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THIS MATERIAL PACKET WAS ORIGINALLY PREPARED FOR THE APRIL 3, 2018 MEETING

WHICH WAS CANCELLED.

THE ENCLOSED MATERIAL HAS BEEN UNCHANGED AND IS BEING PRESENTED IN ITS ORIGINAL FORM FOR THE

APRIL 25, 2018 CLGF MEETING.

BOARD OF TRUSTEES Dr. Todd Thompson, President Mike Chopp, Clerk

LANDER COUNTY SCHOOL DISTRICT SCHOOLS

Anna Penola Corrie Behimer John Davis Elizabeth Torre Mark Lake

March 27, 2018

450 E. Sixth Street P.O. Box 1300

Battle Mountain, NV 89820 Telephone: (775) 635-2886

Fax: (775) 635-5347

Committee on Local Government Finance Department of Taxation 1550 College Parkway, Suite 115 Carson City, NV 89706-7937

RE: 4th Year of Decline in General Fund Ending Fund Balance

Battle Mountain Elementary School Eleanor Lemaire Jr. High School Battle Mountain High School Austin Combined Schools

Dan Lantis Superintendent

This letter is in regards to our 4th Year of decline in the General Fund ending balance.

Lander County School District has used the net proceeds that have made up the majority of the ending fund balance for infrastructure for a new Elementary School Building, and a gymnasium/ sports complex at the Junior High School. As these projects came to an end in FYl 6-17, the process for the net proceeds true up had taken place. The true up process resulted in approximately $5,000,000 less revenue for the FY 17-18 budget. As soon as we were informed of the reduction in revenue we took immediate action to reduce our budgeted expenses. Such actions were; placing a hiring freeze, not filling our vacant positions and we reduced our operating expenses.

As we go forward, our financial situation is showing signs of moving in a positive direction. FYl 7-18 budget augment added an additional $162,501 to our ending fund balance.

If you have any questions or concerns feel free to contact us.

Regards,

�(}A viftelwNanAncho Finance Officer Lander County School District

LCSD is an Equal Employment Opportunity employer. In compliance with applicable disability laws, reasonable accommodations may be provided for qualified individuals with a disability who require and request such accommodations.

CLGF Meeting 4-03-18 Page 1

BOARD OF TRUSTEES Dr. Todd Thompson, President Mike Chopp. Clerk

LANDER COUNTY SCHOOL DISTRICT SCHOOLS

Anna Penola Corrie Behimer John Davis Elizabeth Torre Mark Lake

February 8, 2018

450 E. Sixth Street P.O. Box 1300

Battle Mountain, NV 89820 Telephone: (775) 635-2886

Fax: (775) 635-5347

Committee on Local Government Finance NV Department of Taxation 1550 College Parkway, Suite 115 Carson City, NV 89706

RE: Declining Ending Fund Balance - General Fund

Dear Ms. Gransbery,

Battle Mountain Elementary School Eleanor Lemaire Jr. High School Battle Mountain High School Austin Combined Schools

Dan Lantis Superintendent

The Lander County School District General Fund has had a declining ending fund balance for each of the past four years. The District has utilized the net proceeds of mines revenue to complete several building projects over the previous 3 years. The District is aware of the declining ending fund balance and has taken immediate action to address the situation such as; a 10% mandatory reduction in operating expenses and implementing a hiring freeze. In taking these steps we are projecting that our ending fund balance will increase.

In our augmented budget for FYI 7/18 we were able to increase our ending fund balance in excess of the required 4%.

Please don't hesitate to contact me if you have any questions or need additional information.

Regards,

Nan Ancho Finance Office

pc: Board of Trustees Dan Lantis, Superintendent

RECEI,1E1J FEB 1 3 2018

LCSD is an Equal Employment Opportunity employer. In compliance with applicable disability laws, reasonable accommodations may be provided for qualified individuals with a disability who require and request such accommodations.


LANDER COUNTY SCHOOL DISTRICT, STATE OF NEVADA

FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2017

WITH REPORT OF

CERTIFIED PUBLIC ACCOUNTANTS


LANDER COUNTY SCHOOL DISTRICT Table of Contents

FINANCIAL SECTION Independent Auditor’s Report .......................................................................................................... 1

Management’s Discussion and Analysis .......................................................................................... 5

Basic Financial Statements: Government-wide Financial Statements:

Statement of Net Position ..................................................................................... 12

Statement of Activities ......................................................................................... 13

Fund Financial Statements: Balance Sheet – Governmental Funds .................................................................. 14

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .......................................................................... 15

Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ..................................................................... 16

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .................................................................................... 17

Statement of Net Position – Proprietary Fund ...................................................... 18

Statement of Revenues, Expenses and Changes in Net Position – Proprietary Fund ........................................................................... 19

Statement of Cash Flows – Proprietary Fund ....................................................... 20

Statement of Fiduciary Net Position ..................................................................... 21

Statement of Changes in Fiduciary Net Position – Tom Norris For Teacher Advancement .............................................................................. 22

Statement of Changes in Fiduciary Net Position – Tom Norris For Student Scholarships and Awards ............................................................. 23

Notes to the Financial Statements ...................................................................................... 24

Required Supplementary Information: Budgetary Comparison Schedules:

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund ...................................... 52

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Special Education ............................... 56

Schedule of the Proportionate Share of the Net Pension Liability ................................... 57

Schedule of Contributions ................................................................................................ 58

Schedule of Funding Progress .......................................................................................... 59

Notes to Required Supplementary Information ................................................................ 60


Supplementary Information: Major Governmental Fund:

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Facility and Site Improvement .................... 62

Nonmajor Governmental Funds: Combining Balance Sheet – Nonmajor Governmental Funds .............................. 63 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ............................................ 64

Nonmajor Special Revenue Funds: Schedule of Revenues, Expenditures and Changes in

Fund Balances – Budget and Actual: Local Funds ......................................................................................... 65Class Size Reduction ........................................................................... 67 Adult Education................................................................................... 68State Special Revenue Funds ............................................................... 69 Food Services ...................................................................................... 70Federal Special Revenue Funds ........................................................... 71

Nonmajor Capital Projects Funds: Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

Building and Sites Fund ...................................................................... 73 Extraordinary Maintenance Fund ........................................................ 74

Nonmajor Debt Service Funds: Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

Debt Service ........................................................................................ 75

Proprietary Funds: Schedule of Revenues, Expenditures and Changes in Fund Net Position – Budget and Actual:

Internal Service Health and Accident Insurance Fund ........................ 76

Fiduciary Funds: Schedule of Changes in Fiduciary Net Position – Budget and Actual:

Tom Norris Trust Fund for Teacher Advancement ............................. 77 Tom Norris Trust Fund for Student Scholarships and Awards ........... 78

Combining Statement of Changes in Assets and Liabilities: Agency Funds ...................................................................................... 79

FEDERAL AND STATE REPORTS: Report on Internal Control over Financial Reporting and on Compliance and Other Matters ...... 83

Report on Compliance with Statutes and Administrative Code in Accordance with NRS ............ 85

Findings and Recommendations .................................................................................................... 87


FINANCIAL SECTION


THIS PAGE INTENTIONALLY LEFT BLANK


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INDEPENDENT AUDITOR’S REPORT

Board of Trustees Lander County School District Battle Mountain, Nevada

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Lander County School District, Nevada (a Nevada local government unit) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

CEDAR CITY FLAGSTAFF HURRICANE MESQUITE PHOENIX RICHFIELD ST. GEORGE

www.hintonburdick.com

MEMBERS:CHAD B. ATKINSON, CPA PHILLIP S. PEINE, CPAKRIS J. BRAUNBERGER, CPA STEVEN D PALMER, CPAROBERT S. COX, CPA MICHAEL K. SPILKER, CPATODD B. FELTNER, CPA KEVIN L. STEPHENS, CPAK. MARK FROST, CPA MARK E. TICHENOR, CPAMORRIS J PEACOCK, CPA MICHAEL J. TORGERSON, CPA


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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Lander County School District, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, schedules related to pensions, schedule of funding progress and related notes, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Lander County School District’s basic financial statements. The combining and individual nonmajor fund financial statements and certain budgetary comparison information, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and certain budgetary comparison information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and certain budgetary comparison information are fairly stated in all material respects in relation to the basic financial statements as a whole.


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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2017, on our consideration of Lander County School District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Lander County School District’s internal control over financial reporting and compliance.

HintonBurdick, PLLC St. George, Utah October 31, 2017


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LANDER COUNTY SCHOOL DISTRICTMANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED JUNE 30, 2017

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This document, the Management’s Discussion and Analysis (“MD&A”) serves to introduce the financial reports for the Lander County School District (“District”). It is an overview of our financial activities and is a required element of the Governmental Accounting Standards Board (GASB) in Statement No. 34 and subsequent Statements No. 37 and No. 38. This document is designed to assist the reader in understanding the District’s financial position and financial transactions of the past year.

Financial Highlights

Government-Wide Statements:

Net position of the District at the close of the fiscal year is $31,624,437, which is a decrease of $3,777,656 from the prior fiscal year.

Capital assets totaled $39,749,057 as compared to other assets totaling $8,964,918.

General Fund:

The unassigned ending General Fund balance reported at the end of fiscal year 2017 was $371,014 compared to $940,701 in the prior fiscal year.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the Lander County School District’s basic financial statements. The Lander County School District’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.

Government-wide Financial Statements

The government-wide financial statements are designed to provide readers with a broad overview of the Lander County School District’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the Lander County School District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference being reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Lander County School District is improving or deteriorating.




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The statement of activities presents information showing how the District’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the 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., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish the functions of the Lander County School District that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). Lander County School District does not consider any of its programs to be business-type activities.

Lander County School District Net Position

June 30, 2017 June 30, 2016Governmental Governmental Increase

Activities Activities (Decrease)

Current assets 8,964,918$ 12,180,347$ (3,215,429)$Capital assets 39,749,057 40,438,158 (689,101) Total assets 48,713,975 52,618,505 (3,904,530)

Deferred outflows of resources 3,585,108 2,002,179 1,582,929

Current liabilities 1,107,174 1,324,118 (216,944)Current portion of long-term liabilities 396,000 352,000 44,000Long-term liabilities 17,993,760 15,724,113 2,269,647 Total liabilities 19,496,934 17,400,231 2,096,703

Deferred inflows of resources 1,177,712 1,818,360 (640,648)

Net PositionNet investment in capital assets 38,108,057 38,615,158 (507,101)Restricted 3,216,078 6,494,527 (3,278,449)Unrestricted (9,699,698) (9,707,592) 7,894

Total net position 31,624,437$ 35,402,093$ (3,777,656)$

The District’s assets and deferred outflows exceeded liabilities and deferred inflows by $31,624,437 as of June 30, 2017. The largest portion of total net position, $38,108,057 is invested in capital assets.




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Lander County School District Changes in Net Position

June 30, 2017 June 30, 2016Governmental Governmental Increase

Activities Activities (Decrease)RevenuesProgram RevenuesCharges for services 120,583$ 120,626$ (43)$ Operating grants and contributions 2,461,724 1,751,718 710,006 Capital grants and contributions 25,275 - 25,275 Total Program Revenues 2,607,582 1,872,344 735,238

General RevenuesProperty taxes 5,889,404 9,656,801 (3,767,397) Local school support taxes 1,375,798 1,664,472 (288,674) Government services tax 509,978 496,269 13,709 State aid not restricted to specific purposes 129,537 102,337 27,200 Federal aid not restricted to specific purposes 15,205 2,435 12,770 Other local sources 105,286 99,904 5,382 Unrestricted investment earnings 35,495 56,585 (21,090) Total General Revenues 8,068,303 12,078,803 (4,010,500)

Total Revenues 10,675,885 13,951,147 (3,275,262)

ExpensesInstruction expenses 7,438,920 7,081,115 357,805 Support services expenses:

Student support 499,747 387,712 112,035 Instructional staff support 773,927 905,733 (131,806) General administration 823,786 1,057,384 (233,598) School administration 952,111 922,979 29,132 Central services 355,333 299,284 56,049 Operations and maintenance 1,635,950 1,368,901 267,049 Student transportation 428,328 401,965 26,363 Other central services - 20,007 (20,007) Other support services 189,184 178,176 11,008

Operation of noninstructional services:Food services and other 295,080 301,810 (6,730)

Facilities acquistion and construction services 1,015,314 765,643 249,671 Interest 45,861 50,663 (4,802)

Total Expenses 14,453,541 13,741,372 712,169 -

Change in net position (3,777,656) 209,775 (3,987,431) Net Position Beginning 35,402,093 35,192,318 209,775 Restatement adjustments - - - Net Position Ending 31,624,437$ 35,402,093$ (3,777,656)$




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Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Lander County School District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Lander County School District can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. To provide a better understanding of the relationship between the fund statements and government-wide statements, reconciliation is provided for a more comprehensive picture of the District’s financial position.

Proprietary Funds - Funds that focus on the determination of operating income, changes in net position, financial position, and cash flows are reported in the proprietary funds. There are two types, enterprise funds and internal service funds. Enterprise funds are used to report an activity where a fee is charged to external users. Internal service funds report activities that provide goods and services to the other departments of the District. The District reports one internal service fund, the Health and Accident Insurance Fund.

Fiduciary Funds - Funds that are used to report assets held in a trustee or agency capacity for others and therefore cannot be used to support the government’s own programs. The District currently holds assets related to student activities of various schools in the sum of $282,546 as well as the Tom Norris Trust Funds in the amount of $422,532 (Teacher Advancement - $21,442; Student Scholarships and Awards - $401,090).

The following schedule presents a summary of general fund revenue sources:

FY2017 % of Total FY2016 % of Total

Local sources 7,893,498$ 96% 11,867,802$ 99%State sources 219,938 3% - 0%Federal sources 129,537 1% 102,337 1% Total 8,242,973$ 100% 11,970,139$ 100%

Description

Local Sources:

County retail sales tax decreased during 2017, from $1,664,472 to $1,375,798 in local district revenues. Ad valorem taxes decreased in 2017 from $9,648,921 to $5,879,281. Net proceeds of mines portion of the ad valorem decreased from $5,200,347 to $1,910,255. NRS 387.1235 reserves the net proceeds monies for use in the subsequent year.

State Sources:

The District did receive State Distributive School Account (DSA) revenues in the current year in the amount of $219,938. Lander County School District DSA revenue is based on a funding formula from the state that decreases the actual amount received by local school support tax (sales tax) and a portion of ad valorem tax collections. If the net proceeds of mines portion declines as it did in FY17, the DSA payment will continue to increase.




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Federal Sources:

Typically, the main portion of federal funds is from Impact Aid (Public Law 103-382), which provides revenue in lieu of property tax collections for those industries connected to federal land that are exempt from paying property taxes. Other small federal grants have been received to accomplish specific purposes as required in the grant document.

Special Education Fund

The District received $555,373 in State sources for the Special Education Fund in fiscal year 2017. A transfer of $250,000 was made from the General Fund into the Special Education Fund in fiscal year 2017. Total expenditures for fiscal year 2017 were $1,000,697. This was an increase of $24,618 from fiscal year 2016. The fund balance as of June 30, 2017 is $22,146.

Capital Projects Facilities & Site Improvement Fund

The District received $35,495 from local sources for fiscal year 2017. Total expenditures for fiscal year 2017 were $383,362 which relate to building improvements. The fund balance as of June 30, 2017 is $905,154.

Notes to the Financial Statements

The notes to the financial statements complement the financial statements by describing qualifying factors and changes throughout the fiscal year.

Capital Assets

At June 30, 2017, the District had $39,749,057 invested in a broad range of capital assets, including land and improvements, buildings and improvements, and equipment. This amount represents a net decrease of $689,101 or 1.7% from last fiscal year.

See Note 5 of the financial statements for further details on the District’s capital assets.

Long-Term Debt

As of June 30, 2017 the District had $1,641,000 in bonds payable, which is a decrease of $182,000 from the prior fiscal year.


LANDER COUNTY SCHOOL DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS


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Budgetary Highlights

The original budget (2016-2017) was approved May 25, 2016. Budgeted appropriations are developed with certain main determinants remaining unknown; most important of which are the final certified enrollment and the prior year’s ending fund balance. For this reason, the “original” budget is approved and submitted based on future resolution of these unknown issues. The 2016-2017 Amended Final Budget was filed as required on or before January 1, 2017. Nevada statutes and District regulations require that Districts legally adopt budgets for all funds (except for agency funds). Budgets are prepared in accordance with generally accepted accounting principles and in accordance with state statutes. Budgeted amounts reflected in the accompanying financial statements recognize amendments made during the year. The final appropriated budget is prepared by fund, program and function. All appropriations lapse at year-end and encumbrances are re-appropriated in the ensuing fiscal year. The Board adopted 2016-2017 Amended Final Budget for the General Fund reflected total revenues and other financing sources of $14,617,626 with $2,239,391 as an unrestricted opening fund balance. The budget reflected total expenditures and other financing uses of $14,482,993. The final amended budget for the General Fund was to increase fund balance by $56,981. Total actual General Fund revenues for fiscal year 2017 were $8,242,973 compared to budgeted revenues of $6,392,732. The difference primarily relates to ad valorem taxes/net proceeds of mines and distributive school fund revenues. Total actual General Fund expenditures and transfers out were $11,618,702 compared to budgeted expenditures and transfers of $14,473,241. Most expenditures were under budget. Economic Factors and Future Events The District has begun to receive DSA payments for fiscal year 2018; however there has been a significant drop in net proceeds of mines revenue. A hiring freeze and budget cuts were implemented toward the end of fiscal year 2017 to minimize the impact of the revenue loss. The District experienced a loss in grant revenue in fiscal year 2018. Consequently, the District has had to move expenses for one full time teacher that had been funded at 95% from a grant into the general fund. Title II revenue has declined as well. This revenue had been used for professional development, training stipends and conference expenses in the past. In order to continue funding these activities, the District would need to absorb the expenses in the General Fund. The District continues to experience a loss of enrollment. DSA funding will be impacted by the loss. Maintenance plans have been added to the revised five year maintenance building and facilities plan in order to keep the existing buildings and the new structures in top physical and mechanical condition. The District continues to utilize purchasing agreements in order to save wherever possible


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BASIC FINANCIAL STATEMENTS


LANDER COUNTY SCHOOL DISTRICT Statement of Net Position

June 30, 2017 (With Comparative Totals for June 30, 2016)

The accompanying notes are an integral part of the financial statements. 12

2017 2016Assets

Cash and investments 6,152,455$ 10,501,509$Receivables (net of allowance for uncollectibles) 2,740,638 1,618,565Taxes receivable, delinquent 70,396 60,273 Prepaids 1,429 - Capital assets not being depreciated 223,695 435,087Capital assets being depreciated,

net of accumulated depreciation 39,525,362 40,003,071 Total assets 48,713,975 52,618,505

Deferred Outflows of ResourcesDeferred outflows related to pensions 3,585,108 2,002,179

Total deferred outflows of resources 3,585,108 2,002,179

Liabilities

Accounts payable 109,643 384,939Accrued liabilities 994,059 935,322Accrued interest payable 3,472 3,857 Noncurrent liabilities: Due within one year 396,000 352,000 Due in more than one year 17,993,760 15,724,113

Total liabilities 19,496,934 17,400,231

Deferred Inflows of ResourcesDeferred inflows related to pensions 1,177,712 1,818,360

Total deferred outflows of resources 1,177,712 1,818,360

Net Position

Net investment in capital assets 38,108,057 38,615,158Restricted for:

Net proceeds of minerals 1,910,255 5,200,347Local funds 487,525 460,821Adult education 2,905 61,634 Federal funds - 1,151 State funds 52,368 5,700 Claims 763,025 764,874

Unrestricted (9,699,698) (9,707,592)Total net position 31,624,437$ 35,402,093$


LANDER COUNTY SCHOOL DISTRICT Statement of Activities

For the Year Ended June 30, 2017 (With Comparative Totals for June 30, 2016)


Net (Expense) / Revenueand Change in Net Position

for Governmental FundsOperating Capital

Functions/Programs Charges for Grants and Grants andPrimary government: Expenses Services Contributions Contributions 2017 2016

ProgramsRegular 5,438,700$ 20,000$ 913,268$ -$ (4,505,432)$ (4,808,880)$ Special 1,267,710 - 1,014,378 - (253,332) (380,742) Vocational 276,758 - 65,537 - (211,221) (230,983) Other instructional 58,627 - - - (58,627) (55,182) Co-curricular and extra-curricular 311,105 - - - (311,105) (304,299) Adult education 86,020 - 27,291 - (58,729) 4,603 Total program 7,438,920 20,000 2,020,474 - (5,398,446) (5,775,483)

Support servicesStudent support 499,747 1,915 130,335 - (367,497) (326,730) Instructional staff support 773,927 - 88,327 - (685,600) (727,671) General administration 823,786 - - - (823,786) (1,057,384) School administration 952,111 - - - (952,111) (922,979) Central services 355,333 - - - (355,333) (299,284) Operations and maintenance 1,635,950 - - - (1,635,950) (1,368,901) Student transportation 428,328 - - - (428,328) (381,965) Other central services - - - - - (20,007) Other support 189,184 - 84,574 - (104,610) (94,674) Total support services 5,658,366 1,915 303,236 - (5,353,215) (5,199,595)

Operation of noninstructional servicesFood services operations 295,080 98,668 138,014 25,275 (33,123) (77,644) Total operation of noninstructional 295,080 98,668 138,014 25,275 (33,123) (77,644)

Facilities acquisition and constructionLand improvement 22,487 - - - (22,487) (35,789) Building acquisition and construction 551,287 - - - (551,287) (284,523) Site improvements 915 - - - (915) (41,731) Building improvements 440,625 - - - (440,625) (403,600) Total facilities acquisition and construction 1,015,314 - - - (1,015,314) (765,643)

Interest on long-term debt 45,861 - - - (45,861) (50,663)

Total primary government 14,453,541$ 120,583$ 2,461,724$ 25,275$ (11,845,959) (11,869,028)General revenues:

Property taxes, levied for general purposes 5,889,404 9,656,801 Local school support taxes 1,375,798 1,664,472 Governmental services tax 509,978 496,269 State aid not restricted to specific purposes 129,537 102,337 Federal aid not restricted to specific purposes 15,205 2,435 Other local sources 105,286 99,904 Gain on sale of capital assets 7,600 - Unrestricted investment earnings 35,495 56,585

Total general revenues 8,068,303 12,078,803 Change in net position (3,777,656) 209,775

Net position - beginning 35,402,093 35,192,318 Net position - ending 31,624,437$ 35,402,093$

Program Revenues


LANDER COUNTY SCHOOL DISTRICT Balance Sheet

Governmental Funds June 30, 2017


Capital Projects Other TotalGeneral Special Facilities & Site Governmental Governmental

Fund Education Improvement Funds FundsAssets

Cash and investments 3,136,582$ 126,728$ 909,502$ 1,239,914$ 5,412,726$ Accounts receivable - - 4,710 - 4,710 Taxes receivable, delinquent 70,396 - - - 70,396 Prepaids - - - 1,429 1,429 Due from other funds 116,203 - - - 116,203 Due from other governments 2,464,653 3,185 - 247,571 2,715,409

Total assets 5,787,834$ 129,913$ 914,212$ 1,488,914$ 8,320,873$

Liabilities, Deferred Inflows, and Fund Balances

Liabilities:Accounts payable 62,846$ 310$ 9,058$ 29,212$ 101,426$ Accrued liabilities 708,497 95,336 - 85,937 889,770 Due to other governments 7,086 - - 1,131 8,217 Due to other funds 82,556 12,121 - 128,592 223,269

Total liabilities 860,985 107,767 9,058 244,872 1,222,682

Deferred inflows of resources:Unavailable revenue 83,086 - - - 83,086

Total deferred inflows of resources 83,086 - - - 83,086

Fund balances:Nonspendable - - - 1,429 1,429 Restricted for:

Net proceeds of minerals (NRS 387.1235) 1,910,255 - - - 1,910,255 Local funds - - - 487,525 487,525 Adult education - - - 2,905 2,905 State funds - - - 52,368 52,368

Committed for:Revenue stabilization 684,432 - - - 684,432 Rental properties - - - 268,429 268,429 Building and maintenance 100,000 - - - 100,000

Assigned to:Food services - - - 41,546 41,546 Subsequent year operations 1,778,062 - - - 1,778,062 Capital projects - - 905,154 391,269 1,296,423 Other purposes - 22,146 - - 22,146

Unassigned 371,014 - - (1,429) 369,585 Total fund balances 4,843,763 22,146 905,154 1,244,042 7,015,105

Total liabilities, deferred inflows of resources, and fund balances 5,787,834$ 129,913$ 914,212$ 1,488,914$ 8,320,873$


LANDER COUNTY SCHOOL DISTRICT Reconciliation of the Balance Sheet of Governmental Funds

To the Statement of Net Position June 30, 2017


Amounts reported for governmental activities in the statement of net position aredifferent because:

Total fund balances - total governmental funds 7,015,105$

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

Governmental capital assets 49,932,959$ Accumulated depreciation (10,183,902) 39,749,057

Deferred outflows related to pensions 3,585,108 Deferred inflows related to pensions (1,177,712) 2,407,396

Deferred inflows of resources represent amounts that are not available to fundcurrent expenditures, and therefore, are not reported as revenues in the governmental funds. 83,086

The District's Insurance Internal Service Fund is used by management to chargethe costs of certain activities of individual funds. The net position of the internalservice fund is reported with the governmental activities. 763,025

Some liabilities, including bonds payable, pension liabilities and interest payable are notdue and payable in the current period and therefore are not reported in the funds.

Bonds payable (1,641,000) Compensated absences (271,049) Net pension liability (14,470,185) Net OPEB obligation (2,007,526) Accrued interest payable (3,472) (18,393,232)

Net position of governmental activities 31,624,437$

Deferred outflows and inflows of resources related to pensions are applicable to future reporting periods and, therefore, are not reported in the funds.


LANDER COUNTY SCHOOL DISTRICT Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds For the Year Ended June 30, 2017


Capital Projects Other TotalGeneral Special Facilities & Site Governmental Governmental

Fund Education Improvement Funds FundsRevenues

Local sources 7,893,498$ -$ 35,495$ 152,668$ 8,081,661$ State sources 219,938 555,373 - 1,049,911 1,825,222 Federal sources 129,537 - - 609,052 738,589

Total revenues 8,242,973 555,373 35,495 1,811,631 10,645,472

ExpendituresPrograms

Regular 4,519,256 - - 819,286 5,338,542 Special - 1,000,697 - 240,219 1,240,916 Vocational 208,673 - - 66,976 275,649 Other instructional 58,627 - - - 58,627 Co-curricular and extra-curricular 262,183 - - - 262,183 Adult education - - - 86,020 86,020

Total program expenditures 5,048,739 1,000,697 - 1,212,501 7,261,937

Support services expendituresStudent support 356,280 - - 139,741 496,021 Instructional staff support 690,637 - - 87,142 777,779 General administration 816,446 - - 6,420 822,866 School administration 938,059 - - 7,286 945,345 Central services 344,771 - - - 344,771Operations and maintenance 1,465,269 - - 198,699 1,663,968 Student transportation 335,457 - - - 335,457 Other support 818 - - 81,208 82,026

Total support service expenditures 4,947,737 - - 520,496 5,468,233

Operation of noninstructional servicesFood services - - - 315,395 315,395

Facilities acquisition and construction servicesArchitecture, engineering and other - - 37,500 - 37,500 Capital construction - - - 8,900 8,900 Site improvements - - - 915 915 Building improvements - - 345,862 5,918 351,780

Total facilities acquisition and construction expenditures - - 383,362 15,733 399,095

Debt servicePrincipal - - - 182,000 182,000 Interest - - - 46,246 46,246

Total debt service - - - 228,246 228,246

Total expenditures 9,996,476 1,000,697 383,362 2,292,371 13,672,906

Excess revenues over (under)expenditures (1,753,503) (445,324) (347,867) (480,740) (3,027,434)

Other financing sources (uses)Transfers in - 250,000 720,035 652,191 1,622,226 Transfers out (1,622,226) - - - (1,622,226) Sale of capital assets 7,600 - - - 7,600

Total other financing sources and uses (1,614,626) 250,000 720,035 652,191 7,600

Net change in fund balances (3,368,129) (195,324) 372,168 171,451 (3,019,834) Fund balances - beginning of year 8,211,892 217,470 532,986 1,072,591 10,034,939 Fund balances - end of year 4,843,763$ 22,146$ 905,154$ 1,244,042$ 7,015,105$


LANDER COUNTY SCHOOL DISTRICT Reconciliation of the Statement of Revenues, Expenditures

and Changes in Fund Balances of Governmental FundsTo the Statement of Activities

For the Year Ended June 30, 2017


Amounts reported for governmental activities in the statement of activities aredifferent because:

Net changes in fund balances - total governmental funds (3,019,834)$

Governmental funds report capital outlays as expenditures. However, in thestatement of activities the cost of those assets is allocated over their estimateduseful lives and reported as depreciation expense. This is the amount by whichdepreciation expense exceeded capital outlay in the current period.

Capital outlay 508,378$ Depreciation expense (1,036,063) (527,685)

The net effect of various miscellaneous transactions involving capital assets(i.e. sales, trade-ins, and donations) is to decrease net assets. (161,417)

Pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the statement of net position because the reported net pension liability is measured a year before the report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the statement of activities.

Pension contributions 1,755,933Pension expense (1,916,574) (160,641)

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items.

Principal repayments 182,000

Because some property taxes and other revenues will not be collected in time to pay for obligations of the current period, they are not considered available revenues in the governmental funds and are instead reported as deferred inflows of resources. The changes in such deferred inflows of resources are accounted for as revenue in the statement of activities. 22,813

Accrued interest for long-term debt is not reported as an expenditure for the current period while it is recorded in the statement of activities. This adjustment reflects the change in interest payable. 385

The District's insurance internal service fund is used by management to charge thecosts of certain activities of individual funds. The change in net position of the internal service fund is reported with the governmental activities. (1,849)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expendituresin governmental funds.

Change in compensated absences (6,030) Change in net OPEB obligation (105,398) (111,428)

Change in net position of governmental activities (3,777,656)$


LANDER COUNTY SCHOOL DISTRICT PROPRIETARY FUND

Statement of Net Position June 30, 2017


GovernmentalActivities,

Internal Service,Health and Accident

Insurance FundAssets

Cash and investments 739,729$ Accounts receivable 20,519 Due from other funds 107,066

Total assets 867,314

Liabilities

Accrued liabilities 104,289

Net Position

Restricted for claims 763,025$


LANDER COUNTY SCHOOL DISTRICT PROPRIETARY FUND

Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2017




Insurance FundOperating revenues

Local sources 1,353,857$

Operating expenses

Support services expenses 1,356,156

Net operating income (loss) (2,299)

Nonoperating income (expenses)

Interest income 450

Change in net position (1,849)

Total net position-beginning 764,874

Total net position-ending 763,025$


LANDER COUNTY SCHOOL DISTRICT PROPRIETARY FUND Statement of Cash Flows





Insurance FundCash flows from operating activities:

Cash received from employer premiums 1,078,127$Cash received from employee premiums 270,796Cash paid for health claims (1,106,445)Cash paid for supplemental insurance and administration (279,680)

Net cash flows from operating activities (37,202)

Cash flows from investing activities:Investment earnings 450

Net cash flows from investing activities 450

Net change in cash and cash equivalents (36,752)

Cash and cash equivalents at beginning of year 776,481

Cash and cash equivalents at end of year 739,729$

Reconciliation of operating income (loss) to net cash cash flows from operating activities:

Operating income (loss) (2,299)$Adjustments to reconcile net operating income (loss) to netcash flows from operating activities:

(Increase) decrease in accounts receivable (6,942)(Increase) decrease in due from other funds 2,008 Increase (decrease) in accounts payable (325) Increase (decrease) in accrued liabilities (29,644)

Net cash flows from operating activities (37,202)$


LANDER COUNTY SCHOOL DISTRICT FIDUCIARY FUNDS

Statement of Fiduciary Net Position June 30, 2017


Tom NorrisTom Norris Nonexpendable

Nonexpendable Student ScholarshipTeacher Advancement and Award Agency

Trust Fund Trust Fund FundsASSETS

Cash 21,442$ -$ 282,546$Investments - 401,090 -

Total assets 21,442 401,090 282,546

LIABILITIESDue to student groups - - 282,546

Total liabilities - - 282,546

NET POSITIONHeld in trust - student scholarships and awards -$ 401,090$ -$ Held in trust - teacher advancement 21,442 - -



Tom Norris Nonexpendable Trust Fund For Teacher Advancement

Statement of Changes in Fiduciary Net Position For the Year Ended June 30, 2017


Tom NorrisNonexpendable

Teacher AdvancementTrust Fund

ADDITIONSInvestment earnings -$

Net position, beginning of year 21,442

Net position, end of year 21,442$



Tom Norris Nonexpendable Trust Fund For Student Scholarships and Awards

Statement of Changes in Fiduciary Net Position For the Year Ended June 30, 2017


Tom NorrisNonexpendable

Student Scholarshipand AwardTrust Fund

ADDITIONSInvestment earnings (loss) (975)$

DEDUCTIONSStudent scholarships 5,000

Change in net position (5,975)

Net position, beginning of year 407,065

Net position, end of year 401,090$


LANDER COUNTY SCHOOL DISTRICT Notes to the Financial Statements

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NOTE 1. Summary of Accounting Policies

Description of Government-Wide Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, when applicable, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. No business-type activities or component units are reported.

Reporting Entity

The Lander County School District (the District) is authorized under NRS 386.010 and is governed by an elected Board consisting of seven members. The Board possesses final decision making authority and is held primarily accountable for those decisions. The Board is responsible for approving the budget, establishing spending limitations, funding any deficits and borrowing funds and/or issuing bonds to finance District operations and construction.

The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units are, in substance, part of the primary government’s operations, even though they are legally separate entities. Thus, blended component units are appropriately presented as funds of the primary government. Each discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the government. As to the District, there are no component units which are included to form the reporting entity.

Basis of Presentation – Government-Wide Financial Statements

While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from the governmental funds. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.

Basis of Presentation – Fund Financial Statements

The fund financial statements provide information about the government’s funds, including its fiduciary funds. Separate statements for each fund category—governmental, proprietary, and fiduciary—are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. Major individual governmental funds are reported as separate columns in the fund financial statements.



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NOTE 1. Summary of Accounting Policies, Continued

The government reports the following major governmental funds:

General Fund – the District’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Special Education Fund – used to account for state and local funding used to provide special education to qualifying students. Capital Projects Facilities and Site Improvement Fund – used to account for the resources used for the acquisition or construction of designated capital assets (except those financed by proprietary or trust funds) including, but not limited to supplies, professional services, equipment and other capital outlay.

Additionally, the District reports the following fund types:

Internal Service (Proprietary) Fund – used to account for operations that provide services to other departments within the District on a cost-reimbursement basis. The District currently has one internal service fund, Health and Accident Insurance Fund, which accounts for transactions relating to health insurance coverage for employees and retired employees.

Fiduciary Funds

Tom Norris Nonexpendable Teacher Advancement Trust Fund – used to account for assets held in a trustee capacity to assist schoolteachers who desire to further their education.Tom Norris Nonexpendable Student Scholarship and Award Trust Fund – used to account for assets held in a trustee capacity to be used for student scholarships and awards. Student Activity Agency Funds – used to account for assets held for student groups and organizations. They are custodial in nature and cannot be used to support the District’s own programs.

During the course of operations the government has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column.

Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column.



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Measurement Focus and Basis of Accounting

The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as currentfinancial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The governmental fund financial statements are reported using the current financial resources measurementfocus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources.

The proprietary and private-purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities.

Budgets and Budgetary Accounting

Budgets are prepared, filed, noticed and public hearings held in accordance with the Local Government Budget Act (NRS 354). The Board of Trustees may prepare additional financial information and hold additional meetings and/or public hearings other than those identified in statute in order to disseminate to, and solicit information from, the general public. The provisions of this Act include the following major procedures to establish the budgetary data which is reflected in these financial statements.

1. On or before April 15, the Board files a tentative budget with the Nevada Department of Taxation for all funds other than Fiduciary Funds, which are not required to be budgeted. The appropriated budget is prepared by fund, function and department.

2. Public budget hearings on the tentative budgets are held prior to the adoption of the budget to obtain taxpayer comments.

3. On or before June 1, the Board indicates changes, if any, to be made to the tentative budget and adopts a final budget by the favorable vote of a majority of the members of the Board. The final budget must then be forwarded to the Nevada Department of Taxation for final approval.



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4. On or before January 1, the Board must adopt an amendment to its final budget to reflect any necessary adjustments as a result of the District’s completed pupil count.

5. The Department of Taxation shall examine the submitted documents for compliance with law and with appropriate regulations and shall submit to the governing body at least 3 days before the public hearing a written certificate of compliance or a written notice of lack of compliance. The written notice must indicate the manner in which the submitted documents fail to comply with law or appropriate regulations.

6. Whenever the governing body receives from the Department of Taxation a notice of lack of compliance, the governing body shall forthwith proceed to amend the tentative budget to effect compliance with the law and with the appropriate regulation.

The District maintains site-based budgets that identify costs associated with each site and/or department in addition to other formats that may be prescribed by the Board of Trustees or required by Nevada Revised Statutes. Each site will be recognized as a separate unit and will be analyzed as to use of resources and performance.

Generally, budgets for all funds are adopted in accordance with generally accepted accounting principles. All uncommitted appropriations lapse at fiscal year-end.

Budget changes may be required to reflect changes in revenue and/or expenditures. Any transfer, increase or decrease in budget appropriations are conducted pursuant to NRS 354.

Actual expenditures may not exceed budgetary appropriations of the various governmental functions per NRS.

Property Taxes

Taxes on real property are levied and the lien attached on July 1 (the levy date) of the year for which the taxes are levied. Taxes on property are due on the third Monday in August; however, they may be made in four installments payable on the third Monday in August, and the first Mondays in October, January and March. Any tax paid more than ten days late is assessed a penalty. In the event of nonpayment, a tax lien is taken on the first Monday in May, and the County Treasurer is authorized to hold the property for two additional years, subject to redemption upon payment of taxes, penalties and costs, together with the interest at the rate of 10% per year from the date the taxes were due until paid. If delinquent taxes are not paid within the two-year redemption period, the County Treasurer, upon approval of the Board of county Commissioners, obtains a deed to the property free of all encumbrances. Upon receipt of a deed, the County Treasurer may sell the property to sell the property to satisfy the tax lien. As such, real property taxes receivable reflect only those taxes receivable from the delinquent roll years, and current taxes collected within 60 days or year, and delinquent taxes from all rolls year prior to 2014-2016 have been written off. No provision for uncollectible accounts has been established, as management does not anticipate any material collection losses with respect to remaining balances.



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The State of Nevada limits the total taxes levied by all overlapping governmental units within the boundaries of Lander County to an amount not to exceed $3.64 per $100 of assessed valuation of the property being taxed, except in cases of severe financial emergency as defined by NRS 354.705. In 2005, the Nevada State Legislature passed additional legislation that provides for a partial abatement of the ad valorem taxes levied on qualified property. The abatement limits the increase of taxpayer’s bill to 3% over the previous year’s tax amount for a primary residence and some rental properties. All other property has a higher limit of 69%.

The Nevada Legislature enacted “tax shift” legislation designed to reduce the level of property taxes collected throughout the State. The District receives a share of sales tax allocated as local school support taxes. The amount of sales tax to be distributed to each governmental entity in Nevada is determined by a formula developed and approved by the State Legislature.

All property taxes are collected by Lander County and general fund property taxes are remitted to the District monthly.

Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance

Cash and Investments

For purposes of the statement of cash flows, the District considers all time deposits, certificates of deposit, and all highly liquid investments, generally with original maturities of three months or less to be cash equivalents.

Investments for the government are reported at fair value (generally based on quoted market prices) with unrealized gains/losses recorded as adjustments to investment earnings.

