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HomeMy Public PortalAbout4a TOF 2016 Preliminary Audited FS 4.17.17Town of Fraser Fraser, Colorado Financial Statements December 31, 2016 PRELIMINARY DRAFT i Town of Fraser, Colorado Financial Report December 31, 2016 Table of Contents Page INDEPENDENT AUDITOR'S REPORT A1 – A3 Management’s Discussion and Analysis B1 –B11 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets C1 Statem ent of Activities C2 Fund Financial Statements: Governmental Funds: Balance Sheet C3 Reconciliation of Governmental Fund Balance to Governmental Activities Net Assets C4 Statement of Revenues, Expenditures and Changes in Fund Balances C5 Reconciliation of Net Change in Fund Balances to Change in Net Assets of Governmental Activities C6 Business-Type Funds: Statement of Net Assets -Enterprise Funds C7 Statement of Revenues, Expenses and Changes in Net Assets - Enterprise Funds C8 Statement of Cash Flows -Enterprise Funds C9 Fiduciary Fund: Statement of Fiduciary Assets and Liability C10 Statement of Changes in Fiduciary Assets and Liabilities C11 Notes to the Financial Statem ents D1 – D25 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget (GAAP Basis) and Actual -General Fund E1 Schedule of Revenues -Budget (GAAP Basis) and Actual -General Fund E2 PRELIMINARY DRAFT ii Town of Fraser, Colorado Financial Report December 31, 2016 Table of Contents (Continued) Page Required Supplementary Information (continued): Schedule of Expenditures and Transfers -Budget (GAAP Basis) and Actual General Fund E3 Special Revenue Fund -Conservation Trust Fund E4 Special Revenue Fund –Restricted Revenue Fund E5 Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget (GAAP Basis) and Actual Debt Service Fund F1 Capital Projects Fund -Capital Equipment Replacement Fund F2 Schedule of Revenues, Expenditures and Changes in Net Position - Budget (Non-GAAP Basis) and Actual W ith Reconciliation to GAAP Basis Enterprise Fund -Water Fund F3 Enterprise Fund -Wastewater Fund F4 Agency Fund -JFOC Fund F5 Annual Schedule of Revenues and Expenditures for Roads, Bridges and Streets F6 – F10 PRELIMINARY DRAFT McMahan and Associates, l.l.c. Certified Public Accountants and Consultants Web Site: www.mcmahancpa.com Chapel Square, Bldg C Main Office: (970) 845-8800 245 Chapel Place, Suite 300 Facsimile: (970) 845-8108 P.O. Box 5850, Avon, CO 81620 E-mail: mcmahan@mcmahancpa.com Member: American Institute of Certified Public Accountants Paul J. Backes, CPA, CGMA Avon: (970) 845-8800 Michael N. Jenkins, CA, CPA, CGMA Aspen: (970) 544-3996 Daniel R. Cudahy, CPA, CGMA Frisco: (970) 668-3481 A1 M & A INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Town Board Town of Fraser, Colorado We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the Town of Fraser (the “Town”),as of and for the year ended December 31, 2016, which collectively comprise the Town’s basic financial statements as listed in the table of contents, and the related notes to the financial statements. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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. 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 Town of Fraser as of December 31, 2016, 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. PRELIMINARY DRAFT To the Honorable Mayor and Town Board Town of Fraser A2 Other Matters Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis in Section B 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 in Section B in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of managem ent 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 in section E is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. The budgetary comparison information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statement or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively com prise the Town’s financial statements as a whole. The individual fund budgetary comparisons found in Section F and the Local Highway Finance Report are presented for purposes of additional analysis and are not a required part of the basic financial statements. The individual fund budgetary comparisons found in Section F and the Local Highway Finance Report are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. McMahan and Associates, L.L.C. April 17, 2017 PRELIMINARY DRAFT MANAGEMENT’S DISCUSSION AND ANALYSIS PRELIMINARY DRAFT B1 Town of Fraser, Colorado Management’s Discussion and Analysis December 31, 2016 As management of the Town of Fraser, Colorado, (“Town”), we offer readers of the Town’s financial statements this narrative overview and analysis of the financial activities of the Town for the fiscal year ended December 31, 2016. The Town provides a high level of local government service and availability to the community including operation of the Town’s water and wastewater systems, a public works department that provides for street maintenance, snow removal and management, park and open space preservation, public building and facility management and maintenance. Our planning department provides support for both our business/economic sectors in addition to community development support, all while maintaining our small town character in the bigger mountain resort community that we are a part of. The Town currently acts as the manager of the Upper Fraser Valley W astewater Treatment Facility –providing both the operational expertise and financial management of the facility for the three member organizations who share the plant. In addition the Town participates in a joint Fraser/Winter Park Police Department and a joint Winter Park/Fraser/Granby Building Services Department. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Town’s basic financial statements. The Town’s basic financial statements include three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements:The government-wide financial statements are designed to provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all Town assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The Statement of Activities presents information showing how the government’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 (i.e. uncollected revenues such as grants or earned but unused vacation leave.) Both of the government-wide financial statements distinguish functions of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities). The governmental activities of the Town include general government, public safety, public works, and culture and recreation. The business-type activities of the Town include water production, water distribution system operation and maintenance, and the operation and maintenance of the Town’s wastewater collection system. The government-wide financial statements can be found on pages C1 and C2 of this report. 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 Town, 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 Town can be divided into two categories: governmental and proprietary funds. PRELIMINARY DRAFT B2 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. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. The expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The fund financial statements for the governmental funds are shown on pages C3 and C5. The Town’s Budget includes the following governmental funds: General Fund (GF), which provides for the general functions and services such as administration, planning, law enforcement, streets and properties. Capital Asset Fund (CAF), which is intended to fund long term maintenance of capital assets (streets, buildings, parks, trails, etc). The CAF is consolidated with the GF in the financial statements. Restricted Revenue Fund (RRF), which is funded by a dedicated sales tax to be used for transportation,trails, and capital project expenditures. Debt Service Fund (DSF), which provides for bonded debt service payments. Conservation Trust Fund (CTF), which is funded by lottery proceeds and provides for open space and recreational related capital projects. Capital Equipment Replacement Fund (CERF), which provides for vehicle and heavy equipment purchases. The Town adopts an annually appropriated budget for all governmental funds. A budgetary comparison statement has been provided for the General Fund, Restricted Revenue Fund, Conservation Trust Fund, Debt Service Fund and Capital Equipment Replacement Fund to demonstrate compliance with the State budget statutes. These are included in Sections E and F. Proprietary funds:The Town maintains two proprietary funds commonly known as enterprise funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town uses an enterprise fund to account for its water operations and one to account for its wastewater operations, which was established on December 31, 2009 by the dissolution of the Fraser Sanitation District. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for each of the business-type services provided by the Town. The Town’s Budget includes the following enterprise funds: Water Fund (WF), an enterprise fund for the Town’s water utility. Wastewater Fund (WW F),an enterprise fund for the Town’s wastewater utility. The basic proprietary fund financial statements can be found on pages C7 through C9 of this report. The Town also presents a budgetary comparison for its proprietary funds on pages F3 and F4. Fiduciary fund: As managers of the Upper Fraser Valley Wastewater Treatment Plant (“UFVWWTP”), the Town operates the Joint Facilities Fund (“JFF”) as a fiduciary fund to account for the operations and maintenance of the facility along any capital expenditures related to the plant. JFF Operations and Maintenance (O&M)and the JFF Capital Replacement Reserve (CRR), both of which provide for operations and capital projects at the W astewater Treatment Plant. The JFF activity is found on pages C10, C11,and F5. PRELIMINARY DRAFT B3 Overview of the Financial Statements (continued) Notes to the Financial Statements:The Notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found at Section D of this report. The largest portion of the Town’s assets are reflected in the investment in capital assets (i.e. land, streets, buildings, improvements, and equipment). Capital assets account for 71%of the total assets of $40,421,391. The Town uses these assets to provide services to its citizens. The Town has to pay liabilities out of the remaining liquid assets. The Town also has assets that are considered restricted for a variety of purposes. Accordingly, these assets are not an available source for payment of future spending, other than as restricted. The Town is showing the detail of restricted net position below on page B4 and also on page D19 of the footnotes. Government-wide Fund Analysis Financial Highlights On a short term view, the Town’s governmental fund balances increased by $404,408 in 2016. The Town’s General Fund’s fund balance increased by $426,901. On a long-term view (including depreciation and excluding capital outlay, etc.) the Town had a 1% $483,167) increase in net position from $38,265,648 to $38,748,815. “Net Position” for the Town refers to both the governmental and business-type (Water Fund (W F) and W astewater Fund (WWF)) activities. The business-type activities (W F & WWF) had an increase in net position of $155,803, while the governmental activities had an increase in net position of $327,364. The “long-term” view includes depreciation expense. On page D5 you will see the schedule the Town uses to depreciate its assets. On pages D14 -D15 you will see the corresponding schedules for depreciation and additions to capital assets (capital outlay). It’s important to review the depreciation schedule and compare it to the age of the assets being depreciated. Annual depreciation expense for streets exceeds $500,000 and there is no designated revenue source or reserves associated with this asset. Annual depreciation expense on water and wastewater assets exceeds $800,000,with over $500,000 of that depreciation relating to underground utilities. Over half the Town’s underground utilities have exceeded their depreciation life cycle. At December 31, 2016, The Fraser Town Board has many committed reserves in its General Fund and both of its Enterprise Funds, along with a reserve for unforeseen Joint Facility emergencies. These reserves will allow the Town to meet its short term obligations for safe, reliable and sustainable water and wastewater systems. Available resources will be freed up in the 2017 Budget to address annual street maintenance as all long term bonded indebtedness will be paid for from the Debt Service Fund’s reserves.The Town continues to allow for additional growth in utilities and streets, while the issue of the cost of maintenance reflected by service fees and GF revenues remains a community concern. PRELIMINARY DRAFT B4 Government-wide Fund Analysis (continued) The Town’s restricted net position for 2016 is shown in the following schedule: Ba la nce Ba la nce 1/1/16 Ad diti ons De leti ons 12/31/16 General Fund: Fees in lieu of Park 6,379$ - - 6,379 Affo rdabl e hous ing impac t fee 135,426 - - 135,426 Emergenc y res erves 122,000 - (7,000) 115,000 Debt Service Fund reserves : Nex t year's pay ment s 300,000 - - 300,000 Cons ervation Trus t Fund 12,035 - 6,537 18,572 Res tricted Revenue Fund - 547,624 (541,635) 5,989 Wastewat er Fund Operat ing reserve 47,373 572 - 47,945 Capi tal replac em ent res erve 713,853 3,807 (64,130) 653,530 1,337,066$ 552,003 (606,228) 1,282,841 The following shows the Town’s net position for 2016: 2016 2015 2016 2015 2016 2015 As sets: Current a nd other a ssets 5,210,985$ 4,851,780 6,595,427 5,733,927 11,806,412 10,585,707 Capital as sets 9,088,092 9,550,849 19,526,887 20,235,422 28,614,979 29,786,271 Total Assets 14,299,077 14,402,629 26,122,314 25,969,349 40,421,391 40,371,978 Lia bilitie s: Oth er l iabilities 606,731 661,627 37,875 40,713 644,606 702,340 Long-te rm l iabilities outstanding 818,582 1,202,908 - - 818,582 1,202,908 Total Lia bilitie s 1,425,313 1,864,535 37,875 40,713 1,463,188 1,905,248 De ferred Inflow s of Re sour ces: Property taxe s 209,388 201,082 - - 209,388 201,082 Total Deferred Inflow s of Re sources 209,388 201,082 - - 209,388 201,082 Ne t Pos ition: Net i nves tm ent i n capital as sets 8,269,510 8,347,941 19,526,887 20,235,422 27,796,397 28,583,363 Res tricted 581,366 575,840 701,475 761,228 1,282,841 1,337,068 Unres tri cted 3,813,500 3,413,231 5,856,077 4,931,986 9,669,577 8,345,217 Total Net Position 12,664,376$12,337,012 26,084,439 25,928,636 38,748,815 38,265,648 Tow n of Fraser's Ne t Position Go ve rnmental Bus ine ss-type Ac tivities Ac tivities Tota l PRELIMINARY DRAFT B5 Government-wide Financial Analysis (continued) At the end of the current fiscal year, the Town is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business- type activities. The following chart is a summary of the Town’s Change in Net Position: 2016 2015 2016 2015 2016 2015 REVENUES: Pr ogram re ve nues : C harges for s ervi ces 152,406$ 157,253 1,650,886 1,499,494 1,803,292 1,656,747 Op erating grants and contr ibutions 146,028 178,946 56,832 100,971 202,860 279,917 Capital grants and contr ibutions - 1,394,458 540,000 307,900 540,000 1,702,358 Ge neral reve nues : Pro perty taxe s 201,310 277,410 - - 201,310 277,410 Sa les a nd Use ta xe s 3,152,780 2,176,821 - - 3,152,780 2,176,821 Oth er taxe s 76,925 80,063 - - 76,925 80,063 Interest a nd other revenue 175,303 112,250 37,456 16,769 212,759 129,019 Total Reve nue s 3,904,752 4,377,201 2,285,174 1,925,134 6,189,926 6,302,335 EX PENS ES : Ge neral government 1,665,945 1,059,341 - - 1,665,945 1,059,341 Culture and recreation 50,183 43,696 - - 50,183 43,696 Public safety 441,048 430,045 - - 441,048 430,045 Public works 1,388,797 3,776,060 - - 1,388,797 3,776,060 Interest 51,415 70,642 - - 51,415 70,642 Wa te r - - 1,090,771 904,884 1,090,771 904,884 Wa stewater - - 1,018,600 961,371 1,018,600 961,371 Total Expenses 3,597,388 5,379,784 2,109,371 1,866,255 5,706,759 7,246,039 Cha nge in Net Position Be fore Tr ansfers 307,364 (1,0 02,583) 175,803 58,879 483,167 (943,704) Transfe rs in (out)20,000 20,000 (20,000) (20,000) - - Cha nge in Net Position 327,364 (982,583) 155,803 38,879 483,167 (943,704) Ne t Position-Jan 1 12,337,012 13,319,595 25,928,636 25,889,757 38,265,648 39,209,352 Ne t Position - December 31 12,664,376$12,337,012 26,084,439 25,928,636 38,748,815 38,265,648 Total Tow n of Fraser's Change in Net Posi tion Go ve rnmental Bus ine ss-type Ac tivities Ac tivities Governmental activities: Governmental activities increased the Town’s net position by $327,364 during 2016, as compared to a decrease in net position of $982,583 during 2015. The following are the major elements of the change in net position of governmental activities from December 31, 2015 to December 31, 2016: During 2015, the Town expended $2.2 million for street projects. Of this amount, $1.1 million was funded through a Colorado Department of Transportation RAMP grant recognized as revenue during 2015. During 2016, the Town didn’t undertake any large construction projects so the increase in net position is expected. A newly voter elected 1% Sales Tax increase became effective on January 1st, 2017. PRELIMINARY DRAFT B6 Government-wide Financial Analysis (continued) The following is a graph of the Town’s governmental activities revenues by source for 2016.The Town continues to be challenged by its dependence on the very volatile resort based sales tax revenues. Fortunately,the Town has the community’s grocery, hardware, and department stores within its municipal boundaries. The Town will continue to help the local business community attract and develop a more varied mixture of vendors appealing to both the community’s residents and its resort vacationers. A new grocery store is expected to open in the neighboring community of Winter Park in the third or fourth quarter of 2017. The Town anticipated the estimated potential sales tax loss of this competing grocery store in its 2017 budget. Cha rges f or servi ces , $152,406 Oper ating Grants & Contributions , $146,028 Ca pi ta l Grants and Contributions (excl uding assets ), $- Property Taxes , $201,310 Sa les and Us e Ta x, $3,152,780 Other Ta xes , $76,925 Inter es t a nd other revenue, $175,303 The following is a graph of the Town’s governmental activities expenditures by function for 2016. Gener al government, $1,665,945 Cul ture a nd recreation, $50,183 Publ ic s afety , $441,048 Publ ic works , $1,388,797 Inter es t, $51,415 PRELIMINARY DRAFT B7 Government-wide Financial Analysis (continued) Business-type activities: Business-type activities (water and wastewater, collection and treatment) resulted in an increase in the Town’s net position of $155,803. Key elements of this change are as follows: Within the Water and Wastewater Funds and in the Town’s portion of the JFF assets, depreciation expense on capitalized assets of $841,205 accounted for 40%of total operating expenses. Charges for our customer’s water and wastewater services accounted for 96%of total operating revenues. The following is a graph of the business-type revenues by source for 2016. Cha rges f or services , $1,650,886 Oper ating Gr ants & Contributions, $56,832 Capi ta l Gr ants a nd Contributions, $540,000 Inter es t and other revenue, $37,456 The following is a graph of the business-type expenses by function for 2016. Personnel , $483,839 Commodi ti es , $406,357 Contractua l , $332,143 Sys tem developmen t and other, $45,827 Depreciation, $841,205 Financial Analysis of the Town’s Funds As mentioned on page B2 of this analysis, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. PRELIMINARY DRAFT B8 Financial Analysis of the Town’s Funds (continued) Governmental funds: The focus of the Town’s governmental funds is to provide information on near- term inflows (revenues), outflows (expenditures), and balances of spendable resources. Such information is useful in assessing the Town’s financing requirements. In particular, fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Town’s governmental funds reported combined ending fund balances of $4,414,404;the funds increased $404,408 from the prior year’s ending balances. The Town’s governmental fund balances for 2016 and the past two years are graphed as follows: $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 2014 2015 2016 Ge nera l Fund Conservation Trust Fund Debt Service Fund Rest ricted Reven ue F und Capital Equipment Fund Proprietary funds: The Town’s proprietary funds (W ater and Wastewater Funds)provide the same type of information found in the government-wide financial statements, but in more detail. The proprietary funds’total cash is available for spending at the Town’s discretion. At the end of 2016 the Town Board reserved multiple amounts and designated them as committed reserves for emergencies in both our operations and maintenance and also for capital emergencies. Reserves are recognized in- house and are outlined earlier in this discussion. PRELIMINARY DRAFT B9 Budget Variances in the General Fund: The Town had the following significant budget variances which are detailed as follows: Pos. (Ne g.)Account Re ason Re ve nue s: 661,095$ Sales & use taxes Conservat ive budget ing, increas ed hous ing start s, new 1% res tricted sales tax. 77,236 Liquor and ot her lic ens e fee Marijuana ex cise and dispens ary fees have inc reas ed. Ex pe ndi tu re s: Ge ne ra l Gove rnm ent: 118,306 To wn board comm enhanc .Budget ed ec onom ic devel opment study and proj ec ts not done. 52,729 Ot her purc has ed servic es Purc has ed services were les s than ex pec ted. Public Works 47,137 Salari es and benefi ts Vacant job pos itions ran longer than ant icipated. (72,543) Other purc has ed servic es Remaining costs for RA MP projec t not budget ed. 48,586 Propert y management Budgeted more for trail and park maintenanc e than ex pended. 278,486 Capital outlay Expended less for street projec ts than budgeted. Capital assets: The Town’s government-wide capital assets, net of accumulated depreciation, decreased due largely to depreciation expense. Additional information as well as a detailed classification of the Town’s net capital assets can be found in the Notes to the Financial Statements on pages D14 and D15 of this report. Long-term debts: As of the end of 2016, the Town had $854,272 in long-term obligations. This includes obligations for sales and use tax revenue bonds, general obligation bonds capital leases and accrued com pensated absences. The Town paid off its general obligation bonded debt in 2016, and anticipates paying off all other bonded debt in 2017. Additional information regarding the Town’s debt can be found on pages D16 –D18 of this report. Sales and Use Taxes: The Town has sales and use taxes that are used to fund its governmental operations. The Town’s sales and use taxes changed from a total of $2,176,821 in 2015 to $3,152,780 in 2016. The following chart indicates changes in the taxes collections: 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 2014 2015 2016 1% R es trict ed Sa les Tax Ge nera l Fund Use Tax Ge nera l Fund Sal es Tax The Town’s sales and use tax collections increased over the past years. Sales tax receipts increased 19%from 2015 to 2016 and the new 1% restricted sales tax generated $546,685. PRELIMINARY DRAFT B10 Next year’s budget and rates: The Town’s General Fund balance at the end of the current fiscal year was $3,433,440. The Town’s 2017 budget anticipates decreasing the General Fund balance by $661,409. It is anticipated that this budgeted reduction in fund balance will decrease by year end due to under spending budgeted amounts as well as surpassing revenue projections. Request for Information This financial report is designed to provide a general overview of the Town’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Town of Fraser, Finance Manager, P.O. Box 120, Fraser, Colorado 80442-0120. PRELIMINARY DRAFT GOVERNMENT-WIDE FINANCIAL STATEMENTS PRELIMINARY DRAFT Governmental Business-type Activities Activities Total Assets: Cash and investments - Unrestricted 4,105,733 5,501,952 9,607,685 Cash and investments - Restricted 300,000 - 300,000 Cash with County Treasurer 1,326 1,171 2,497 Accounts, taxes, and interest receivables 803,926 398,188 1,202,114 Due from fiduciary fund - 694,116 694,116 Capital assets, net 9,088,092 19,526,887 28,614,979 Total Assets 14,299,077 26,122,314 40,421,391 Liabilities: Accounts payable 420,553 - 420,553 Due to fiduciary fund 14,484 - 14,484 Other liabilities 152,154 21,725 173,879 Accrued compensated absences 19,540 16,150 35,690 Non-current liabilities due within one year 504,329 - 504,329 Non-current liabilities due longer than one year 314,253 - 314,253 Total Liabilities 1,425,313 37,875 1,463,188 Deferred Inflows of Resources: Property taxes 209,388 - 209,388 Total Deferred Inflows of Resources 209,388 - 209,388 Net Position: Net investment in capital assets 8,269,510 19,526,887 27,796,397 Restricted 581,366 701,475 1,282,841 Unrestricted 3,813,500 5,856,077 9,669,577 Total Net Position 12,664,376 26,084,439 38,748,815 Town of Fraser, Colorado Statement of Net Position For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C1 PRELIMINARY DRAFT Operating Capital Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total Functions/Programs: Governmental activities: General government 1,665,945 152,406 99,871 - (1,413,668) - (1,413,668) Culture and recreation 50,183 - - - (50,183) - (50,183) Public safety 441,048 - - - (441,048) - (441,048) Public works 1,388,797 - 46,157 - (1,342,640) - (1,342,640) Interest 51,415 - - - (51,415) - (51,415) Total governmental activities 3,597,388 152,406 146,028 - (3,298,954) - (3,298,954) Business-type activities: Water 1,090,771 916,591 5,015 - - (169,165) (169,165) Wastewater 1,018,600 734,295 51,817 540,000 - 307,512 307,512 Total business-type activities 2,109,371 1,650,886 56,832 540,000 - 138,347 138,347 Total 5,706,759 1,803,292 202,860 540,000 (3,298,954) 138,347 (3,160,607) General revenues: Taxes: Property tax 201,310 - 201,310 Specific ownership tax 12,285 - 12,285 General sales and use tax 3,152,780 - 3,152,780 Franchise tax 55,575 - 55,575 Other miscellaneous taxes 9,065 - 9,065 Investment earnings 27,902 37,456 65,358 Miscellaneous 147,401 - 147,401 Transfers to (from) 20,000 (20,000) - Total general revenues and transfers 3,626,318 