DURANGO FIRE & RESCUE AUTHORITYgfoa.net/cafr/COA2012/DurangoFireAndRescueAuthorityCO.pdf · Durango Fire and Rescue Authority 142 Sheppard Drive, Durango, CO Phone: 970 382 6001 Fax:

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DURANGO FIRE & RESCUE AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2012 and 2011

TABLE OF CONTENTS INTRODUCTORY SECTION

Letter of Transmittal ................................................................................................. .4 Certificate of Achievement for Excellence in Financial Reporting ........................... .8 Organizational Chart ................................................................................................ .9 List of Appointed and Elected Officials .................................................................... 10

FINANCIAL SECTION Independent Auditor’s Report .................................................................................. 13 Management’s Discussion and Analysis .................................................................. 15 Basic Financial Statements Fund Financial Statements

Statement of Net Position ........................................................................... 22 Statement of Revenues, Expenses and Changes in Net Position .............. 23 Statement of Cash Flows ............................................................................ 24 Statement of Fiduciary Net Position – Fiduciary Fund ................................ 25 Statement of Changes in Fiduciary Net Position – Fiduciary Fund ............ 25

Notes to Financial Statements ........................................................................... 26 Required Supplemental Information

Schedule of Funding Progress – Volunteer Pension Fund ......................... 37 Other Supplemental Information Schedule of Revenues – Budget and Actual ............................................. 39 Schedule of Expenditures – Budget and Actual ........................................ 40

Schedule of Additions & Deletions–Fiduciary Fund–Budget and Actual ... 42

STATISTICAL SECTION Statistical Section Comments ................................................................................. 44 Net Position by Component .................................................................................... 45 Changes in Net Position ......................................................................................... 46 Expenses ................................................................................................................ 47 Revenues ................................................................................................................ 48 Demographic Data .................................................................................................. 49 Principal Employers ................................................................................................ 50 Full-time Equivalent Employees .............................................................................. 51 Operating Indicators by Function ............................................................................ 52 Capital Asset Statistics ............................................................................................ 53 Calls by District ....................................................................................................... 54 DFRA Response Area and Station Location .......................................................... 55

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INTRODUCTORY SECTION

Durango Fire and Rescue Authority 142 Sheppard Drive, Durango, CO

Phone: 970 382 6001 Fax: 970 382‐6028

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June 21, 2013

To the Members of the Board of Directors, City Council and Citizens of the City of Durango, Animas Fire Protection District and Hermosa Cliff Fire Protection District:

State law requires that governmental entities publish within seven months of the close of each calendar year (unless such deadline is extended) a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (US GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Durango Fire & Rescue Authority (“Authority”) for the fiscal year ended December 31, 2012.

This report consists of management’s representations concerning the finances of the Authority. Consequently, management assumes full responsibility for the completeness and reliability for all the information presented in this report. To provide a reasonable basis for making these representations, management of the Authority has established a comprehensive framework that is designed to protect the government’s assets from loss, theft or misuse, and to compile sufficient reliable information for the presentation of the Durango Fire & Rescue Authority’s financial statements in conformity with US GAAP. As management, we assert to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The Durango Fire & Rescue Authority’s financial statements have been audited once again by Haynie and Company, a firm of licensed certified public accountants who regularly audit governmental entities in Colorado. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Durango Fire & Rescue Authority for the fiscal year ended December 31, 2012, are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and assessing the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was reasonable basis for rendering an unqualified opinion and that Durango Fire & Rescue Authority’s financial statements for the year ended December 31, 2012, are fairly presented in conformity with US GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

Generally accepted accounting principles require that management provide a narrative introduction, overview and analysis to accompany the financial statements in the form of Management’s Discussion and Analysis (“MD&A”). This letter of transmittal is designed to complement MD&A and should be read in conjunction with the audit. The Durango Fire & Rescue Authority’s MD&A can be found immediately following the report of the independent auditors.

Profile of the Authority

Durango Fire & Rescue Authority was formed in 2001 through an Intergovernmental Agreement (“IGA”) between the City of Durango, Animas Fire Protection District, Hermosa Cliff Fire Protection District ( the “Contracting Parties”), and included the absorption of the Mercy Hospital Paramedic Ambulance system. The Authority’s first year of operation began January 1, 2002. The Authority provides fire suppression (structural, wildland and vehicle), emergency medical service/ambulance service to include patient transport, rescue (water, ice, low and high angle rope, confined space, vehicle extrication), fire prevention, fire code enforcement, public education, and hazardous material response.


Phone: 970 382 6001 Fax: 970 382‐6028

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These services are provided to a fulltime population of approximately 40,000 in 325 square miles of southwest Colorado. The Authority is funded by fees for service from its three Contracting Parties, contracts and ambulance revenue.

Durango Fire & Rescue Authority is governed by a seven member Board made up of two representatives from each of the Contracting Parties and one member selected at large. The governing Board has fiduciary responsibilities set forth in the IGA. The Board is responsible for hiring the Chief of the Department. The Chief is responsible for carrying out the policies of the Board, for management and supervision of the day-to-day operations of the Authority, and for managing its employees and members.

The annual budget and budget process serves as the foundation for the Durango Fire & Rescue Authority’s financial planning and control. Following approval of the proposed budget by the three Contracting Parties, the Authority Board of Directors holds a public hearing and adopts its final budget no later than December 31st each year.

Appropriations for the budget are adopted on a total fund basis (Enterprise Fund and Fiduciary Fund known as the Mark Carroll Pension Fund). The Board of Directors may make additional appropriations during the budget year for expenditures required, but not in excess of the amount of actual revenues exceeding budgeted revenues and un-appropriated surplus for the fund. The Chief may transfer any unencumbered appropriation balance or a portion thereof from one classification of expenditure to another within the Enterprise Fund in order to carry out the goals and objectives of the Board of Directors and the Authority.

Factors Affecting Financial Condition

The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective, the specific environment within which the Durango Fire & Rescue Authority operates. The following is a recap of the economic factors impacting the Authority’s three funding entities.

Local Economy

General: The Durango geographic area is located in the southwestern part of Colorado in the County of La Plata. La Plata County has experienced considerable economic and population growth from the late 1980’s to 2008. Like most of the United States the 2009 local economy showed considerable financial declines over previously prosperous years; however 2012 has clearly shown some stabilization and growth within certain areas of the local economy.

Durango is also home to Fort Lewis College, a four year liberal arts college with a census of approximately 4,000 students. Fort Lewis College Department of Economics believes that Durango’s present economy is primarily based on tourism, now generating approximately 28% of all activity in La Plata County.

City of Durango: In 2012, the City provided 44.1% of the total funding provided by the Contracting Parties (this is exclusive of ambulance or other fee income). The City continues to be optimistic about the future as City sales tax collections for 2012 showed an increase of 5.7% over 2011. Real estate values continue to level off within the City. Housing prices and loans remain a challenge for low to moderate income families.


Phone: 970 382 6001 Fax: 970 382‐6028

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Animas Fire Protection District: The District provided 49.2% of the total funding provided by the Contracting Parties (this is exclusive of ambulance or other fee income). In 2012, 36.6% of the District’s property tax base was from oil and gas production. The District’s heavy dependency on natural gas will subject its property tax base to market fluctuations. A significant decrease in assessed valuation occurred in 2011 due to a reduction in natural gas cost and property valuation decreases. Then in 2012, we saw some stabilization and a decrease in the assessed valuation of $14,344,680 (2.3%).

Hermosa Cliff Fire Protection District: In 2012, the Hermosa Cliff Fire Protection District provided 6.7% of the total funding provided by the Contracting Parties (this is exclusive of ambulance or other fee income). Hermosa Cliff Fire Protection District’s major source of revenues is property taxes. The District’s valuation is from rural residential and resort commercial property in northern La Plata County, including the Durango Mountain Resort. The slowdown of construction at Durango Mountain Resort and Glacier Club continued through most of 2012 and resort sales continued downward.

Long-term Financial Planning:

Based on the clear success of the Authority from 2002 thru 2005 the Board of Directors developed a Service Plan in 2006 to create a stand-alone special district: “Durango Fire Protection District” to operate in place of the current Authority. The plan was placed on the ballot, voted upon and approved in November 2006.

The second question on the November 2006 ballot was whether to fund the District, which if funded would create a single governance over emergency services with a mill rate on property. The funding question failed to pass the electorate by a margin of 65% to 35%. Without a funding source it was not possible for the Durango Fire Protection District to operate the Authority. Until such time the funding is approved it has been the intent of the Board of Directors to continue operating as an Authority.

After that failure to pass a single funding solution for the newly established Durango Fire Protection District; the Authority Board of Directors commissioned an Operational Analysis in 2007.

The current operational funding has struggled to cover more than operating costs as the Authority has not received any separate capital funding from its partners since 2006. This is unlike the years 2002 through 2006 when the Authority received $750,000 annually of additional capital allocation funds from all of the Contracting Parties. The Consultant, the Authority Board of Directors and the Chief believe that for sustainability of services the Authority will need a long-term strategic approach to its operations and capital replacement program.

The three tenants of the Operational Analysis are to have a single governance for emergency services, have it funded through a fair and equitable mill rate for both operations and capital, and to develop a county wide impact fee to assist in offsetting capital needs.

In 2011 the Durango Fire District put together a Citizens Review Panel made up of 24 members from the community. After a thorough five month process the Board unanimously supported going back to the electorate to approve a single mill levy of 6.6 for the District and with that approval, the support to dissolve all the other Boards. This mill levy election, once again failed at the polls by a margin of 57% to 43%.


Phone: 970 382 6001 Fax: 970 382‐6028

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The second failure of this legal consolidation effort was analyzed by the Board, Chief, and legal counsel. They spent the later portion of 2012 working to craft a resolution that would be rolled out to the community in 2013. The clear goal is to restore the employee, operational, and capital health of the department, while providing quality service and safety of our members.

After the economic downturn in late 2008, DFRA management recognized that they would be facing a decline in property valuations which would mean a decline in revenues beginning in 2011. Starting in 2009, management made the decision to keep operating expenses as flat as possible and to reduce capital expenditures to only critical items. The excess revenues were moved into the fund balance with the idea that they would be available to fund operations when revenues declined.

Operating revenues declined by $1,237,416 in 2011 which required the use of $363,340 from the fund balance and operating revenues increased by $451,790 in 2012 and $247,840 was added to the fund balance. These results were significantly better than anticipated as a shortfall was budgeted for 2012 of $553,586. The fund balance at the end of 2012 is $4,738,891 and with the past planning and savings, it is sufficient to cover multiple years of operating shortfalls.

Awards and Acknowledgements:

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Durango Fire and Rescue Authority for its comprehensive annual financial report for the fiscal year ended December 31, 2011. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

We would like to express our appreciation to Haynie & Company, the firm that serves as the Authority’s external auditors.

I would like to recognize the Authority’s Board of Directors for their unfailing support for the Authority, its fiscal responsibility and the highest standards of professionalism in the management of the Authority’s finances.