Receivables

Receivables, as stated in the balance sheet, are considered collectible. Accordingly, an allowance for uncollectible accounts is not deemed necessary.

Inventories and prepaid items

Expenditures for supplies held for future consumption and minor equipment purchases are charged against appropriations of all governmental funds at the time of purchase. Any inventories of such supplies at year end are not material to the individual funds and are not recognized in these financial statements.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.



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Capital Assets

Capital assets, which include property and equipment, are reported in the government-wide financial statements. Capital assets are defined by the District as assets with an individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation.

Capital assets are being depreciated using the straight-line method over the following estimated useful lives:

Buildings 60 years Building/Land/Site improvements 10-35 years Equipment 3-40 years Vehicles/Buses 10-30 years

In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures by the governmental fund upon acquisition.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The District has one item that qualifies for reporting in this category; the deferred pension related items (see Note 10). This amount is deferred and recognized as an outflow of resources in future periods.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has two items that qualify for reporting in this category; unavailable delinquent property taxes and the deferred pension related items (see Note 10). The unavailable delinquent property taxes are deferred in the governmental funds balance sheet and recognized as an inflow of resources in the period that the amounts become available.

Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan’s fiduciary net position of the Public Employees’ Retirement System of Nevada (PERS) and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by PERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.



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Net Position Flow Assumption

Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.

Fund Balance Flow Assumptions

Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.

Fund Balance Policies

Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance).

The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. The governing board is the highest level of decision-making authority for the government that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation.

Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The Superintendent is authorized to assign amounts to a specific purpose in accordance with the District’s budget policy pending Board approval. The board may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment.



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Revenues and Expenditures/Expenses

Program revenues

Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions (including special assessments) that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenues.

Compensated Absences

It is the District’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. The liability for these compensated absences is recorded as a long-term liability in the government-wide statements. A liability for these accounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

Proprietary funds operating and nonoperating revenues and expenses

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the internal service fund are charges for insurance premiums. Operating expenses for internal service funds include the cost of claims and administrative costs. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

Prior-Year Summarized Comparative Information

Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the government’s financial position and operations. However, comparative data has not been presented in all statements because their inclusion would make certain statements unduly complex and difficult to understand. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the District’s financial statements for the year ended June 30, 2016, from which the summarized information was derived.

Use of Estimates

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



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Reclassifications Prior Year Balances

Certain reclassifications have been made to the presentation of the prior fiscal year information to correspond to the current fiscal year’s format. Total net position/fund balances and change in net position/fund balances are unchanged due to these reclassifications.

NOTE 2. Reconciliation of Government-Wide and Fund Financial Statements

The governmental fund balance sheet includes a reconciliation between total governmental fund balances and net position of governmental activities as reported in the government-wide statement of net position. This difference primarily results from the long-term economic focus of the statement of net position versus the current financial resources focus of the governmental fund balance sheets. The details of these differences are reported in the reconciliation on page 15.

The governmental fund statement of revenues, expenditures, and changes in fund balance includes a reconciliation between net changes in fund balances-total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. These differences are the result of converting from the current resources measurement focus and modified accrual basis for governmental fund statements to the economic resources measurement focus and full accrual basis used for government-wide statements. The details of these differences are reported in the reconciliation on page 17.



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NOTE 3. Deposits and Investments

Deposits and investments of the District at June 30, 2017 consist of the following:

Carrying Amount-Fair

ValueDeposits:

Cash on hand 586$ Cash in bank 1,757,230 Cash with brokerage (fiduciary funds) 122,082

Investments:State Treasurer's Investment Pool 2,193 Wells Fargo Securities:

Money market mutual funds 286,044 Bonds (certificates of deposit) 4,410,389

Morgan Stanley (fiduciary funds):Government securities 74,967 Municipal bonds 47,063 Certificates of deposit 94,427

Equity securities (fiduciary funds) 62,552

Total cash and investments 6,857,533$

A reconciliation of cash and investments as shown on the statement of net position is as follows:

Cash and investments 6,152,455$ Fiduciary fund cash and investments 705,078

Total cash and investments 6,857,533$

Deposits

Custodial Credit Risk

For deposits this is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. The District does not have a deposit policy for custodial credit risk. As of June 30, 2017, none of the District’s bank balance was exposed to custodial credit risk because it was insured or collateralized with securities held by the pledging financial institution’s trust department or agent, but not in the District’s name.

Investments

State statutes authorize the District to invest in the State Treasurer’s investment pool, bonds and debentures of the United States, obligations of the Federal Land Banks, bills and notes of the U.S. Postal Service, obligations of the Federal National Mortgage Association, short-term bonds of local governments, and banker’s acceptances. The District has not adopted a formal investments policy that would further limit its investments choices nor further limit its exposure to certain risks as set forth below.



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NOTE 3. Deposits and Investments, Continued

As of June 30, 2017 the District had the following investments, maturities, and quality ratings:

Fair Weighted AverageInvestment Type Value S&P Moody's Maturity - Days (2)

Nevada Local GovernmentPooled Investment Fund 2,193$ N/A N/A 310

Wells Fargo Securities:Money market mutual funds 286,044 AAAm Aaa-mf 31Bonds-certificates of deposit (3) 4,410,389 N/A N/A 356

Morgan Stanley:Government securities 74,967 AA+ Aaa 179Municipal bonds 47,063 AA to AAA Aa2 to Aaa 3,242Certificates of deposit (3) 94,427 N/A N/A 404

Equity securities 62,552 N/A N/A N/A

Total Fair Value 4,977,634$

(1) Ratings are provided where applicable to indicate associated Credit Risk. N/A indicates not applicable.(2) Interest rate risk is estimated using the weighted average days to maturity.(3) FDIC insured.

Credit Rating (1)

Interest rate risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The District’s policy for managing its exposure to fair value loss arising from decreasing interest rates is to comply with the provision of the Nevada Revised Statutes (NRS).

Credit risk

For an investment, this is the risk that, in the event of a failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that were in the possession of an outside party. The District does not have a formal investment policy. Credit risk is reduced by investing in the Nevada Local Government Investment pool and other investments authorized by NRS.

Fair value measurements

As noted above, the District holds investments that are measured at fair value on a recurring basis. The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

The government securities, equity securities, and 10.22% of the Nevada Local Government Pooled Investment Fund, as listed above, are valued using quoted market prices (Level 1 inputs). The money market mutual funds, the bonds—certificates of deposit, municipal bonds, and 89.78% of the Nevada Local Government Pooled Investment Fund, as listed above, are valued using significant other observable inputs (Level 2 inputs).



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NOTE 4. Interfund Receivables, Payables, and Transfers

Interfund account balances due to/from consisted of the following at June 30, 2017:

Due From Due ToOther Funds Other Funds

General fund 116,203$ 82,556$Special education fund - 12,121Internal service fund 107,066 -Nonmajor funds - 128,592

Total 223,269$ 223,269$

Interfund balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.

Interfund transfers for the fiscal year ended June 30, 2017 are as follows:

Transfers TransfersIn Out

General fund -$ 1,622,226$Special education 250,000 -Capital project fund 720,035 -Nonmajor funds 652,191 -

Total 1,622,226$ 1,622,226$

Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and (2) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.



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NOTE 5. Capital Assets

Capital asset activity for the year ended June 30, 2017 was as follows:

Governmental Activities: Balance Balance06/30/16 Additions Deletions 06/30/17

Capital assets, not being depreciated:Land 175,737$ -$ -$ 175,737$ Construction in progress 259,350 88,149 (299,541) 47,958

Total capital assets, not being depreciated: 435,087 88,149 (299,541) 223,695

Capital assets, being depreciated:Buildings and improvements 44,843,973 635,753 (286,769) 45,192,957 Improvements other than buildings 1,031,050 - (44,474) 986,576 Equipment and vehicles 3,732,225 84,017 (286,511) 3,529,731

Total capital assets, being depreciated: 49,607,248 719,770 (617,754) 49,709,264

Less accumulated depreciation for:Buildings and improvements (7,413,934) (807,205) 175,652 (8,045,487)Improvements other than buildings (444,283) (39,454) 19,554 (464,183)Equipment and vehicles (1,745,960) (189,404) 261,132 (1,674,232)

Total accumulated depreciation (9,604,177) (1,036,063) 456,338 (10,183,902) Total capital assets, being depreciated, net 40,003,071 (316,293) (161,416) 39,525,362Governmental activities capital assets, net 40,438,158$ (228,144)$ (460,957)$ 39,749,057$

Depreciation expense was charged to functions/programs of the primary government as follows:

Regular programs 8,965$Vocational programs 8,249Co-curricular and extra-curricular programs 2,482Support Services:

Student support 813Instructional staff support 27,308General administration 1,676Operations and maintenance 18,235Student transportation 87,630

Operation of non-instructional services:Food service operations 2,752

Facilities and sites improvements:Land improvement 22,487Building acquisition and construction 513,787Building improvements 341,679

1,036,063$

Function and Activity



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NOTE 6. Long-Term Liabilities

Long-term liabilities at June 30, 2017 consisted of the following:

Balance Balance CurrentGovernmental Activities: 06/30/16 Additions Retirements 06/30/17 Portion

Bonds payable 1,823,000$ -$ (182,000)$ 1,641,000$ 186,000$ Net pension liability 12,085,966 2,384,219 - 14,470,185 -

Accrued compensated absences 265,019 228,388 (222,358) 271,049 210,000 Net OPEB obligation 1,902,128 317,801 (212,403) 2,007,526 -

Total long-term liabilities $ 16,076,113 $ 2,930,408 $ (616,761) $ 18,389,760 $ 396,000

The aggregate maturities of notes and bonds payable are as follows:

Period EndingJune 30, Principal Interest

2018 186,000$ 41,331$ 2019 192,000 36,285 2020 197,000 31,092 2021 202,000 25,765 2022 207,000 20,305

2023-2025 657,000 26,633 1,641,000$ 181,411$

The following is a listing of long-term liabilities as of June 30, 2017:

Bonds Payable:Governmental Activities:

General Obligation (Limited Tax) Medium-Term, Series 2015, with semi-annual interest payments ranging between $12,000 and $52,000, and annual principal payments ranging between $177,000 and $225,000,bearing interest at 2.67%, maturing December 2024. 1,641,000$

Total bonds payable 1,641,000

Accrued Compensated Absences 271,049

Net Pension Liability 14,470,185 Net OPEB Obligation 2,007,526

Total long-term liabilities 18,389,760 Less current portion: (396,000) Net long-term liabilities 17,993,760$



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NOTE 7. Nevada Plan for Local Education Agency Financing

The Nevada Plan is the means used to finance elementary and secondary education in Nevada’s public schools. The State develops a guaranteed amount of funding for the District. Funding consists of state support received through the distributive school account and locally collected revenues through a 2.25 cent local school support tax and 25 cents of the ad valorem tax.

The District receives funding based on the number of students enrolled on the last day of the first school month. The funding rate is determined by a formula that considers the demographic characteristics of the District. In addition, transportation costs are included using approximately 85% of the actual historical costs adjusted for inflation according to the Consumer Price Index. A wealth adjustment based on the District’s ability to generate revenues in addition to the guaranteed funding is also included in the formula.

Special education is funded on a unit basis, with the amount per unit established by the legislature. A unit includes the full-time services of licensed personnel providing a program of instruction in accordance with minimum standards prescribed by the State Board of Education. To protect the District from decreases in enrollment by 5% or more, the Nevada Revised Statutes contain a Hold Harmless Provision. If the District’s enrollment decreases, the guaranteed level of funding is based on the highest enrollment figures from the prior two years. If the decrease in enrollment is less than 5%, funding is based on the prior year enrollment figures.

NOTE 8. Risk Management

The District 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. These risks, except for injuries to employees, are covered by commercial insurance purchased from independent third parties.

The District joined together with similar public agencies (cities, counties, school and special districts) throughout the State of Nevada to create a pool under the Nevada Interlocal Cooperation Act. The Nevada Public Agency Insurance Pool (POOL) is a public entity risk pool currently operating as a common risk management and insurance program for its members.

The District pays an annual premium and specific deductibles, as necessary to POOL for its general insurance coverage. POOL is considered a self-sustaining risk pool that will provide liability coverage of its members up to $10,000,000 per event and a $10,000,000 general aggregate per member. Property, crime and equipment breakdown coverage is provided to its members up to $300,000,000 per loss with various sublimits established for earthquake, flood, equipment breakdown, and money and securities. Cyber security coverage is provided to its members up to $2,000,000 per event with a $2,000,000 annual aggregate per member with a sublimit for privacy response expense of $500,000.

The District has also joined together with similar public agencies, under the Nevada Interlocal Cooperation Act, to create an intergovernmental self-insured association for workers compensation insurance, the Public Agency Compensation Trust (PACT). The District pays premiums based on payroll costs to PACT. PACT is considered a self-sustaining pool that will provide coverage based on established statutory limits.



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NOTE 8. Risk Management, Continued

The District continues to carry commercial insurance for other risks of loss, including specific risks of loss not covered by POOL. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years.

The Health and Accident Insurance Fund is accounted for as an internal service fund where assets are set aside for health claim settlements. The District maintains stop loss insurance coverage from an outside insurance carrier for any claims in excess of $75,000 per occurrence with a limit of liability for the coverage period of $1,000,000.

Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNR). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts, and other economic and social factors.

Changes in the balances of the claims liabilities during the past two fiscal years are as follows:

Incurred Claims

Unpaid Claims (Including) Claim Unpaid ClaimsBeginning (IBNRs) Payments Ending

Self-insurance health2016-2017 133,933$ 1,043,515$ 1,073,159$ 104,289$ 2015-2016 226,719 980,614 1,073,400 133,933

NOTE 9. Stabilization Fund

NRS 354.6115 states that the governing body of a local government may, by resolution, establish a fund to stabilize the operation of the local government and mitigate the effects of natural disasters. In accordance with GASBS 54, Fund Balance Reporting and Governmental Fund Type Definitions, the District’s stabilization fund is included in the General Fund and it is included as committed fund balance. The NRS also states that the money in this fund may be used only if the total actual revenue of the local government falls short of the total anticipated revenue in the general fund for the fiscal year in which the local government uses that money; or to pay expenses incurred by the local government to mitigate the effects of a natural disaster.

In addition, NRS 354.6115 states that the balance in the stabilization amount must not exceed 10 percent of the expenditures from the general fund for the previous fiscal year, excluding any federal funds expended by the local government.

During the fiscal year ended June 30, 2017, the District complied with the provisions of this section.



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NOTE 10. Retirement and Pension Plans

Public Employees’ Retirement System of Nevada (PERS)

Plan description

PERS administers a cost-sharing, multiple-employer, defined benefit public employees’ retirement system which includes Regular members. The System was established by the Nevada Legislature in 1947, effective July 1, 1948. The System is administered to provide a reasonable base income to qualified employees who have been employed by a public employer and whose earnings capacities have been removed or substantially impaired by age or disability.

Benefits provided

Benefits, as required by the Nevada Revised Statutes (NRS or statute), are determined by the number of years of accredited service at time of retirement and the member’s highest average compensation in any 36 consecutive months with special provisions for members entering the System on or after January 1, 2010, and July 1, 2015. Benefit payments to which participants or their beneficiaries may be entitled under the plan include pension benefits, disability benefits, and survivor benefits.

Monthly benefit allowances for members are computed as 2.5% of average compensation for each accredited year of service prior to July 1, 2001. For service earned on and after July 1, 2001, this multiplier is 2.67% of average compensation. For members entering the System on or after January 1, 2010, there is a 2.5% service time factor and for regular members entering the System on or after July 1, 2015, there is a 2.25% factor. The System offers several alternatives to the unmodified service retirement allowance which, in general, allow the retired employee to accept a reduced service retirement allowance payable monthly during his or her lifetime and various optional monthly payments to a named beneficiary after his or her death.

Post-retirement increases are provided by authority of NRS 286.575 - .579.

Vesting

Regular members entering the system prior to January 1, 2010, are eligible for retirement at age 65 with five years of service, at age 60 with 10 years of service, or at any age with thirty years of service. Regular members entering the System on or after January 1, 2010, are eligible for retirement at age 65 with five years of service, or age 62 with 10 years of service, or any age with thirty years of service. Regular members who entered the system on or after July 1, 2015, are eligible for retirement at age 65 with 5 years of service, or at age 62 with 10 years of service or at age 55 with 30 years of service or any age with 33 1/3 years of service.

The normal ceiling limitation on monthly benefits allowances is 75% of average compensation. However, a member who has an effective date of membership before July 1, 1985, is entitled to a benefit of up to 90% of average compensation. Regular members become fully vested as to benefits upon completion of five years of service.



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NOTE 10. Retirement and Pension Plans, Continued

Contributions

The authority for establishing and amending the obligation to make contributions and member contribution rates is set by stature. New hires, in agencies which did not elect the Employer-Pay Contribution (EPC) plan prior to July 1, 1983, have the option of selecting one of two contribution plans. Contributions are shared equally by employer and employee. Employees can take a reduced salary and have contributions made by the employer (EPC) or can make contributions by a payroll deduction matched by the employer.

The System’s basic funding policy provides for periodic contributions at a level pattern of cost as a percentage of salary throughout an employee’s working lifetime in order to accumulate sufficient assets to pay benefits when due.

The System receives an actuarial valuation on an annual basis indicating the contribution rates required to fund the System on an actuarial reserve basis. Contributions actually made are in accordance with the required rates established by the Nevada Legislature. These statutory rates are increased/decreased pursuant to NRS 286.421 and 286.450.

The actuary funding method used is the Entry Age Normal Cost Method. It is intended to meet the funding objective and result in a relatively level long-term contributions requirement as a percentage of salary.

For the fiscal years ended June 30, 2016 and June 30, 2017 the Statutory Employer/employee matching rate was 14.50% and 14.50%, respectively, for Regular members. The Employer-pay contribution (EPC) rate was 28.00% and 28.00%, respectively, for Regular members.

The District's contributions for the current and two preceding fiscal years, all of which were equal to the required contributions, were as follows:

Year Ended RegularJune 30, Fund

2015 1,627,937$2016 1,823,3582017 1,755,933

Investment policy

The System’s policies which determine the investment portfolio target asset allocation are established by the Board. The asset allocation is reviewed annually and is designed to meet the future risk and return needs of the System.



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The following was the Board adopted policy target asset allocation as of June 30, 2016:

Asset Class Target Allocation

Long-term Geometric Expected Real Rate of Return*

Domestic equity 42% 5.50%International equity 18% 5.75%Domestic fixed income 30% 0.25%Private markets 10% 6.80%

*As of June 30, 2016, PERS’ long-term inflation assumption was 3.50%.

Pension liability

Net pension liability

At June 30, 2017, the District reported a liability of $14,470,185 for its proportionate share of the PERS' net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The employer allocation percentage of the net pension liability was based on the total contributions due on wages paid during the measurement period. Each employer’s proportion of the net pension liability is based on their combined employer and member contributions relative to the total combined employer and member contributions for all employers for the period ended June 30, 2016.The District's proportion measured as of June 30, 2016, was 0.107530 percent, which was an increase of 0.002060 percent from its proportion measured as of June 30, 2015.

Pension liability discount rate sensitivity

The following presents the net pension liability of the PERS as of June 30, 2016, calculated using the discount rate of 8.00%, as well as what the PERS net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (7.00%) or 1-percentage-point higher (9.00%) than the current discount rate:

1% Decrease Discount Rate 1% Increase(7.00%) (8.00%) (9.00%)

Proportionate share of Net pension (asset) / liability 21,210,464$ 14,470,185$ 8,862,356$

Pension plan fiduciary net position

Detailed information about the pension plan’s fiduciary net position is available in the PERS Comprehensive Annual Financial Report, available on the PERS website.



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Actuarial assumptions

The District’s net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation rate 3.50% Payroll growth 5.00%, including inflation Investment rate of return 8.00% Productivity pay increase 0.75% Projected salary increases Regular: 4.60% to 9.75%, depending on service

Rates include inflation and productivity increases Consumer Price Index 3.50% Other assumptions Same as those used in the June 30, 2016 funding

actuarial valuation

Actuarial assumptions used in the June 30, 2016 valuation were based on the results of the experience review completed in 2013.

The discount rate used to measure the total pension liability was 8.00% as of June 30, 2016 and June 30, 2015. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, the pension plan’s fiduciary net position at June 30, 2016, was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability as of June 30, 2016 and June 30, 2015.



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Pension expense and deferred outflows/inflows of resources related to pensions

For the year ended June 30, 2017, the District recognized pension expense for PERS of $1,916,574. At June 30, 2017, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience -$ 968,961$

1,345,183 -Subtotal 1,345,183 968,961

483,992 208,751

Contributions subsequent to the measurement date 1,755,933 -Total 3,585,108$ 1,177,712$

Average expectd remaining service lives 6.48 years

Net difference between projected and actual earnings on pension plan investments

Changes in proportion and differences between contributions and proportional share of contributions

The $1,755,933 reported as deferred outflows of resources related to PERS pensions resulting from district contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the subsequent fiscal year. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to PERS pensions, excluding the changes in proportion and differences between actual contributions and proportionate share of contributions, will be recognized in pension expense as follows:

Year Ending June 30,

Deferred Outflows

(Inflows) of Resources

2018 (111,510)$2019 (111,510)2020 476,9472021 230,6912022 (88,817)2023 (19,579)

Thereafter -



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NOTE 11. Post Employment Healthcare Plan

Plan Description

The District administers a single-employer defined benefit healthcare plan, Lander County School District Employee Health Benefits Plan (LCSDEHBP). Additionally, the District contributes to an agent multiple-employer defined benefit postemployment healthcare plan, Public Employees’ Benefits Plan (PEBP). Each plan provides medical and life insurance benefits to eligible retired District employees and beneficiaries. In addition, PEBP provides dental and vision benefits.

Benefit provisions for LCSDEHBP are established pursuant to NRS 287.023 and amended through negotiations between the District and the respective associations. NRS 288.150 assigns the authority to establish benefit provisions to Board of Trustees. The plan provides healthcare coverage for eligible retirees and their beneficiaries through the District’s group health plan, which covers both active and retired members. Under NRS 287.023, eligible retirees are able to participate in the plan with blended rates, thereby befitting from an implicit subsidy. Retirees are required to pay 100% of their premiums under the plan. As of June 30, 2017, 13 retirees were using this plan. LCSDEHBP does not issue a publicly available financial report.

Benefit provision for the PEBP are administered by the State of Nevada. NRS 287.043 assigns the authority to establish and amend benefit provisions to the PEBP nine-member board of trustees. District employees who met the eligibility requirements effective September 1, 2008 for retirement within the Nevada Public Employee Retirement System had the option upon retirement to enroll in coverage under the PEBP. NRS 287.023 discontinued the option to join PEBP for District employees who retired after November 29, 2008. Local governments are required to pay the same portion of the cost of coverage for their retirees joining PEBP that the State of Nevada pays for the state retirees participating in their plan. As of June 30, 2017, 73 school district retirees were utilizing this benefit.

The PEBP issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Public Employee’s Benefits Program, 901 S. Stewart Street, Suite 1001, Carson City, NV, 89701, by calling (775) 684-7000, or by accessing the website at www.pebp.state.nv.us/informed/financial.htm

Funding Policy

For LCSDEHBP, contribution requirements of the plan members and District are established and may be amended through negotiations between the District and the associations. Retirees pay 100% of the pay-as-you-go premiums based on a blended rate that blends active participants and retirees. The District’s contribution requirements for retirees relate to the implicit subsidy that results from using the blended rates and is determined in actuarial studies contracted for by the District. The implicit subsidy as determined by the actuary is $49,123. The District did not prefund any future benefits.



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NOTE 11. Post Employment Healthcare Plan, Continued

For PEBP, NRS 287.046 established the subsidies to be contributed by the District toward the premium costs of the eligible retired District employees. The contribution requirements of plan members and the District may be amended by the PEBP board. Premium rates determined by PEBP are the same for all participating members. Plan members receiving benefits have their monthly contribution deducted from their pension checks based on the health plan chosen by the retiree, as reduced by the amount of the subsidy; therefore their contributions are not available. For the plan year ended June 30, 2017, retirees qualified for a subsidy of $55 at five years of service and $220 at twenty years of service, with incremental increases for each year of service in between. As a participating employer, the District is billed for the subsidy on a monthly basis and is legally required to provide for it. For fiscal year 2017, the District actually contributed $173,671 to the plan, equal to the required contributions. The District did not prefund future benefits.

Annual OPEB Cost and Net OPEB Obligation

The District’s annual other postemployment benefit (OPEB) cost (expense) for the plans is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded liabilities (or funding excess) over a period not to exceed thirty years.

The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plans, and the net OPEB obligation, by plan for fiscal years 2015 through 2017 are as follows:

PlanFiscal Year

Ended

Annual OPEB Cost (EANC Cost

Method)Employer

Contributions

% of Annual OPEB Cost Contributed

Net OPEB Obligation

LCSDEHBP 06/30/17 177,012$ 49,123$ 28% 1,784,931$LCSDEHBP 06/30/16 167,908 43,480 26% 1,657,042LCSDEHBP 06/30/15 159,257 42,222 27% 1,532,614

PEBP 06/30/17 140,789 163,280 116% 222,595PEBP 06/30/16 141,716 166,827 118% 245,086PEBP 06/30/15 143,723 174,062 121% 270,197

Combined 06/30/17 317,801 212,403 67% 2,007,526Combined 06/30/16 309,624 210,307 68% 1,902,128Combined 06/30/15 302,980 216,284 71% 1,802,811



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The net OPEB obligation (NOPEBO) is calculated as follows as of June 30, 2017:

LCSDEHBP PEBP CombinedAnnual required contribution 176,582$ 147,946$ 324,528$Interest on net OPEB obligation 66,282 9,803 76,085 Adjustments to annual required contributions (65,852) (16,960) (82,812)

Annual OPEB cost (expense) 177,012 140,789 317,801 Contributions made, projected (49,123) (163,280) (212,403)

Increase (decrease) in net OPEB obligation 127,889 (22,491) 105,398

Net OPEB obligation - beginning of year 1,657,042 245,086 1,902,128 Net OPEB obligation - end of year 1,784,931$ 222,595$ 2,007,526$

The NOPEBO is liquidated by the funds with salaries and related benefits resulting in the majority of the obligation being liquidated by the General Fund.

Funded Status and Funding Progress

The funded status of the plans as of the most recent actuarial valuation (9/1/14) is as follows:

LCSDEHBP PEBP CombinedAccrued actuarial liability (a) 1,527,459$ 2,294,691$ 3,822,150$Acturial value of plan assets (b) - - -

Unfunded Actuarial Accrued Liability (a)-(b) 1,527,459$ 2,294,691$ 3,822,150$

Funded ratio (b) / (a) 0% 0% -

Covered payroll ( c) 6,301,186$ N/A

Unfunded Actuarial Accrued Liability as Percentage of Covered Payroll ([(a)-(b)] / (c))) 24.24% N/A

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.



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Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

Significant methods and assumptions used in the September 1, 2014 actuarial valuation are as follows:

LCSDEHBP PEBPActuarial valuation date 9/1/2014 9/1/2014

Actuarial cost method Entry age

normal cost Entry age

normal cost

Amortization method Level % of

payroll Level Dollar Amortization period 30 years open 24 years closed Asset valuation method Market Value Market ValueActuarial Assumptions:

Investment rate of return 4.00% 4.00%Projected salary increase 4.00%Healthcare inflation rate* 8.00% 8.00%

*Decreasing .5% each year until ultimate trend rate of 5% is reached

NOTE 12. Related Party Transactions

Insurance was purchased through an agent of which a relative of a board member of the District is employed. The agent was paid $155,492 (including premiums and agent fees) for the NV Public Agency Insurance renewal for fiscal year 2017.

A concrete company, which is in part owned by a board member of the District, is a subcontractor (hired by the contractor) on the building construction projects. The concrete company was paid $504 for fiscal year 2017.



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NOTE 13. Commitments and Contingencies

Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability in the applicable funds. The amounts, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time although the District expects such amounts, if any, to be immaterial.


50



51

REQUIRED SUPPLEMENTARY INFORMATION


LANDER COUNTY SCHOOL DISTRICT GENERAL FUND

Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual

For the Year Ended June 30, 2017 (With Comparative Totals for the Year Ended June 30, 2016)

52

VarianceActual Favorable Actual

Original Final Amounts (Unfavorable) 2016Revenues

Local sourcesAd valorem taxes 4,345,808$ 4,345,808$ 5,879,281$ 1,533,473$ 9,648,921$ Governmental services tax 495,787 495,787 509,978 14,191 496,269 School support tax 1,303,736 1,303,736 1,375,798 72,062 1,664,472 Tuition, regular day school 15,000 15,000 20,000 5,000 16,000 Department of Wildlife 2,300 2,300 2,515 215 2,435 Other local revenue 8,850 111,863 105,926 (5,937) 39,705

Total from local sources 6,171,481 6,274,494 7,893,498 1,619,004 11,867,802

Federal sourcesImpact aid 150,000 40,000 112,267 72,267 38,027 National forest 60,000 45,000 - (45,000) 45,254 E-rate funds 19,000 33,238 17,270 (15,968) 19,056

Total from federal sources 229,000 118,238 129,537 11,299 102,337

State sourcesDistributive school fund 94,652 - 219,938 219,938 -

Total from state sources 94,652 - 219,938 219,938 -

Total revenues 6,495,133 6,392,732 8,242,973 1,850,241 11,970,139

ExpendituresRegular programs

InstructionSalaries and wages 3,070,967 3,043,001 2,965,534 77,467 3,348,229Employee benefits 1,380,102 1,371,276 1,318,538 52,738 1,476,266Purchased services 33,378 58,954 45,820 13,134 38,181Supplies 241,611 245,697 182,121 63,576 244,928Property 3,500 1 0 1 4,074Other 15,808 14,113 6,177 7,936 6,017

Total instruction 4,745,366 4,733,042 4,518,190 214,852 5,117,695

Instructional staff supportPurchased services 2,000 2,000 1,066 934 731

Total instructional staff support 2,000 2,000 1,066 934 731

Total regular programs 4,747,366 4,735,042 4,519,256 215,786 5,118,426

Vocational programsInstruction

Salaries and wages 116,197 116,307 114,908 1,399 168,189Employee benefits 51,874 51,878 51,359 519 72,423Purchased services 3,300 9,772 4,770 5,002 3,653Supplies 11,020 6,951 6,932 19 3,270Property - 40,000 30,000 10,000 - Other 350 704 704 - 2,654

Total vocational programs 182,741 225,612 208,673 16,939 250,189

Other instructional programsInstruction

Salaries and wages 50,000 50,000 47,699 2,301 46,340Employee benefits 4,964 4,649 2,882 1,767 3,411Supplies 7,893 8,208 8,046 162 5,431

Total other instructional programs 62,857 62,857 58,627 4,230 55,182 (continued)

Budgeted Amounts





53


Expenditures (Continued): Original Final Amounts (Unfavorable) 2016

Co-curricular and extra-curricular programsCo-curricular activitiesInstruction

Salaries and wages 45,200$ 42,069$ 33,820$ 8,249$ 36,077$ Employee benefits 2,257 2,270 1,290 980 1,358Purchased services 700 700 65 635 1,488

Total instruction 48,157 45,039 35,175 9,864 38,923

Student transportationEmployee benefits 1,806 1,806 498 1,308 412Purchased services 6,800 7,312 5,116 2,196 2,514

Total student transportation 8,606 9,118 5,614 3,504 2,926

Total co-curricular activities 56,763 54,157 40,789 13,368 41,849

Extra-curricular activitiesInstruction

Salaries and wages 112,925 112,925 95,334 17,591 101,568Employee benefits 7,408 7,408 4,582 2,826 4,992Purchased services 46,901 44,927 37,478 7,449 27,831Supplies 31,715 38,342 33,242 5,100 30,737Property - - - - 44,214Other 2,250 2,250 180 2,070 800


Student transportationSalaries and wages 29,770 29,770 21,367 8,403 21,210Employee benefits 9,611 4,581 2,216 2,365 3,504Purchased services 2,950 4,370 4,084 286 5,093Supplies 40,000 40,000 22,911 17,089 20,842


Total extra-curricular activities 283,530 284,573 221,394 63,179 260,791

Total co-curricular and extra-curricular 340,293 338,730 262,183 76,547 302,640

Support services - student supportSalaries and wages 236,354 242,429 238,593 3,836 228,194Employee benefits 111,262 111,336 109,825 1,511 107,935Purchased services 1,000 518 150 368 1,185Supplies 9,806 10,284 7,712 2,572 7,278Other 135 135 - 135 135

Total student support 358,557 364,702 356,280 8,422 344,727

Support services - instructional staff supportSalaries and wages 165,563 170,115 168,700 1,415 164,975Employee benefits 270,028 269,240 252,235 17,005 261,351Purchased services 170,474 197,850 139,745 58,105 163,571Supplies 468,507 466,052 129,957 336,095 189,544

Total instructional staff support 1,074,572 1,103,257 690,637 412,620 779,441 (continued)

Budgeted Amounts





54


Expenditures (Continued): Original Final Amounts (Unfavorable) 2016

Support services - general administrationSalaries and wages 270,958$ 286,386$ 285,127$ 1,259$ 270,564$ Employee benefits 247,972 399,285 290,525 108,760 381,934Purchased services 339,650 325,750 169,674 156,076 174,656Supplies 183,460 179,454 51,702 127,752 44,771Other 156,725 171,725 19,418 152,307 169,549

Total general administration 1,198,765 1,362,600 816,446 546,154 1,041,474

Support services - school administrationSalaries and wages 630,990 638,433 625,158 13,275 631,783Employee benefits 288,457 288,357 277,822 10,535 279,427Purchased services 29,650 33,743 21,194 12,549 28,440Supplies 14,123 13,673 8,645 5,028 20,939Other 4,717 5,717 5,240 477 5,599

Total school administration 967,937 979,923 938,059 41,864 966,188

Support services - central servicesSalaries and wages 223,749 236,349 236,344 5 209,236Employee benefits 104,178 109,462 108,025 1,437 101,132Purchased services 1,000 1,000 402 598 1,070Other 150 150 - 150 148

Total central services 329,077 346,961 344,771 2,190 311,586

Support services - operation and maintenanceSalaries and wages 535,407 506,811 447,799 59,012 512,036Employee benefits 250,224 232,631 216,240 16,391 225,181Purchased services 399,820 490,413 432,174 58,239 414,164Supplies 1,143,108 1,150,823 368,456 782,367 401,985Other 1,550 1,700 600 1,100 5,611

Total operation and maintenance 2,330,109 2,382,378 1,465,269 917,109 1,558,977

Support services - student transportationSalaries and wages 178,396 178,396 158,014 20,382 153,407Employee benefits 74,000 74,005 54,433 19,572 55,653Purchased services 83,150 81,400 73,309 8,091 70,875Supplies 58,900 66,210 49,620 16,590 39,462Other 500 500 81 419 531


Support services - other central servicesEmployee benefits 37,380 34,655 - 34,655 20,007

Total other central services 37,380 34,655 - 34,655 20,007

Support services - otherSupplies - 818 818 - -

Total other support - 818 818 - -

Total support services expenditures 6,691,343 6,975,805 4,947,737 2,028,068 5,342,328

Total expenditures 12,024,600 12,338,046 9,996,476 2,341,570 11,068,765

Excess of revenues over/(under) expenditures (5,529,467) (5,945,314) (1,753,503) 4,191,811 901,374 (continued)

Budgeted Amounts





55


Original Final Amounts (Unfavorable) 2016

Other sources (uses)Transfers out (1,042,020) (2,135,195) (1,622,226) 512,969 (1,680,503) Sale of capital assets 1,000 7,500 7,600 100 -

Total other financing sources (uses): (1,041,020) (2,127,695) (1,614,626) 513,069 (1,680,503)

Net change in fund balance (6,570,487) (8,073,009) (3,368,129) 4,704,880 (779,129)

Fund balance, beginning of year 8,211,892 8,211,892 8,211,892 - 8,991,021 Fund balance, end of year 1,641,405$ 138,883$ 4,843,763$ 4,704,880$ 8,211,892$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT SPECIAL EDUCATION



56

VarianceFavorable Actual

Original Final Actual (Unfavorable) 2016Revenues

State sourcesDistributive school fund 555,373$ 555,373$ 555,373$ -$ 545,456$

ExpendituresSpecial programs

InstructionSalaries and wages 573,753 644,027 514,255 129,772 533,096 Employee benefits 256,643 302,033 256,803 45,230 242,601 Purchased services 800 3,800 (181) 3,981 (98) Supplies 2,360 8,260 7,409 851 1,140 Other 100 100 - 100 -

Total special programs 833,656 958,220 778,286 179,934 776,739 Student support

Salaries and wages 108,274 132,326 132,325 1 112,455 Employee benefits 47,866 48,246 46,977 1,269 46,089


Instructional staff supportSalaries and wages 25,434 25,854 25,854 - 25,098 Employee benefits 15,821 15,836 15,836 - 15,698

Total instructional staff support 41,255 41,690 41,690 - 40,796

Other instructionalSupplies - 2,500 - 2,500 -

Total other instructional - 2,500 - 2,500 -

Other supportPurchased services - 37,004 - 37,004 - Supplies - 5,000 1,419 3,581 -

Total other support - 42,004 1,419 40,585 -

Total expenditures 1,031,051 1,224,986 1,000,697 224,289 976,079

Excess of revenuesover (under) expenditures (475,678) (669,613) (445,324) 224,289 (430,623)

Other financing sources (uses)Transfers in 453,143 453,143 250,000 (203,143) 562,354

Net change in fund balance (22,535) (216,470) (195,324) 21,146 131,731

Fund balance, beginning of year 217,470 217,470 217,470 - 85,739

Fund balance, end of year 194,935$ 1,000$ 22,146$ 21,146$ 217,470$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT Schedule of the Proportionate Share of the Net Pension Liability

Public Employees’ Retirement System of Nevada June 30, 2017

Last 10 Fiscal Years

57

2017 2016 2015(2016) (2015) (2014)

Proportion of the net pension liability (asset) 0.10753% 0.10547% 0.10776%

Proportionate share of the net pension liability (asset) 14,470,185$ 12,085,966$ 11,230,684$

Covered payroll 6,511,993$ 6,322,085$ 6,341,258$

Proportionate share of the net pension liability (asset) as a percentage of its covered payroll 222.21% 191.17% 177.10%

Plan fiduciary net position as a percentage of the total pension liability 72.2% 75.1% 76.3%

Reporting Fiscal Year(Measurement Date)

Note: The District implemented GASB 68 in fiscal year 2015. Some prior year information is not available.


LANDER COUNTY SCHOOL DISTRICT Schedule of Contributions

Public Employees’ Retirement System of Nevada June 30, 2017

Last 10 Fiscal Years

58

2017 2016 2015(2016) (2015) (2014)

Contractually required contribution 1,823,358$ 1,627,937$ 1,632,874$

Contributions in relation to the contractually required contribution (1,823,358)$ (1,627,937)$ (1,632,874)$

Contribution deficiency (excess) -$ -$ -$

Covered payroll 6,511,993$ 6,322,085$ 6,341,258$

Contributions as a percentage of covered payroll28.00% 25.75% 25.75%

Reporting Fiscal Year(Measurement Date)

Note: The District implemented GASB 68 in fiscal year 2015. Some prior year information is not available.