17,456 3,643,774 Change in Net Position 327,364 155,803 483,167 Net Position - Beginning of Year 12,337,012 25,928,636 38,265,648 Net Position - End of Year 12,664,376 26,084,439 38,748,815 Program Revenues Net (Expense) Revenue and Tow n of Fraser, Colorado Statement of Activities For the Year Ended December 31, 2016 Changes in Net Position The accompanying notes are an integral part of these financial statements. C2 PRELIMINARY DRAFT FUND FINANCIAL STATEMENTS PRELIMINARY DRAFT Capital Total Debt Conservation Equipment Restricted Governmental General Service Trust Replacement Revenue Funds Assets: Cash and investments - Unrestricted 3,396,111 183,531 18,572 469,291 38,228 4,105,733 Cash and investments - Restricted - 300,000 - - - 300,000 Cash with County Treasurer 1,326 - - - - 1,326 Receivables 35,013 - - - - 35,013 Due from other governments 452,841 - - 3,581 - 456,422 Property tax receivable 209,388 - - - 103,101 312,489 Total Assets 4,094,679 483,531 18,572 472,872 141,329 5,210,983 Liabilities and Fund Equity: Liabilities: Accounts/vouchers payable 350,644 - - - 135,340 485,984 Due to fiduciary fund 14,484 - - - - 14,484 Other liabilities 86,723 - - - - 86,723 Total Liabilities 451,851 - - - 135,340 587,191 Deferred Inflows of Resources: Property taxes 209,388 - - - - 209,388 Total Deferred Inflow s of Resources 209,388 - - - - 209,388 Fund Balances: Nonspendable 35,013 - - - - 35,013 Spendable Restricted 256,805 300,000 18,572 - 5,989 581,366 Committed 1,000,000 183,531 - - - 1,183,531 Assigned 696,444 - - 472,872 - 1,169,316 Unassigned 1,445,178 - - - - 1,445,178 Total Fund Balances 3,433,440 483,531 18,572 472,872 5,989 4,414,404 Total Liabilities, Deferred Inflow s of Resources and Fund Balances 4,094,679 483,531 18,572 472,872 141,329 5,210,983 Town of Fraser, Colorado Balance Sheet Governmental Funds December 31, 2016 The accompanying notes are an integral part of these financial statements. C3 PRELIMINARY DRAFT Amounts reported for governmental activities in the Statement of Net Position are different because: Governmental Fund Balance 4,414,404 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.9,088,092 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.(838,120) Net Position of Governmental Activities 12,664,376 Town of Fraser, Colorado Reconciliation of Governmental Fund Balance to Governmental Activities Net Position December 31, 2016 The accompanying notes are an integral part of these financial statements. C4 PRELIMINARY DRAFT Capital Total Debt Conservation Equipment Restricted Governmental General Service Trust Replacement Revenue Funds Revenues: Taxes 2,884,263 68 - - 546,685 3,431,016 Licenses and permits 137,840 - - - - 137,840 Charges for services 14,566 - - - - 14,566 Intergovernmental revenue 124,953 - 6,444 46,157 - 177,554 Investment income 20,080 3,473 93 3,317 939 27,902 Miscellaneous 115,876 - - - - 115,876 Total Revenues 3,297,578 3,541 6,537 49,474 547,624 3,904,754 Expenditures: General government 1,035,049 - - - 541,635 1,576,684 Public safety 424,580 - - - - 424,580 Public works 836,513 - - - - 836,513 Culture and recreation 11,237 - - - - 11,237 Debt service 38,374 353,499 - 45,418 - 437,291 Capital outlay 157,014 - - 77,027 - 234,041 Total Expenditures 2,502,767 353,499 - 122,445 541,635 3,520,346 Excess (Deficiency) of Revenues Over Expenditures 794,811 (349,958) 6,537 (72,971) 5,989 384,408 Other Financing Sources (Uses): Transfers in (out)(367,910) 257,910 - 130,000 - 20,000 Total Other Financing Sources (Uses)(367,910) 257,910 - 130,000 - 20,000 Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing (Uses)426,901 (92,048) 6,537 57,029 5,989 404,408 Fund Balances - Beginning of Year 3,006,539 575,579 12,035 415,843 - 4,009,996 Fund Balances - End of Year 3,433,440 483,531 18,572 472,872 5,989 4,414,404 Town of Fraser, Colorado Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C5 PRELIMINARY DRAFT Net Change in Fund Balances of Governmental Funds 404,408 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeded capital outlay, net of capital disposals during the year.(462,757) Accrued liabilities for employees' sick and vacation are not an expenditure in the governmental funds, but are increases in long- term liabilities in the Statement of Net Position. This is the amount that accrued vacation not immediately payable decreased.1,386 Repayment of capital lease and bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. This is the amount of principal repayments.384,327 Change in Net Position of Governmental Activities 327,364 Town of Fraser, Colorado Reconciliation of Net Change in Fund Balances to Change in Net Position of Governmental Activities For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C6 PRELIMINARY DRAFT Total Water Wastewater Enterprise Fund Fund Funds Assets: Current assets: Cash and cash equivalents 1,530,008 3,971,944 5,501,952 Utility receivables 199,849 182,785 382,634 Other receivables - 15,554 15,554 Due (to) from fiduciary fund - 694,116 694,116 Due from other governments 713 458 1,171 Total Current Assets 1,730,570 4,864,857 6,595,427 Non-current assets: Land 100,000 144,320 244,320 Water rights 19,776 - 19,776 Equipment 353,994 108,789 462,783 Treatment plant and system 14,774,155 14,617,090 29,391,245 Less: Accumulated depreciation (5,123,227) (5,468,010) (10,591,237) Total Non-Current Assets 10,124,698 9,402,189 19,526,887 Total Assets 11,855,268 14,267,046 26,122,314 Liabilities and Fund Equity: Liabilities: Current liabilities: Deposits payable 15,600 6,125 21,725 Total Current Liabilities 15,600 6,125 21,725 Non-current liabilities: Accrued compensated absences 5,449 10,701 16,150 Total Liabilities 21,049 16,826 37,875 Net Position: Net investment in capital assets 10,124,698 9,402,189 19,526,887 Restricted - 701,475 701,475 Unrestricted 1,709,521 4,146,556 5,856,077 Total Net Position 11,834,219 14,250,220 26,084,439 Town of Fraser, Colorado Statement of Net Position Enterprise Funds For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C7 PRELIMINARY DRAFT Total Enterprise Water Wastewater Funds Operating Revenues: Charges for services 858,499 734,295 1,592,794 Meter sales 58,092 - 58,092 Miscellaneous revenue 5,015 39 5,054 Total Operating Revenues 921,606 734,334 1,655,940 Operating Expenses: Personnel 242,901 240,939 483,840 Commodities 281,366 124,990 406,356 Contractual 152,396 179,747 332,143 System development 6,790 - 6,790 Depreciation 407,318 433,887 841,205 Total Operating Expenses 1,090,771 1,018,600 2,109,371 Operating Income (Loss)(169,165) (284,266) (453,431) Non-Operating Revenues: Grants - 51,778 51,778 Interest revenue 10,240 27,216 37,456 Net Non-Operating Revenues 10,240 78,994 89,234 Income (Loss) before Contributions and Transfers (158,925) (205,272) (364,197) Capital contributions - 540,000 540,000 Transfers (out)(10,000) (10,000) (20,000) Contributions and Transfers (10,000) 530,000 520,000 Change in Net Position (168,925) 324,728 155,803 Net Position - Beginning of Year 12,003,144 13,925,492 25,928,636 Net Position - End of Year 11,834,219 14,250,220 26,084,439 Town of Fraser, Colorado Statement of Revenues, Expenses and Changes in Net Position Enterprise Funds For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C8 PRELIMINARY DRAFT Total Enterprise Water Wastewater Funds Cash Flows From Operating Activities: Cash received from customers 906,520 748,799 1,655,319 Other cash received 1,725 29,038 30,763 Cash received (paid) for deposits (5,500) 59,540 54,040 Cash payments for goods and services (440,552) (343,774) (784,326) Cash payments for salaries and benefits (243,020) (244,282) (487,302) Net Cash Provided (Used) by Operating Activities 219,173 249,321 468,494 Cash Flows From Non-Capital and Related Financing Activities: Cash transferred to other funds (10,000) (10,000) (20,000) Cash received from grants and contributions - 37,609 37,609 Net Cash Provided (Used) by Non-Capital and Related Financing Activities (10,000) 27,609 17,609 Cash Flows From Capital and Related Financing Activities: Plant investment fees (paid) received - 540,000 540,000 Cash (paid) for assets (49,000) (83,670) (132,670) Net Cash Provided (Used) by Capital and Related Financing Activities (49,000) 456,330 407,330 Cash Flows From Investing Activities: Interest 10,240 27,216 37,456 Net Cash Provided (Used) by Investing Activities 10,240 27,216 37,456 Net (Decrease) Increase in Cash and Cash Equivalents 170,413 760,476 930,889 Cash and Cash Equivalents - Beginning of Year 1,359,595 3,211,468 4,571,063 Cash and Cash Equivalents - End of Year 1,530,008 3,971,944 5,501,952 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(169,165) (284,266) (453,431) Adjustments: Depreciation 407,318 433,887 841,205 (Increase) decrease in accounts receivable (13,360) 37,378 24,018 (Increase) decrease in deposits receivable - 59,540 59,540 Increase (decrease) in accrued compensated absences (120) (3,343) (3,463) Increase (decrease) in deposits payable (5,500) 6,125 625 Total Adjustments 388,338 533,587 921,925 Net Cash Provided (Used) by Operating Activities 219,173 249,321 468,494 Town of Fraser, Colorado Statement of Cash Flows Enterprise Funds For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C9 PRELIMINARY DRAFT JFOC Fund Assets: Cash and cash equivalents 2,074,074 Accounts receivable, net:78,795 Total Assets 2,152,869 Liabilities: Accounts payable 34,104 Deposits 2,118,765 Total Liabilities 2,152,869 Town of Fraser, Colorado Statement of Fiduciary Assets and Liabilities December 31, 2016 The accompanying notes are an integral part of these financial statements. C10 PRELIMINARY DRAFT JFOC Fund Operating Revenues: Charges for operations and maintenance costs 457,703 Transfer in 164,677 Total Operating Revenues 622,380 Operating Expenses: Salaries and Wages 179,532 Employee Benefits 58,574 Purchased services 162,482 Supplies 31,938 Utilities 189,854 Total Operating Expenses 622,380 Change in Assets and Liabilties - Due to Others - Beginning - Due to Others - Ending - Town of Fraser, Colorado Statement of Changes in Fiduciary Assets and Liabilities For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. C11 PRELIMINARY DRAFT NOTES TO THE FINANCIAL STATEMENTS PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 D1 I.Summary of Significant Accounting Policies The Town of Fraser, Colorado (the "Town") is incorporated under Colorado statutes to provide public safety, streets and street maintenance, water and wastewater service, recreation including parks and trails, transportation, special events, planning and zoning, and general administrative services. The Town is located in Grand County and operates under a Council-Manager form of government. An elected Mayor and Town Board are responsible for setting policy, appointing administrative personnel and adopting an annual budget in accordance with state statutes. The Town’s major operations include road maintenance, water and wastewater service, public safety and culture and recreation. The Town’s financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”). The Governmental Accounting Standards Board (“GASB”) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The more significant accounting policies established by GAAP and used by the Town are discussed below. A.Reporting Entity The reporting entity consists of (a) the primary government; i.e., the Town, and (b) organizations for which the Town is financially accountable. The Town is considered financially accountable for legally separate organizations if it is able to appoint a voting majority of an organization's governing body and is either able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits, to, or to impose specific financial burdens on, the Town. Consideration is also given to other organizations that are fiscally dependent; i.e., unable to adopt a budget, levy taxes, or issue debt without approval by the Town. Organizations for which the nature and significance of their relationship with the Town are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete are also included in the reporting entity. Based upon the above criteria, the Town is not financially accountable for any other organization, nor is the Town a component unit of any other primary governmental entity. B.Government-wide and Fund Financial Statements The Town’s basic financial statements include both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town’s major funds). Government-wide financial statements report on information of all of the activities of the Town. Both the government-wide and fund financial statements categorize primary activities as either governmental or business-type. The Town’s public safety, public works, culture and recreation, and administration functions are classified as governmental activities. The Water Fund and W astewater Fund are classified as business-type activities. In the government-wide Statement of Net Position, the governmental activities columns are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The Town’s net position are reported in three parts –Net investment in capital assets; Restricted net position; and Unrestricted net position. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D2 I.Summary of Significant Accounting Policies (continued) B.Government-wide and Fund Financial Statements (continued) The government-wide Statement of Activities reports both the gross and net cost of each of the Town’s governmental functions and business-type activities. The governmental functions are also supported by general government revenues (sales taxes, property and specific ownership taxes, investment earnings, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. Program revenues must be directly associated with the governmental function or a business-type activity. Operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants.The government-wide focus is on the sustainability of the Town as an entity and the change in the Town’s net position resulting from the current year’s activities. C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation Measurement focus refers to whether financial statements measure changes in current resources only (current financial focus) or changes in both current and long-term resources (long-term economic focus). Basis of accounting refers to the point at which revenues, expenditures, or expenses are recognized in the accounts and reported in the financial statements. Financial statement presentation refers to classification of revenues by source and expenses by function. 1.Long-term Economic Focus and Accrual Basis Both governmental and business-type activities in the government-wide financial statements and the proprietary fund financial statements use the long-term economic focus and are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of the related cash flows. 2.Current Financial Focus and Modified Accrual Basis The governmental fund financial statements use the current financial focus and are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and available. “Available” means collectible within the current period or soon enough thereafter (60 days) to be used to pay liabilities of the current period. Expenditures are generally recognized when the related liability is incurred. The exception to this general rule is that principal and interest on general long-term debt and compensated absences are recorded only when payment is due. Franchise fees, licenses and interest associated with current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. Sales and excise taxes collected by vendors at year end on behalf of the Town are also recognized as revenue if collected within 30 days after year end. Expenditure driven grants are recognized as revenue when qualified expenditures have been incurred and all other grant requirements have been met. All other revenue items are considered to be measurable and available only when cash is received by the Town. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D3 I.Summary of Significant Accounting Policies (continued) C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) 3.Financial Statement Presentation As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments where the amounts are reasonably equivalent to the value of the interfund services provided and other charges between the functions of the Town. Elimination of these charges would distort the direct costs and program revenues reported for the water and wastewater functions. Amounts reported as program revenues include 1) charges to customers and applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non- operating 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 Town’s enterprise funds are the operation of the water and wastewater systems within the Town. Operating expenses for the enterprise funds includes operating expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. D.Fund Financial Statements The financial transactions of the Town are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self- balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. The fund focus is on current available resources and budget compliance. The Town reports the following major governmental funds: General Fund The General Fund is the Town’s primary operating fund. It accounts for all financial resources of the Town, except those required to be accounted for in another fund. Special Revenue Funds Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. The term “proceeds of specific revenue sources” establishes that one or more specific restricted or committed revenues should be the foundation for a special revenue fund. The Conservation Trust Fund accounts for lottery proceeds required to be expended solely on park and recreation improvements. The Restricted Revenue Fund accounts for a dedicated sales tax to be used for transportation,trails, and capital project expenditures. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D4 I.Summary of Significant Accounting Policies (continued) D.Fund Financial Statements (continued) Capital Projects Funds Capital projects funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Capital projects funds exclude those types of capital-related outflows financed by proprietary funds or for assets that will be held in trust for individuals, private organizations, or other governments. The Capital Equipment Replacement Fund accounts for funds set aside for the purchase and replacement of capital equipment. A significant portion of revenues consists of highway user tax proceeds. Debt Service Funds Debt service funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures of principal and interest. Debt service funds should be used to report resources if legally mandated. Financial resources that are being accumulated for principal and interest maturing in future years also should be reported in debt service funds. The Debt Service Fund accounts for payments made on the Town’s bonded debt obligations. The Town reports the following proprietary or business-type funds: The Water Fund accounts for the purchase and delivery of water to the citizens of the Town. The Water Fund also maintains the infrastructure needed to provide water service. The Wastewater Fund accounts for the treatment of wastewater from the citizens of the Town. The Wastewater Fund also maintains the infrastructure needed to provide wastewater service. The Town reports the following fiduciary fund: The Joint Facilities Oversight Committee (“JFOC”) Operations Fund accounts for the operations of the Upper Fraser Valley W astewater Treatment Joint Facilities. E.Financial Statement Accounts 1.Cash and Cash Equivalents The Town pools deposits and investments of all funds except JFOC Operations Fund, which are held in separate accounts. Each fund’s share of the pool is readily identified by the Town’s internal records. Investments are stated at market value. Cash and cash equivalents include demand deposits, certificates of deposit, local government investment pools (COLOTRUST), and U.S. government-backed securities. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D5 I.Summary of Significant Accounting Policies (continued) E.Financial Statement Accounts (continued) 1.Cash and Cash Equivalents (continued) Certain proceeds of debt issues, as well as certain resources set aside for their repayment, have been classified as restricted assets on the balance sheet because their use is limited by the applicable covenants. Restricted assets also include certain deposits that have been limited as to usage pursuant to escrow and similar agreements. The Town’s investment policy permits investments in the following type of obligations which corresponds with state statutes: U.S. Treasury Obligations (maximum maturity of 60 months) Federal Instrumentality Securities (maximum maturity of 60 months) FDIC-insured Certificates of Deposit (maximum maturity of 18 months) Corporate Bonds (maximum maturity of 36 months) Prime Commercial Paper (maximum maturity of 9 months) Eligible Bankers Acceptances Repurchase Agreements General Obligations and Revenue Obligations Local Government Investment Pools Money Market Mutual Funds 2.Receivables Receivables are reported net of an allowance for uncollectible accounts. 3.Property Taxes Property taxes are assessed in one year as a lien on the property, but not collected by the governmental units until the subsequent year. In accordance with generally accepted accounting principles, the assessed but uncollected property taxes have been recorded as a receivable and as deferred inflow of resources. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D6 I.Summary of Significant Accounting Policies (continued) E.Financial Statement Accounts (continued) 4.Capital Assets Capital assets, which include land, buildings, equipment, vehicles, and infrastructure assets (only infrastructure acquired after January 1, 2002), are reported in the applicable governmental or business-type activity columns in the government-wide financial statements. The Town defines capital assets as assets with an initial cost of $5,000 or more and an estimated useful life in excess of two years. Such assets are recorded at historical cost. Donated capital assets are recorded at estimated fair value at the date of donation. Capital outlay for projects is capitalized as projects are constructed. Interest incurred during the construction phase is capitalized as part of the value of the assets constructed in the business-type activities. Infrastructure, buildings, and equipment are depreciated using the straight line method over the following estimated useful lives: Asse ts Ye ars Infrastructure 15 - 30 Buildings and improvem ent s 15 - 40 Di stribution systems 40 Equi pment and ve hicles 7 5.Compensated Absences Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the obligated governmental fund. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable available financial resources are reported in the governmental activities column in the government-wide financial statements. Vested or accumulated vacation leave of the proprietary fund type is recorded as an expense and liability of that fund as the benefits accrue to employees. In accordance with the provisions of GASB No. 16, Accounting for Compensated Absences,no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. 6.Restricted Assets Certain proceeds of the Town’s government fund general obligation bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Fees collected in lieu of park and open space and affordable housing impact fees are restricted as to their use by Town ordinances. Debt service property tax collected in excess of the debt service of the general obligation series 1998 bonds is reserved for em ergency and catastrophic road failure, future debt service or early redemption of the bond. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D7 I.Summary of Significant Accounting Policies (continued) E.Financial Statement Accounts (continued) 7.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 government doesn’t have any deferred outflows of resources at December 31, 2016. 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, represents 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 only one type of item that qualifies for reporting in this category. Accordingly, the deferred inflow, property taxes,is deferred and recognized as an inflow of resources in the period that the amounts become available. 8.Categories and Classification of Fund Balance Governmental accounting standards establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Fund balance classifications, include Non-spendable, Restricted, Committed, Assigned, and Unassigned. These classifications reflect not only the nature of funds, but also provide clarity to the level of restriction placed upon fund balance. Fund Balance can have different levels of restraint, such as external versus internal compliance requirements. Unassigned fund balance is a residual classification within the general fund. The general fund should be the only fund that reports a positive unassigned balance. In all other funds, unassigned is limited to negative residual fund balance. The Town of Fraser classifies governmental fund balances as follows: Non-spendable -includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual requirements. Spendable: Restricted –includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation. Committed –includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority which is the Town Board. Assigned –includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. Fund Balance may be assigned by the Town or its management designee. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D8 I.Summary of Significant Accounting Policies (continued) E.Financial Statement Accounts (continued) 8.Categories and Classification of Fund Balance (continued) Unassigned -includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. The Town may use restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the Town might first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. 9.Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it that are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of expenditures or expenses in the fund that is reimbursed. 