Respectfully submitted,

Daniel J Noonan Chief Durango Fire Rescue

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DURANGOFIRE&RESCUEAUTHORITY2012APPOINTEDOFFICIALS

DURANGO FIRE AND RESCUE AUTHORITY BOARD

Bill Webbe, Chairperson

Paul Broderick

Bud Deering

Kirk Dignum

Ron LeBlanc

Joe Lloyd

David Woodford

OURFUNDINGPARTNERS2012ELECTEDOFFICIALS

ANIMAS FIRE PROTECTION DISTRICT

Kathy Morris, Chairperson

Wayne Barger

Bud Deering

Joe Lloyd

Matt Leeder

DURANGO FIRE AND RESCUE PENSION BOARD


Don Baker

Fred Hutt

Joe Lloyd

Kathy Morris

Dave Tranum

David Woodford

CITY OF DURANGO

Doug Lyon, Mayor

Paul Broderick

Sweetie Marbury

Christina Rinderle

Dick White

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OURFUNDINGPARTNERS2012ELECTEDOFFICIALS (Continued)

HERMOSA CLIFF FIRE PROTECTION DISTRICT


Ed Belt

Bill Brown

Patric Flinn

David Woodford

DURANGO FIRE PROTECTION DISTRICT

Emil Wanatka, Chairperson

Jim Barrett

Phil Bryson

Kathy Morris

Matt Leeder

Joe Lloyd

Bill Webbe

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FINANCIAL SECTION

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DURANGO FIRE AND RESCUE AUTHORITY Management Discussion and Analysis

Year Ended December 31, 2012 and 2011

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As the financial management of the Durango Fire & Rescue Authority (“Authority”), we offer readers of these financial statements this narrative overview and analysis of the financial activities of the Authority for the years ended December 31, 2012 and 2011. This discussion and analysis is designed to assist the reader in focusing on the significant accomplishments, financial issues and activities, and to identify any significant changes in financial position. We encourage readers to consider the information presented here in conjunction with the financial statements as a whole.

Financial Highlights

The Durango Fire & Rescue Authority incurred operating losses of $627,499 and $1,262,743 and an operating income of $404,143 for calendar years 2012, 2011, and 2010 respectively. Net income produced a decrease in net position of $224,317 in 2012 a decrease of $903,907 in 2011 and an increase in net position of $501,635 in 2010. The term “net position” refers to the difference between assets and liabilities. At the close of 2012, the Authority had a net position of $11,659,141, a decrease of 2% from fiscal year 2011. At the close of 2011, the Authority had a net position of $11,883,458, a decrease of 7% from fiscal year 2010. At the close of 2010 the Authority had a net position of $12,787,365, an increase of 4% over fiscal year 2009.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the Authority’s financial statements, which is comprised of the basic financial statements, the notes to the financial statements, and supplementary information presented. Since the Authority operates via an Enterprise Fund and a fiduciary fund (the Mark Carroll Pension Fund), fund level financial statements are not shown. In addition to the basic financial statements, this report also contains other supplementary information pertaining to the Authority’s budget.

Basic Financial Statements: The basic financial statements are designed to provide readers with a broad overview of the Authority’s finances, in a manner similar to a private-sector business.

Proprietary funds: The balance sheet presents information on all of the Authority’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial condition of the Authority is improving or deteriorating. Net position increases when revenues exceed expenses. Increases to assets without a corresponding increase to liabilities results in increased net position, which indicates an improved financial condition. Net position decreases when revenues are less than expenses which indicates a declining financial condition.

The statement of revenues, expenses, and changes in net position presents information showing how a government’s net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event occurs, regardless of timing of related cash flows. Thus revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation leave).

Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The Mark Carroll Pension Fund is not reflected in the Enterprise Fund financial statements because the resources of the fiduciary fund are not available to support the Authority’s own programs. The accounting used for the Mark Carroll Pension Fund is much like that used for the Enterprise Fund. The basic financial statement for the Mark Carroll Pension Fund can be found on page 25 of this report.



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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.

Other information: In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information pertaining to the Authority’s progress in funding its obligation to provide pension benefits to its volunteer firefighters. Required supplementary information can be found on pages 37 and 38 of this report.

Also, this report presents certain supplementary information pertaining to the Authority’s budget for demonstrating legal compliance with budgetary control obligations. This supplementary information can be found on pages 39 through 42 of this report.

Financial Analysis

Net position, the excess of assets over liabilities, may serve, over time, as a useful indicator of a government’s financial position. In the case of the Authority, assets exceeded liabilities by $11,659,141 at the close of the most recent fiscal year. This overall net asset decrease of $224,317 (2%) was attributable to a decline in the value of capital assets and an increase in current liabilities. Investment in capital assets decreased from $7,392,407 at December 31, 2011 to $6,920,250 at December 31, 2012. This decrease of $472,157 (6%) was attributable to depreciation exceeding purchases of capital equipment and leasehold station improvements. Investment in capital assets also decreased from $7,932,974 at December 31, 2010 to $7,392,407 at December 31, 2011 for a decrease of $540,567 (7%). Unrestricted net position decreased from $4,643,391 at December 31, 2010 to $4,289,956 at December 31, 2011, a decrease of $540,567 (7%). This change was the result of management decision to use unrestricted fund balances to cover funding shortfalls during 2011. Unrestricted net position increased from $4,289,956 at December 31, 2011 to $4,538,891 at December 31, 2012, an increase of $472,157 (6%). These fund balances are anticipated to be needed to cover future funding shortfalls.

Net Position2012 2011 2010

Current assets 5,601,154$ 5,239,166$ 5,611,446$

Capital assets 6,920,250 7,392,407 7,932,974

Total assets 12,521,404 12,631,573 13,544,420

Current liabilities 655,296 544,243 518,301

Other long-term liabilities 206,966 203,872 238,754

Total liabilities 862,262 748,115 757,055

Net position

Net investment in capital assets 6,920,250 7,392,407 7,932,974

Restricted 200,000 201,095 211,000

Unrestricted 4,538,892 4,289,956 4,643,391

Total net position 11,659,142$ 11,883,458$ 12,787,365$



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The largest portion of the Authority’s net position is its investment in capital assets (59%). These assets include apparatus, vehicles, leasehold improvements, buildings and equipment. The Authority uses these capital assets to provide service and consequently, these assets are not available to liquidate liabilities or for other spending. The debt incurred by the Animas Fire Protection District and Hermosa Cliff Fire Protection District associated with the purchase of the assets transferred by these entities has not been assumed by the Authority. The responsibility for servicing of this debt has been retained by these two special districts and is serviced by separate bond mil levys. The City of Durango did not incur any debt specifically for the assets that it transferred to the Authority. Real property associated with providing fire and emergency medical services owned by the Contracting Parties was not transferred to the Authority. Instead, the Authority has obtained leases from the Contracting Parties for nominal rates to use, maintain, encumber or unencumber these facilities.

Restricted net position decreased by $1,095 in 2012 after a decrease of $9,905 in 2011 to a total of $200,000. This $200,000 is restricted for capital improvements to Animas Fire Protection District’s Station 5. The Authority has no committed or assigned fund balances. The Authority funds fire and emergency medical services with funds received from its three Contracting Parties and patient charges.

Contributions from Contracting Entities (excluding pension contributions)

Operations Capital Total

City of Durango 2,770,763$ -$ 2,770,763$ Animas Fire Protection District 3,094,694 - 3,094,694 Hermosa Cliff Fire Protection District 419,910 - 419,910

Total contributions 6,285,367$ -$ 6,285,367$







2012

2010

2011

The Authority’s funding from Contracting Parties is derived from the approved funding formula as part of the annual budget process. The Authority’s budget and funding from Contracting Parties must be approved by each of the three Contracting Parties.

Emergency medical services net patient charges revenue increased by $5,824 (1%) in 2012 after an increase of $89,903 (9%) in 2011. EMS revenues for 2012, 2011, and 2010 were $1,102,172, $1,096,348, and $1,006,445 respectively. The majority of the increase in 2011 was due to an increase in rates which took effect on January 1, 2011. Although the gross EMS patient charges revenue increased



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by 3% in 2012, due to increased call volume; the net EMS patient charges revenue increased by under 1% due to an increase in write-offs and bad debts. Future revenue increases will be determined by call volume, any change in rate for service charges and contractual write-offs and bad debt. Future increases in write-offs for Medicare and Medicaid will put downward pressure on net patient charges revenue.

Revenues by Source2012 2011 2010

Operating revenuesFire

Operation contributions from participating entities 5,951,984$ 5,898,705$ 7,521,705$ Fire protection fees 41,411 41,965 41,000 Wild land fire fees 844,630 521,829 243,813 Miscellaneous 107,760 34,612 17,312

Total fire revenues 6,945,785 6,497,111 7,823,830

Emergency medical servicesPatient charges, net 1,102,172 1,096,348 1,006,445 Operation contributions from participating entities 360,000 360,000 360,000 Miscellaneous 3,004 5,712 6,311

Total emergency medical services revenues 1,465,176 1,462,060 1,372,756

Total operating revenues 8,410,961 7,959,171 9,196,586

Non-operating revenuesGrants 83,222 59,227 9,899 Interest income 12,935 10,023 12,084

Total non-operating revenues 96,157 69,250 21,983

Total revenue 8,507,118$ 8,028,421$ 9,218,569$

In fiscal year 2012, the Authority had a loss from operations of $627,499 after a loss from operations of $1,262,743 in 2011. This decrease of $635,244 in the operating loss is due to a combination of a decrease in operating expenses due to the elimination of three employee positions and an increase in Fire operations operating revenue due primarily to an increase in Wildland fire fees. Operating income had declined by $1,666,885 in 2011 after positive income from operations of $404,462 in 2010, primarily due to decreased funding from the contracting parties. Funding from the Contracting Parties increased by $53,279 (0.9%) in 2012 after a drop of $1,510,500 (19%) from 2010 to 2011.

The Authority’s salary plan is based upon Colorado average fire and EMS personnel wages. Salary surveys indicate that the Authority’s employee scale of wages in 2012 is at 85% of market wages. For 2012, only 2% of Authority employees earn wages at market rates; the other 98% are below market wages, regardless of their tenure.

In 2012 Wildland fire fees were $844,630; this is an increase of $322,801 over 2011. During 2011, the Authority had an increase of $278,016 in Wildland fire fees. This revenue is from a cooperative agreement between the Authority and the State of Colorado where the Authority provides personnel and equipment to assist on national wildland fire incidents. The Authority receives reimbursement for the cost of the personnel including benefits and other expenses incurred plus a small amount toward overhead of around 5%. In addition the Authority receives a daily fee for the use of equipment.

Impact fees increased by 224% from $19,095 in 2011 to $61,899 in 2012 after a 75% increase from $11,000 in 2010; however, this increase came after a dramatic decrease from a level of $420,788 in



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2009. Impact fees are collected as a result of development agreements with three subdivisions within the Authority’s area – Three Springs which is located within the City of Durango, Durango Mountain Resort located within Hermosa Fire Protection District, and Edgemont Highlands which is located within Animas Fire Protection District. A development agreement has been signed with Twin Buttes which is also located within the City of Durango; however no impact fees have been collected from this agreement to date.