LANDER COUNTY SCHOOL DISTRICT Schedule of Funding Progress

Other Postemployment Benefit Plans June 30, 2017

59

ActuarialActuarial Accrued Unfunded UAAL as a

Actuarial Value of Liability (AAL) AAL Funded Covered Percentage ofValuation Assets EANC (UAAL) Ratio Payroll Covered Payroll

Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)

LCSDEHBP 9/1/2014 -$ 1,527,459$ 1,527,459 0.0% 6,301,186$ 24.2%9/1/2012 - 1,804,636 1,804,636 0.0% 6,191,291 29.1%9/1/2010 - 3,815,185 3,815,185 0.0% 5,729,994 66.6%

PEBP 9/1/2014 - 2,294,691 2,294,691 0.0% n/a n/a9/1/2012 - 2,970,374 2,970,374 0.0% n/a n/a9/1/2010 - 5,564,574 5,564,574 0.0% n/a n/a


LANDER COUNTY SCHOOL DISTRICT Notes to Required Supplementary Information

June 30, 2017

60

NOTE 1. Schedule of Funding Progress – Other Postemployment Benefit Plans

The decline in Actuarially Accrued Liability (AAL) for both the LCSDEHBP and PEBP plans from the 2012 valuation to the 2014 valuation is primarily the result of the following:

1) LCSDEHP: updates to employee and premium data; updates to the assumed rates of retirement, termination and mortality to be consistent with those used in the most recent retirement plan valuation covering district employees; a change in the methodology and assumptions we used for developing age related retiree medical claim costs.

2) PEBP: updates in members covered and in the amount of their monthly subsidy from the District; a decrease in the trend assumption for future increases in subsidies after eligibility for Medicare.

The decline in Actuarially Accrued Liability (AAL) for both the LCSDEHBP and PEBP plans from the 2010 valuation to the 2012 valuation is primarily the result of the following:

1) LCSDEHP: updates to employee and premium data; decline in the percentage of employees assumed to elect medical and life insurance coverage in retirement based on observed experience; increase in the percentage of future plan retirees assumed to elect spousal coverage, changes in mortality rates (longer life expectancies).

2) PEBP: decrease in required District subsidy for retirees, updates in number of retirees receiving a subsidy, update to mortality assumption.


61

SUPPLEMENTARY INFORMATION


LANDER COUNTY SCHOOL DISTRICT FACILITIES AND SITE IMPROVEMENTS



62



Local sourcesInvestment earnings -$ 45,700$ 35,495$ (10,205)$ 56,021$Miscellaneous - - - - 60,635

Total revenues - 45,700 35,495 (10,205) 116,656

ExpendituresFacilities acquisition and construction services

Land improvementsPurchased services - - - - 3,568

Total land improvements - - - - 3,568

Architecture, engineering and otherPurchased services - 144,000 37,500 106,500 3,829,959

Total architecture, engineering and other - 144,000 37,500 106,500 3,829,959

Capital construction costPurchased services - - - - 101,141Supplies - 50,035 - 50,035 -

Total capital construction cost - 50,035 - 50,035 101,141

Site improvementsPurchased services - 144,000 - 144,000 - Supplies - 50,000 - 50,000 70 Other - 2,035 - 2,035 -

Total site improvements - 196,035 - 196,035 70

Building improvementsPurchased services - 532,000 342,015 189,985 1,142,663Supplies - 276,651 3,847 272,804 79,651

Total building improvements - 808,651 345,862 462,789 1,222,314

Total expenditures - 1,198,721 383,362 815,359 5,157,052

Excess of revenuesover (under) expenditures - (1,153,021) (347,867) 805,154 (5,040,396)

Other financing sources (uses)Transfers in - 720,035 720,035 - 750,000

Total other financing sources and uses - 720,035 720,035 - 750,000

Net change in fund balance - (432,986) 372,168 805,154 (4,290,396)

Fund balance, beginning of year 532,986 532,986 532,986 - 4,823,382

Fund balance, end of year 532,986$ 100,000$ 905,154$ 805,154$ 532,986$

Budgeted Amounts


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Cap

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LANDER COUNTY SCHOOL DISTRICT LOCAL FUNDS

Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual


65



Local sourcesGrants -$ -$ -$ -$ 13,388$ Donations 50,000 52,000 54,000 2,000 51,500

Total revenues 50,000 52,000 54,000 2,000 64,888


InstructionSalaries and wages 2,500 2,500 2,400 100 2,500 Employee benefits 93 93 74 19 81 Purchased services - - - - 4,500

Total regular programs 2,593 2,593 2,474 119 7,081

Vocational programsFacilities acquisition and construction

Purchased services - 1,800 - 1,800 - Supplies - 178,164 5,240 172,924 4,314

Total vocational programs - 179,964 5,240 174,724 4,314

Support services Support services - instructional staff support

Salaries and wages - - - - 5,860 Purchased services - 8,575 - 8,575 137 Supplies - 35,156 1,739 33,417 2,790 Other - - - - 100

Total instructional staff support - 43,731 1,739 41,992 8,887

Support services - general administrationPurchased services 5,000 - - - - Supplies 15,453 1,500 1,500 - 238 Other 20,000 4,925 4,920 5 25,073

Total general administration 40,453 6,425 6,420 5 25,311

Support services - school administrationSupplies - 200 200 - -

Total school administration - 200 200 - -

Support services - operation and maintenancePurchased services 65,561 65,559 126 65,433 126 Supplies 193,524 208,524 10,308 198,216 - Other 15,000 15,000 5,529 9,471 8,906

Total operation and maintenance 274,085 289,083 15,963 273,120 9,032 (continued)

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT LOCAL FUNDS


For the Year Ended June 30, 2017(With Comparative Totals for June 30, 2016)

66


Expenditures (continued): Original Final Actual (Unfavorable) 2016

Operation of noninstructional servicesFood service program

Supplies 9,748$ 9,748$ -$ 9,748$ -$ Total food service program 9,748 9,748 - 9,748 -

Facilities acquisition and constructionSite improvements

Supplies 12,414 15,190 915 14,275 - Property and equipment 17,586 - - - 29,810

Total building improvements 30,000 15,190 915 14,275 29,810

Building improvementsPurchased services 200,000 200,000 - 200,000 - Supplies 39,971 39,971 - 39,971 -

Total building improvements 239,971 239,971 - 239,971 -

Total expenditures 596,850 786,905 32,951 753,954 84,435

Net change in fund balance (546,850) (734,905) 21,049 755,954 (19,547)


Fund balance, end of year 188,055$ -$ 755,954$ 755,954$ 734,905$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT CLASS SIZE REDUCTION FUND



67



State sourcesGrant 191,660$ 191,660$ 181,139$ (10,521)$ 132,728$


InstructionSalaries and wages 128,598 129,729 101,470 28,259 77,807 Employee benefits 63,062 63,461 50,716 12,745 53,391 Total expenditures 191,660 193,190 152,186 41,004 131,198

Excess of revenuesover (under) expenditures - (1,530) 28,953 30,483 1,530

Other financing sources (uses)Transfers in - - - - -

Net change in fund balance - (1,530) 28,953 30,483 1,530

Fund balance, beginning of year 1,530 1,530 1,530 - -


Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT ADULT EDUCATION FUND



68



Local sourcesFees 200$ 200$ -$ (200)$ 465$

State sourcesGrant 60,435 62,410 27,291 (35,119) 60,435

Total revenue 60,635 62,610 27,291 (35,319) 60,900

ExpendituresAdult education programs

InstructionSalaries and wages 47,000 81,000 68,819 12,181 51,292 Employee benefits 3,450 5,872 4,286 1,586 3,151 Purchased services 7,500 9,500 3,535 5,965 1,480 Supplies 18,121 20,772 8,124 12,648 - Other 8,000 7,100 1,256 5,844 374 Total expenditures 84,071 124,244 86,020 38,224 56,297

Net change in fund balance (23,436) (61,634) (58,729) 2,905 4,603



Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT STATE FUNDS



69



State sourcesGrants 448,100$ 933,806$ 841,481$ (92,325)$ 286,717$

Total revenues 448,100 933,806 841,481 (92,325) 286,717


InstructionSalaries and wages 133,716 149,416 146,599 2,817 3,280Employee benefits 68,100 68,730 67,505 1,225 -Purchased services - 24,717 19,835 4,882 1,747Supplies - 149,327 143,656 5,671 64,799


Instructional staff supportSalaries and wages - 121,394 108,454 12,940 -Employee benefits - 54,859 50,077 4,782 -Purchased services - 15,000 4,028 10,972 -Supplies - 10,000 7,783 2,217 -

Total instructional staff support - 201,253 170,342 30,911 -

Total regular programs 201,816 593,443 547,937 45,506 69,826


Purchased services 10,575 25,550 15,915 9,635 2,049Supplies 77,026 32,346 30,812 1,534 63,817Property and equipment 46,581 10,286 10,286 - -


Support services Support services - student support

Salaries and wages 36,682 111,792 93,736 18,056 42,559Employee benefits 17,021 50,170 41,904 8,266 16,595Purchased services - 1,725 701 1,024 -Supplies 61 61 - 61 -


Support services - instructional staff supportSalaries and wages - 1,922 1,922 - 2,114Employee benefits - 290 191 99 209Purchased services - 288 275 13 132Supplies - 4,962 4,850 112 4,179

Total instructional staff support - 7,462 7,238 224 6,634

Support services - school administrationEmployee benefits 448 124 40 84 4Purchased services - 500 500 - 1,627Supplies - 9,082 2,827 6,255 3,013

Total school administration support 448 9,706 3,367 6,339 4,644

Support services - other supportSalaries and wages 37,884 57,958 53,670 4,288 53,898Employee benefits 21,625 21,692 21,694 (2) 21,808Purchased services 750 2,500 2,500 - 513Supplies 1,395 1,500 3,000 (1,500) 298Other - 11,785 344 11,441 2,342

Total other support 61,654 95,435 81,208 14,227 78,859


Excess of revenuesover (under) expenditures (3,764) (4,170) 8,377 12,547 1,734

Other financing sources (uses)Transfers in - - 9,338 - -

Net change in fund balance (3,764) (4,170) 17,715 12,547 1,734


Fund balance, end of year 406$ -$ 21,885$ 12,547$ 4,170$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT FOOD SERVICES FUND



70



Local sourcesDaily sales 97,500$ 70,558$ 98,668$ 28,110$ 104,161$

Federal sourcesGrant 93,000 115,000 122,251 7,251 104,237 Food distribution program 20,000 20,000 14,781 (5,219) 15,310 Special milk program for children 458 924 981 57 458

Total federal sources 113,458 135,924 138,013 2,089 120,005

Total revenue 210,958 206,482 236,681 30,199 224,166

ExpendituresOperation of noninstructional services

Food service operationsSalaries and wages 96,824 100,000 97,325 2,675 100,644 Employee benefits 26,122 26,760 25,354 1,406 25,868 Purchased services 4,966 7,703 5,054 2,649 3,546 Supplies 193,189 214,983 160,117 54,866 172,431 Other 1,200 3,737 2,270 1,467 1,200 Total expenditures 322,301 353,183 290,120 63,063 303,689

Excess of revenuesover (under) expenditures (111,343) (146,701) (53,439) 93,262 (79,523)

Other financing sources (uses)Transfers in 101,716 101,716 50,000 (51,716) 65,951

Net change in fund balance (9,627) (44,985) (3,439) 41,546 (13,572)



Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT FEDERAL FUNDS



71



Federal sourcesGrants 383,875$ 603,061$ 471,039$ (132,022)$ 521,489$

Total revenues 383,875 603,061 471,039 (132,022) 521,489 Expenditures

Regular programsInstruction

Salaries and wages 7,504 69,556 69,554 2 66,331 Employee benefits 4,547 37,229 37,229 - 36,109 Purchased services 27,646 25,829 9,906 15,923 9,611

Total regular programs 39,697 132,614 116,689 15,925 112,051

Special programsInstruction

Salaries and wages 34,480 63,735 61,527 2,208 59,254 Employee benefits 17,842 34,470 33,575 895 33,252 Purchased services 33,000 33,250 - 33,250 (10) Supplies 4,500 11,251 3,420 7,831 6,825


Student supportSalaries and wages 57,783 65,500 55,378 10,122 54,742 Employee benefits 22,951 22,261 21,368 893 21,189 Purchased services 16,000 17,500 16,720 780 19,880 Supplies 5,894 7,956 6,005 1,951 4,714 Other 1,177 2,900 - 2,900 624


Instructional staff supportSalaries and wages 26,796 26,270 26,270 - 25,867 Employee benefits 16,237 16,105 15,956 149 15,805

Total instructional staff support 43,033 42,375 42,226 149 41,672

Total special programs 236,660 301,198 240,219 60,979 242,142 (continued)

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT FEDERAL FUNDS


For the Year Ended June 30, 2017(With Comparative Totals for June 30, 2016)

72


Expenditures (continued): Original Final Actual (Unfavorable) 2016


Purchased services 5,408$ 6,475$ 3,123$ 3,352$ 7,567$ Supplies 4,100 2,330 1,217 1,113 649 Other - 703 383 320 -


Support servicesStudent support

Salaries and wages 5,000 7,925 3,375 4,550 2,575 Employee benefits 188 214 7 207 94 Purchased services 1,000 1,000 18 982 13 Supplies 1,550 1,550 - 1,550 -


Instructional staff supportSalaries and wages - 40,049 23,046 17,003 85,936 Employee benefits - 3,015 2,076 939 31,075 Purchased services - 45,037 26,042 18,995 28,179 Supplies - 29,881 23,838 6,043 11,443 Other - 6,563 3,163 3,400 1,500

Total instructional staff support - 124,545 78,165 46,380 158,133

School administration supportPurchased services - 2,351 2,349 2 629 Other - 1,370 1,370 - -

Total school administration support - 3,721 3,719 2 629

Total support services 7,738 138,955 85,284 53,671 161,444

Operation of noninstructional servicesFood service operations - 25,275 25,275 - -

Total operation of noninstructional services - 25,275 25,275 - -


Excess of revenuesover (under) expenditures 90,272 (4,489) (1,151) 3,338 (2,364)

Other financing sources (uses)Transfers in 4,052 4,052 - (4,052) -

Net change in fund balance 94,324 (437) (1,151) (714) (2,364)


Fund balance, end of year 95,475$ 714$ -$ (714)$ 1,151$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT BUILDING AND SITES FUND



73



Local sourcesInterest -$ -$ -$ -$ 127$

Total revenues - - - - 127

ExpendituresFacilities Acquisition and Construction Services

Land improvementsPurchased services - - - - 7,928

Total land improvements - - - - 7,928

Building improvementsPurchased services - 45,312 918 44,394 4,999Supplies - 25,000 5,000 20,000 - Other - - - - 45

Total building improvements - 70,312 5,918 64,394 5,044

Capital constructionProperty - 10,000 8,900 1,100 -

Total capital construction - 10,000 8,900 1,100 -

Support servicesOperation and maintenance

Purchased services - 80,000 74,909 5,091 - Total operation and maintenance - 80,000 74,909 5,091 -

Total expenditures - 160,312 89,727 70,585 12,972

Excess of revenuesover (under) expenditures - (160,312) (89,727) 70,585 (12,845)

Other financing sources (uses)Transfers in - 100,000 100,000 - -

Total other financing sources and uses - 100,000 100,000 - -

Net change in fund balance - (60,312) 10,273 70,585 (12,845)



Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT EXTRAORDINARY MAINTENANCE FUND



74



Local sourcesInterest -$ -$ -$ -$ -$

Total revenues - - - - -

ExpendituresSupport services

Operation and maintenancePurchased services - 428,511 107,827 320,684 137,371

Total operation and maintenance - 428,511 107,827 320,684 137,371

Total expenditures - 428,511 107,827 320,684 137,371

Excess of revenuesover (under) expenditures - (428,511) (107,827) 320,684 (137,371)

Other financing sources (uses)Transfers in - 300,000 300,000 - 74,160

Total other financing sources and uses - 300,000 300,000 - 74,160

Net change in fund balance - (128,511) 192,173 320,684 (63,211)



Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT DEBT SERVICE FUND



75



Interest income -$ -$ -$ -$ -$ Total revenues - - - - -

Expenditures

Debt service:Principal 182,000 182,000 182,000 - 177,000 Interest 46,246 46,246 46,246 - 51,037

Total debt service 228,246 228,246 228,246 - 228,037

Excess of revenuesover (under) expenditures (228,246) (228,246) (228,246) - (228,037)

Other financing sources (uses)Transfers in 192,853 192,853 192,853 - 228,038

Total other financing sources and uses 192,853 192,853 192,853 - 228,038

Net change in fund balance (35,393) (35,393) (35,393) - 1


Fund balance, end of year -$ -$ -$ -$ 35,393$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT HEALTH AND ACCIDENT INSURANCE FUND

Schedule of Revenues, Expenses and Changes in Net Position Budget and Actual


76


Original Final Actual (Unfavorable) 2016Operating revenues

Local SourcesDependent and retiree coverage 190,000$ 220,000$ 277,738$ 57,738$ 229,369$ Employee coverage 1,000,000 1,000,000 1,076,119 76,119 1,065,395

Total operating revenues 1,190,000 1,220,000 1,353,857 133,857 1,294,764

Operating expenditures

Support servicesBenefits 1,441,352 1,984,884 1,356,156 628,728 1,341,035

Total support services 1,441,352 1,984,884 1,356,156 628,728 1,341,035

Total operating expenditures 1,441,352 1,984,884 1,356,156 628,728 1,341,035

Operating income (loss) (251,352) (764,884) (2,299) 762,585 (46,271)

Nonoperating revenues (expenditures)Interest income 200 10 450 440 193

Change in net position (251,152) (764,874) (1,849) 763,025 (46,078)

Net position, beginning of year 764,874 764,874 764,874 - 810,952

Net position, end of year 513,722$ -$ 763,025$ 763,025$ 764,874$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT TOM NORRIS NONEXPENDABLE TRUST FUND

FOR TEACHER ADVANCEMENT Schedule of Changes in Fiduciary Net Position

Budget and Actual For the Year Ended June 30, 2017

(With Comparative Totals for June 30, 2016)

77


Original Final Actual (Unfavorable) 2016Additions

Investment earnings -$ -$ -$ -$ 5$ Total additions - - - - 5

DeductionsSupport services

Instructional staff supportBenefits 21,442 21,442 - 21,442 -

Total deductions 21,442 21,442 - 21,442 -

Change in net position (21,442) (21,442) - (21,442) 5


Net position, end of year -$ -$ 21,442$ (21,442)$ 21,442$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT TOM NORRIS NONEXPENDABLE TRUST FUND FOR STUDENT SCHOLARSHIPS AND AWARDS

Schedule of Changes in Fiduciary Net Position Budget to Actual


78


Original Final Actual (Unfavorable) 2016Additions

Investment earnings (loss) -$ -$ (975)$ (975)$ 25,260$

Total additions - - (975) (975) 25,260

Deductions

Student scholarships - - 5,000 (5,000) -

- - 5,000 (5,000) -

Change in net position - - (5,975) 4,025 25,260


Net position, end of year 407,065$ 407,065$ 401,090$ 4,025$ 407,065$

Budgeted Amounts


LANDER COUNTY SCHOOL DISTRICT AGENCY FUNDS

Combining Statement of Changes in Assets and Liabilities For the Year Ended June 30, 2017

79

Balance BalanceJune 30, 2016 Additions Deductions Transfers June 30, 2017

BATTLE MOUNTAIN HIGH SCHOOLSTUDENT BODY ACTIVITIES FUND

ASSETSCash 169,528$ 226,781$ 244,152$ -$ 152,157$

LIABILITIESDue to student groups 169,528$ 226,781$ 244,152$ -$ 152,157$

ELEANOR LEMAIRE JUNIOR HIGH SCHOOLSTUDENT BODY ACTIVITIES FUND

ASSETSCash 10,804$ 71,727$ 62,121$ -$ 20,410$


AUSTIN SCHOOLS' STUDENTSTUDENT BODY ACTIVITIES FUND

ASSETSCash 37,789$ 9,542$ 13,053$ -$ 34,278$


BATTLE MOUNTAIN ELEMENTARY SCHOOLSTUDENT BODY ACTIVITIES FUND

ASSETSCash 67,699$ 42,489$ 34,487$ -$ 75,701$


TOTAL - ALL AGENCY FUNDSASSETS

Cash 285,820$ 350,539$ 353,813$ -$ 282,546$



80



81

FEDERAL AND STATE REPORTS


82



83

Independent Auditor’s Report on Internal Control OverFinancial Reporting and on Compliance and Other Matters

Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards


We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Lander County School District, State of Nevada, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Lander County School District’s basic financial statements and have issued our report thereon dated October 31, 2017.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Lander County School District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Lander County School District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Lander County School District’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify and deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and recommendations that we consider to be a significant deficiency (item 2016-001).



MEMBERS:CHAD B. ATKINSON, CPA PHILLIP S. PEINE, CPAKRIS J. BRAUNBERGER, CPA STEVEN D PALMER, CPAROBERT S. COX, CPA MICHAEL K. SPILKER, CPATODD B. FELTNER, CPA KEVIN L. STEPHENS, CPAK. MARK FROST, CPA MARK E. TICHENOR, CPAMORRIS J PEACOCK, CPA MICHAEL J. TORGERSON, CPA


84

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Lander County School District’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standard.

Response to Findings

The District’s response to the findings identified in our audit is described in the accompanying schedule of findings and recommendation. The District’s response was not subjected to the auditing procedures applies in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.



85

Independent Auditor’s Report on Compliance withStatutes and Administrative Code in

Accordance with NRS 354.624(4)(C) and 354.6241


We have audited the basic financial statements of the Lander County School District School, State of Nevada, for the year ended June 30, 2017, and have issued our report thereon dated October 31, 2017. Our audit also included test work on Lander County School District’s compliance with selected requirements identified in the State of Nevada Revised Statutes (NRS) including, but not limited to, NRS section 354.624 and section 354.6241.

The management of Lander County School District, State of Nevada, is responsible for the District’s compliance with the Nevada Revised Statutes (NRS) and regulations (Nevada Administrative Code). Our responsibility is to express an opinion on compliance with those requirements based on our audit and make specific statements regarding funds established and the status of prior year finding and recommendations; accordingly, we make the following statements:

We noted no instances of noncompliance for the year ended June 30, 2017.

The District has complied with the provisions of NRS 354.6113.

The District has complied with the provisions of NRS 354.6115.

Lander County School District appears to be using all of its funds expressly for the purposes for which they were created in accordance with NRS 354.624.

NRS 354.624 requires that a schedule of all fees imposed by the District which are subject to the provisions of NRS 354.5989 be presented. The District does not impose fees that are subject to NRS 354.5989.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.



MEMBERS:CHAD B. ATKINSON, CPA PHILLIP S. PEINE, CPA KRIS J. BRAUNBERGER, CPA STEVEN D PALMER, CPAROBERT S. COX, CPA MICHAEL K. SPILKER, CPATODD B. FELTNER, CPA KEVIN L. STEPHENS, CPA K. MARK FROST, CPA MARK E. TICHENOR, CPAMORRIS J PEACOCK, CPA MICHAEL J. TORGERSON, CPA


86

In our opinion, Lander County School District complied, in all material respects, with the requirements identified above for the year ended June 30, 2017.

The purpose of this report is solely to describe the scope of our testing of the applicable compliance requirements identified in the Nevada Revised Statutes (NRS) and regulations (Nevada Administrative Code) and the results of that testing based on the state requirements. Accordingly, this report is not suitable for any other purpose.



87

Findings and Recommendations For the Fiscal Year Ended June 30, 2017


Professional standards require that we communicate, in writing, deficiencies in internal control over financial reporting that are considered significant deficiencies or material weaknesses that are identified during the audit of the financial statements. We noted circumstances that, if improved, would strengthen the District’s accounting system and control over its assets. These items are discussed below for your consideration.

INTERNAL CONTROL OVER FINANCIAL REPORTING:

Material Weaknesses

None noted

Significant Deficiencies:

2016-001 Reconciliation of Cash and Investment Accounts

The District’s total reconciled cash and investments book balance did not agree to the total cash and investments general ledger balance (10101 accounts) as of June 30, 2017. The discrepancy amount was initially significant but not deemed to be material to the financial statements. The District uses only one general ledger account (10101 accounts) for each fund to record all bank cash and investment balances, which can complicate the reconciliation process of each cash and investment account. Furthermore, some investment activity is being tracked and reconciled outside of the District’s main accounting system throughout the fiscal year, and a journal entry is made at fiscal year-end to record the investment activity for the fiscal year. Proper monthly cash and investment account reconciliations provide important safeguards and controls to ensure the proper recording, deposit, and disposition of the District’s funds.



MEMBERS:CHAD B. ATKINSON, CPA PHILLIP S. PEINE, CPA KRIS J. BRAUNBERGER, CPA STEVEN D PALMER, CPAROBERT S. COX, CPA MICHAEL K. SPILKER, CPATODD B. FELTNER, CPA KEVIN L. STEPHENS, CPA K. MARK FROST, CPA MARK E. TICHENOR, CPAMORRIS J PEACOCK, CPA MICHAEL J. TORGERSON, CPA


88

Recommendation

We recommend that the District establish procedures that will allow the District to fully reconcile all cash and investment accounts of the District on a monthly basis. The District should maintain documentation of the monthly reconciliations and the reconciliations should clearly reconcile the financial institution balance to the general ledger book balance at the end of each month. The District should consider using additional general ledger accounts to track each cash and investment account separately. Furthermore, we recommend that the investment activity be tracked and reconciled with the general ledger balances on a monthly basis. We know that the District is in the process of upgrading its accounting software and is planning to address these issue with the change.

Management’s Response/Corrective Action Plan

The District will reconcile the financial institution balances to the general ledger book balance at the end of each month. The District plans to improve its reconciliation process with the transition to the new accounting software. Investment activity will be tracked and reconciled monthly with the general ledger balances.

COMPLIANCE AND OTHER MATTERS:

Compliance:

None noted

This communication is intended solely for the information and use of management, board members and others within the District and is not intended to be used and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.

It has been a pleasure to be of service to the District this past year. We would like to express special thanks to the District staff that assisted us so efficiently in this year's audit. We invite you to ask questions of us throughout the year as you feel it necessary and we look forward to a continued pleasant professional relationship.

Sincerely,

HintonBurdick, PLLC October 31, 2017


NYE COUNTYCash Flow Projections for the General Fund

Fiscal Year 2017-18

PR's/Periods Elapsed Total PR's/Periods % ElapsedPR Time Elapsed 17.14 26.07 65.7%S&S Time Elapse 8 12 66.7%

8.0% 9.0% 6.0% 5.0% 7.0% 6.0% 5.0% 5.0% 5.0% 19.0% Variance Percent PercentActual Actual Actual Actual Actual Actual Actual Actual Budget Budget Budget Budget 2017-18 Budget to Time Recd/SpentJuly August September October November December January February March April May June July August Final Budget Actual Elapsed YTD

RECEIPTS/DEPOSITSProperty Tax 407,802 3,073,219 966,676 1,517,416 1,228,289 494,593 1,823,300 1,860,969 1,980,118 372,671 1,233,067 205,577 381,786 353,073 15,898,557 13,375,683 2,522,874 66.2% 85.0%Net Proceeds - - 1,821,283 1,821,283 1,821,283 - 66.2% 0%Licenses and Permits 27,111 62,342 74,308 27,299 70,776 70,274 77,285 55,778 54,313 27,658 50,820 68,546 36,909 703,419 557,700 145,719 66.2% 83.4%Federal in lieu tax - - - - - - - - - - 2,400,000 2,400,000 2,400,000 - 66.2% 0%Consolidated tax - - 2,024,198 1,836,931 1,182,078 1,049,102 1,171,931 1,401,527 1,025,602 973,386 1,307,878 1,051,205 1,171,343 780,895 14,976,076 13,750,000 1,226,076 66.2% 63.0%Other Intergovernmental - 25,821 34,073 25,234 25,354 25,136 116,769 68,333 63,934 32,558 59,822 43,447 80,688 - 601,168 656,489 (55,321) 66.2% 48.9%Charges for services 9,638 101,022 100,251 109,068 298,847 104,720 184,477 226,981 230,712 117,487 215,876 156,784 291,171 3 2,147,037 2,369,013 (221,976) 66.2% 47.9%Fines - 66,245 72,904 67,469 89,548 57,908 57,444 65,586 75,531 38,463 70,674 51,329 95,324 5 808,430 775,575 32,855 66.2% 61.5%Other 8,789 66,024 98,163 31,546 38,870 (27,749) 34,276 29,964 76,451 38,932 71,535 148,438 43,092 658,331 828,109 (169,778) 66.2% 33.8%

Total Receipts 453,341 3,394,672 3,370,572 3,614,963 2,933,761 1,773,984 3,465,483 3,709,138 3,506,660 1,601,156 4,830,955 4,125,327 2,057,221 1,177,069 40,014,301 36,533,852 3,480,449 66.2% 62.2%Total Receipts Y-T-D 453,341 3,848,013 7,218,585 10,833,548 13,767,308 15,541,292 19,006,775 22,715,913 26,222,573 27,823,729 32,654,684 36,780,011 38,837,232 40,014,301 40,014,301

EXPENDITURES/PAYMENTS 0 0 0 0 0 0 0 0 0 0 General Gov - Salaries 382,471 317,720 351,034 348,463 360,318 586,822 443,374 345,984 366,133 366,133 366,133 536,385 - 4,770,970 5,020,564 (249,594) 65.7% 62.5%General Gov - Benefits 318,416 309,474 306,923 310,884 312,869 374,100 341,845 330,102 293,958 293,958 293,958 430,648 - 3,917,133 3,913,801 3,332 65.7% 66.5%General Gov - Services & Supplies 912,577 268,197 405,038 263,568 373,626 377,429 517,210 241,292 493,362 372,485 349,502 561,964 71,432 5,207,683 5,252,364 (44,681) 66.7% 64.0%General Gov - Capital Outlay - - - - - - - - - - - - - - - - 66.7% 0%Judicial - Salaries 329,535 282,327 299,112 293,149 288,417 435,784 338,037 336,600 302,564 302,564 302,564 443,256 - 3,953,909 3,998,123 (44,214) 65.7% 65.1%Judicial - Benefits 149,749 137,849 133,926 136,793 132,051 180,905 158,268 148,565 144,993 144,993 144,993 212,415 - 1,825,500 1,913,408 (87,908) 65.7% 61.6%Judicial - Services & Supplies 197,525 21,814 67,349 243,568 67,916 21,784 198,083 31,501 153,026 115,534 108,405 174,305 3,221 1,404,031 1,574,985 (170,954) 66.7% 53.9%Judicial - Capital Outlay - - - 0 - 0 0 0 - 0 66.7% #DIV/0!Public Saftey - Salaries 815,411 519,211 593,824 525,962 580,852 911,892 600,540 550,821 572,745 572,745 572,745 839,071 - 7,655,819 7,500,727 155,092 65.7% 68.0%Public Saftey - Benefits 348,166 296,622 294,468 276,879 297,166 446,798 401,146 388,614 361,784 361,784 361,784 530,014 - 4,365,226 4,725,354 (360,128) 65.7% 58.2%Public Saftey - Services & Supplies 65,923 119,872 248,766 169,572 158,022 228,254 294,895 94,424 139,149 105,057 98,575 158,498 17,812 1,898,819 1,428,522 470,297 66.7% 96.6%Public Saftey - Capital Outlay - - - - - 0 0 0 - 0 66.7% #DIV/0!Public Works - Salaries 5,433 4,444 5,564 6,116 6,715 9,390 9,624 3,961 4,564 4,564 4,564 6,687 - 71,628 73,497 (1,869) 65.7% 69.7%Public Works - Benefits 3,212 2,966 687 3,487 3,493 2,794 4,190 2,986 2,236 2,236 2,236 3,276 - 33,799 33,147 652 65.7% 71.8%Public Works - Services & Supplies 996 837 903 2,085 3,407 2,993 2,742 1,788 3,175 2,397 2,250 3,617 406 27,596 32,600 (5,004) 66.7% 48.3%Public Works - Capital Outlay - - 0 0 - 0 0 0 - 0 66.7% #DIV/0!Welfare - Salaries - - - - - - - - - - - - - - - - 65.7% 0%Welfare - Benefits - - - - - - - - - - - - - - - - 65.7% 0%Welfare - Services & Supplies - - - - - - - 533 4,870 3,677 3,450 5,548 8,901 26,979 50,000 (23,021) 66.7% 1.1%Welfare - Capital Outlay - - - - - - - - - - 66.7% 0%Community Support - Salaries - - - - - - - - - - - - - - - - 65.7% 0%Community Support - Benefits - - - - - - - - - - - - - - - - 65.7% 0%Community Support - Services & Suppl - 141 2,500 - 121 500 - 3,812 2,500 2,500 2,500 2,500 2,500 19,573 28,706 (9,133) 66.7% 24.6%Community Support - Capital Outlay - - - - - - - - - - 66.7% 0%Transfer Out (97) 35,000 944,634 979,634 979,634 - 66.7% 0%Contingency (97) - - - - - - - - - 200,000 (200,000) 66.7% 0.0%

Total Disbursements 3,529,414 2,281,473 2,710,094 2,615,527 2,584,973 3,579,446 3,309,952 2,480,984 2,845,060 2,650,628 2,613,658 4,852,818 104,273 - 36,158,300 36,725,432 (567,132) 66.2% 62.9%Total Disbursements Y-T-D 3,529,414 5,810,886 8,520,980 11,136,507 13,721,480 17,300,926 20,610,879 23,091,863 25,936,923 28,587,551 31,201,209 36,054,027 36,158,300 36,158,300 36,158,300

CASH BALANCE

Net change in Cash (3,076,073) 1,113,199 660,478 999,436 348,788 (1,805,462) 155,531 1,228,154 661,600 (1,049,472) 2,217,297 (727,491) 1,952,948 1,177,069 3,856,001

Beginning Cash 7,539,779 4,463,706 5,576,905 6,237,383 7,236,819 7,585,607 5,780,145 5,935,675 7,163,829 7,825,429 6,775,957 8,993,254 8,265,763 10,218,711 7,539,779

End Cash Balance 4,463,706 5,576,905 6,237,383 7,236,819 7,585,607 5,780,145 5,935,675 7,163,829 7,825,429 6,775,957 8,993,254 8,265,763 10,218,711 11,395,780 11,395,780

Total Actual + Budgeted

CASH FLOW PROJECTIONS FOR FY 2017-18FY 2017-18 Accruals

3/20/20185:49 PM**UNAUDITED**

PROJECTIONS ARE NOT A GUARANTEE OF FUTURE RESULTSCLGF Meeting 4-03-18 Page 96

NORTHERN NYE HOSPITAL DISTRICTCash Flow Projections

Fiscal Year 2017-18PR's/Periods ElaTotal PR's/Peri % Elapsed

PR Time Elapsed 17.14 26.07 65.75%S&S Time Elapsed 8 12 66.67%

Variance Percent PercentageActual Actual Actual Actual Actual Actual Actual Actual Budget Budget Budget Budget 2017-18 Budget to Time Received/July August September October November December January February March April May June Final Budget Actual Elapsed Spent

RECEIPTS/DEPOSITS 8.00% 9.00% 6.00% 5.00% 7.00% 6.00% 5.00% 5.00% 5.00% 19.00% 200.0%Property Tax (Prop and Real) 2,923 110,513 62,525 83,511 29,987 3,573 131,849 132,220 133,991 57,118 303,260 3,778 1,055,249 661,847 393,402 66.7% 84.2%Net Proceeds - - - - - - - - - 334,297 - 334,297 334,297 - 66.7% 0%Other - 2,784 3,454 2,506 1,694 (7,458) - 911 388 2,062 26 6,366 4,500 1,866 66.7% 66.2%

Total Receipts 2,923 113,297 65,980 86,017 31,681 (3,885) 131,849 132,220 134,903 57,506 639,619 3,803 1,395,913 1,000,644 395,269 66.7% 56.0%Total Receipts Y-T-D 2,923 116,220 182,199 268,216 299,897 296,013 427,862 560,081 694,984 752,490 1,392,109 1,395,913 1,395,913

EXPENDITURES/PAYMENTS 0Salaries - - - - - - - - 65.7% 0%Benefits - - - - - - - - - - - - 65.7% 0%Services & Supplies - 8,474 - 938 793 - 11,813 78,335 78,335 78,335 78,335 335,357 1,350,000 (1,014,643) 66.7% 1.6%Capital Outlay - - - - - - - - - - 1,000,000 (1,000,000) 66.7% 0.0%Contingency - - - 66.7% 0%Any Legal Litigation - - - 66.7% 0%

Total Disbursements - 8,474 - - 938 793 - 11,813 78,335 78,335 78,335 78,335 335,357 2,350,000 (2,014,643) 66.2% 0.9%Total Disbursements Y-T-D - 8,474 8,474 8,474 9,412 10,204 10,204 22,017 100,352 178,687 257,022 335,357 335,357

CASH BALANCE

Net change in Cash 2,923 104,822 65,980 86,017 30,743 (4,677) 131,849 120,407 56,568 (20,829) 561,284 (74,532) 1,060,556

Beginning Cash 1,409,184 1,412,107 1,516,929 1,582,909 1,668,926 1,699,670 1,694,992 1,826,841 1,947,249 2,003,816 1,982,988 2,544,272 2,469,740

End Cash Balance 1,412,107 1,516,929 1,582,909 1,668,926 1,699,670 1,694,992 1,826,841 1,947,249 2,003,816 1,982,988 2,544,272 2,469,740 3,530,296

Total Actual + Budgeted

3/20/20185:49 PM

**UNAUDITED**PROJECTIONS ARE NOT A GUARANTEE OF FUTURE RESULTS CLGF Meeting 4-03-18 Page 97

From: Savannah R. RuckerTo: Kelly Langley; Susan LewisCc: Timothy Sutton; Lorina F. DellingerSubject: FW: Fiscal watch for Nye CountyDate: Thursday, March 22, 2018 8:52:10 AM

Good morning,Please see email below from Commissioner Wichman to Ms. Contine regarding the request to remove Nye Countyfrom fiscal watch. To my knowledge there was not a formal letter sent, only the email below. Thank you.

Thank You,Savannah [email protected]@co.nye.nv.us

-----Original Message-----From: Lorinda WichmanSent: Wednesday, January 31, 2018 10:21 AMTo: [email protected]: Fiscal watch for Nye County

Good morning Ms Contine;I am happy to learn you are moving on to future adventures but sad that it means the Department will lose you.Before you go could you please submit a letter to the CLGF asking to discontinue the fiscal watch for Nye County.Thank you for your consideration of this request.Lorinda WichmanNye County [email protected]

Sent from my iPhone


mailto:[email protected]




CITY OF NORTH LAS VEGAS NEWS RELEASE

FROM THE OFFICE OF THE CITY MANAGER CONTACT: Delen Goldberg, Public Information Officer PHONE: (702) 633-1084 FOR IMMEDIATE RELEASE: March 1, 2018

Hiring, promotion of top talent by City of North Las Vegas

North Las Vegas, Nevada — The City of North Las Vegas is pleased to announce the hiring and promotion of several employees.

Certified Public Accountant Cori Knauss was hired as Director of Finance and Information Technology. Knauss has 13 years of accounting and finance experience. Prior to joining the City, she was Controller at Luzich Partners, a private equity and investment company, and served simultaneously as Chief Financial Officer and Chief Human Resources Officer at the University of Nevada Cooperative Extension. Knauss also has held executive positions at Piercy Bowler Taylor & Kern and Caesars Entertainment.

Knauss will be working closely with Darren Adair, who has been named Chief Financial Officer. Adair brings to the position more than two decades of progressive experience in local public accounting, corporate and real estate development finance, and SEC reporting. He previously served as Chief Financial Officer of local data center developer and operator Switch and as Director and Corporate Controller for Mpower Communications, a national telecom provider. Adair served as North Las Vegas Finance Director from October 2013 through July 2017.

Claudia Aguayo was named Assistant City Attorney. She has practiced law for 15 years and is a graduate of the University of California, Davis, School of Law. Aguayo has been with the City since August 2004. In 2017, she was named one of the top government attorneys in the state by Nevada Business Magazine.

“We are moving the City forward by filling critical positions that sat vacant for far too long, and we have more positive changes coming,” Acting City Manager Ryann Juden said. “The talent of our staff in North Las Vegas is second to none as we grow to better serve our residents and customers.”