10. Deposits Deposits on the JFOC Operations Fund represent contributions made to the JFOC operations fund by Winter Park Ranch Water and Sanitation District (“W inter Park Ranch”) and Grand County Water and Sanitation District #1 (“Grand County #1”) and the Town (previously the Fraser Sanitation District)for operating and replacement costs relating to the combined wastewater treatment plant. These deposits are held for working capital and replacement costs during the time all members remain joint operators of the plant. F.Significant Accounting Policies 1.Use of Estimates The preparation of financial statements in conformity with GAAP requires the Town’s management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenditures or expenses during the reporting period. Actual results could differ from those estimates. 2.Proprietary Funds As required by GASB Statement No. 62, the Town has elected to follow all GASB pronouncements for its proprietary funds. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D9 I.Summary of Significant Accounting Policies (continued) F.Significant Accounting Policies (continued) 3.Credit Risk Receivables in the Town’s funds are primarily due from other governments. Management believes that the credit risk related to these receivables is minimal. 4.Restricted and Unrestricted Resources When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. II.Reconciliation of Government-wide and Fund Financial Statements A.Explanation of certain differences between the governmental fund Balance Sheet and the government-wide Statement of Net Position The governmental fund Balance Sheet includes reconciliation between fund balance - total governmental funds and net position of governmental activities as reported in the government-wide Statement of Net Position. One element of that reconciliation explains that “Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.” The $9,088,092 represents the book value of assets at December 31, 2016. Another element of that reconciliation states that "Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.” The details of this $838,122 difference represent accrued compensated absences, sales and use tax revenue bonds, general obligation bonds, and capital leases payable at year end. B.Explanation of certain differences between the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances and the government-wide Statement of Activities The governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances includes reconciliation between net change in fund balances of governmental funds and changes in net position of governmental activities as reported in the government-wide Statement of Activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures, but in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. The details of this reconciling amount are capital outlay of $132,771,less depreciation expense of $595,528 during 2016. Also, repayment of long- term obligations of $384,327 is shown as an expenditure in the governmental fund, but is not reflected in the Statement of Activities. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D10 III.Stewardship, Compliance, and Accountability A.Budgetary Information 1.Budgetary Basis of Accounting The preparation Budgets are adopted on a basis consistent with generally accepted accounting principles, except for the proprietary funds. Annual appropriations are adopted for all funds. Expenditures may not legally exceed appropriations at the fund level. All appropriations lapse at year end. As required by Colorado Statutes, the Town followed the required timetable noted below in preparing, approving, and enacting its budget for 2016. (1)For the 2016 budget year, prior to August 25, 2015, the County Assessor sent to the Town an assessed valuation of all taxable property within the Town’s boundaries. (2)The Town Manager, or other qualified person appointed by the Board, submitted to the Board, on or before October 15, 2015, a recommended budget which detailed the necessary property taxes needed along with other available revenues to meet the Town’s operating requirements. (3)Prior to December 15, 2015, a public hearing was held for the budget, the Board certified to the County Commissioners a levy rate that derived the necessary property taxes as computed in the proposed budget, and the Board adopted the proposed budget and an appropriating resolution that legally appropriated expenditures for the upcoming year. (4)After adoption of the budget resolution, the Town may make the following changes: a) it may transfer appropriated money between funds; b) approve supplemental appropriations to the extent of revenues in excess of estimated revenues in the budget; c) approve emergency appropriations; and d) reduce appropriations for which originally estimated revenues are insufficient. Taxes levied in one year are collected in the succeeding year. Thus, taxes certified in 2015 were collected in 2016 and taxes certified in 2016 will be collected in 2017. Taxes are due on January 1st in the year of collection; however, they may be paid in either one installment (no later than April 30th) or two equal installments (not later than February 28th and June 15th) without interest or penalty. Taxes that are not paid within the prescribed time bear interest at the rate of one percent (1%) per month until paid. Unpaid amounts and the accrued interest thereon become delinquent on June 16th. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D11 III.Stewardship, Compliance, and Accountability (continued) A.Budgetary Information (continued) 2.Excess of Expenditures over Appropriations For the year ended December 31, 2016, expenditures exceeded appropriations in the following funds. Ex penditure s in excess of Fund budget Res tricted Revenue 91,635$ This may be a violation of Colorado budget law. B.TABOR Amendment In November 1992, Colorado voters amended Article X of the Colorado Constitution by adding Section 20, commonly known as the Taxpayer's Bill of Rights (“TABOR). TABOR contains revenue, spending, tax and debt limitations that apply to the State of Colorado and local governments. TABOR requires, with certain exceptions, advance voter approval for any new tax, tax rate increase, mill levy above that for the prior year, extension of any expiring tax, or tax policy change directly causing a net tax revenue gain to any local government. Except for refinancing bonded debt at a lower interest rate or adding new employees to existing pension plans, TABOR requires advance voter approval for the creation of any multiple-fiscal year debt or other financial obligation unless adequate present cash reserves are pledged irrevocably and held for payments in all future fiscal years. TABOR also requires local governments to establish an emergency reserve to be used for declared emergencies only. The reserve is calculated at 3% of fiscal year spending. Fiscal year spending excludes bonded debt service and enterprise spending. The Town has reserved $115,000. On April 4, 2000, the Town’s electorate approved the following: Without any increase in the property tax mill levy or the 4% sales and use tax rate, shall the Town of Fraser, Colorado, be authorized, in the year 2000 and each subsequent year thereafter, to collect, retain, and expend the full proceeds of the Town’s fees, taxes, non-federal grants and other revenues and to spend such revenues for debt service, municipal operations, capital projects, and any other lawful municipal purpose, notwithstanding any state of Colorado restrictions on revenues or spending, including the restrictions of Article X, Section 20 of the Colorado Constitution, the revenue limit in Section 29-1-301 of the Colorado Revised Statutes, or any other law. The Town's management believes it is in compliance with the financial provisions of TABOR. However, TABOR is complex and subject to interpretation. Many of its provisions, including the interpretation of how to calculate fiscal year spending limits, could require judicial interpretation. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D12 IV.Detailed Notes on All Funds A.Deposits and Investments The Town’s checking accounts are entirely covered by federal depository insurance (“FDIC”) or by collateral held under Colorado’s Public Deposit Protection Act (“PDPA”). The FDIC insures the first $250,000 of the Town’s deposits at each financial institution. Deposit balances over $250,000 are collateralized as required by PDPA. The carrying amount of the Town’s demand deposits was $1,379,097 at year end. Fair Value of Investments The Town measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs. At December 31, 2016, the Town had the following recurring fair value measurements: Inve st ments at Fair Value Total Le ve l 1 Le ve l 2 Le ve l 3 Cas h with fiscal agent 2,497$ 2,497 - - Colotrus t 10,602,662 - 10,602,662 - 10,605,159$ 2,497 10,602,662 - Fa ir Value Measure ment The Town had the following deposits and investments for all funds Fund, with the following maturities December 31, 2016: Ma turi ti es Type:Ra ti ng Ca rrying Am ount Le ss Tha n One Year Le ss Tha n Five Ye ars Depos its: Cert ificat es of Depos it Not Rat ed 1,079,684 1,079,684 - Checking Account s Not Rat ed 264,829$ 264,829 - Savi ngs Accounts Not Rat ed 34,584$ 34,584 - Investments: Cas h with fiscal agent 2,497 2,497 Inve stment Pools AAAm 10,602,662 10,602,662 - 11,984,256$ The investment pools represent investments in the Colorado Government Liquid Asset Trust (“COLOTRUST”)a 2a7-like pools. Pools are not covered by FDIC insurance or PDPA but are rated AAAm. The fair value of the pools is determined by the pools’share price. The Town has no regulatory oversight for the pools. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D13 IV.Detailed Notes on All Funds (continued) A.Deposits and Investments (continued) Interest Rate Risk. As a means of limiting its exposure to interest rate risk, the Town coordinates its investment maturities to closely match cash flow needs and restricts the maximum investment term to less than five years from the purchase date. As a result of the limited length of maturities the Town has limited its interest rate risk. Credit Risk.Colorado statutes specify instruments in which local governments may invest, including: Obligations of the U.S.and certain U.S. governmental agency securities Certain international agency securities General obligation and revenue bonds for U.S. local governmental entities Bankers acceptances of certain banks Commercial paper Local government investment pools Written repurchase agreements collateralized by certain authorized securities Certain money market funds Guaranteed investment contracts The Town’s general investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and, in general, avoid speculative investments. At December 31, 2016, cash has been restricted for the following purposes: 1998 Sales Tax Revenue Bond Res erves 155,000$ 2002 Sales Tax Revenue Bond Res erves 20,000 1998 General Obligation Bond Res erves 40,000 Additional debt service res erve 85,000 Tota l Restri cte d Ca sh 300,000$ PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D14 IV.Detailed Notes on All Funds (continued) B.Receivables Receivables as of year-end for the Town’s funds, including applicable allowances for uncollectible accounts, are as follows: Ca pita l Re st ricte d Ge nera l Eq uipment Re ve nue Total Re ce ivable s: Property Tax es 209,388$ - 103,102 312,490 Accounts 31,216 - - 31,216 Other 3,798 - - 3,798 Intergovernmental 452,841 3,581 - 456,422 Gros s rec eiva bles 697,243 3,581 103,102 803,926 Les s: allowance for unc ollectible - - - - Net Receiva bles 697,243$ 3,581 103,102 803,926 Gove rnm enta l Funds Water Waste water Ope ra ti ons Ope ra ti ons Total Re ce ivables: Account s 199,849$ 182,785$ 382,634$ Ot her - 15,554 15,554$ Gros s receiva bles 199,849 198,339 398,188 Les s: allowanc e for uncollec tible - - - Net Receiva bles 199,849$ 198,339$ 398,188$ Governmental funds report deferred inflow of resources from property taxes in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. This includes $209,388 of property taxes levied in 2016 but not available until 2017. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D15 IV.Detailed Notes on All Funds (continued) C.Capital Assets Capital asset activity for the year ended December 31, 2016 was as follows: Be ginning En ding Ba lance Incre ases De cre ases Ba lance Gove rnmenta l acti vi ti es: Capit al assets, not being deprec iated: Land and improvem ent s 1,237,355$ - - 1,237,355 Cons truc tion in progres s 360,255 9,634 (190,439) 179,450 To tal capit al assets, not being deprec iated 1,597,610 9,634 (190,439) 1,416,805 Capit al assets, being deprec iated: Infras truc ture 14,392,044 289,902 - 14,681,946 Buildings 1,183,052 - - 1,183,052 Furniture and equipment 1,542,317 23,674 - 1,565,991 To tal capit al assets, being deprec iated 17,117,413 313,576 - 17,430,989 Les s accumulated deprec iation for: Infras truc ture (6,975,503) (519,279) - (7,494,782) Buildings (887,582) (41,249) - (928,831) Furniture and equipment (1,301,089) (35,000) - (1,336,089) To tal accumulated deprec iation (9,164,174) (595,528) - (9,759,702) To tal capit al assets, being deprec iated, net 7,953,239 (281,952) - 7,671,287 Gove rnm enta l acti vi ti es ca pi ta l asse ts, net 9,550,849$ (272,318) (190,439) 9,088,092 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D16 IV.Detailed Notes on All Funds (continued) C.Capital Assets (continued) Be ginning En ding Ba lance Incre ases De cre ases Ba lance Busi ne ss-type acti vi ti es: Capit al assets, not being depreciated: Land 244,320$ - - 244,320 Water rights 19,776 - - 19,776 To tal capital assets, not being deprec iated 264,096 - - 264,096 Capit al assets, being depreciated: System and improvement s 22,901,791 95,576 - 22,997,367 Buildings and improvements 6,367,469 26,411 - 6,393,880 Equipment 452,100 10,683 - 462,783 To tal capital assets, being deprec iated 29,721,360 132,670 - 29,854,030 Les s accumulated deprec iation for: System and improvement s (7,558,602) (685,927) - (8,244,529) Buildings and improvements (1,980,773) (122,273) - (2,103,046) Equipment (210,657) (33,007) - (243,664) To tal accumulated deprec iation (9,750,032) (841,207) - (10,591,239) To tal capital assets, being deprec iated, net 19,971,328 (708,537) - 19,262,791 Bu si ne ss-type acti vi ti es ca pita l asse ts, net 20,235,424$ (708,537) - 19,526,887 In accordance with generally accepted accounting principles, the Town has elected to report general government infrastructure assets prospectively. Therefore, only general government infrastructure assets acquired since January 1, 2002 are included in the Town’s financial statements. The Town had the following capital outlay and depreciation expense for the following functions: De pre ci ation Ca pita l Ex pense Outlay Governm ental ac tivities: General government 36,815$ - Public work s, including infras truc ture 520,203 123,138 Culture and rec reat ion 38,510 200,072 Total gove rnmenta l acti vi ti es 595,528$ 323,210 Busines s-type activi ties: Water 407,319$ 49,000 Was tewat er 433,888 83,670 Total business-type a cti vi ti es 841,207$ 132,670 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D17 IV.Detailed Notes on All Funds (continued) D.Interfund Receivables, Payables, and Transfers Transfers were as follows: In Out General -$ (367,910) Debt Service 257,910 - Capi tal Equipment 130,000 - Wastewat er - (10,000) Water - (10,000) 387,910$ (387,910) Transfers were to provide additional resources to meet the activities provided in each fund. E.Other Liabilities 1.Capital Leases In April 2008, the Town entered into a capital lease agreement for the purchase of property within Town limits. The total amount financed was $485,725, with interest stated at 4.90% per annum. The lease requires semi-annual payments of $18,187 through 2028. In September 2013, the Town entered into a capital lease agreement for the purchase of a street sweeper. The total amount financed was $215,745 with interest stated at 2.63% per annum. The lease requires annual payments of $45,418 through 2017. Future minimum lease payments for both leases are as follows: Ye ar Princi pa l Inte re st Total 2017 66,515 17,277 83,792 2018 23,365 15,008 38,373 2019 24,524 13,850 38,374 2020 25,741 12,633 38,374 2021 27,017 11,356 38,373 2022 - 2026 156,568 35,301 191,869 2027 - 2028 54,852 2,709 57,561 To tal 378,582$ 108,134 486,716 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D18 IV.Detailed Notes on All Funds (continued) E.Other Liabilities (continued) 2.Sales Tax Revenue Bonds In 1992,the Town issued Series 1992 Sales and Use Tax Bonds with a gross issue price of $1,145,000. This issue was partially ($525,000) refunded with the issuance $2,215,000 of Series 1998 Sales and Use Tax bonds. The proceeds not used for refunding the 1992 Sales and Use Tax Bonds were used for street improvements and paving. In 2002, the remaining outstanding balance of the 1992 Bond issue was refunded through the issuance of the 2002 Sales and Use Tax Refunding Bonds. The Series 1998 Bonds are subject to redemption prior to maturity as follows: June 1, 2009 and thereafter, subject to redemption at 100%. Interest for both the 1998 Bonds and 2002 Bonds are payable semi-annually on June 1 and December 1 at 5.05%. Principal payments are made December 1. The required reserves are accounted for in the Town’s Debt Service Fund. 3.General Obligation Bonds In 1998, the Town issued $600,000 in Series 1998 General Obligation Bonds. The bonds are secured by the full faith and credit of the Town and pay interest at 4.25% to 5.1%. The bonds were issued to finance improvements to the Town’s streets, roads, sidewalks and other infrastructure. These bonds were paid off during 2016. 4.Advance Refunding The Town has advance refunded the 1992 Sales Tax Revenue Bonds. Sufficient U.S. government, state and local government securities were placed in an irrevocable trust for the purpose of generating resources for all future debt service payments of the refunded debt. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the General Long-Term Debt Account Group. The amount of defeased bonds outstanding at year end is not readily determinable. 5.Bonded Debt The Town's annual bonded debt service is as follows: Ye ar Principa l Inte re st Total 2017 440,000 11,910 451,910 To tal 440,000$ 11,910 451,910 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D19 IV.Detailed Notes on All Funds (continued) E.Other Liabilities (continued) 6.Long-term Debt The Town's annual total debt service requirements are as follows: Ye ar Princi pa l Inte re st Total 2017 506,515 29,187 535,702 2018 23,365 15,008 38,373 2019 24,524 13,850 38,374 2020 25,741 12,633 38,374 2021 27,017 11,356 38,373 2022 - 2026 156,568 35,301 191,869 2027 - 2028 54,852 2,709 57,561 To tal 818,582$ 120,044 938,626 7.Accrued Compensated Absences Earned but unused vacation benefits amounted to $19,540 at December 31, 2016. All unused vacation benefits are recorded on the government-wide financial statements. 8.Schedule of Changes in Long-term Debt Ba lance Ba la nce Due Within 1/1/16 Ad diti ons Re ducti ons 12/31/16 One Year Capi tal leases 442,908$ - (64,326) 378,582 64,329 Sales and us e tax bonds 665,000 - (225,000) 440,000 440,000 General obligat ion bonds 95,000 - (95,000) - - Accrued compens at ed abs ences 20,926 - (1,386) 19,540 - Tota l 1,223,834$ - (385,712) 838,122 504,329 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D20 IV.Detailed Notes on All Funds (continued) F.Restricted Fund Balance The Town had the following restrictions on the fund balances at December 31, 2016: Ba la nce Ba lance 1/1/16 Additi ons De le ti ons 12/31/16 General Fund: Fees in lieu of Park 6,379$ - - 6,379 Affordable hous ing impac t fee 135,426 - - 135,426 Emergenc y res erves 122,000 - (7,000) 115,000 Debt Service Fund reserves : Nex t year's pay ment s 300,000 - - 300,000 Cons ervat ion Tr us t Fund 12,035 - 6,537 18,572 Res tric ted Revenue Fund - 547,624 (541,635) 5,989 Wastewater Fund Operat ing reserve 47,373 572 - 47,945 Capi tal replacem ent res erve 713,853 3,807 (64,130) 653,530 1,337,066$ 552,003 (606,228) 1,282,841 The Town had $701,475 restricted in the Wastewater Fund for Upper Fraser Valley Wastewater Treatment Joint Facilities operating and capital replacement expenses. G.Committed Fund Balance The Town has the following commitments of the governmental fund balances at December 31, 2016: Ba la nce Ba lance 1/1/16 Additi ons De leti ons 12/31/16 General Fund: Res erve savi ngs 1,000,000$ - - 1,000,000 Debt Service Fund: Capi tal projec ts 275,579 - (92,048) 183,531 1,275,579$ - (92,048) 1,183,531 H.Assigned Fund Balance The Town had the following assignments of the governmental fund balances at December 31, 2016: Ba lance Ba lance 1/1/16 Additi ons De le ti ons 12/31/16 General Fund: Capital projec ts 113,999 - (78,964) 35,035 Fut ure budget deficit 871,910 - (210,501) 661,409 Capital Equipment Replac ement : Capital projec ts 415,843 57,029 - 472,872 1,401,752$ 57,029 (289,465) 1,169,316 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D21 V.Other Information A.Joint Facilities Oversight Committee (“JFOC”) Operations Fund In 2002, the Fraser Sanitation District (the “District”), Winter Park Ranch, and Grand County #1 entered into an agreement to participate in the joint construction, maintenance, and operation of joint interceptor sewer lines and joint sewage treatment facilities. This new wastewater treatment plant has been constructed on the existing plant site of the District/Winter Park Ranch treatment facility and a new and/or expanded sewer trunk line from Grand County #1 will connect with the existing District/W inter Park Ranch interceptor line. Title of the new joint facilities will be allocated among these three members based on each member’s proportionate share of equivalent residential units to be serviced by the new plant. The District was dissolved into the Town effective December 31, 2009. Construction costs of these new facilities, excluding expenses relating to segment B of the joint trunk lines (“B-Line”) described below, are based on each member’s future share of equivalent residential units to be serviced by the new plant and are allocated as follows: Town –34.07% Winter Park Ranch –28.89% Grand County #1 –37.04% Under the Upper Fraser Valley W astewater Agreement, a Joint Facilities Oversight Committee (“JFOC”) was established to represent the three members regarding the construction, expansion, operations, management, and maintenance of the new joint facilities. The JFOC is comprised of a total of nine members, with each member having three members. The Town was appointed as the manager of the joint facilities for 2016. The JFOC may designate a new manager on an annual basis. In 2016, as approved by the JFOC, the Town earned $29,000 in management fees. Operations and maintenance costs will be allocated among the three members based on each member’s proportionate share of equivalent residential units currently serviced by the new plant. In addition, upon certification of the new joint facilities, this agreement requires the establishment of an operations and maintenance reserve fund equal to three months operations and maintenance costs and a capital replacement reserve fund, the amount which is determined by the JFOC. 1.Maryvale Village (Rendezvous) The District entered an agreement on May 9, 2000, with Maryvale Village, L.L.C., and several individuals (collectively referred to as the “Rendezvous”), Maryvale Commercial Metropolitan District, and Maryvale Residential Metropolitan District (these districts are collectively referred to as the “Maryvale Districts”) that permitted the inclusion of the Maryvale development within the District’s boundaries in order to receive sanitation services, in exchange for inclusion fees. Pursuant to this agreement, Rendezvous and the Maryvale Districts are responsible for the construction of sewer main extensions and related infrastructure from the existing District sewer main to the Maryvale development. These sewer main extensions and related infrastructure will ultimately be conveyed to the District at the time these projects are completed or begin to be used, whichever comes first, subject to the District’s acceptance of these assets. As of December 31, 2016,Maryvale development sewer mains and infrastructure had been conveyed to the District, and is presented as an asset on the Town’s financial statements. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D22 V.Other Information (continued) A.Joint Facilities Oversight Committee (“JFOC”) Operations Fund (continued) 1.Maryvale Village (Rendezvous)(continued) Per this agreement, in exchange for the District agreeing to oversize the new wastewater treatment plant described earlier, the Developer and Maryvale Districts agreed to cover the amount of any shortfall in the District’s CW RPDA loan payments by pre-purchasing tap fees. In addition, this agreement requires the Developer and Maryvale Districts to establish an escrow account in the amount of $160,000 to guarantee their compliance in the event of a default regarding their pre-purchase obligations. As of December 31, 2016, no prepaid tap fees have been required or made by the Developer and the Maryvale Districts. This guarantee was released in 2009. 