he has at least 30 years ofcreditable service. In any case, monthly retirement benefits paid under Plan B cannot exceed 100 percent of final-average salary. Final-average salary is the employee's average salary over the 36consecutive or joined months that produce the highest average. Employees who terminate with atleast the amount of creditable service stated above, and do not withdraw their employee contributions,may retire at the ages specified above and receive the benefit accrued to their date of termination. TheSystem also provides death and disability benefits. Benefits are established or amended by statestatute.

The System issues an annual publicly available financial report that includes financial statements andrequired supplementary information for the System. That report may be obtained by writing to theMunicipal Employees Retirement System of Louisiana, 7937 Office Park Boulevard, Baton Rouge,Louisiana 70809, or by calling (225) 925-4810.

Funding Policy. Under Plan B, members are required by state statute to contribute 5.0 percent oftheir annual covered salary and the City of Jennings is required to contribute at an actuariallydetermined rate. The current rate is 9.75 percent of annual covered payroll. Contributions to theSystem also include one-fourth of one percent (except Orleans and East Baton Rouge parishes) of thetaxes shown to be collectible by the tax rolls of each parish. These tax dollars are divided betweenPlan A and Plan B based proportionately on the salaries of the active members of each plan. Thecontribution requirements of plan members and the City of Jennings are established and may beamended by state statute. As provided by Louisiana Revised Statute 11:103, the employercontributions are determined by actuarial valuation and are subject to change each year based on theresults of the valuation for the prior fiscal year. The City of Jennings contributions to the Systemunder Plan B for the years ending June 30, 2007, 2006, and 2005, were $124,330, $122,228, and$116,056, respectively, equal to the required contributions for each year.

B. Municipal Police Employees Retirement System of Louisiana (Svstenri

Plan Description. All full-time police department employees engaged in law enforcement arerequired to participate in the System. Employees who retire at or after age 50 with at least 20 yearsof creditable service or at or after age 55 with at lease 12 years of creditable service are entitled to aretirement benefit, payable monthly for life, equal to 3 1/3 percent of their final-average salary foreach year of creditable service. Final-average salary is the employee's average salary over the 36consecutive or joined months that produce the highest average. Employees who terminate with atleast the amount of creditable service stated above, and do not withdraw their employeecontributions, may retire at the ages specified above and receive the benefit accrued to their date

32 (Continued)



of termination. The System also provides death and disability benefits. Benefits are established oramended by state statute.

The System issues an annual publicly available financial report that includes financial statements andrequired supplementary information for the System. That report may be obtained by writing to theMunicipal Police EmployeesRetirement System of Louisiana, 8401 United Plaza Boulevard, BatonRouge, Louisiana 70809-2250, or by calling (225) 929-7411.

Funding Policy. Plan members are required by state statute to contribute 7.5 percent of their annualcovered salary and the City of Jennings is required to contribute at an actuarially determined rate. Thecurrentrateis 15.5 percent of annual covered payroll. The contribution requirements of plan membersand the City of Jennings are established and may be amended by state statute. As provided byLouisiana Revised Statute 11:103, the employer contributions are determined by actuariallyvaluationand are subject to change each year based on the results of the valuation for the prior fiscal year. TheCity of Jennings contributions to the System forthe years ended June 30,2007,2006, and 2005, were$146,542, $141,161, and $178,348, respectively, equal to the required contributions for each year.

C. Firefighters' Retirement System of Louisiana

Plan Description. Membership in the Louisiana Firefighters' Retirement System is mandatory forall full-time firefighters employed by a municipality, parish, or fire protection district that did notenact an ordinance before January 1, 1980, exempting itself from participation in the System.Employees are eligible to retire at or after age 55 with at least 12 years of creditable service or at orafter age 50 with at least 20 years of creditable service. Upon retirement, members are entitled to aretirement benefit, payable monthly for life, equal to 3 1/3 percent of their final-average salary foreach year of creditable service, not to exceed 100 percent of their final-average salary. Final-averagesalary is the employee's average salary over the 36 consecutive or joined months that produce thehighest average. Employees who terminate with at least 12 years of service and do not withdraw theiremployee contributions may retire at or after age 55 (or at or after age 50 with at least 20 years ofcreditable service at termination) and receive the benefit accrued to their date of termination. TheSystem also provides death and disability benefits. Benefits are established or amended by statestatute.