###


tel:(702)%20633-1084

CIP No. Related Item: No

LIST CITY COUNCIL GOAL(S): Responsible Fiscal Management

PREPARED BY:

Cori Knauss

Finance Director

Respectfully Submitted

Ryann Juden

Acting City Manager

CITY COUNCIL

MEETING DATE:

2/7/2018

NORTH LAS VEGAS CITY COUNCIL

AGENDA ITEM

NUMBER:

<ITEM_OUTLINE>

SUBJECT:

Adopt Revised Plan for Submittal to the Committee on Local Government Finance for Approval to Reduce the

Transfer of Funds From the Enterprise Funds to Subsidize the General Fund by a Reduction Amount of Not

Less Than 3.3% and Not to Exceed 5% Per Fiscal Annum.

REQUESTED BY:

Cori Knauss, Director of Finance

WARD:

Citywide

RECOMMENDATION OR RECOMMEND MOTION:

That the City Council Adopt Revised Plan For Submittal To The Committee On Local Government Finance For

Approval To Reduce The Transfer Of Funds From The Enterprise Funds Used To Subsidize the General Fund By

An Amount Not Less Than 3.3% Per Fiscal Annum, Up To An Amount Not To Exceed 5.0% Per Fiscal Annum.

FISCAL IMPACT:

AMOUNT: None

EXPLANATION:

N/A

ACCOUNT NUMBER:

N/A

STAFF COMMENTS AND BACKGROUND INFORMATION:

Senate Bill 78 Amended NRS 354.613 to allow the governing body, on or before July 1, 2018, to adopt a plan

to eliminate transfers from an enterprise funds used to subsidize the general fund of the local government.

Pursuant to meetings and discussions with the Committee on Local Government Finance, the subsidy from

the enterprise funds to the general fund will be reduced by an amount of not less than 3.3%, up to an amount

not to exceed 5%, per fiscal annum, until such time that the subsidy has been eliminated in full.

It is proposed that the City of North Las Vegas adopt a plan to reduce the amounts transferred from the

enterprise funds to subsidize the general fund as follows:

1. The minimum annual reduction be no less than 3.3% per fiscal annum, up to an amount not to

exceed 5.0% per fiscal annum, which eliminates the subsidy in no less than 20 years and not more than 30

years,

2. Reduce the transfers by 3.3% per fiscal annum for the first five fiscal years of the reduction plan (FY

2018/2019, FY 2019/2020, FY2020/2021, FY 2021/2022, and FY 2022/2023),


3. Submit to an annual compliance review of the reduction by the Committee on Local Government

Finance, to occur during, and in conjunction with, the annual budget process,

4. Every fifth year, review and re-adopt a reduction plan, within the 3.3% minimum to 5% maximum

annual reduction range, to ensure that the annual reduction of the subsidy is proceeding in a manner that is

economically feasible and fiscally responsible to both the general fund and the enterprise funds, and submit

the five-year plans to the Committee on Local Government Finance.


CITY OF NORTH LAS VEGAS, NEVADA

FITCH RATING UPDATEFEBRUARY 2018


MAYOR AND CITY COUNCIL

John J. Lee, MayorIsaac E. Barron

Pamela A. Goynes-BrownScott Black

Richard Cherchio

CITY OFFICIALS

Ryann Juden, Acting City ManagerDarren Adair, Chief Financial Officer

Cori L. Knauss, Director of Finance and Information TechnologiesMicaela C. Moore, City AttorneyCatherine A. Raynor, City Clerk

PRESENTATION TEAM

Darren Adair, Chief Financial OfficerCori L. Knauss, Director of Finance and Information Technologies

Debbie Barton, City Treasurer/Finance ManagerAndrew Artusa, Municipal Advisor, Zions Public FinanceMark Vincent, Municipal Advisor, Zions Public Finance


Section

Financial Overview I

Debt Profile II

Economic and Demographic Highlights III

Recent Economic Developments IV

TABLE OF CONTENTS


FINANCIAL OVERVIEW

Section I


Fiscal Year 2017 Highlights

Consolidated tax revenues grew 6.2% Property tax revenues grew 2.1% Business license revenues grew 26.5% Ended FY 2017 $17.5 million more than budgeted as a result of vacancy savings, lower

expenditures and one-time revenues• Excess used to shore up reserves

─ $9.5 million to the Workers' Compensation Reserve Fund─ $5 million to Vehicle Replacement Reserves─ $3 million to Debt Service Fund

2017 Legislative Session

Senate Bill 78 authorizes the City to continue with the transfers from the Utility EnterpriseFunds to the General Fund on and after July 1, 2021, providing on or before July 1, 2018, theCommittee on Local Government Finance (CLGF) approves the City's plan to eliminate suchtransfers by at least 3.3% annually during the term of the plan. The plan shall be reviewedfor compliance by the CLGF each fiscal year until such time as the Utility Enterprise Fundsare no longer subsidizing the General Fund.

• City Council adopted a plan on February 7, 2017, agreeing to a reduction in the subsidyfrom the enterprise funds to the general fund by an amount not less than 3.3% and notto exceed 5% per fiscal year

Section I 1

FiscalYear2017FinancialHighlights


Fiscal Year 2018 Budget Highlights Assessed valuation of property increased by 5.4%; due to abatements, total property

taxes are expected to only increase by 3.5%

General Fund reflects a balanced budget with revenues exceeding expenditures by$450,971

• Ending fund balance expected to increase to 12.9% of budgeted expenditures• City has out-performed its budget each of the last four years

The FY 2018 budget assumes cost savings necessary to balance the budget, such as:• Continued restriction on increases to base pay - limiting COLAs, merit

increases, uniform allowances and holiday pay sell-back

Increase in staffing of 58 for critical positions

Section I 2

FiscalYear2018BudgetHighlights


(as a % of Total General Fund Expenditures - including transfers out)

Section I 3

TotalGeneralFundEndingBalance

FY 2017 total ending fund balance of $14.3 million or 10.2% of totalexpenditures (including transfers out)

7.9%6.3%

9.8%10.3% 10.2%

12.9%

$0

$3

$6

$9

$12

$15

$18

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018(Budgeted)

(Millions)


STATUS OF COLLECTIVE BARGAINING AGREEMENTS

Section I 4

StatusofCollectiveBargainingAgreements

TEAMSTERS – 473 members• Current contract period: 07/01/2016 – 06/30/2018• Negotiation meetings began December 2017 and are ongoing

POLICE NON-SUPERVISORS – 272 members• Current contract period: 07/01/2016 – 06/30/2018• Negotiation meetings to begin shortly

FIREFIGHTERS – 169 members• Current contract period: 07/01/2015 – 06/30/2017 (expired)• Negotiation meetings began February 2017

─ Impasse declared and arbitration is scheduled for February 27, 2018

POLICE SUPERVISORS – 38 members• Current contract period: 07/1/2016 – 06/30/2018• Negotiation meetings to begin shortly

Strikes are not permitted under Nevada Revised Statutes


STATUS OF COLLECTIVE BARGAINING AGREEMENTS

Section I 5

ManagementPolicies

GENERAL FUND'S ENDING FUND BALANCE• The City had a reserve policy of maintaining a fund balance of at least 18% and in the past, reserves consistently exceeded 19% of

expenditures. However, due to the recession, the City Council temporarily first lowered the reserve policy to 8% and then againbriefly to 6%, and back up now to 8%, with the intent that ending fund balance be restored to the 18% level in the near future.

5-YEAR PROJECTIONS• City manager has requested 5 year projections to be presented to the City Council

― Currently being updated

CRITICAL NEEDS COMMITTEE• Comprised of the City Manager, City Attorney, Assistant City Manager and Chief Financial Officer – responsible for all the

managerial decisions with regard to staffing needs and levels and evaluating recurring expenditures and contracts.

LONG-TERM FINANCIAL HEALTH• All departments will participate in the responsibility of meeting policy goals and ensuring long-term financial health. Future

staffing levels and program initiatives will be developed to reflect current policy directives, projected resources and future servicerequirements.

SELF-INSURANCE RESERVES• Self-insurance reserves will be rebuilt to a level, which, together with purchased insurance policies, will adequately indemnify the

City's property, liability, workers' compensation risk, and compensated absences liability. Qualified actuarial firms shall beretained on an annual basis, or as needed, in order to recommend appropriate funding levels, which will be approved by the CityCouncil.

ALTERNATIVES TO CURRENT SERVICE DELIVERY• Alternative means of service delivery will be evaluated to ensure that quality services are provided to the citizens at the most

competitive and economical cost. Departments, in cooperation with the City Manager, will identify all activities that could beprovided by another source and review options/alternatives to current service delivery. This review is ongoing and will beperformed at least annually.


Public Employees Retirement System (PERS)

Current PERS contribution rate is 28.0% for regular employees and 40.50% for public safety employees• Current rates will remain in effect throughout the current biennium (through June 30, 2019)• PERS made changes to actuary assumptions for the mid-biennium cycle:

• Discount rate reduced to 7.50% from 8.00%• Inflation rate reduced to 2.75% from 3.50%• Other assumption changes

Employer/employee paid plan

Employees pay half of PERS contribution through wage rate adjustments

PERS GASB 68 report for June 30, 2016, issued in June 2017:• City's net pension liability of approximately $233.2 million as of June 30, 2017 – approximately

1.7% of the total PERS liability

Other Post Employment Benefits (OPEB)

Latest actuarial report as of June 30, 2017, was completed in November 2017

Annual required contribution (ARC) is $2.9 million

Annual estimated payments approximately $1.4 million

GASB 45 actuarial accrued liability (AAL) = $33.7 million

PERS AND OPEB

Section I 6

PERS andOPEB


PERS AND OPEB

Section I 7

InvestmentPool

$322.4 million on deposit as of December 31, 2017 67.5% of investment pool has a final maturity of 1 year or less - as of December 31, 2017 Cash and investments 85.3% of operating revenue

$0$50

$100$150$200$250$300

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

MillionsInvestment Pool Balance – June 30

28.0%

11.4%

18.1%

0.4%

42.1%

U.S. Treasuries U.S. Government Agencies Money Market Mutual Funds Certificates of Deposit State Local Government Investmant Pool


DEBT PROFILE

Section II


32.0%

1.8%

66.3%

Consolidated Tax - $135,535,000

Medium-Term Bonds - $7,475,000

Water/Wastewater Revenues - $281,147,958

By Repayment Source - As of February 1, 2018

Section II 8

CompositionofG.O.GrossDirectDebt


22.8% of principal and interest will be repaid within 5 Years

46.7% of principal and interest will be repaid within 10 Years

$0

$5

$10

$15

$20

$25

$30

$35

$40(Millions)

Consolidated Tax Bonds Medium-Term Bonds Water/Wastewater Bonds

Fiscal Year

EXISTING G.O. DEBT SERVICE TO MATURITY

Section II

ExistingG.O.DebtServicetoMaturity

9


VARIABLE RATE DEBT

Section II

ConsolidatedTaxRevenueGrowth

Fiscal year 2017 consolidated tax revenues represented 37.5% of the General Fund revenues

Fiscal year 2018 year-to-date actual increase of 6.0%

5.0%11.5%

8.4% 4.7% 6.2% 3.3%

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000


10

6.0%

$0

$10,000,000

$20,000,000

$30,000,000

FY 2017 FY 2018Fiscal year-to-date as of November


CITY HALL CERTIFICATES OF PARTICIPATION

Section II

ExistingBondsPaidfromConsolidatedTaxRevenuesandCoverage

OutstandingAmount

Maturity Original As ofGENERAL OBLIGATION Issued Date Amount February 1, 2018

Judicial/Public Safety Bonds, Series 2003 03/11/03 03/01/23 $ 32,500,000 $ 6,855,000Building Bonds, Series 2006 06/07/06 05/01/36 105,000,000 94,455,000Judicial/Public Safety Refunding Bonds, Series 2007A 05/17/07 05/01/23 7,630,000 7,555,000Refunding Bonds, Series 2011 10/27/11 06/01/36 27,070,000 26,670,000

$ 135,535,000

Fiscal Year 2013 2014 2015 2016 2017 2018Ended June 30 (Actual) (Actual) (Actual) (Actual) (Actual) (Budgeted)

Consolidated Tax Receipts $39,434,352 $43,976,942 $47,685,565 $49,903,290 $52,977,267 $54,705,350

Pledged Revenues (15% ofConsolidated Tax Receipts) 5,915,153 6,596,541 7,152,835 7,485,494 7,946,590 8,205,803

Existing Annual Debt Service 4,734,014 3,176,814 8,004,764 6,771,514 6,840,514 11,166,401

Coverage (times) * 1.25 2.08 0.89 1.11 1.16 0.73

* If pledged revenues are insufficient, general fund revenues are used to pay the remaining debt service. In fiscal years 2016 and2017, the City set aside $3 million in each year into the Debt Service Fund to cover the increase in debt service in fiscal year 2018.

11


Section II 12

ExistingWater/WastewaterBondsOutstandingDebt

OutstandingAmount

As ofFebruary 1, 2018Issued

MaturityDate

OriginalAmount

Superior Lien BondsWater and Sewer Refunding Bonds, Series 2005B 07/14/05 08/01/19 $ 10,030,000 $ 2,345,000Wastewater Reclamation System Bonds, Series 2006 10/04/06 10/01/36 140,000,000 62,665,000Wastewater Reclamation System Refunding Bonds (SRF), Series 2017A 11/17/17 07/01/36 49,997,958 49,997,958

TOTAL $ 115,007,958Subordinate Lien Bonds

Water & Wastewater Improvement Bonds, Series 2010A (BABs) 06/17/10 06/01/40 145,000,000 144,580,000Wastewater Reclamation System Bonds (SRF), Series 2018B 01/10/18 01/01/38 10,000,000 10,000,000Water Bonds (SRF), Series 2018C 01/10/18 01/01/38 11,560,000 11,560,000

TOTAL $ 166,140,000

TOTAL WATER & WASTEWATER BONDS $ 281,147,958


Section II 13

Water/WastewaterBondsHistoricalCoverage

1/ Annual debt service on the subordinate bonds (Series 2010A Bonds) is net of BABs credit.

Fiscal Year 2013 2014 2015 2016 2017Ended June 30 (Actual) (Actual) (Actual) (Actual) (Actual)

Water/Wastewater Fund Revenues:Charges for Services:

Utility Fees $ 83,286,815 $ 86,270,211 $ 88,222,998 $ 92,683,751 $ 97,084,046 Connection Fees 1,994,024 2,545,911 2,245,154 3,099,900 4,485,445 Construction and Other Fees 2,251,937 2,513,008 2,786,398 2,657,136 3,046,561

Fines and Forfeitures 2,049,805 2,066,404 2,588,489 3,426,132 2,964,659 Interest 136,985 13,586 15,803 7,702 17,449Miscellaneous 8,100,774 1,446,498 1,318,047 1,267,626 1,393,636

Total Revenues 97,820,340 94,855,618 97,176,889 103,142,247 108,991,796

Superior Bond Operation and Maintenance Expenses 70,849,603 72,613,389 70,102,822 68,891,156 73,705,872

Pledged Revenues Available for Superior Bonds 26,970,737 22,242,229 27,074,067 34,251,091 35,285,924

Annual Debt Service Paid on Superior Bonds 13,754,056 13,558,807 13,421,408 12,538,144 12,047,106

Superior Bond Coverage (times) 1.96 1.64 2.02 2.73 2.93

Gross Revenues Remaining for Subordinate Bonds 13,216,681 8,683,422 13,652,659 21,712,947 23,238,818 Add PILT payment 31,500,000 23,998,930 23,743,485 23,492,404 23,277,283 Pledged Revenues Available for Subordinate Bonds 44,716,681 32,682,352 37,396,144 45,205,351 46,516,101

Annual Debt Service Paid on Subordinate Bonds 6,050,114 6,284,672 6,387,930 6,268,854 6,592,110

Subordinate Bond Coverage (times) 7.39 5.20 5.85 7.21 7.06


Section II 14

ProjectedWater/WastewaterBondsCoverage

Fiscal year 2017 unrestricted net position of $94.2 million Council adopted rate increases of 3% annually each October

1/ Annual debt service on the subordinate bonds (Series 2010A Bonds) is not net of the BABs credit.

Fiscal Year 2018 % 2019 % 2020 % 2021 %Ended June 30 (Budgeted) Change (Projected) Change (Projected) Change (Projected) Change

Water/Wastewater Fund Revenues:Charges for Services:

Utility Fees $ 97,125,000 0.04% $ 100,038,750 3.00% $ 105,066,000 5.03% $ 109,250,000 3.98%Connection/Construction & Other Fees 4,980,000 -34.05% 5,375,000 7.93% 4,347,000 -19.13% 4,373,000 0.60%

Fines and Forfeitures 3,000,000 1.19% 2,975,000 -0.83% 2,226,000 -25.18% 2,314,000 3.95%Miscellaneous 1,190,000 -14.78% 1,015,000 -14.71% 907,000 -10.64% 908,000 0.11%

Total Revenues 106,295,000 -2.48% 109,403,750 2.92% 112,546,000 2.87% 116,845,000 3.82%Superior Bond Operation and Maintenance Expenses 79,589,641 7.98% 87,249,000 9.62% 89,645,000 2.75% 92,100,000 2.74%

Pledged Revenues Available for Superior Bonds 26,705,359 -24.33% 22,154,750 -17.04% 22,901,000 3.37% 24,745,000 8.05%

Annual Debt Service Paid on Superior Bonds 11,281,781 -6.35% 7,831,866 -30.58% 7,813,341 -0.24% 6,578,816 -15.80%

Superior Bond Coverage (times) 2.37 2.83 2.93 3.76 Gross Revenues Remaining for Subordinate Bonds 15,423,578 -33.64% 14,322,884 -7.14% 15,087,659 5.34% 18,166,184 20.40%Add PILT payment 23,060,285 -0.93% 22,752,000 -1.34% 22,512,000 -1.05% 22,261,000 -1.11%

Pledged Revenues Available for Subordinate Bonds 38,483,863 -17.28% 37,074,884 -3.66% 37,599,659 1.42% 40,427,184 7.52%Annual Debt Service Paid on Subordinate Bonds 1/ 10,919,471 13.46% 16,674,602 52.71% 16,697,889 0.14% 17,877,679 7.07%

Subordinate Bond Coverage (times) 3.52 2.22 2.25 2.26


GENERAL OBLIGATION DEBT RATIOS

Section II 15

GeneralObligationDebtRatios

2017-2016FY 2016 FY 2017 % Change

Population 240,708 240,708 --Assessed Value $5,505,886,141 $6,064,962,361 10.2%Taxable Value $15,731,103,260 $17,328,463,889 10.2%General Fund Revenues $112,178,554 $116,560,966 3.9%General Fund Expenditures $123,504,882 $130,064,108 5.3%Gross Direct G.O. Debt $419,770,000 $410,720,000 -2.2%Gross Direct G.O. Debt Service $31,267,416 $31,160,404 -0.3%Percent of G.O. Debt Service to General Fund Expenditures 25.3% 24.0% -5.4%

Ratio to Gross Direct G.O. DebtPer Capita $1,743.90 $1,706.30 -2.2%Percent of Assessed Value 7.62% 6.77% -11.2%Percent of Taxable Value 2.67% 2.37% -11.2%Net Direct G.O. Debt $11,960,000 $9,765,000 -18.4%Net Direct G.O. Debt Service $2,654,027 $2,649,053 -0.2%

Percent of Net Direct G.O. Debt Service to General Fund Expenditures 9.68% 7.51% -22.5%

Ratio to Net Direct G.O. DebtPer Capita $49.69 $40.57 -18.4%Percent of Assessed Value 0.22% 0.16% -25.9%Percent of Taxable Value 0.08% 0.06% -25.9%Percent of General Fund Revenues 10.66% 8.38% -21.4%


ECONOMIC ANDDEMOGRAPHIC

HIGHLIGHTS

Section III


Section III

CityofNorthLasVegas,Nevada

City Encompasses 101.1 Square Miles2016 Estimated Population: 240,708 4.7% Average Annual Population

Growth Since 2000 4th Largest City in the State 43% of Land Developed

Master Planned Communities: Aliante

• 20,000 estimated population at build-out• 1,905 Acres• 96% Complete

Eldorado• 18,000 estimated population at build-out• 1,080 acres• 74% complete

Valley Vista/Villages at Tule Springs• 36,000 estimated population at build-out• 2,675 Acres

Commercial/Industrial Parks• Northern Beltway Commercial Area

― 1,500+ Acres available in Q2 of 2018• Apex Industrial Park

― 7,000+ Acres available beginning Q4 of 2018

16

Sedona Ranch• 150-acre housing development with more than 500 homes• Three phases of development are planned• First homes began appearing at the end of 2017


Section III

MajorEmployers– 2ndQuarter2017

SOURCE: Nevada Department of Employment, Training and Rehabilitation

17

Employer Employment Range Industry

1. City of North Las Vegas 1,000 - 1,499 Local Government2. NBC Nevada Merchants 1,000 - 1,499 Warehousing/Storage3. Amazon.com 1,000 - 1,499 Warehousing/Storage4. Aliante Station Hotel & Casino 800 - 899 Casino Hotel5. Cannery Hotel Casino LLC 800 - 899 Casino Hotel6. NP Texas LLC 700 - 799 Casino Hotel7. Republic Silver State Disposal 700 - 799 Solid Waste Collection8. Bechtel Nevada Corp 700 - 799 Research and Development9. North Vista Hospital 700 - 799 Hospital

10. Unistaff LLC 600 - 699 Temporary Help Services


STATE UNEMPLOYMENT

18

Year 2017 initial claims for unemployment insurance were down 2.0% from 2016

Section III

StateUnemployment

8,000

10,000

12,000

14,000

16,000

18,000

20,000Monthly Initial Claims for Unemployment Insurance

5.0% 5.1%

4.1%

4.6%

3.5%

4.5%

5.5%November 2017 Unemployment Rate

Nevada

Las Vegas-Henderson -Paradise MSA

U.S.

California

SOURCE: U.S. Department of Labor


Section III

LargestTaxpayers(FY2016‐2017)

1/ Based on the fiscal year 2017 assessed valuation for the City of $6,064,962,361 (excluding the assessed valuation of the North Las Vegas Redevelopment Agency).

% ofNorth Las Vegas

Type of Assessed Total TaxableTaxpayer Business Value Assessed Valuation 1/

Aliante Gaming LLC Hotel/Casino $ 77,577,372 1.28%Golden Triangle Industrial Park Industrial Park 52,727,901 0.87Picerne Development Apartments 37,967,792 0.63Cannery Casino Resorts Hotel/Casino 37,270,735 0.61Alliance Residential Company Apartments 36,103,263 0.60Stations Casinos, Inc. Hotel/Casino 35,480,496 0.59ProLogis Distribution 27,251,559 0.45Colonial Realty Limited Partnership Apartments 25,448,669 0.42Wal-Mart Stores Inc. Retail 24,312,552 0.40Colfin AI-NV Developer 23,585,612 0.39

TOTAL $ 377,725,951 6.23%

19


20Section III

SouthernNevadaRealEstate

Source: Greater Las Vegas Association of Realtors

Southern NevadaSingle Family Home,

Condo & Townhome Sales

28,6

18 46,8

79

43,8

77

48,1

86

44,9

02

40,2

42

35,6

10

37,8

24

39,9

84

43,0

07

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Median single family home price increased 14.0%from a year ago $267,900 in December 2017

3,204 single family homes, condos andtownhomes sold in December – single familyhome sales down 3.5% from a year ago

Compared to a year ago, total home sales volumesin December up 10.9% for homes

Total properties sold during 2017 makes it thethird best sales year on record and the best yearfor existing home sales since 2011


BUILDING PERMIT VALUATIONS

$0

$100

$200

$300

$400

$500

$600

2012 2013 2014 2015 2016 2017

(15.6%)28.3%

29.3% (0.4%)

50.5%

45.0%(Millions) Calendar Year

Residential Commercial Miscellaneous

21

Calendar year 2017 residential permit valuation increased 29.0% – total buildingpermit valuations increased 45.0% from the prior year

Section III

BuildingPermitValuations


Section III

AssessedValuations

Assessed value calculated at 35% of taxable value

Note: Excludes the North Las Vegas Redevelopment AgencySource: State of Nevada Department of Taxation

22

$3,988 $4,068

$4,731$5,506

$6,065 $6,393

(10.1%)

2.0%

16.3%16.4%

10.2%5.4%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

(Millions)


Section III

TotalPropertyTaxRevenues– IncludingAbatements

Property Tax Revenue TrendGeneral Fund and Tax Overrides

(Excludes Library and Redevelopment Districts)

$0$10$20$30$40$50$60$70$80


Millions

(Millions)

Abated Collected

Fiscal Actual Tax % Year Collections Change Abatement2013 $ 44,029,619 -9.9% $ 425,3422014 44,086,877 0.1 1,334,2572015 45,943,724 4.2 7,566,6862016 48,153,666 4.8 15,150,455 2017 49,185,609 2.1 20,327,4582018 * 50,416,273 2.5 22,969,063

23

* Budgeted


Section III

PropertyTaxRates

5-Year History of City Property Tax Rates

Fiscal year 2018 highest overlapping tax rate in Clark County – $3.4030

Under the maximum overlapping rate of $3.64/$100 of assessed value, the City hasability to levy an additional property tax rate of $0.2856, however current tax caps andrelated abatements negates almost all of the short-term impact of any related increases

Source: State of Nevada Department of Taxation

Fiscal Year Ended June 30 2014 2015 2016 2017 2018

Operating Rate $ 0.1937 $ 0.1937 $ 0.1937 $ 0.1937 $ 0.1937Override Rate 0.9475 0.9650 0.9700 0.9650 0.9650Debt Service Rate 0.0175 0.0000 0.0000 0.0000 0.0000TOTAL $ 1.1587 $ 1.1587 $ 1.1637 $ 1.1587 $ 1.1587

24


RECENT ECONOMICDEVELOPMENTS

Section IV


FUTURE CITY DEVELOPMENT PROJECTS

Section IV 25

NewDevelopmentProjects

Veterans Affairs Medical Center (on Phase 3 of 9)• Estimated project cost - $600 million• Over 900,000 square-foot building on 151 acres• 90 inpatient beds• 120-bed extended and skilled care community living center• Projected jobs created - 2,000

Job Creation Zone & the 215 West Beltway• University of Nevada, Las Vegas (UNLV) has a planned use of 2,009-acre parcel of federal land to

build a North Las Vegas Campus• City has 645 acres of federal job creation zone land for high-density employment

─ 150 acres programmed for a medical center and research campus next to the Veterans Administration Hospital

─ City will receive the patent on this land in early 2018• 188 acres (located next to the 150 acres programmed for a medical center and research campus) was

just purchased by American West Homes in the recent BLM auction for $35.1 million

APEX Industrial Park• Nevada Department of Transportation (NDOT) has begun work on a $58 million highway

improvement project for Interstate 93• City has a planned elevated water tank in Northern Apex, a $4 million project that will provide

750,000 gallon tank for Virgin-Hyperloop and a new proposed project in escrow on a 173 acre parcel• City has several additional projects with global brand recognition looking to develop at Apex

215 – I-15 Speedway Industrial Area• Two infrastructure projects – road and sewer opened up 1100 acres of underdeveloped land• The long-term sewer solution is 5 miles – $26 million project under construction. The Tropical

Interchange project by the City is a $9 million road improvement project under construction and willconnect to an NDOT project estimated at $130 million for a full system to system interchange.

• Prologis has 110 acres – 2 million square feet – 1 million square feet completed and occupied with 3tenants in 2 buildings. The remaining one million square feet is under construction.

(continued)



Section IV 26

SuccessStories

215 – I-15 Speedway Industrial Area - Continued• Tropical Distribution Center by VanTrust Real Estate:

─ 120 acres total – tenant 1 will occupy 80 acres and 900,000+ square feet─ Approximately $200 million in capital investment─ Approximately 4,000 new jobs will be created─ Tenant 1 is currently located at NorthGate and expanding. On February 13, 2018 VanTrust will be interviewing

contractors so construction can commence.

NorthGate Industrial Project by VanTrust Real Estate, LLC located at Lamb & I-15125+ acres totals 3,322,678 square feet – 9 buildings and brand equity tenants:

• Amazon Building 1 in 248,126 square feet• Amazon Building 3 in 834,080 square feet – 1,100 new jobs• Fanatics Building 2 in 400,186 square feet – 189 new jobs• Teamsters Local 631 in 71,000 square feet, taking the balance of Building 2• Honest Company Building 8 in 570,810 square feet – 425 new jobs

• Fanatics Inc. – the first Fortune 500 Company to move into North Las Vegas and the first tenant to locate in the above mentionedNorthgate Distribution Center. Fanatics is known for manufacturing licensed sports gear, clothing and other merchandise. Phase I ofthe facility, already under construction, is a 36-foot clear height, concrete tilt building that will function as a high-cube 400,000 square-foot state-of-the-art distribution center with four levels of walkable racks. Phase II will add an additional 600,000 square-feet to theproject, for which Fanatics is investing a total of $8 million in capital equipment at the site. Fanatics plans within the first year to createalmost 200 jobs, while also creating an abundance of job opportunities for many years to come.

• Amazon – the largest internet-based retailer in the world is currently constructing a 813,120 square-foot fulfillment center fordistribution of their medium-sized items, such as DVD players and computers, etc., that will be operated by Amazon.com.kycd LLC, asubsidiary of Amazon.com, also to be located in the above Northgate Distribution Center. Amazon already has a presence in otherlocations in Nevada that, when combined, employ 4,900 full-time Nevadans. Amazon is making a capital investment of approximately$34 million. The facility opened in 2017 and currently has 1,000 employees.

• The Honest Company, Inc. – meets rigorous standards of social and environmental performance, legal accountability and publictransparency. This company provides products across a wide range of consumer categories, including baby, personal care, home care,vitamins and supplements. The Honest Company is expected to make a total capital investment of just over $9.4 million in a largewarehouse and distribution center in the Northgate Distribution Center that will create 425 jobs.



Section IV 27

ApexAnnexation


FITCH UPGRADES NORTH LAS VEGAS,NV LTGOS TO 'BB'; OUTLOOK STABLE

Fitch Ratings-San Francisco-15 February 2018: Fitch Ratings has upgraded the following North Las Vegas, Nevada (the city) ratings to 'BB' from 'B+':

--Long-Term Issuer Default Rating (IDR); --$127 million limited tax general obligation (LTGO) bonds (additionally secured by consolidated tax pledged revenues); --$265.4 million LTGO water and wastewater improvement bonds (additionally secured by water and wastewater system pledged revenues).

The Rating Outlook is Stable.

SECURITY The bonds are backed by the full faith and credit of the city, subject to Nevada's constitutional and statutory limitations on the aggregate amount of ad valorem property taxes. As noted above, the bonds are additionally backed either by an irrevocable pledge of and lien on certain consolidated tax revenues (15% of these revenues) or by water/wastewater system net revenues.

ANALYTICAL CONCLUSION

The upgrade of the IDR and LTGO bonds to 'BB'+' is based on recent state legislation (SB 78) that allows the city to continue making utility transfers to subsidize general fund operations with a decades-long, planned step-down period. The ratings continue to reflect the city's very weak revenue framework, lack of spending flexibility, and severely limited gap-closing ability relative to historical general fund volatility and minimal inherent budget flexibility.

Economic Resource Base North Las Vegas encompasses 100 square miles in Clark County with a population of approximately 240,000. The city is less than 50% built out with large tracts of undeveloped land. Its population has nearly doubled since 2000, but growth slowed with the 2008-2010 housing and economic downturn. The city and region's economy were among the hardest hit in the U.S. by the collapse of the housing market, with a combined loss of 56% of taxable assessed valuation (TAV). While TAV has rebounded to some extent, Fitch is concerned that long-term economic growth prospects remain weak. The regional economy is dominated by tourism and gaming, both of which experienced significant revenue and employment declines but appear to be stabilizing.

KEY RATING DRIVERS

Revenue Framework: 'bbb' The city's 10-year CAGR has been negative and its legal ability to increase revenues is extremely limited. However, revenues have been modestly increasing the last few years. Positively, the city gained legislative approval for a long-term step-down of large utility transfers that support general fund operations, halting the previously required elimination of such transfers within the next few years.

Expenditure Framework: 'bb' The pace of spending is expected to be well above that of revenue growth and the city's ability to cut spending is very constrained.


Long-Term Liability Burden: 'aa' The long-term liability burden is moderate as a percentage of total personal income. Operating Performance: 'bb' The city's gap-closing ability is very limited given its restricted budget flexibility. Chronic budgetary structural imbalance reflects the weak revenue framework and pressured expenditure framework. As such, the city has a limited ability to materially strengthen its financial operations. RATING SENSITIVITIES LIMITED FINANCIAL RESILIENCE: Fitch believes the city is vulnerable to severe financial stress in an economic downturn given its low level of financial flexibility. CREDIT PROFILE The city's tax base has rebounded a significant 52% since bottoming out during the great recession but remains about two-thirds of the 2009 peak. Despite recent increases, home prices are still more than 30% below their 2006 peak levels. The city and regional economies are concentrated in gaming; most major employers and taxpayers are hotel/casinos. Employment in the city experienced a steep decline in 2010 but has since more than recovered jobs lost. The city's unemployment rate has historically tracked above the county, state, and nation and it remains so. Median household income is slightly above the state while below the nation, although per capita income is below both. Several large residential and commercial developments have remained in the planning stages for years, including Park Highlands, a planned community with a population of about 36,000 at build out. The city's development focus reportedly is on its Apex Industrial Park located on I-15. The state provided tax incentives to tenants including Hyperloop One and Faraday Future, which recently abandoned plans for a $1 billion electric car production plant. The city is working to extend utilities to Apex, and management expects the project to generate considerable tax base growth in future years. Revenue Framework The city's largest source of revenues is consolidated taxes (C-tax), which account for about 45% of general fund revenues. C-taxes are primarily sales taxes that are collected at the state level and distributed to localities based upon a formula that takes into account a base allocation, population, and assessed value. Property taxes account for only 7% of general fund revenues, down from 23% in fiscal 2008 due to declines in assessed value (AV) and property tax abatement. A statutory provision signed into law in 2005 provides a partial abatement of property taxes by applying a cap to the tax bill. The state's intent was to provide tax relief when property values were accelerating at a swift pace prior to the downturn. There has been some discussion in the state legislature about modifying the caps to allow municipalities to recapture some of the abated AV, but no action has been taken to date. The general fund revenue 10-year CAGR ending fiscal 2017 was -3.0%. This trend reflects significant exposure to economically sensitive revenues during the Great Recession and incorporates the impacts of a housing sector collapse that disproportionately affected the Nevada economy to an extent Fitch believes is unlikely to recur. Revenues have increased the past four years, including 3% in fiscal 2016 and 3.9% in fiscal 2017. The city's ability to raise revenue is extremely limited. State law caps combined property taxes at $3.64 per $100 of AV, and tax bill increases cannot exceed 3% for residential properties and 8% for commercial. Although the city has a modest amount of room under the tax cap, raising the


rate to the maximum allowed under state law would generate only about $1 million in additional revenue, given abatement provisions. Expenditure Framework Public safety accounts for more than two-thirds of general fund expenditures. Given the severity of spending cuts made during and after the great recession, Fitch believes additional cuts would severely cripple service delivery. The pace of spending is well above that of revenues due in part to pension costs and hiring pressures. The passage of SB 78 will allow the city to gradually (over 20 to 30 years) reduce the annual $23 million utility transfer, equal to about 17% of revenues and transfers, with a required reduction of at least 3.3% per year instead of the previously mandated, complete elimination of the transfer by 2021. The current employee count stands at about one-half of its peak prior to the recession despite very modest recent hiring, and management reports that the city's current staffing level is insufficient to provide adequate services over the long term. Fiscal 2017 spending was 33% lower than the fiscal 2009 peak. Carrying costs including debt, the actuarially calculated pension contribution, and retiree healthcare contributions made up 21% of fiscal 2017 governmental spending. Fitch's supplemental pension metric, which assumes a 20-year level pay-off of the Fitch-adjusted liability, indicates that contributions at the actuarial level would likely be insufficient to reduce pension liabilities over time. The city's history of contentious labor relations includes attempts to suspend labor contracts via a declaration of state of emergency under Nevada Revised Statue (NRS) 288.15 after failing to obtain labor concessions during severe economic distress in 2013 and 2014. Following the governor's intervention in negotiations and a January 2014 judgment against the city regarding the use of the emergency declaration to suspend labor contracts, the city reached settlements with its labor unions in spring 2014. The city was able to implement the fiscal 2015 and 2016 budgets due to temporary budgetary relief resulting from the union's agreement to defer drawing on compensated absences in fiscal 2015, as well as delayed hiring and departmental budget cuts. Currently, the city has two-year contracts with its bargaining units, all of which expire at fiscal 2018 year-end except the firefighter agreement, which expired in fiscal 2017. The city is currently at an impasse with the firefighter bargaining unit and will go to arbitration if an agreement is not reached. These contracts include various merit and other pay increases, which have added $5 million in recurring expenses to the budget. The city has offset these costs through outsourcing of various functions including detention and crossing guards and reducing services from two courtrooms into one. Long-Term Liability Burden The city's long-term liabilities are moderate, with total debt and unfunded pensions equal to 14% of total personal income. Amortization is very slow with just 38% of principal retired within 10 years. The city participates in the Public Employees' Retirement System of Nevada (PERS), which has an estimated ratio of assets to liabilities of 56.4% using a Fitch-adjusted 6% discount rate. The city makes its annual required statutorily determined pension contributions, which are set every two years based on actuarially determined rates. The city's liability for other post-employment benefits (OPEB) is approximately $34 million, equal to a negligible 0.4% of personal income. Operating Performance The city's financial resilience is poor, given very high historical revenue volatility and minimal budget flexibility, although the city has striven to bolster its reserves in recent years. As such, Fitch expects that the city could experience fiscal distress in a moderate economic downturn.