2.Pre-Inclusion Agreement -Cornerstone The District entered an agreement on April 5, 2005, with Cornerstone W inter Park Holdings, L.L.C. (“Cornerstone”) that permits the inclusion of a portion of Cornerstone’s development within the District’s boundaries in order to receive sanitation services for inclusion fees. Cornerstone shall be responsible for constructing, paying for and installing all sewer lines and any related facilities within the property including all lines, manholes and mains.This infrastructure will ultimately be conveyed to the District at the time these projects are completed or begin to be used, whichever comes first, subject to the District’s acceptance of these assets. B.Retirement Plans –Defined Contribution Pension Plan –Section 401(a) The Town is a member of Colorado County Officials & Employees Retirement Association (“CCOERA”). COERA was established to provide retirement benefits to employees of Colorado local governments. As a member, the Town participates in the CCOERA retirement plan created in accordance with Internal Revenue Code Section 401(a) (the “401(a) Plan”), which is a defined contribution pension plan. Employees of the Town are required to participate in the 401(a) Plan after one full year of service. Each eligible employee is required to contribute 4% of gross wages to the 401(a) Plan. The Town matches employee contributions at the same rate and these matched dollars have a vesting period of 5 years. The Town is neither the trustee nor the administrator for the 401(a) Plan. The seven-member governing board of CCOERA makes all necessary rules and is responsible for administration of the funds in the 401(a) Plan. Benefits payable at retirement, death, termination, or other unforeseen circumstance are based on the accumulated account balance of each employee. Upon termination of service with the Town, any unvested amounts will be forfeited and may be used to pay plan expenses or Employer’s contributions to the 401(a) Plan. During 2016, the Town recognized $36,612 of expense under this plan. The Town has $2,913 of forfeitures included in the 2016 401(a) Plan expense. The Town had a liability of $2,562 due to the 401(a) Plan at December 31, 2016. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D23 V.Other Information (continued) C.Retirement Plans –Defined Contribution Pension Plan –Section 457 The Town also participates in the CCOERA retirement plan created in accordance with Internal Revenue Code Section 457 (the “457 Plan”), which is a defined contribution plan. The plan permits employees to defer a portion of their salary until future years. All contributions to the 457 Plan and all income attributable to those amounts, property are to be held in trust for the exclusive benefit of the plan participants and their beneficiaries. Plan investment purchases are determined by the plan participant and therefore, the plan’s investment concentration varies between participants. The Town has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The Town is neither the trustee nor the administrator for the plan. The seven-member governing board of CCOERA makes all necessary rules and is responsible for administration of the funds in the 401(a) Plan. Benefits payable at retirement, death, termination, or other unforeseen circumstance are based on the accumulated account balance of each employee. The Town did not recognize any pension expense related to this 457 Plan during 2016 and had no liability to the 457 Plan at December 31, 2016. D.Other Employee Benefits -Post Employment Health Care Benefits All Town employees covered by State continuation insurance may continue their health insurance due to a reduction in work hours or termination of employment (for reasons other than "gross misconduct") for up to 18 months after the occurrence of one of these events. Eligible dependents may continue coverage for up to 36 months. Employees who elect continued coverage must pay the Town for premiums from the termination date of coverage and monthly thereafter. No cost to the Town is recognized as employees reimburse 100% of their premium cost. E.Intergovernmental Agreements i.Public Safety Services In lieu of directly providing public safety services, the Town has entered into an agreement with the Town of Winter Park, Colorado to form a joint public safety force effective May 1, 2005 and amended March 21, 2012. The agreement requires costs to be split 65% to W inter Park and 35% to Fraser, based upon average call volume, but reevaluated annually and may be amended as agreed upon by both parties. ii.Building Department The Town has entered into an agreement January 20, 2010 to form a joint building services department with the Town of Winter Park, Colorado and the Town of Granby, Colorado.According to the agreement, quarterly expenses are to be split based upon the portion of revenue collected for each Town, but may be adjusted annually by mutual agreement based on permits issued, inspections performed, time expended by personnel, vehicle depreciation and mileage and other measures. PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D24 V.Other Information (continued) F.Commitments and Contingencies i.Construction Commitments The Town entered into an agreement with Conroy Excavating, Inc. to perform work on the north sewer system sanitary sewer for a total estimated project cost of $176,060. At December 31, 2015, the Town had expended $110,506 for this project, leaving $65,554 to be expended in future years. G.Risk Management The Town is exposed to various risks of loss related to workers’ compensation, general liability, and worker unemployment. The Town has acquired commercial coverage for these risks. Any settled claims are not expected to exceed the commercial insurance coverage. The Town is also exposed to the risks of loss related to torts; theft of, damage to, and destruction of assets; and errors and omissions. The Town is a member of the insurance pool described below to cover these risks. Pursuant to an inter-local agreement authorized by state statute, the Town joined the Colorado Intergovernmental Risk Sharing Agency (“CIRSA”) to provide insurance coverage. Members of the board of directors are nominated and elected by members to two-year, staggered terms and meet at least monthly to direct operations. CIRSA budgets are funded by contributions from member governments. The Town's share of assets, liabilities and fund equity as of December 31, 2016, the latest date for which information is available, is as follows: Insu ra nce Pools:Fra se r Sha re Propert y and Cas ualty Pool: Loss fund 26,704$ Operat ing 11,697 Pooled ex cess fund 5,691 Res erve fund 19,797 Work ers ' Compensation Pool: Los s fund 23,421 Operat ing 2,106 Pooled ex cess fund 14,433 Res erve fund 15,248 PRELIMINARY DRAFT Town of Fraser Notes to the Financial Statements December 31, 2016 (Continued) D25 V.Other Information (continued) G.Risk Management (continued) The December 31, 2016 combined financial information is as follows: Cas h and inves tment s 16,478,953$ Ot her as sets 70,775,712 Total 87,254,665 Liabilit ies 36,055,129 Net assets 51,199,536 Total 87,254,665 To tal revenue 26,382,872 To tal ex pens e (21,927,693) (De fi ci ency) of Re ve nue Ove r Ex pe nse 4,455,179 Coverage provided by CIRSA is as follows: 1) $250,000 per claim/occurrence property; 2) $1,000,000 per claim/occurrence liability; and 3) $150,000 per claim/occurrence crime. CIRSA has also acquired additional excess coverage from outside sources. The Town may be liable for any losses in excess of the above coverage. At December 31, 2016, the Town does not expect to incur losses in excess of the above coverage. Surpluses or deficits for any year are subject to change for reasons which include: interest earnings on invested amounts for those years and funds, re-estimation of losses for those years and funds, and credits or distributions from surplus for those years and funds. H. Prepaid Plant Investment Fees The Town entered into annexation agreements with two developers that provided for the use of Plant Investment Fees to fund water system capital improvements within the developments. The agreements essentially provide that the Town will not retain Plant Investment Fees paid by building permit applicants within these developments until such time as the total Plant Investment Fees paid exceeds the certified costs of regional water capital improvements within the developments. Currently the developers have certified water regional infrastructure improvements totaling $6,266,976 and a total of $3,242,993 of Plant Investment Fees have been rebated to the developers. PRELIMINARY DRAFT REQUIRED SUPPLEMENTARY INFORMATION PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Taxes 2,216,482 2,884,263 667,781 2,449,163 Licenses and fees 63,000 137,840 74,840 116,478 Charges for services 5,000 14,566 9,566 41,050 Intergovernmental 97,000 124,953 27,953 1,477,305 Interest 3,500 20,080 16,580 6,450 Other revenue 92,500 115,876 23,376 148,346 Total Revenues 2,477,482 3,297,578 820,096 4,238,792 Expenditures: General government 1,254,416 1,035,049 219,367 1,016,942 Public safety 450,000 424,580 25,420 406,020 Public works 1,300,140 993,527 306,613 3,331,099 Culture and recreation 13,550 11,237 2,313 7,566 Debt service 38,375 38,374 1 38,374 Total Expenditures 3,056,481 2,502,767 553,714 4,800,001 Excess (Deficiency) of Revenues Over Expenditures (578,999) 794,811 1,373,810 (561,209) Other Financing Sources (Uses): Transfer in - - - 10,000 Transfer (out)(367,910) (367,910) - (246,550) Total Other Financing (Uses)(367,910) (367,910) - (236,550) Excess (Deficiency) of Revenues Over Expenditures and Other Financing Sources (Uses)(946,909) 426,901 1,373,810 (797,759) Fund Balances - Beginning of Year 1,765,979 3,006,539 1,240,560 3,804,298 Fund Balances - End of Year 819,070 3,433,440 2,614,370 3,006,539 2016 Town of Fraser, Colorado General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) The accompanying notes are an integral part of these financial statements. E1 PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Taxes: Property 201,082 201,242 160 197,417 Specific ownership 10,200 12,285 2,085 11,677 Sales & use 1,945,000 2,606,095 661,095 2,176,821 Franchise 52,000 55,575 3,575 54,795 Motor vehicle 4,200 4,770 570 4,661 Cigarette 4,000 4,296 296 3,792 Total 2,216,482 2,884,263 667,781 2,449,163 Licenses and Fees: Business license fees 13,000 10,604 (2,396) 13,100 Regulated Industry fees 50,000 127,236 77,236 103,378 Total 63,000 137,840 74,840 116,478 Charges for services: Planning and building fees 5,000 14,566 9,566 41,050 Total 5,000 14,566 9,566 41,050 Intergovernmental: Grant revenue 97,000 124,953 27,953 1,477,305 Total 97,000 124,953 27,953 1,477,305 Interest: Earnings on deposits 3,500 20,080 16,580 6,450 Total 3,500 20,080 16,580 6,450 Other: Other income 80,000 99,871 19,871 132,731 Rents 12,500 16,005 3,505 15,615 Total 92,500 115,876 23,376 148,346 Other Financing Sources: Transfer in - - - 10,000 Total - - - 10,000 Total Revenues 2,477,482 3,297,578 820,096 4,248,792 2016 Town of Fraser, Colorado General Fund Schedule of Revenues Budget (GAAP Basis) and Actual For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) The accompanying notes are an integral part of these financial statements. E2 PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual General Government: Town board salaries 51,295 44,388 6,907 34,901 Town board community enhancement 306,640 188,334 118,306 231,436 Miscellaneous 3,000 12,917 (9,917) 1,098 Administrative salaries 341,527 321,515 20,012 323,037 Other purchased services 467,954 415,225 52,729 387,134 Utilities 22,500 16,074 6,426 16,384 Property management 61,500 25,226 36,274 22,952 Fiscal agent salaries - 11,370 (11,370) - Total General Government 1,254,416 1,035,049 219,367 1,016,942 Public Safety 450,000 424,580 25,420 406,020 Total Public Safety 450,000 424,580 25,420 406,020 Public Works Salaries and benefits 560,190 513,053 47,137 501,685 Other purchased services 171,250 243,793 (72,543) 2,390,267 Utilities 15,700 10,753 4,947 12,385 Property management 117,500 68,914 48,586 137,592 Capital outlay 435,500 157,014 278,486 289,170 Total Public Works 1,300,140 993,527 306,613 3,331,099 Culture and Recreation Other purchased services 6,000 5,100 900 5,250 Utilities 2,550 1,759 791 1,899 Property management 5,000 4,378 622 417 Total Culture and Recreation 13,550 11,237 2,313 7,566 Debt Services Interest 17,165 17,165 - 18,167 Principal 21,210 21,209 1 20,207 Total Debt Services 38,375 38,374 1 38,374 Other Financing Uses Transfer out 367,910 367,910 - 246,550 Total Financing Sources 367,910 367,910 - 246,550 Total Expenditures 3,424,391 2,870,677 553,714 5,046,551 2016 Town of Fraser, Colorado General Fund Schedule of Expenditures and Transfers Budget (GAAP Basis) and Actual For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) The accompanying notes are an integral part of these financial statements. E3 PRELIMINARY DRAFT Conservation Trust Fund 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Lottery proceeds 6,500 6,444 (56) 5,523 Interest 15 93 78 17 Total Revenues 6,515 6,537 22 5,540 Other Financing Uses Transfer (Out)- - - (10,000) Total Financing Sources - - - (10,000) Excess (Deficiency) of Revenues Over Expenditures 6,515 6,537 22 (4,460) Fund Balances - Beginning of Year 13,010 12,035 (975) 16,495 Fund Balances - End of Year 19,525 18,572 (953) 12,035 Schedule of Revenues, Expenditures and Changes in Fund Balances Special Revenue Fund Town of Fraser, Colorado 2016 For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) Budget (GAAP Basis) and Actual The accompanying notes are an integral part of these financial statements. E4 PRELIMINARY DRAFT Restricted Revenue Fund 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Taxes 450,000 546,685 96,685 - Interest 150 939 789 - Total Revenues 450,150 547,624 97,474 - Expenditures: General government Transportation 400,000 536,747 (136,747) - Trails 50,000 4,887 45,113 - Total Expenditures 450,000 541,634 (91,634) - Excess (Deficiency) of Revenues Over Expenditures 150 5,990 5,840 - Fund Balances - Beginning of Year - - - - Fund Balances - End of Year 150 5,990 5,840 - 2016 Town of