Expenses2012 2011 2010

Operating expensesFire

Personnel services 4,504,980$ 4,629,753$ 4,458,295$ Purchased services 719,580 782,562 709,629 Supplies and equipment 440,085 336,951 284,283 Depreciation 662,276 706,074 702,600

Total fire operating expenses 6,326,921 6,455,340 6,154,807

Emergency medical servicesPersonnel services 1,930,706 1,984,180 1,910,698 Purchased services 308,392 335,384 303,990 Supplies and equipment 188,608 144,407 121,835 Depreciation 283,833 302,603 301,114

Total ems operating expenses 2,711,539 2,766,574 2,637,637

Total operating expenses 9,038,460 9,221,914 8,792,444

Non-operating expensesInterest expense - - - Grants expense - - -

Total non-operating expenses - - -

Total expenses 9,038,460$ 9,221,914$ 8,792,444$

Total operating expenses decreased by $183,454 (2%) from $9,221,914 in 2011 to $9,038,460 in 2012. Two major factors accounted for this decrease. The Authority eliminated three employee positions for a savings of $215,714 and experienced a decrease in health benefits expense of $224,641. The decrease in health benefits expense was due to a drop in health claims as well as the institution of a requirement for employee contributions to health insurance. Some of these savings were offset by increased salaries, benefits, and expenses for wildland fire crews; however the additional expenses for wildland crews were offset by increased wildland fire revenues. This followed an increase in total operating expenses of $429,470 (5%) from $8,792,444 in 2010 to $9,221,914 in 2011. Depreciation expense decreased by $62,568 in 2012 and increased by $4,963 in 2011, purchased services expense decreased by $89,974 in 2012 and increased by $104,327 in 2011, supplies and equipment expense increased by $147,335 in 2012 and by $75,240 in 2011, and personnel services expense decreased by $178,247 in 2012 after an increase of $244,940 in 2011.



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Changes in Net Position2012 2011 2010

Operating revenuesFire operations 6,945,785$ 6,497,111$ 7,823,830$ EMS operations 1,465,176 1,462,060 1,372,756

Total operating revenue 8,410,961 7,959,171 9,196,586

Operating expenses

Fire operations 6,326,921 6,455,340 6,154,807 EMS operations 2,711,539 2,766,574 2,637,637

Operating expenses 9,038,460 9,221,914 8,792,444

Income (loss) from operations (627,499) (1,262,743) 404,142

Nonoperating revenues (expenses)Grants 83,222 59,227 9,899 Interest income 12,935 10,023 12,084 Interest expense - - - Grant expense - - - Gain (Loss) on disposal of equipment (16,003) - (2,745)

Net nonoperating revenues (expenses) 80,154 69,250 19,238

Capital contributions and impact fees 323,029 289,586 78,255

Change in net position (224,316) (903,907) 501,635

Net position, beginning of year 11,883,458 12,787,365 12,285,730

Net position, end of year 11,659,142$ 11,883,458$ 12,787,365$

Cash Flows. Net cash provided / (used) by operating activities increased from ($563,030) in 2011 to $151,698 in 2012, an increase of $687,728. Net cash had declined by $1,602,403 from 2010 to 2011 mostly due to a drop in contributions from the funding partner. Net cash used in capital and related financing activities decreased from $119,298 used in the year ended December 31, 2011 to $83,704 in the year ended December 31, 2012. For the year ended December 31, 2012, $489,954 was spent in capital expenditures up from $468,111 for the year ended December 31, 2011.

Capital Assets and Long-term Debt

Capital Assets. The Authority’s investment in capital assets as of December 31, 2012 is $6,920,250, net of accumulated depreciation. This is a decrease of $472,157 (6%) from December 31, 2011 following a decrease of $540,567 (7%) from December 31, 2010 to December 31, 2011. Capital assets net of accumulated depreciation were $7,392,407 at December 31, 2011 and $7,932,974 at December 31, 2010. The decrease for the two years is due to depreciation expense exceeding capital expenditures. Major capital asset events during the current fiscal year included the following:

(1) Dodge 4500 AEV Ambulance

(7) Physio Control – Life Pak 15’s



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Bauer Compressor for Air Truck

Video Link – Video Conference Equipment and Software

Additional information on the Authority’s capital assets can be found in Note 4 on page 29 of this report.

Long Term Debt. As of December 31, 2012 and December 31, 2011 the Authority had no long term debt.

Requests for Information

This financial report is designed to provide a general overview of the Authority’s finances. Questions concerning any of the information provided in this report or request for additional financial information should be addressed to the Chief and the Finance Director, Durango Fire & Rescue Authority, 142 Sheppard Drive, Durango, CO 81303.

DURANGO FIRE AND RESCUE AUTHORITY Fund Financial Statements


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DURANGO FIRE AND RESCUE AUTHORITYSTATEMENT OF NET POSITIONDecember 31, 2012 and 2011

2012 2011Current assets:

Cash and investments 4,770,634$ 4,689,704$ Accounts receivable, net 149,922 196,308 Unbilled ambulance revenue 46,269 71,772 Prepaids - 37,398 Receivable from other governments 634,329 243,984

Total current assets 5,601,154 5,239,166

Noncurrent assetsNet investment in capital assets 6,920,250 7,392,407

Total noncurrent assets 6,920,250 7,392,407

Total assets 12,521,404 12,631,573

Current liabilitiesAccounts payable 213,487 113,919 Due to other governments - - Accrued payroll 157,379 110,023 Accrued compensated absences 206,966 203,872 Incurred but unreported claims 77,464 116,429

Total current liabilities 655,296 544,243

Noncurrent liabilitiesAccrued compensated absences 206,966 203,872

Total noncurrent liabilities 206,966 203,872

Total liabilities 862,262 748,115

Net investment in capital assets 6,920,250 7,392,407 Restricted for:

Capital projects 200,000 201,095 Unrestricted 4,538,892 4,289,956

Total net position 11,659,142$ 11,883,458$

See accompanying notes.



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DURANGO FIRE AND RESCUE AUTHORITYSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFor the Years Ended December 31, 2012 and 2011

2012 2011Operating revenues

FireOperation contributions from participating entities 5,951,984$ 5,898,705$ Fire protection fees 41,411 41,965 Wild land fire fees 844,630 521,829 Miscellaneous 107,760 34,612

Total fire revenues 6,945,785 6,497,111

Emergency medical servicesPatient charges, net 1,102,172 1,096,348 Operation contributions from participating entities 360,000 360,000 Miscellaneous 3,004 5,712

Total emergency medical services revenues 1,465,176 1,462,060

Total operating revenues 8,410,961 7,959,171

Operating expensesFire

Personnel services 4,504,980 4,629,753 Purchased services 719,580 782,562 Supplies and equipment 440,085 336,951 Depreciation 662,276 706,074

Total fire operating expenses 6,326,921 6,455,340

Emergency medical servicesPersonnel services 1,930,706 1,984,180 Purchased services 308,392 335,384 Supplies and equipment 188,608 144,407 Depreciation 283,833 302,603

Total emergency medical services operating expenses 2,711,539 2,766,574

Total operating expenses 9,038,460 9,221,914

Operating income / (loss) (627,499) (1,262,743)

Non-operating revenue (expense)Grants 83,222 59,227 Interest income 12,935 10,023 Disposal of capital assets (16,003) -

Total non-operating revenue (expense) 80,154 69,250

Change in net position, before capital contributions (547,345) (1,193,493)

Capital contributionsGrants 261,130 270,491 Impact fees 61,899 19,095

Total capital contributions 323,029 289,586

Change in net position (224,316) (903,907)

Net position at beginning of the year 11,883,458 12,787,365

Net position at end of the year 11,659,142 11,883,458




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DURANGO FIRE AND RESCUE AUTHORITYSTATEMENT OF CASH FLOWSFor the Years Ended December 31, 2012 and 2011

2012 2011CASH FLOWS FROM OPERATING ACTVITIES

Receipts from customers - emergency medical services 1,181,681$ 1,020,695$ Receipts from participating entities - fire services 7,065,761 6,857,111 Payments to employees (6,398,249) (6,601,522) Payments to vendors (1,697,494) (1,812,314)

Net cash provided (used) by operations 151,699 (536,030)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds from grants 344,351 329,718 Impact fees 61,899 19,095 Purchase of capital equipment and buildings (489,954) (468,111)

Net cash provided (used) by capital and related financing actvities (83,704) (119,298)

CASH FLOWS FROM INVESTING ACTIVITIESInterest 12,935 10,023

Net cash provided by investing activities 12,935 10,023

Net increase in cash 80,930 (645,305)

Balances - beginning of the year 4,689,704 5,335,009

Balances - end of the year 4,770,634$ 4,689,704$

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDEDBY OPERATING ACTVITIES

Operating income / (loss) (627,499)$ (1,262,743)$ Adjustments to reconcile operating income to net cash provided

by operating activitiesDepreciation expense 946,109 1,008,677

Changes in assets and liabilitiesReceivables, net (347,157) (290,483) Unbilled ambulance revenue 25,503 (36,514) Allowance for collection costs 40,595 53,973 Incurred but unreported claims (38,965) 33,801 Accounts payable and other payables 99,568 3,283 Accrued expenses 53,545 (46,023)

Net cash provided by operations 151,699$ (536,030)$

See accompanying notes



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DURANGO FIRE AND RESCUE AUTHORITYSTATEMENT OF FIDUCIARY NET POSITIONFIDUCIARY FUNDS - VOLUNTEER PENSIONDecember 31, 2012 and 2011

2012 2011Assets

Investments in Common Fund of Fire and PolicePension Fund of Colorado, at fair value 4,908,621$ 4,615,727$

Total assets 4,908,621 4,615,727

Net PositionHeld in trust for pension benefits 4,908,621$ 4,615,727$


DURANGO FIRE AND RESCUE AUTHORITYSTATEMENT OF CHANGES IN FIDUCIARY NET POSITIONFIDUCIARY FUND - VOLUNTEER PENSION For the Years Ended December 31, 2012 and 2011

2012 2011Additions

Contributions:Employer 132,800$ 132,800$ State of Colorado 38,552 38,552

Total contributions 171,352 171,352

Investment earnings

Interest, dividends and other 97,703 100,815 Net increase/(decrease) in fair value of investments 461,145 (36,995)

Total investment earnings 558,848 63,820 Less investment expense (42,506) (36,417)

Net investment earnings 516,342 27,403

Total additions 687,694 198,755

DeductionsBenefits 394,800 386,971

Total deductions 394,800 386,971

Change in net position 292,894 (188,216) Net position - beginning 4,615,727 4,803,943

Net position - ending 4,908,621$ 4,615,727$


DURANGO FIRE AND RESCUE AUTHORITY Notes to the Financial Statements


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Note 1 - Summary of significant accounting policies

Reporting Entity – Durango Fire & Rescue Authority is an “authority” which is a separate governmental entity formed under the IGA Act (C.R.S. Section 29-1-201, et. Seq.) by the City of Durango, the Animas Fire Protection District and the Hermosa Cliff Fire Protection District (collectively the “Contracting Parties”) to supply fire protection and emergency response services to the Contracting Parties. The Authority is governed by a seven member board made up of two representatives from each of the three Contracting Parties and one member selected at large. For financial reporting purposes, the Authority, an Enterprise (C.R.S Section 20 Article X) is a stand-alone entity; there are no component units included in the accompanying financial statements and the Authority is not considered a component unit of another entity. The Authority began operations on January 1, 2002.