The city received meaningful budget relief with the passage of SB 78, allowing it to continue the utility transfer with a very gradual step-down. The city is hopeful that future revenue growth, in conjunction with a 20-30-year decline in the transfer, will eventually result in structural balance, although Fitch believes the lengthy time frame leaves the city exposed to future economic and financial variability. The city utilized budget savings and one-times revenues in fiscal 2017 to increase reserves in its workers compensation fund, vehicle replacement fund, and debt service fund (to accommodate an increase in debt service payments in fiscal 2018). The general fund budget was balanced for fiscal 2018 and the city expects an ending fund balance increase to 12.9% of spending. Contact: Primary Analyst Shannon Groff Director +1-415-732-5628 Fitch Ratings, Inc. 650 California Street San Francisco, CA 94108 Secondary Analyst Karen Ribble Senior Director +1-415-732-5611 Committee Chairperson Marcy Block Senior Director +1-212-908-0239 In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis and InvestorTools. Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: [email protected]. Additional information is available on www.fitchratings.com Applicable Criteria U.S. Public Finance Tax-Supported Rating Criteria (pub. 31 May 2017) https://www.fitchratings.com/site/re/898466 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONSAND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. INADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITEAT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE,AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THISSITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT HTTPS://WWW.FITCHRATINGS.COM/SITE/REGULATORY. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRDPARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITYCAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.Copyright © 2018 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212)908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuingand maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers andunderwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it


in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sourcesare available for a given security or in a given jurisdiction. 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12ae05bc12ae05bc





PROJECTED ACTUAL VARIANCE PROJECTED ACTUAL VARIANCE PROJECTED PROJECTED PROJECTED

JANUARY JANUARY JANUARY FEBRUARY FEBRUARY FEBRUARY MARCH APRIL MAY

Beginning Cash and Investment Balance 1,178,330,496.96$ 1,178,330,496.96$ -$ 1,174,586,377.36$ 1,178,081,991.31$ 3,495,613.95$ 1,247,518,954.54$ 1,173,218,954.54$ 1,205,218,954.54$

RECEIPTS/DEPOSITS

Distributive School Account (DSA) 30,784,315.86$ 30,834,315.86$ 50,000.00$ 53,206,906.37$ 53,206,906.37$ -$ 55,000,000.00$ 50,000,000.00$ 80,784,316.00$

Class Size Reduction - - - 29,326,646.37 29,326,646.37 - - - -

Local School Support Tax (LSST) 80,172,241.07 80,172,241.07 - 84,000,000.00 90,872,888.56 6,872,888.56 73,000,000.00 77,000,000.00 89,500,000.00 Taxes - Property, room and real property

transfer 69,826,898.48 69,826,898.48 - 133,742,697.65 135,158,069.17 1,415,371.52 36,000,000.00 145,500,000.00 24,000,000.00

State, Federal and Government Service Tax 1 97,586,922.16 96,086,922.16 (1,500,000.00) 60,318,226.00 20,645,999.51 (39,672,226.49) 39,600,000.00 43,900,000.00 64,130,000.00

District deposits 7,576,630.71 9,491,251.25 1,914,620.54 3,914,841.68 7,241,074.83 3,326,233.15 6,500,000.00 4,000,000.00 8,000,000.00

Total Receipts/Deposits 285,947,008.28$ 286,411,628.82$ 464,620.54$ 364,509,318.07$ 336,451,584.81$ (28,057,733.26)$ 210,100,000.00$ 320,400,000.00$ 266,414,316.00$

EXPENDITURES/PAYMENTS

Salaries and tax deposits 160,574,042.35$ 159,600,530.33$ (973,512.02)$ 150,000,000.00$ 145,165,724.49$ (4,834,275.51)$ 145,000,000.00$ 145,000,000.00$ 145,000,000.00$ Wires: Public Employees Retirement System

(PERS) and other miscellaneous 37,674,916.14 37,674,916.14 - 40,176,740.90 40,730,730.90 553,990.00 38,000,000.00 42,000,000.00 37,000,000.00 Accounts Payable Disbursements (services,

supplies, property, and other) 291,442,169.39 89,384,688.00 (2,057,481.39) 101,400,000.00 77,880,894.72 (23,519,105.28) 101,400,000.00 101,400,000.00 101,400,000.00

Debt service payments - - - - - - - - -

Total Disbursements 289,691,127.88$ 286,660,134.47$ (3,030,993.41)$ 291,576,740.90$ 263,777,350.11$ (27,799,390.79)$ 284,400,000.00$ 288,400,000.00$ 283,400,000.00$

Net Change (3,744,119.60)$ (248,505.65)$ 3,495,613.95$ 72,932,577.17$ 72,674,234.70$ (258,342.47)$ (74,300,000.00)$ 32,000,000.00$ (16,985,684.00)$

Ending Cash and Investment Balance 1,174,586,377.36$ 1,178,081,991.31$ 3,495,613.95$ 1,247,518,954.54$ 1,250,756,226.01$ 3,237,271.47$ 1,173,218,954.54$ 1,205,218,954.54$ 1,188,233,270.54$

1 Receipt of State and Federal grants and National School Lunch Program funding anticipated in February received in March.2

Accounts Payable disbursement for last week of February was paid on March 2, 2018.

CLARK COUNTY SCHOOL DISTRICT

Cash Flow Projections - All Funds

Fiscal Year 2018 January - June

3/20/2018 CLGF Meeting 4-03-18 Page 144

Beginning Cash and Investment Balance

RECEIPTS/DEPOSITS

Distributive School Account (DSA)

Class Size Reduction

Local School Support Tax (LSST)Taxes - Property, room and real property

transfer

State, Federal and Government Service Tax 1

District deposits

Total Receipts/Deposits


Salaries and tax depositsWires: Public Employees Retirement System

(PERS) and other miscellaneousAccounts Payable Disbursements (services,

supplies, property, and other) 2

Debt service payments

Total Disbursements

Net Change

Ending Cash and Investment Balance

1

2




PROJECTED PROJECTED

JUNE TOTAL

1,188,233,270.54$

101,000,000.00$ 370,825,538.23$

29,326,646.00 58,653,292.37

82,000,000.00 485,672,241.07

17,700,000.00 426,769,596.13

28,560,000.00 332,595,148.16

4,000,000.00 35,906,092.93

262,586,646.00$ 1,710,421,908.89$

153,500,000.00$ 898,100,530.33$

37,500,000.00 232,351,657.04

101,400,000.00 596,384,688.00

367,315,582.25 367,315,582.25

659,715,582.25$ 2,094,152,457.62$

(397,128,936.25)$ (383,730,548.73)$

791,104,334.29$




3/20/2018 CLGF Meeting 4-03-18 Page 145

PROJECTED ACTUAL VARIANCE PROJECTED PROJECTED PROJECTED PROJECTED PROJECTED PROJECTED

JANUARY JANUARY JANUARY FEBRUARY MARCH APRIL MAY JUNE TOTAL

Beginning Cash and Investment Balance 1,178,330,496.96$ 1,178,330,496.96$ -$ 1,174,586,377.36$ 1,247,518,954.54$ 1,173,218,954.54$ 1,205,218,954.54$ 1,188,233,270.54$

RECEIPTS/DEPOSITS

Distributive School Account (DSA) 30,784,315.86$ 30,834,315.86$ 50,000.00$ 53,206,906.37$ 55,000,000.00$ 50,000,000.00$ 80,784,316.00$ 101,000,000.00$ 370,825,538.23$

Class Size Reduction - - - 29,326,646.37 - - - 29,326,646.00 58,653,292.37

Local School Support Tax (LSST) 80,172,241.07 80,172,241.07 - 84,000,000.00 73,000,000.00 77,000,000.00 89,500,000.00 82,000,000.00 485,672,241.07

Taxes - Property, room and real property transfer 69,826,898.48 69,826,898.48 - 133,742,697.65 36,000,000.00 145,500,000.00 24,000,000.00 17,700,000.00 426,769,596.13

State, Federal and Government Service Tax 97,586,922.16 96,086,922.16 (1,500,000.00) 60,318,226.00 39,600,000.00 43,900,000.00 64,130,000.00 28,560,000.00 332,595,148.16

District deposits $7,576,631 $9,491,251 1,914,620.54 $3,914,842 $6,500,000 $4,000,000 $8,000,000 $4,000,000 $35,906,093

Total Receipts/Deposits 285,947,008.28$ 286,411,628.82$ 464,620.54$ 364,509,318.07$ 210,100,000.00$ 320,400,000.00$ 266,414,316.00$ 262,586,646.00$ 1,710,421,908.89$


Salaries and tax deposits 160,574,042.35$ 159,600,530.33$ (973,512.02)$ 150,000,000.00$ 145,000,000.00$ 145,000,000.00$ 145,000,000.00$ 153,500,000.00$ 898,100,530.33$ Wires: Public Employees Retirement System

(PERS) and other miscellaneous 37,674,916.14 37,674,916.14 - 40,176,740.90 38,000,000.00 42,000,000.00 37,000,000.00 37,500,000.00 232,351,657.04 Accounts Payable Disbursements (services,

supplies, property, and other) 91,442,169.39 89,384,688.00 (2,057,481.39) 101,400,000.00 101,400,000.00 101,400,000.00 101,400,000.00 101,400,000.00 596,384,688.00

Debt service payments - - - - - - - 367,315,582.25 367,315,582.25

Total Disbursements 289,691,127.88$ 286,660,134.47$ (3,030,993.41)$ 291,576,740.90$ 284,400,000.00$ 288,400,000.00$ 283,400,000.00$ 659,715,582.25$ 2,094,152,457.62$

Net Change (3,744,119.60)$ (248,505.65)$ 3,495,613.95$ 72,932,577.17$ (74,300,000.00)$ 32,000,000.00$ (16,985,684.00)$ (397,128,936.25)$ (383,730,548.73)$

Ending Cash and Investment Balance 1,174,586,377.36$ 1,178,081,991.31$ 3,495,613.95$ 1,247,518,954.54$ 1,173,218,954.54$ 1,205,218,954.54$ 1,188,233,270.54$ 791,104,334.29$




February 20, 2018CLGF Meeting 4-03-18 Page 146


Cash and Investments by Fund

Fiscal Years 2017 - 2018 YTD

FUND JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE

General Operating

2017 (FY 2018) 73,913,419.81 56,774,831.11 147,124,281.57 113,422,105.56 153,928,535.43 189,276,754.48 142,348,181.78 179,561,540.01

2016 (FY 2017) 26,161,512.23 195,918,206.82 264,106,163.39 176,565,706.35 210,338,453.61 242,782,839.15 170,990,855.98 238,114,563.87 248,507,787.72 215,280,078.61 230,275,560.66 145,651,210.19

Class Size Reduction 1

2017 (FY 2018) 7,085,658.40 (231,914.63) 21,375,481.63 43,057,808.50 36,977,500.76 30,845,541.82 24,706,747.80 44,589,989.40

2016 (FY 2017) 9,580,326.37 29,018,601.00 19,816,125.30 39,745,356.67 32,779,920.90 25,982,608.22 19,137,212.79 44,849,390.59 22,139,050.05 9,297,985.17 23,437,469.86 14,180,074.89

NV Ed Funding Plan - SB 178

2017 (FY 2018) 34,178,400.00 34,178,400.00 33,608,269.15 33,228,146.66 31,094,879.27 28,128,845.45 26,026,711.63 23,673,191.30

2016 (FY 2017) - - - - - - - - - - - -

Vegas PBS

2017 (FY 2018) 2,076,562.32 1,973,414.16 1,795,137.49 1,717,951.07 439,579.81 1,246,276.30 1,375,040.91 1,100,162.15

2016 (FY 2017) 1,779,889.05 1,857,771.32 1,483,406.51 1,379,450.22 210,580.96 1,333,744.75 1,385,751.63 1,436,424.48 1,541,434.50 1,547,265.66 1,949,913.29 2,546,355.29

Adult HS Diploma 2

2017 (FY 2018) 1,965,374.08 974,650.45 11,243.80 (1,020,540.87) (918,498.14) (887,826.35) (1,032,266.56) (1,522,943.31)

2016 (FY 2017) 3,104,234.25 5,219,924.15 4,366,962.37 3,453,275.09 2,510,745.74 4,382,008.73 3,474,807.52 5,460,702.88 4,479,360.93 6,272,963.36 5,230,201.57 3,114,562.37

State Grants 2

2017 (FY 2018) (11,553,046.12) 1,390,327.73 (4,054,054.92) (7,205,193.73) (10,654,833.35) (14,355,987.00) (9,262,907.13) (10,478,540.23)

2016 (FY 2017) 4,859,842.02 20,503,065.49 (1,132,933.77) (10,988,714.88) (2,130,801.21) (17,986,766.81) (11,298,600.19) (10,778,277.49) (17,515,888.83) (26,919,907.57) (20,272,851.57) -

Federal Grants 2

2017 (FY 2018) 3,362,694.06 (34,381,936.75) (34,362,356.95) (39,712,129.08) (46,022,336.96) (52,570,697.20) (16,498,440.41) (23,333,837.78)

2016 (FY 2017) 4,060,782.28 (16,132,985.97) (24,983,954.83) (27,308,244.25) (20,399,132.00) (17,746,784.60) (21,314,563.00) (16,774,898.50) (19,711,324.42) (27,717,787.44) (23,638,687.82) -

Medicaid - General

2017 (FY 2018) 13,216,341.10 13,138,429.56 12,801,576.65 12,787,959.74 11,851,946.17 10,753,353.46 12,088,394.66 12,710,433.39

2016 (FY 2017) 14,321,796.59 14,085,061.71 14,033,851.32 13,845,339.89 13,131,072.47 12,762,103.66 12,090,057.65 10,303,549.50 12,685,845.49 9,985,168.67 10,921,013.27 9,184,182.75

Bond

2017 (FY 2018) 483,496,020.25 473,735,462.21 452,765,051.49 434,127,356.62 411,882,474.67 614,874,498.75 585,263,466.00 563,144,274.30

2016 (FY 2017) 574,303,514.60 570,279,667.29 559,707,620.45 554,215,941.79 550,474,104.42 514,332,968.68 499,716,022.92 492,382,293.55 462,456,414.27 443,239,174.80 422,259,131.13 497,429,180.43

Building & Sites

2017 (FY 2018) 11,784,794.63 11,756,314.23 11,681,322.66 11,603,565.00 11,592,665.00 11,586,705.62 11,530,329.62 11,520,055.45

2016 (FY 2017) 12,206,342.58 12,190,500.73 12,186,022.44 12,172,912.23 12,157,146.82 12,154,813.33 12,400,275.71 12,388,825.71 12,112,923.09 12,025,376.51 11,848,017.78 11,779,883.82

GST - Rehab and Modernization

2017 (FY 2018) 60,698,883.58 60,252,990.74 61,956,430.60 63,836,142.56 65,913,380.32 67,822,501.49 69,629,280.39 71,778,071.70

2016 (FY 2017) 55,326,003.79 52,473,675.33 50,280,458.66 49,527,556.13 38,596,411.10 34,805,961.78 34,702,258.79 32,190,684.73 47,630,761.75 48,172,909.73 48,447,080.52 61,000,614.97

Capital Replacement

2017 (FY 2018) 1,291,272.04 1,644,901.78 1,607,612.88 1,234,845.86 1,234,845.86 1,233,300.85 814,332.12 810,983.96

2016 (FY 2017) - - - - - 21,969,538.05 21,969,538.05 21,969,538.05 5,728,217.35 5,662,601.32 4,736,384.92 1,699,375.89

Debt Service

2017 (FY 2018) 55,945,794.62 61,171,295.90 151,397,211.61 170,114,505.77 236,674,628.88 206,776,139.31 231,883,535.52 285,938,163.38

2016 (FY 2017) 42,808,038.04 135,614,183.71 174,022,190.10 174,586,358.89 216,064,813.19 173,354,336.45 196,850,792.26 248,997,503.34 261,430,389.34 319,260,720.13 325,910,632.21 54,196,044.30

Food Service

2017 (FY 2018) 68,654,291.24 67,048,839.77 54,922,330.62 43,398,442.24 34,193,073.26 45,009,768.74 60,069,656.68 51,351,404.76

2016 (FY 2017) 48,164,331.01 57,563,841.66 49,005,861.12 39,481,956.95 45,176,960.03 47,494,002.85 39,804,785.98 48,363,897.74 34,560,845.12 48,802,873.43 54,786,604.89 57,033,115.05

Insurance and Risk Management

2017 (FY 2018) 34,707,014.34 35,492,833.26 36,181,818.61 37,100,537.06 37,096,271.20 36,682,281.44 37,283,547.81 38,037,566.56

2016 (FY 2017) 28,405,715.35 28,340,772.44 29,061,282.64 29,686,070.79 30,134,442.35 29,551,106.53 30,279,254.85 31,292,819.32 31,465,939.95 31,974,310.57 32,524,172.15 33,846,576.20

Graphics Arts Production

2017 (FY 2018) 1,842,256.95 1,846,084.67 1,826,749.64 1,929,619.36 1,957,423.58 1,909,039.80 1,856,380.49 1,875,710.97

2016 (FY 2017) 1,588,381.47 1,640,114.59 1,686,518.68 1,749,790.18 1,727,352.43 1,754,515.14 1,719,307.73 1,712,879.64 1,655,232.17 1,624,281.90 1,715,857.12 1,819,975.65

Total Cash and Investments

2017 (FY 2018) 842,665,731.30 786,764,924.19 950,638,106.53 919,621,122.32 977,241,535.76 1,178,330,496.96 1,178,081,991.31 1,250,756,226.01 - - - -

2016 (FY 2017) 826,670,709.63 1,108,572,400.27 1,153,639,574.38 1,058,112,756.05 1,130,772,070.81 1,086,926,995.91 1,011,907,758.67 1,161,909,897.41 1,109,166,988.48 1,098,508,014.85 1,130,130,499.98 893,481,151.80

1 Negative cash balance due to receipt of first quarter payment in September.

2 Due to Federal regulation CFR 200.305, grant funds sometimes have a negative cash balance as a result of the reimbursement method.

3/20/2018CLGF Meeting 4-03-18 Page 147


Cash and Investments by Fund

Fiscal Years 2017 - 2018 YTD

FUND JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE

General Operating

2017 (FY 2018) 73,913,419.81 56,774,831.11 147,124,281.57 113,422,105.56 153,928,535.43 189,276,754.48 142,348,181.78

2016 (FY 2017) 26,161,512.23 195,918,206.82 264,106,163.39 176,565,706.35 210,338,453.61 242,782,839.15 170,990,855.98 238,114,563.87 248,507,787.72 215,280,078.61 230,275,560.66 145,651,210.19

Class Size Reduction 1

2017 (FY 2018) 7,085,658.40 (231,914.63) 21,375,481.63 43,057,808.50 36,977,500.76 30,845,541.82 24,706,747.80

2016 (FY 2017) 9,580,326.37 29,018,601.00 19,816,125.30 39,745,356.67 32,779,920.90 25,982,608.22 19,137,212.79 44,849,390.59 22,139,050.05 9,297,985.17 23,437,469.86 14,180,074.89

NV Ed Funding Plan - SB 178

2017 (FY 2018) 34,178,400.00 34,178,400.00 33,608,269.15 33,228,146.66 31,094,879.27 28,128,845.45 26,026,711.63

2016 (FY 2017) - - - - - - - - - - - -

Vegas PBS

2017 (FY 2018) 2,076,562.32 1,973,414.16 1,795,137.49 1,717,951.07 439,579.81 1,246,276.30 1,375,040.91

2016 (FY 2017) 1,779,889.05 1,857,771.32 1,483,406.51 1,379,450.22 210,580.96 1,333,744.75 1,385,751.63 1,436,424.48 1,541,434.50 1,547,265.66 1,949,913.29 2,546,355.29

Adult HS Diploma 2

2017 (FY 2018) 1,965,374.08 974,650.45 11,243.80 (1,020,540.87) (918,498.14) (887,826.35) (1,032,266.56)

2016 (FY 2017) 3,104,234.25 5,219,924.15 4,366,962.37 3,453,275.09 2,510,745.74 4,382,008.73 3,474,807.52 5,460,702.88 4,479,360.93 6,272,963.36 5,230,201.57 3,114,562.37

State Grants 2

2017 (FY 2018) (11,553,046.12) 1,390,327.73 (4,054,054.92) (7,205,193.73) (10,654,833.35) (14,355,987.00) (9,262,907.13)

2016 (FY 2017) 4,859,842.02 20,503,065.49 (1,132,933.77) (10,988,714.88) (2,130,801.21) (17,986,766.81) (11,298,600.19) (10,778,277.49) (17,515,888.83) (26,919,907.57) (20,272,851.57) -

Federal Grants 2

2017 (FY 2018) 3,362,694.06 (34,381,936.75) (34,362,356.95) (39,712,129.08) (46,022,336.96) (52,570,697.20) (16,498,440.41)

2016 (FY 2017) 4,060,782.28 (16,132,985.97) (24,983,954.83) (27,308,244.25) (20,399,132.00) (17,746,784.60) (21,314,563.00) (16,774,898.50) (19,711,324.42) (27,717,787.44) (23,638,687.82) -

Medicaid - General

2017 (FY 2018) 13,216,341.10 13,138,429.56 12,801,576.65 12,787,959.74 11,851,946.17 10,753,353.46 12,088,394.66

2016 (FY 2017) 14,321,796.59 14,085,061.71 14,033,851.32 13,845,339.89 13,131,072.47 12,762,103.66 12,090,057.65 10,303,549.50 12,685,845.49 9,985,168.67 10,921,013.27 9,184,182.75

Bond

2017 (FY 2018) 483,496,020.25 473,735,462.21 452,765,051.49 434,127,356.62 411,882,474.67 614,874,498.75 585,263,466.00

2016 (FY 2017) 574,303,514.60 570,279,667.29 559,707,620.45 554,215,941.79 550,474,104.42 514,332,968.68 499,716,022.92 492,382,293.55 462,456,414.27 443,239,174.80 422,259,131.13 497,429,180.43

Building & Sites

2017 (FY 2018) 11,784,794.63 11,756,314.23 11,681,322.66 11,603,565.00 11,592,665.00 11,586,705.62 11,530,329.62

2016 (FY 2017) 12,206,342.58 12,190,500.73 12,186,022.44 12,172,912.23 12,157,146.82 12,154,813.33 12,400,275.71 12,388,825.71 12,112,923.09 12,025,376.51 11,848,017.78 11,779,883.82

GST - Rehab and Modernization

2017 (FY 2018) 60,698,883.58 60,252,990.74 61,956,430.60 63,836,142.56 65,913,380.32 67,822,501.49 69,629,280.39

2016 (FY 2017) 55,326,003.79 52,473,675.33 50,280,458.66 49,527,556.13 38,596,411.10 34,805,961.78 34,702,258.79 32,190,684.73 47,630,761.75 48,172,909.73 48,447,080.52 61,000,614.97

Capital Replacement

2017 (FY 2018) 1,291,272.04 1,644,901.78 1,607,612.88 1,234,845.86 1,234,845.86 1,233,300.85 814,332.12

2016 (FY 2017) - - - - - 21,969,538.05 21,969,538.05 21,969,538.05 5,728,217.35 5,662,601.32 4,736,384.92 1,699,375.89

Debt Service

2017 (FY 2018) 55,945,794.62 61,171,295.90 151,397,211.61 170,114,505.77 236,674,628.88 206,776,139.31 231,883,535.52

2016 (FY 2017) 42,808,038.04 135,614,183.71 174,022,190.10 174,586,358.89 216,064,813.19 173,354,336.45 196,850,792.26 248,997,503.34 261,430,389.34 319,260,720.13 325,910,632.21 54,196,044.30

Food Service

2017 (FY 2018) 68,654,291.24 67,048,839.77 54,922,330.62 43,398,442.24 34,193,073.26 45,009,768.74 60,069,656.68

2016 (FY 2017) 48,164,331.01 57,563,841.66 49,005,861.12 39,481,956.95 45,176,960.03 47,494,002.85 39,804,785.98 48,363,897.74 34,560,845.12 48,802,873.43 54,786,604.89 57,033,115.05

Insurance and Risk Management

2017 (FY 2018) 34,707,014.34 35,492,833.26 36,181,818.61 37,100,537.06 37,096,271.20 36,682,281.44 37,283,547.81

2016 (FY 2017) 28,405,715.35 28,340,772.44 29,061,282.64 29,686,070.79 30,134,442.35 29,551,106.53 30,279,254.85 31,292,819.32 31,465,939.95 31,974,310.57 32,524,172.15 33,846,576.20

Graphics Arts Production

2017 (FY 2018) 1,842,256.95 1,846,084.67 1,826,749.64 1,929,619.36 1,957,423.58 1,909,039.80 1,856,380.49

2016 (FY 2017) 1,588,381.47 1,640,114.59 1,686,518.68 1,749,790.18 1,727,352.43 1,754,515.14 1,719,307.73 1,712,879.64 1,655,232.17 1,624,281.90 1,715,857.12 1,819,975.65

Total Cash and Investments

2017 (FY 2018) 842,665,731.30 786,764,924.19 950,638,106.53 919,621,122.32 977,241,535.76 1,178,330,496.96 1,178,081,991.31 - - - - -

2016 (FY 2017) 826,670,709.63 1,108,572,400.27 1,153,639,574.38 1,058,112,756.05 1,130,772,070.81 1,086,926,995.91 1,011,907,758.67 1,161,909,897.41 1,109,166,988.48 1,098,508,014.85 1,130,130,499.98 893,481,151.80

1 Negative cash balance due to receipt of first quarter payment in September.

2 Due to Federal regulation CFR 200.305, grant funds sometimes have a negative cash balance as a result of the reimbursement method.

February 20, 2018CLGF Meeting 4-03-18 Page 148



Financial Statements June 30, 2017

City of Carlin



City of Carlin Table of Contents

June 30, 2017

Independent Auditor’s Report .................................................................................................................................... 1

Management’s Discussion and Analysis .................................................................................................................... 4

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Position .................................................................................................................................. 12 Statement of Activities ...................................................................................................................................... 13


Balance Sheet – Governmental Funds ............................................................................................................... 14 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ........................... 15 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ...................... 16 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund

Balances to the Statement of Activities ................................................................................................... 17 Statement of Net Position – Proprietary Fund ................................................................................................... 18 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Fund ....................................... 19 Statement of Cash Flows – Proprietary Fund .................................................................................................... 20 Notes to Financial Statements ........................................................................................................................... 22

Required Supplementary Information

Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund .. 46 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Open Door

Senior Citizens Center ............................................................................................................................. 50 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Grants Fund .... 51 Schedule of Funding Progress – Other Postemployment Benefit Plans ............................................................ 52 Schedule of City’s Share of Net Pension Liability ............................................................................................ 53 Schedule of City’s Contributions ...................................................................................................................... 54

Supplementary Information

Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Capital Projects Fund ......................................................................................................................................................... 55

Combining Balance Sheet – Nonmajor Governmental Funds ........................................................................... 56 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental

Funds ....................................................................................................................................................... 57 Parks and Recreation Fund ................................................................................................................................ 58 Municipal Court Building Fund ........................................................................................................................ 59 Administrative Assessment Fund ...................................................................................................................... 60 Parks and Recreation Fund #2 ........................................................................................................................... 61 Equestrian Center Fund ..................................................................................................................................... 62 Police Forfeiture Fund ....................................................................................................................................... 63 Debt Service Fund ............................................................................................................................................. 64 Perpetual Cemetery Care Fund .......................................................................................................................... 65 Schedule of Revenues, Expenses, and Changes in Net Position – Budget and Actual – Utility Fund .............. 66 Schedule of Fees Imposed Subject to the Provisions of NRS 354.5989 ........................................................... 67


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Compliance Section

Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................................................................................................................... 68

Schedule of Findings and Responses ................................................................................................................ 70

Auditor’s Comments ......................................................................................................................................... 74




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Independent Auditor’s Report

To the Honorable Mayor and Council City of Carlin State of Nevada

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Carlin, State of Nevada (the City), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.




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Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Carlin, State of Nevada, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Adoption of New Accounting Standard As discussed in Notes 1 and 15 to the financial statements, the City has adopted the provisions of GASB Statement No. 82, Pension Issues – An Amendment of GASB No. 67, No 68, and No .73, which has resulted in a restatement of the net position as of July 1, 2016. Our opinions are not modified with respect to this matter.

Other Matters

Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis on pages 4 through 11, budgetary comparison information on pages 46 through 50, the Schedules of Funding Progress – Other Postemployment Benefits Plans on page 51, the Schedule of the City’s Share of Net Pension Liability on page 52 and the Schedule of the City’s Contributions on page 53 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Management’s Discussion and Analysis, the Schedules of Funding Progress – Other Postemployment Benefits Plans, the Schedule of the City’s Share of Net Pension Liability and the Schedule of the City’s Contributions in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

The budgetary comparison information is the responsibility of management and was derived from and relate directly to underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statement themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary comparison information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparisons and schedule of fees imposed subject to the provision of NRS 354.5989 are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and budgetary comparisons are the responsibility of management and were derived from and relate directly to the underlying accounting and




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other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparisons are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The schedule of fees imposed subject to the provision of NRS 354.5989 has not been subject to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it.

Prior-Year Comparative Information We have previously audited, in accordance with accounting standards general accepted in the United States of America, the basic financial statements of the City as of and for the year ended June 30, 2016, and have issued a report thereon dated January 10, 2017, which expressed an unmodified opinion on the respective financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information.

The individual fund financial statements and budgetary comparisons related to the 2016 financial statements are presented for purposes of additional analysis and were derived from and relate directly to the underlying accounting and other records used to prepare the 2016 financial statements. The information has been subjected to the auditing procedures applied in the audit of the 2016 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those financial statements or to those financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. The combining and individual fund financial statements and budgetary comparisons are consistent in relation to the basic financial statements from which they have been derived.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 15, 2018 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Elko, Nevada February 15, 2018




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City of Carlin Management’s Discussion and Analysis

June 30, 2017

The Management’s Discussion and Analysis (MD&A) is presented to provide the reader with an overview of the financial activity and financial condition of the City of Carlin (City). This document is required by the Governmental Accounting Standards Board (GASB) in Statement No. 34 and subsequent statements governing the presentation of the financial statements, MD&A, and note disclosure for state and local governments. The major components of this financial report include:

• Management’s Discussion and Analysis (MD&A)• Basic Financial Statements• Other Required Supplementary Information (RSI)

The MD&A, a component of RSI, introduces the basic financial statements and provides an analytical overview of the City’s financial activities.

Overview of the Financial Statements

The City’s basic financial statements include the following elements:

Government-wide Financial Statements

Government-wide financial statements provide both long-term and short-term information about the City’s overall financial condition. Changes in the City’s financial position may be measured over time by increases and decreases in the Statement of Net Position. Information on how the City’s net position changed during the fiscal year is presented in the Statement of Activities.


Fund financial statements focus on individual parts of the City, reporting the City’s operations in more detail than the government-wide financial statements. Fund financial statements include the statements for governmental, proprietary and fiduciary funds.

Notes to the Financial Statements

Notes to the financial statements provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements.

Refer to Note 1 to the financial statements for more detailed information on the elements of the financial statements. Table 1 below summarizes the major features of the basic financial statements.


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June 30, 2017

Table 1: Major Features of the Basic Financial Statements

Government-Wide Financial Statements Government Funds Proprietary Funds Fiduciary Funds

Scope Entire City Government (except fiduciary funds)

Activities of the City that are not proprietary or fiduciary

Activities of the City that are operated similar to private businesses

Instances in which the City is the trustee agent for someone else’s resources

Required Financial Statements

Statement of Net Position, Statement of Activities

Balance Sheet, Statement of Revenues, Expenditures and Changes in Fund Balances

Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position, Statement of Cash Flows

Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position

Accounting Basis and Measurement Focus

Accrual accounting and economic resources focus

Modified accrual accounting and current financial resources focus

Accrual accounting and economic resources focus

Accrual accounting

Types of Asset/Liability/ Deferred Inflow/Outflow Information

All assets and liabilities both financial, capital assets and short-term and long-term, deferred inflows/outflows of resources

Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included. Deferred inflows/outflows are resources for which cash will be received or expended in a future period

All assets and liabilities, both financial, capital assets and short-term and long-term, deferred inflows/outflows of resources

Assets and liabilities held in fiduciary capacity

Type of Inflow/Outflow Information

All revenues and expenses during the year, regardless of when cash is received or paid

Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter

All revenues and expenses during the year, regardless of when cash is received or paid

Revenues and expenses during the year, regardless of when cash is received or paid



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June 30, 2017 Condensed Statement of Net Position The largest component, $7,614,751 of the City’s net position reflects its investment in capital assets (i.e. land, infrastructure, buildings, equipment and others) less depreciation and any related debt outstanding that was needed to acquire or construct the assets. Capital Assets represent 57% of this City’s total Net Position. The City uses these capital assets to provide services to the citizens and businesses in the City; consequently, these capital assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Table 2 below presents the City’s condensed statement of net position. These are derived from the government-wide Statement of Net Position.

2017 2016 (as restated) 2017 2016 (as restated) 2017 2016 (as restated)Current and other

assets 6,195,887$ 5,653,934$ 2,546,639$ 2,457,083$ 8,742,526$ 8,111,017$ Capital Assets 4,991,283 5,213,484 2,783,762 2,903,796 7,775,045 8,117,280

Total Assets 11,187,170 10,867,418 5,330,401 5,360,879 16,517,571 16,228,297

Deferred outflowsof Resources 337,557 140,137 105,503 42,498 443,060 182,635

Other liabilities 175,311 220,327 47,085 48,789 222,396 269,116 Long-term liabilities

Due in one year 46,455 46,648 56,383 51,235 102,838 97,883 Due in more than

one year 2,398,650 2,170,230 699,910 641,452 3,098,560 2,811,682

Total liabilities 2,620,416 2,437,205 803,378 741,476 3,423,794 3,178,681

Deferred inflowsof resources 210,441 236,430 63,562 71,699 274,003 308,129

Net investment incapital assets 4,848,316 5,064,917 2,766,435 2,867,867 7,614,751 7,932,784

Restricted 187,074 141,459 20,398 20,398 207,472 161,857 Unrestricted 3,658,480 3,127,544 1,782,131 1,701,937 5,440,611 4,829,481

Total net position 8,693,870$ 8,333,920$ 4,568,964$ 4,590,202$ 13,262,834$ 12,924,122$ -

Table 2: Condensed Statement of Net Position

Governmental Activates Business-type Activities Total


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June 30, 2017

Changes in Net Position

Table 3 presents the City’s changes in net position, as derived from the government-wide Statement of Activities. Over time, increases and decreases measure whether the City’s financial position is improving or deteriorating. During the fiscal year, the net position of the governmental activities increased by $359,950 and the net position of the business-type activities decreased by $21,238.

2017 2016 (as restated) 2017 2016 (as restated) 2017 2016 (as restated)Program revenues

Charges for services 255,116$ 289,512$ 1,040,122$ 1,124,883$ 1,295,238$ 1,414,395$ Operating grants

contributions 287,334 154,213 - - 287,334 154,213 Capital grants and

contributions - 75,342 2,000 - 2,000 75,342

Total programs revenues 542,450 519,067 1,042,122 1,124,883 1,584,572 1,643,950

General revenuesTaxes

Property 422,936 375,265 - - 422,936 375,265 Room 49,761 43,732 - - 49,761 43,732 Fuel 48,891 48,542 - - 48,891 48,542

Consolidated revenues 1,810,661 1,829,419 - - 1,810,661 1,829,419 Interest and investment

earnings 6,959 7,512 19,087 17,235 26,046 24,747 Miscellaneous 363,335 84,769 14,188 11,947 377,523 96,716

Total general revenues 2,702,543 2,389,239 33,275 29,182 2,735,818 2,418,421

Total revenues 3,244,993 2,908,306 1,075,397 1,154,065 4,320,390 4,062,371

Program expensesGeneral government 872,599 987,537 872,599 987,537 Public safety 1,182,095 1,193,289 - - 1,182,095 1,193,289 Judicial 56,748 76,542 - - 56,748 76,542 Public works 366,176 338,121 - - 366,176 338,121 Health and sanitation 90,362 101,699 - - 90,362 101,699 Culture and recreation 310,563 293,205 - - 310,563 293,205 Water - - 457,529 383,223 457,529 383,223 Garbage - - 147,838 113,291 147,838 113,291 Sewer - - 463,415 424,961 463,415 424,961 Street lights - - 27,853 27,856 27,853 27,856 Interest on long-term debt 6,500 6,294 - - 6,500 6,294

Total expenses 2,885,043 2,996,687 1,096,635 949,331 3,981,678 3,946,018

Change in net position 359,950 (88,381) (21,238) 204,734 338,712 116,353

Net position,beginning of year 8,333,920 8,422,301 4,590,202 4,385,468 12,924,122 12,807,769

Net position, end of year 8,693,870$ 8,333,920$ 4,568,964$ 4,590,202$ 13,262,834$ 12,924,122$

Table 3: Change in Net Position

Governmental Activates Business-type Activities Total


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June 30, 2017 Program Expenses and Revenues for Governmental Activities Table 4 presents program expenses and revenues for governmental activities. Generally, program revenues were not sufficient to cover program expenses for governmental activities. The net program expenses of these governmental activities were, therefore, supported by general revenues, which are derived primarily from consolidated tax revenue from the State and from property taxes.

Net Program (Expenses) Program Expenses Program Revenues Revenues

General Government $ 872,599 $ - (872,599)$ Public Safety 1,182,095 237,032 (945,063)Judicial 56,748 - (56,748)Public Works 366,176 69,706 (296,470)Health and Sanitation 90,362 - (90,362)Culture and Recreation 310,563 235,712 (74,851)Interest Long-term Debt 6,500 - (6,500)

Total $ 2,885,043 542,450$ $ (2,342,593)

Table 4: Program Expenses and Revenuesfor Governmental Activities

For the Fiscal Year Ended June 30, 2017

City Programs

Program Expenses and Revenues for Business-type Activities Table 5 presents program expenses and revenues for business-type activities. Program revenues generated from business-type activities were sufficient to cover program expenses.

Net Program (Expenses) Program Expenses Program Revenues Revenues

Water $ 457,529 $ 461,310 3,781$ Garbage 147,838 227,487 79,649 Sewer 463,415 325,472 (137,943)Street Lights 27,853 27,853 -

Total $ 1,096,635 1,042,122$ $ (54,513)

for Business-type ActivitiesFor the Fiscal Year Ended June 30, 2017

City Programs

Table 5: Program Expenses and Revenues


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June 30, 2017

Financial highlights for the City during the fiscal year ended June 30, 2017, include the following:

• The City’s total Net Position for all activities increased from $12,924,122 to $13,262,834, an increase of$338,712 (2.6%). This increase is attributable to continued expense control by all departments because ofuncertain revenue projections. General Fund expenditures were lower than budgeted amounts by $675,201(24.5%). General Fund revenues were also better than projected by $203,927 (8.1%) due to a conservativeestimate of budget revenues during budgeting and an actual increase in Developer Reimbursement Income.

• Capital assets added during the year in the amount of $139,804 include improvements to City buildings andfacilities, the City Park and the Equestrian Park, and three new police vehicles was purchased and placed inservice.

• The City’s Business-type Activities (Utility Fund) operating expenses exceeded operating revenues by $54,717.As an Enterprise Fund, the Utility Fund is required to generate operating revenues sufficient to offset operatingexpenses. Excess revenues year to year are used for maintenance and eventual replacement of older infrastructure.A Preliminary Engineering Report (PER) is currently underway and a refurbishment plan can be implementedfollowing the PER. The costs associated with the PER resulted in expenses exceeding revenues in the currentyear.

Fund Analysis

All Governmental Funds

At the close of the fiscal year ending June 30, 2017, the City’s governmental funds reported a combined endingfund balance of $5,759,985, representing an increase of $586,802 (11.5%) from the previous fiscal year. Theincrease across all governmental funds is the result of the following factors:

• Expense control by all departments.• Increased revenue from higher than projected revenues.

General Fund

Fund balance at June 30, 2017 totaled $4,641,861 which is an increase of $541,135 (11.7%) from the previousfiscal year. The increase is due to lower than budgeted expenses and an increase in excepted revenues.

Capital Projects Fund

Fund balance at June 30, 2017 totaled $304,497 which is an increase of $38,653 (14.5%) from the previous year.The increase is due to there being no new major construction or renovation projects during the year.

Senior Citizens Center Fund

Fund balance at June 30, 2017 totaled $89,673 which is an increase of $50,566 (129.3%) from the previous year.The increase is due to lower than budgeted expenses.


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June 30, 2017 Grants Fund

Fund balance at June 30, 2017 was a deficit of $8,872 which is decrease of $22,159 (162.4%) from the previous year. The decrease is due to the timing of when revenues are received and recognized in governmental funds. Non-major Governmental Funds Fund balance at June 30, 2017 totaled $732,826, which is a decrease of $21,330 (2.8%) from the previous fiscal year. The following table shows the fund balances that are included in the Non-major Governmental Funds, as of June 30, 2017 and the increase/(decrease) from the previous fiscal year:

Fund BalanceJune 30, 2017 Increase/(Decrease)

Non-Major Governmental Funds:Municipal Court Building Fund 14,445 2,582 Administrative Assessment Fund 6,876 1,321 Park and Recreation Fund 285,724 6,031 Parks and Recreation Fund #2 44,473 2,568 Equestrian Center Fund 94,778 7,195 Debt Service Fund 77,426 (12,100) Police Forfeiture Fund 123,982 (31,208) Perpetual Cemetery Care Fund 85,122 2,578

Totals 732,826$ (21,033)$

Fund

Proprietary Funds The City’s sole Proprietary Fund, the Utility Fund, had a net position of $4,568,964 as of June 30, 2017. Operating expenses exceeded operating revenues by $54,717. Capital Asset and Long-term Debt Activity

Capital Asset Activity At June 30, 2017, the City reported $4,991,283 in capital assets for governmental activities and $2,783,762 in capital assets for business-type activities. Capital asset additions included three vehicles for the police department, a portable loading ramp for the Equestrian Park, and a scoreboard for Legion Field. Depreciation exceeded additions to capital assets in the current year. Long-term Debt Activity Long-term debt outstanding at June 30, 2017, excluding the annual required contribution for other-post employment benefits and the net position liability, totaled $160,294. The debt consists of the $142,967 for the Senior Center and $17,327 for the Water Line Extension (2/3 of this debt is paid by the City of Elko and Elko County). The other postemployment benefits liability increased by $20,701 to $229,138. The City’s net pension liability increase by $298,957 to $2,680,474.


