Draper & McGinley, P.A Certified Public Accountants

Presented by:Michele R. Mills, CPA

Partner

The City of Brunswick, MD

Fiscal Year 2015 Audit

Scope of Services

Financial Statement Audit

Responsibilities:

The financial statements are the responsibility of management

Our responsibility is to: Plan and perform the audit to obtain reasonable assurance that

the financial statements are free of material misstatement

Express an opinion on the financial statements based on our audit

The audit was performed in accordance with Generally Accepted Auditing Standards and

Government Auditing Standards

Auditors’ Opinion

The City of Brunswick, Maryland received an Unmodified opinion on the financial

statements.

Overview provided by management of the financial highlights of the City

Our responsibility is to review the MD&A to ensure 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

Management’s Discussion & Analysis (MD&A)

See page 3 - 9 of the audit report

Governmental Accounting Standards Board requires:

Two sets of Financial Statements

Government – wide (pg. 10 - 11)Fund – level (pg. 12 - 18)

GASB Reporting Model

Financial Highlights

New for FY 2015

City implemented GASB 68; “Accounting and Financial Reporting for Pensions”

Required restatement of opening net position.

Required the City to record its proportionate share of the net pension liability as a participating governmental unit in the State’s retirement system.

The City’s proportionate share as of 06/30/15 was $970,619.

See page 10 of the audit report

Required government-wide financial statements:

Statement of Net PositionStatement of Activities

Government – Wide Statements

Statement of Net Position:

Presents the financial condition of the governmental and business-type activities of the

City

Government – Wide Statements

Statement of Net Position

Total Assets $42,530,635 (Government-Wide)

Governmen-tal Activi-

ties,

$11,383,820, 27%Business-

Type Activi-ties,

$31,146,815,

73%

See page 10 of the audit report

0.3% decrease from FY 2014

Statement of Net Position

Total Liabilities $5,292,252 (Government-Wide)

Governmen-tal Activities,

$1,642,538,

31%

Business-Type Activi-

ties, $3,649,714,

69%

See page 10 of the audit report

19% increase from FY 2014

Overall, the City’s debt decreased 5% from FY 2014.

No new borrowings in FY 2015.

Principal Payments of $197,639 $91,630 - Governmental activities $106,009 - Business-type activities

See page 31 of the audit report

Deferred Inflows/Outflows of Resources

Deferred outflows of resources – a consumption of net assets by the government that is applicable to a future reporting period (attributable to pension)

Governmental activities - $117,082 Business-type activities - $34,973

Deferred inflows of resources – an acquisition of net assets by the government that is applicable to a future reporting period (attributable to pension and unearned revenue)

Governmental activities - $114,996 Business-type activities - $12,192,333

See page 10 of the audit report

Deferred Inflows/Outflows of Resources

Assets + Deferred Outflows – Liabilities – Deferred Inflows = Net Position

Governmental Activities:Net position - $9,743,368

Business-type Activities:Net position - $15,339,741

Statement of Net Position

Total Net Position $25,083,109 (Government-Wide)

Governmental Activities, $9,743,368,

39%

Business-Type Activities, $15,339,741,

61%

See page 10 of the audit report

Statement of Activities:

Presents a comparison between direct expenses and program revenues for each program or

function of the City’s governmental and business-type activities

Government – Wide Statements

Statement of Activities

Governmental Activities

Total Expenses

$3,958,638

Charges for Services

$412,020

Operating Grants and Contributio

ns

$346,458

Capital Grants and

Contributions

$ -

General Revenues

$3,833,907

See page 11 of the audit report

Expenses Program Revenues

Statement of Activities

Business-type

Activities

Total Expenses

$3,222,623

Charges for Services

$2,716,512

Operating Grants and Contributio

ns

$42,000

General Revenues

$113,263

See page 11 of the audit report

Expenses Revenues

Statement of Activities

Change in Net Position $282,899 (Government-Wide)

As compared to $132,894 for FY 2014

Governmental Activities $633,747 Business-Type Activities $(350,848)