On December 31, 2001, the three Contracting Parties and Mercy Medical Center transferred ownership of their emergency medical service vehicles and equipment to the Authority. The Contracting Parties retained ownership of all real property and leased such property to the Authority for a nominal fee. The Contracting Parties thereby delegated to the Authority the power, duty, and responsibility to maintain, operate, manage, and control all of the fire protection and EMS transport facilities, equipment, resources, and property of the Contracting Parties, including without limitation, all fire stations, land, buildings, and firefighting equipment, and to employ the necessary personnel, and to do any and all other things necessary or desirable to provide continued efficient and economical fire protection services to all persons and property within the Authority service area. In addition, all fire and emergency medical service personnel and volunteers of the Contracting Parties and Mercy Medical Center became employees and volunteers for the Authority.

Basis of Accounting – The Authority, prepares its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (US GAAP) for proprietary funds, which are similar to those used for private business enterprises. Accordingly, the requirements of Statement of Governmental Accounting Standards No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments: Omnibus – an amendment of GASB Statements No. 21 and No. 34 and No. 38, Certain Financial Statement Note Disclosures have been implemented and incorporated in the Authority’s financial statement presentation.

The Authority has elected not to apply Financial Accounting Standards Board statements and interpretations issued after November 30, 1989.

The assets, liabilities, and net position of the Authority are reported in a self-balancing set of accounts, which include restricted and unrestricted resources, representing funds available for support of the Authority’s programs.

Operating Revenues and Expenses – The Authority’s operating revenues and expenses consist of revenues earned and expenses incurred in providing fire protection and emergency medical services. Major sources of operating revenues are fees from the Authority’s three Contracting Parties and ambulance fees. Capital Assets – Contributed Equipment – On December 31, 2001 the Contracting Parties transferred all vehicles and equipment used for fire and emergency medical services to the Authority. These assets have been valued at historical cost less accumulated depreciation at the date of transfer.



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Capitalization Policy – Costs to acquire additional capital assets, which replace existing assets or otherwise prolong their useful lives, are capitalized for equipment, buildings and other related costs and furniture and equipment. The Authority utilizes a capitalization threshold of $5,000.

Depreciation Policy – Depreciation of equipment, building improvements, and furniture and equipment is computed using the straight-line method over the estimated useful lives of the assets as follows:

Heavy vehicles 20 years

Medium vehicles 10 years

Light vehicles 7 years

Equipment 5-7 years

Building improvements 20 years

Accrued Compensated Absences – Accrued compensated absences includes accumulated vacation pay and vested sick leave.

Restricted Net Position – Restricted net position is comprised of impact fee payments received from developers and homebuilders that are restricted for capital purchases.

Deposits and Investments – The Authority’s cash and cash equivalents are considered to be cash on hand, demand deposits, investments in COLOTRUST Plus+ (an external investment pool) and certificates of deposit.

Investments for the Authority are reported at fair value.

Budgets and Budgetary Accounting – The Authority follows the following procedures as required by Colorado State Statutes in establishing budgetary data:

The Chief directs the preparation of the proposed budget for the year commencing the following January 1 and submits the proposed budget to the Authority’s Board of Directors in a timely manner. The operating budget includes proposed expenditures and the proposed means for paying for such expenditures.

On or before September 3 of each year (unless such deadline is extended) the Authority submits a draft budget to each of the Contracting Parties, setting forth anticipated expenses and revenues necessary to fund the Authority for the following calendar year according to the funding formula. The Authority’s proposed budget specifies the amount of funding, along with the method of calculation and apportionment, sought from each Contracting Party to fund the Authority’s operation.

The Authority submits the budget to the respective governing bodies of the Contracting Parties for review and approval within 45 days of submission. Only after approval of the respective Contracting Parties (or passage of 45 days upon which time approval of a Contracting Party shall be presumed), but not earlier than November 1 of each year, the Board of Directors of the Authority shall consider the budget for final approval. A public hearing on the proposed budget prior to December 31st must be held for the Authority before final adoption of the budget.

Appropriations for the budget are adopted on a total fund basis (Enterprise Fund and Mark Carroll Pension Fund). The Board of Directors may make additional appropriations during the budget year for



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expenditures; however, appropriations may not be in excess of available revenues and beginning fund balance. The Board of Directors made four additional appropriations in 2012.

The budget is adopted on the modified accrual basis of accounting which is a non-US GAAP basis.

Appropriations lapse at the end of the year.

Non-Operating Revenues and Expenses – The majority of the Authority’s operating revenues and expenses consist of revenues earned and expenses incurred relating to providing fire and emergency medical services. There are instances where the Authority is the recipient of Non-Operating Revenues, i.e. grants, interest income and donations and may incur Non-Operating Expenses related to grant writing.

New Accounting Pronouncements

Effective January 1, 2012, the Authority implemented the provisions of GASB No. 63, “Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position” (GASB No. 63) and early implemented the provisions of GASB no. 65, “Items Previously Reported as Assets and Liabilities” (GASB 65).

GASB No. 63 provides guidance for reporting deferred outflows and deferred inflows of resources as introduced and defined in GASB Concepts Statement No. 4 “Elements of Financial Statements” (Concepts Statement No. 4). Concepts Statement No. 4 defines a deferred outflow of resources as a consumption of net assets that is applicable to a future reporting period. A deferred inflow of resources is defined as an acquisition of net assets applicable to a future reporting period. The impact on the Authority’s financial statements has been to replace the term “net assets” with “net position”.

GASB No. 65 establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflow of resources, certain items that were previously reported as assets and liabilities. The implementation of this standard did not have a significant impact to the Authority’s financial statements.

Note 2 – Deposits and Investments

Deposits – The Colorado Public Deposit Protection Act, (“PDPA”) requires that all units of local government deposit cash in eligible public depositories. State regulators determine eligibility. Amounts deposited in excess of federal insurance levels must be collateralized. The eligible collateral is determined by the PDPA. PDPA allows the institution to create a single collateral pool for all public funds. The pool is to be maintained by another institution, or held in trust for all uninsured public deposits as a group. The market value of the collateral must be equal to 102% of the aggregate uninsured deposits.



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At December 31, 2012 and 2011 the Authority’s deposits were as follows:

Bank CarryingBalance Balance

Petty cash -$ 800$ Deposits covered by federal insurance 500,000 500,000 Deposits collateralized in a single institution pool 985,612 895,250

Totals 1,485,612$ 1,396,050$

Bank CarryingBalance Balance

Petty cash -$ 800$ Deposits covered by federal insurance 500,000 500,000 Deposits collateralized in a single institution pool 972,793 821,871

Totals 1,472,793$ 1,322,671$

2011

2012

Investments – At December 31, 2012 and 2011 the Authority had investments of $4,908,621 and $4,615,727 respectively in the Mark Carroll Pension Fund held by the Members Benefit Investment Fund of the Fire and Police Pension Association of Colorado, an external investment pool. At December 31, 2012 and 2011 the Authority had investments in a Colotrust Plus+ pool of $3,374,584 and $3,367,033 respectively held by Colotrust of Colorado an external investment pool. The reported value of these pools is the same as the fair value of the pools shares. Credit risk and interest risk information is not available for the FPPA Members Benefit Investment Fund external investment pool. The Colotrust Plus+ is rated AAAm by Standard and Poor with an average maturity of 35 days.

Interest Rate Risk – In order to minimize the risk that the market value of securities in the portfolio will fall due to changes in market interest rates, the Authority’s investment policy requires the investment portfolio be structured so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. The policy also emphasizes investing in shorter-term securities, money market mutual funds, or similar investment pools.

Note 3 – Due From Governmental Agencies

Due from governmental agencies consists of the following:

2012 2011

FEMA - AFG 67,932$ -$ FEMA - SAFER 79,632 - National Wildland Fires 307,747 67,723 State of Colorado 179,017 176,261

Totals 634,329$ 243,984$



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Note 4 – Capital Assets

Capital assets are summarized as follows:

January 1, 2011 Additions Retirements December 31, 2011

Vehicles 9,186,512$ 342,446$ (273,414)$ 9,255,544$ Equipment 2,747,494 - (101,108) 2,646,386 Buildings and

leasehold improvements 1,474,274 - - 1,474,274 Land 350,000 125,665 - 475,665

13,758,280 468,111 (374,522) 13,851,869

Accumulated depreciationVehicles (4,125,899) (624,730) 273,414 (4,477,215) Equipment (1,544,287) (331,081) 101,108 (1,774,260) Buildings and

leasehold improvements (155,120) (52,867) - (207,987)

(5,825,306) (1,008,678) 374,522 (6,459,462)

Total capital assets 7,932,974$ (540,567)$ (0)$ 7,392,407$

January 1, 2012 Additions Retirements December 31, 2012

Vehicles 9,255,544$ 250,732$ (343,101)$ 9,163,175$ Equipment 2,646,386 244,673 - 2,891,059 Buildings and

leasehold improvements 1,474,274 - - 1,474,274 Land 475,665 - - 475,665

13,851,869 495,405 (343,101) 14,004,173

Accumulated depreciationVehicles (4,477,215) (649,523) 321,648 (4,805,090) Equipment (1,774,260) (243,574) - (2,017,834) Buildings and

leasehold improvements (207,987) (53,012) - (260,999)

(6,459,462) (946,109) 321,648 (7,083,923)

Total capital assets 7,392,407$ (450,704)$ (21,453)$ 6,920,250$

The Authority utilizes a capitalization threshold of $5,000. The Authority lost $16,003 on the sale of assets in 2012 and sold no assets in 2011.

Note 5 – Pensions

Defined Benefit Plans -

Local Government Division Trust Fund - PERA

Plan Description: The Durango Fire and Rescue Authority contributes to the Local Government Division Trust Fund (“LGDTF”), a cost-sharing multiple-employer defined benefit pension plan administered by the Public Employees’ Retirement Association of Colorado (“PERA”). Prior to January 1, 2006, the LGDTF was known as the Municipal Division Trust Fund (“MDTF”). The LGDTF provides retirement and disability, post-retirement annual increases, and death benefits for members or their beneficiaries. All administrative employees and part-time firefighters and part-time paramedics of the Authority are members of the LGDTF. Title 24, Article 51 of the Colorado Revised Statutes (CRS), as amended, assigns the authority to establish benefit provisions to the State Legislature. PERA issues a publicly available annual financial report that includes financial statements and required supplementary information for the LGDTF. That



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report may be obtained online at www.copera.org or by writing to Colorado PERA, 1300 Logan Street, Denver, Colorado 80203 or by calling PERA at 303-832-9550 or 1-800-759-PERA (7372).

Basis of Accounting for the LGDTF. The financial statements of the LGDTF are prepared using the accrual basis of accounting. Member and employer contributions are recognized as revenues in the period in which the employer pays compensation to the member and the employer is statutorily committed to pay these contributions to the LGDTF. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. The LGDTF plan investments are presented at fair value except for short-term investments, which are recorded at cost, which approximates fair value.