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June 30, 2017

Additionally, the City estimates $131,492 for compensated absences.

For additional information, refer to Note 6 in the financial statements.

Requests for Information

This financial report is designed to provide a general overview of the financial activity of the City of Carlin to all having an interest in the City of Carlin. Questions concerning any of the information provided in this report or requests of additional financial information should be addressed to the City of Carlin, Attn: City Manager, P.O. Box 787, Carlin, Nevada 89822.


See Notes to Financial Statements 12

City of Carlin Statement of Net Position

June 30, 2017

Governmental Business-TypeActivities Activities Total

AssetsCash 5,540,707$ 2,444,182$ 7,984,889$ Accounts receivable, net 80,047 82,059 162,106 Due from other governments 401,410 - 401,410 Due from developers 145,000 - 145,000 Taxes receivable, delinquent 13,273 - 13,273 Prepaid expenses 3,350 - 3,350 Restricted cash and cash equivalents 12,100 20,398 32,498 Capital assets, net of

accumulated depreciation 3,471,911 2,705,707 6,177,618 Capital assets, not being depreciated 1,519,372 78,055 1,597,427

Total assets 11,187,170 5,330,401 16,517,571

Deferred Outflows of ResourcesDeferred outflows related to pensions 337,557 105,503 443,060

LiabilitiesAccounts payable and other 106,339 34,831 141,170 Accrued salaries and related liabilities 55,611 - 55,611 Customer meter deposits - 12,254 12,254 Unearned revenue - grants 13,361 - 13,361 Noncurrent liabilities portion due or payable

within one yearCompensated absences 40,610 39,056 79,666 Notes payable 5,845 17,327 23,172

Noncurrent liabilities portion due or payableafter one year

Compensated absences 26,418 25,408 51,826 Notes payable 137,122 - 137,122 Other postemployment benefits liability 180,993 48,145 229,138 Net pension liability 2,054,117 626,357 2,680,474

Total liabilities 2,620,416 803,378 3,423,794

Deferred Inflows of ResourcesDeferred inflows related to pensions 210,441 63,562 274,003

Net PositionNet investment in capital assets 4,848,316 2,766,435 7,614,751 Restricted for

Debt service 12,100 20,398 32,498 Nonspendable perpetual cemetery care 33,004 - 33,004 Perpetual cemetery care 52,118 - 52,118 Capital projects 68,050 - 68,050 Senior Center 481 - 481 Judicial fees (NRS 176) 21,321 - 21,321

Unrestricted 3,658,480 1,782,131 5,440,611

Total net position 8,693,870$ 4,568,964$ 13,262,834$


See Notes to Financial Statements

Program RevenuesOperating Capital

Charges for Grants and Grants andFunctions/Programs Expenses Services Contributions ContributionsGovernmental Activities

General government 872,599$ -$ -$ -$ Public safety 1,182,095 134,146 102,886 - Judicial 56,748 - - - Public works 366,176 69,706 - - Health and sanitation 90,362 - - - Culture and recreation 310,563 51,264 184,448 - Interest on long-term debt 6,500 - - -

Total governmental activities 2,885,043 255,116 287,334 -

Business-type ActivitiesWater 457,529 461,310 - - Garbage 147,838 227,487 - - Sewer 463,415 323,472 - 2,000 Street lights 27,853 27,853 - -

Total business-type activities 1,096,635 1,040,122 - 2,000

Total primary government 3,981,678$ 1,295,238$ 287,334$ 2,000$

Property taxesRoom taxesConsolidated revenues - unrestrictedFuel taxesInterest and investment earningsMiscellaneous revenue

Total general revenues

Change in Net Position

Net Position, Beginning of Year, as Originally Reported

Prior period adjustment

Net Position, Beginning of Year, as Restated

Net Position, End of Year


13

City of Carlin Statement of Activities

Year Ended June 30, 2017

Net (Expense) Revenue andChanges in Net Position

Primary GovernmentGovernmental Business-Type

Activities Activities Total

(872,599)$ -$ (872,599)$ (945,063) - (945,063)

(56,748) - (56,748) (296,470) - (296,470)

(90,362) - (90,362) (74,851) - (74,851)

(6,500) - (6,500)

(2,342,593) - (2,342,593)

- 3,781 3,781 - 79,649 79,649 - (137,943) (137,943) - - -

- (54,513) (54,513)

(2,342,593) (54,513) (2,397,106)

422,936 - 422,936 49,761 - 49,761

1,810,661 - 1,810,661 48,891 - 48,891

6,959 19,087 26,046 363,335 14,188 377,523

2,702,543 33,275 2,735,818

359,950 (21,238) 338,712

8,473,867 4,632,643 13,106,510

(139,947) (42,441) (182,388)

8,333,920 4,590,202 12,924,122

8,693,870$ 4,568,964$ 13,262,834$



City of Carlin Balance Sheet – Governmental Funds

June 30, 2017

Senior Citizens Capital Other TotalCenter Grants Projects Governmental Governmental

General Fund Fund Fund Funds FundsAssets

Cash 4,428,095$ 81,850$ 19,146$ 296,159$ 715,457$ 5,540,707$ Receivables, net

Accounts 73,611 - - - 6,436 80,047 Taxes 13,273 - - - - 13,273 Due from developers 145,000 - - - - 145,000

Due from other governments 333,204 23,301 36,567 8,338 - 401,410 Prepaid expenses - - 3,350 - - 3,350 Restricted cash - - - - 12,100 12,100

Total assets 4,993,183$ 105,151$ 59,063$ 304,497$ 733,993$ 6,195,887$

LiabilitiesAccounts payable 65,158$ 15,478$ 24,344$ -$ 1,167$ 106,147$ Accrued salaries and related liabilities 55,611 - - - - 55,611 Bail and fines held 192 - - - - 192 Unearned revenue - grants - - 13,361 - - 13,361

Total liabilities 120,961 15,478 37,705 - 1,167 175,311

Deferred Inflows of ResourcesUnavailable property taxes 13,273 - - - - 13,273 Unavailable due from developers 145,000 - - - - 145,000 Unavailable ambulance fees 36,028 - - - - 36,028 Unavailable grant revenue 36,060 - 30,230 - - 66,290

Total deferred inflowsof resources 230,361 - 30,230 - - 260,591

Fund BalancesNonspendable - - - - 33,004 33,004 Restricted for

Debt service - - - - 12,100 12,100 Perpetual cemetery care - - - - 52,118 52,118 Capital projects - - - 68,050 - 68,050 Senior Center - 481 - - - 481 Judicial fees (NRS 176) - - - - 21,321 21,321

Committed forFuture community development - - - - 40,005 40,005 Recreational activities - - - - 290,192 290,192 Public safety - - - - 123,982 123,982

AssignedSubsequent year operations 630,617 - - - 57,000 687,617 Other purposes - 89,192 - 236,447 103,104 428,743

Unassigned 4,011,244 - (8,872) - - 4,002,372

Total fund balances 4,641,861 89,673 (8,872) 304,497 732,826 5,759,985

Total Liabilities, Deferred Inflows ofResources, and Fund Balances 4,993,183$ 105,151$ 59,063$ 304,497$ 733,993$ 6,195,887$



City of Carlin Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position

June 30, 2017

Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances - governmental funds 5,759,985$

The net investment in capital assets is not reported in the governmental funds financialstatements because they are not current financial resources, but they are reportedin the statement of net position.

Capital assets 11,109,142$ Less accumulated depreciation (7,637,231)

3,471,911

Capital assets, not being depreciated 1,519,372 1,519,372

Unavailable revenue represents amounts that are not available to fund currentexpenditures, and therefore, are not reported as revenue in the governmental funds 260,591

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

Net pension liability (2,054,117) Notes payable (142,967) Other post employment benefits (180,993) Compensated absences (67,028)

(2,445,105)

Deferred outflows and inflows of resource related to pensions are applicable tofuture periods and, therefore, are not reported in the governmental funds.

Deferred outflows of resources related to pensions 337,557 Deferred inflows of resources related to pensions (210,441)

127,116

Net position of governmental activities 8,693,870$



City of Carlin Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds


Senior Citizens Capital Other TotalCenter Grants Projects Governmental Governmental

General Fund Fund Fund Funds FundsRevenues

Taxes 401,742$ -$ -$ 29,785$ 49,761$ 481,288$ Licenses, permits and fees 69,706 - - - - 69,706 Intergovernmental 1,868,852 148,388 72,656 - - 2,089,896 Charges for services 17,835 20,025 - - - 37,860 Fines and forfeits 24,786 - - - - 24,786 Other 318,305 15,966 - 8,868 49,094 392,233

Total revenues 2,701,226 184,379 72,656 38,653 98,855 3,095,769

ExpendituresCurrent

General government 719,715 - - - - 719,715 Public safety 907,888 - 95,175 - 21,825 1,024,888 Judicial 44,647 - - - 11,374 56,021 Public works 222,758 - - - - 222,758 Health and sanitation 60,939 - - - - 60,939 Culture and recreation 19,675 205,976 - - 52,084 277,735

Capital outlay 104,319 7,987 - - 22,505 134,811 Debt service

Principal - - - - 5,129 5,129 Interest - - - - 6,971 6,971

Total expenditures 2,079,941 213,963 95,175 - 119,888 2,508,967

Excess (Deficiency) of RevenuesOver Expenditures 621,285 (29,584) (22,519) 38,653 (21,033) 586,802

Other Financing Source (Uses)Transfer in - 80,150 - - 40,000 120,150 Transfer out (80,150) - - - (40,000) (120,150)

Total other financing sources (uses) (80,150) 80,150 - - - -

Net Change in Fund Balances 541,135 50,566 (22,519) 38,653 (21,033) 586,802

Fund Balances, Beginning of Year 4,100,726 39,107 13,647 265,844 753,859 5,173,183

Fund Balances, End of Year 4,641,861$ 89,673$ (8,872)$ 304,497$ 732,826$ 5,759,985$



City of Carlin Reconciliation of the Governmental Funds Statement of Revenues, Expenditures,

and Changes in Fund Balances to the Statement of Activities Year Ended June 30, 2017

Amounts reported for governmental activities in the statements of activities are different because:

Net change in fund balances - total governmental funds 586,802$

Capital outlays to purchase or build capital assets are reported in governmentalfunds as expenditures. However, those costs are shown in the statement of netposition and allocated over their estimated useful lives as depreciation expense in the statement of activities. This is the amount by which depreciation exceededcapital outlays in the current period.

Capital outlay to purchase capital assets 133,832$ Current depreciation expense (356,033)

(222,201)

Revenue in the statement of activities that do not provide current financial resourcesare not reported as revenues in the funds.

Change in unavailable property taxes (8,591) Change in unavailable ambulance fees (57,532) Change in unavailable grant revenue 66,290

167

Long-term liabilities, include notes payable, that are not due and payable in currentperiod and therefore are not reported in the governmental funds.

Note payable - principal payments 5,600

Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and, therefore, are not reported as expenditures ingovernmental funds.

Current year change in compensated absences 8,245 Current year change in other post employment benefits (15,307)

(7,062)

Governmental funds report City PERS contributions as expenditures. However, in the statement of activities, the cost of pension benefits earned is reported aspension expense:

City PERS contributions 140,397 City pension expense (143,753)

(3,356)

Change in net position of governmental activities 359,950$



City of Carlin Statement of Net Position – Proprietary Fund

June 30, 2017

Business-TypeActivities

Enterprise FundUtility Fund

AssetsCurrent Assets

Cash 2,444,182$ Accounts receivable 82,059

Total current assets 2,526,241

Noncurrent AssetsRestricted cash and cash equivalents 20,398 Capital assets, net of accumulated depreciation 2,705,707 Capital assets, not being depreciated 78,055

Total noncurrent assets 2,804,160

Total assets 5,330,401

Deferred Outflows of ResourcesDeferred outflows related to pensions 105,503

LiabilitiesCurrent Liabilities

Accounts payable 34,831 Compensated absences, current portion 39,056 Customer meter deposits 12,254 Note payable, current portion 17,327

Total current liabilities 103,468

Noncurrent LiabilitiesCompensated absences 25,408 Net pension liability 626,357 Other post employment benefits 48,145

Total noncurrent liabilities 699,910

Total liabilities 803,378

Deferred Inflows of ResourcesDeferred inflows related to pensions 63,562

Net PositionNet investment in capital assets 2,766,435 Restricted for debt service 20,398 Unrestricted 1,782,131

Total net position 4,568,964$



City of Carlin Statement of Revenues, Expenses, and Changes in Net Position –

Proprietary Fund Year Ended June 30, 2017



Operating RevenuesCharges for sales and services

Water (pledged for revenue bond coverage) 461,310$ Garbage 227,487 Sewer 323,472 Street lights 27,853

Total operating revenues 1,040,122

Operating ExpensesSalaries and wages 296,229 Employee benefits 162,887 Services and supplies 242,029 General services and supplies 267,688 Depreciation 126,006

Total operating expenses 1,094,839

Operating Income (Loss) (54,717)

Nonoperating Revenues (Expenses)Interest and penalties earned 19,087 Miscellaneous revenues 14,188 Interest expense (1,796)

Total nonoperating revenues 31,479

Income (Loss) Before Capital Contributions (23,238)

Capital Contributions 2,000

Change in Net Position (21,238)

Net Position, Beginning of Year, as Originally Reported 4,632,643

Prior period adjustment (42,441)

Net Position, Beginning of Year, as Restated 4,590,202

Net Position, End of Year 4,568,964$



City of Carlin Statement of Cash Flows – Proprietary Fund




Operating ActivitiesCash received from customers 1,048,665$ Cash payments to employees for services and benefits (448,050) Cash payments to suppliers for goods and services (511,421)

Net Cash from Operating Activities 89,194

Capital and Related Financing ActivitiesAcquisition of capital assets (5,972) Proceeds from other governmental units 14,188 Note payments (18,602) Interest expense (1,796) Connection fees 2,000

Net Cash used for Capital and Related Financing Activities (10,182)

Investing ActivityInterest on investments 19,087

Net Change in Cash and Cash Equivalents 98,099

Cash and Cash Equivalents, Beginning of Year 2,366,481

Cash and Cash Equivalents, End of Year 2,464,580$

Cash and Cash Equivalents Consist ofRestricted cash and cash equivalents 20,398$ Unrestricted cash and cash equivalents 2,444,182

2,464,580$



City of Carlin Statement of Cash Flows – Proprietary Fund




Reconciliation of operating income to net cash from (used for)operating activities

Operating income (54,717)$ Adjustments to reconcile operating income (loss) to net cash

provided by operating activitiesDepreciation 126,006 Pension expense 42,685 City pension contributions (41,635)

Changes inAccounts receivable 8,543 Accounts payable 2,918 Other post employment benefits liability 5,394

Net Cash from Operating Activities 89,194$


22

City of Carlin Notes to Financial Statements

June 30, 2017

Summary of Significant Accounting Policies

The City of Carlin (the City) was incorporated April 17, 1971 per Chapter 344, Statutes of Nevada 1971. The City is governed by an elected Council of four Councilmen and a Mayor who hold the final decision making authority and are held primarily accountable for those decisions. The Council is responsible for approving the budget, establishing spending limitations, funding any deficits and borrowing funds and/or issuing bonds to finance city operations and construction.

The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing these accounting and financial principles.

The accounting and reporting framework and the more significant accounting policies are as follows:

Reporting Entity

The accompanying financial statements include all the activities that comprise the financial reporting entity of the City. The City is legally separate and fiscally independent of other governing bodies. No other governmental organizations are includable within the City’s reporting entity.

Government-Wide and Fund Financial Statements

The basic financial statements consist of government-wide statements and the fund financial statements. The government-wide financial statements include a statement of net position and a statement of activities. The government-wide statements report information on all of the activities of the City since the City does not have any fiduciary activities. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of net position presents the consolidated financial position of the City at year-end in separate columns, for both governmental and business-type activities. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to patrons who use or directly benefit from goods, services, or privileges provided by a given function, and grants and contributions that are restricted to meet the operational or capital requirements of a particular function or segment. Taxes and revenues not properly included among program revenues are reported instead as general revenues. Those programs or functions with a net cost not supported by program revenues are generally dependent on general-purpose revenues, such as taxes and unrestricted interest earnings, to remain operational. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

Separate fund financial statements are provided for governmental funds, and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. All other funds are aggregated into a single column.


23


June 30, 2017 Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-Wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Grant revenues have been deferred if funds have been received prior to meeting such requirements. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered “measurable” when in the hands of intermediary collecting agents or governments. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers all revenues available if they are collected within 60 days after the end of the current fiscal period. Anticipated refunds of taxes are recorded as liabilities and reductions of revenue when they are measurable and the payment seems certain. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. The major revenue sources of the City include consolidated tax revenues, ad valorem (property) taxes, governmental services tax, interest income and various state and federal grants. Ad valorem taxes have been deferred in the governmental funds if they are not available to finance the activities of the current period. The City’s financial records are organized on the basis of funds, which are independent fiscal and accounting entities with a separate set of self-balancing accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The City reports the following major governmental funds:

• General Fund is the primary operating fund of the City. It accounts for all financial resources and costs of operations traditionally associated with governments, which are not required to be accounted for in another fund.

• Capital Projects Fund accounts for financial resources used for the acquisition or construction of major capital assets.

• Senior Citizens Center Fund accounts for financial resources and costs associated with the operation of the Senior Citizens Center.

• Grants Fund accounts for revenue and expenditures from grants not accounted for in other funds.


24


June 30, 2017

The City reports the following major proprietary fund:

• Utility Fund accounts for all revenues and expenses used to provide water, sewer, garbage and street lightservices to the City’s residents.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services or producing and delivering goods in connection with the proprietary funds’ principal ongoing operations. Revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

The City reports the following non-major governmental fund types:

• Special Revenue Funds account for specific financial resources that are legally restricted to expenditure forspecific purposes.

• Debt Service Funds account for the servicing of general long-term debt not being financed by proprietaryfunds.

• Permanent Funds account for financial resources that are legally restricted to the extent that only earningsand not principal may be used for purposes that support the City’s programs.

Budgets and Budgetary Accounting

The City adheres to the Local Government Budget Act incorporated in Section 354 of the Nevada Revised Statutes. The City is required to legally adopt budgets for all funds except fiduciary funds. The budgets are filed as a matter of public record with the City Clerk, the County Clerk and the State Department of Taxation. The City staff use the following procedures to establish, modify, and control the budgetary information that is included in these financial statements.

On or before April 15, the City Council files a tentative budget with the Nevada Department of Taxation for all funds for the fiscal year beginning the following July 1. The tentative budget is prepared by fund, function and department and includes proposed expenditures and the means of financing them. Public budget hearings on the tentative budget must be held by the governing body not sooner than the third Monday in May and not later than the last day in May. Prior to June 1, at a public hearing, the Council indicates changes, if any, to be made to the tentative budget and adopts a final budget by the majority vote of the Council. The final budget must then be forwarded to the Nevada Department of Taxation for final approval. The above dates may be adjusted as necessary during legislative years. Formal budgetary integration in the financial records of all funds is employed to enhance management control during the year, however encumbrance accounting is not utilized. All appropriations lapse at the end of the fiscal year. The appropriated budget amounts may be transferred between functions, funds, or contingency accounts if the transfer does not increase the total appropriations for fiscal year amounts subject to advisement of the Council at the next subsequent meeting and must be recorded in the minutes of the meeting. Budget augmentations and amendments in excess of original budgetary amounts require prior approval of the City Council following a scheduled and noticed public hearing. Budgets for all funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America (GAAP). Budgeted amounts reflected in the accompanying financial statements recognize budget amendments made during the year in accordance with the above procedures.


25


June 30, 2017

In accordance with state statute, actual expenditures may not exceed budgetary appropriations of the various functions of the governmental funds, except for bond repayments, short-term financing repayment and any other long-term contract expressly authorized by law, and certain other items specified in NRS 354.626. For proprietary funds the sum of operating and nonoperating expenses may not exceed the sum of budgeted operating and nonoperating expenses.

Property Taxes

Taxes on real property are levied and the lien attached on July 1 (the levy date) of the year for which the taxes are levied. Taxes are due on the third Monday of August, however they may be paid in quarterly installments payable on the third Monday of August and the first Mondays in October, January and March. Any tax paid more than ten days late is assessed a penalty. In the event of nonpayment, a tax lien is taken on the first Monday in May, and the County Treasurer is authorized to hold the property for two additional years, subject to redemption upon payment of taxes, penalties and costs, together with interest at the rate of 10% per year from the date the taxes were due until paid. If delinquent taxes are not paid within the two-year redemption period, the County Treasurer, upon approval of the Board of County Commissioners, obtains a tax deed to the property free of all encumbrances. Upon receipt of a deed, the County Treasurer may sell the property to satisfy the tax lien.

The State of Nevada limits the total taxes levied by all overlapping governmental units within the boundaries of Elko County (i.e., the county, the state, the school district, the city, and any other city, town or special district) to an amount not to exceed $3.64 per $100 of assessed valuation of the property being taxed, except in cases of severe financial emergency as defined by NRS 354.705.

Property tax revenue and the related receivable have been recognized for property tax assessments in the fiscal year for which they were levied. All property taxes are collected by Elko County and remitted to the City monthly.

Cash

For purposes of the statement of cash flows, the City considers all time deposits, certificates of deposit, and all highly liquid investments, generally with original maturities of three months or less to be cash equivalents.

Cash balances from most funds are combined, held and invested by City staff. Interest earned on the cash balances is generally recognized in the fund holding the cash.

Debt loan agreements require the City to maintain a debt service reserve for each loan. These amounts are reported as restricted cash.

State statutes authorize deposits in any bank, credit union or savings and loan that are federally insured. The City may invest in the following securities:

• United States bonds and debentures, bills and notes of the United States Treasury, or obligations of theUnites States or a corporation sponsored by the government maturing within ten (10) years from the date ofpurchase.

• Certain farm loan bonds.• Negotiable certificates of deposit from commercial banks, insured credit unions or insured savings and loan

associations.• State of Nevada Local Government Pooled Investment Fund.• Certain securities issued by local governments of the State of Nevada.


26


June 30, 2017

• Certain “AAA” rated money market mutual funds that invest in federal securities.• Other securities expressly provided by other statues, including repurchase agreements.• Certain banker’s acceptances not to exceed 180 days maturities or 20% of the money available for

investment.• Obligations of state and local governments rated A or higher and exempt from gross income for federal

income tax purposes.• Certain corporate or depository institution commercial paper purchased from a registered broker-dealer

rated A-1, P-1, or better with maturity of no more than 270 days.

Any securities purchased by or on behalf of the City must remain in the physical possession of an appropriate officer of the City or a trust department of a designated bank (federally insured) after issuing a written acknowledgment.

Accounts Receivable

Accounts receivable are reported net of an allowance of uncollectible accounts, if applicable. No allowance for uncollectible accounts has been established since management does not anticipate any material collection loss with respect to taxes and due from developer receivables. Total accounts receivable in the General Fund of $456,028 are reported at $73,611, net of a $328,417 allowance for uncollectible ambulance billings and accounts receivable in the Utility Fund of $83,740 are reported at $82,059, net of a $1,681 allowance for uncollectable utility billings.

Inventories

Expenditures for consumable supplies and minor equipment purchases are charged against appropriations at the time of purchase. Any inventories of such supplies at June 30 are not material to the individual funds and are not recognized in these financial statements.

Capital Assets

Capital assets, which include property, plant and equipment, and infrastructure, are recorded in the government-wide and proprietary fund financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $1,500 and an estimated useful life in excess of one year. These assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at their acquisition value determined at the date of donation. Interest, if applicable, is capitalized on assets acquired with tax-exempt debt for business-type activities. The amount of interest to be capitalized is determined by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period.

Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities and the Proprietary Fund Statement of Revenues, Expenses and Changes in Net Position, with accumulated depreciation reflected in the government-wide and proprietary fund Statement of Net Position. Depreciation is provided over the assets’ estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows:

Buildings 15–100 yearsEquipment and Vehicles 5-25 yearsInfrastructure 5-50 years


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June 30, 2017 In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures by the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for as capital assets in the Statement of Net Position – Proprietary Funds. Compensated Absences Employees may accumulate unused vacation time within certain limits. Unused vacation time is paid to the employee after his/her anniversary date. After five years of employment, employees will be paid for sick leave up to 480 hours at one-fourth of the regular rate of pay at separation from service. If employment termination is due to death, any unused sick leave will be paid at the regular rate of pay. Accumulated costs for unused vacation pay and sick leave are recognized currently for those retiring prior to year-end. Remaining costs of unused vacation and sick leave are not recorded in the governmental fund financial statements, but are included in the government-wide financial statements. These benefits have typically been paid from the General Fund. Pensions For purposes of measuring the net pension liability and pension expense, information about the fiduciary net position of the Public Employees’ Retirement System of the State of Nevada (PERS) Base Plan (Base Plan) and additions to/deductions from Base Plan’s fiduciary net position have been determined on the same basis as they are reported by the Base Plan. For this purpose, benefit payments (including refund or employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Post-Employment Benefits In addition to pension benefits (Public Employees Retirement System) described in Note 7 and postemployment healthcare benefits described in Note 11, the City waives monthly utility bills for certain retired employees per the City’s Personnel Policy Manual section 5.16. The benefit terminates upon the death of the retiree. The City funds the benefit on a current basis and, as of June 30, 2017, the City had one retiree utilizing the benefit. The City had $945 associated with the above benefit for the year ended June 30, 2017. Deferred Inflows and Outflows of Resources In addition to assets, the Statements of Net Position/Governmental Funds Balance Sheet may report a separate section for deferred outflows of resources. This separate statement element represents the consumption of net position/fund balance that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reported deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the measurement date of the net pension liability and change in the City’s proportion and difference between the City’s contributions and the City’s proportionate contributions in the Statement of Net Position. In addition to liabilities, the Statements of Net Position/Governmental Funds Balance Sheet may report a separate section for deferred inflows of resources. This separate statement element represents an acquisition of net position/fund balance that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City reflects deferred inflows of resources which are unavailable revenue reported in the governmental fund balance sheet for delinquent property taxes, grants received beyond 60 days of year end and uncollected ambulance fees under the modified accrual basis of accounting. The City entered into an agreement in a prior year to sell land for cash and the value of infrastructure assets that the developer of the land would construct and then give to the City. The City reports the value of the assets to be received from the


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June 30, 2017

Developer as a deferred inflow of resources in the governmental fund balance sheet. The City reported deferred inflows of resources related to pensions resulting from differences between expected and actual experience and the difference between the projected and actual earnings on pension plan investments in the Statement of Net Position.

Fund Balance/Net Position

Government-wide and Proprietary Fund Financial Statements:

The government-wide and proprietary fund Statement of Net Position utilizes a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted. Net investment in capital assets is the net book value of capital assets, less related debt. Related debt is the debt outstanding that relates to the acquisition, construction, or improvement of capital assets.

Governmental Fund Financial Statements:

In the governmental fund financial statements, governmental funds report the following classifications of fund balance:

• Nonspendable – Amounts that cannot be spent because they are either not spendable in form or are legallyor contractually required to be maintained intact.

• Restricted – Amounts that can be spent only for specific purposes because of constitutional provisions,enabling legislation, or because of constraints that are externally imposed by creditors, grantors,contributors, or the law or regulations of other governments.

• Committed – Amounts that can only be used for specific purposes. Committed fund balance is reportedpursuant to resolutions passed by the City Council, the City’s highest level of decision making authority.Committed amounts may only be established, amended, or rescinded pursuant to Council resolution.

• Assigned – Amounts that the City intends to use for a specific purpose, but do not meet the definitions ofrestricted or committed fund balance. Under the City’s adopted policy, amounts may be assigned by theCity Manager or City Clerk under the authorization of the City Council.

• Unassigned – Amounts that have not been assigned to other funds or restricted, committed, or assigned to aspecific purpose within the General Fund. In accordance with an ordinance enacted by the City of Carlin onJune 8, 2011, the City has adopted a policy to maintain a minimum level of unassigned fund balance for theGeneral Fund of not less than 75% of the previous year’s unrestricted general fund expenditures.

When an expenditure is incurred for purposes for which both restricted and unrestricted amounts are available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned amounts are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally, unassigned funds, as needed, unless the City Council has provided otherwise in its commitment or assignment actions.

Change in Accounting Principle and Restatements

For the year ended June 30, 2017, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 82, Pension Issues – An Amendment of GASB No. 67, No. 68, and No. 73. This statements requires payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions to be classified as employee contributions. The effect of implementation of this standard on beginning net position is disclosed in Note 15 and the additional disclosures required by these standards are included in Note 7.


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June 30, 2017

Risk Management

The City, like any governmental entity, is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries of employees; and natural disasters. The City assesses these risks and utilizes risk management provided through the Nevada Public Agency Insurance Pool (POOL) created through an inter-local cooperative agreement by participating Nevada governments. The City participated in Agency programs designed to reduce risk loss by governments. Members pay an annual premium and specific deductibles, as necessary, to POOL for its general insurance coverage. POOL is considered a self-sustaining risk pool that will provide coverage for its members for up to $10,000,000 per event and a $10,000,000 general aggregate per member. POOL obtains independent coverage for insured events in excess of the $200,000 limit and claims have not exceeded these amounts during the previous three years.

The City also pays premiums based on payroll costs to the Public Agency Compensation Trust (PACT) for workers compensation coverage. PACT is considered a self-sustaining pool that will provide coverage based on established statutory limits.

Reclassifications

Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to confirm with presentation in the current-year financial statements.

Compliance with Nevada Revised Statutes and Nevada Administrative Code

The City conformed to all significant statutory constraints on its financial administration during the year with the following possible exceptions:

The funds listed below over expended amounts appropriated for various functions and, as such, may not be in accordance with Nevada Revised Statute 354.626:

Amount OverFund Expenditure

General Fund 8,235$

Function

Culture and recreation

NRS 354.6245 requires that a corrective action plan for violations of law or regulation noted during the Department of Taxation’s (DOT) review of the annual audit must be submitted to DOT within 60 days of the delivery of the annual audit to the local government. NAC 354.721 requires that the corrective action plan is approved by the City Council. The City did submit a corrective action plan for violations of laws and regulations noted during DOT’s review of the fiscal year 2016 audit; however, the corrective action plan had not been presented to and approved by the City Council as required by NAC 354.721.

A quarterly economic survey is required to be completed and filed with DOT no later than 45 days after the end of quarter per NRS 354.6015 and NAC 354.559(2)(d). The quarterly economic survey reports for the quarters ending March 30, 2017 and June 30, 2017 have not been filed with DOT.


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June 30, 2017

NRS 354.6015 and NAC 354.561 requires that local governments publish the annual fiscal report on or before July 1 of each year for the fiscal year immediately preceding the date on which the report is published. The annual fiscal report for the City’s fiscal year 2016 has not been published.

NRS 268.030 requires that cities post quarterly financial information on their website, showing the receipts, disbursements and bills allowed and paid for the period covered by the statement. The City has not posted the required quarterly financial information on their website for the quarters ending March 30, 2017 and June 30, 2017.

Cash

As defined in Note 1, Nevada Revised Statutes (NRS 355.170) set forth acceptable investments for Nevada local governments. The City has not adopted a formal investment policy that would further limit its investment choices nor further limit its exposure to certain risks as set forth below. As of and for the year ended June 30, 2017, the City had no investments, only cash balances.

Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned. All deposits were collateralized under the Nevada Pooled Collateral Program or insured by the Federal Deposit Insurance Corporation (FDIC).

Cash held by the City as of June 30, 2017 are allocated to the various funds as follows:

Major governmental funds 4,806,104$ Nonmajor governmental funds 734,603Business-type activities/proprietary fund 2,444,182 Restricted:

Nonmajor governmental funds 12,100 Business-type activities/proprietary fund 20,398

8,017,387$


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June 30, 2017

Capital Assets

The amounts recorded as capital assets are summarized as follows:

Governmental ActivitiesBalance Balance

July 1, 2016 Additions Deletions June 30, 2017Capital Assets, Being Depreciated

Buildings 2,388,335$ 12,184$ -$ 2,400,519$ Office equipment 161,076 - - 161,076 Other equipment 2,029,749 7,987 - 2,037,736Vehicles 1,968,024 106,342 - 2,074,366Infrastructure 4,428,126 7,319 - 4,435,445

Total capital assets,being depreciated 10,975,310 133,832 - 11,109,142

Less Accumulated Depreciation forBuildings (838,856) (53,267) - (892,123) Office equipment (243,594) (8,910) - (252,504) Other equipment (1,222,576) (80,759) - (1,303,335) Vehicles (1,571,382) (94,275) - (1,665,657) Infrastructure (3,404,790) (118,822) - (3,523,612)

Total accumulated (7,281,198) (356,033) - (7,637,231) depreciation

Total capital assets, being depreciated, net 3,694,112 (222,201) - 3,471,911

Capital Assets, not Being DepreciatedLand 816,723 - - 816,723 Construction in progress 702,649 - - 702,649

Total capital assets, not being depreciated 1,519,372 - - 1,519,372

Governmental Activities CapitalAssets, net 5,213,484$ (222,201)$ -$ 4,991,283$


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June 30, 2017

Business-type ActivitiesBalance Balance

July 1, 2016 Additions Deletions June 30, 2017Capital Assets, Being Depreciated

Buildings 292,162$ -$ -$ 292,162$ Office equipment 21,526 - - 21,526 Other equipment 483,567 5,972 - 489,539Vehicles 424,545 - - 424,545Infrastructure 6,071,737 - - 6,071,737

Total capital assets,being depreciated 7,293,537 5,972 - 7,299,509

Less Accumulated Depreciation forBuildings (66,013) (7,248) - (73,261) Office equipment (17,658) (303) - (17,961) Other equipment (314,025) (7,171) - (321,196) Vehicles (424,545) - - (424,545) Infrastructure (3,645,555) (111,284) - (3,756,839)

Total accumulateddepreciation (4,467,796) (126,006) - (4,593,802)

Total capital assets, being depreciated, net 2,825,741 (120,034) - 2,705,707

Capital Assets, Not Being DepreciatedLand 78,055 - - 78,055

Business-type Activities CapitalAssets, net 2,903,796$ (120,034)$ -$ 2,783,762$

Depreciation expense was charged to functions/programs of the City as follows:

Governmental ActivitiesGeneral government 19,283$ Public safety 108,949 Public works 143,524 Health and sanitation 29,063 Culture and recreation 55,214

Total Depreciation Expense – Governmental Activities 356,033$

Business-type ActivitiesWater 19,617$ Sewer 106,389

Total Depreciation Expense – Business-type Activities 126,006$


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June 30, 2017

The City has completed phase 1 and 2 of the 3 phases of construction on a new fire house. Phase 3 of construction was not started during the year. As of June 30, 2017, the City has not set a time frame for construction to resume and the $702,649 for the completion of phases 1 and 2 of the fire house are reported as construction in progress in the governmental activities.

Cooperative Agreement

On January 9, 2002 the City of Carlin, City of Elko, and Elko County entered into a cooperative agreement to provide financial resources for a water-line extension project. The water line initially served the University of Nevada-Reno Fire Science Academy that was deemed beneficial to the economy of the three governmental entities. The water line is the property of the City of Carlin. The project was funded by a federal grant obtained by the City of Carlin. This grant required matching funds of twenty-five percent. Therefore, a loan was obtained from the U.S. Department of Agriculture, Rural Development Agency. The cooperative agreement provides that the City of Elko and Elko County will each reimburse the City of Carlin one-third of the annual loan payments the City of Carlin will be obligated to pay to the USDA. The loan carries a maximum interest rate of 5% per year, payable over a period of forty years in annual payments of $20,398. The City of Elko and Elko County have each agreed to pay to the City of Carlin the maximum sum of $6,800 per year until the loan is paid in full or for a maximum of forty years.

The City of Carlin has enacted an ordinance providing for a water extension connection fee. This fee will be collected by the City of Carlin as a surcharge fee from every water user connecting to City water within the “UNR Fire Science Academy Water Extension Area” for a period of forty years after the date the extension line is connected to the City of Carlin’s water system. The City of Carlin agrees the proceeds collected from this water extension connection fee will be used to reimburse equally the City of Elko and Elko County for the payments made by them prior to the collection of any connection extension fees. Any excess funds collected will be used to reduce debt incurred for the project.

The City of Carlin received pledged revenues totaling $80,716 since the cooperative agreement was put into place. The City received no pledged revenues in the year ended June 30, 2017.

Long-Term Liabilities

Long-term debt as of June 30, 2017, consisted of the following:

BalanceJune 30, 2017

Governmental activitiesNote payable United States Department of Agriculture, Rural Development,

$12,100 annually including interest at 4.38%, maturing June 28, 2034.The note is for construction of a senior citizens facility. 142,967$

Business-type activities (Enterprise Fund)Note payable United States Department of Agriculture, Rural Development,

$20,398 annually including interest at 5.0%, maturing on or before April 1, 2018. The note provides matching funds for construction of the water line extension. 17,327

160,294$


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June 30, 2017

The governmental activities notes will be repaid by the Debt Service Fund. The maturity of the notes payable for the years after June 30, 2017, based upon present arrangements, is as follows:

FiscalYear Principal Interest Principal Interest Principal Interest

2018 5,845$ 6,255$ 17,327 866$ 23,172$ 7,121$ 2019 6,101 5,999 - - 6,101 5,999 2020 6,368 5,732 - - 6,368 5,732 2021 6,646 5,454 - - 6,646 5,454 2022 6,937 5,163 - - 6,937 5,163 2023-2027 39,513 20,987 - - 39,513 20,987 2028-2032 48,947 11,553 - - 48,947 11,553 2033-2034 22,610 1,492 - - 22,610 1,492

142,967$ 62,635$ 17,327$ 866$ 160,294$ 63,501$

Water Line Extension Total

Government-Type Activities Business-Type ActivitiesU.S. Department

of AgricultureSenior Citizens Facility

U.S. Department of Agriculture

Changes in Long-Term Liabilities

Beginning Ending Due WithinBalance Additions Reductions Balance One Year

Governmental activitiesCompensated absences 75,273$ 71,744$ 79,989$ 67,028$ 40,610$ Notes payable 148,567 - 5,600 142,967 5,845

223,840$ 71,744$ 85,589$ 209,995$ 46,455$

Business-type activitiesCompensated absences 59,842$ 30,742$ 26,120$ 64,464$ 39,056$ Notes payable 35,929 - 18,602 17,327 17,327

95,771$ 30,742$ 44,722$ 81,791$ 56,383$

The City was, in accordance with Nevada Revised Statutes, within the legal debt limit at June 30, 2017.

Defined Benefit Pension Plan

Plan Description

The City of Carlin contributes to the Public Employees’ Retirement System of the State of Nevada (PERS). PERS administers a cost-sharing, multiple-employer, defined benefit public employees’ retirement system which includes both Regular and Police/Fire members. PERS was established by the Nevada Legislature in 1947, effective July 1, 1948. PERS is administered to provide a reasonable base income to qualified employees who have been employed by a public employer and whose earnings capacities have been removed or substantially impaired by age or disability.