The System issues an annual publicly available financial report that includes financial statements andrequired supplementary information for the System. That report may be obtained by writing to theFirefighters * Retirement System, Post Office Box 94095, Baton Rouge, Louisiana 70804, or by calling(225) 925-4060.

Funding Policy. Plan members are required by state statute to contribute 8.0 percent of their annualcovered salary and the City of Jennings is required to contribute at an actuarially determined rate. Thecurrent rate is 15.5 percent of annual covered payroll. The contribution requirements of plan membersand the City of Jennings are established and may be amended by state statute. As provided byLouisiana Revised Statute 11:103, the employer contributions are determined by actuarial valuationand are subject to change each year based on the results of the valuation for the prior fiscal year. TheCityof Jennings'contributions to theSystem for the year ending June 30,2007,2006, and 2005, were$50,431, $61,323, and $69,891, respectively, equal to the required contributions for each year.

33 (Continued)



D. Louisiana State Employees Retirement System

Plan Description. The City contributes to this plan on behalf of the city judge of the City Courtof Jennings (Ward 2). This is a cost-sharing multiple-employer defined benefit pension thatprovides for retirement and disability benefits and death benefits to plan members and beneficiaries.Benefits are established or amended by state statute.

The System issues an annual publicly available financial report that includes financial statementsand required supplementary information for the System. That report may be obtained by writingto the Louisiana State Employees Retirement System, P.O. Box 44213, Capitol Station, BatonRouge, Louisiana 70804-4213 or by calling 1-800-256-3000.

Funding Policy. Plan members are required by state statute to contribute 8.0 percent of theirannual covered salary and the City of Jennings is required to contribute at an actuarially determinedrate. The current rate is 19.10 percent of annual covered payroll. The contribution requirementsof plan members and the City of Jennings are established and may be amended by state statute. Asprovided by Louisiana Revised Statute 11:103, the employer contributions are determined byactuarial valuation and are subject to change each year based on the results of the valuation for theprior fiscal year. The City of Jennings contributions to the System for the years ending June 30,2007, 2006 and 2005, were $1,430, $1,367 and $1,213, respectively, equal to the requiredcontributions for each year.

(13) SEGMENT INFORMATION FOR ENTERPRISE FUNDS

The City maintains two enterprise funds which provide utilities (water and sewer) and an office/apartmentcomplex. Segment information for the year ended June 30,2007 was as follows:

Operating RevenuesDepreciationOperating Income (Loss)Transfers:

InOut

Change in Net AssetsProperty, Plant & Equipment:

AdditionsDeletions

Net Working Capital

Total AssetsBonds PayableTotal Net Assets

PublicUtility

E 1,526,550441,194

(348,586)

983,871(148,009)446,923

869,17617,796

970,018

12,734,6343,590,0008,804,868

Office/ApartmentComplex

$ 90,20317,5694,836

10,689

3,62186,875

169,294

167,004

TotalEnterprise

Funds$ 1,616,753

458,763(343,750)

983,871(148,009)457,612

869,17621,417

1,056,893

12,903,9283,590,0008,971,872

34 (Continued)



(14) LANDFILL JOINT VENTURE

The City is a participant in a joint venture referred to as the Jefferson Davis Parish Sanitary LandfillCommission. This entity was chartered on February 17, 1984. The Commission's purpose is theestablishment of a long-term plan for the disposal of solid wastes in Jefferson Davis Parish. According tothe charter, each participant in the Commission is responsible for a pro rata share of any operating deficits.Likewise, any distributions of surpluses are also shared on a pro rata basis. Each participants pro rata shareis based on the number of households within each participant's unit to the total number of households withinall participating units. These proportions were determined using the 1980 U. S. Census as follows:

LocalityJenningsWelshLake ArthurParish (excluding Jennings,

Welsh, Lake Arthur, & Elton)

Totals

Number of Households4,1611,1671,212

3.339

Percentages.421196.118129.122684

.337991

1.000000

The Commission consists of six commissioners as follows: two residents of Jennings, one resident ofWelsh, one resident of Lake Arthur, and two residents of Jefferson Davis Parish living outside the citylimits of the Jennings, Welsh, Lake Arthur and Elton. The Commission members are to be appointed bythe governing body of their place of residence.