Funding Policy: The Authority is required to contribute member and employer’ contributions at a rate set by statute. The contribution requirements of plan members and the Authority are established under Title 24, Article 51, Part 4 of the CRS, as amended. The statutory contribution rate for members is 8.0%. The Authority’s contribution consists of 1) the statutory contribution rate of 10.00% of covered salary, 2) the Amortized Equalization Disbursement of 2.2% of covered salary, 3) the Supplemental Equalization Disbursement of 1.5% of covered salary, equal to a total annual contribution of 13.7% of covered salary. A portion of the Authority’s contribution (1.02% of covered salary) is allocated for the Health Care Trust Fund (See Note 6). If the Authority rehired a PERA retiree as an employee or under any other work arrangement, it is required to report and pay employer contributions on the amounts paid for the retiree, however no member contributions are required. For the years ending December 31, 2010, 2011 and 2012, the Authority’s employer contributions to LGDTF were $126,978, $147,572, and $157,768 respectively, equal to the required contributions for each year. The LGDTF currently has a funded ratio of 75%.

FPPA Statewide Defined Benefit Plan

Plan Description. The Authority contributes to the FPPA Statewide Defined Benefit Plan (“Statewide Plan”), a cost sharing multiple-employer defined benefit plan administered by the Fire and Police Pension Association of Colorado (“FPPA”). The Statewide Plan provides retirement, annual increases, and death benefits for members or their beneficiaries. A portion of firefighters and paramedics of the Authority are members of the Statewide Plan. Colorado Revised Statutes (CRS), as amended, assigns the authority to establish benefit provisions with the Board of Directors of the FPPA. FPPA issues a publicly available annual financial report that includes financial statements and required supplementary information for the Statewide Plan. That report may be obtained by writing to FPPA of Colorado, 5290 DTC Parkway, Suite 100, Greenwood Village, Colorado 8OIII or by calling FPPA at 303-770-3772.

Funding Policy: Statewide Plan members and the Authority are required to contribute to the Statewide Plan at a rate set by FPPA Board of Directors. The contribution rate for members is 8.0% and for the Authority is 8.0% of covered salary. The Authority’s employer contributions to Statewide Plan for the years ending December 31, 2010, 2011 and 2012 were $213,837, $209,337, and $213,829 respectively, equal to their required contributions for each year. FPPA currently has a funded ratio of 96%.

City of Durango Old Hire Plan

Plan Description: The Authority no longer contributes to the City of Durango Old Hire Firemen Plan (“Old Hire Plan”) a cost sharing, single employer, defined benefit plan. The City of Durango, Colorado (“City”) makes contributions to those certain paid firefighters and policemen hired by the City prior to April 8, 1978 and provides retirement benefits to plan members and their beneficiaries. Cost-of-living adjustments are provided at the discretion of the City Council of the City. The Old Hire Plan is administered by the Fire and Police Pension Association of Colorado (“FPPA”) Title 31 of the Colorado



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Revised Statutes, as amended, assigns the authority to establish and amend benefit provisions of the plan to the City Council with input of the Pension Board. FPPA issues a publicly available annual financial report that includes the assets of the plans and separate biennial actuarial reports for each of the plans. The reports may be obtained by writing to FPPA, 5290 DTC Parkway, Suite 100, Greenwood Village, Colorado, 80111, or by calling FPPA at 1-800-770-3772. Funding Policy: The Authority no longer has any employees that are members in the Old Hire Plan. The plan received a favorable determination for a Deferred Retirement Option Plan (DROP) amendment from the Internal Revenue Service in December of 2001. The amendment allows active members to elect to have a monthly benefit, along with their current employee contributions to the plan (8%), deposited into a separate account while they continue to be employed. However, they must terminate from the Authority no later than five years after the election. The Authority has no contribution requirement due to this amendment. Member contributions to the Old Hire Plan for the years ended December 31, 2010, 2011 and 2012 were $0, $0, and $0 respectively, equal to the required contributions for each year.

Mark Carroll Pension Fund

Plan Description: On January 1, 2003 the Animas Fire Protection District and the Hermosa Cliff Fire Protection District transferred the assets of their respective volunteer pension plans to the Authority and the Mark Carroll Pension Fund was established. The two proceeding volunteer pension plans of the Districts were merged on that date into the Mark Carroll Pension Fund. The funds transferred totaled $3,569,428, and all pension rights and obligations of the previous plans were assumed by the new plan.

All Authority volunteer firefighters participate in the Mark Carroll Pension Fund (“Volunteer Plan”) administered by a Board of Trustees composed of members of the Board of Directors and firefighters selected in accordance with State of Colorado Statutes. The plan is a single-employer defined benefit pension plan. The Volunteer Plan provides retirement, disability, and death benefits to plan members and beneficiaries. Colorado Revised Statues authorize the Board of Trustees to establish and amend all plan provisions. The Authority issues no stand-alone financial statements for the Volunteer Plan.

Basis of accounting and valuation of investments: The financial statements of the plan are prepared using the accrual basis of accounting. The Authority’s contributions are recognized when due and a formal commitment to provide the contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. The plan is administrated by the Fire and Police Pension Association of Colorado (“FPPA”). All plan investments are reported at fair value.

All plan investments are invested in the Members Benefit Investment Fund of the FPPA. The FPPA has established a long-range statement of investment objectives and policies for managing and monitoring the fund. The investment policy sets forth the fund’s investment objective to provide the greatest long-term benefits to members by maximizing the total rate of return on investments, within prudent parameters of risk. The investment policy also defines the responsibilities of the fiduciaries with respect to the fund, their investment authority under the prudent person rule, the level of acceptable risk for investments, statutory asset allocation restrictions, investment performance objectives, and guidelines within which outside investment managers may operate. Under Colorado Revised Statutes, the FPPA, as trustee of the Members Benefit Investment Fund, has complete discretionary authority to invest and reinvest funds, using the prudent investor rule.

Funding policy: The Authority can contribute to the plan an annual amount not to exceed the equivalent of one mill on the total assessed valuation of the Contracting Parties. The Authority is contributing a set dollar amount as outlined in the most recent actuarial valuation effective January 1, 2011.



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The matching contribution of the State of Colorado is a fixed dollar amount as determined on a yearly basis per a formula set by State statute. The contribution from the State of Colorado is reflected as revenue in the Authority’s Enterprise Fund. In 2010, the Authority contributed $132,800 to the Plan and the State’s matching contribution was $38,552. In 2011, the Authority contributed $132,800 to the Plan and the State’s matching contribution was $38,552. In 2012, the Authority contributed $132,800 to the Plan and the State’s matching contribution was $38,552.

Annual Pension Cost: For 2012, the Authority’s annual pension cost, including State match, was $171,352. The required contribution for the plan year was $171,352. The required contribution was determined as part of the January 1, 2011 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8% investment rate of return and (b) projected inflation of 3.5%. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period. The plan’s actuarial accrued surplus is being amortized as a level amount on an open basis. The remaining amortization period at January 1, 2011, was 20 years, up to a maximum of 40 years.

Trend Information for the Plan: For the year ended December 31, 2010, the plan’s annual pension cost was $171,352 which was 100% contributed and the net pension benefit obligation was $0. For the year ended December 31, 2011, the Volunteer Plan’s annual pension cost was $171,352 which was 100% contributed and the net pension benefit obligation was $0. For year ended December 31, 2012, the plan’s annual pension cost was $171,352 which was 100% contributed and the net pension benefit obligation was $0. The FPPA Actuarial Valuation effective January 1, 2011 indicates a 93% Funded Ratio and addressed maintaining the Actuarially Required Contribution (“ARC”) at $171,352 for 2012. According to biannual actuarial studies, the Actuarial Accrued Liability (AAL) was $5,242,069 at January 1, 2011, $5,133,274 at January 1, 2009, and $3,783,581 at January 1, 2007. An updated actuarial study as of January 1, 2013 will be available at the end of June 2013.

Defined Contribution Plans

401(a) Money Purchase Plan – Effective January 1, 1988, eligible firemen then employed by the City of Durango, with hire dates on or after April 8, 1978, elected to withdraw from the Colorado Statewide Defined Benefit Plan, a defined benefit plan, administered by the Colorado Fire and Police Pension Association (“FPPA”). The state legislation allowing the withdrawal states that the alternate pension plan must be a money purchase plan. The replacement plan is a 401(a) Money Purchase Plan (“Money Purchase Plan”) administered by the ICMA Retirement Corporation (“ICMA”). Each participant has an individual account with ICMA into which all contributions flow. The participants are offered various investment options through the plan and are allowed to invest all moneys in their account at their own discretion among the options. The Authority may amend, modify, or terminate the plan, upon approval of such amendment, modification or termination by 65% of the active participants, provided that no amendment or modification shall reduce the account balances of any participant accrued to the date of the change.

Employees covered by this plan are eligible to participate from the date of employment. The plan defines the Authority and participant contributions at 10.2 and 8 percent respectively. The Authority’s contributions for each participant are fully vested after five years. Authority contributions for, and interest forfeited by, employees who leave employment before five years of service are used to reduce the Authority’s obligation to contribute. The contribution to the plan for the year ended December 31, 2010 totaled $164,093, which consisted of $72,129 contributed by employees and $91,964 contributed by the Authority. The contribution to the plan for the year ended December 31, 2011 totaled $161,315, which consisted of $70,908 contributed by employees and $90,407 contributed by the Authority. The



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contribution to the Money Purchase Plan for the year ended December 31, 2012 totaled $145,995, which consisted of $64,210 contributed by employees and $81,785 contributed by the Authority.

Note 6 - Postemployment Healthcare Benefits

Plan Description. The Authority contributes to the Health Care Trust Fund (“HCTF”), a cost-sharing multiple-employer postemployment healthcare plan administered by PERA. The HCTF provides a health care premium subsidy to PERA participating benefit recipients and their eligible beneficiaries. Title 24, Article 51, Part 12 of the CRS, as amended, assigns the authority to establish the HCTF benefit provisions to the State Legislature. PERA issues a publicly available annual financial report that includes financial statements and required supplementary information for the HCTF. That report may be obtained online at www.copera.org or by writing to PERA of Colorado, 1300 Logan Street, Denver, Colorado 80203 or by calling PERA at 303-832-9550 or 1-800-759-PERA (7372).

Basis of Accounting for the HCTF: The financial statements of the HCTF are prepared using the accrual basis of accounting. Employer contributions are recognized as revenues in the period in which the employer pays compensation to the member and the employer is statutorily committed to pay these contributions to the HCTF. Benefits are recognized when due and payable in accordance with the terms of the plan. The HCTF plan investments are presented at fair value except for short-term investments, which are recorded at cost, which approximates fair value.

Funding Policy: The Authority is required to contribute at a rate of 1.02% of covered salary for all PERA members as set by statute. No member contributions are required. The contribution requirements for the Authority are established under Title 24, Article 51, Part 4 of the CRS, as amended. The apportionment of the contribution to the HCTF is established under Title 24, Article 51, Section 208 of the CRS, as amended. For the years ending December 31, 2010, 2011 and 2012, the Authority’s contributions to the HCTF were $9,454, $10,987, and $11,746 respectively, equal to their required contributions for each year.