Fraser, Colorado Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) The accompanying notes are an integral part of these financial statements. E5 PRELIMINARY DRAFT SUPPLEMENTARY INFORMATION PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Property taxes - 68 68 79,993 Specific ownership tax - - - 5,138 Interest 100 3,473 3,373 970 Total Revenues 100 3,541 3,441 86,101 Expenditures: Principal 320,000 320,000 - 250,000 Interest 37,704 31,953 5,751 49,074 Other 3,000 1,546 1,454 3,938 Total Expenditures 360,704 353,499 7,205 303,012 Excess (Deficiency) of Revenues Over Expenditures (360,604) (349,958) 10,646 (216,911) Other Financing Sources: Transfer in 257,910 257,910 - 246,550 Total Other Financing Sources 257,910 257,910 - 246,550 Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures (102,694) (92,048) 10,646 29,639 Fund Balances - Beginning of Year (100) 575,579 575,679 545,940 Fund Balances - End of Year (102,794) 483,531 586,325 575,579 Schedule of Revenues, Expenditures and Changes in Fund Balances Debt Service Fund Town of Fraser, Colorado 2016 For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) Budget (GAAP Basis) and Actual The accompanying notes are an integral part of these financial statements. F1 PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Highway users revenue 45,039 46,157 1,118 45,940 Earnings on investments 350 3,317 2,967 828 Total Revenues 45,389 49,474 4,085 46,768 Expenditures: Capital lease 45,418 45,418 - 45,418 Equipment 175,000 77,027 97,973 71,085 Total Expenditures 220,418 122,445 97,973 116,503 Excess (Deficiency) of Revenues Over Expenditures (175,029) (72,971) 102,058 (69,735) Other Financing Sources: Transfer In 130,000 130,000 - 20,000 Total Other Financing Sources 130,000 130,000 - 20,000 Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures (45,029) 57,029 102,058 (49,735) Fund Balances - Beginning of Year 410,774 415,843 5,069 465,578 Fund Balances - End of Year 365,745 472,872 107,127 415,843 Capital Equipment Replacement Fund Town of Fraser, Colorado (With Comparative Actual Amounts for 2015) 2016 For the Year Ended December 31, 2016 Budget (GAAP Basis) and Actual Schedule of Revenues, Expenditures and Changes in Fund Balances The accompanying notes are an integral part of these financial statements. F2 PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Tap fees 7,700 - (7,700) 15,400 User fees 832,120 858,499 26,379 786,229 Water meter fees 5,000 58,092 53,092 38,419 Interest income 800 10,240 9,440 2,079 Excavation permits 275 825 550 550 Grants - - - 50,000 Other 2,500 4,190 1,690 4,020 Total Revenues 848,395 931,846 83,451 896,697 Expenditures: Personnel: Salaries 210,503 202,839 7,664 199,682 Retirement 6,500 5,620 880 6,217 Health insurance 29,250 32,086 (2,836) 25,827 Travel and training 8,000 2,356 5,644 1,144 Total 254,253 242,901 11,352 232,870 Commodities: Insurance 20,000 15,097 4,903 17,084 Supplies 77,500 96,539 (19,039) 49,080 System repair and maintenance 140,000 129,377 10,623 37,017 Testing 5,000 1,292 3,708 1,974 Telephone 4,500 4,140 360 4,303 Utilities 50,000 33,437 16,563 33,776 Miscellaneous 8,000 1,484 6,516 1,807 Total 305,000 281,366 23,634 145,041 Contractual: Legal 65,000 48,184 16,816 69,618 Engineering 60,000 77,343 (17,343) 24,303 Other professional services 25,500 20,954 4,546 1,773 Professional memberships 9,500 5,915 3,585 8,625 Total 160,000 152,396 7,604 104,319 Other: Transfer to Other Fund 10,000 10,000 - 10,000 Capital projects and purchases 900,000 49,000 851,000 104,514 Water rights 35,000 6,790 28,210 6,482 Total 945,000 65,790 879,210 120,996 Total Expenditures 1,664,253 742,453 921,800 603,226 Excess (Deficiency) of Revenues Over Expenses (Budget Basis)(815,858) 189,393 1,005,251 293,471 Reconciliation from Budget Basis to GAAP Basis: Capitalized assets 49,000 88,658 Depreciation (407,318) (400,315) Excess (Deficiency) of Revenues Over Expenses (GAAP Basis)(168,925) (18,186) Net Position - Beginning of Year 12,003,144 12,021,330 Net Position - End of Year 11,834,219 12,003,144 2016 Town of Fraser, Colorado Enterprise Fund Water Fund Schedule of Revenues, Expenditures and Change in Net Position Budget (Non-GAAP) Basis and Actual With Reconciliation to GAAP Basis (With Comparative Actual Amounts for 2015) For the Year Ended December 31, 2016 The accompanying notes are an integral part of these financial statements. F3 PRELIMINARY DRAFT 2015 Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Tap fees 100,000 540,000 440,000 292,500 User fees 694,000 705,295 11,295 645,846 Management fees 29,000 29,000 - 29,000 Interest income 3,200 27,216 24,016 14,690 Grants 30,000 51,778 21,778 46,401 Other - 39 39 - Total Revenues 856,200 1,353,328 497,128 1,028,437 Expenditures: Personnel: Salaries 221,298 201,862 19,436 212,095 Retirement 7,000 5,587 1,413 6,381 Health insurance 30,500 32,030 (1,530) 26,235 Travel and training 7,000 1,460 5,540 839 Total 265,798 240,939 24,859 245,550 Commodities: Insurance 6,500 3,103 3,397 4,405 Supplies 3,000 1,920 1,080 2,113 System repair and maintenance 344,500 201,432 143,068 208,136 Testing 1,000 - 1,000 - Telephone 2,000 1,529 471 1,672 Miscellaneous 3,000 675 2,325 165 Total 360,000 208,659 151,341 216,491 Contractual: Legal 5,000 - 5,000 693 Engineering 5,000 1,008 3,992 8,392 Other professional services 202,346 173,597 28,749 159,357 Treasurer's and bank fees 100 - 100 - Professional memberships 2,000 5,142 (3,142) 1,525 Total 214,446 179,747 34,699 169,967 Other: Transfer to Other Fund 10,000 10,000 - 10,000 Capital Reserve payments - - - 33,151 Total 10,000 10,000 - 43,151 Total Expenditures 850,244 639,345 210,899 675,159 Excess (Deficiency) of Revenues Over Expenses (Budget Basis)5,956 713,983 708,027 353,278 Reconciliation from Budget Basis to GAAP Basis: Capitalized assets 83,669 132,402 Depreciation (433,887) (428,615) Excess (Deficiency) of Revenues Over Expenses (GAAP Basis)324,728 57,065 Net Position - Beginning of Year 13,925,492 13,868,427 Net Position - End of Year 14,250,220 13,925,492 For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) 2016 Town of Fraser, Colorado Enterprise Fund Wastewater Fund Schedule of Revenues, Expenditures and Change in Net Position Budget (Non-GAAP) Basis and Actual With Reconciliation to GAAP Basis The accompanying notes are an integral part of these financial statements. F4 PRELIMINARY DRAFT 2015 Final Budget Original and Variance Final Positive Budget Actual (Negative)Actual Revenues: Other revenue 1,500 1,822 322 - JFOC operating charges 725,962 622,379 (103,583) 600,208 Interest revenue 12,300 11,528 (772) 12,244 Sale of fixed assets - - - 14,215 Total Revenues 739,762 635,729 (104,033) 626,667 Expenses: Training programs 2,000 1,435 565 240 Travel, meals and lodging 2,500 575 1,925 95 Meals and entertainment 100 256 (156) 45 Professional fees 159,750 117,473 42,277 4,074 Engineering fees 15,000 5,965 9,035 3,475 Sludge removal 55,000 41,636 13,364 32,520 Other professional services 10,000 3,569 6,431 3,216 Insurance 30,000 24,167 5,833 25,177 Advertising 500 - 500 1,963 Plant maintenance & repair 50,000 24,007 25,993 28,260 Grounds maintenance 1,500 - 1,500 1,104 Equipment rental 500 - 500 - Professional memberships 500 450 50 - Operating supplies 65,000 31,938 33,062 32,881 Equipment purchase and repair 15,000 202 14,798 4,445 Testing 65,000 51,491 13,509 39,962 Utilities 162,200 189,854 (27,654) 190,204 Vehicles 7,500 4,115 3,385 7,277 Miscellaneous 1,000 414 586 300 Capital projects 301,000 74,956 226,044 164,632 Payroll expenses 232,913 238,105 (5,192) 224,971 Total Expenses 1,176,963 810,608 366,355 764,841 Excess (Deficiency) of Revenues Over Expenses (Budget Basis)(437,201) (174,879) 262,322 (138,174) Reconciliation from Budget Basis to GAAP Basis: Capital reserve reduced by capital expenses 188,229 164,633 Capital reserve increased by interest income (11,174) (12,244) Capital reserve increased by other income (1,822) - Operating reserve increased by interest income (354) - Proceeds from sale of asset to gain or loss on sale - (14,215) Excess (Deficiency) of Revenues Over Expenses (GAAP Basis)- - JFOC Operations Schedule of Revenues & Expenses 2016 Town of Fraser, Colorado For the Year Ended December 31, 2016 (With Comparative Actual Amounts for 2015) Budget (Non-GAAP) Basis and Actual With Reconciliation to GAAP Basis The accompanying notes are an integral part of these financial statements. F5 PRELIMINARY DRAFT LocalHighwayFinanceReport CY16Page of ANNUAL HIGHWAYFINANCEREPORT - CY16 Step1: Enter youremailandselectyourCityorCounty fromthelistbelow. Step2: Click on "Start" toedit/updateyourdata. Step3: Clickon "Submit" atthebottomoftheformtoedit/updateyourdata. YourEmailAddress: nhavens@town.fraser.co.us SelectCity: Fraser Start II - RECEIPTS FORROADANDSTREETPURPOSES Please nocommasordollarsignsfortheinput A. Receiptsfromlocalsources 2329628.072. GeneralFundAppropriations: 91,850.473. Other localimposts: fromA.3. 'Total' below) 8,973.344. Miscellaneouslocalreceipts: fromA.4. 'Total' below) 0.005. Transfersfromtollfacilities 6. Proceedsofsaleofbondsandnotes 0.00a. Bonds - Original Issues: 0.00b.Bonds - RefundingIssues: 0.00c. Notes: 2,430,451.88SubTotal: 0.00B. PrivateContributions II - RECEIPTS FORROADANDSTREET PURPOSES (Detail) Pleasenocommasordollarsignsfortheinput A.3.Otherlocalimposts 67.81a. PropertyTaxesandAssessments b. OtherLocalImposts https://nnu5n3kgicq6j5y66doh5y3t6lcgm6sa6klg525q0luscript.googleusercontent.com/u...4/14/2017 PRELIMINARY DRAFT LocalHighwayFinanceReport CY16Page of 1. SalesTaxes: 79498.08 0.002. InfrastructureandImpact Fees: 0.003. Liens: 0.004. Licenses: 12284.585. SpecificOwnership and/orOther: 91,850.47Total: a + b) carriedto 'Otherlocalimposts' above) A.4.Miscellaneous localreceipts Please nocommasordollarsignsfortheinput 3473.34a. Interest onInvestments: 0.00b. Trafficfines & Penalities: 0.00c. ParkingGarageFees: 0.00d. ParkingMeterFees: 0.00e. SaleofSurplusProperty: 0.00f. ChargesforServices: 5500.00g. OtherMisc. Receipts: 0.00h. Other: 8,973.34Total: athrough h) carriedto 'Misclocalreceipts' above) C. ReceiptsfromStateGovernment Please nocommasordollarsignsfortheinput 46157.061. HighwayUserTaxes: 3. OtherStatefunds: 4769.50c. MotorVehicleRegistrations: d. Other (Specify): Comments:undefined0.00 e. Other (Specify): Comments:undefined0.00 50,926.56Total: 1+3c,d,e) D. ReceiptsfromFederalGovernment Pleasenocommasordollarsignsfortheinput 2. OtherFederalAgencies 0.00a. ForestService: 0.00b. FEMA: 0.00c. HUD: https://nnu5n3kgicq6j5y66doh5y3t6lcgm6sa6klg525q0luscript.googleusercontent.com/u...4/14/2017 PRELIMINARY DRAFT LocalHighwayFinanceReport CY16Page of d. Federal TransitAdministration: 0.00 0.00e. U.S. CorpofEngineers 0.00f. OtherFederal: 0.00Total: 2a-f) III - DISBURSEMENTS FORROAD ANDSTREET PURPOSES Please nocommasordollarsignsfortheinput A. Localhighway disbursements 278,378.961. Capitaloutlay: fromA.1.d. 'TotalCapitalOutlay' below) 213588.542. Maintenance: 3. Roadandstreet services 15339.00a. Trafficcontroloperations: 335639.14b.Snowandiceremoval: 0.00c. Other: 61025.304. Generaladministration & miscellaneous 424580.005. Highway lawenforcementandsafety 1,328,550.94Total: A.1-5) Pleasenocommasordollarsignsfortheinput B. Debtserviceonlocalobligations 1.Bonds 27827.50a.Interest 1125000.00b.Redemption 2.Notes 0.00a.Interest 0.00b.Redemption 1,152,827.50SubTotal: 1+2) Pleasenocommasordollarsignsfortheinput 0.00C. Payments toStateforHighways: https://nnu5n3kgicq6j5y66doh5y3t6lcgm6sa6klg525q0luscript.googleusercontent.com/u...4/14/2017 PRELIMINARY DRAFT LocalHighwayFinanceReport CY16Page of D. Payments toTollFacilities: 0.00 2,481,378.44TotalDisbursements: A+B+C+D) Please nocommasordollarsignsfortheinput III - DISBURSEMENTS FORROAD ANDSTREET PURPOSES - (Detail) Please nocommasordollarsignsfortheinput A. ONNATIONAL B. OFFNATIONAL HIGHWAY SYSTEMHIGHWAY SYSTEMC. TOTAL A.1. CapitalOutlay 0.002303.52 2,303.52a. Right-Of-WayCosts: 47558.7113806.00 61,364.71b. EngineeringCosts: c. Construction 96799.050.00 96,799.051. NewFacilities: 0.000.00 0.002.Capacity Improvements: 0.00107638.14 107,638.143. SystemPreservation: 0.0010273.54 10,273.544. SystemEnhancement: 214,710.735. TotalConstruction: 278,378.96d. TotalCapitalOutlay: LinesA.1.a. + 1.b. + 1.c.5) IV. LOCALHIGHWAY DEBTSTATUS Pleasenocommasordollarsignsfortheinput OPENINGDEBTAMOUNTISSUEDREDEMPTIONSCLOSING DEBT A. Bonds (Total) 1505000.000.001125000.00 380,000.00 1. Bonds (Refunding 0.000.00 0.00Portion) 0.000.000.00 0.00B. Notes (Total): https://nnu5n3kgicq6j5y66doh5y3t6lcgm6sa6klg525q0luscript.googleusercontent.com/u...4/14/2017 PRELIMINARY DRAFT LocalHighwayFinanceReport CY16Page of V - LOCAL ROADANDSTREETFUNDBALANCE Please nocommasordollarsignsfortheinput A. Beginning C.Total E. Reconciliation BalanceB. TotalReceiptsDisbursementsD. EndingBalance 0.000.002,481,378.442,481,378.440.00 Notes & Comments: undefined Pleaseenter yourname: NatHavens Pleaseprovideatelephonenumberwhereyoumaybereached: 970-726-5491 SavePrintReport Note: Printingyourformwill *NOT* save it. Save *BEFORE* printing. FORMFHWA-536e(Version3.00) - CY16 https://nnu5n3kgicq6j5y66doh5y3t6lcgm6sa6klg525q0luscript.googleusercontent.com/u...4/14/2017 PRELIMINARY DRAFT