The Commission has the power and authority to employ personnel, adopt its own budget and enter intoagreements necessary for the operation of the Landfill. In certain instances, some agreements must beconsented to by all six members of the Commission.

Condensed financial information for the Jefferson Davis Parish Sanitary Landfill as of December 31,2006(the latest available audited financial statements) were as follows:

Total

Total assetsTotal liabilitiesTotal net assetsTotal liabilities and net assets

Total revenuesTotal expendituresChange in net assets

5,690,87620,372

5,670,5045,690,876

987,3561,408,149(420,793)

Jennings(42.1196%)

$ 2,396,9748,580

2,388,3942,396,974

415,870593,106

(177,236)

As of December 31,2006, the Commission had no long-term debt outstanding.

The Landfill Commission as owner of a sanitary landfill is subject to Environmental Protection Agency(EPA) regulations that require monitoring the landfill site for 30 years following closure of the site inaddition to other closure requirements. These regulations also mandate that landfill owners providefinancial assurances that they will have the resources available to satisfy the postclosure standards. Theseguarantees can be third-party trusts, surety bonds, letters of credit, insurance, or state sponsored plans.

35 (Continued)



According to the Commission's contract with the site operator, "...the contractor shall be responsible forclosure in accordance with the permit...". Additionally, "...the contractor's post-closure care, maintenanceand monitoring responsibility shall be three (3) years, or as required by law,...". In the event the operatoris for whatever reason unwilling or unable to fulfill this requirement, the responsibility for closure and postclosure monitoring will revert back to the Commission.

Additionally, because of the industry the Commission participates in, certain potential liabilities are alwayspresent. These include, but are not limited to, environmental cleanup costs and EPA penalties for violationof its regulations. The EPA is empowered by law (through the Superfund legislation) to seek recovery fromanyone who ever owned or operated a particular contaminated site, or anyone who ever generated ortransported hazardous materials to a site (these parties are commonly referred to as potentially responsibleparties, or PRPs). Potentially, the liability can extend to subsequent owners or to the parent company ofa PRP. While there are no asserted or unassorted potential costs or penalties at the date of this report thatthe Commission is aware of, the potential is present.

For the year ended June 30,2007, the City received $400,136 from this Commission as its proportionatedistribution, plus $10,000 for economic development. The Commission is a Governmental Fund and theCity of Jennings has not included its 42.1% share of the Commission's net assets in these financialstatements.

ECONOMIC DEVELOPMENT COMMISSION JOINT VENTURE

The City is a participant in a joint venture referred to as the Jefferson Davis Parish Economic DevelopmentCommission. This entity was chartered on January 30, 2007. The Commission's purpose is to act as anagency to enhance economic development and sustainable growth in Jefferson Davis Parish. According tothe charter, each member is responsible for contributing to the Commission an amount equal to thepercentage of ownership that the member holds in the commission. The proportion of annual participationshall be as follows:

NotMember Percentage to Exceed

City of Jennings .395 $ 75,000Jefferson Davis Parish Tourist Commission .395 75,000Town of Welsh .210 40,000

Total 1.00

The Commission consists of seven commissioners as follows: three residents of the City of Jennings, threerepresentatives appointed by the Jefferson Davis Parish Tourist Commission, and one resident of the Townof Welsh. The Commission members are to be appointed by the governing body of their place of residence.

The Commission has the power and authority to employ a director to oversee and manage the operation ofthe commission office, hire other staff as needed, adopt its own budget, and enter into contracts forprofessional services necessary for the operation of the Commission.

As of June 30, 2007, separate financial statements for the Jefferson Davis Economic DevelopmentCommission was not available since the Commission was established January 30, 2007 and has not

Documents

City of Jennings...CITY OF JENNINGS, LOUISIANA Annual Financial Statements As of and for the Year Ended June 30,2007 With Supplemental Information Schedules CONTENTS Statement Page