Note 7 – Risk Management

Property, Casualty and Worker Compensation Insurance - The Authority 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.

The Colorado Special Districts Property and Liability Pool is a public entity risk pool currently operating as a common risk management and insurance program for special districts in Colorado. The Authority, as a member of the pool, pays annual premiums to the pool for workers compensation insurance coverage. The by-laws and intergovernmental agreement of the pool states that the pool will provide coverage through pooling of self-insured losses and purchase of stop-loss insurance coverage.

The pool has a legal obligation for claims against its members to the extent that funds are available in its annually established loss fund and amounts are available from insurance providers under excess specific and aggregate insurance contracts. Losses incurred in excess of loss funds and amounts recoverable from excess insurance are direct liabilities of the participating members. The pool has indicated that the amount of any excess losses would be billed to members in proportion to their contributions in the year such excess occurs, although it is not legally required to do so.

Ultimate liability to the Authority resulting from claims not covered by the pool is not presently determinable. Management and the Authority’s attorney are of the opinion that the final outcome of such claims, if any, will not have a material adverse effect on the Authority’s financial statements.



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There were no significant reductions in insurance coverage from the prior year, and there have been no settlements that exceed the Authority’s insurance coverage during the past three years.

Employee Medical Insurance – The Authority has a self-insurance program for employee medical claims. The purpose of the program is to pay medical claims of Authority employees and their covered dependents up to certain limits and to minimize the total cost of annual medical insurance to the Authority. The Authority provides employee and dependent coverage. Claims are processed by Group Administrators Ltd. Individual excess risk coverage commences after an individual has incurred $25,000 of claims in one year. The excess risk coverage for both individual and aggregate claims coverage was provided by third party reinsurers. Settled claims have not exceeded coverage for 2012 or 2011.

The claims liabilities of $77,464 at December 31, 2012 and $116,429 at December 31, 2011 were based upon the requirements of GASB Statement No. 10, as amended by Statement No. 30, which require that a liability for claims be reported if information prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The table below presents the changes in the liability for claims and judgments for the years ended December 31, 2012 and 2011.

2012 2011

Claims liability at beginning of year 116,429$ 82,628$ Claims incurred during the year including reinsurance costs 1,315,209 2,000,316 Payment on claims during the year including reinsurance costs (1,354,174) (1,966,515)

Claims liability end of the year 77,464$ 116,429$

Note 8 – EMS Accounts Receivable

Revenues for emergency medical services are reported net of allowances and uncollectible amounts. The uncollectible amounts for the year ended December 31, 2011 were $879,495 on total charges of $1,975,843. At December 31, 2011 the allowance for uncollectibles was $239,645 on total gross receivables of $502,395. The uncollectible amounts for the year ended December 31, 2012 were $935,597 on total charges of $2,037,769. At December 31, 2012 the allowance for uncollectibles was $280,240 on total gross receivables of $466,249.

Note 9 – Net Position

Restricted net position – The development agreements that allow the Authority to collect impact fees from several subdivisions require that these funds be restricted for capital expenditures. The balances of restricted net position as of December 31, 2012 and 2011 are $200,000 and $201,095 respectively.

Balance December 31, 2001 – On December 31, 2001 the contracting parties transferred capital assets, a capitalized lease, accrued vacation and accrued sick leave to the Authority. The table below (based on December 31, 2001) summarizes those transfers as adjusted:



36

Assets 2001 Accrued Accrued Lease

Transferred Net loss Vacation Sick Leave Transferred Total

City of Durango 469,322$ (15,603)$ (97,973)$ (60,396)$ -$ 295,350$

Animas Fire Protection District 4,165,369 (1,362) (31,895) (14,177) - 4,117,935

Hermosa Cliff Fire Protection District 1,215,903 (9,362) (9,778) (7,730) (18,365) 1,170,668

Mercy Medical Center 108,276 - (3,727) - - 104,549

Totals 5,958,870$ (26,327)$ (143,373)$ (82,303)$ (18,365)$ 5,688,502$

Note 10 – Compensated Absences

It is the Authority’s policy to permit employees to accumulate earned but unused vacation and sick benefits. It is the Authority’s policy to pay all unused vacation when employees separate from service with the Authority. Also, it is the Authority’s policy to pay up to 240 hours of unused sick leave when employees qualify to retire and when they separate from service with the Authority.

Balance Balance Due in

December 31, 2011 Increases Decreases December 31, 2012 one year

Accrued vacation 344,127 210,886 198,909 356,104 178,052 Accrued sick leave 63,617 96,323 102,111 57,829 28,914

407,744 307,208 301,020 413,933 206,966

Balance Balance Due in

December 31, 2010 Increases Decreases December 31, 2011 one year

Accrued vacation 329,366 188,441 173,680 344,127 172,063 Accrued sick leave 148,141 22,044 106,568 63,617 31,808

477,507 210,485 280,249 407,744 203,872

Note 11 – TABOR Amendment

In November 1992, Colorado voters approved Amendment 1 to the Colorado State Constitution, which is commonly known as the Taxpayer’s Bill of Rights or the “TABOR Amendment”. The amendment applies to all units of local government and limits taxes, spending, and revenue. The amendment does not apply to units of local government that are defined as an “Enterprise.” The Authority qualifies as an “Enterprise,” and is therefore not subject to “TABOR.”

Note 12 – Related Party Transaction

The Chairman of the Authority Board of Directors is a shareholder in Group Administrators Ltd., a third party administrator providing health insurance services to the Authority. Payments to Group Administrators during 2012 and 2011 equaled $422,930 and $453,601 respectively. The majority of the funds paid to Group Administrators are to cover the cost of the third party reinsurers, accidental death and disability carrier, and the life insurance carrier. Group Administrators fees to process health claims were $13,348 for 2012 and $14,505 for 2011. There were no amounts owed to Group Administrators Ltd. on December 31, 2012 or December 31, 2011.

DURANGO FIRE AND RESCUE AUTHORITY Required Supplemental Information


37

January 1, 2007 January 1, 2009 January 1, 2011

Actuarial Value of Plan Assets $ 5,278,958 $ 4,735,110 $ 4,860,276Actuarial Accrued

Liability(AAL) 3,783,581 5,133,274 5,242,069Excess/(Shortfall) of Assets

over AAL 1,495,377 (398,164) (381,793)Funded Ratio 140% 92% 93%

Contribution Year Employer Contribution State Contribution Percentage Contributed

2003 50,000 37,571 100%

2004 50,000 37,571 100%

2005 50,000 37,571 100%

2006 50,796 38,535 100%

2007 50,000 38,552 100%

2008 50,000 38,535 100%

2009 50,908 38,535 100%

2010 132,800 38,552 100%

2011 132,800 38,552 100%

2012 132,800 38,552 100%

Active 83

Retirees 56

Terminated Vested Members 10

Terminated Members Active in

Another Fund 1

SCHEDULE OF FUNDING PROGRESS (ACTUARIAL VALUATION) DURANGO FIRE AND RESCUE AUTHORITY

VOLUNTEER FIREFIGHTERS PENSION FUND

SCHEDULE OF EMPLOYER CONTRIBUTIONS DURANGO FIRE AND RESCUE AUTHORITY


SCHEDULE OF CLASSES DURANGO FIRE AND RESCUE AUTHORITY


DURANGO FIRE AND RESCUE AUTHORITY Required Supplemental Information


38

The amount shown below as “Net Pension Obligation” is a disclosure measure of the difference between the cumulative annual pension costs and employer contributions made to the plan in accordance with Statement No. 25 and No.27 of the Governmental Accounting Standards Board (GASB) for a cost-sharing plan with a special funding situation. January 1, 2011 actuarial assumption adjustments were based on experience studies from 2007 - 2010, retirement rates, termination rates and pre-retirement mortality.

Estimated Employer Annual Required Contribution (ARC) $ 171,352

Net Pension Obligation Net Pension Obligation January 1, 2011 -0- Estimated Annual Required Contribution 171,352 Estimated Contribution for Plan Year 171,352 Estimated Net Pension Obligation as of December 31, 2011 -0-

NOTE A - DESCRIPTION

The historical trend information about the Mark Carroll Pension Fund is presented as required supplementary information. This information is intended to help users assess the funding status on a going-concern basis and to assess progress made in accumulating assets to pay benefits when due.

NOTE B - ACTUARIAL ASSUMPTIONS AND METHODS

The information required in the supplementary schedules was determined as part of the actuarial valuations at January 1, 2011. Additional information as of the latest actuarial valuation follows:

Actuarial Cost Method Entry Age Amortization Method Level Dollar Open Remaining Amortization Period 20 years, up to maximum of 40 years Asset Valuation Method 3-year smoothed fair market value Investment Rate of Return 8% Projected Salary Increases None Inflation 3.5% Cost Of Living Adjustments None

DURANGO FIRE AND RESCUE AUTHORITY Other Supplemental Information


39

DURANGO FIRE AND RESCUE AUTHORITYSCHEDULE OF REVENUES BUDGET AND ACTUALBUDGETARY BASIS NON-US GAAPFor the Year Ended December 31, 2012

PositiveOriginal Final Actual (Negative)

Local government fundingOperations

City of Durango 2,571,180$ 2,770,763$ 2,770,763$ -$ Animas Fire Protection District 2,848,919 3,095,327 3,094,694 (633) Hermosa Cliff Fire Protection District 381,362 419,910 419,910 (1)

Total local government operations funding 5,801,461 6,286,000 6,285,367 (633)

Volunteer PensionAnimas Fire Protection District - - - - Hermosa Cliff Fire Protection District 26,617 26,617 26,617 -

Total volunteer pension funding 26,617 26,617 26,617 -

Long term capital replacement fundingCurrent year obligation

Hermosa Cliff Fire Protection District - - - -

Total capital funding - - - -

Other revenuesAmbulance income 2,092,684 2,092,684 2,037,769 (54,915) Impact fees 20,000 20,000 61,899 41,899 Special events fees 5,000 5,000 3,004 (1,996) Wildland fires 150,000 430,000 844,630 414,630 Grants - 332,201 344,351 12,150 Interest 10,000 10,000 12,935 2,935 Miscellaneous income 10,000 10,000 55,669 45,669 Donations 1,000 1,000 - (1,000) Prevention fees 80,000 80,000 52,091 (27,909) Discounts Earned - - - - Williams Field contract 43,248 43,248 41,411 (1,837)

- Total other revenues 2,411,932 3,024,133 3,453,759 429,626

Total revenues 8,240,010 9,336,750 9,765,744 428,994

Reconcilication to US GAAP basis revenueReconciling items

Bad debts reported net of revenue (935,597)

Total revenues 8,830,147

Operating revenues 8,410,961 Non-operating revenues 96,157 Capital contributions 323,029

8,830,147

Budgeted Amounts



40

DURANGO FIRE AND RESCUE AUTHORITYSCHEDULE OF EXPENDITURES BUDGET AND ACTUALBUDGETARY BASIS NON-US GAAPFor the Year Ended December 31, 2012