See page 11 of the audit report

Balance Sheet

Total Assets $ 6,098,830Total Liabilities

2,016,845Total deferred inflows of resources

33,188Fund Balances

Assigned $1,835,897Unassigned 2,212,900Total Fund Balances

$4,048,797

Governmental Funds

Governmental Funds include: General and Capital ProjectsSee page 12 of the audit report

Statement of Revenues, Expenditures and Changes in Fund Balances

Total Revenues $4,592,385

Total Expenditures 3,858,704

Excess of Revenues over Expenditures $ 733,681

Governmental Funds

Governmental Funds include: General and Capital Projects See page 13 of the audit report

Statement of Revenues, Expenditures and Changes in Fund Balances

Excess of Revenues and Other Financing SourcesOver Expenditures and Other Uses $733,681

Adjustments for the Statement of Activities Capital outlay 206,780 Depreciation expense (403,691) Compensated absences (8,399) Debt service expenditures 91,630 Net pension adjustment 13,746

Change in Net Position of Governmental Activities $633,747

Governmental Funds

Governmental Funds include: General and Capital ProjectsSee page 13 of the audit report

Reconciliation of Fund Balance to Net Position of Governmental Activities

Fund balances - governmental funds 4,048,797$

Amounts reported for governmental activities in thestatement of net assets are different because:

Capital assets used in governmental activities are not financial resources, therefore are not reported in the funds

Property and equipment, net 6,960,632

Deferred outflows of resources 117,082

Long-term liabilities are not due and payable in the current period and therefore, are not reported in the funds

Long-term debt (440,597)Compensated absences (113,361) Net pension liability (747,377)

Deferred inflows of resources (81,808)

Net position - governmental activities 9,743,368$

See page 14 of the audit report

Property Taxes Income Taxes Intergov Service Charges Other

$1,936,173

$584,297

$1,112,610

$279,549

$419,901

$2,037,030

$638,915

$1,213,114

$309,052$394,274

Governmental Fund Types -General & Capital Projects Funds

REVENUES

FY 2014 FY 2015 See page 13 of the audit report

Totals:FY2015 $4,592,385FY2014 $4,332,530

$894,702

$1,051,356

$1,825,982

$176,667$20,749 $60,641

$17,146

$954,357

$1,083,857

$1,397,905

$175,269 $125,123 $105,737

$16,456

Governmental Fund Types -General & Capital Projects Funds

EXPENDITURES

FY 2014 FY 2015 See page 13 of the audit report

Totals:FY2015 $3,858,704FY2014 $4,047,423

Operating Revenue Operating Expense Operating Income/ (Loss)

Change in net position

$1,366,711

$1,274,747

$91,964 $50,213

$1,428,443 $1,374,375

$54,068 $11,751

FY14 FY15

See page 16 of the audit report

7.8% increase

4.5% increase

Statement of Operations – Water(Proprietary Fund -Enterprise)

Operating Revenue Operating Expense Operating Income / (Loss)

Change in net posi-tion

$1,328,851

$1,765,915

$(437,064) $(488,653)

$1,443,307

$1,754,273

$(310,966) $(362,599)FY14 FY15

See page 16 of the audit report

Less than 1%

decrease

8.6% increase

Statement of Operations – Sewer(Proprietary Fund - Enterprise)

Operating expenses include depreciation expense as follows:

Water Fund - $545,005 Sewer Fund - $945,248

See page 16 of the audit report

BUDGET TO ACTUAL – GENERAL FUND

BUDGET (Original

)

BUDGET (Final)

ACTUAL VARIANCE

REVENUES $4,046,200

$4,384,200

$4,549,710

$165,510

EXPENDITURES

$3,695,20

0

$3,889,500

$3,657,879

231,621

TOTAL OTHER FINANCING SOURCES (USES)

($351,000

)

($494,700) ($494,700)

$ -

NET CHANGE IN FUND BALANCE

$ - $ - $397,131 $397,131

See page 37 & 39 of the audit report

QUESTIONS?