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June 30, 2017 Benefits Provided Benefits, as required by the Nevada Revised Statutes (NRS or statute), are determined by the number of years of accredited service at time of retirement and the member’s highest average compensation in any 36 consecutive months with special provisions for members entering PERS on or after January 1, 2010 and July 1, 2015. Benefit payments to which participants or their beneficiaries may be entitled under the plan include pension benefits, disability benefits, and survivor benefits. Monthly benefit allowances for members are computed as 2.5% of average compensation for each accredited year of service prior to July 1, 2001. For service earned on and after July 1, 2001, this multiplier is 2.67% of average compensation. For members entering PERS on or after January 1, 2010, there is a 2.5% multiplier and for regular members entering PERS on or after July 1, 2015, there is a 2.25% factor. PERS offers several alternatives to the unmodified service retirement allowance which, in general, allow the retired employee to accept a reduced service retirement allowance payable monthly during his or her lifetime and various optional monthly payments to a named beneficiary after his or her death. Post-retirement increases are provided by authority of NRS 286.575 - .579. Vesting Regular members entering PERS prior to January 1, 2010, are eligible for retirement at age 65 with 5 years of service, at age 60 with 10 years of service, or at any age with 30 years of service. Regular members entering PERS on or after January 1, 2010, are eligible for retirement at age 65 with 5 years of service, or age 62 with 10 years of service, or any age with 30 years of service. Regular members entering PERS on or after July 1, 2015, are eligible for retirement at age 65 with 5 years of service, or at age 62 with 10 years of service or at age 55 with 30 years of service or at any age with 33 1/3 years of service. Police/Fire members entering PERS prior to January 1, 2010, are eligible for retirement at age 65 with 5 years of service, at age 55 with 10 years of service, at age 50 with 20 years of service, or at any age with 25 years of service. Police/Fire members entering PERS on or after January 1, 2010, are eligible for retirement at 65 with 5 years of service, or age 60 with 10 years of service, or age 50 with 20 years of service, or at any age with 30 years of service. Only service performed in a position as a police officer or firefighter may be counted towards to eligibility for retirement as Police/Fire accredited service. The normal ceiling limitation on monthly benefits allowances is 75% of average compensation. However, a member who has an effective date of membership before July 1, 1985, is entitled to a benefit of up to 90% of average compensation. Both Regular and Police/Fire members become fully vested as to benefits upon completion of 5 years of service. Contributions The authority for establishing and amending the obligation to make contributions and member contribution rates, is set by statute. New hires, in agencies which did not elect the Employer-Pay Contribution (EPC) plan prior to July 1, 1983, have the option of selecting one of two contribution plans. Contributions are shared equally by employer and employee. Employees can take a reduced salary and have contributions made by the employer (EPC) or can make contributions by a payroll deduction matched by the employer.


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June 30, 2017

PERS’ basic funding policy provides for periodic contributions at a level pattern of cost as a percentage of salary throughout an employee’s working lifetime in order to accumulate sufficient assets to pay benefits when due.

PERS receives an actuarial valuation on an annual basis indicating the contribution rates required to fund PERS on an actuarial reserve basis. Contributions actually made are in accordance with the required rates established by the Nevada Legislature. These statutory rates are increased/decreased pursuant to NRS 286.421 and 286.450.

The actuary funding method used is the Entry Age Normal Cost Method. It is intended to meet the funding objective and result in a relatively level long-term contributions requirement as a percentage of salary.

For the fiscal year ended June 30, 2017 the Statutory Employer/employee matching rate was 14.50% for Regular and 20.75% for Police/Fire. The Employer-pay contribution (EPC) rate for the fiscal year ending June 30, 2017, was 28.00% for Regular and 40.50% for Police/Fire.

The City’s contributions were $349,244 for the year ended June 30, 2017.

PERS Investment Policy

PERS’ policies which determine the investment portfolio target asset allocation are established by the PERS Board. The asset allocation is reviewed annually and is designed to meet the future risk and return needs of the System.

The following was the PERS Board adopted policy target asset allocation as of June 30, 2016:

Asset Class Target Allocation

Domestic Equity 42%International Equity 18%Domestic Fixed Income 30%Private Markets 10%

Expected Real Rate of Return

5.50%5.75%0.25%6.80%

As of June 30, 2016, PERS’ long-term inflation assumption was 3.5%.

Net Pension Liability

At June 30, 2017, the City reported a liability of $2,680,474 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s share of contributions in PERS pension plan relative to the total contributions of all participating PERS employers and members. At June 30, 2016, the City’s proportion was 0.01992 percent, which is a decrease of 0.00086 from its proportion measured as of June 30, 2015 of 0.02078 percent.


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June 30, 2017

Pension Liability Discount Rate Sensitivity

The following presents the net pension liability of the City as of June 30, 2016, calculated using the discount rate of 8.00%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (7.00%) or 1-percentage-point higher (9.00%) than the current discount rate.

1% Decrease in Discount Rate Discount Rate

1% Increase in Discount Rate

(7.00%) (8.00%) (9.00%)

Net Pension Liability 4,084,506$ 2,680,474$ 1,512,924$

Pension Plan Fiduciary Net Position

Detailed information about the pension plan’s fiduciary net position is available in the PERS Comprehensive Annual Financial Report, available on the PERS website.

Actuarial Assumptions

The City’s net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation Rate 3.50%Payroll Growth 5.00% including inflationInvestment Rate of Return 8.00%Productivity Pay Increase 0.75%Projected Salary Increases Regular: 4.60% to 9.75%, depending on service

Police/Fire: 5.25% to 14.5%, depending on serviceRates include inflation and productivity increases

Consumer Price Index 3.50%Other Assumptions Same as those used in the June 30, 2016 funding actuarial valuation

Mortality rates for non-disabled male regular members were based on the RP-2000 Combined Healthy Mortality Table projected to 2013 with Scale AA. Mortality rates for non-disabled female regular members were based on the RP-2000 Combined Healthy Mortality Table, projected to 2013 with Scale AA, set back one year. Mortality rates for all non-disabled police/fire members were based on the RP-2000 Combined Healthy Mortality Table projected to 2013 with Scale AA, set forward one year. The mortality table used in the actuarial valuation to project mortality rates for all disabled regular members and all disabled police/fire members is the RP-2000 Disabled Retiree Mortality Table projected to 2013 with Scale AA, set forward three years.

Actuarial assumptions used in the June 30, 2016 valuation were based on the results of the experience review completed in 2013.


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June 30, 2017

The discount rate used to measure the total pension liability was 8.00% as of June 30, 2016. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, the pension plan’s fiduciary net position at June 30, 2016, was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability as of June 30, 2016.

Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

For the year ended June 30, 2017, the City recognized pension expense of $188,759. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflowsof Resources of Resources

Differences between expected and actual experience -$ 179,491$ Net difference between projected and actual earnings on pension

plan investments 249,184 94,512 Changes in the employer’s proportion and differences between the

employer’s contributions and the employer's proportionatecontributions 19,254 -

City contributions subsequent to the measurement date 174,622 -

Total 443,060$ 274,003$

The $174,662 reported as deferred outflows of resources related to pensions resulting from Employer contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2018.

The average of the expected remaining service lives of all employees that are provided with pensions through PERS (active and inactive employees) determined at July 1, 2015 (the beginning of the measurement period ended June 30, 2016) is 6.48 years.

Other estimated amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30,

2018 32,345$ 2019 32,345 2020 (76,661) 2021 (30,025) 2022 34,036 Thereafter 13,525


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June 30, 2017

Additional Information

The PERS Comprehensive Annual Financial Report (CAFR) is available on the PERS website at www.nvpers.org under Quick Links – Publications.

Fund Equity

As defined in Note 1, Fund Equity may be reported in various classifications. Specific restrictions of fund balance/net position accounts are summarized below:

Unrestricted/Unassigned – Amounts that have not been assigned to other funds or restricted, committed, or assigned to a specific purpose.

Nonspendable for Perpetual Cemetery Care – In accordance with an ordinance enacted by the City on December 9, 1970, a minimum reserve of $33,004 will be left in the Perpetual Cemetery Care Fund. The earnings can be withdrawn and deposited to the General Fund to be used for perpetual cemetery care.

Restricted for Debt Service – In accordance with agreements from the USDA Rural Development for the revenue bond water line extension and the loan for the Carlin Senior Center, the City is required to set-aside fund balance/net position of one-tenth of the annual payment amount for each loan until one full payment has been set-aside. The restricted debt service requirements for the year ended June 30, 2017 for the water line extension in the Utility Fund and Carlin Senior Center in the Debt Service Fund are currently $20,398 and $12,100, respectively.

Restricted for Perpetual Cemetery Care – In accordance with an ordinance enacted by the City on December 9, 1970, the earnings on the minimum reserve in the Perpetual Cemetery Care Fund are restricted for perpetual cemetery care.

Restricted for Capital Projects– In accordance with property taxes imposed and collected for capital projects.

Restricted for the Senior Center– In accordance with the donor imposed use that the amount be used for the Senior Center.

Restricted for Judicial Fees – In accordance with Nevada Revised Statues 176.059 and 176.0611, the administrative assessments collected under these statues are restricted for the use outlined in each statue. The administrative assessment collected in accordance with Nevada Revised State 176.059 is restricted for the use of the municipal court. The administrative assessment collected in accordance with Nevada Revised Statue 176.0611 is restricted for the acquisition, construction and improvement of court facilities, acquisition of advanced technology for use in court facilities or for the payment of debt service on any bonds issued for the acquisition of land or facilities.

Committed for Future Community Development – In accordance with a revised ordinance enacted by the City on December 11, 2008, this represents the amount the City council has specifically designated for future projects that will enhance the community.

Committed for Recreational Activities – In accordance with the Carlin City Code, this represents the amount the City council has specifically designated for recreational purposes.

Committed for Public Safety – In accordance with the Carlin City Code, this represents the amount the City council has specifically committed for public safety purposes.


http://www.nvpers.org/

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June 30, 2017

Assigned for Subsequent Year Operations –This is the amount of the City’s current year ending fund balance that the City intends to use to meet the next years’ operating expenditures.

Assigned for Other Purposes –These are amount that the City intends to use in future periods for the purpose of the fund.

Unassigned –The residual classification for the General Fund that is available to spend.

The City Council has formally designated per City Code a portion of user charges to be set aside for major capital improvements such as water wells and sewer improvements. These amounts do not meet the definition of restricted net position and are not included in the Statement of Fund Net Position.

Balance BalanceJuly 1, 2016 Net Change June 30, 2017

Water System $ 312,015 $ - $ 312,015 Water Capital Improvement 54,272 394 54,666 Sewer Capital Improvement 228,396 2,000 230,396

Interfund Items

Interfund transfers are shown as other financing sources or uses in all governmental funds. Transfers between funds during the year ended June 30, 2017 are as follows:

Transfer In Transfer Out Net

General Fund -$ (80,150)$ (80,150)$ Open Door Senior Citizens Center Fund 80,150 - 80,150 Nonmajor Governmental Funds

Parks and Recreation Fund - (40,000) (40,000) Parks and Recreation Fund #2 5,000 - 5,000 Equestrian Center Fund 35,000 - 35,000

120,150$ (120,150)$ -$

The General Fund subsidized the Senior Citizens Center Fund whose funding sources were not large enough to support the entire cost of their programs in accordance with budgetary authority. The Parks and Recreation Fund transferred monies to the Parks and Recreation Fund #2 and Equestrian Center Fund to reimburse for certain park improvement costs.

Enterprise Fund Revenue-Supported Debt Information

The City of Carlin maintains an Enterprise Fund that provides water, sewer, streetlight and garbage services. Selected additional revenue-supported debt information is provided for those enterprise activities with outstanding debt obligations. Information for the year ended June 30, 2017 is provided for the water service as follows:


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June 30, 2017

Condensed Statement of Net PositionAssets

Current assets 756,478$ Capital assets, net of accumulated depreciation 1,680,075

Total assets 2,436,553

Deferred Inflows of ResourcesDeferred inflows of resources related to pensions 54,436

LiabilitiesCurrent liabilities 51,479 Noncurrent liabilities 330,421

Total liabilities 381,900

Deferred Outflows of ResourcesDeferred outflows of resources related to pensions 66,941

Net PositionNet investment in capital assets 1,662,748 Restricted for debt service 20,398 Unrestricted 359,002

Total net position 2,042,148$

Condensed Statement of ActivitiesOperating Revenues

Charges for services 461,310$

Operating ExpensesDepreciation 19,617 Other operating expenses 445,543

Total operating expenses 465,160

Operating Income (3,850)

Nonoperating Revenue (Expense)Interest income 8,193 Miscellaneous income 13,560 Interest expense (1,796)

Total nonoperating revenue/(expense) 19,957

Change in Net Position 16,107

Net Position, Beginning of Year, as Originally Reported 2,049,486

Prior period adjustment (23,445)

Net Position, Beginning of Year, as Restated 2,026,041

Net Position, End of Year 2,042,148$


42


June 30, 2017

Condensed Statement of Cash FlowsNet cash from (used for)

Operating activities (24,558)$ Capital and related financing activities 5,792 Investing activities 8,193

Net Decrease in Cash (10,573)

Cash, Beginning of Year 730,727

Cash, End of Year 720,154$

Postemployment Healthcare Plan

Plan Descriptions – The City administers a single-employer defined benefit healthcare plan, Carlin Employee Health Benefits Plan (CEHBP). Additionally, the City contributes to an agent multiple-employer defined benefit postemployment healthcare plan, Public Employees’ Benefits Plan (PEBP). Each plan provides medical, dental, prescription, and life insurance benefits to eligible City retirees and beneficiaries.

Benefit provisions for CEHBP are established pursuant to NRS 287.023 and amended through negotiations between the City and its employees. NRS 288.150 assigns the authority to establish benefit provisions to the City Council. The plan provides healthcare insurance for eligible retirees and their beneficiaries through the City’s group health insurance plan, which covers both active and retired members. Under NRS 287.023, eligible retirees are able to participate in the plan with blended rates, thereby benefitting from an implicit subsidy. Retirees are required to pay 100% of their premiums under the plan. As of June 30, 2017, no retirees were using this plan. CEHBP does not issue a publicly available financial report.

Benefit provisions for the PEBP are administered by the State of Nevada. NRS 287.043 assigns the authority to establish and amend benefit provisions to the PEBP nine-member board of trustees. City employees who met the eligibility requirements effective September 1, 2008 for retirement within the Nevada Public Employee Retirement System had the option upon retirement to enroll in coverage under the PEBP. NRS 287.023 discontinued the option to join PEBP for City employees who retired after November 29, 2008. Local governments are required to pay the same portion of the cost of coverage for their retirees joining PEBP that the State of Nevada pays for state retirees participating in their plan. As of June 30, 2017, eleven city retirees were utilizing this benefit. PEBP does not issue a publicly available financial report.

Funding Policy – For CEHBP, contribution requirements of the plan members and City are established and may be amended through negotiations between the City and their employees. Retirees pay 100% of the pay-as-you-go premiums based on a blended rate that blends active participants and retirees. The City’s contribution requirements for retirees relate to the implicit subsidy that results from using the blended rates and is determined in actuarial studies contracted for by the City. The implicit subsidy as determined by the actuary is $0. The City did not prefund any future benefits.

For PEBP, NRS 287.046 establishes the subsidies to be contributed toward the premium costs of the eligible retired City employees. The contribution requirements of plan members and the City may be amended by the PEBP board. For the plan year ended June 30, 2017, the city paid subsidies for qualified retirees ranging from $3 to $774 per month. For fiscal year 2017, the City contributed $15,483 to the plan for current premiums.


43


June 30, 2017

Annual OPEB Cost and Net OPEB Obligation – The City’s annual other postemployment benefit (OPEB) cost (expense) for the plans is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plans, and the net OPEB obligation, by plan were as follows:

Percentage ofFiscal Year Annual Employer Annual OPEB Net OPEB

Ended OPEB Cost Contribution Cost Contributed Obligation

CEHBP 6/30/2017 18,665$ -$ 0.00% 151,227$ CEHBP 6/30/2016 17,433 - 0.00% 133,844 CEHBP 6/30/2015 10,952 - 0.00% 116,411

PEBP 6/30/2017 18,801 15,483 82.35% 77,911 PEBP 6/30/2016 18,679 16,723 89.53% 74,593 PEBP 6/30/2015 25,791 14,086 54.62% 72,637

Combined 6/30/2017 37,466 15,483 41.33% 229,138 Combined 6/30/2016 36,112 16,723 46.31% 208,437 Combined 6/30/2015 36,743 14,086 38.34% 189,048

The net OPEB obligation (NOPEBO) as of June 30, 2017, was calculated as follows:

CEHBP PEBP Total

Annual Required Contribution 20,028$ 20,838$ 40,866$ Interest on Net OPEB Obligation 5,354 2,984 8,338 Adjustment to Annual Required Contribution (6,717) (5,021) (11,738)

Annual OPEB Cost 18,665 18,801 37,466 Contributions Made (1,282) (15,483) (16,765)

Change in Net OPEB Obligation 17,383 3,318 20,701 Net OPEB Obligation, Beginning of Year 133,844 74,593 208,437

Net OPEB Obligation, End of Year 151,227$ 77,911$ 229,138$


44


June 30, 2017

Funded Status and Funding Progress – The funded status of the plans as of the latest actuarial valuation date (June 30, 2016) were as follows:

CEHBP PEBP Total

Accrued Actuarial Liability (a) 70,901$ 325,661$ 396,562$ Actuarial Value of Plan Assets (b) - - -

Unfunded Actuarial Accrued Liability (a-b) 70,901$ 325,661$ 396,562$

Funded Ratio (b/a) 0.00% 0.00% 0.00%Covered Payroll (c) 990,759$ N/AUnfunded Actuarial Accrued Liability as a

Percentage of covered payroll [(a-b)/c] 7.16% N/A

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedules of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions – Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the City and plan members to that point. Actuarial calculations reflect long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and actuarial value of assets.

Significant methods and assumptions used in the June 30, 2016 actuarial valuation were as follows:

CEHP PEBP

Actuarial Valuation Date 6/30/2016 6/30/2016Actuarial Cost Method Entry age Entry age

normal cost normal costAmortization Cost Method Level % of payroll Level dollarAmortization Period 24 years 24 years

(open) (closed)Asset Valuation Method Market value Market valueActuarial Assumptions:

Projected general inflation rate 2.75% 2.75%Investment rate of return 4.00% 4.00%Projected salary increases 4.00% N/A

Healthcare Inflation Rate* 7.50% 7.50%

*Decreasing .50% each year until ultimate trend rate of 5.00% is reached.


45


June 30, 2017

Deficit Fund Balance

The Grants Fund has a deficit fund balance in the amount of $8,872 as of June 30, 2017.

Commitments and Contingent Liabilities

The City entered into two contracts during the year, one for the coating of two portable water tanks for $297,282, including change orders, and the second for the purchase of a street sweeper in the amount of $131,235. As of June 30, 2017, the City had not paid any amounts under these commitments.

Legal counsel for the City is aware of one pending lawsuit and an instance of possible litigation. The ultimate effect to the City has not been determined.

Subsequent Events

The City awarded three contracts in fiscal year 2017-2018, one for the purchase of a vehicle for the Police Department in the amount of $26,926, the second for the purchase of a Concession Stand Trailer in the amount of $50,513 for the Equestrian Park, and the third for the purchase of a Durapatch machine for $49,435.

Adoption of New Standards

As of July 1, 2016, the City adopted GASB Statement No. 77, Tax Abatement Disclosures. The implementation of this standard requires governments that enter into tax abatement agreements to disclose certain information. The City was not a party to any significant tax abatement agreements at June 30, 2017.

As of July 1, 2016, the City adopted GASB Statement No. 82, Pension Issues – An Amendment of GASB Statements No. 67, No. 68, and No. 73. This statement requires payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions be classified as employee contributions. Accordingly, net position as of July 1, 2016 has been restated for the cumulative effect of this change.

Governmental Business-typeActivities Activities Total

Utility Fund

Net Position at June 30, 2016, as Originally Reported 8,473,867$ 4,632,643$ 13,106,510$

Deferred outflows of resources related to2015 deferrals for the difference betweenemployer contributions and proportionateshare contributions (17,832) (5,408) (23,240)

Deferred outflows of resources related toCity contributions subsequent to themeasurement date (122,115) (37,033) (159,148)

Net Position at July 1, 2016, as Restated 8,333,920$ 4,590,202$ 12,924,122$




Required Supplementary Information June 30, 2017

City of Carlin




46

City of Carlin Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund

Year Ended June 30, 2017 (With Comparative Actual Amounts for the Year Ended June 30, 2016)

Final BudgetOriginal Final Actual Variance 2016

RevenuesTaxes

Ad valorem taxes 361,799$ 361,799$ 401,742$ 39,943$ 395,453$

Licenses, Permits and FeesFranchise fees 14,000 14,000 13,566 (434) 17,108Business licenses 25,000 25,000 22,577 (2,423) 20,075Liquor licenses 4,800 4,800 4,880 80 5,215 Local gaming licenses 8,500 8,500 5,930 (2,570) 8,710 Animal licenses 1,600 1,600 2,264 664 2,333 Building permits 12,000 12,000 18,124 6,124 31,431 Other permits and fees 2,000 2,000 2,365 365 2,375

67,900 67,900 69,706 1,806 87,247

IntergovernmentalConsolidated revenues 1,900,000 1,900,000 1,810,661 (89,339) 1,829,419 Motor vehicle fuel tax 50,000 50,000 48,891 (1,109) 48,542 Share of county gaming license 8,000 8,000 9,300 1,300 9,068

1,958,000 1,958,000 1,868,852 (89,148) 1,887,029

Charges for ServicesAmbulance charges 40,000 40,000 13,761 (26,239) 69,897 Ambulance supplies 6,500 6,500 3,681 (2,819) 18,714 Facility Use Fees - - 393 393 30

46,500 46,500 17,835 (28,665) 88,641

Fines and ForfeitsCourt fines and fees 17,000 17,000 21,571 4,571 29,812 Animal fines and fees 3,000 3,000 2,905 (95) 2,823Other - - 310 310 700

20,000 20,000 24,786 4,786 33,335

OtherInterest income 4,500 4,500 6,881 2,381 7,467 Other income 7,600 7,600 37,681 30,081 24,085 Developer reimbursement - - 258,839 258,839 - Sales and rentals - - 226 226 259 Leases and contracts 18,000 18,000 14,678 (3,322) 14,558 Local grants 13,000 13,000 - (13,000) 2,300

43,100 43,100 318,305 275,205 48,669

Total revenues 2,497,299 2,497,299 2,701,226 203,927 2,540,374

Budgeted Amounts


47




ExpendituresCurrentGeneral Government

Finance AdministrationSalaries and wages 145,900$ 145,900$ 133,437$ 12,463$ 133,452$ Employee benefits 84,500 84,500 73,160 11,340 67,778 Services and supplies 27,250 27,250 19,039 8,211 12,414 Capital outlay 18,000 18,000 3,300 14,700 -

275,650 275,650 228,936 46,714 213,644

LegislativeSalaries and wages 13,500 13,500 12,833 667 12,392 Employee benefits 7,000 7,000 3,490 3,510 3,275 Services and supplies 3,000 3,000 4,512 (1,512) 3,672

23,500 23,500 20,835 2,665 19,339

OtherServices and supplies 736,155 736,155 374,039 362,116 395,515

City ManagerSalaries and wages 64,000 64,000 72,913 (8,913) 72,669 Employee benefits 25,000 25,000 24,593 407 25,252 Services and supplies 5,500 5,500 1,699 3,801 2,978

94,500 94,500 99,205 (4,705) 100,899

Total general government 1,129,805 1,129,805 723,015 406,790 729,397

Public SafetyPolice

Salaries and wages 370,000 370,000 374,400 (4,400) 364,193 Employee benefits 273,842 273,842 230,831 43,011 230,705 Services and supplies 123,866 123,866 123,953 (87) 110,718Capital outlay 35,000 35,000 57,017 (22,017) 30,351

802,708 802,708 786,201 16,507 735,967

Animal ControlSalaries 30,800 30,800 30,992 (192) 30,435Employee benefits 23,100 23,100 22,611 489 22,829 Services and supplies 4,750 4,750 1,020 3,730 1,111 Capital outlay 1,000 1,000 1,000 - 6,720

59,650 59,650 55,623 4,027 61,095

Budgeted Amounts


48




Fire and AmbulanceSalaries 53,200$ 53,200$ 30,447$ 22,753$ 67,669$ Employee benefits 35,900 35,900 13,515 22,385 48,501 Services and supplies 92,180 92,180 80,119 12,061 84,107 Capital outlay 40,000 40,000 39,942 58 -

221,280 221,280 164,023 57,257 200,277

Total public safety 1,083,638 1,083,638 1,005,847 77,791 997,339

JudicialMunicipal Court

Salaries and wages 37,500 37,500 35,145 2,355 35,344 Employee benefits 15,000 15,000 7,591 7,409 20,509 Services and supplies 3,100 3,100 1,911 1,189 2,184 Capital outlay 5,000 5,000 - 5,000 1,981

Total judicial 60,600 60,600 44,647 15,953 60,018

Public WorksHighways and Streets

Salaries and wages 41,213 41,213 36,407 4,806 35,264 Employee benefits 25,357 25,357 22,284 3,073 21,966 Services and supplies 193,200 193,200 164,067 29,133 135,053 Capital outlay 125,000 125,000 - 125,000 11,280

Total public works 384,770 384,770 222,758 162,012 203,563

Health and SanitationPublic Health Administration

Services and supplies 15,000 15,000 4,704 10,296 9,754

CemeterySalaries and wages 35,216 35,216 31,324 3,892 30,086 Employee benefits 23,613 23,613 20,668 2,945 20,441 Services and supplies 8,000 8,000 4,243 3,757 8,261

66,829 66,829 56,235 10,594 58,788

Total health and sanitation 81,829 81,829 60,939 20,890 68,542

Budgeted Amounts


49




Culture and RecreationParks

Services and supplies 12,000$ 12,000$ 17,031$ (5,031)$ 17,352$ Capital outlay - - 3,060 (3,060) 18,900

12,000 12,000 20,091 (8,091) 36,252

LibraryServices and supplies 2,500 2,500 2,644 (144) 2,387

Total culture and recreation 14,500 14,500 22,735 (8,235) 38,639

Total expenditures 2,755,142 2,755,142 2,079,941 675,201 2,097,498

Excess (Deficiency) of Revenues over Expenditures (257,843) (257,843) 621,285 879,128 442,876

Other Financing Sources (Uses)Sale of capital assets 10,000 10,000 - (10,000) - Transfers in 5,000 5,000 - (5,000) 3,000 Transfers out (300,376) (300,376) (80,150) 220,226 (484,673) Contingency (20,000) (20,000) - 20,000 -

Total other financingsources (uses) (305,376) (305,376) (80,150) 225,226 (481,673)

Net Change in Fund Balance (563,219) (563,219) 541,135 1,104,354 (38,797)

Fund Balance, Beginning of Year 4,296,232 4,296,232 4,100,726 (195,506) 4,139,523

Fund Balance, End of Year 3,733,013$ 3,733,013$ 4,641,861$ 908,848$ 4,100,726$

Budgeted Amounts


50

City of Carlin Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual –

Open Door Senior Citizens Center Year Ended June 30, 2017

(With Comparative Actual Amounts for the Year Ended June 30, 2016)

Original Final Actual Variance 2016Revenues

IntergovernmentalFederal grants 55,000$ 55,000$ 55,000$ -$ 55,000$ Cash match 97,000 97,000 87,213 (9,787) 88,300 USDA 7,600 7,600 6,175 (1,425) 10,913

159,600 159,600 148,388 (11,212) 154,213

Charges for services 23,500 23,500 20,025 (3,475) 21,512

MiscellaneousContributions - - 14,731 14,731 23,386 In-Kind Revenue - - 1,235 1,235 358

- - 15,966 15,966 23,744

Total revenues 183,100 183,100 184,379 1,279 199,469

ExpendituresCurrent

Culture and RecreationSalaries and wages 105,826 105,826 82,828 22,998 93,487 Employee benefits 86,559 86,559 47,839 38,720 66,941 Services and supplies 86,450 86,450 75,309 11,141 105,743 Capital outlay - - 7,987 (7,987) -


Excess (Deficiency) of Revenuesover Expenditures (95,735) (95,735) (29,584) 66,151 (66,702)

Other Financing Sources (Uses)Transfers in 80,150 80,150 80,150 - 66,000

Net Change in Fund Balance (15,585) (15,585) 50,566 66,151 (702)

Fund Balance, Beginning of Year 45,653 45,653 39,107 (6,546) 39,809

Fund Balance, End of Year 30,068$ 30,068$ 89,673$ 59,605$ 39,107$

Budget Amounts


51


Grants Fund Year Ended June 30, 2017


Original Final Actual Variance 2016Revenues

IntergovernmentalGrants 447,745$ 447,745$ 72,656$ (375,089)$ 75,342$

ExpendituresCurrent

Public SafetyServices and supplies 47,745 47,745 95,175 (47,430) 79,157 Capital outlay 425,000 425,000 - 425,000 1,060


Excess (Deficiency) of Revenuesover Expenditures (25,000) (25,000) (22,519) (752,659) (4,875)

Other Financing Sources (Uses)Transfers in 25,000 25,000 - (25,000) -

Net Change in Fund Balance - - (22,519) (22,519) (4,875)

Fund Balance, Beginning of Year 18,522 18,522 13,647 (4,875) 18,522

Fund Balance (Deficit),End of Year 18,522$ 18,522$ (8,872)$ (27,394)$ 13,647$

Budget Amounts


52

City of Carlin Schedule of Funding Progress – Other Postemployment Benefit Plans

June 30, 2017

Actuarial UAAL as aActuarial Accrued Unfunded Percentage

Actuarial Value of Liability AAL Funded Covered of CoveredValuation Assets (AAL) (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (b/a) (c) [(b-a)/c]

CEHBP 6/30/16 -$ 70,901$ 70,901$ 0.00% 990,759$ 0$ CEHBP 6/30/13 - 56,959 56,959 0.00% 974,577 5.84%CEHBP 6/30/10 - 199,145 199,145 0.00% 895,024 22.25%

PEBP 6/30/16 - 325,661 325,661 0.00% N/A * N/APEBP 6/30/13 - 435,794 435,794 0.00% N/A * N/APEBP 6/30/10 - 434,682 434,682 0.00% N/A * N/A

* PEBP was closed to City employees retiring after November 29, 2008.

Change 2010 to 2013 valuation (CEHBP AAL): The City's AAL for its Plan decreased from $199,145 to $56,959, mostly due to changes in assumptions since the prior valuation. In particular, there was a decrease from 50% to 20% in the participation rate assumption for future retirees who will elect to continue their insurance coverage. The decrease was based on the actuary's review of actual plan data. There were also changes in the assumptions for retiree life expectancy and healthcare trend rates.

Change 2013 to 2016 valuation (CEHBP AAL): The City's AAL for its Plan increased from $56,959 to $70,901, mostly due to changes in assumptions since the prior valuation. In particular, updates to employee and premium data since the prior valuation;

introduction of an assumption that no future retirees will elect to continue medical coverage through the City after reaching age 65; updates to the assumed rate of retirement, termination and mortality;

updated trend assumptions for future increase in medical premiums; a change in the methodology and assumptions used for developing age related retiree medical claim costs; and recognition of the projected excise tax for high cost coverage.


53

City of Carlin Schedule of City’s Share of Net Pension Liability

Public Employee’s Retirement System of Nevada (PERS) Last Ten Fiscal Years

2014 2015 2016

City's portion of the net pension liability 0.02057% 0.02078% 0.01992%City's proportionate share of the net pension liability 2,143,875$ 2,381,517$ 2,680,474$ City's covered payroll 1,061,682$ 1,141,555$ 1,013,684$ City's proportional share of the net pension liability as

a percentage of its covered payroll 201.93% 208.62% 264.43%Plan fiduciary net position as a percentage of the

total pension liability 76.30% 75.10% 72.20%

* GASB Statement No. 68 requires ten years of information to be presented in this table. However, until afull 10-year trend is compiled, the City will present information for those years for which informationis available.


54

City of Carlin Schedule of City’s Contributions

Public Employee’s Retirement System of Nevada (PERS) Last Ten Fiscal Years

2015 2016 2017

Statutorily required contribution 320,782$ 337,761$ 349,244$ Contributions in relation to the statutorily required

contribution 320,782$ 337,761$ 349,244$ Contribution (deficiency) excess -$ -$ Employer’s covered payroll 1,141,555$ 1,013,684$ 1,125,719$ Contributions as a percentage of covered payroll 28.10% 33.32% 31.02%

* GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which information is available.




Supplementary Information June 30, 2017

City of Carlin




55

City of Carlin Schedule of Revenues, Expenditures, and Changes in Fund Balances –

Budget and Actual – Capital Projects Fund Year Ended June 30, 2017


Budgeted Amounts Final BudgetOriginal Final Actual Variance 2016

RevenuesTaxes

Ad valorem taxes 26,000$ 26,000$ 29,785$ 3,785$ 29,397$

MiscellaneousDonations - - 8,868 8,868 -

Total revenues 26,000 26,000 38,653 12,653 29,397

Other Financing (Uses)Transfers in 90,226 90,226 - (90,226) 378,673

Net Change in Fund Balance 116,226 116,226 38,653 (77,573) 408,070

Fund Balance (Deficit), Beginning of Year (116,226) (116,226) 265,844 382,070 (142,226)

Fund Balance, End of Year -$ -$ 304,497$ 304,497$ 265,844$


MunicipalParks and Court Administrative Parks andRecreation Building Assessment Recreation

Fund Fund Fund Fund #2Assets

Cash 280,698$ 14,180$ 6,806$ 44,591$ Accounts receivable, net 5,026 265 1,119 - Restricted cash - - - -

Total assets 285,724$ 14,445$ 7,925$ 44,591$

LiabilitiesAccounts payable -$ -$ 1,049$ 118$ Unearned revenue - grants - - - -

Total liabilities - - 1,049 - 118

Fund BalanceNonspendable - - - - Restricted for

Debt service - - - - Perpetual cemetery care - - - - Court facilities fees

(NRS 176.0611) - 14,445 - - Judicial fees (NRS 176.059) - - 6,876 -

Committed forFuture community

development 40,005 - - - Recreational activities 245,719 - - 44,473 Public safety - - - -

AssignedSubsequent year operations - - - - Other purposes - - - -

Unassigned - - - -

Total fund balance 285,724 14,445 6,876 44,473

Total Liabilities and Fund Balance 285,724$ 14,445$ 7,925$ 44,591$

Special Revenue Funds


56

City of Carlin Combining Balance Sheet – Nonmajor Governmental Funds

June 30, 2017

PermanentFund

Equestrian Debt PerpetualCenter Police Service CemeteryFund Forfeiture Fund Care Fund Total

94,752$ 123,982$ 65,326$ 85,122$ 715,457$ 26 - - - 6,436

- - 12,100 - 12,100

94,778$ 123,982$ 77,426$ 85,122$ 733,993$

-$ -$ -$ -$ 1,167$ - - - - -

- - - - 1,167

- - - 33,004 33,004

- - 12,100 - 12,100 - - - 52,118 52,118

- - - - 14,445 - - - - 6,876

- - - - 40,005 - - - - 290,192 - 123,982 - - 123,982

57,000 - - - 57,000 37,778 - 65,326 - 103,104

- - - - -

94,778 123,982 77,426 85,122 732,826

94,778$ 123,982$ 77,426$ 85,122$ 733,993$



MunicipalParks and Court Administrative Parks andRecreation Building Assessment Recreation

Fund Fund Fund Fund #2Revenues

Taxes 49,761$ -$ -$ -$ Intergovernmental - - - - Miscellaneous - 2,582 12,695 13,654

Total revenues 49,761 2,582 12,695 13,654

ExpendituresCurrent

Public safety - - - - Judicial - - 11,374 - Culture and recreation 3,730 - - 11,818

Capital outlay - - - 4,268 Debt service

Principal - - - - Interest - - - -

Total expenditures 3,730 - 11,374 16,086

Excess (Deficiency) of RevenuesOver Expenditures 46,031 2,582 1,321 (2,432)

Other Financing Sources (Uses)Transfers in - - - 5,000 Transfers out (40,000) - - -

Total other financingsources (uses) (40,000) - - 5,000

Net Change in Fund Balance 6,031 2,582 1,321 2,568

Fund Balances, Beginning of Year 279,693 11,863 5,555 41,905

Fund Balances, End of Year 285,724$ 14,445$ 6,876$ 44,473$



57

City of Carlin Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –

Nonmajor Governmental Funds Year Ended June 30, 2017

PermanentFund

Equestrian Debt PerpetualCenter Police Service CemeteryFund Forfeiture Fund Care Fund Total

-$ -$ -$ -$ 49,761$ - - - - -

17,585 - - 2,578 49,094

17,585 - - 2,578 98,855

- 21,825 - - 21,825 - - - - 11,374

36,536 - - - 52,084 8,854 9,383 - - 22,505

- - 5,129 - 5,129 - - 6,971 - 6,971

45,390 31,208 12,100 - 119,888

(27,805) (31,208) (12,100) 2,578 (21,033)

35,000 - - - 40,000 - - - - (40,000)

35,000 - - - -

7,195 (31,208) (12,100) 2,578 (21,033)

87,583 155,190 89,526 82,544 753,859

94,778$ 123,982$ 77,426$ 85,122$ 732,826$



58


Parks and Recreation Fund Year Ended June 30, 2017


Budget Actual Variance 2016Revenues

TaxesRoom tax revenues 38,000$ 49,761$ 11,761$ 43,732$

ExpendituresCurrent

Culture and RecreationServices and supplies 4,000 3,730 270 4,053

Total expenditures 4,000 3,730 270 4,053

Excess (Deficiency) of Revenuesover Expenditures 34,000 46,031 12,031 39,679

Other Financing Sources (Uses)Transfers out (60,000) (40,000) 20,000 (90,000)

Net Change in Fund Balance (26,000) 6,031 32,031 (50,321)

Fund Balance, Beginning of Year 272,944 279,693 6,749 330,014

Fund Balance, End of Year 246,944$ 285,724$ 38,780$ 279,693$


59


Municipal Court Building Fund Year Ended June 30, 2017



MiscellaneousBuilding Assessments 1,700$ 2,582$ 882$ 2,210$

Other Financing Sources (Uses)Transfers Out (5,000) - (5,000) (3,000)

Net Change in Fund Balance (3,300) 2,582 (4,118) (790)

Fund Balance, Beginning of Year 14,353 11,863 (2,490) 12,653



60


Administrative Assessment Fund Year Ended June 30, 2017



MiscellaneousAdministrative

assessments 14,000$ 12,695$ (1,305)$ 14,840$

ExpendituresCurrent

JudicialServices and supplies 12,600 11,374 1,226 13,133

Net Change in Fund Balance 1,400 1,321 (79) 1,707

Fund Balance, Beginning of Year 5,348 5,555 207 3,848

Fund Balance, End of Year 6,748$ 6,876$ 128$ 5,555$


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Parks and Recreation Fund #2 Year Ended June 30, 2017



MiscellaneousOther income 14,350$ 13,654$ (696)$ 18,711$

ExpendituresCurrent


Services and supplies 23,500 11,818 11,682 14,534

Capital outlay 25,000 4,268 20,732 50,559

Total expenditures 48,500 16,086 32,414 65,093

Excess (Deficiency) of Revenuesover Expenditures (34,150) (2,432) 31,718 (46,382)

Other Financing SourcesTransfers in 25,000 5,000 (20,000) 55,000

Net Change in Fund Balance (9,150) 2,568 11,718 8,618




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Equestrian Center Fund Year Ended June 30, 2017



MiscellaneousOther income 25,000$ 17,585$ (7,415)$ 23,554$

ExpendituresCurrent


Services andsupplies 25,000 36,536 (11,536) 18,854

Capital outlay 35,000 8,854 26,146 30,002


Excess (Deficiency) of Revenuesover Expenditures (35,000) (27,805) 7,195 (25,302)

Other Financing SourcesTransfers in 35,000 35,000 - 35,000

Net Change in Fund Balance - 7,195 7,195 9,698


Fund Balance, End of Year 112,174$ 94,778$ (17,396)$ 87,583$


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Police Forfeiture Fund Year Ended June 30, 2017


Budget Actual Variance 2016Expenditures

CurrentPublic Safety

PoliceServices and

supplies 33,000$ 21,825$ 11,175$ 17,779$ Capital outlay 32,000 9,383 22,617 15,317


Net Change in Fund Balance (65,000) (31,208) 33,792 (33,096)




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Debt Service Fund Year Ended June 30, 2017


Budget Actual Variance 2016Expenditures

Debt servicePrincipal 35,279$ 5,129$ 30,150$ 5,806$ Interest 9,108 6,971 2,137 6,294


Other Financing SourcesTransfers in 40,000 - (40,000) 40,000

Net Change in Fund Balance (4,387) (12,100) (7,713) 27,900




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Perpetual Cemetery Care Fund Year Ended June 30, 2017



MiscellaneousContributions from individuals 75$ 2,500$ 2,425$ 1,054$ Interest income 30 78 48 45

Total revenues 105 2,578 2,473 1,099

Net change in Fund Balance 105 2,578 2,473 1,099

Fund Balance, Beginning of Year 81,780 82,544 764 81,445



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City of Carlin Schedule of Revenues, Expenses, and Changes in Net Position – Budget and Actual –

Utility Fund Year Ended June 30, 2017


Budget Actual Variance 2016Operating Revenues

Utility FeesWater 391,040$ 461,310$ 70,270$ 532,526$ Garbage 208,000 227,487 19,487 234,404 Sewer 297,677 323,472 25,795 325,447

Street lightsUse fees 24,000 27,853 3,853 27,856

Total operating revenues 920,717 1,040,122 119,405 1,120,233

Operating ExpensesWater

Salaries and wages 183,000 166,125 16,875 144,066 Employee benefits 93,000 92,045 955 74,104 Services and supplies 268,800 68,649 200,151 52,741

544,800 326,819 217,981 270,911

GarbageServices and supplies 76,000 93,940 (17,940) 84,171

SewerSalaries and wages 151,000 130,104 20,896 132,529 Employee benefits 83,300 70,842 12,458 65,735 Services and supplies 71,900 79,440 (7,540) 58,433

306,200 280,386 25,814 256,697

GeneralServices and supplies 253,398 267,688 (14,290) 164,139 Depreciation 120,000 126,006 (6,006) 128,290

373,398 393,694 (20,296) 292,429

Total operating expenses 1,300,398 1,094,839 205,559 904,208

Operating Income (Loss) (379,681) (54,717) 324,964 216,025

Nonoperating Revenues (Expenses)Interest and penalties earned 18,600 19,087 487 17,235 Miscellaneous income 13,598 14,188 590 11,947 Interest expense (1,796) (1,796) - (2,682)

Total nonoperatingrevenues (expenses) 30,402 31,479 1,077 26,500

Income (Loss) Before CapitalContributions (349,279) (23,238) 326,041 242,525

Capital contributions 3,000 2,000 (1,000) 4,650

Change in Net Position (346,279)$ (21,238) 325,041$ 247,175

Net Position, Beginning of Year, as Originally Reported 4,632,643 4,385,468

Prior period adjustment (42,441) -

Net Position, Beginning of Year, as Restated 4,590,202 4,385,468

Net Position, End of Year 4,568,964$ 4,632,643$


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City of Carlin Schedule of Fees Imposed Subject to the Provisions of NRS 354.5989


Flat Fixed FeesBusiness license revenue for the year ended June 30, 1991 (base year)

adjusted through June 30, 2016 34,818$

Adjustment of BaseBase year1. Percentage increase in population of local government 0.2%

2. Percentage increase in the Consumer Price Index forthe year ending on December 31 next preceding the yearfor which the limit is being calculated 1.8%

2.0%

700

Adjusted base at June 30, 2017 35,518

Actual revenue 22,577

Amount under allowable amount 12,941$





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Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with

Government Auditing Standards

To the Honorable Mayor and Council City of Carlin State of Nevada

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Carlin, State of Nevada (the City), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 15, 2018.

Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described in the accompanying schedule of findings and responses, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and responses to be a material weaknesses (2017-A and 2017-B).




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A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying schedule of findings and responses to be significant deficiencies (2017-C and 2017-D).

Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

City of Carlin’s Response to Findings The City’s response to the findings identified in our audit is described in the accompanying schedule of findings and responses. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.





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City of Carlin Schedule of Findings and Responses


2017-A Report Preparation Material Weakness

Criteria: Management of the City of Carlin is responsible for establishing and maintaining an effective system of internal control over financial reporting. One of the key components of an effective system of internal control is a finance staff with adequate resources available to prepare the financial statements in accordance with generally accepted accounting principles. Additionally, a good system of internal control contemplates an adequate system for recording and processing entries material to the financial statements.

Condition: Based on our audit procedures performed as of June 30, 2017, we proposed the following material audit adjustments to properly state various account balances in order to fairly present the financial statements in accordance with generally accepted accounting principles:

• Miscellaneous revenue totaling $8,868 was incorrectly recorded as a transferinto the Capital Projects Fund.

• An adjustment of $12,100 was made to properly record cash, debt principal andinterest in the Debt Service Fund.

• Property taxes restricted for the Capital Projects Fund totaling $5,550 wereincorrectly recorded in the General Fund.

• An adjustment was made for $13,273 to properly record taxes receivable anddeferred inflows of resources for unavailable property taxes in the GeneralFund.

• An adjustment was made for $54,240 to properly record accrued payroll andrelated liabilities and payroll expenditures in various fund: $36,183 in theGeneral Fund, $14,381 in the Utility Fund, $3,676 in the Senior Citizens Fundand $54,240 in the government-wide activities.

• Contributions totaling $20,223 were incorrectly recorded as intergovernmentalmatching grant revenue in the Senior Citizens Fund.

• An adjustment of $3,350 was made to properly record prepaid expenses andservice and supplies in the Grants Fund and the government-widegovernmental activities.

• Fund balance did not reconcile to the June 30, 2016 audited financialstatements, therefore an adjustment was made to beginning net position andexpenses totaling $731 in the Utility Fund, an adjustment was made to cash andbeginning fund balance for $25,000 in the Grants Fund, and an adjustment wasmade to cash and beginning fund balance for $37,100 in the nonmajorgovernmental funds.

Cause: Given the daily responsibilities of management, the resources of time and training necessary to prepare the City’s financial statements in accordance with generally accepted accounting principles are not available. As a result the City has chosen to contract with Eide Bailly LLP to prepare the financial statements. This circumstance is not unusual in an organization of this size, due to time constraints of management and costs associated with compliance of the standards. However, management has not


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implemented sufficient procedures to capture the necessary information needed for the financial statements and related disclosures to be prepared in all material respects.

Effect: The City’s financial records required audit adjustments in order for the financial statements to be in accordance with generally accepted accounting principles. Internally prepared financial information may not be accurate and full disclosure financial statements may not be available as timely as they would be if prepared by City personnel.

Recommendation: We recommend management should perform a detailed review of all financial statements and fund trial balances throughout the year to ensure that all significant transactions have been appropriately reported. In addition, management and those charged with governance should annually make the decision to accept the degree of risk associated with this condition because of costs or other considerations.

Management’s Response: Management will annually review whether to accept the degree of risk associated with

the auditors preparing the City’s financial statements. In addition, management will perform year end reconciling procedures to ensure accounts are properly stated.

2017-B Ambulance Billings Material Weakness

Criteria: Management is responsible for establishing and maintaining an effective system of internal controls over financial reporting. One of the key components of an effective system of internal control is the ability to maintain accounting records necessary to prepare the financial statements in accordance with generally accepted accounting principles.

Condition: During our audit procedures performed as of June 30, 2017, we noted billings for ambulance calls had not been processed since October 2016. In addition, the audit resulted in an adjustment to properly record ambulance fees. This adjustment resulted in an increase of $91,525 in accounts receivable, an increase of $149,057 in allowance for doubtful accounts, and a decrease of $57,532 in deferred inflows of resources for unavailable ambulance fees in the General Fund.

Cause: Internal controls in place were not sufficient to ensure that all billable ambulance calls were billed in a timely manner and that ambulance receivables were reconciled to the ambulance billing system.

Effect: Improper reporting of ambulance revenue.

Recommendation: We recommend that the City enhance internal controls over ambulance billing to ensure that all ambulances calls are billed in a timely manner and that the City’s accounting records are reconciled to the ambulance billing system.


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Management’s Response: Management understands the importance of correcting this deficiency. It is believed this

will be corrected before the end of the fiscal year by hiring an outside third party administrator to perform the billing function.

2017-C Controls over Adjusting Journal Entries Significant Deficiency


Condition: During the performance of our procedures, we noted three of the seven adjusting journal entries tested did not have sufficient backup documentation to support the adjusting journal entry.

Cause: Internal controls in place were not sufficient to ensure that adjusting journal entries included appropriate backup documentation to support the adjusting journal entry.

Effect: Possible misstatement of the financial statements.

Recommendation: We recommend that the City enhance internal controls to ensure that adjusting journal entries are supported by appropriate documentation.

Management’s Management understands the importance of correcting this deficiency. Staff will be Response: provided additional training in the current fiscal year relating to proper documentation to

support adjusting journal entries.

2017-D Controls over Special Events Revenue Significant Deficiency


Condition: During the performance of our procedures, we noted there was no supporting documentation, such as records of ticket sales or records of concession sales, for events held at the Equestrian Center. Revenue was record based solely on cash turned in by volunteers after the event. It was also noted, that there is inadequate cash handling policies regarding cash banks for events.


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Cause: Internal controls in place were not sufficient to ensure that all earned revenue was collected by the volunteers at the events, remitted to City personal along with backup documentation and recorded accurately in the City’s accounting records.

Effect: Possible misstatement of the of events revenue.

Recommendation: We recommend that the City enhance internal controls to ensure accurate recording of Equestrian Center event revenues, such as issuing tickets for admittance and using cash registers to track concession sales. We also recommend that the City enhance internal controls over the handling of cash by employees and volunteers, such as requiring that all cash be counted and signed for by the person taking and receiving the cash.

Management’s Management understands the importance of correcting this deficiency. The City is Response: working on updating its cash handling policies and procedures, which will include the

appropriate documentation required to be remitted to the City Clerk’s office for all special events.



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Auditor’s Comments

To the Honorable Mayor and Council City of Carlin Carlin, Nevada

In connection with our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Carlin (the City) as of and for the year ended June 30, 2017, and the related notes to the financial statements, nothing came to our attention that caused us to believe that the City failed to comply with the specific requirements of Nevada Revised Statutes other than those cited below. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City’s noncompliance with the requirements of Nevada Revised Statutes cited below, insofar as they relate to accounting matters.

Current Year Statute Compliance Compliance with Nevada Revised Statues is contained in Note 2 of the financial statements.

Progress on Prior Year Statute Compliance In the prior year, apparent violations of NRS 354.626 occurred in various funds. As noted in Note 2 of the financial statements, apparent violations of NRS 354.626 were once again noted.

Disposition of Prior Year Recommendations Prior year findings 2016-A is reported again this year as finding 2017-A and prior year finding 2016-B is reported again this year as finding 2017-B.

Current Year Audit Recommendations See items noted in the Schedule of Findings and Responses.



1-30-18 CLGF Committee Meeting Minutes - DRAFT 1

DRAFT Minutes of the Meeting

COMMITTEE ON LOCAL GOVERNMENT FINANCE January 30, 2018, 8:30 a.m.

The meeting was held at the Legislative Counsel Bureau, 401 S. Carson St, Room 2134, Carson City, Nevada, and video-conferenced to the Legislative Counsel Bureau, Grant Sawyer State Office Building, 555 E Washington Ave, Room 4412, Las Vegas, Nevada. This meeting was also part of a teleconference.

COMMITTEE MEMBERS PRESENT:

Marty Johnson, Acting Chairman Beth Kohn-Cole Jessica Colvin Alan Kalt Jeff Cronk Tom Ciesynski Mary Walker Jim McIntosh Christine Vuletich

COUNSEL TO COMMITTEE

Peter Keegan

DEPT OF TAXATION STAFF PRESENT:

Jeff Mitchell Kelly Langley Penny Hampton Erik Rowley Susan Lewis Keri Gransber Stephanie Klapstein Chali Spurlock

MEMBERS OF THE PUBLIC PRESENT:

Name Representing

Lorinda A. Wichman Nye County Savannah Rucker Nye County Ken Eason Nye County Hospital District Tim Sutton Nye County Maurina Dillinger Nye County Kendall Swensen Winnemucca Conv & Visitor Auth Linda Poleski City of N. Las Vegas Cori Knauss City of N. Las Vegas Darren Adair City of N. Las Vegas Ryann Juden City of N. Las Vegas Debbie Burton City of N. Las Vegas Vinson Guthreau NACO Bob Erickson City of Fallon Michael Pelham Nevada Taxpayers Jason Goudie Clark County School District Maria Gueder Clark County School District

ITEM 1. ROLL CALL AND OPENING REMARKS

Acting Chairman Johnson called the meeting to order at 8:30 a.m. Member Kalt arrived just after roll call. Chairman Leavitt and Member Zander where absent.

ITEM 2. PUBLIC COMMENT

There was no public comment.

ITEM 3. FINANCIAL CONDITION REPORTS BY THE DEPARTMENT; CONSIDERATION AND POSSIBLE ADOPTION OF RECOMMENDATIONS AND ORDERS

(a) For Possible Action: Discussion Regarding Winnemucca Convention and Visitors Authority audit status:

1. Report by Winnemucca Convention and Visitors Authority regarding their FY 16/17 audit.

Member Beth Kohn-Cole recused herself from Clark County School District discussions.



Kelly Langley and Keri Gransbery appeared on behalf of the Department of Taxation (Department). Kendall Swensen appeared on behalf of Winnemucca Convention and Visitors Authority.

Ms. Gransbery reported that the entity filed timely, but the quarterly economic surveys (QES’s) had not been filed for the 4th quarter of 16/17 FY or the 1st quarter of 17/18 FY. Mr. Swensen confirmed the audit report was filed in December as requested.

Member Walker explained NRS 354.6241 requires the audit be submitted to staff to go to the board in December. Ms. Langley confirmed. Member Walker also clarified that extensions are not needed if the entity receives the audit by November 30. Mr. Swensen noted he discussed that with his auditors.

Member Ciesynski asked if the corrective action plan required a written plan. Ms. Gransbery confirmed the Department received and accepted two corrective action plans.

Acting Chairman reminded Mr. Swensen to turn in the QES’s.

(b) For Possible Action: Discussion and Consideration of School Districts reporting a 3rd

Year of Decline in General Fund Ending Balances pursuant to NRS 387.3045: 1. Report by Clark County School District (3rd year) a) Report by the Department and Discussion of Possible Fiscal Watch Status for

Clark County School District pursuant to NRS 354.675 Kelly Langley appeared on behalf of the Department. Jason Goudie appeared on behalf of Clark County School District.

Mr. Goudie explained the decline was primarily due to hiring expenditures. They expected the ending fund balance (EFB) to increase in 2018 but the Board of School Trustees voted to reduce it. The School District made several cuts continues to reduce costs, and make changes where possible. EFB is anticipated to increase in 2019.

Acting Chairman Johnson had arbitration concerns and asked if they are on track for the budgeted EFB for FY18. Mr. Goudie replied that their contracts are expired and they are on track.

Member Ciesynski questioned their cash flow situation and if they are looking ahead. Mr. Goudie stated they are monitoring cash flow and working on the FY19 budget.

Member Walker asked if they had negative cash balances in the last 18 months, requesting Mr. Goudie to provide that information. She asked if the auditor cited them for over expenditures from the arbitration they had. He explained funds weren’t received until after the audit. Member Walker cited NRS 354.626, noting it isn’t a legal violation as it pertains to employee contracts. Ms. Langley noted that the Department sees it as an exception. Member Walker suggested auditor education may be necessary noting there is no law stating they can’t make transfers higher than budgeted; the law pertains to expenditures.

Member Ciesynski asked about risks and if the 2% level was a permanent policy. Mr. Goudie replied don’t have contingency reserves, are continuing arbitration, and making changes for potential reserves. He added that the Board makes the 2% decision, and the law only protects 8.3% of the budgeted EFB.

Acting Chairman Johnson questioned the possibility of a similar impact in arbitration as in May 2017. Mr. Goudie replied that it could be larger, adding they are looking into it for FY19 and how they can budget differently with more cuts. Member Walker requested a



copy of the 2017 arbitration award be provided to the members. Member McIntosh expressed concerns with the potential for loss due to arbitration.

Acting Chairman Johnson was concerned the 2% balance wouldn’t be enough. He asked the Departments opinion and believes they looked at fiscal watch in the past. Ms. Langley agreed expressing concerns to Mr. Goudie that the Board chose not to make cuts, allowing that low of an ending fund balance.

Mr. Goudie stressed cuts were brought to the Board, some didn’t take place before the start of the year. He believes the Board felt the impact to employees would be great and opted to utilize a portion of the fund balance to avoid affecting critical programs and staff, with the plan that FY19 would be budgeted differently.

Member Vuletich asked if they are looking further out. Mr. Goudie confirmed they are developing a 5 year strategic budget.

Member Ciesynski discussed the limited ability for school districts to borrow money to cover cash flow, and that it has been difficult for schools to achieve the 4%. He would like to see the cash flows. Ms. Langley noted that entities on fiscal watch are required to provide them.

Acting Chairman Johnson asked if using the one time funds to cover expenditures was mentioned to the board, and Mr. Goudie stated that he mentioned it to them.

Member McIntosh understands the FY18 budget was based on the 2017 Legislature, he wanted to know what conversations were had and what they are now. Mr. Goudie explained their funding shortfall and that they are talking with legislatures about their challenges, and doing more to get ahead of it for the 2019 session.

Ms. Langley requested the Committee place Clark County School District on Fiscal Watch. She and Acting Chairman Johnson discussed the process. He reiterated the declining balance isn’t an issue to him, but the decline to such a low level is. Ms. Langley also requested monthly cash flow statements.

Member McIntosh motioned to put Clark County School District on Fiscal Watch with monthly cash flow statements, Member Ciesynski seconded the motion. Member Kohn-Cole recused herself. The remaining members were in favor.

Acting Chairman Johnson noted they are looking for monthly projections and will likely ask them to come back to the next meeting to see where they are.

Mr. Goudie clarified they had no adjustments from the auditor, and asked the length of fiscal watch. Acting Chairman Johnson explained. Ms. Langley confirmed, quoting NRS 354.685.

Member Walker noted she would like cash flows going back 18 months. Acting Chairman Johnson clarified that they want actuals for all of FY17 and the first half of FY18.

(c) For Possible Action: Discussion and Consideration of Nye County Financial Condition:

1. Review of the FY 16/17 audit, FY 17/18 Revenue and Expenditures, Cash Flow Analysis for Nye County.

Kelly Langley and Susan Lewis, appeared on behalf of the Department. Savannah Rucker, Lorinda Wichman, and Tim Sutton appeared on behalf of Nye County. Ms. Lewis noted she is the new budget analyst for Nye County.

Ms. Rucker reviewed the budget, noting improvements since FY16, and explained the corrective actions in place. She noted Nye County is overall seeing financial success.



Acting Chairman Johnson asked about the two increases in their budget, specifically property tax. She explained they are working with the assessor’s office to verify and that she budgeted based on the Department Redbook.

Member Ciesynski asked about the bank reconciliation issue. She explained she is working with the treasurer’s office, they plan to meet monthly. He mentioned he doesn’t believe the PERS liability should be on the audit report. Member Kalt referred to NRS 354.626 regarding unlawful expenditures and noted CLGF put a letter in there showing it is not a violation. He asked if the Department needs to address these inconsistent interpretations and provide guidance to the auditors. Member Walker agreed and commended Nye County on where they are now.

Member Kohn-Cole noted as an auditor, they put what NRS says and that they believe it is an exception, if the Committee and Taxation feel it isn’t necessary, Taxation can send a letter to local governments to provide to their auditors. She commended Nye County.

Acting Chairman Johnson commented that the finances in Nye County have taken an upward turn and would like to address auditor education later in the meeting.

(d) For Possible Action: Discussion and Consideration of Nye County Hospital Financial Condition:

1. Update on Northern Nye County Regional Hospital District regarding renegotiation of the lease and any potential budget impacts;

2. Review of the FY 16/17 Audit, FY 17/18 Revenue and Expenditures, Cash Flow Analysis for Nye County Hospital.

Kelly Langley appeared on behalf of the Department. Ken Eason, Savannah Rucker, and Lorinda Wichman appeared on behalf of Nye County Hospital District.

Ms. Rucker discussed the audit and explained they have a plan of action.

Acting Chairman Johnson again noted the large property tax difference.

Mr. Eason explained the plan, going over the plans with Renown and Remsa. They will meet monthly, Remsa and Renown will send them their billings, they will analyze the invoice and cost, and the Hospital District will pay the difference.

Member Vuletich asked Mr. Eason the service area population. He estimated between Round Mountain and Tonopah, about 6,000 people, about 4,000 are permanent.

Member Kalt asked about the impact of Highway 95. Mr. Eason agreed it is significant, and when the hospital was open, roughly 20% of the patients were from accidents.

Member Walker congratulated them on medical care and finances, and asked about the EMT issue. Mr. Eason thinks there are management issues. Remsa and the county manager are working on it and he believes progress is being made. He also believes Remsa EMTs will relieve some of that stress.

Ms. Langley questioned the capital outlay in the budget. Ms. Rucker explained it was in anticipation of building repairs and will rollover to FY19. Ms. Langley also asked about the goal to bring a doctor in. Mr. Eason noted Renown proposed Physician Assistants for now and Physicians once they can move Doctors to the area. He assured the Committee the county has a 5 year contract with Renown.

Ms. Wichman added that the county did not see any reason to renegotiate the lease. Renown assured them that the county can lease the remainder of the facilities if they chose to. She requested to be removed from fiscal watch.



Mr. Eason added that they are lacking emergency service. There are doctors in the area, but it is limited. They are trying to improve that.

(e) For Possible Action: Discussion and Consideration of the City of North Las Vegas Financial Condition:

1. Update on the proposed SB78 Plan 2. Review of the FY 16/17 audit results 3. Summary of Staffing levels from 2008 to present. Kelly Langley appeared on behalf of the Department. Darren Adair, Cori Knauss, and Ryann Juden appeared for the City of North Las Vegas.

Mr. Adair reviewed the financial results and staffing levels, noting the positive balance in the general fund. He added that some of the indicators that put them on fiscal watch were no longer issues. Their general fund balance has increased the last 3 years. He believes Chairman Leavitt commented at the last meeting that they were no longer on fiscal watch and would only need to appear on SB78.

Member Colvin asked if the major enterprise funds actual revenue exceeded budgeted revenue due to an increase in rates or in usage. Mr. Adair believes it was with both.

Member Walker doesn’t believe an extension request was needed. Mr. Adair explained it was out of an abundance of caution. Ms. Langley explained why they are requested.

Member Ciesynski wanted an update on their financial staffing. Mr. Adair went over the last ten years of staffing numbers; the average of the last five is close to the same, at the critical floor. His concern is trading financial insolvency for service level insolvency. He added that the savings in the budget are not recurring savings.

Acting Chairman Johnson asked what area employee levels declined. Mr. Adair replied that the largest level was the service level.

Mr. Adair noted the budget is in line, they need to reduce their PILT dependency, and staffing levels are still an issue. He briefly went over SB78, discussing their 30 year reduction plan. He hopes to get direction and guidance to bring to the city council.

Member McIntosh asked about labor contracts. Mr. Juden stated all contracts are open, one is in arbitration. They are working with counsel on a plan to help with negotiations. Mr. Adair added they will manage it tightly while meeting obligations under SB78.

Acting Chairman Johnson asked about recurring savings. Mr. Adair explained they can solve problems, but he is concerned about service insolvency.

Ms. Langley asked what the plan was regarding the 3% rate increase for water and wastewater, and how they plan to maintain the funds. Mr. Juden believes it’s an annual increase determined by SNWA. It is an ordinance and counsel does not want to change it. Mr. Adair added the 3% has been necessary to stabilize the utility department, the PILT reduction plan would add additional capacity.

Ms. Langley questioned cash flows and QES’s. Mr. Adair believed they were off of fiscal watch and didn’t need to send them in. He was unaware they needed a letter from the Director. Ms. Langley noted QES’s are due from all local government entities, regardless of fiscal watch. Acting Chairman Johnson suggested checking with the Chairman regarding fiscal watch.

Ms. Langley added Chairman Leavitt expressed confusion in a phone call with the City and General Counsel on what is required in the plan. Peter Keegan confirmed those



concerns, and it appears to him that SB78 requires annual review and adjustments as necessary. Acting Chairman Johnson agreed, and would encourage a flexible plan.

Mr. Juden recalled when the bill was submitted Taxation offered an amendment regarding annual review. His concern is that Ms. Langley referred to Chairman Leavitt’s question being about approval, something different than oversight or review. During the work session, Chairman Parks removed the words “and approval”. Mr. Juden added it is critical to the city to have a fixed plan, and was clear in the actions of the Legislature on March 17th that approval or affirmative action moving forward was not intended by the bill.

Member McIntosh questioned the timing the city sees on an annual basis. Mr. Juden stressed the importance of a fixed plan without substantive changes.

Acting Chairman Johnson believes they are to approve the initial plan by July with annual reviews. Mr. Juden would like guidance for their council, adding that Chairman Leavitt suggested reevaluating every 5 years. The city agrees, as long as there is a cap. Acting Chairman Johnson agreed.

Peter Keegan expressed compliance concerns. CLGF would need to make adjustments to the plan if the city was noncompliant. Mr. Juden noted if they are noncompliant, it would be dealt with at the next Legislative session, 3% suggests the legislature wanted a fixed bottom to assure CLGF and North Las Vegas they were serious. The Legislature believed they needed a bottom. The City believes they need a ceiling for fiscal certainty.

Mr. Adair noted the city gets authority to spend based on budgets submitted and approved by the governing body and the Department. He has not seen the Department reject a budget. If there was a requirement, transfers would not be allowed in the budget. They have not violated the cap they have had for the last 8 years.

Ms. Langley noted Chairman Leavitt mentioned a range. She saw what was presented to the city’s board and the reduction in PILT doesn’t begin until FY19/20. She hopes they can get a plan to begin reducing it sooner.

Mr. Juden agreed, clarifying there should be annual review of compliance, and suggested readjustment every 5 years. Mr. Adair added at times the city may shift savings to the utility department in excess of the plan requirement. The city needs a fixed plan, but it would be motivated to do what is best for the rate payers and utility companies.

Acting Chairman Johnson offered guidance that their plan needs a floor and ceiling, that includes triggers, discusses reporting, provides annual review, and allows for discussions every 5 years. Member Colvin suggested adjusting the base around revenue growth, including EFB for parameters. Acting Chairman Johnson agreed.

Mr. Adair noted they have to make sure the city has the ability to increase staff, and that could be part of the periodic review.

Acting Chairman Johnson added they are not looking for the City of North Las Vegas to only maintain the minimum. Member Cronk questioned the concept of a ceiling and Mr. Juden explained that it creates certainty for the credit markets and adds the length and duration of the plan. Mr. Adair noted the fixed nature of the plan gives the credit markets an ability to know what the cash impact will be over time. Except for PILT, the water/wastewater enterprise is healthy. Acting Chairman Johnson agreed that the ceiling gives them something to shoot for, and nothing keeps the city from increasing that minimum.

Mr. Juden will suggest to counsel to get a plan with a floor and ceiling, triggers, a five year potential adjustment, and annual review of the plan. Acting Chairman Johnson



commented that he would add to that the timing of when they would report back to the Department.

Ms. Langley requested Mr. Juden consider beginning the reduction of PILT prior to the FY19/20 budget. He replied that he would take that back to them.

Acting Chairman looks forward to the changes and will have them back before July.

ITEM 4. BRIEFING TO AND FROM THE COMMITTEE ON LOCAL GOVERNMENT FINANCE AND LOCAL GOVERNMENT FINANCE STAFF

The Department had nothing to report. ITEM 5. REVIEW AND APPROVAL OF MINUTES For Possible Action: CLGF Committee Meeting – June 9, 2017

Member Ciesynski noticed White Pine and Lander were due to come before the committee, and asked Kelly to explain. She stated they are now improving and when reviewing the Draft Agenda, Chairman Leavitt said they did not need to come back.

Member Kalt motioned to approve the minutes from the September 6, 2017 meeting, Member McIntosh seconded. The minutes were approved unanimously.

ITEM 6. FOR POSSIBLE ACTION: SCHEDULE DATE AND REVIEW AGENDA TOPICS FOR THE NEXT MEETING Acting Chairman Johnson suggested the 1st week of April for the next meeting.

Ms. Langley noted the Department will provide additional information regarding audits and will have preliminary projections, final projections, and the pro forma.

Acting Chairman Johnson requested a discussion on Clark County Schools and to check with the Chairman about removing Nye County from fiscal watch. He asked about the auditor education and if the Department could prepare a letter. Ms. Langley requested assistance from the committee so he suggested a subcommittee, with Mary Walker in charge, Alan Kalt, and Beth Kohn-Cole.

Ms. Langley requested North Las Vegas and their plan to be on the next agenda.

Member Walker mentioned prior to removing North Las Vegas from fiscal watch, the Committee needs to clarify with Chariman Leavitt if that is his intent to.



ITEM 8. FOR POSSIBLE ACTION: ADJOURNMENT Meeting adjourned at 11:48 a.m.


3-08-18 CLGF SubCommittee Meeting Minutes - DRAFT1

DRAFT Minutes of the Meeting

SUBCOMMITTEE ON LOCAL GOVERNMENT FINANCE March 8, 2018, 9:00 a.m.

The meeting was held at the Department of Taxation, 1550 E. College Parkway, Carson City, Nevada, This meeting was also part of a teleconference.

COMMITTEE MEMBERS PRESENT:

Mary Walker, Chairman Beth Kohn-Cole

COMMITTEE MEMBERS ABSENT: Alan Kalt

COUNSEL TO COMMITTEE Peter Keegan

DEPT OF TAXATION STAFF PRESENT: Jeff Mitchell Kelly Langley Penny Hampton Erik Rowley Susan Lewis Keri Gransbery Christina Griffith Chali Spurlock

MEMBERS OF THE PUBLIC PRESENT: Name Representing Deborah Lauchner City of Reno Christine Vuletich Washoe County Stacie Hammerling City of Sparks Bob Erickson City Fallon Marla McDade Williams Strategies 360 Kristen Chinvarasopak Eide Bailly Daniel Carter Eide Bailly Teri Gage Eide Bailly Denise Lewis City of Fernley Joannie Brum City of Henderson Corey Mayes City of Las Vegas Grace Martel Clark County School District Susan Paprocki Elko Community & Visitors Auth Lori Clark County School District Linda Newman Incline Village Resident Gina Rackley Humboldt County Kelly Haluzak City of Caliente Maria Gueder Clark County School District Leah Williams Reno Tahoe Airport Authority Quin Oszakiewski City of Las Vegas Sherry Wideman Churchill County

ITEM 1. ROLL CALL AND OPENING REMARKS

Chairman Mary Walker called the meeting to order at 9:03 a.m. Chairman Walker and Member Beth Kohn-Cole were present, Member Alan Kalt was absent.

Chairman Walker briefly explained the reason for the subcommittee meeting.


Linda Newman, a resident of Incline Village, requested the Committee contact the Attorney General or the District Attorney to investigate Incline Village General Improvement Districts accounting and reporting processes.

ITEM 3. For Possible Action: Discussion and Consideration of Proposed Guidance regarding NRS, 354.624 Submittal of Audits, 354.626 Unlawful Expenditures, and NAC 354.410 Available Resources Chairman Walker read paragraph 1 from NRS 354.624, regarding submittal of the annual audit. She noted there was some confusion at the last Committee of Local Government Finance meeting (CLGF). The first clarification she would like in a letter from the Department of Taxation (the Department) is that within 5 months after the audit report has



been completed it must be submitted to the local government body. A board meeting must be held 30 days after the report is submitted to the local government.

Member Kohn-Cole agreed adding auditors may think they have to wait until the audit goes to the governing body to date the report. Chairman Walker clarified that the governing body does not approve the audit report, they accept it.

Chairman Walker noted some local governments have been cited for not bringing the report to the governing body by November 30th, but that is not a violation.

Christine Vuletich, on behalf of Washoe County, asked for clarification on when it is considered a public document.

Member Kohn-Cole believes it is a public document once it becomes an Agenda Item. Ms. Vuletich agreed.

Daniel Carter, with Eide Bailly, expressed concern about compliance with paragraph 6. The public has access to the document once it is posted, before it is filed with the clerk due to things being done electronically. Ms. Vuletich read from paragraph 6 where it refers to filing it as a public record.

Chairman Walker agreed that is the process. Since it is posted 3 days in advance, it becomes a public document at that time.

Chairman Walker added some local governments think the audit report must be concluded without the Management Discussion and Analysis Letter (MDA). Chairman Walker noted that it needs to be included. Auditors look at the MDA and tie those numbers back to the audit.

Member Kohn-Cole agreed adding that it is part of the annual audit. She mentioned single audits are sometimes separate, but thinks it is really the engagement letter of the auditor. The entire thing should be complete.

Susan Lewis, with the Department, questioned where that material was located. Chairman Walker clarified that it was a comment made at the last CLGF meeting.

Chairman Walker noted the MDA is part of the audit that needs to be completed before November 30th.

Penny Hampton, on behalf of the Department, noted they often get calls on November 30th because entities are unsure if they need an extension as the MDA is not ready. The Department always advises them if the MDA is not ready, perhaps they should ask for an extension. Chairman Walker agreed. Member Kohn-Cole noted without the MDA the report of the audit submitted hasn’t been submitted.

Ms. Vuletich agreed it is the auditor’s report, adding it is the entity’s financial statement, and is general good practice to have completed the MDA to be sure they understand the financial results. Chairman Walker agreed.

Chairman Walker discussed NRS 354.626, unlawful expenditure of money in excess of amount appropriated. She read paragraphs 1 and 2. Her interpretation is the exceptions are things they don’t have control over, insurance for example. They don’t know what the costs will be. Paragraph 2(e) regards contracts between local governments and employees covering professional services or contracts between local governments and employee organizations.

Chairman Walker referred to the last CLGF meeting where a school district was cited for an over expenditure due to arbitration that was out of their control. Negotiations can go



on for years. She believes this is specifically excluded and does not believe is a legal violation.

Member Kohn-Cole questioned unbudgeted transfers, noting she understands they will discuss transfers later. She also noted in paragraph 2(e) that she agrees with the Chairman, especially if it is retroactive. She explained she makes a footnote that it appears to be a violation, but there is an exception and asked if they shouldn’t do that. Chairman Walker replied that they should not.

Chairman Walker noted she spoke with Peter Keegan with the Attorney General’s office regarding that. If there isn’t an actual violation, it should not be noted that there is a possible, or appearance of a violation.

Member Kohn-Cole noted if they are over expended in the audit, and nothing is noted in the MDA, they would end up getting a letter from Taxation asking why. The auditors try to prevent that from happening.

Kelly Langley, on behalf of the Department, agreed it is nice for the Department to have that, but not how it has been stated. She suggested stating that the over expenditure is not a violation due to this exception regulation. Member Kohn-Cole added they do the same thing with grants. Ms. Langley noted the Departments appreciation.

Peter Keegan, with the Attorney General’s Office, asked if when it is not an exception, if the auditors ask for clarification before they complete the audit. Member Kohn-Cole replied that they visually know why it is over budget, and if it is a violation.

Chairman Walker asked Mr. Keegan his thoughts on the auditors using the term it could be a potential violation. He stated he would avoid that, to put local governments on the hook when there isn’t evidence there was a violation should be avoided to eliminate the possibility where a local government is in the position of being accused of a violation. Member Kohn-Cole added the public could read that and not understand it as well.

Member Kohn-Cole and Ms. Langley discussed new language for the auditors to use. They agreed on “The over expenditure in X is not a violation due to this”. Chairman Walker suggested that needs to be added to the letter.

Chairman Walker went over NRS 354.626, which regards unlawful expenditures of money. She emphasized the word expenditures, clarifying that operating transfers are not expenditures. This is another thing they saw at the last CLGF meeting. She also clarified that it is not illegal for a local government to overspend their operating transfers.

Kristen Chinvarasopak, with Eide Bailly wanted to discuss where over expenditures lie. She understands some local governments were receiving notification of a violation in a particular line item, salary and wages being over expended but not the function itself. She asked if they could talk about appropriated for that function and what that means.

Chairman Walker replied that it is function, for example: general government, public safety, etc. It is not going line item by line item. Member Kohn-Cole added that it is summarized on the budget based on function in a particular fund.

Ms. Langley added that they can’t take public safety across a number of funds, but in that fund the Department looks at function. Chairman Walker requested that be added to the letter. Member Kohn-Cole also requested for her to refer to the budget as that clarifies it.

Ms. Lewis noted in the audit it can be misleading if there is an item called "Current", and functions are listed under it. Chairman Walker reiterated that it is not function. Ms. Lewis added that they make it look like, and use it as a function. Chairman Walker stated that the function should not be "Current".



Ms. Hampton added the GASB requirement has caused confusion in terminology. She has seen Capital Outlay separate from the other objects. At first glance it appears it is a separate function when it is not. Member Kohn-Cole agreed that needs to be clarified.

Member Kohn-Cole asked for there to be clarification that Enterprise Funds have different requirements. Chairman Walker asked how the Department looks at that. Ms. Hampton replied through operating expenses. Member Kohn-Cole asked that they clarify that as it has come up that there are over expenditures there. Ms. Hampton added that the Department considers depreciation expenses.

Chairman Walker wanted to discuss NAC 354.410, available resources. She noted this should be used when a local government is trying to do an augmentation. She read paragraph 1 and 2. She wanted to clarify that this is for what is available resources for an augmentation. She noted there was an audit point they saw that said the EFB was lower than budgeted by 684,000 which put the district in violation of 354.410. According to that audit point, it would say that at any time if EFB is less than budgeted, it would be illegal. She disagrees. This particular entity’s total revenues were below budget. It is a management consideration, but it’s not illegal.

Member Kohn-Cole noted concern that a tentative budget comes in with EFB of say 5 million, but the final shows an EFB of 4 million. That extra million was not an available resource. Chairman Walker asked if she was talking about the tentative due April 15 and the Final due June 1. She confirmed. Chairman Walker noted that the tentative budget is just an estimate.

Ms. Langley noted they look at the tentative budget, but the compliance issues are only for their final budget or their augmented budget.

Chairman Walker summarized that the first clarification on NRS 354.624 is that when the law states that the audit must be concluded and the report submitted to the government body within 5 months at the end of the fiscal year, it does not mean that it needs to be at a public meeting, just submitted to the local government. Then the audit report needs to be presented to the governing board at a public board meeting within 30 days after the report was submitted.

The second clarification is that the MDA is included. It must be a complete audit.

Regarding clarification on NRS 354.626, workers comp and medical expenses, for example as well as union contracts with employees is excluded. It also does not include operating transfers.

NAC 354.410 available resources for augmentation, it does not reflect on if the EFB is lower than budgeted. Several factors could affect that as well as decrease in revenue. It is a financial management concern, but not a legal concern.

Member Kohn-Cole asked that it be clarified that it is the actual EFB is less than budgeted.

Chairman Walker added in regards to potential violation of NRS, that unless there is actual proof of a violation, there should not be a potential violation.

Ms. Langley offered an example that “it is not a violation due to the exception”. Also, unlawful expenditures is done at a function level, "current" is not a function.

Ms. Lewis asked for clarification of when the 30 days starts, Chairman Walker explained that they have 5 months to deliver it to the local government and 30 days from that to submit it to their governing body as well as the Department of Taxation.



Deborah Lauchner, representing the City of Reno, clarified that the 30 days starts the day it is submitted to the local government, even if before November 30th. Chairman Walker confirmed.

Member Kohn-Cole motioned to accept the recommendations for a clarification notice to local governments, Chairman Walker seconded it.

ITEM 4. For Possible Action: SCHEDULE DATE AND REVIEW AGENDA TOPICS FOR THE NEXT MEETING Chairman Walker was not sure another meeting was necessary.

Ms. Langley suggested submitting a draft letter to the Committee on Local Government finance and if needed at that point, another meeting could be scheduled.



ITEM 8. FOR POSSIBLE ACTION: ADJOURNMENT Meeting adjourned at 9:57 a.m.


Documents

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