AdministrationOffice of the Chief

Salary 340,554$ 340,554$ 349,046$ (8,492)$ Benefits 135,104 135,104 100,737 34,367 Purchased professional services 212,664 212,664 159,053 53,611 Purchased property services 184,610 184,610 192,598 (7,988) Other purchased services 17,600 17,600 19,743 (2,143) Supplies 13,495 13,495 12,418 1,077 Capital outlay 20,000 20,000 18,093 1,907 Other 26,617 26,617 26,617 -

Totals 950,644 950,644 878,305 72,339

OperationsSalary 83,429 83,429 84,567 (1,138) Benefits 31,372 31,372 23,707 7,665

Totals 114,801 114,801 108,275 6,526

Total Administration 1,065,445 1,065,445 986,580 78,865

Fire fightingSalary 2,138,083 2,488,083 2,478,475 9,608 Benefits 853,648 853,648 715,242 138,406 Purchased professional services 6,920 6,920 19,368 (12,448) Purchased property services 6,500 6,500 13,334 (6,834) Other purchased services 13,100 13,100 69,510 (56,410) Supplies 129,070 129,070 165,008 (35,938) Capital outlay 117,000 197,000 287,428 (90,428)

Totals 3,264,321 3,694,321 3,748,364 (54,043)

Fire preventionSalary 235,088 235,088 224,831 10,257 Benefits 111,094 111,094 78,619 32,475 Purchased professional services 500 500 - 500 Purchased property services - - - - Other purchased services 800 800 460 340 Supplies 16,455 16,455 13,167 3,288 Capital outlay - - - -

Totals 363,937 363,937 317,077 46,860

Fire trainingSalary 237,880 237,880 189,353 48,527 Benefits 109,485 109,485 73,805 35,681 Purchased professional services 79,800 79,800 44,161 35,639 Purchased property services 1,000 1,000 - 1,000 Other purchased services 45,950 45,950 28,036 17,914 Supplies 23,300 23,300 25,639 (2,339) Capital outlay - - - -

Totals 497,415 497,415 360,993 136,422

Fire communicationsPurchased professional services 2,500 2,500 150 2,350 Purchased property services 13,850 13,850 11,702 2,148 Other purchased services 71,500 71,500 63,877 7,623 Supplies 7,000 7,000 3,021 3,979 Capital outlay 30,000 30,000 36,202 (6,202)

Totals 124,850 124,850 114,952 9,898

Budgeted Amounts



41

DURANGO FIRE AND RESCUE AUTHORITYSCHEDULE OF EXPENDITURES BUDGET AND ACTUALBUDGETARY BASIS NON-US GAAPFor the Year Ended December 31, 2012


Fire repair servicesSalary 171,933$ 171,933$ 179,322$ (7,389)$ Benefits 81,792 81,792 60,087 21,705 Purchased professional services 350 350 44 306 Purchased property services 110,500 110,500 107,504 2,996 Other purchased services 750 750 85 665 Supplies 25,445 25,445 21,184 4,261 Capital outlay - - - -

Totals 390,770 390,770 368,226 22,544

EMSSalary 1,321,739 1,321,739 1,410,980 (89,241) Benefits 597,681 597,681 440,298 157,383 Purchased professional services 161,500 161,500 165,933 (4,433) Purchased property services 6,270 6,270 6,755 (485) Other purchased services 2,400 2,400 3,213 (813) Supplies 116,565 116,565 118,212 (1,647) Capital outlay 15,000 379,403 389,777 (10,374) Bad debts 941,708 941,708 935,597 6,111

Totals 3,162,863 3,527,266 3,470,764 56,502

Fire stations and buildingsPurchased property services 144,727 144,727 122,446 22,281 Supplies 9,830 9,830 10,258 (428) Capital outlay 21,000 21,000 23,692 (2,692)

Totals 175,557 175,557 156,397 19,160

Contingency 50,775 50,775 - 50,775

.Total expenditures 9,095,933 9,890,336 9,523,356 366,980

Reconciliation to total expensesReconciling items

Depreciation expense 946,109 Capital outlay (495,405) Bad debts reported net of revenue (935,597)

Total operating expenses 9,038,463

Total operating expenses 9,038,460 Total non-operating expenses 16,003

Total expenses 9,054,463

Budgeted Amounts



42

DURANGO FIRE AND RESCUE AUTHORITYSCHEDULE OF ADDITIONS AND DELETIONS - BUDGET AND ACTUALFIDUCIARY FUNDFor the Year Ended December 31, 2012


AdditionsContributions:

Employer 132,800$ 132,800$ 132,800$ -$ State of Colorado 38,535 38,535 38,552 17

Total contributions 171,335 171,335 171,352 17

Investment earnings

Interest, dividends and other - - 97,703 97,703 Net increase in fair value of investments 280,000 280,000 461,145 181,145

Total investment earnings 280,000 280,000 558,848 278,848 Less investment expense (40,000) (40,000) (42,506) (2,506)

Net investment earnings 240,000 240,000 516,342 276,342

Total additions 411,335 411,335 687,694 276,359

DeductionsBenefits 400,000 400,000 394,800 (5,200)

Total deductions 400,000 400,000 394,800 (5,200)

Change in net assets 11,335 11,335 292,894 281,559 Net assets - beginning 4,615,727 4,615,727 4,615,727 -

Net assets - ending 4,627,062$ 4,627,062$ 4,908,621$ 281,559$

Budgeted Amounts

43

STATISTICAL SECTION

44

Statistical Section Comments

The purpose of the statistical portion of the comprehensive annual financial report is to give the reader information to judge the Authority’s economic condition – that is to show not only current economic resources and claims to those resources but to help the reader to understand potential future resources and claims to those future resources. This section has five objectives: 1) provide financial trend data to show how the Authority’s financial position has changed over time. 2) provide information on revenue capacity to show the Authority’s ability to generate revenues. 3) provide information on debt capacity to show the Authority’s debt burden and capacity to issue additional debt. 4) provide demographic and economic information to show the social and economic environment in which the Authority is operating. and 5) provide operating information to help understand the Authority’s operation and resources used. The financial information presented in this section is prepared on an accrual basis.

Financial Trends: Net position increased every year from 2003 thru 2010 starting at $6,878,274 in 2003 and peaking at $12,787,365 in 2010. There was a decrease in net position in 2011 and 2012 ending 2012 at $11,659,141. Grants and capital contributions from participating entities & impact fees contributed significantly to the increase in net position from 2003 thru 2006. Although they also contributed to the increase in net position from 2007 thru 2010, net operating income was also a contributor during that period. Operating revenues started at $5,618,117 in 2003 and they increased every year thru 2010 to a peak of $9,196,587. In 2011 operating revenues dropped by $1,237,416 (13%) and in 2012 they increased by $451,790 (6%). In 2012, 71% of the Authority’s operating revenue was from contributions from participating partners which is down by $1,569,721 from the highest in 2010.

Revenue Capacity: The Authority receives the majority of its revenue from contributions from the participating partners – Animas Fire Protection District, Hermosa Fire Protection District and the City of Durango. Animas and Hermosa receive the majority of their revenues from property taxes and the City receives most of their revenue from sales taxes. Future revenue capacity from these entities can be judged by reviewing their annual financial reports.

Debt Capacity: The Authority has no legal authority to issue long-term debt and has had no long-term debt since 2002.

Demographic and Economic Information: La Plata County has experienced a 13% increase in population from 2002 to 2011 when the US Census calculated the population at 51,917. The number of housing units has increased by 17% during the same time frame. Total personal income experienced strong growth thru 2008 and then saw a 3% decline in 2009 but has increased for the two years since. Unemployment has been very low for most of the past ten years, however it did increase in 2009 and 2010 reaching 6.9%. It was at 6.6% at the end of 2011 which is still well below the national average.

Operating Information: The Authority has maintained a fairly even level of employees from 65 in 2003 to 71 in 2010, dropping to 68 in 2011 and is currently at 74. Capital assets have also maintained a fairly even level with an increase of one fire station and an administrative building in 10 years. Although there have been slight fluctuations thru the years, the fleet is essentially the same size in 2012 as it was in 2003. EMS calls have increased by 31% from 2003 to 2012 and Fire calls increased by 30% during the same time period.

Sources: Except where noted, the information in this section comes from the Authority’s comprehensive annual reports. Additional information comes from internal operating reports, the Durango Chamber of Commerce, Fort Lewis College – School of Business Administration: Office of Business & Economic Research, Colorado Division of Local Government, Demographic Section and the Colorado Secretary of State.

45

Durango Fire and Rescue AuthorityNet Position by Component

2003 - 2012

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Business-type activities

Invested in capital assets, net of related debt 5,447,591 5,608,877 7,519,404 7,161,163 7,047,927 6,994,628 8,641,653 7,932,974 7,392,407 6,920,250 Restricted for capital projects 737,338 1,514,848 482,211 942,609 472,820 653,753 200,000 211,000 201,095 200,000 Unrestricted 693,345 1,078,181 1,641,947 2,115,170 3,263,725 3,870,965 3,444,077 4,643,391 4,289,956 4,538,892

Total Business-type activities net position 6,878,274 8,201,906 9,643,562 10,218,942 10,784,472 11,519,346 12,285,730 12,787,365 11,883,458 11,659,142

46

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Expenses


Fire 3,801,674 3,645,746 4,262,185 4,835,291 5,035,886 5,826,803 5,813,544 6,154,807 6,455,340 6,326,921

EMS 1,866,823 2,118,276 2,334,406 2,426,403 2,554,066 2,497,201 2,919,486 2,637,637 2,766,574 2,711,539

Total Business-type activities expenses 5,668,497 5,764,022 6,596,591 7,261,694 7,589,952 8,324,004 8,733,030 8,792,444 9,221,914 9,038,460

Program Revenues


Fire 4,039,336 4,381,601 5,130,197 5,601,396 6,314,267 7,235,330 7,434,643 7,823,831 6,497,111 6,945,785

EMS 1,195,738 1,236,516 1,256,836 1,264,604 1,410,191 1,370,190 1,446,996 1,372,756 1,462,060 1,465,176

Total Business-type activities program revenues 5,235,074 5,618,117 6,387,033 6,866,000 7,724,458 8,605,520 8,881,639 9,196,587 7,959,171 8,410,961

Net (expense)/revenue

Business-type activities (433,423) (145,905) (209,558) (395,694) 134,506 281,516 148,609 404,143 (1,262,713) (627,499)

General Revenues and Other Changes in Net Position

Business-type activties

Grants 159,200 1,622,815 1,842,503 405,225 693,299 161,658 1,246 77,154 329,718 344,352

Interest income 31,098 45,515 78,304 130,327 197,791 111,067 19,846 12,084 10,023 12,935

Interest expense (633) (363) - - - - - - - -

Grants expense (1,091,476) (1,194,907) (368,492) (604,565) (300) - - - -

Gain (Loss) on disposal of fixed assets (13,391) 66,888 5,000 2,409 6,410 - 9,740 (2,745) - (16,003)

Capital contributions from participating entities & impact fees 660,000 886,358 920,314 801,605 138,089 180,933 586,943 11,000 19,095 61,899

Total Business-type activites 836,274 1,529,737 1,651,214 971,074 431,024 453,358 617,775 97,493 358,836 403,183

Change in Net Position 402,851 1,383,832 1,441,656 575,380 565,530 734,874 766,384 501,636 (903,877) (224,316)

Durango Fire and Rescue AuthorityChanges in Net Position

2003 - 2012

47

Durango Fire and Rescue AuthorityExpenses

2003 - 2012

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Operating expenses

FirePersonnel services 2,726,329 2,771,121 3,024,923 3,432,824 3,492,412 4,252,565 4,536,316 4,458,295 4,629,753 4,504,980 Purchased services 374,099 288,766 381,398 561,451 627,348 700,489 665,752 709,629 782,562 719,580 Supplies and equipment 294,046 186,687 398,135 286,561 343,625 337,251 244,206 284,283 336,951 440,085 Depreciation 407,200 399,172 495,300 554,455 572,501 536,498 649,920 702,600 706,074 662,276

Total fire operating expenses 3,801,674 3,645,746 4,299,756 4,835,291 5,035,886 5,826,803 6,096,194 6,154,807 6,455,340 6,326,921

Emergency medical servicesPersonnel services 1,338,944 1,446,510 1,627,918 1,749,642 1,795,290 1,822,528 1,968,317 1,910,698 1,984,180 1,930,706 Purchased services 251,377 361,200 361,973 361,173 401,110 300,209 285,322 303,990 335,384 308,392 Supplies and equipment 187,581 189,176 213,409 163,378 197,039 144,536 104,660 121,835 144,407 188,608 Depreciation 88,921 121,390 131,106 152,210 160,627 229,928 278,537 301,114 302,603 283,833

Total ems operating expenses 1,866,823 2,118,276 2,334,406 2,426,403 2,554,066 2,497,201 2,636,836 2,637,637 2,766,574 2,711,539

Total operating expenses 5,668,497 5,764,022 6,634,162 7,261,694 7,589,952 8,324,004 8,733,030 8,792,444 9,221,914 9,038,460

Non-operating expensesInterest expense 633 363 - - - - - - - - Grants expense 1,091,476 1,842,503 368,492 604,565 300 - - - - Loss on disposal of capital assets 13,391 1,135 - - - - - - - (16,003)

Total non operating expenses 14,024 1,092,974 1,842,503 368,492 604,565 300 - - - (16,003)

48

Durango Fire and Rescue AuthorityRevenues

2003 - 2012

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Operating revenues

FireOperation contributions from partners 3,927,581$ 4,273,926$ 5,036,515$ 5,451,608$ 6,164,088$ 6,695,702 6,916,671$ 7,521,705 5,898,705$ 5,951,984 Fire protection fees 53,748 53,937 50,000 50,000 50,000 50,000 42,500 41,000 41,965 41,411 Wild land fire fees 13,020 28,758 11,830 26,946 66,681 461,372 445,926 243,814 521,829 844,630 Miscellaneous 44,987 24,980 69,423 72,842 33,498 28,256 29,546 17,312 34,612 107,760

Total fire operating revenues 4,039,336 4,381,601 5,167,768 5,601,396 6,314,267 7,235,330 7,434,643 7,823,831 6,497,111 6,945,785

Emergency medical servicesOperation contributions from partners 360,000 360,000 360,000 360,000 360,000 360,000 360,000 360,000 360,000 360,000 Patient charges, net 829,389 870,963 892,736 901,551 1,048,221 1,000,646 1,083,954 1,006,445 1,096,348 1,102,172 Miscellaneous 6,349 5,553 4,100 3,053 1,970 9,544 3,042 6,311 5,712 3,004

Total ems operating expenses 1,195,738 1,236,516 1,256,836 1,264,604 1,410,191 1,370,190 1,446,996 1,372,756 1,462,060 1,465,176

Total operating revenues 5,235,074 5,618,117 6,424,604 6,866,000 7,724,458 8,605,520 8,881,639 9,196,587 7,959,171 8,410,961

Non-operating revenueInterest income 31,098 45,515 78,304 130,327 197,791 111,067 19,846 12,084 10,023 12,935 Grants 159,200 1,622,815 1,842,503 405,225 693,299 161,658 1,246 77,154 59,227 83,222 Gain on disposal of assets - 6,688 5,000 2,409 6,410 - 9,740 - - -

Total non operating revenue 190,298$ 1,675,018$ 1,925,807$ 537,961$ 897,500$ 272,725$ 30,832$ 89,238$ 69,250$ 96,157$

49

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Population 45,979 46,258 46,905 47,792 48,834 49,668 50,633 51,464 51,334 51,917

Births 458 479 516 501 564 597 606 593 589 543

Deaths 246 271 269 245 302 280 277 275 270 246

Housing units 22,253 22,632 23,259 23,858 24,583 25,160 25,719 25,813 25,908 26,130

Households 18,288 18,475 18,728 19,094 19,423 19,758 20,154 20,488 21,141 21,358

Average household size 2.42 2.41 2.41 2.40 2.40 2.39 2.39 2.38 2.35 2.35

Registered voters 32,841 32,600 36,151 35,861 37,124 33,761 37,715 37,185 37,565 38,590

Employment 25,280 25,461 27,087 28,880 29,665 30,356 30,464 29,476 28,344 27,931

Unemployment 1,062 1,203 1,174 1,159 1,029 883 1,132 1,881 2,180 2,116

Unemployment rate 4.00% 4.30% 4.30% 3.70% 2.80% 2.90% 4.10% 6.70% 6.90% 6.60%

Total personal income (thousands) 1,370,025 1,417,442 1,546,510 1,672,234 1,833,663 1,998,215 2,264,557 2,082,599 2,178,381 2,255,966

Per capita personal income 29,868 30,733 33,096 35,149 37,750 40,496 45,029 40,751 42,346 43,453

Sources: Colorado Division of Local Government, Demographic Section, (1-303-866-4989) in cooperation with the U.S. Bureau of Census Colorado Secretary of State, Fort Lewis College, School of Business Administration: Office of Business & Economic Research Durango Chamber of Commerce

Accurate demographic information is not compiled for the Authority's service area. The Authority's service area covers a significant part of La Plata Countyincluding the county seat the City of Durango. Complete data for 2012 is not available as of this date.

La Plata County, ColoradoDemographic Data

2002 - 2011

50

2012 Percentage2006 2007 2008 2009 2010 2011 2012 of Total County

Employees Employees Employees Employees Employees Employees Employees Employment

Employer

Southern Ute Indian Tribe 791 744 805 854 1,500 1,500 1,500 5.3%Mercy Medical Center 704 724 750 719 625 625 726 2.6%Mercury Payment Systems 222 442 442 637 2.2%Durango School District 9-R 787 795 823 824 544 544 544 1.9%Fort Lewis College 636 645 655 687 535 535 535 1.9%

City of Durango 440 458 487 501 500 500 430 1.5%

La Plata County 375 388 400 406 412 412 412 1.5%Durango Mountain Resort 405 333 393 295 346 346 400 1.4%Wal Mart Stores, Inc. 341 382 303 395 353 353 320 1.1%San Juan Basin Health 208 226 226 226 0.8%Sky Ute Lodge and Casino 300 301 307Bayfield School District 188Flint Energy 222 214

Total 4,967 4,992 5,137 5,111 5,483 5,483 5,730 20.2%

Source: Durango Chamber of Commerce, Durango, ColoradoInformation prior to 2006 is unavailable.Information presented is for La Plata County which includes areas outside of the boundaries of the Authority.

Durango Fire and Rescue AuthorityPrincipal Employers

2006 - 2012

51

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Function

Fire and EMSFirefighters and officers 48 48 48 48 49 48 48 48 48 54 Administrative staff 7 7 7 7 7 9 9 9 9 9 Operational support staff 10 10 14 14 13 13 13 14 11 11

Total Fire and EMS Full-time Employees 65 65 69 69 69 70 70 71 68 74

Durango Fire and Rescue AuthorityFull-time Equivalent Employees

2003 - 2012

52

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FunctionFire

Structure and wildland fires 174 150 185 308 350 236 193 270 327 226

Hazardous conditions a a a 133 84 84 117 169 115 126

EMSEmergency medical 1,189 1,160 1,136 1,281 1,324 1,376 1,424 1,348 1,399 1,454 Motor vehicle and bicycle accidents 294 260 246 312 331 251 235 245 223 239 Other tramua 337 421 428 402 449 402 471 521 588 551 Non-emergency transports and assists 447 442 471 554 689 521 600 519 503 566

EMS Totals 2,267 2,283 2,281 2,549 2,793 2,550 2,730 2,633 2,713 2,810

Public Service Assistance a a a 29 46 108 48 37 52 44

False Alarms a a a 659 622 862 695 509 484 779

Total Calls 2,441 2,433 2,466 3,678 3,895 3,840 3,783 3,618 3,691 3,985

Inspections 1,490 1,147 500 995 1,305 1,307 1,439 1,461 1,214 885

Durango Fire and Rescue AuthorityOperating Indicators by Function

2003 - 2012

53

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Function

Fire and EMSFire stations

Staffed stations 3 3 3 3 3 3 3 3 3 3 Volunteer 12 12 12 13 13 13 13 13 13 13

Administrative building - - 1 1 1 1 1 1 1 1

FleetEngines 18 18 18 18 18 18 18 18 18 18 Tankers 9 9 9 9 9 9 9 9 9 9 75' aerials 2 2 2 2 2 2 2 2 2 2 Ambulances 6 6 6 6 7 7 6 6 6 6 Brush trucks 9 9 10 10 10 10 10 8 8 8 Rescue trucks 5 5 4 4 4 4 4 3 3 3 Other 34 35 37 37 38 40 40 33 33 33

Durango Fire and Rescue AuthorityCapital Asset Statistics

2003 - 2012

54

2012 Calls by District EMS False Alarm Fire Hazardous Cond. Public Service TotalDFRA 1 - Bodo 296 80 11 7 5 399DFRA 2 - Downtown 1,047 210 47 61 13 1,378DFRA 3 - 32nd Street 400 96 34 22 3 555DFRA 4 - Sunnyside 64 23 12 5 0 104DFRA 5 - Edgemont 39 18 9 1 1 68DFRA 6 - Trimble 90 37 22 6 0 155DFRA 7 - Elmore's Corner 523 76 30 3 4 636DFRA 8 - Rafter J 28 24 1 6 1 60DFRA 9 - Durango West 40 21 7 4 1 73DFRA 10 - Elkhorn Mountain 0 1 2 1 0 4DFRA 11 - Bondad 26 27 15 1 1 70DFRA 12 - Timberline 44 37 12 2 1 96DFRA 13 - Falls Creek 8 9 5 2 1 25DFRA 14 - Tamarron 10 9 3 0 0 22DFRA 15 - Electra Lake 23 10 3 0 0 36DFRA 16 - Durango Mtn. Resort 87 60 3 1 0 151Mutual Aid 85 41 10 4 13 153Total 2,810 779 226 126 44 3,985

Durango Fire and Rescue AuthorityCalls by District

2012

55

Documents

DURANGO FIRE & RESCUE AUTHORITYgfoa.net/cafr/COA2012/DurangoFireAndRescueAuthorityCO.pdf · Durango Fire and Rescue Authority 142 Sheppard Drive, Durango, CO Phone: 970 382 6001 Fax: