HomeMy WebLinkAbout2017 Audit Report
Annual Financial Report
For the Year Ended June 30, 2017
State of
New Mexico
Town of Taos
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INTRODUCTORY SECTION
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STATE OF NEW MEXICO
Town of Taos
Annual Financial Report
June 30, 2017
Table of Contents
INTRODUCTORY SECTION Exhibit Page
Table of Contents 4‐5
Official Roster 6
FINANCIAL SECTION
Independent Auditors' Report 8‐10
Management's Discussion and Analysis 11‐17
BASIC FINANCIAL STATEMENTS
Government‐wide Financial Statements:
Statement of Net Position A‐1 20‐21
Statement of Activities A‐2 22‐23
Fund Financial Statements:
Balance Sheet ‐ Governmental Funds B‐1 24‐25
Reconciliation of the Balance Sheet to the Statement of Net Position 27
Statement of Revenues, Expenditures, and Changes in Fund Balances ‐
Governmental Funds B‐2 28‐29
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities 31
Statement of Revenues, Expenditures, and Changes in Fund Balance ‐
Budget (GAAP Budgetary Basis) and Actual:
General Fund C‐1 32
Lodgers' Tax Special Revenue Fund C‐2 33
Statement of Net Position ‐ Proprietary Funds D‐1 34‐35
Statement of Revenues, Expenses and Changes in Net Position ‐ Proprietary Funds D‐2 36
Statement of Cash Flow ‐ Proprietary Funds D‐3 37
Statement of Fiduciary Assets and Liabilities ‐ Agency Funds E‐1 39
NOTES TO THE FINANCIAL STATEMENTS 40‐77
REQUIRED SUPPLEMENTARY INFORMATION Schedule
Schedule of the Town's Proportionate Share of the Net Pension Liability I 80‐82
Schedule of the Town's Contributions II 83‐85
Notes to Required Supplementary Information 86
SUPPLEMENTARY INFORMATION Statement
Nonmajor Governmental Fund Descriptions 88‐89
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet ‐ Nonmajor Governmental Funds A‐1 90‐95
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances ‐ Nonmajor Governmental Funds A‐2 96‐101
SUPPORTING SCHEDULES Schedule
Schedule of Deposits and Investment Accounts III 104
Schedule of Collateral Pledged by Depository for Public Funds IV 105
Schedule of Changes in Fiduciary Assets and Liabilities ‐ Agency Funds V 107
Schedule of Joint Powers Agreement VI 108‐109
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STATE OF NEW MEXICO
Town of Taos
Annual Financial Report
June 30, 2017
Table of Contents
COMPLIANCE SECTION
Report on Internal Control Over Financial Reporting and on Compliance Schedule Page
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 112‐113
FEDERAL FINANCIAL ASSISTANCE
Report on Compliance for the Major Federal Program and on Internal Control
Over Compliance Required by the Uniform Guidance 116‐117
Schedule of Expenditures of Federal Awards VII 118‐121
Schedule of Findings and Questioned Costs VIII 122‐124
OTHER DISCLOSURES 125
5
STATE OF NEW MEXICO
Town of Taos
Official Roster
June 30, 2017
Name Town Council Title
Daniel Barrone Mayor
Judith Cantu Councilor
George “Fritz” Hahn Councilor
Darien Fernandez Councilor
Nathaniel Evans Councilor
Administration
Richard Bellis Town Manager
Marietta Fambro Finance Director
Renee Lucero Town Clerk
Richard Chavez Municipal Judge
Stephen Ross Town Attorney
6
FINANCIAL SECTION
7
Alamogordo | Albuquerque | Carlsbad | Clovis | El Paso | Hobbs | Lubbock | Roswell | Santa Fe
INDEPENDENT AUDITORS’ REPORT
Wayne A. Johnson
New Mexico State Auditor
The United States Office of Management and Budget and
The Town Council
Town of Taos
Taos, New Mexico
Report on Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business‐type
activities, each major fund, the aggregate remaining fund information, and the budgetary comparisons for the
General Fund and major special revenue fund of the Town of Taos (the Town), as of and for the year ended June
30, 2017, and the related notes to the financial statements whi ch collectively comprise the Town’s basic financial
statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatements, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ 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 Town’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 Town’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.
8
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 Taos, as of June 30, 2017, and the respective changes in financial
position and where applicable, cash flows thereof, and the respective budgetary comparisons for the General
Fund and major special revenue fund for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis on pages 11 through 17 and Schedules I and II and the Notes to the Required
Supplementary Information on pages 80 through 86 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied certain
limited procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statement. The introductory section, combining and individual nonmajor
fund financial statements, the Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance) and Supporting Schedules III through VI required by 2.2.2 NMAC are
presented for the purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements, the Schedule of Expenditures of Federal
Awards and Supporting Schedules III through VI required by Section 2.2.2 NMAC are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records used to
prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and certain additio nal procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance with
the auditing standards generally accepted in the United States of America. In our opinion, the combining and
individual nonmajor fund financial statements, the Schedule of Expenditures of Federal Awards and Supporting
Schedules III through VI required by Section 2.2.2 NMAC are fairly stated, in all material respects, in relation to
the basic financial statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
9
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 6, 2017, on
our consideration of the Town’s internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Town’s internal control over financial reporting and compliance.
RPC CPAs + Consultants, LLP
Albuquerque, NM
December 6, 2017
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Town of Taos
Management’s Discussion and Analysis
June 30, 2017
We are pleased to present the Town of Taos’s financial statements for the fiscal year ended June 30, 2017. Management’s
discussion and analysis of these statements is also provided to help the reader fully understand the Town’s financial condition.
FINANCIAL HIGHLIGHTS
The Town of Taos’ total assets exceeded its total liabilities at the close of the fiscal year by $86,646,029 (net position).
Of this amount, ($1,066,146) is unrestricted net position, due to the on-going implementation of GASB Statement No.
68. The current year Pension Plan Liability is the underlying factor of this negative unrestricted net position. This
GASB Statement is reflected on the financial statements for the third time in the history of the Town and other
governmental entities throughout the entire state. The difference this year from prior on the Net Pension Liability is
the new actuarial report and calculations based on factors such as our entity size, life expectancy, etc. Even though
ending the year with this negative amount, the Town has at this time the available cash balances to meet the
government’s ongoing obligations to its citizens and creditors.
The Town’s total net position increased by $10,313,280 during the fiscal year. The majority of this overall increase
was due to increases in charges for services, capital grants (again this year is due mainly to the Airport Runway
Construction project) and taxes.
As of June 30, 2017, the Town’s governmental activities reported a combined ending net position balance of
$59,136,716. Of this total, $5,628,176 is designated for debt service and capital projects.
At the close of the current fiscal year, the unassigned fund balance for the general fund was $3,969,926, amounting to
44 percent of total general fund expenditures.
The Town of Taos’ total debt had a net decrease of $1,155,444 during the year due to scheduled principal payments
being paid and the retirement of a NMFA loan for 20 acre parcel of land that was acquired in 2007 for recreation
purposes. Compensated absences stayed relatively flat from last fiscal. The Town paid $1,176,602 towards the
principal of various of its government loans, bonds, compensated absences and contracts payable
Overview of the Financial Statements
The Town’s basic financial statements comprise 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 themselves.
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a
broad overview of the Town of Taos’ finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the Town of Taos’ assets and liabilities, with the difference between
the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator regarding
whether or not the financial position of the Town of Taos 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 (e.g., uncollected taxes and earned but unused personal leave).
Both of the government-wide financial statements distinguish functions of the Town of Taos that are principally supported in a
majority by taxes and a minimal amount from other miscellaneous receipts (governmental activities) from other functions that
are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The
governmental activities of the Town of Taos include general government, public safety, public works, culture and recreation,
and health and welfare. The business-type activities of the Town include joint Water and Sewer Services, Solid Waste Services,
and the Taos Regional Landfill.
The government-wide financial statements can be found in Exhibits A-1 and A-2 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have
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Town of Taos
Management’s Discussion and Analysis
June 30, 2017
been segregated for specific activities or objectives. The Town of Taos, 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 of Taos
can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial statements,
governmental fund financial statements focus on daily 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 determining what financial
resources are available in the near future to finance the Town’s programs.
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. Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds
and governmental activities.
The Town of Taos maintains twenty-nine individual governmental funds organized according to their type (special revenue,
debt service and capital projects). Information is presented separately in the governmental fund balance sheet and statement of
revenues, expenditures, and changes in fund balances for the General Fund and Capital Projects, which are considered major
funds. Data from the other twenty-seven governmental funds are combined into a single, aggregated presentation. Individual
fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this
report.
The Town of Taos adopts an annual appropriated budget for its general fund, capital equipment replacement, special revenue
fund, fire, police, GRT, and all other funds. A budgetary comparison statement has been provided for the General Fund to
demonstrate compliance with this budget. In addition, the individual financial statements of the nonmajor governmental fund
types include budgetary comparison data.
The basic governmental fund financial statements can be found in Exhibits B-1 through C-1 of this report.
Proprietary funds. Proprietary funds are generally used to account for services for which the Town charges customers – either
outside customers or internal units or departments of the Town. Proprietary funds provide the same type of information as
shown in the government-wide financial statements, only in more detail. The Town maintains one type of proprietary fund.
Enterprise funds. Are used to report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses enterprise funds to account for the joint water and sewer services, solid waste and regional landfill
operations for the Town. The enterprise funds are considered to be major funds of the Town and can be found in Exhibits D-1
through D-3 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not
available to support the Town of Taos’ own programs. The accounting used for fiduciary funds is much like that used for
proprietary funds.
The Town of Taos fiduciary funds account for the collection of street cut permits and deposits for recreation events. The basic
fiduciary fund financial statement can be found in Exhibit E-1 of this report.
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 on pages
40-77 of this report.
Combining statements. The combining statements referred to earlier in connection with nonmajor governmental funds are
presented immediately following the notes to the financial statements. Combining and individual fund statements and
schedules can be found on pages 90-101 of this report.
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Town of Taos
Management’s Discussion and Analysis
June 30, 2017
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Analysis of Net Position
As noted earlier, the net of assets over liabilities, otherwise known as net position, may serve over time as a useful indicator of a
government’s financial position. In the case of the Town of Taos, assets exceeded liabilities by $86,646,029 at the close of the
current fiscal year.
The significant portion of the Town of Taos’ net position represents the Town’s investment of $79,301,242 in capital assets
(e.g., land improvements, buildings, infrastructure and machinery & equipment), less any related outstanding debt used to
acquire those assets. The Town of Taos uses these capital assets to provide services to its citizens, so these assets are not
available for future spending. Although the Town of Taos’ investment in its capital assets is reported net of related debt, it
should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
Governmental Business-Type
Activities Activities Total
Assets
Current and other assets 13,105,413$ 5,919,178$ 19,024,591$
Restricted cash, cash equivalents & investments 22,618 2,710,398 2,733,016
Restricted investments - 374,570 374,570
Bond issuance costs and discount - - -
Capital assets, net of accumulated 63,977,850 26,989,333 90,967,183
depreciation
Total assets 77,105,881 35,993,479 113,099,360
Deferred Outflows of Resources
Change in assumptions 695,556 76,849 772,405
Changes in proportion 49,137 5,428 54,565
Difference between expected and actual experience 646,734 71,511 718,245
Net difference between projected and actual investment
earnings on pension plan investments 1,878,524 216,911 2,095,435
Employer contributions subsequent to the measurement date 562,282 62,610 624,892
Total deferred outflows of resources 3,832,233 433,309 4,265,542
Total assets and deferred outflows of resources 80,938,114$ 36,426,788$ 117,364,902$
Liabilities `
Current Liabilities 3,586,178$ 1,083,858$ 4,670,036$
Non-current liabilities 17,593,830 7,765,189 25,359,019
Total liabilities 21,180,008 8,849,047 30,029,055
Deferred Inflows of Resources
Difference between expected and actual experience 66,133 7,307 73,440
Change in assumptions 58,536 6,133 64,669
Change in proportion 496,721 54,988 551,709
Net difference between projected and actual investment
earnings on pension plan investments - - -
Total deferred inflows of resources 621,390 68,428 689,818
Net Position
Net investment in capital assets 57,511,470 21,789,772 79,301,242
Restricted 5,628,176 2,782,757 8,410,933
Unrestricted (4,002,930) 2,936,784 (1,066,146)
Total net position 59,136,716$ 27,509,313$ 86,646,029$
Total Liabilities and Net Position 80,938,114$ 36,426,788$ 117,364,902$ 13
Town of Taos
Management’s Discussion and Analysis
June 30, 2017
A portion of the Town of Taos’ governmental restricted net position of $5,628,176 (10 percent) represents resources that are
subject to restrictions related to covenants arising from the Town’s long-term debt issuance and capital projects. The remaining
balance of unrestricted net position, ($4,002,390) previously stated, continue to fall to a negative due to the implementation of
GASB Statement 68. In the previous year, this amount was ($3,479,204), the first year of implementation of GASB Statement
68 and updates on what does into the calculations. Taking that negative into consideration the Town still has the available cash
to meet the government’s ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the Town of Taos is able to report positive balances in all categories of net position for
both governmental and business-type activities.
Analysis of Changes in Net Position
The Town’s net position increased by $10,313,280 during the fiscal year. This increase is primarily the result of increased
operating and capital grants, and gross receipts taxes during the fiscal year. The Airport Runway project is the main
contributing factor, which was substantially complete in the current fiscal year with close-out activities in 2017-2018.
Governmental Business-type
Revenues Activities Activities Total
Program revenues:
Charges for service 1,017,424$ 6,170,230$ 7,187,654$
Operating grants and contributions 715,370 - 715,370
Capital grants and contributions 11,603,850 11,603,850
General revenues:
Property taxes, levied for general purposes 1,117,005 - 1,117,005
Gross receipts taxes 10,854,707 309,930 11,164,637
Gasoline and auto distribution taxes 317,435 - 317,435
Other taxes 1,577,291 - 1,577,291
Interest income (loss)24,857 5,651 30,508
Miscellaneous income 56,384 20,688 77,072
Transfer to other entity - -
Loss on disposal of capital assets - - -
Total Revenues 27,284,323 6,506,499 33,790,822
Program expenses:
General government 8,528,029$ -$ 8,528,029$
Public safety 3,916,950 - 3,916,950
Public works 1,126,104 - 1,126,104
Culture and recreation 2,695,884 - 2,695,884
Health and welfare 35,626 - 35,626
Interest on long-term debt 250,812 - 250,812
Joint water and sewer - 4,403,498 4,403,498
Solid waste - 1,544,075 1,544,075
Taos Regional Landfill - 976,564 976,564
Total Expenses 16,553,405 6,924,137 23,477,542
Change in net position 10,730,918 (417,638) 10,313,280
Net Position, beginning 48,708,026 27,926,951 76,634,977
Net Position, ending 59,438,944$ 27,509,313$ 86,948,257$
14
Town of Taos
Management’s Discussion and Analysis
June 30, 2017
Governmental activities. Governmental activities increased the Town of Taos’ net position by $10,313,280, primarily as the
result of increase in capital grants and contributions (as previously stated the Airport Runway project) and gross receipts taxes.
Along with the combination of expenditures increased by $304,700 from last fiscal year.
Tax revenues account for $13,866,348 or 51 percent of governmental revenues. Tax revenues are made up of property, gross
receipts, gasoline and motor vehicle and other taxes.
The General fund received the majority of the Town’s program revenue, accounting for $13,336,644 or 49 percent of total
governmental revenues. The primary recipients of these revenues are general government, public works and public safety.
The Town’s direct charges to users of governmental services made up $1,017,424 or 4 percent of total governmental revenues.
These charges are for fees, fines and forfeitures, and licenses and permits.
Business-type activities. Business-type activities decreased the Town’s net position by $417,638, primarily as the result of
higher expenditures for operations and one-time maintenance costs at the Wastewater Treatment Plant undertaken by new
management of the plant.
The Town’s direct charges to users of business-type services made up $6,170,230 or 95 percent of total business-type revenues.
These charges are for water and sewer services, water and sewer connection fees, landfill tipping fees and solid waste services.
These direct charges for service increased by $237,391 from the previous year, primarily as the result of the CIP increase and
adjustment to the billing cycle for these services. Even though revenues were up, expenditures exceeded revenues in the joint
water and sewer program which contributed to the decrease in the net position. The Town continues looking at the joint water
and sewer program in ways to reduce expenditures, such as refunding of debt service and analysis of direct cost of employees
expensed to the program.
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS
The Town of Taos uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental funds. The focus of the Town of Taos’ governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the Town of Taos’ financing
requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available
for spending at the end of the fiscal year. Types of Governmental funds reported by the Town include the General Fund,
Special Revenue Funds, Debt Service Funds and Capital Projects Funds.
Revenues for governmental functions overall totaled approximately $27,286,068 in the fiscal year ended June 30, 2017, which
represents an increase of $5,296,222 from the fiscal year ended June 30, 2016. This is largely due to the increase in gross
receipts, federal and state capital grants and state operating grants. Expenditures for governmental functions, totaling
$27,107,852 increased by approximately $6,046,161 from the fiscal year ended June 30, 2016. This is largely due to the
increase in expenditures public works and capital outlay due to several infrastructure projects on-going (Airport Runway
Construction) and completed (Salazar Road Extension and Resurfacing of several Roadways). In the fiscal year ended June 30,
2017, revenues for governmental functions exceeded expenditures by approximately $178,216.
The General Fund is the chief operating fund of the Town of Taos. It is from here that the Town pays for the public safety and
other basic services it provides to its citizens. At the end of the current fiscal year, unassigned fund balance of the general fund
was $3,969,926.
Overall, the general fund’s performance resulted in revenues over expenditures in the fiscal year ended June 30, 2017 of
$1,656,731, an increase of $70,589 over the comparable figure from the prior year of $1,586,142. The Town’s overall financial
position improved with continued music venue and community events for tourists and locals alike bringing in additional gross
receipts tax.
Proprietary Funds. The Town’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail.
At the end of the fiscal year, the unrestricted net position for enterprise funds were $2,915,475. The total increase in net
position for the enterprise funds was $287,301 compared to $2,628,174 from the prior year. This was due to a few large
maintenance expenditures and operating costs along with continued funding of our current asset management plan along with 15
Town of Taos
Management’s Discussion and Analysis
June 30, 2017
the other items previously addressed in the discussion of the Town’s business-type activities.
Fiduciary Funds. The Town maintains fiduciary funds for the assets associated with bid bonds, street cuts permits and
recreation deposits. Changes to the fiduciary funds were immaterial for the fiscal year.
General Fund Budgetary Highlights
Town budgets reflect the same pattern as seen in the revenue and expenditures of the Town. The State of New Mexico budget
process is defined under state law and regulation. To enhance the process of developing a budget at the Town level, Taos
utilizes goals and objectives defined by the Town Council, community input meetings, long term plans and input from various
staff groups to develop the Town budget. Town defines its priorities through this process.
GASB Statement No. 34 does not require a statement presenting the overall result of the budget for each year; however, all
major budgetary funds are required to be reported as a separate statement.
The following table examines the summary budget performance of the general fund for the fiscal year ending June 30, 2017.
Detailed budget performance is examined through the Statement of Revenues, Expenditures, and Changes in Fund Balance for
the General fund found at Exhibit C-1. The Town’s final budget differs from the original budget due to amendments that were
made during the fiscal year and the increase of expenditures. Actual general fund expenditures were $585,069 less than
budgeted. This was primarily due to general governmental favorable variance of $296,525. The difference between actual
expenditures and budgeted expenditures is due to various departments not spending there projected costs along with personnel
vacancy savings over the course of the fiscal year.
Budget Amounts
Original Final
Expenditures:
General government 4,812,912$ 4,671,121$ 4,374,596$ 296,525$
Public safety 3,687,884 3,287,668 3,162,166 125,502
Public works 995,971 951,028 822,294 128,734
Culture and recreation 1,502,694 1,522,244 1,490,936 31,308
Capital outlay - 3,000 - 3,000
Total Expenditures 10,999,461$ 10,435,061$ 9,849,992$ 585,069$
Actual (GAAP
Basis)
Favorable
(Unfavorable)
Variance
Capital Asset and Debt Administration
Capital assets. The Town of Taos’ capital assets for its governmental and business-type activities as of June 30, 2017 amount
to $90,967,183 (net of accumulated depreciation). Capital assets include land, land improvements, buildings and
improvements, furniture, fixtures and equipment, and infrastructure. The Town’s capital assets for the current fiscal year
increased $10,468,634 for governmental activities and decreased $135,378 for business-type activities (net of accumulated
depreciation).
The significant additions to capital assets during the year were as follows:
$14,321,859 of additions to governmental infrastructure and equipment/vehicles for completion and/or purchase of the
following –Airport Runway Improvements, Resurfacing of Placitas, Salazar, Albright & Gusdorf Roads, Youth &
Family Center Improvements, Technical Rescue Response Truck for Fire Department and Salazar Road Extension.
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Town of Taos
Management’s Discussion and Analysis
June 30, 2017
Capital Asset and Debt Administration (continued)
Governmental Business-like
Activities Activities Total
Land 6,258,729$ 262,422$ 6,521,151$
Constuction in progress 20,868,627 455,434 21,324,061
Land improvements 7,461,945 104,895 7,566,840
Buildings and improvements 34,834,677 4,656,981 39,491,658
Machinery and Equipment 15,762,340 9,138,459 24,900,799
Infrastructure 57,424,391 37,774,106 95,198,497
Total capital assets 142,610,709 52,392,297 195,003,006
Less: accumulated depreciation (78,632,859) (25,383,762) (104,016,621)
Total property, plant and equipment, net
of accumulated depreciation 63,977,850$ 27,008,535$ 90,986,385$
For government-wide financial statement presentation purposes, all depreciable capital assets were depreciated from acquisition
date to the end of the current fiscal year. Fund financial statements record capital asset purchases as expenditures. See Note 6
in the accompanying Notes to the Financial Statements for further information regarding capital assets.
Debt Administration. At the end of the current fiscal year, the Town of Taos had total long-term obligations outstanding of
$14,025,753. The Town retired a NMFA loan for 20 acre parcel that was acquired in 2007 for recreation purposes during this
fiscal year. In total we decreased our outstanding debt by $1,155,444 from the previous fiscal year. The Town continues to
look at options at either paying off early or refinancing those loans with higher interest rates and low balances to further reduce
our outstanding debt.
Governmental Business-type
Activities Activities Total
Revenue Bonds 4,060,000$ 1,798,600$ 5,858,600$
NMFA amd RUS Loans 2,371,924 3,400,961 5,772,885
USDA Contract Payable - - -
Compensated absences 610,922 85,016 695,938
Landfill Closure Liability - 1,698,330 1,698,330
Total long-term liabilities 7,042,846$ 6,982,907$ 14,025,753$
See Note 7 in the accompanying Notes to the Financial Statements for further information regarding the Town of Taos’ long-
term debt.
The Town knows of no currently known facts, decisions or conditions that are expected to have a significant effect on financial
position or results of operations.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Town of Taos’ finances for all of 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 Taos – Finance Director, Town of Taos, 400 Camino de la Placita,
Taos, New Mexico, 87571, (575) 751-2024.
17
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18
BASIC
FINANCIAL STATEMENTS
19
Governmental
Activities
Business‐type
Activities Total
Assets
Current assets
Cash and cash equivalents 5,135,542$ 3,179,113$ 8,314,655$
Investments 2,918,275 1,658,165 4,576,440
Receivables:
Property taxes 160,442 ‐ 160,442
Other taxes 1,807,472 171,124 1,978,596
Due from other governments 2,214,394 ‐ 2,214,394
Other 753,780 ‐ 753,780
Customer receivables, net ‐ 914,673 914,673
Inventory 82,582 29,029 111,611
Internal balances 32,926 (32,926) ‐
Total current assets 13,105,413 5,919,178 19,024,591
Noncurrent assets
Restricted cash and cash equivalents 22,618 2,710,398 2,733,016
Restricted investments ‐ 374,570 374,570
Capital assets 142,610,709 52,373,095 194,983,804
Less: accumulated depreciation (78,632,859) (25,383,762) (104,016,621)
Total noncurrent assets 64,000,468 30,074,301 94,074,769
Total assets 77,105,881 35,993,479 113,099,360
Deferred outflows of resources
Changes of assumptions 695,556 76,849 772,405
Changes in proportion 49,137 5,428 54,565
Difference between expected and actual
experience 646,734 71,511 718,245
Net difference between projected and actual
investment earnings on pension plan
investments 1,878,524 216,911 2,095,435
Employer contributions subsequent to the
measurement date 562,282 62,610 624,892
Total deferred outflows of resources 3,832,233 433,309 4,265,542
Total assets and deferred outflows of resources 80,938,114$ 36,426,788$ 117,364,902$
STATE OF NEW MEXICO
Primary Government
June 30, 2017
Statement of Net Position
Town of Taos
The accompanying notes are an integral part of these financial statements.20
Exhibit A‐1
Governmental
Activities
Business‐type
Activities Total
Liabilities
Current liabilities
Accounts payable 2,016,332$ 230,444$ 2,246,776$
Accrued payroll 419,257 35,504 454,761
Deposits held in trust for others 5,103 302,211 307,314
Accrued compensated absences 365,539 60,833 426,372
Accrued interest 26,716 55,886 82,602
Current portion of bonds payable 385,000 60,000 445,000
Current portion of loans payable 368,231 338,980 707,211
Total current liabilities 3,586,178 1,083,858 4,670,036
Noncurrent liabilities
Accrued compensated absences 245,383 24,183 269,566
Accrued landfill closure costs ‐ 1,698,330 1,698,330
Bond premiums, net of accumulated
amortization of $36,386 34,456 ‐ 34,456
Bonds payable 3,675,000 1,738,541 5,413,541
Loans payable 2,003,693 3,062,040 5,065,733
Net pension liability 11,635,298 1,263,404 12,898,702
Total noncurrent liabilities 17,593,830 7,786,498 25,380,328
Total liabilities 21,180,008 8,870,356 30,050,364
Deferred inflows of resources
Difference between expected and actual
experience 66,133 7,307 73,440
Changes of assumptions 58,536 6,133 64,669
Changes in proportion 496,721 54,988 551,709
Total deferred inflows of resources 621,390 68,428 689,818
Net position
Net investment in capital assets 57,511,470 21,789,772 79,301,242
Restricted for:
Debt service 347,889 1,832,487 2,180,376
Capital projects 3,467,789 ‐ 3,467,789
Special revenue 1,812,498 ‐ 1,812,498
Landfill ‐ 950,270 950,270
Unrestricted (4,002,930) 2,915,475 (1,087,455)
Total net position 59,136,716 27,488,004 86,624,720
Total liabilities, deferred inflows of resources, and net
position 80,938,114$ 36,426,788$ 117,364,902$
Primary Government
The accompanying notes are an integral part of these financial statements.21
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental Activities:
General government 8,901,257$ 893,710$ 371,751$ ‐$
Public safety 3,985,777 ‐ 343,619 ‐
Public works 986,277 ‐ ‐ 11,085,811
Culture and recreation 2,695,884 123,714 ‐ ‐
Health and welfare 35,626 ‐ ‐ 518,039
Interest on long‐term debt 250,812 ‐ ‐ ‐
Total governmental activities 16,855,633 1,017,424 715,370 11,603,850
Business‐type Activities:
Water and sewer 4,403,498 3,562,312 ‐ ‐
Solid waste 1,544,075 1,262,367 ‐ ‐
Taos regional landfill 997,873 1,345,551 ‐ ‐
Total business‐type activities 6,945,446 6,170,230 ‐ ‐
Total primary government 23,801,079$ 7,187,654$ 715,370$ 11,603,850$
General Revenues:
Taxes:
Property taxes, levied for general purposes
Gross receipts taxes
Gasoline and motor vehicle taxes
Franchise taxes
Lodgers' taxes
Investment income
Miscellaneous income
Total general revenues
Change in net position
Net position ‐ beginning
Net position ‐ ending
STATE OF NEW MEXICO
Town of Taos
Statement of Activities
For the Year Ended June 30, 2017
Program Revenues
The accompanying notes are an integral part of these financial statements.22
Exhibit A‐2
Governmental
Activities
Business‐Type
Activities Total
(7,635,796)$ ‐$ (7,635,796)$
(3,642,158) ‐ (3,642,158)
10,099,534 ‐ 10,099,534
(2,572,170) ‐ (2,572,170)
482,413 ‐ 482,413
(250,812) ‐ (250,812)
(3,518,989) ‐ (3,518,989)
‐ (841,186) (841,186)
‐ (281,708) (281,708)
‐ 347,678 347,678
‐ (775,216) (775,216)
(3,518,989) (775,216) (4,294,205)
1,117,005 ‐ 1,117,005
10,854,707 309,930 11,164,637
317,435 ‐ 317,435
393,238 ‐ 393,238
1,184,053 ‐ 1,184,053
24,857 5,651 30,508
56,384 20,688 77,072
13,947,679 336,269 14,283,948
10,428,690 (438,947) 9,989,743
48,708,026 27,926,951 76,634,977
59,136,716$ 27,488,004$ 86,624,720$
Net (Expense) Revenue and Changes in Net Position
The accompanying notes are an integral part of these financial statements.23
Exhibit B‐1
Page 1 of 2
STATE OF NEW MEXICO
Town of Taos
Balance Sheet
Governmental Funds
June 30, 2017
General Fund
Lodgers' Tax
Special
Revenue Fund
Airport
Construction
Capital
Projects Fund
1999 Gasoline
Tax
Acquisition
Debt Service
Fund
Assets
Cash and cash equivalents 2,546,516$ 257,903$ 240,834$ 339,545$
Investments 1,030,128 ‐ ‐ 100,152
Receivables:
Property taxes 160,442 ‐ ‐ ‐
Other taxes 1,673,062 134,410 ‐ ‐
Due from other governments ‐ ‐ 1,481,302 733,092
Other ‐ ‐ ‐ ‐
Inventory 78,753 3,829 ‐ ‐
Due from other funds 32,927 ‐ ‐ ‐
Total assets 5,521,828$ 396,142$ 1,722,136$ 1,172,789$
Liabilities, deferred inflows of resources,
and fund balances
Liabilities
Accounts payable 118,938$ 31,785$ 1,379,630$ 329,953$
Accrued payroll 402,938 12,991 ‐ ‐
Deposits held in trust for others ‐ ‐ ‐ ‐
Total liabilities 521,876 44,776 1,379,630 329,953
Deferred inflows of resources
Unavailable revenue ‐ property taxes 115,455 ‐ ‐ ‐
Total deferred inflows of resources 115,455 ‐ ‐ ‐
Fund balances
Nonspendable
Inventory 78,753$ 3,829$ ‐$ ‐$
Spendable
Restricted for:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Culture and recreation ‐ 347,537 ‐ ‐
Public works ‐ ‐ ‐ ‐
Fire protection ‐ ‐ ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Debt service expenditures ‐ ‐ ‐ ‐
Capital projects ‐ ‐ 342,506 842,836
Minimum fund balance 835,818 ‐ ‐ ‐
Committed for:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Transportation ‐ ‐ ‐ ‐
Capital projects ‐ ‐ ‐ ‐
Unassigned (deficit)3,969,926 ‐ ‐ ‐
Total fund balances 4,884,497 351,366 342,506 842,836
Total liabilities, deferred inflows of resources,
and fund balances 5,521,828$ 396,142$ 1,722,136$ 1,172,789$
The accompanying notes are an integral part of these financial statements.24
Exhibit B‐1
Page 1 of 2
Other
Governmental
Funds Total
1,773,362$ 5,158,160$
1,787,995 2,918,275
‐ 160,442
‐ 1,807,472
‐ 2,214,394
753,780 753,780
‐ 82,582
‐ 32,927
4,315,137$ 13,128,032$
156,027$ 2,016,333$
3,328 419,257
5,103 5,103
164,458 2,440,693
‐ 115,455
‐ 115,455
‐$ 82,582$
225,008 225,008
56,529 56,529
19,038 366,575
17,525 17,525
450,217 450,217
1 1
377,215 377,215
838,902 2,024,244
‐ 835,818
195,241 195,241
9,828 9,828
517,974 517,974
1,445,524 1,445,524
(2,323) 3,967,603
4,150,679 10,571,884
4,315,137$ 13,128,032$
The accompanying notes are an integral part of these financial statements.25
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26
Exhibit B‐1
Page 2 of 2
STATE OF NEW MEXICO
Town of Taos
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Fund balances ‐ total governmental funds 10,571,884$
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds 63,977,850
Delinquent property taxes not collected within sixty days after year end are
not considered "available" revenues and are considered to be unavailable
revenue in the fund financial statements, but are considered revenue in the
Statement of Activities 115,455
Interest on long‐term debt is not accrued in the fund financial statements
unless it is due and payable:
Accrued interest (26,716)
Deferred outflows of resources related to employer contributions subsequent to
the measurement date 562,282
Deferred outflows of resources related to change of assumptions 695,556
Deferred outflows of resources related to changes in proportion 49,137
Deferred inflows of resrouces related to change of assumptions (58,536)
Deferred inflows of resources related to changes in proportion (496,721)
Deferred outflows or resources related to difference between expected and actual
experience 646,734
Deferred inflows or resources related to difference between expected and actual
experience (66,133)
Deferred inflows of resources related to net difference between projected and
actual investment earnings on pension plan investments 1,878,524
Some liabilities, including bonds payable, loans and net pension payable are not due
and payable in the current period and, therefore, are not reported in the funds:
Accrued compensated absences (610,922)
Bond premiums (34,456)
Bonds payable (4,060,000)
Loans payable (2,371,924)
Net pension liability (11,635,298)
Total net position of governmental activities 59,136,716$
June 30, 2017
Governmental Funds
Reconciliation of the Balance Sheet to the Statement of Net Position
The accompanying notes are an integral part of these financial statements.27
Exhibit B‐2
Page 1 of 2
General Fund Lodgers' Tax
Airport
Construction
1999 Gasoline
Tax
Acquisition
Revenues
Taxes:
Property 1,118,750$ ‐$ ‐$ ‐$
Gross receipts 9,108,452 ‐ ‐ ‐
Gasoline and motor vehicle taxes 220,610 ‐ ‐ ‐
Lodgers' taxes ‐ 1,184,053 ‐ ‐
Franchise taxes 393,238 ‐ ‐ ‐
Intergovernmental income:
Federal operating grants ‐ ‐ ‐ ‐
Federal capital grants ‐ ‐ 9,774,553 ‐
State operating grants 101,560 ‐ ‐ ‐
State capital grants ‐ ‐ 703,299 748,164
Charges for services 231,714 109,737 ‐ ‐
Licenses and fees 478,183 ‐ ‐ ‐
Investment income 11,503 ‐ ‐ 1
Miscellaneous 22,539 4,499 ‐ 10,116
Total revenues 11,686,549 1,298,289 10,477,852 758,281
Expenditures
Current:
General government 4,445,596 ‐ ‐ ‐
Public safety 3,230,993 ‐ ‐ ‐
Public works 859,294 ‐ ‐ ‐
Culture and recreation 1,490,936 864,789 ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Capital outlay 2,999 90,000 10,652,841 2,337,104
Debt service:
Principal ‐ ‐ ‐ ‐
Interest ‐ ‐ ‐ ‐
Total expenditures 10,029,818 954,789 10,652,841 2,337,104
Excess (deficiency) of revenues over
expenditures 1,656,731 343,500 (174,989) (1,578,823)
Other financing sources (uses)
Transfers in ‐ ‐ ‐ 1,640,811
Transfers out (2,076,504) (753,284) ‐ ‐
Total other financing sources (uses)(2,076,504) (753,284) ‐ 1,640,811
Net change in fund balances (419,773) (409,784) (174,989) 61,988
Fund balance ‐ beginning of year 5,270,046 761,150 517,495 815,072
Fund balance ‐ end of year 4,850,273$ 351,366$ 342,506$ 877,060$
STATE OF NEW MEXICO
For the Year Ended June 30, 2017
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
Town of Taos
The accompanying notes are an integral part of these financial statements.28
Exhibit B‐2
Page 1 of 2
Other
Governmental
Funds Total
‐$ 1,118,750$
1,746,255 10,854,707
96,825 317,435
‐ 1,184,053
‐ 393,238
.
69,676 69,676
178,974 9,953,527
544,134 645,694
198,860 1,650,323
60,369 401,820
137,421 615,604
13,353 24,857
19,230 56,384
3,065,097 27,286,068
582,888 5,028,484
223,719 3,454,712
3,780 863,074
190,055 2,545,780
33,354 33,354
1,063,128 14,146,072
785,564 785,564
250,812 250,812
3,133,300 27,107,852
(68,203) 178,216
3,141,495 4,782,306
(1,952,518) (4,782,306)
1,188,977 ‐
1,120,774 178,216
3,029,905 10,393,668
4,150,679$ 10,571,884$
The accompanying notes are an integral part of these financial statements.29
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30
Exhibit B‐2
Page 2 of 2
Amounts reported for governmental activities in the Statement of Activities
are different because:
Net change in fund balances ‐ total governmental funds 178,216$
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 and reported as depreciation expense:
Capital expenditures recorded in capital outlay 14,321,859
Depreciation expense (3,834,017)
Book value of disposed capital assets (19,208)
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenue in the funds:
Decrease in unavailable revenue related to property taxes receivable (1,745)
Governmental funds report Town pension contributions as expenditures. However
in the Statement of Activities, the cost of pension benefits earned net of employee
contributions is reported as pension expense:
Pension expense (1,573,969)
Subsequent contributions 562,720
The issuance of long‐term debt (e.g. bonds, loans, leases) provides current financial
resources to governmental funds, while the repayment of the principal of long‐term
debt consumes the current financial resources of govermental funds. Neither
transaction, however, has any effect on net position. Also, governmental funds
report the effect of premiums, discounts, and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the Statement of Activities:
Decrease in accrued compensated absences 5,406
Amortization of bond premiums 3,864
Principal payments on bonds payable 315,000
Principal payments on loans payable 470,564
Change in net position of governmental activities 10,428,690$
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2017
STATE OF NEW MEXICO
Town of Taos
The accompanying notes are an integral part of these financial statements.31
Exhibit C‐1STATE OF NEW MEXICO
Town of Taos
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
For the Year Ended June 30, 2017
Variances
Favorable
(Unfavorable)
Original Final Actual Final to Actual
Revenues
Taxes:
Property taxes 1,022,044$ 1,022,044$ 1,118,750$ 96,706$
Gross receipts 8,568,739 9,074,789 9,108,452 33,663
Gas and motor vehicle 256,741 256,741 220,610 (36,131)
Other 378,101 378,101 393,238 15,137
Intergovernmental income:
State operating grants 90,000 90,000 101,560 11,560
Charges for services 289,590 289,590 231,714 (57,876)
Licenses and fees 516,976 516,976 478,183 (38,793)
Interest income 5,341 5,341 11,503 6,162
Miscellaneous 33,420 33,420 22,539 (10,881)
Total revenues 11,160,952 11,667,002 11,686,549 19,547
Expenditures
Current:
General government 4,812,912 4,671,121 4,445,596 225,525
Public safety 3,687,884 3,287,668 3,230,993 56,675
Public works 995,971 951,028 859,294 91,734
Culture and recreation 1,502,694 1,522,244 1,490,936 31,308
Capital outlay ‐ 3,000 2,999 1
Total expenditures 10,999,461 10,435,061 10,029,818 405,243
Excess (deficiency) of revenues over
expenditures 161,491 1,231,941 1,656,731 424,790
Other financing sources (uses)
Budgeted (increase) decrease in fund
balance 667,574 844,564 ‐ (844,564)
Transfers in (14,345) 618,689 ‐ (618,689)
Transfers out (814,720) (2,695,194) (2,042,280) 652,914
Total other financing sources (uses)(161,491) (1,231,941) (2,042,280) (810,339)
Net change in fund balance ‐ ‐ (385,549) (385,549)
Fund balance ‐ beginning of year ‐ ‐ 5,270,046 5,270,046
Fund balance ‐ end of year ‐$ ‐$ 4,884,497$ 4,884,497$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.32
Exhibit C‐2STATE OF NEW MEXICO
Town of Taos
Lodgers' Tax Special Revenue Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
For the Year Ended June 30, 2017
Variances
Favorable
(Unfavorable)
Original Final Actual Final to Actual
Revenues
Taxes:
Property taxes ‐$ ‐$ ‐$ ‐$
Gross receipts ‐ ‐ ‐ ‐
Gas and motor vehicle ‐ ‐ ‐ ‐
Lodgers' taxes 988,497 1,186,075 1,184,053 (2,022)
Intergovernmental income:
State operating grants ‐ ‐ ‐ ‐
Charges for services 122,668 122,668 109,737 (12,931)
Licenses and fees ‐ ‐ ‐ ‐
Interest income ‐ ‐ ‐ ‐
Miscellaneous 4,200 4,200 4,499 299
Total revenues 1,115,365 1,312,943 1,298,289 (14,654)
Expenditures
Current:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Public works ‐ ‐ ‐ ‐
Culture and recreation 973,070 976,761 864,789 111,972
Capital outlay 38,445 157,787 90,000 67,787
Total expenditures 1,011,515 1,134,548 954,789 179,759
Excess (deficiency) of revenues over
expenditures 103,850 178,395 343,500 165,105
Other financing sources (uses)
Budgeted (increase) decrease in fund
balance 53,964 574,889 ‐ (574,889)
Transfers in (4,106,777) (4,674,175) 781,258 5,455,433
Transfers out 3,948,963 3,920,891 (1,534,542) (5,455,433)
Total other financing sources (uses)(103,850) (178,395) (753,284) (574,889)
Net change in fund balance ‐ ‐ (409,784) (409,784)
Fund balance ‐ beginning of year ‐ ‐ 761,150 761,150
Fund balance ‐ end of year ‐$ ‐$ 351,366$ 351,366$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.33
Water and
Sewer Solid Waste Total
Assets
Current assets
Cash and cash equivalents 1,936,727$ 392,368$ 850,018$ 3,179,113$
Investments 1,333,665 249,100 75,400 1,658,165
Gross receipts taxes receivable 171,124 ‐ ‐ 171,124
Customer receivables, net 583,516 180,254 150,903 914,673
Inventory 29,029 ‐ ‐ 29,029
Total current assets 4,054,061 821,722 1,076,321 5,952,104
Noncurrent assets
Restricted cash and cash equivalents 1,431,538 ‐ 1,278,860 2,710,398
Restricted investments 294,451 ‐ 80,119 374,570
Capital assets 44,892,621 1,104,796 6,375,678 52,373,095
Less: accumulated depreciation (22,613,768) (649,426) (2,120,568) (25,383,762)
Total noncurrent assets 24,004,842 455,370 5,614,089 30,074,301
Total assets 28,058,903 1,277,092 6,690,410 36,026,405
Deferred outflows of resources
Changes in assumptions 45,063 13,126 18,660 76,849
Changes in proportion 3,183 927 1,318 5,428
Difference between expected and actual
experience 42,382 11,839 17,290 71,511
Net difference between projected and
actual investment earnings on pension
plan investments 123,944 39,778 53,189 216,911
Employer contributions subsequent to the
measurement date 40,552 7,485 14,573 62,610
Total deferred outflows of resources 255,124 73,155 105,030 433,309
Total assets and deferred outflows of resources 28,314,027$ 1,350,247$ 6,795,440$ 36,459,714$
Taos Regional
Landfill
Enterprise Funds
STATE OF NEW MEXICO
Town of Taos
Statement of Net Position
Proprietary Funds
June 30, 2017
The accompanying notes are an integral part of these financial statements.34
Exhibit D‐1
Water and
Sewer Solid Waste Total
Liabilities
Current liabilities
Accounts payable 96,762$ 112,563$ 21,119$ 230,444$
Accrued payroll 19,585 6,036 9,883 35,504
Meter deposits payable 302,211 ‐ ‐ 302,211
Accrued compensated absences 35,952 4,869 20,012 60,833
Interfund payable 16,653 5,878 10,395 32,926
Accrued interest payable 53,006 ‐ 2,880 55,886
Current portion of bonds and loans payable 283,971 ‐ 115,009 398,980
Total current liabilities 808,140 129,346 179,298 1,116,784
Noncurrent liabilities
Accrued compensated absences 13,726 ‐ 10,457 24,183
Accrued landfill closure costs ‐ ‐ 1,698,330 1,698,330
Bonds payable 1,733,600 ‐ ‐ 1,733,600
Loans payable 1,750,455 ‐ 1,316,526 3,066,981
Net pension liability 788,020 176,307 299,077 1,263,404
Total noncurrent liabilities 4,285,801 176,307 3,324,390 7,786,498
Total liabilities 5,093,941 305,653 3,503,688 8,903,282
Deferred inflows of resources
Difference between expected and actual
experience 4,285 1,248 1,774 7,307
Changes in assumptions 4,013 699 1,421 6,133
Changes in proportion 33,090 8,685 13,213 54,988
Total deferred inflows of resources 41,388 10,632 16,408 68,428
Net position
Net investment in capital assets 18,510,827 455,370 2,823,575 21,789,772
Restricted for:
Debt service 1,423,778 ‐ 408,709 1,832,487
Landfill ‐ ‐ 950,270 950,270
Unrestricted 3,244,093 578,592 (907,210) 2,915,475
Total net position 23,178,698 1,033,962 3,275,344 27,488,004
Total liabilities, deferred inflows of resources, and
net position 28,314,027$ 1,350,247$ 6,795,440$ 36,459,714$
Taos Regional
Landfill
Enterprise Funds
The accompanying notes are an integral part of these financial statements.35
Exhibit D‐2
Total
Operating revenues
Charges for services 3,562,312$ 1,262,367$ 1,345,551$ 6,170,230$
Total operating revenues 3,562,312 1,262,367 1,345,551 6,170,230
Operating expenses
Personnel services 705,426 193,716 300,190 1,199,332
Contractual services 1,215,070 893,559 307,751 2,416,380
Supplies 103,225 26,314 18,707 148,246
Repairs and maintenance 50,484 44,239 56,094 150,817
Utilities 378,465 261,583 6,910 646,958
Depreciation 1,609,964 60,972 201,715 1,872,651
Other costs 214,716 63,692 78,698 357,106
Total operating expenses 4,277,350 1,544,075 970,065 6,791,490
Operating income (loss)(715,038) (281,708) 375,486 (621,260)
Non‐operating revenues (expenses)
Gross receipts taxes 309,930 ‐ ‐ 309,930
Interest expense (122,148) ‐ (27,808) (149,956)
Interest income (loss) (823) ‐ 6,474 5,651
Miscellaneous income (expense) 50 16,653 (15) 16,688
Total non‐operating revenues (expenses)187,009 16,653 (21,349) 182,313
Income (loss)(528,029) (265,055) 354,137 (438,947)
Change in net position (528,029) (265,055) 354,137 (438,947)
Net position ‐ beginning 23,706,727 1,299,017 2,921,207 27,926,951
Net position ‐ ending 23,178,698$ 1,033,962$ 3,275,344$ 27,488,004$
Town of Taos
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2017
STATE OF NEW MEXICO
Taos Regional
Landfill
Enterprise Funds
Water and
Sewer Solid Waste
The accompanying notes are an integral part of these financial statements.36
Exhibit D‐3
Total
Cash flows from operating activities
Cash received from user charges 3,567,277$ 1,368,936$ 1,304,727$ 6,240,940$
Cash payments to employees for services (648,070) (172,091) (266,807) (1,086,968)
Cash payments to suppliers for goods and services (1,968,835) (1,214,772) (473,236) (3,656,843)
Net cash provided (used) by operating activities 950,372 (17,927) 564,684 1,497,129
Cash flows from noncapital financing activities
Gross receipts taxes 309,930 ‐ ‐ 309,930
Miscellaneous income (expense)50 16,653 (15) 16,688
Noncurrent accrued compensated absences 5,816 ‐ (2,329) 3,487
Interfund advances (payments) 703 436 4,672 5,811
Net cash provided by noncapital
financing activities 316,499 17,089 2,328 335,916
Cash flows from capital and related financing activities
Interest paid (122,148) ‐ (27,808) (149,956)
Principal payments on long‐term debt (224,766) ‐ (166,273) (391,039)
Transfer from cash to investments (294,451) ‐ (80,119) (374,570)
Acquisition of capital assets (1,736,274) ‐ (999) (1,737,273)
Net cash (used) provided by capital and
related financing activities (2,377,639) ‐ (275,199) (2,652,838)
Cash flows from investing activities
Purchases of investments (12,755) ‐ ‐ (12,755)
Gain (loss) on investments (823) ‐ 6,474 5,651
Net cash provided by investing activities (13,578) ‐ 6,474 (7,104)
Net (decrease) increase in cash and cash equivalents (1,124,346) (838) 298,287 (826,897)
Cash and cash equivalents ‐ beginning of year 4,492,611 393,206 1,830,591 6,716,408
Cash and cash equivalents ‐ end of year 3,368,265$ 392,368$ 2,128,878$ 5,889,511$
Reconciliation of operating income (loss) to
net cash provided by operating activities:
Operating income (loss) (715,038)$ (281,708)$ 375,486$ (621,260)$
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation 1,609,964 60,972 201,715 1,872,651
Noncash pension expense 65,242 19,002 27,016 111,260
Changes in assets, deferred outflows,
and liabilities:
Receivables 4,965 106,489 (40,824) 70,630
Inventory 7,273 ‐ 7,273
Employer contributions subsequent to the
measurement date 274 80 114 468
Accounts payable (22,736) 74,615 (26,385) 25,494
Accrued payroll expenses (3,253) 1,453 747 (1,053)
Current accrued compensated absences (4,907) 1,170 5,506 1,769
Meter deposits 8,588 ‐ ‐ 8,588
Net cash provided (used) by operating activities 950,372$ (17,927)$ 564,684$ 1,497,129$
STATE OF NEW MEXICO
Town of Taos
Proprietary Funds
Water and Sewer Solid Waste
Statement of Cash Flows
For the Year Ended June 30, 2017
Enterprise Funds
Regional
Landfill
The accompanying notes are an integral part of these financial statements.37
(This page intentionally left blank.)
38
Exhibit E‐1
Assets
Cash 13,884$
Investments 60,000
Total assets 73,884$
Liabilities
Due to other entities 73,884
Total liabilities 73,884$
Statement of Fiduciary Assets and Liabilities ‐ Agency Funds
Town of Taos
STATE OF NEW MEXICO
For the Year Ended June 30, 2017
The accompanying notes are an integral part of these financial statements.39
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies
The Town of Taos (the Town) was incorporated in 1934. The Town operates under a Council‐Mayor form of
government and provides the following services as authorized by its charter: public safety (police and fire),
highways and streets, public utilities (water and sewer, solid waste, and landfill), health and social services,
culture‐recreation, education, public improvements, planning and zoning, and general administrative
services.
The Town of Taos is a body politic and corporate under the name and form of government selected by its
qualified electors. The Town may:
1. Sue or be sued;
2. Enter into contracts and leases;
3. Acquire and hold property, both real and personal;
4. Have common seal, which may be altered at pleasure;
5. Exercise such other privileges that are incident to corporations of like character or degree that are
not inconsistent with the laws of New Mexico;
6. Protect generally the property of its municipality and its inhabitants;
7. Preserve peace and order within the municipality; and
8. Establish rates for services provided by municipal utilities and revenue‐producing projects,
including amounts which the governing body determines to be reasonable in the operation of
similar facilities.
This summary of significant accounting policies of the Town is presented to assist in the understanding of
Town’s financial statements. The financial statements and notes are the representation of Town’s
management who is responsible for their integrity and objectivity. The financial statements of the Town
have been prepared in conformity with accounting principles generally accepted in the United States of
America (GAAP) as applied to government units.
During the year ended June 30, 2017, the Town adopted GASB Statements No. 73, Accounting and Financial
Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement 68, and
Amendments to Certain Provisions of GASB Statements 67 and 68 (partial), No. 74, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans, No. 77, Tax Abatement Disclosures, No. 78 Pensions
Provided through Certain Multiple‐Employer Defined Benefit Pension Plans, and No. 80, Blending Requirements
for Certain Component Units – an amendment of GASB Statement No. 14 and No. 82, Pension Issues‐an
amendment of GASB Statements No. 67, NO. 68, and No. 73.. These six Statements are required to be
implemented as of June 30, 2017, if applicable.
GASB Statement No. 73 establishes accounting and financial reporting standards for defined benefit
pensions and defined contribution pensions that are not provided to employees of state and local
government employers and are not within the scope of Statement 68. A portion of this pronouncement was
effective and was implemented for the June 30, 2016 year end, and a portion is effective for June 30, 2017
year end. Effective for June 30, 2017 are the provisions of the statement that address accounting and
financial reporting by employers and governmental nonemployer contributing entities for pensions that are
not within the scope of Statement 68. This does not have a material effect on the financial statements of the
Town, as its pension plan is within the scope of Statement 68.
The objective of GASB Statement No. 74 is to improve the usefulness of information about postemployment
benefits other than pensions (other postemployment benefits or OPEB) included in the general purpose
external financial reports of state and local governmental OPEB plans for making decisions and assessing
accountability. This Statement results from a comprehensive review of the effectiveness of existing
standards of accounting and financial reporting for all postemp loyment benefits (pensions and OPEB) with
regard to providing decision‐useful information, supporting assessments of accountability and interperiod
equity, and creating additional transparency. This Statement doe s n ot affect the Town’s financial statements
directly; however, the effects on the Town’s OPEB plan, administered through the New Mexico Retiree
40
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
Health Care Authority, will be seen in future periods.
GASB Statement No. 77 is intended to improve the usefulness of financial statements prepared by state and
local governments – which are intended, among other things, to assist users of financial statements in
assessing (1) whether a governmen t’s current‐year revenues were sufficient to pay for current‐year services
(interperiod equity), (2) whether a government complied with finance‐related legal and contractual
obligations, (3) where a government’s financial resources came from and how it uses them, and (4) a
government’s financial position and economic condition and how they have changed after time – by
including information about certain limitations on a government’s ability to raise resources. This includes
limitations on revenue‐raising capacity resulting from government programs that use tax abatements to
induce behavior by individuals and entities that is beneficial to the government or its citizens – such as the
encouragement of economic development. For financial reporting purposes, this Statement defines a tax
abatement as resulting from an agreement between a government and an individual or entity in which the
government promises to forgo tax revenues and the individual or entity promises to subsequently take a
specific action that contributes to economic development or otherwise benefits the government or its
citizens.
These tax abatements may affect the financial position of the government and its results of operations,
including its ability to raise resources in the future. Statement No. 77 requires disclosure of tax abatement
information about (1) a reporting government’s own tax abatement agreements and (2) those that are
entered into by other governments that reduce the reporting government’s tax revenues.
This Statement requires governments that enter into tax abatement agreements to disclose the following
information about the agreements:
Brief descriptive information, such as the tax being abated, the authority under which tax
abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions
for recapturing abated taxes, and the types of commitments made by tax abatement recipients;
The gross dollar amount of taxes abated during the period;
Commitments made by a government, other than to abate taxes, as part of a tax abatement
agreement.
For tax abatement agreements entered into by other governments, the following should be disclosed:
The names of the governments that entered into the agreements;
The specific taxes being abated; and
The gross dollar amount of taxes abated during the period.
The Town was not affected by any tax abatements. Implementation of this standard is June 30, 2017.
The objective of GASB Statement No. 78 is to address a practice issue regarding the scope and applicability
of Statement No. 68, Accounting and Financial Reporting for Pensions. This issue is associated with pensions
provided through certain multiple‐employer defined benefit pension plans and to state or local
governmental employers whose employees are provided with such pensions. This Statement amends the
scope and applicability of Statement 68 to exclude certain pensions provided to employees of state or local
governmental employers. The Town’s pension plan does not meet the criteria for exclusion.
41
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
The objective of GASB Statement No. 80 is to improve financial reporting by clarifying the financial
statement presentation requirements for certain component units. This Statement amends the blending
requirements established in paragraph 53 of Statement No. 14, The Financial Reporting Entity, as amended.
This Statement amends the blending requirements for the financial statement presentation of component
units of all state and local governments. The additional criterion requires blending of a component unit
incorporated as a not‐for‐profit corporation in which the primary government is the sole corporate member.
The additional criterion does not apply to component units included in the financial reporting entity
pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations Are Component
Units.
GASB Statement No. 82 clarified and adjusted several items from GASB Statement Nos. 67 and 68, including
the definition of covered payroll, the presentation of payroll‐related measures in required supplementary
information, the selection of assumptions and the treatment of deviations from the guidance in an Actuarial
Standard of Practice for financial reporting purposes, and the classification of payments made by employers
to satisfy employee contribution requirements.
A. Financial Reporting Entity
The financial reporting entity consists of (a) the primary government, (b) organizations for which
the primary government is financially accountable and (c) other organizations for which the nature
and significance of their relationship with the primary government are such that exclusion would
cause the reporting entity’s financial statements to be misleading or incomplete.
In evaluating how to define the Town, for financial reporting purposes, management has
considered all potential component units. The decision to include any potential component units in
the financial reporting entity was made by applying the criteria set forth in GASB Statement No. 14,
as amended by GASB Statement No. 39, GASB Statement No. 61 and GASB Statement No. 80.
Blended component units, although legally separate entities, are in substance part of the
government’s operations. Each discretely presented component unit is reported in a separate
column in the government‐wide financial statements to emphasize that it is legally separate from
the government.
The basic‐but not the only‐criterion for including a potential component unit within the reporting
entity is the governing body’s ability to exercise oversight responsibility. The most significant
manifestation of this ability is financial interdependency. Other manifestations of the ability to
exercise oversight responsibility include, but are not limited to, the selection of governing
authority, the designation of management, the ability to significantly influence operations, and
accountability for fiscal matters.
A second criterion used in evaluating potential component units is the scope of public service.
Application of this criterion involves considering whether the activity benefits the government
and/or its citizens.
A third criterion used to evaluate potential component units for inclusion or exclusion from the
reporting entity is the existence of special financing relationships, regardless of whether the
government is able to exercise oversight responsibilities. Finally, the nature and significance of a
potential component unit to the primary government could warrant its inclusion within the
reporting entity.
Based upon the application of these criteria, the Town has no component units, and is not a
component unit of another governmental agency.
42
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
B. Government‐wide and fund financial statements
The government‐wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the primary government. For
the most part, the effect of interfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental revenues,
are reported separately from business‐type activities, which rely to a significant extent on fees and
charges for support.
The Statement of Net Position and the Statement of Activities were prepared using the economic
resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains,
losses, assets and liabilities resulting from exchange‐like transactions are recognized when the
exchange takes place. Revenues, expenses, gains, losses, assets and liabilities resulting from non‐
exchange transactions are recognized in accordance with the requirements of GASB Statement No.
33, Accounting and Financial Reporting for Non‐exchange Transactions.
In the government‐wide Statement of Net Position, both the governmental and business‐type
activities columns (a) are presented on a consolidated basis by column, (b) and 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 is reported in three parts – net
investment in capital assets; restricted net position; and unrestricted net position.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segments are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to customers
or applicants who purchase, use, or directly benefit from goods , services, or privileges provided by
a given function or segment and 2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function or segment. Taxes and other items not
properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental fun ds, proprietary funds and fiduciary
funds, even though the latter are excluded from the government‐wide financial statements. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.
The government‐wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes, net of estimated refunds,
are recognized as revenues in the year for which they are levied. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been
met.
C. Measurement focus, basis of accounting, and financial statement presentation
Governmental fund financial statements are reported using the current financial resources
measurement focus a n d the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current
period. For this purpose, the government considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a
liability is incurred, as under accrual accounting.
43
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
However, debt service expenditures, as well as expenditures related to compensated absences and
claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current
fiscal period, subject to the availability criterion. Sales and use taxes are classified as derived tax
revenues and are recognized as revenue when the underlying exchange takes place and the
revenues are measurable and available. Grants and similar items are recognized as revenue as
soon as all eligibility requirements imposed by the provider have been met, subject to the
availability criterion. Only the portion of special assessments receivable due within the current
fiscal period is considered to be susceptible to accrual as revenue of the current period. All other
revenue items are considered to be measurable and available only when cash is received by the
government.
The Town reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another
fund. This fund includes state shared gross receipts tax income fund and state shared gas
tax income funds.
The Lodgers’ Tax Special Revenue Fund is to account for the operations of tourist facilities
or for half of advertising, promoting and publicizing such facilities and tourist attractions.
Financing is provided by one and a half percent of a five percent tax on lodging gross
receipts within the Town of Taos. State Statute Section 4‐6‐41 provides for this tax to be
imposed by the Town. Revenues received are pursuant to the Lodgers Tax Act (Section 3‐
38‐15, NMSA 1978). Monies in the Lodgers Tax Fund may be used to build, operate, and
maintain tourism related facilities.
The Airport Construction Capital Projects Fund was created to receive proceeds from
federal and state grants for the purpose of financing improvements to the Taos Municipal
Airport. Authority is Town Council resolution.
The 1999 Gasoline Tax Acquisition Debt Service fund was created to receive bond proceeds
and to account for the capital outlay associated with the bond issue. Authority is the Town
Council resolution.
The Town reports its proprietary funds as major funds. Proprietary funds include:
The Water and Sewer Fund is used to account for the activities of the Town’s water and
sewer operations.
The Solid Waste Fund accounts for the provision of solid waste services to the resi dents of
the Town and some residents of Taos County. All activities necessary to provide such
services are accounted for in this fund, including, but not limited to administration,
operations, maintenance, financing and related debt service, and billing and collection.
The Taos Regional Landfill Fund is used to account for the activities of the Taos Regional
Landfill including debt repayments, closure and post‐closure care estimates as well as
operations and administration.
44
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
Additionally, the Town reports the following fund type:
The Fiduciary Fund is purely custodial (assets equal liabilities) and does not involve the
measurement of results of operations. This fund accounts for assets held by the Town as a
trustee for the judicial system bonds and recreational events.
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‐in‐lieu of taxes and other
charges between the government’s enterprise funds and various other functions of the government.
Elimination of these charges would distort the direct costs an d program revenues reported in the
Statement of Activities. The General Fund, Lodgers Tax Fund, W ater and Sewer Fund and the Taos
Regional Landfill fund are combined with funds that have identi cal activities for financial statement
reporting.
Program revenues included in the Statement of Activities are derived directly from the program
itself or from parties outside the Town’s taxpayers or citizenry, as a whole; program revenues
reduce the cost of the function to be financed from the Town’s general revenues. Program revenues
are categorized as (a) charges for services, which include revenues collected for fees and use of
Town facilities, etc., (b) program‐specific operating grants, which includes revenues received from
state and federal sources such as small cities assistance to be used as specified within each program
grant agreement, and (c) program‐specific capital grants and contributions, which include revenues
from state sources to be used for capital projects. Internally dedicated resources are reported as
general revenues rather than as program revenues. Likewise, general revenues include all taxes.
The Town reports all direct expenses by function in the Statement of Activities. Direct expenses are
those that are clearly identifiable with a function. The Town does not currently employ indirect
cost allocation systems. Depreciation expense is specifically identified by function and is included
in the direct expense of each function. Interest on general lo ng‐term debt is considered an indirect
expense and is reported separately on the Statement of Activities.
Proprietary funds distinguish operating revenues and expenses from non‐operating items.
Operating revenues and expenses generally result from providing services in connection with the
fund’s principal ongoing operations. The principal operating revenue of the Town’s enterprise fund
is charges for services for the Town’s utilities. Operating ex penses for enterprise funds include the
cost of services, administrative expenses and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non‐operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to use
restricted resources first, then unrestricted resources as they are needed.
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or
Equity
Deposits and Investments: The Town’s cash and cash equivalents are considered to be cash on
hand, demand deposits and short‐term investments with original maturities of three months or less
from the date of acquisition. For purposes of the Statement of Cash Flows, cash and cash
equivalents represent cash and cash equivalents, restricted cash and cash equivalents and
restricted investments (cash held by New Mexico Finance Authority.)
State statutes authorize the Town to invest in Certificates of Deposit, obligations of the U.S.
Government, and the State Treasurer’s Investment Pool.
45
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or
Equity (continued)
Investments for the Town are reported at fair value. The State Treasurer’s Pool operates in
accordance with appropriate state laws and regulations. The reported value of the pool is the same
as the fair value of the pool shares.
Receivables and Payables: Interfund activity is reported as loans, services provided,
reimbursements or transfers. Loans are reported as interfund receivables and payables as
appropriate and are subject to elimination upon consolidation. Services provided, deemed to be at
market or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and
reduces its related cost as a reimbursement. All other interfund transactions are treated as
transfers. Transfers between governmental or between proprieta ry funds are netted as part of the
reconciliation to the government‐wide financial statements.
Advances between funds, as reported in the fund financial statements, are offset by a fund balance
reserve account in applicable governmental funds to indicate that they are not available for
appropriation and are not expendable available financial resources in the event they are not
received within 60 days of year end.
All receivables are reported at their gross value and, where appropriate, are reduced by the
estimated portion that is expected to be uncollectible. The Town estimates the allowance for
uncollectible accounts based off the days delinquent. The Town has estimated all accounts that are
greater than 120 days to be uncollectible. In the government‐wide and governmental fund
financial statements, delinquent property taxes are recorded when levied. Property taxes are
considered to be 100% collectible.
Property taxes are levied on November 1 based on the assessed v alue of property as listed on the
previous January 1 and are due in two payments by November 10th and April 10th. Property taxes
uncollected after November 10th and April 10 th are considered delinquent and the Town may assess
penalties and interest. The taxes attach as an enforceable lien on property thirty (30) days
thereafter, at which time they become delinquent. Property taxes are collected by Taos County and
remitted monthly to the Town.
Inventory: The Town’s method of accounting for inventory is the consumption method. Under the
consumption approach, governments report inventories they purchase as an asset and defer
recognition of the expenditures until the period in which the inventories actually are consumed.
The cost of inventory is recorded as expenditures at the time individual inventory items are
consumed.
Restricted Assets: Restricted assets consist of those funds expendable for operati ng purposes but
restricted by donors or other outside agencies as to the specific purpose for which they may be
used and restricted for future debt service payments, capital p rojects, meter deposits payable, and
the Town’s landfill liability.
Capital Assets: Capital assets, which include property, plant, equipment, an d infrastructure assets
(e.g., roads, bridges, sidewalks, and similar items), are repor ted in the applicable governmental or
business‐type activities columns in the government‐wide financial statements. Capital assets are
defined by the government as assets with an initial, individual cost of more than $5,000 (amount
not rounded) and an estimated useful life in excess of one year. Such assets are recorded at
46
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or
Equity (continued)
historical cost or estimated historical cost if purchased or constructed. Pursuant to the
implementation of GASB Statement No. 34, the historical costs of infrastructure assets (retroactive
to 1979) are included as part of the governmental capital assets reported in the government wide
statements. Information Technology Equipment including software is being capitalized and
included in machinery and equipment in accordance with NMAC 2.20.1.9 C (5). Donated capital
assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized. Library books and periodicals are estimated to have a useful
life of less than one year or are under the capitalization threshold and are expensed when
purchased.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business‐type activities is
included as part of the capitalized value of the assets constructed. There was no interest expense
capitalized by the Town during the current fiscal. No interest was included as part of the cost of
capital assets under construction.
Property, plant, and equipment of the primary government are depreciated using the straight line
method over the following estimated useful lives:
Assets Years
Land improvements 20
Buildings and improvements 10‐50
Machinery and equipment 5‐25
Infrastructure 10‐50
Accrued Expenses: Accrued expenses are comprised of the payroll expenditures based on
amounts earned by the employees through June 30, 2017, along with applicable PERA, Retiree
Health Care, FICA and Medicare accruals.
Deposits Held in Trust For Others: Deposits held in trust for others consists of security deposits
for the Civic Center as of June 30, 2017.
Deferred Outflows of Resources: In addition to assets, the balance sheet reports a separate
section for deferred outflows of resources. This separate financial statement element represents a
use of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expenditure) until that time. The Town has five types of items that qualify for reporting
in this category in the governmental and business‐type activities. Accordingly, the items, changes
of assumptions of $772,405, changes in proportion of $54,565, difference between expected and
actual experience of $718,245, net difference between projected and actual investment earnings of
$2,095,435, and employer contributions subsequent to the measurement date of $624,892, have
been reported as a deferred outflow of resources These amounts are reported in the Statement of
Net Position. These amounts will directly reduce the net pension liability in future periods.
Deferred Inflows of Resources: In addition to liabilities, the balance sheet reports a separate
section for deferred inflows of resources. This separate financial statement element 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. Revenue must be susceptible to accrual (measurable
47
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or
Equity (continued)
and available to finance expenditures of the current fiscal period) to be recognized. If assets are
recognized in connection with a transaction, but those assets are not yet available to finance
expenditures of the current fiscal period, then the assets must be offset by a corresponding liability
for deferred inflows of resources. The Town has one type of def erred inflow which arises under the
modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the
tem, unavailable revenue ‐ prope rty taxes is reported only in the governmental funds balance sheet.
This amount is deferred and recognized as an inflow of resource in the period that the amount
becomes available. The Town has recorded $115,455 related to property taxes considered
“unavailable”. In addition, the Town has three types of items present on the Statement of Net
Position for both the governmental and business‐type activities, which arise due to the
implementation of GASB 68 and the related net pension liability. Accordingly, the items, difference
between expected and actual experience of $73,440, change of assumptions of $64,669, and
changes in proportion of $551,709, are reported on the Statement of Net Position. These amounts
are reported as a deferred inflows and amortized into pension expense in future periods.
Pensions: For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the
fiduciary net position of the Public Employees Retirement Association (P.E.R.A) and additions
to/deductions from P.E.R.A’s fiduciary net position have been determined on the same basis as they
are reported by P.E.R.A, on the economic resources measurement focus and accrual basis of
accounting. For this purpose, benefit payments (including refunds of employee contributions) are
recognized when due and payable in accordance with the benefit terms. Investments are reported
at fair value.
Compensated Absences: The Town’s employees earn personal leave at a rate of 22 to 27 days per
year based on years of service. Employees can carry over unused personal leave each year with a
cap of 500 hours.
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 governmental or
proprietary fund that will pay it. In prior years, substantially all of the related expenditures have
been liquidated by the general fund. Amounts of vested or accu mulated vacation leave that are not
expected to be liquidated with expendable available financial resources are reported in the
government‐wide statement of net position.
Long‐term Obligations: In the government‐wide financial statements, and proprietary fund types
in the fund financial statements, long‐term debt and other long‐term obligations are reported as
liabilities in the applicable governmental activities, business‐type activities, or proprietary fund
type statement of net position. Bond premiums and discounts, are deferred and amortized over the
life of the bonds using the effective interest method or the straight‐line method if the difference is
minimal. Bonds payable are reported net of the applicable bond premium or discount. For fund
financial reporting, bond premiums and discounts, as well as is suance costs, are recognized in the
period the bonds are issued. Bond proceeds are reported as another financing source net of the
applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds
received, are reported as debt service expenditures.
48
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or
Equity (continued)
Fund Balance Classification Policies and Procedures: In the governmental fund financial
statements, fund balance is reported in five classifications:
Nonspendable – This classification includes amounts that cannot be spent be cause they are either
(a) not in spendable form, for example, inventories, prepaid amounts, long term amount of loans
and note receivable; or (b) legally or contractually required to be maintained intact, for example,
debt service reserves. The Town has $82,582 of nonspendable fund balance at June 30, 2017.
Restricted – This classification includes amounts that are restricted to a specific purpose. Fund
balances are restricted when constraints placed on the use of resources are either: (a) externally
imposed by creditors (such as debt covenants) grantors, contributors, or laws or regulations of
other governments; (b) enabling legislation, as the term is used authorizes the Town to assess, levy,
charge, or otherwise mandate payment of resources and includes a legally enforceable requirement
that those resources be used only for the specific purposes stipulated in the legislation. The Town
has $4,353,132 in restricted fund balances at June 30, 2017.
Committed – This classification includes amounts that can only be used for specific purposes to
constraints imposed by formal action of the highest level of Authority, the Town Council. Those
committed amounts cannot be used for any other purpose unless the Council removes or changes
the specific use by taking the same type of action (for example, resolution or ordinance) it
employed to previously commit those amounts. The Town has $2,168,567 in committed funds at
June 30, 2017 for Town funded capital projects. The Town does not designate fund balances at year
end for subsequent year expenditures.
Assigned – This classification includes amounts that are constrained by the Town’s intent to be
used for specific purposes, but are neither restricted nor committed and should be reported as
assigned fund balance. The Board of Town Commissioners has delegated the authority to assign
amounts to be used for specific purposes to the Town Manager and the Director of Finance. The
Town had no assigned fund balances at June 30, 2017.
Unassigned – This classification is the residual classification for the general fund. This
classification represents fund balance that has not been assigned to other funds and that has not
been restricted, committed, or assigned to specific purposes within the general fund. The general
fund should be the only fund that reports a positive unassigned fund balance amount. The Town
has $4,295,017 in unassigned fund balances at June 30, 2017.
Minimum Fund Balance Policy: The Town’s policy for maintaining a minimum amount of fund
balance for operations is to minimize any sudden and unplanned discontinuity to programs and
operations and for unforeseen contingencies. At a minimum, the budget shall ensure that the Town
holds cash reserves of 1/12th the General Fund expenditures. The amount at June 30, 2017 for the
Town is $835,818.
Net Position: Equity is classified as net position and displayed in three components:
a. Net investment in capital assets: Consists of capital assets, net of accumulated
depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or
other borrowings that are attributable to the acquisition, construction, or improvement of
those assets.
49
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or
Equity (continued)
b. Restricted net position: Consist of net position with constraints placed on the use either
by (1) external groups such as creditors, grantors, contributors, or laws or regulation of
other governments; or (2) law through constitutional provisions or enabling legislation.
Descriptions for the related restrictions for net position restricted for “special revenue,
debt service and capital projects” are described on pages 44 and 88‐89.
c. Unrestricted net position: Net position that does not meet the definition of “restricted” or
“Net investment in capital assets.”
Interfund Transactions: Quasi‐external transactions are accounted for as revenues, expenditures
or expenses. Transactions that constitute reimbursements to a fund from expenditures/expenses
initially made from it that are properly applicable to another fund, are recorded as
expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the
fund that is reimbursed.
All other interfund transactions, except quasi‐external transactions and reimbursements, are
reported as transfers. Nonrecurring or non‐routine permanent transfers of equity are reported as
residual equity transfers. All other interfund transfers are reported as operating transfers.
Estimates: The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates. Significant estimates in the Town’s financial statements include the
allowance for uncollectible accounts in the joint utility fund, depreciation on capital assets, the net
pension liability and related deferred outflows and inflows of resources, and the estimate for
landfill closure and postclosure costs.
NOTE 2. Stewardship, Compliance and Accountability
Budgetary Information
Annual budgets of the Town are prepared prior to June 1 and mus t be approved by resolution of the Town
Councilors, and submitted to the Department of Finance and Administration for State approval. Once the
budget has been formally approved, any amendments must also be approved by the Town Council Members
and the Department of Finance and Administration. A separate budget is prepared for each fund. Line items
within each budget may be over‐expended; however, it is not legally permissible to over‐expend any budget
in total by fund.
Governmental fund budgets are prepared on the GAAP basis, excluding encumbrances, and secure
appropriation of funds for only one year. Carryover funds must be re‐appropriated in the budget of the
subsequent fiscal year.
Proprietary fund budgets are prepared on the GAAP basis, excluding encumbrances, and secure
appropriation of funds for only one year. Carryover funds must be re‐appropriated in the budget of the
subsequent fiscal year. The Town does not budget for depreciation expense, only capital outlay.
The budgetary information presented in these financial statements has been properly amended by Town
Council in accordance with the above procedures. These amendments resulted in the following changes:
50
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 2. Stewardship, Compliance and Accountability (continued)
Budgetary Information (continued)
Original Final
Budget Budget
Budgeted Funds:
General Fund 161,491$ 1,231,941$
Lodgers' Tax 103,850$ 178,395$
Airport Construction (602,386)$ (560,079)$
1999 Tax Acquisition (2,562,662)$ (3,474,251)$
Nonmajor Governmental Funds (4,675,729)$ (7,648,155)$
Budgeted Funds:
Water and Sewer (1,316,337)$ (1,877,111)$
Solid Waste (142,581)$ (140,069)$
Taos Regional Landfill 214,305$ 269,375$
Change in net position
The accompanying Statements of Revenues, Expenditures and Changes in Fund Balance – Budget (GAAP
Basis) and Actual and Statements of Revenues, Expenses and Chan ges in Net Position‐ Budget (GAAP Basis)
and Actual present comparisons of the legally adopted budget with actual data on a budgetary basis.
NOTE 3. Deposits and Investments
State statutes authorize the investment of Town funds in a wide variety of instruments including certificates
of deposit and other similar obligations, state investment pool, money market accounts, and United States
Government obligations. The Town is not aware of any invested funds that did not meet the State
investment requirements as of June 30, 2017.
Deposits of funds may be made in interest or non‐interest bearing checking accounts in one or more banks
or savings and loan associations within the geographical boundaries of the Town. Deposits may be made to
the extent that they are insured by an agency of the United States or collateralized as required by statute.
The financial institution must provide pledged collateral for 50% of the deposit amount in excess of the
deposit insurance.
The rate of interest in non‐demand interest‐bearing accounts shall be set by the State Board of Finance, but
in no case shall the rate of interest be less than one hundred percent of the asked price on United States
treasury bills of the same maturity on the day of deposit.
Excess funds may be temporarily invested in securities which are issued by the State or by the United States
government, or by their departments or agencies, and which are either direct obligations of the State or the
United States or are backed by the full faith and credit of those governments.
All of the Town’s accounts at located an insured depository institution, including all noninterest‐bearing
transaction accounts, which will be insured by the FDIC up to the standard maximum deposit insurance
amount of $250,000.
51
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 3. Deposits and Investments (continued)
Custodial Credit Risk – Deposits Custodial credit risk is the risk that in the event of a bank f ailure, the Town’s
deposits may not be returned to it. The Town does not have a d eposit policy for custodial credit risk, other
than following state statutes as set forth in the Public Money Act (Section 6‐10‐1 to 6‐10‐63, NMSA 1978).
At June 30, 2017, $8,744,217 of the Town’s deposits of $11,504,469 was exposed to custodial credit risk.
$10,754,469 was uninsured and collateralized by collateral held by the pledging bank’s trust department,
not in the Town’s name, and $0 was uninsured and uncollateralized.
Amount of deposits 5,721,166$ 5,783,303$ 11,504,469$
FDIC Coverage (500,000) (250,000) (750,000)
Total uninsured public funds 5,221,166 5,533,303 10,754,469
Collateralized by securities held by
pledging institutions or by its trust
department or agent in other than
the Town's name 5,221,166 3,523,051 8,744,217
Uninsured and uncollateralized ‐$ 2,010,252$ 2,010,252$
Collateral requirement
(50% of uninsured funds)2,610,583$ 2,766,652$ 5,377,235$
Pledged Collateral 10,000,000 3,523,051 13,523,051
Over (Under) collateralized 7,389,416$ 756,400$ 8,145,816$
TotalCentinel BankUS Bank
The collateral pledged is listed on Schedule IV in this report. The types of collateral allowed are limited to
direct obligations of the United States Government and all bonds issued by any agency, Town or political
subdivision of the State of New Mexico.
52
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 3. Deposits and Investments (continued)
Reconciliation to the Statement of Net Position:
Cash and cash equivalents per Exhibit A‐1 8,314,655$
Restricted cash and cash equivalents per Exhibit A‐1 2,733,016
Agency funds cash per Exhibit E‐1 13,884
Subtotal 11,061,555$
Plus: outstanding checks 806,756
Less: deposits in transit (486,514)
Less: U.S. Treasury Money Market Mutual Funds 170,500
Less: New Mexico State Treasurer Debt Service (45,978)
Less: petty cash (1,850)
Bank balance of deposits 11,504,469$
Investments
The Town invests excess cash in the State Treasurer Local Government Investment Pool. The New Mexico
Local Government Investment Pool’s (LGIP) investments are valued at fair value based on quoted market
prices as of the valuation date. The LGIP is not SEC registered. The New Mexico State Treasurer is
authorized to invest the short‐term investment funds, with the advice and consent of the State Board of
Finance, in accordance with Sections 6‐10‐10(I) through 6‐10‐10(P) and Sections 6‐10‐10.1(A) and (E),
NMSA 1978. The pool does not have unit shares. Per Section 6‐10‐10. (F), NMSA 1978, at the end of each
month all interest earned is distributed by the State Treasurer to the contributing entities in amounts
directly proportionate to the respective amounts deposited in the fund and the length of time the fund
amounts were invested. Participation in the LGIP is voluntary.
As of June 30, 2017, the Town’s investment in the New Mexico LGIP was rated as AAAm by Standard &
Poor’s.
Additionally, the Town has investments held in U.S. Treasury Money Market Mutual Funds at the Bank of
Albuquerque in connection with New Mexico Finance Authority (NMFA) loans. Also, the Town has
investments which are managed by NMFA, on deposit with the Stat e Treasurer’s office, in NMFA’s name for
the benefit of the Town.
The Town’s investments at June 30, 2017 include the following:
Investments Rated
New Mexico Local Government Investment
Pool AAAm
WAM (R) 58 day and WAM
(F)106 day 4,268,250$
U.S. Treasury Money Market Mutual Funds Aaa **>365 Days 374,570
$ 4,642,820
Weighted Average Maturity Fair Value
** Based Moody’s rating
53
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 3. Deposits and Investments (continued)
At June 30, 2017 the Town had $170,500 of certificates of deposit classified as governmental activities
investments at Exhibit A‐1 and $60,000 of certificates of deposit in Agency funds at Exhibit E‐1. The Town
has funds which are managed by NMFA which are considered restricted cash and cash equivalents and
restricted investments. Of the $4,576,440 noted above $374,570 is considered restricted investments as
these are invested by NMFA in US Treasury notes and $2,733,016 is considered a cash and cash equivalent
per Exhibit A‐1.
For purposes of cash flows at Exhibit D‐3 ending cash is considered to be cash and cash equivalents,
restricted cash and cash equivalents, and restricted investments.
Interest Rate Risk – Investments. The Town does not have a formal policy limiting investment maturities that
would help manage its exposure to fair value losses from increasing interest rates.
Concentration of Credit Risk – Investments. For an investment, concentration of credit risk is when any one
issuer is 5% or more of the investment portfolio of the Town. The investments in the New Mexico LGIP and
U.S Treasury Money Market Mutual Funds represent 68% and 32%, respectively, of the investment
portfolio. Since the Town only purchases investments with the highest credit rating, the additional
concentration is not viewed to be an additional risk by the Town. The Town’s policy related to
concentration of credit risk is to comply with the state statute as put forth in the Public Money Act (Section
6‐10‐1 to 6‐10‐63, NMSA 1978).
Fair Value Measurement
The fair value framework uses a hierarchy that prioritizes the inputs to the valuation techniques used to
measure fair value. The hierarchy gives the highest priority t o unadjusted quoted prices in active markets
for identical assets or liabilities (level 1 measurement) and t he lowest priority to unobservable inputs (level
3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the Town has the ability to access.
Level 2 Inputs to the valuation methodology include:
Quoted prices for similar assets or liabilities in active markets.
Quoted prices for identical or similar assets or liabilities in inactive markets.
Inputs other than quoted prices that are observable for the asset or liability.
Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable
for substantially the full term of the asset or liability.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize the use of unobservable inputs. See above for
discussion of valuation methodologies used to measure fair value of investments.
54
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 3. Deposits and Investments (continued)
The valuation methodologies described above may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values. Furthermore, while the Town believes its
valuation methods are appropriate and consistent with other market participants, the use of different
methodologies or assumptions to determine the fair value of certain financial instruments could result in a
different fair value measurement at the reporting date.
The Town maintained a balance of $4,268,250 in the Local Government Investment Pool and $374,570 in
U.S. Treasury Money Market Mutual Funds at year end which required fair value disclosure.
The following table sets forth by level within the fair value hierarchy, the Town’s assets at fair value as
of June 30, 2017:
Level 1 Level 2 Level 3 Total
4,642,820$ ‐$ ‐$ 4,642,820$
NOTE 4. Receivables
Receivables as of June 30, 2017, are as follows:
Lodgers' Airport
General Tax Construction
Property taxes receivable 160,442$ ‐$ ‐$
Other taxes receivable:
Gross receipts 1,647,066 ‐ ‐
Gasoline and motor vehicle ‐ ‐ ‐
Franchise taxes 25,996 ‐ ‐
Lodgers' taxes ‐ 134,410 ‐
Due from other governments ‐ ‐ 1,481,302
Other receivables ‐ ‐ ‐
Total receivables 1,833,504$ 134,410$ 1,481,302$
Other
1999 Gasoline Governmental
Tax Acquisition Funds Total
Property taxes receivable ‐$ ‐$ 160,442$
Other taxes receivable:
Gross receipts ‐ ‐ 1,647,066
Gasoline and motor vehicle ‐ ‐ ‐
Franchise taxes ‐ ‐ 25,996
Lodgers' taxes ‐ ‐ 134,410
Due from other governments 733,092 ‐ 2,214,394
Other receivables ‐ 753,780 753,780
Total receivables 733,092$ 753,780$ 4,936,088$ Receivables for governmental activities are considered to be 100% collectible.
Governmental funds report unavailable revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities in the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received but not yet earned. Unavailable
revenue related to property taxes receivable for the Town for the year ended June 30, 2017 was $115,455.
55
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 4. Receivables (continued)
Business‐type Activities:Water and Solid Taos Regional
Sewer Waste Landfill Total
Customer receivables 1,328,732$ 232,856$ 168,388$ 1,729,976$
Other receivables:
Gross receipts taxes 171,124 ‐ ‐ 171,124
Total gross receivables 1,499,856 232,856 168,388 1,901,100
Less: allowance for
doubtful accounts 745,216 52,602 17,485 815,303
Total net receivables 754,640$ 180,254$ 150,903$ 1,085,797$
NOTE 5. Transfers and Interfund Receivables
Net operating transfers, made to close out funds and to supplem ent other funding sources, were as follows:
Governmental Activities:
Transfers In Transfers Out Amount
Recreation Fund General Fund 35,705$
Public Transportation Fund Lodgers' Tax 313,284
Public Transportation Fund Lodgers' Tax 90,000
Community Grants General Fund 47,308
2009 NMFA PPRF Disadvantage
Program - EcoPark 1/4 Cent Municipal GRT Fund 180,753
2008 GRT Revenue Bond Retirement 1/4 Cent Municipal GRT Fund 496,025
2011 NMFA PPRF Disadvantaged
Prog Street Fund Municipal Road Gasoline Tax Fund 52,700
2011 NMFA PPRF Street
Improvement General Fund 129,375
2015 NMFA Fire Pumper Fund Fire Protection Fund 75,094
2007 NMFA Land Purchase 1/4 Cent Municipal GRT Fund 113,765
Facilities Improvement Fund General Fund 400,000
Facilities Improvement Fund 1/4 Cent Municipal GRT Fund 38,985
Capital Projects Fund 1/4 Cent Municipal GRT Fund 9,000
Capital Maintenance Operating Fund General Fund 809,501
Library Construction Lodgers' Tax 350,000
1999 Gasoline Tax Acquisition General Fund 600,000
1999 Gasoline Tax Acquisition General Fund 54,615
1999 Gasoline Tax Acquisition Municipal Road Gasoline Tax Fund 26,600
1999 Gasoline Tax Acquisition 1/4 Cent Municipal GRT Fund 175,596
1999 Gasoline Tax Acquisition Capital Projects Fund 784,000
4,782,306$
56
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 5. Transfers and Interfund Receivables (continued)
Internal balances have primarily been recorded when funds overdraw their share of pooled cash. The
composition of interfund balances as of June 30, 2017 is as follows:
Due from Other Funds Due to Other Funds Amount
General Fund Water & Sewer Fund 17,652$
General Fund Solid Waste Fund 5,878
General Fund Taos Regional Landfill Fund 9,396
32,926$
All interfund transactions are short‐term and are expected to be repaid within a year.
57
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 6. Capital Assets
A summary of capital assets and changes occurring during the year ended June 30, 2017 follows. Land and
construction in progress are not subject to depreciation.
Balance Balance
Governmental activities:June 30, 2016 Additions Deletions June 30, 2017
Capital assets, not depreciated:
Land 6,277,809$ ‐$ 19,080$ 6,258,729$
Construction in progress 9,612,167 11,281,846 25,386 20,868,627
Total capital assets, not depreciated 15,889,976 11,281,846 44,466 27,127,356
Capital assets, depreciated:
Land improvements 7,461,945 ‐ ‐ 7,461,945
Buildings and improvements 34,815,034 19,643 ‐ 34,834,677
Machinery and equipment 15,850,116 435,952 523,728 15,762,340
Infrastructure 54,814,587 2,609,804 ‐ 57,424,391
Total capital assets, depreciated 112,941,682 3,065,399 523,728 115,483,353
Less accumulated depreciation:
Land improvements (4,827,831) (244,976) ‐ (5,072,807)
Buildings and improvements (17,799,617) (1,108,303) ‐ (18,907,920)
Machinery and equipment (13,199,752) (620,542) (523,600) (13,296,694)
Infrastructure (39,495,242) (1,860,196) ‐ (41,355,438)
Total accumulated depreciation (75,322,442) (3,834,017) (523,600) (78,632,859)
Net book value 53,509,216$ 10,513,228$ 44,594$ 63,977,850$
Depreciation expense for the year ended June 30, 2017 was charged to governmental activities as follows:
General government 3,488,955$
Public safety 76,681
Public works 268,381
3,834,017$
58
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 6. Capital Assets (continued)
Balance Balance
Business‐type activities:June 30, 2016 Additions Deletions June 30, 2017
Capital assets, not depreciated:
Land 262,422$ ‐$ ‐$ 262,422$
Construction in progress 3,268,986 455,434 3,268,986 455,434
Total capital assets, not depreciated 3,531,408 455,434 3,268,986 717,856
Capital assets, depreciated:
Land improvements 104,895 ‐ ‐ 104,895
Buildings and improvements 4,656,981 ‐ ‐ 4,656,981
Machinery and equipment 8,876,468 295,544 52,755 9,119,257
Infrastructure 33,499,623 4,274,483 ‐ 37,774,106
Total capital assets, depreciated 47,137,967 4,570,027 52,755 51,655,239
Less accumulated depreciation:
Land improvements (94,689) (1,258) ‐ (95,947)
Buildings and improvements (2,741,611) (150,917) ‐ (2,892,528)
Machinery and equipment (7,519,719) (242,120) (33,553) (7,728,286)
Infrastructure (13,188,645) (1,478,356) ‐ (14,667,001)
Total accumulated depreciation (23,544,664) (1,872,651) (33,553) (25,383,762)
Net book value 27,124,711$ 3,152,810$ 3,288,188$ 26,989,333$
Depreciation expense for the year ended June 30, 2017 was charged to business‐type activities as follows:
Enterprise activities:
Water and sewer 1,609,964$
Solid waste 60,972
Landfill 201,715
1,872,651$
59
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 7. Long‐term Debt
Governmental Activities:
During the year ended June 30, 2017, the following changes occurred in the liabilities reported in the
government‐wide statement of net position:
Balance Balance Due Within
June 30, 2016 Additions Retirements June 30, 2017 One Year
Revenue Bonds 4,375,000$ ‐$ 315,000$ 4,060,000$ 385,000$
NMFA Loans 2,842,487 ‐ 470,563 2,371,924 368,231
Compensated Absences 616,329 360,132 365,539 610,922 365,539
Total Long‐Term Debt 7,833,816$ 360,132$ 1,151,102$ 7,042,846$ 1,118,770$
Revenue Bonds
At June 30, 2017, the Town had one revenue bond outstanding. For the Series 2008 Gross Receipts Tax
Revenue Bonds, the Town pledged revenues from the State‐Shared Gross Receipts Tax revenues. The
revenue bonds are as follows:
Original
Date of Due Interest Amount
Description Issue Date Rate of Issue
Series 2008 Gross Receipts Tax 01/30/08 06/01/26 4.00‐5.00% 6,395,000$
The annual requirements to amortize the revenue bonds as of June 30, 2017, including interest payments,
are as follows:
Fiscal Year Total Debt
Ending June 30, Principal Interest Service
2018 385,000$ 166,775$ 551,775$
2019 400,000 151,375 551,375
2020 415,000 135,375 550,375
2021 430,000 118,775 548,775
2022 450,000 101,145 551,145
2023‐2025 1,980,000 211,635 2,191,635
4,060,000$ 885,080$ 4,945,080$
60
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 7. Long‐term Debt (continued)
NMFA Loans
The Town entered into three loan agreements with the New Mexico Finance Authority, wherein the Town
pledged revenue derived from State‐Shared Gross Receipts Tax and the Fire to cover debt service. Aside
from the NMFA Fire Truck Pumper loan, this revenue is not subject to intercept agreements. The NMFA
loans are as follows:
Original
Date of Due Interest Amount
Description Issue Date Rate of Issue
NMFA Phase I Multi‐Phase Eco Park 11/25/09 05/01/25 0.62‐3.67% 2,213,469
NMFA Revolving Loan Fund Road Projects 11/04/11 05/01/22 1.895% 1,694,457
NMFA Fire Truck Pumper Loan 05/08/15 05/01/21 0.92%434,994 The annual requirements to amortize the NMFA loans as of June 30, 2017, including interest payments, are
as follows:
Fiscal Year Total Debt
Ending June 30, Principal Interest Service
2018 368,231$ 60,668$ 428,899$
2019 377,252 53,801 431,053
2020 387,381 45,952 433,333
2021 398,774 36,928 435,702
2022 334,977 28,099 363,076
2023‐2025 505,309 36,960 542,269
2,371,924$ 262,408$ 2,634,332$
Compensated Absences‐ Employees of the Town are able to accrue a limited amount of vacation and other
compensatory time during the year. During fiscal year June 30, 2017, government‐wide compensated
absences decreased $5,406 from the prior year accrual. Compensated absences are liquidated by the
respective funds in which they are accrued.
61
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 7. Long‐term Debt (continued)
Proprietary Funds:
The proprietary funds have incurred various forms of debt which were used for the purposes of
constructing, expanding, repairing and making improvements to its property, plant and equipment. The
following schedule shows the changes to its various forms of debt during the fiscal year ended June 30,
2017:
Balance Balance Due Within
June 30, 2016 Additions Retirements June 30, 2017 One Year
Revenue Bonds 1,855,600$ ‐$ 57,000$ 1,798,600$ 60,000$
NMFA and RUS Loans 3,735,000 ‐ 334,039 3,400,961 338,980
Landfill Closure Liability 1,677,021 21,309 ‐ 1,698,330 ‐
Compensated Absences 79,760 66,089 60,833 85,016 60,833
Total Long‐Term Debt 7,347,381$ 87,398$ 451,872$ 6,982,907$ 459,813$
Revenue Bonds
At June 30, 2017, the Town had the following revenue bonds outstanding:
Original
Date of Due Interest Amount
Description Issue Date Rate of Issue
Series 1993A Water & Sewer 03/16/93 03/16/33 5.63%635,600$
Series 1993B Water & Sewer 03/16/93 03/16/33 5.50%123,000
Series 1995A Water & Sewer 12/05/95 12/05/35 5.125% 1,315,000
Series 1998A Water & Sewer 07/01/99 01/01/38 4.75%475,000 The annual requirements to amortize the revenue bonds as of June 30, 2017, including interest payments,
are as follows:
Fiscal Year Total Debt
Ending June 30, Principal Interest Service
2018 60,000$ 93,457$ 153,457$
2019 63,000 90,312 153,312
2020 66,000 87,007 153,007
2021 70,000 83,546 153,546
2022 74,000 79,870 153,870
2023‐2026 335,000 278,672 613,672
2027‐2031 529,000 239,327 768,327
2032‐2037 562,600 71,764 634,364
2038 39,000 ‐ 39,000
1,798,600$ 1,023,955$ 2,822,555$
62
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 7. Long‐term Debt (continued)
NMFA and USDA Loans
The Town entered into loan agreements with the New Mexico Finance Authority and USDA. These loans are
not subject to intercept agreements. The loans are as follows:
Date of Due Interest Amount
Description Issue Date Rate of Issue
RUS Series 2000A Water & Sewer 12/18/00 12/18/40 5.00%250,000$
NMFA Series 2001A Water & Sewer 05/11/01 05/01/21 4.16‐5.41% 950,391
NMFA Series 2008A Landfill 04/11/08 05/01/18 2.72‐3.58% 1,000,000
NMFA/WTB Water Project Fund Loan 09/11/09 06/01/29 0.00%130,000
NMFA/WTB Water Project Fund Loan 09/11/09 06/01/29 0.00%600,000
NMED/ARRA Water State Revolving Fund Loan 11/23/09 06/30/30 0.00% 1,200,000
NMFA/WTB Water Project Fund Loan 04/19/13 06/01/33 0.25%197,390
NMFA New Cell for Landfill Facility Loan 8/28/2015 6/1/2025 0.38‐2.24% 1,376,046
The annual requirement to amortize the loans as of June 30, 201 7, including interest payments, is as follows:
Fiscal Year Total Debt
Ending June 30, Principal Interest Service
2018 338,980$ 43,813$ 382,793$
2019 345,346 36,957 382,303
2020 348,868 31,718 380,586
2021 300,979 25,783 326,762
2022 291,593 21,605 313,198
2023‐2026 1,016,583 47,607 1,064,190
2027‐2031 500,421 35,828 536,249
2032‐2037 200,191 28,376 228,567
2038‐2041 58,000 7,950 65,950
3,400,961$ 279,637$ 3,680,598$
Compensated Absences‐ Employees of the Town are able to accrue a limited amount of vacation and other
compensatory time during the year. During fiscal year June 30, 2017, business‐type compensated absences
increased $5,256 from the prior year accrual. Compensated absences are liquidated by the respective funds
in which they are accrued.
63
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 8. Risk Management
The Town is exposed to various risks of loss related to torts, thefts of, damage to, and destruction of
property, errors and omissions and natural disasters. The Town participates in the New Mexico Self‐
Insurers’ Fund risk pool.
The Town has not filed any claims for which the settlement amount exceeded the insurance coverage during
the past three years. However, should a claim be filed against the Town which exceeds the insurance
coverage, the Town would be responsible for a loss in excess of the coverage amounts. As claims are filed,
the New Mexico Self‐Insurers’ Fund assesses and estimates the potential for loss and handles all aspects of
the claim. Insurance coverage has not changed significantly from prior years and coverage’s are expected to
be continued.
At June 30, 2017, no unpaid claims have been filed which exceed the policy limits and to the best of
management’s knowledge and belief all known and unknown claims will be covered by insurance. The
Town is not aware of any major lawsuits that have been filed.
New Mexico Self‐Insurers’ Fund has not provided information on an entity by entity basis that would allow
for a reconciliation of changes in the aggregate liabilities for claims for the current fiscal year and the prior
fiscal year.
NOTE 9. Other Required Individual Fund Disclosures
Generally accepted accounting principles require disclosures of certain information c oncerning individual
funds including:
A. Deficit fund balance of individual funds. The following fund had a deficit fund balance as of June 30,
2017.
Civic Center Special Revenue Fund $(2,323)
B. Actual expenditures in excess of amount budgeted at the budgetary authority level. Budgetary legal
level of control is at the fund level. There were no funds that exceeded approved budgetary authority
for the year ended June 30, 2017.
C. Designated cash appropriations in excess of available balances. There were no funds in which
designated cash appropriations were in excess of available balances.
NOTE 10. Pension Plan ‐ Public Employees Retirement Association
General Information about the Pension Plan
Plan description. The Public Employees Retirement Fund (PERA Fund) is a cost‐sharing, multiple
employer defined benefit pension plan. This fund has six divisions of members, including State General,
State Police/Adult Correction Officer, Municipal General, Municipal Police/Detention Officers, Municipal fire,
and State Legislative Divisions, and offers 24 different types of coverage within the PERA plan. All assets
accumulated may be used to pay benefits, including refunds of member contributions, to any of the plan
members or beneficiaries, as defined by the terms of this plan. Certain coverage plans are only applicable to
a specific division. Eligibility for membership in the PERA Fund is set forth in the Public Employees
Retirement Act (Chapter 10, Article 11, NMSA 1978). Except as provided for in the Volunteer Firefighters
Retirement Act (10‐11A‐1 to 10‐11A‐7, NMSA 1978), the Judicial Retirement Act (10‐12B‐1 to 10‐12B‐19,
NMSA 1978), the Magistrate Retirement Act (10‐12C‐1 to 10‐12C‐18, NMSA 1978), and the Educational
64
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 10. Pension Plan ‐ Public Employees Retirement Association (continued)
General Information about the Pension Plan (continued)
Retirement Act (Chapter 22, Article 11, NMSA 1978), and the pro visions of Sections 29‐4‐1 through 29‐4‐11,
NMSA 1978 governing the State Police Pension Fund, each employe e and elected official of every affiliated
public employer is required to be a member in the PERA Fund.
PERA issues a publicly available financial report and a comprehensive annual financial report that can be
obtained at http://saonm.org using the Audit Report Search function for agency 366.
Benefits provided. For a description of the benefits provided and recent changes to the benefits see Note 1
in the PERA audited financial statements for the fiscal year ended June 30, 2016 available at
https://www.saonm.org/media/audits/366_Public_Employees_Retirement_Association_FY2016.pdf.
Contributions. The contribution requirements of defined benefit plan members and the Town of Taos are
established in state statute under Chapter 10, Article 11, NMSA 1978. The contribution requirements may be
amended by acts of the legislature. For the employer and emplo yee contribution rates in effect for FY15 for
the various PERA coverage options, for both Tier I and Tier II, see the tables available in the note disclosures
on pages 80 through 82 of the PERA FY16 annual audit report at
https://www.saonm.org/media/audits/366_Public_Employees_Retirement_Association_FY2016.pdf. The
PERA coverage options that apply to Town of Taos are: Municipal General Division, Municipal Police
Division and Municipal Fire Division. Statutorily required con tributions to the pension plan from the Town
of Taos were $892,208 and there were no employer paid member benefits that were “picked up” by the
employer for the year ended June 30, 2017.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions: The PERA pension liability amounts, net pension liability amounts, and
sensitivity information were based on an annual actuarial valuation performed as of June 30, 2015. The
PERA pension liability amounts for each division were rolled forward from the valuation date to the Plan
year ending June 30, 2016, using generally accepted actuarial principles. Therefore, the employer’s portion
was established as of the measurement date June 30, 2016.
The assets of the PERA fund are held in one trust, but there ar e six distinct membership groups (municipal
general members, municipal police members, municipal fire members, state general members, state police
members and legislative members) for whom separate contribution rates are determined each year
pursuant to chapter 10, Article 11 NMSA 1978.
Therefore, the calculations of the net pension liability, pensi on expense and deferred inflows and outflows
were performed separately for each of the membership groups: municipal general members; municipal
police members; municipal fire members; state general members; state police members and legislative
members. Town of Taos’ proportion of the net pension liability for each membership group that the
employer participates in is based on the employer contributing entity’s percentage of that membership
group’s total employer contributions for the fiscal year ended June 30, 2016. Only employer contributions
for the pay period end dates that fell within the period of July 1, 2015 to June 30, 2016 were included in the
total contributions for a specific employer.
Regular and any adjustment contributions that applied to FY 2017 are included in the total contribution
amounts. In the event that an employer is behind in reporting to PERA its required contributions, an
estimate (receivable) was used to project the unremitted employer contributions. This allowed for fair and
consistent measurement of the contributions with the total population. This methodology was used to
maintain consistent measurement each year in determining the percentages to be allocated among all the
participating employers.
65
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 10. Pension Plan ‐ Public Employees Retirement Association (continued)
General Information about the Pension Plan (continued)
For PERA Fund Municipal General Division, at June 30, 2017, Town of Taos reported a liability of
$7,524,994 for its proportionate share of the net pension liability. At June 30, 2016, Town of Taos’
proportion was .4710% percent, which was a decrease of .0344 percent from its proportion measured as of
June 30, 2015.
For the year ended June 30, 2017, Town of Taos recognized PERA Fund Municipal General Division pension
expense of $759,588. At June 30, 2017, Town of Taos reported PERA Fund Municipal General Division
deferred outflows of resources and deferred inflows or resources related to pensions from the following
sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Change in assumptions 441,253$ 1,250$
Changes in proportion ‐ 513,362
Difference between expected and actual experience 375,979 73,440
Net difference between projected and actual earning
on pension plan investments 1,384,585 ‐
Contributions subsequent to the measurement date 373,075 ‐
2,574,892$ 588,052$
$373,075 reported as deferred outflows of resources related to pensions resulting from Town of Taos’
contributions subsequent to the measurement date June 30, 2016 will be recognized as a reduction of the
net pension liability in the year ended June 30, 2018.
Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Year ended June 30:
2017 (267,532)$
2018 (267,532)
2019 (736,281)
2020 (342,420)
Thereafter ‐
For PERA Fund Municipal Police Division, at June 30, 2017, Town of Taos reported a liability of
$3,516,497 for its proportionate share of the net pension liability. At June 30, 2016, Town of Taos’
proportion was 0.4766 percent, which was a decrease of .0078 percent from its proportion measured as of
June 30, 2015.
For the year ended June 30, 2017, Town of Taos recognized PERA Fund Municipal Police Division pension
expense of $470,148. At June 30, 2017, Town of Taos reported PERA Fund Municipal Police Division
deferred outflows of resources and deferred inflows or resources related to pensions from the following
sources:
66
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 10. Pension Plan ‐ Public Employees Retirement Association (continued)
General Information about the Pension Plan (continued)
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Change in assumptions 232,913$ 63,419$
Changes in proportion ‐ 38,347
Difference between expected and actual experience 258,162 ‐
Net difference between projected and actual earning
on pension plan investments 556,154 ‐
Contributions subsequent to the measurement date 182,311 ‐
1,229,540$ 101,766$
$182,311 reported as deferred outflows of resources related to pensions resulting from Town of Taos’
contributions subsequent to the measurement date June 30, 2016 will be recognized as a reduction of the
net pension liability in the year ended June 30, 2018. Other amounts reported as deferred inflows and
outsources of resources related to pensions will be recognized in pension expense as follows:
Year ended June 30:
2017 (221,085)$
2018 (221,085)
2019 (361,813)
2020 (141,480)
Thereafter ‐
For PERA Fund Municipal Fire Division, at June 30, 2017, Town of Taos reported a liability of $1,857 ,211
for its proportionate share of the net pension liability. At June 30, 2016, Town of Taos’ proportion was
0.2784 percent, which was an decrease of .0015 percent from its proportion measured as of June 30, 2016.
For the year ended June 30, 2017, Town of Taos recognized PERA Fund Municipal Fire Division pension
expense of $255,809. At June 30, 2017, Town of Taos reported PERA Fund Municipal Fire Division deferred
outflows of resources and deferred inflows or resources related to pensions from the following sources:
67
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 10. Pension Plan ‐ Public Employees Retirement Association (continued)
General Information about the Pension Plan (continued)
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Change in assumptions 98,239$ ‐$
Changes in proportion 54,565 ‐
Difference between expected and actual experience 84,104 ‐
Net difference between projected and actual earning
on pension plan investments 154,696 ‐
Contributions subsequent to the measurement date 69,506 ‐
461,110$ ‐$
$69,506 reported as deferred outflows of resources related to pensions resulting from Town of Taos’
contributions subsequent to the measurement date June 30, 2016 will be recognized as a reduction of the
net pension liability in the year ended June 30, 2018. Other amounts reported as deferred inflows and
outsources of resources related to pensions will be recognized in pension expense as follows:
Year ended June 30:
2017 (117,135)$
2018 (117,135)
2019 (117,110)
2020 (40,224)
Thereafter ‐
Actuarial assumptions. As described above, the PERA Fund member group pension liabilities and net
pension liabilities are based on actuarial valuations performed as of June 30, 2015 for each of the
membership groups. Then each PERA Fund member group pension liability was rolled forward from the
valuation date to the Plan year ending June 30, 2017 using generally accepted actuarial principles. There
were no significant events or changes in benefit provisions that required an adjustment to the roll‐forward
liabilities as of June 30, 2017. These actuarial methods and assumptions were adopted by the Board for use
in the June 30, 2017 actuarial valuation.
68
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 10. Pension Plan ‐ Public Employees Retirement Association (continued)
General Information about the Pension Plan (continued)
Actuarial valuation date June 30, 2015
Actuarial cost method Entry age normal
Amortization method Level percentage of pay
Amortization period Solved for based on statutory rates
Asset valuation method Fair value
Actuarial assumptions:
Investment rate of return 7.48% annual rate, net of investment expense
Projected benefit payment 100 years
Payroll growth 2.75% for the first 10 years, then 3.25% all other years
Projected salary increases 2.75% to 14.25% annual rate
Includes inflation at 2.25% annual rate first 10 years, 2.75% all other years
Mortality assumptions
Experience study date
RP‐200 mortality tables (combined table for
healthy post‐retirements, Employee table for
active members, and disabled table for
disabled retirees before retirement age) with
projections to 2018 using scale AA.
July 1, 2008 to June 30, 2013 (demographic)
and July 1, 2010 through June 20, 2015
The long‐term expected rate of return on pension plan investments was determined using a statistical
analysis in which best‐estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed fo r each major asset class. These ranges are
combined to produce the long‐term expected rate of return by weighting the expected future real rates of
return by the target asset allocation percentage and by adding expected inflation. The target asset allocation
and most recent best estimates of arithmetic real rates of return for each major asset class are summarized
in the following table:
Long‐Term
Target Expected Real Rate
ALL FUNDS ‐ Asset Class Allocation of Return
Global Equity 43.50%7.39%
Risk Reduction & Mitigation 21.50 1.79
Credit Oriented Fixed Income 15.00 5.77
Real Assets 20.00 7.35
Total 100.00%
Total 5793.50%
Discount rate: The discount rate used to measure the total pension liability was 7.48 percent. The
projection of cash flows used to determine the discount rate as sumed that future contributions will be made
in accordance with statutory rates. On this basis, the pension plan’s fiduciary net position together with the
expected future contributions are sufficient to provide all projected future benefit payments of current plan
members as determined in accordance with GASBS 67. Therefore, the 7.48% assumed long‐term expected
rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
69
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 10. Pension Plan ‐ Public Employees Retirement Association (continued)
General Information about the Pension Plan (continued)
Sensitivity of the Employer’s proportionate share of the net pension liability to changes in the discount
rate. The following tables show the sensitivity of the net pension liability to changes in the discount rate. In
particular, the tables present Town of Taos’ net pension liability in each PERA Fund Division that Town of
Taos participates in, under the current single rate assumption, as if it were calculated using a discount rate
one percentage point lower (6.48%) or one percentage point higher (8.48%) than the single discount rate.
PERA Fund Municipal General Division
1% Decrease
(6.48%)
Current
Discount
Rate
(7.48%)
1% Increase
(8.48%)
Town of Taos' proportionate share of the
net pension liability 11,219,099$ 7,524,994$ 4,460,920$
PERA Fund Municipal Police Division
1% Decrease
(6.48%)
Current
Discount
Rate
(7.48%)
1% Increase
(8.48%)
Town of Taos' proportionate share of the
net pension liability 5,173,640$ 3,516,497$ 2,161,148$
PERA Fund Municipal Fire Division
1% Decrease
(6.48%)
Current
Discount
Rate
(7.48%)
1% Increase
(8.48%)
Town of Taos' proportionate share of the
net pension liability 2,429,222$ 1,857,211$ 1,387,363$
Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position
is available in the separately issued FY16 Restated PERA financial report. The report is available at
http://www.pera.state.nm.us/publications.html.
Payables to the pension plan. At June 30, 2017 there were no contributions due and payable to PERA for
the Town.
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan
Plan Description. Town of Taos contributes to the New Mexico Retiree Health Care Fund, a cost‐sharing
multiple‐employer defined benefit postemployment healthcare plan administered by the New Mexico
Retiree Health Care Authority (RHCA). The RHCA provides health care insurance and prescription drug
benefits to retired employees of participating New Mexico gover nment agencies, their spouses, dependents,
and surviving spouses and dependents. The RHCA Board was established by the Retiree Health Care Act
(Chapter 10, Article 7C, NMSA 1978). The Board is responsible for establishing and amending benefit
provisions of the healthcare plan and is also authorized to des ignate optional and/or voluntary benefits like
dental, vision, supplemental life insurance, and long‐term care policies.
70
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan
Eligible retirees are: 1) retirees who make contributions to the fund for at least five years prior to
retirement and whose eligible employer during that period of time made contributions as a participant in
the RHCA plan on the person’s behalf unless that person retires before the employer’s RHCA effective date,
in which event the time period required for employee and employer contributions shall become the period
of time between the employer’s effective date and the date of retirement; 2) retirees defined by the Act who
retired prior to July 1, 1990; 3) former legislators who served at least two years; and 4) former governing
authority members who served at least four years.
The RHCA issues a publicly available stand‐alone financial report that includes financial statements and
required supplementary information for the postemployment healthcare plan. That report and further
information can be obtained by writing to the Retiree Health Care Authority at 4308 Carlisle NE, Suite 104,
Albuquerque, NM 87107.
Funding Policy. The Retiree Health Care Act (Section 10‐7C‐13 NMSA 1978) authorizes the RHCA Board to
establish the monthly premium contributions that retirees are required to pay for healthcare benefits. Each
participating retiree pays a monthly premium according to a service based subsidy rate schedule for the
medical plus basic life plan plus an additional participation fee of five dollars if the eligible participant
retired prior to the employer’s RHCA effective date or is a for mer legislator or former governing authority
member. Former legislators and governing authority members are required to pay 100% of the insurance
premium to cover their claims and the administrative expenses of the plan. The monthly premium rate
schedule can be obtained from the RHCA or viewed on their website at www.nmrhca.state.nm.us.
The employer, employee and retiree contributions are required to be remitted to the RHCA on a monthly
basis. The statutory requirements for the employer and employe e contributions can be changed by the New
Mexico State Legislature. Employers that choose to become part icipating employers after January 1, 1998,
are required to make contributions to the RHCA fund in the amount determined to be appropriate by the
board.
The Retiree Health Care Act (Section 10‐7C‐15 NMSA 1978) is the statutory authority that establishes the
required contributions of participating employers and their employees. For employees that were members
of an enhanced retirement plan (state police and adult correctional officer member coverage plan 1;
municipal police member coverage plans 3, 4 or 5; municipal fir e member coverage plan 3, 4 or 5; municipal
detention officer member coverage plan 1; and members pursuant to the Judicial Retirement Act) during the
fiscal year ended June 30, 2017, the statute required each part icipating employer to contribute 2.5% of each
participating employee’s annual salary; and each participating employee was required to contribute 1.25%
of their salary. For employees that were not members of an enha nced retirement plan during the fiscal year
ended June 30, 2017, the statute required each participating employer to contribute 2.0% of each
participating employee’s annual salary; each participating employee was required to contribute 1.0% of
their salary. In addition, pursuant to Section 10‐7C‐15(G) NMSA 1978, at the first session of the Legislature
following July 1, 2013, the legislature shall review and adjust the distributions pursuant to Section 7‐1‐6.1
NMSA 1978 and the employer and employee contributions to the authority in order to ensure the actuarial
soundness of the benefits provided under the Retiree Health Care Act.
The Town’s contributions to the RHCA for the years ended June 30, 2017, 2016 and 2015 were $109,547,
$116,266, and $114,919, respectively, which equal the required contributions for each year.
NOTE 12. Contingent Liabilities
The Town is party to various claims and lawsuits arising in the normal course of business. The Town is
insured through the New Mexico Self Insurers Fund. The maximum exposure of the Town is not estimable
as of June 30, 2017.
71
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 13. Federal and State Grants
In the normal course of operations, the Town receives grant fun ds from various federal and state agencies.
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor
agencies, the purpose of which is to ensure compliance with conditions precedent to the granting of funds.
Any liability for reimbursement which may arise as a result of these audits is not believed to be material.
NOTE 14. Landfill Closure and Post Closure Care Costs
State and Federal laws and regulations require that the Town place a final cover on its landfill site and
perform certain maintenance and monitoring functions at the landfill site for a minimum of thirty years after
closure. In addition to operating expenses related to current activities of the landfill site, an expense
provision and related liability are being recognized based on the future closure and post closure care costs
that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these
landfill closure and post‐closure care costs is based on the amount of the landfill used during the year. The
estimated liability for landfill closure and post closure care costs is $1,698,330 as of June 30, 2017, which is
based on 40 percent usage (filled) of the landfill. The estimate has remained unchanged from the prior year
as no significant construction occurred or changes to the site conditions. The estimated total current cost of
the landfill closure and post closure care is based on the amount that would be paid if all equipment,
facilities, and services required to close, monitor, and maintain the landfill were acquired as of June 30,
2016. However, the actual cost of closure and post closure care may be higher due to inflation, changes in
technology, or changes in landfill laws and regulations.
In addition, the Town is required by State and Federal laws and regulations to make annual contributions to
finance closure and postclosure care. The Town is in compliance with these requirements, and at June 30,
2017 cash of $1,278,860 and investments of $80,119 is part of the pooled funds held by the Town and is
presented as restricted cash on the statement of net position.
NOTE 15. Construction and Other Significant Commitments
The Town has committed to pay for several construction contracts that were not completed at June 30, 2017
in the amount of $7,620,924 as follows:
Project Description
Contract Amount
Remaining Contractor
Salazar Road Improvements 321,742$ Northern Mountain Constructors, Inc.
Construction of Runway 12/30 Phase I 454,582 Northern Mountain Constructors, Inc.
Engineernig Services for Construction Runway 12/30
Phase 1 58,168 Armstrong Consultants, Inc.
Construction of Runway 12/30 Phase II 5,353,736 Northern Mountain Constructors, Inc.
Engineering Services for Construction Ruway 12/30
Phase 2 256,730 Armstrong Consultants, Inc.
Construction of Youth & Family Center Improvements 706,607 CDR Construction Inc.
Architectural Services for Youth & Family Center
Improvements 38,267 NCA Architects, LLC
Visitors Center Roof Repair 170,326 Design‐Building Solutions, Inc.
Bedford Tank Replacement 82,721 File Construction, LLC
SCADA System Upgrades 27,220 Miller Engineers Inc.
Engineering/R‐O‐W Services for Camino del Medio 150,824 Miller Engineers Inc.
Total 7,620,924$
72
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 16. Subsequent Events
The date to which events occurring after June 30, 2017, the date of the most recent statement of net
position, have been evaluated for possible adjustment to the fi nancial statements or disclosures is December
6, 2017, which is the date on which the financial statements were issued.
NOTE 17. Concentrations
The Town depends on financial resources flowing from, or associated with, both the Federal Government
and the State of New Mexico. Because of this dependency, the Town is subject to changes in the specific
flows of intergovernmental revenues based on modifications to Federal and State laws and Federal and
State appropriations.
NOTE 18. Restricted Net Position
The government‐wide statement of net position reports $5,628,176 of restricted net position for
governmental activities, all of which is restricted by enabling legislation. See pages 44 and 88‐89 for
descriptions of the related restrictions for special revenue, debt service and capital projects funds. In
addition, the government‐wide statement of net position reports $2,782,757 of restricted net position for
business‐type activities See page 46 for descriptions of the related restrictions for meter deposits, debt
service and landfill obligations.
NOTE 19. Utility Revenues Pledged
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $635,600 in Series 1993A Water & Sewer Revenue Bonds, issued in 1993.
The bonds are payable solely from utility customer net revenues and are payable through March 2033. The
pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the bond agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the bond agreement reserve account, to the USDA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the bond agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining
to be paid on the bonds is $421,600 and $229,028, respectively. Principal and interest paid for the current
year and total customer net revenues were $40,615 and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $123,000 in Series 1993B Water & Sewer Revenue Bonds, issued in 1993.
The bonds are payable solely from utility customer net revenues and are payable through March 2033. The
pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the bond agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the bond agreement reserve account, to the USDA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the bond agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining
to be paid on the bonds is $84,000 and $47,685, respectively. Principal and interest paid for the current
year and total customer net revenues were $7,785 and $3,260,084, respectively.
73
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 19. Utility Revenues Pledged (continued)
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $1,315,000 in Series 1995A Water & Sewer Revenue Bonds, issued in 1995.
The bonds are payable solely fr om utility customer net revenues and are payable through December 2035.
The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the bond agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the bond agreement reserve account, to the USDA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the bond agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining
to be paid on the bonds is $933,000 and $537,360, respectively. Principal and interest paid for the current
year and total customer net revenues were $78,303 and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $475,000 in Series 1998A Water & Sewer Revenue Bonds, issued in 1999.
The bonds are payable solely from utility customer net revenues and are payable through January 2038.
The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the bond agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the bond agreement reserve account, to the USDA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the bond agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining
to be paid on the bonds is $360,000 and $209,771 respectively. Principal and interest paid for the current
year and total customer net revenues were $26,745 and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $250,000 in RUS Series 2000A Water & Sewer Loan, issued in 2000. The
loans are payable solely from utility customer net revenues and are payable through December 2040. The
pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account, to the USDA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining
to be paid on the loan is $203,000 and $153,900, respectively. Principal and interest paid for the current
year and total customer net revenues were $14,350 and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $950,391 in NMFA Series 2001A Water & Sewer Loan, issued in 2001. The
loans are payable solely from utility customer net revenues and are payable through May 2021. The
pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining
to be paid on the loan is $199,224 and $19,947, respectively. Principal and interest paid for the current year
and total customer net revenues were $68,856 and $3,260,084, respectively.
74
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 19. Utility Revenues Pledged (continued)
The Town of Taos has pledged future revenues from the Taos Regi onal Landfill system, net of operation and
maintenance expenses, to repay $1,000,000 in NMFA Series 2008A Landfill Loan, issued in 2008. The loans
are payable solely from utility customer net revenues and are payable through May 2018. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due
under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service
account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited
in the debt service reserve account or the loan agreement reser ve account held by the trustee, payable from
and constituting a lien upon the pledged revenues. The total p rincipal and interest remaining to be paid on
the loan is $118,577 and $3,482, respectively. Principal and interest paid for the current year and total
customer net revenues were $152,141 and $1,345,551, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $130,000 in NMFA/WTB Water Project, issued in 2009. The loans are
payable solely from utility customer net revenues and are payable through June 2029. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due
under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service
account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited
in the debt service reserve account or the loan agreement reser ve account held by the trustee, payable from
and constituting a lien upon the pledged revenues. The total principal remaining to be paid on the loan is
$79,862 with no interest due. Principal for the current year and total customer net revenues were $6,548
and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $600,000 in NMFA/WTB Water Project, issued in 2009. The loans are
payable solely from utility customer net revenues and are payable through June 2029. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due
under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service
account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited
in the debt service reserve account or the loan agreement reser ve account held by the trustee, payable from
and constituting a lien upon the pledged revenues. The total principal remaining to be paid on the loan is
$368,597 with no interest due. Principal for the current year and total customer net revenues were $30,220
and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $1,200,000 in NMED Clean Water State Revolving Fund Project, issued in
2009. The loans are payable solely from utility customer net revenues and are payable through June 2030.
The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other
amounts due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account, to the NMED or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal remaining to be paid on
the loan is $960,000 with no interest due. Principal for the current year and total customer net revenues
were $60,000 and $3,260,084, respectively.
75
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 19. Utility Revenues Pledged (continued)
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $197,390 in NMFA/WTB Water Project, issued in 2013. The loans are
payable solely from utility customer net revenues and are payable through June 2033. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due
under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service
account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited
in the debt service reserve account or the loan agreement reser ve account held by the trustee, payable from
and constituting a lien upon the pledged revenues. The total p rincipal and interest remaining to be paid on
the loan is $158,743 and $3,395, respectively. Principal for the current year and total customer net
revenues were $9,712 and $3,260,084, respectively.
The Town of Taos has pledged future revenues from the New Cell for Landfill Facility, net of operation and
maintenance expenses, to repay $1,376,046 in NMFA loan issued 2015. The loans are payable solely from
utility customer net revenues and are payable through June 2025. The pledged revenues shall be in an
amount sufficient to pay principal, premium, if any, interest and other amounts due under the loan
agreement, including an amount sufficient to cure any deficiencies in the debt service account or the loan
agreement reserve account, to the NMFA or the Trustee, as its a ssignee, to be deposited in the debt service
reserve account or the loan agreement reserve account held by t he trustee, payable from and constituting a
lien upon the pledged revenues. The total principal and interest remaining to be paid on the loan is
$1,312,958 and $98,914, respectively. Principal for the curren t year and total customer net revenues were
$72,318 and $1,345,551, respectively.
NOTE 20. Subsequent Pronouncements
In June 2015, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions, was issued. Effective Date: The provisions of this Statement are effective for fiscal years
beginning after June 15, 2017. The standard will be implemented during the fiscal year ended June 30,
2018. The Town expects this pronouncement to have a material effect on the financial statements.
In March 2016, GASB Statement No. 81, Irrevocable Split‐Interest Agreements, was issued. Effective Date: The
requirements of this Statement are effective for reporting periods beginning after December 15, 2016.
Earlier application is encouraged. The Town is still evaluating how this pronouncement will affect the
financial statements.
In November 2016, GASB Statement No. 83, Certain Asset Retirement Obligations, was issued. Effective Date:
The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. Earlier
application is encouraged. The Town is still evaluating how this pronouncement will affect the financial
statements.
In January 2017, GASB Statement No. 84, Fiduciary Activities, was issued. Effective Date: The requirements of
this Statement are effective for reporting periods beginning after December 15, 2018. Earlier application is
encouraged. The Town is still evaluating how this pronouncement will affect the financial statements.
In March 2017, GASB Statement No. 85, Omnibus 2017, was issued. Effective Date: The requirements of this
Statement are effective for reporting periods beginning after June 15, 2017. Earlier application is
encouraged. This Statement addresses a variety of topics including issues related to blending component
units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other
postemployment benefits [OPEB]). The Town is still evaluating how this pronouncement will affect the
financial statements.
76
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2017
NOTE 20. Subsequent Pronouncements
In May 2017, GASB Statement No. 86, Certain Debt Extinguishment Issues, was issued. Effective Date: The
requirements of this Statement are effective for reporting periods beginning after June 15, 2017. Earlier
application is encouraged. This Statement addresses a variety of topics including issues related to in‐
substance defeasance of debt using only existing resources. Th e Town does not expect the pronouncement
to have a material effect on the financial statements.
In June 2017, GASB Statement No. 87, Leases, was issued. Effective Date: The requirements of this
Statement are effective for reporting periods beginning after December 15, 2019. Earlier application is
encouraged. The Town is still evaluating how this pronouncement will affect the financial statements.
77
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78
REQUIRED SUPPLEMENTARY INFORMATION
79
STATE OF NEW MEXICO Schedule I
Town of Taos Page 1 of 3
Schedule of the Town's Proportionate Share of the Net Pension Liability
of PERA Fund Municipal General Division
Public Employees Retirement Association (PERA) Plan
Last 10 Fiscal Years*
2017
Measurement
Date (As of and
for the Year
Ended June 30,
2016)
2016
Measurement
Date (As of and
for the Year
Ended June 30,
2015)
2015
Measurement
Date (As of and
for the Year
Ended June 30,
2014)
Town of Taos' proportion of the net pension liability 0.4710% 0.5054% 0.5476%
Town of Taos' proportionate share of the net pension liability 7,524,994$ 5,152,991$ 4,271,868$
Town of Taos' covered payroll 4,069,174$ 4,513,593$ 4,457,324$
Town of Taos' proportionate share of the net pension liability
as a percentage of its covered‐employee payroll 184.93% 114.17% 95.84%
Plan fiduciary net position as a percentage of the total pension 69.18% 76.99% 81.29%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to show
information for 10 years. However, until a full 10‐year trend is compiled, Town of Taos will present information for those
years for which information is available.
See independent auditors' report.
See notes to required supplementary information.80
STATE OF NEW MEXICO Schedule I
Town of Taos Page 2 of 3
Schedule of the Town's Proportionate Share of the Net Pension Liability
of PERA Fund Municipal Police Division
Public Employees Retirement Association (PERA) Plan
Last 10 Fiscal Years*
2017
Measurement
Date (As of and
for the Year
Ended June 30,
2016
Measurement
Date (As of and
for the Year
Ended June 30,
2015
Measurement
Date (As of and
for the Year
Ended June 30,
Town of Taos' proportion of the net pension liability 0.4766% 0.4844% 0.4887%
Town of Taos' proportionate share of the net pension liability 3,516,497$ 2,329,267$ 1,593,109$
Town of Taos' covered payroll 953,345$ 949,833$ 937,534$
Town of Taos' proportionate share of the net pension liability
as a percentage of its covered‐employee payroll 368.86% 245.23% 169.93%
Plan fiduciary net position as a percentage of the total pension 69.18% 76.99% 81.29%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to show
information for 10 years. However, until a full 10‐year trend is compiled, Town of Taos will present information for those
years for which information is available.
See independent auditors' report.
See notes to required supplementary information.81
STATE OF NEW MEXICO Schedule I
Town of Taos Page 3 of 3
Schedule of the Town's Proportionate Share of the Net Pension Liability
of PERA Fund Municipal Fire Division
Public Employees Retirement Association (PERA) Plan
Last 10 Fiscal Years*
2017
Measurement
Date (As of and
for the Year
Ended June 30,
2016
Measurement
Date (As of and
for the Year
Ended June 30,
2015
Measurement
Date (As of and
for the Year
Ended June 30,
Town of Taos' proportion of the net pension liability 0.2784% 0.2769% 0.2567%
Town of Taos' proportionate share of the net pension liability 1,857,210$ 1,429,131$ 1,071,464$
Town of Taos' covered payroll 323,796$ 315,617$ 285,100$
Town of Taos' proportionate share of the net pension liability
as a percentage of its covered‐employee payroll 573.57% 452.81% 375.82%
Plan fiduciary net position as a percentage of the total pension 69.18% 76.99% 81.29%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to show
information for 10 years. However, until a full 10‐year trend is compiled, Town of Taos will present information for those
years for which information is available.
See independent auditors' report.
See notes to required supplementary information.82
STATE OF NEW MEXICO Schedule II
Town of Taos Page 1 of 3
Schedule of the Town's Contributions
Public Employees Retirement Association (PERA) Plan
PERA Municipal General Division
Last 10 Fiscal Years*
As of and for the
Year Ended June
30, 2017
As of and for the
Year Ended June
30, 2016
As of and for the
Year Ended June
30, 2015
Contractually required contributions 373,065$ 386,572$ 428,791$
Contributions in relation to the contractually required contribution (373,065) (386,572) (428,791)
Contribution deficiency (excess)‐$ ‐$ ‐$
Town of Taos' covered‐employee payroll 3,909,077$ 4,069,174$ 4,513,593$
Contributions as a percentage of covered‐employee payroll 9.5% 9.5% 9.5%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to show
information for 10 years. However, until a full 10‐year trend is compiled, Town of Taos will present information for those years for
which information is available.
See independent auditors' report.
See notes to required supplementary information.83
STATE OF NEW MEXICO Schedule II
Town of Taos Page 2 of 3
Schedule of the Town's Contributions
Public Employees Retirement Association (PERA) Plan
PERA Municipal Police Division
Last 10 Fiscal Years*
As of and for the
Year Ended June
30, 2017
As of and for the
Year Ended June
30, 2016
As of and for the
Year Ended June
30, 2015
Contractually required contributions 161,795$ 169,123$ 168,500$
Contributions in relation to the contractually required contribution (161,795) (169,123) (168,500)
Contribution deficiency (excess)‐$ ‐$ ‐$
Town of Taos' covered‐employee payroll 911,949$ 953,345$ 949,833$
Contributions as a percentage of covered‐employee payroll 17.74% 17.74% 17.74%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to show
information for 10 years. However, until a full 10‐year trend is compiled, Town of Taos will present information for those years for
which information is available.
See independent auditors' report.
See notes to required supplementary information.84
STATE OF NEW MEXICO Schedule II
Town of Taos Page 3 of 3
Schedule of the Town's Contributions
Public Employees Retirement Association (PERA) Plan
PERA Municipal Fire Division
Last 10 Fiscal Years*
As of and for the
Year Ended June
30, 2017
As of and for the
Year Ended June
30, 2016
As of and for the
Year Ended June
30, 2015
Contractually required contributions 69,503$ 72,748$ 68,173$
Contributions in relation to the contractually required contribution (69,503) (72,748) (68,173)
Contribution deficiency (excess)‐$ ‐$ ‐$
Town of Taos' covered‐employee payroll 321,046$ 336,796$ 315,617$
Contributions as a percentage of covered‐employee payroll 21.6% 21.6% 21.6%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to show
information for 10 years. However, until a full 10‐year trend is compiled, Town of Taos will present information for those years for
which information is available.
See independent auditors' report.
See notes to required supplementary information.85
STATE OF NEW MEXICO
Town of Taos
Notes to Required Supplementary Information
June 30, 2017
See independent auditors’ report.
Changes of benefit terms. The PERA Fund COLA and retirement eligibility benefits changes in recent years are described
in Note 1 of the PERA FY15 audit available at: http://www.pera.state.nm.us/pdf/AuditFinancialStatements/366_Public
_Employees_Retirement_Association_2015.pdf.
Changes of assumptions. The PERA Fund COLA and retirement eligibility benefits changes in recent years are described
in Note 1 of the PERA FY15 audit available at http://www.nmpera.org/assets/uploads/ downloads/comprehensive‐
annual‐financial‐reports/2016‐CAFR_12.22.2016_FINAL‐with‐corrections.pdf
Changes in assumptions. The Public Employees Retirement Association (PERA) of New Mexico Annual Actuarial
Valuation as of June 30, 2016 report is available at http://s3.amazonaws.com/boardaudio/Final‐Version‐2016‐PERA‐
GASB‐68‐Report.pdf See the notes to the financial statements on the CAFR pages 74‐76 which summarizes actuarial
assumptions and methods effective with the June 30, 2016 valuation.
86
SUPPLEMENTARY INFORMATION
87
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Fund Descriptions
June 30, 2017
SPECIAL REVENUE FUNDS
Fire Protection – To account for the operations and maintenance of the fire department. Financing is provided by an
allotment from the State of New Mexico Fire Marshall’s Office. State Statute Section 59A‐53‐2, NMSA, 1978 compilation,
requires the allotment be used only to operate fire departments.
Recreation – To account for establishing a nd maintaining recreational programs in the Town. Financing is provided by
program revenue and by a 1‐cent tax on cigarette sales, which is collected and distributed by the State of New Mexico.
State Statute Section 7‐12‐15, NMSA, 1978 compilation requires this tax be used in the above manner.
Local Government Correction – The local government corrections fee fund is used to account for the collection of a
mandatory correction fee for violations of any municipal ordinance. Funds collected can only be used for jailer training,
construction planning, construction, operation and maintenance of a municipal jail, and for paying for costs of housing.
Authority is NMSA 1978 Section 35‐14‐11B(1).
Law Enforcement Protection – The law enforcement protection fund was created to account for revenues received
pursuant to the law enforcement protection fund (Section 29‐13‐7, NMSA 1978). Amounts distributed from this fund may
only be expended for the following purposes: (1) the repair and purchase of law enforcement apparatus and equipment
that meet nationally recognized standards; (2) expenses associated with advanced law enforcement planning and training;
(3) complying with match or contribution requirements of federal funds for criminal justice programs; (4) no more than
fifty percent (50%) of the replacement salaries of municipal and county law enforcement personnel while attending a
specified advanced law enforcement planning and training.
Civic Center – To account for that portion of lodgers tax receipts allocated for Civic Center operations and promotional
expenditures, as well as the revenues earned from Civic Center operations, including rentals, catering fees, and related
charges for services. Authority is Town Council resolution.
Domestic Violence Shelter – This fund was created to receive the appropriations and grants for the purpose of
construction and maintaining the Domestic Violence Shelter Home. Authority is Town Council resolution.
Public Transportation – To account for the portion of Lodgers Tax receipts allocated for the purpose of providing
transportation to the public. Authority is Town Council resolution.
Community Grants – To account for various small grants for various community purposes. Each grant is authorized
by the granting agency. The fund is authorized by Town Council resolution.
Municipal Road Gasoline Tax – To account for a 1 cent gasoline tax that is used for repairing and construction of
roads. Also included in this fund is revenue from the State Department of Transportation under a municipal arterial
project agreement. Authority is 7‐7‐6.9 and 7‐1‐6.27 NMSA 1978.
1/4 Cent Municipal Gross Receipts Tax – To account for proceeds from a supplemental municipal gross receipts tax, a
portion of which is pledged toward payment of principal and interest on Gross Receipts Tax Revenue Bonds. After
required debt service transfers have been made, the remaining income of this fund is restricted for capital improvement
purposes. NMSA 1978 Chapter 7, Article 20E‐1 to 22.
Historical District – To account for all associated parking meter and associated revenues and costs, including leases,
meter maintenance, personnel, and historic district promotion. Authority is Town Council resolution.
Communications – To account for money collected by the Town from three other government entities to share
centralized dispatch services throughout the County of Taos. Funding is authorized by a joint powers agreement as
authorized by Sections 11‐1‐1 through 11‐1‐7 NMSA 1978.
88
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Fund Descriptions
June 30, 2017
SPECIAL REVENUE FUNDS (CONTINUED)
Confidential Informant – A structured accounting system, operated within the department, providing officers with
investigative expense monies to support operations related to the detection, investigation or enforcement of the laws
related to crime. This includes, but is not limited to: paying documented confidential informants and confidential
sources; purchasing contraband as evidence; and paying expenses for surveillance activities and equipment.
Authority is Town Council resolution.
Capital/Maintenance/Operating Fund – This fund was created to receive additional amounts that are paid for one‐
time costs by the Town of Taos. Authority is Town Council resolution.
DEBT SERVICE FUNDS
2015 NMFA Fire Pumper – This fund was created for the purpose of repayment of the bond issued for the new fire
pumper purchased. Authority is Town Council resolution.
2009 NMFA PPRF Disadvantage Program‐ Eco Park – This fund was created for the purpose of constructing phase I of a
multi‐phased recreation park. The repayment under the loan agr eement is solely from the first and second increments of
municipal infrastructure gross receipts tax pursuant to section 7‐19D‐11, NMSA 1978.
2008 Gross Receipts Tax Revenue Bond Retirement – This f u nd was created for the purpose of repayment of the bo nd
issue from the 1.225% distribution of State Shared Gross Receipts Tax revenues. Authority is Town Council resolution.
NMFA Debt Service Reserve Eco Park – This fund was created to be credited with transfers from the General Fund for
the purpose of accumulating monies for payment of principal and interest on the debt for repayment of Eco Park.
Authority is Town Council resolution.
2007 NMFA Land Purchase – This fund was created to be credited with transfers from the General Fund for the purpose
of accumulating monies for payment of principal and interest on the debt for repayment of land purchase. Authority is
Town Council resolution.
2011 PPRF Street Improvement – This fund was created for the purpose of accumulating monies for the payment of
principal and interest on Series PPRF Street Improvement Revenue Bonds. Authority is Town Council resolution.
2011 PPRF Street Improvement Reserve – This fund was created for the purpose of accumulating monies for the
payment of principal and interest on Series PPRF Street Improvement Revenue Bonds. Authority is Town Council
resolution.
CAPITAL PROJECTS FUNDS
Facilities Improvements – This fund was created to receive transfers from other funds for the purpose of improving
facilities of the Town. Authority is Town Council resolution.
Capital Projects – This fund was created to accumulate revenue and other financ ing sources for the purpose of financing
general‐purpose capital projects. Authority is Town Council resolution.
Vehicle Replacement – This fund was created to receive transfers from other funds for the purpose of purchasing
vehicles for the Town of Taos. Authority is Town Council resolution.
Special Events Enterprise – This fund was created to account for the monies for the special events the Town puts on
throughout the year to generate revenue . Authority is Town Council resolution.
1994 Gross Receipts Tax Revenue Bond Acquisition – This fund was created to receive the 1994 Gross Receipts Tax
Bond proceeds for the purpose of construction of affordable housing. Authority is Town Council resolution. 89
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
Special Revenue
Fire Protection Recreation
Local
Government
Correction
Law
Enforcement
Protection
Assets
Cash and cash equivalents 234,248$ 22,848$ 58,865$ 1,419$
Investments 223,258 ‐ ‐ ‐
Receivables:
Other ‐ ‐ ‐ ‐
Total assets 457,506$ 22,848$ 58,865$ 1,419$
Liabilities
Accounts payable 7,289$ 3,810$ 3,600$ 155$
Accrued payroll ‐ ‐ ‐ ‐
Deposits held in trust for others ‐ ‐ ‐ ‐
Total liabilities 7,289 3,810 3,600 155
Fund balances
Spendable
Restricted for:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ 55,265 1,264
Culture and recreation ‐ 19,038 ‐ ‐
Public works ‐ ‐ ‐ ‐
Fire protection 450,217 ‐ ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Debt service expenditures ‐ ‐ ‐ ‐
Capital projects ‐ ‐ ‐ ‐
Committed for:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Transportation ‐ ‐ ‐ ‐
Capital projects ‐ ‐ ‐ ‐
Unassigned (deficit)‐ ‐ ‐ ‐
Total fund balances 450,217 19,038 55,265 1,264
Total liabilities and fund balances 457,506$ 22,848$ 58,865$ 1,419$
See independent auditors' report.90
Statement A‐1
Page 1 of 3
Special Revenue
Civic Center
Domestic
Violence
Shelter
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
780$ 1$ 307,974$ 28,659$ 17,525$
2,000 ‐ 210,000 50,000 ‐
‐ ‐ ‐ 68,045 ‐
2,780$ 1$ 517,974$ 146,704$ 17,525$
‐$ ‐$ ‐$ 10,479$ ‐$
‐ ‐ ‐ 3,133 ‐
5,103 ‐ ‐ ‐ ‐
5,103 ‐ ‐ 13,612 ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ 17,525
‐ ‐ ‐ ‐ ‐
‐ 1 ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ 133,092 ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ 517,974 ‐ ‐
‐ ‐ ‐ ‐ ‐
(2,323) ‐ ‐ ‐ ‐
(2,323) 1 517,974 133,092 17,525
2,780$ 1$ 517,974$ 146,704$ 17,525$
See independent auditors' report.91
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
Special Revenue
1/4 Cent
Municipal
Gross Receipts
Tax
Historical
District Communications
Confidential
Informant
Assets
Cash and cash equivalents 53,885$ 64,533$ ‐$ 9,828$
Investments ‐ ‐ ‐ ‐
Receivables:
Other 171,123 ‐ ‐ ‐
Total assets 225,008$ 64,533$ ‐$ 9,828$
Liabilities
Accounts payable ‐$ 2,189$ ‐$ ‐$
Accrued payroll ‐ 195 ‐ ‐
Deposits held in trust for others ‐ ‐ ‐ ‐
Total liabilities ‐ 2,384 ‐ ‐
Fund balances
Spendable
Restricted for:
General government 225,008 ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Culture and recreation ‐ ‐ ‐ ‐
Public works ‐ ‐ ‐ ‐
Fire protection ‐ ‐ ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Debt service expenditures ‐ ‐ ‐ ‐
Capital projects ‐ ‐ ‐ ‐
Committed for:
General government ‐ 62,149 ‐ ‐
Public safety ‐ ‐ ‐ 9,828
Transportation ‐ ‐ ‐ ‐
Capital projects ‐ ‐ ‐ ‐
Unassigned (deficit)‐ ‐ ‐ ‐
Total fund balances 225,008 62,149 ‐ 9,828
Total liabilities and fund balances 225,008$ 64,533$ ‐$ 9,828$
See independent auditors' report.92
Statement A‐1
Page 2 of 3
Special Revenue Debt Service
Capital
Maintenance
Operating Fund
2015 NMFA
Fire Pumper
2009 NMFA
PPRF
Disadvantage
Program‐ Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
NMFA Debt
Service
Reserve Eco
Park
237,612$ ‐$ 213$ 1$ 11,517
‐ ‐ ‐ ‐ 177,809
‐ ‐ ‐ ‐ ‐
237,612$ ‐$ 213$ 1$ 189,326$
27,903$ ‐$ ‐$ ‐$ ‐$
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
27,903 ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ 213 1 189,326
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
209,709 ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
209,709 ‐ 213 1 189,326
237,612$ ‐$ 213$ 1$ 189,326$
See independent auditors' report.93
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
Debt Service Capital Projects
2007 NMFA
Land Purchase
2011 PPRF
Street
Improvement
2011 PPRF
Street
Improvement
Reserve
Facilities
Improvements
Assets
Cash and cash equivalents 386$ 15,890$ 4,746 444,821$
Investments ‐ ‐ 166,653 ‐
Receivables:
Other ‐ ‐ ‐ 386,269
Total assets 386$ 15,890$ 171,399$ 831,090$
Liabilities
Accounts payable ‐$ ‐$ ‐$ 100,602$
Accrued payroll ‐ ‐ ‐ ‐
Deposits held in trust for others ‐ ‐ ‐ ‐
Total liabilities ‐ ‐ ‐ 100,602
Fund balances
Spendable
Restricted for:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Culture and recreation ‐ ‐ ‐ ‐
Public works ‐ ‐ ‐ ‐
Fire protection ‐ ‐ ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Debt service expenditures 386 15,890 171,399 ‐
Capital projects ‐ ‐ ‐ ‐
Committed for:
General government ‐ ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐
Transportation ‐ ‐ ‐ ‐
Capital projects ‐ ‐ ‐ 730,488
Unassigned (deficit)‐ ‐ ‐ ‐
Total fund balances 386 15,890 171,399 730,488
Total liabilities and fund balances 386$ 15,890$ 171,399$ 831,090$
See independent auditors' report.94
Statement A‐1
Page 3 of 3
Capital Projects
Capital Projects
Vehicle
Replacement
Special Events
Enterprise
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
Total Nonmajor
Governmental
Funds
32,680$ 1,401$ 139,490$ 84,040$ 1,773,362$
316,903 26,000 190,000 425,372 1,787,995
128,343 ‐ ‐ ‐ 753,780
477,926$ 27,401$ 329,490$ 509,412$ 4,315,137$
‐$ ‐$ ‐$ ‐$ 156,027$
‐ ‐ ‐ ‐ 3,328
‐ ‐ ‐ ‐ 5,103
‐ ‐ ‐ ‐ 164,458
‐ ‐ ‐ ‐ 225,008
‐ ‐ ‐ ‐ 56,529
‐ ‐ ‐ ‐ 19,038
‐ ‐ ‐ ‐ 17,525
‐ ‐ ‐ ‐ 450,217
‐ ‐ ‐ ‐ 1
‐ ‐ ‐ ‐ 377,215
‐ ‐ 329,490 509,412 838,902
‐ ‐ ‐ ‐ 195,241
‐ ‐ ‐ ‐ 9,828
‐ ‐ ‐ ‐ 517,974
477,926 27,401 ‐ ‐ 1,445,524
‐ ‐ ‐ ‐ (2,323)
477,926 27,401 329,490 509,412 4,150,679
477,926$ 27,401$ 329,490$ 509,412$ 4,315,137$
See independent auditors' report.95
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2017
Special Revenue
Fire Protection Recreation
Local
Governmental
Correction
Law
Enforcement
Protection
Revenues
Taxes:
Gross receipts ‐$ ‐$ ‐$ ‐$
Gasoline and motor vehicle taxes ‐ ‐ ‐ ‐
Intergovernmental income:
Federal operating grants ‐ ‐ ‐ ‐
Federal capital grants ‐ ‐ ‐ ‐
State operating grants 314,619 ‐ ‐ 29,000
State capital grants ‐ ‐ ‐ ‐
Charges for services ‐ 1,179 59,190 ‐
Licenses and fees ‐ ‐ 14,946 ‐
Investment income 215 ‐ ‐ ‐
Miscellaneous ‐ 13,430 ‐ ‐
Total revenues 314,834 14,609 74,136 29,000
Expenditures
Current:
General government ‐ ‐ ‐ ‐
Public safety 101,011 ‐ 94,972 27,736
Public works ‐ ‐ ‐ ‐
Culture and recreation ‐ 52,935 ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Capital outlay ‐ ‐ ‐ ‐
Debt service:
Principal ‐ ‐ ‐ ‐
Interest ‐ ‐ ‐ ‐
Total expenditures 101,011 52,935 94,972 27,736
Excess (deficiency) of revenues over
expenditures 213,823 (38,326) (20,836) 1,264
Other financing sources (uses)
Transfers in ‐ 35,706 ‐ ‐
Transfers out (75,094) ‐ ‐ ‐
Total other financing sources (uses)(75,094) 35,706 ‐ ‐
Net change in fund balances 138,729 (2,620) (20,836) 1,264
Fund balances ‐ beginning of year 311,488 21,658 76,101 ‐
Fund balances ‐ end of year 450,217$ 19,038$ 55,265$ 1,264$
See independent auditors' report.96
Statement A‐2
Page 1 of 3
Special Revenue
Civic Center
Domestic
Violence Shelter
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
‐$ ‐$ ‐$ ‐$ ‐$
‐ ‐ ‐ ‐ 96,825
‐ ‐ ‐ 69,676 ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ 148,782 ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ 218,458 96,825
‐ ‐ ‐ 316,430 ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ 33,354 ‐ ‐
‐ ‐ ‐ 4,589 ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ 33,354 321,019 ‐
‐ ‐ (33,354) (102,561) 96,825
‐ ‐ 403,284 47,308 ‐
‐ ‐ ‐ ‐ (79,300)
‐ ‐ 403,284 47,308 (79,300)
‐ ‐ 369,930 (55,253) 17,525
(2,323) 1 148,044 188,345 ‐
(2,323)$ 1$ 517,974$ 133,092$ 17,525$
See independent auditors' report.97
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2017
Special Revenue
1/4 Cent
Municipal
Gross Receipts
Tax
Historical
District Communications
Confidential
Informant
Revenues
Taxes:
Gross receipts 997,860$ ‐$ ‐$ ‐$
Gasoline and motor vehicle taxes ‐ ‐ ‐ ‐
Intergovernmental income:
Federal operating grants ‐ ‐ ‐ ‐
Federal capital grants ‐ ‐ ‐ ‐
State operating grants ‐ ‐ ‐ ‐
State capital grants ‐ ‐ ‐ ‐
Charges for services ‐ ‐ ‐ ‐
Licenses and fees ‐ 122,475 ‐ ‐
Investment income ‐ ‐ ‐ ‐
Miscellaneous ‐ ‐ ‐ ‐
Total revenues 997,860 122,475 ‐ ‐
Expenditures
Current:
General government ‐ ‐ 11,200 ‐
Public safety ‐ ‐ ‐ ‐
Public works ‐ ‐ ‐ ‐
Culture and recreation ‐ 137,120 ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Capital outlay ‐ ‐ ‐ ‐
Debt service:
Principal ‐ ‐ ‐ ‐
Interest ‐ ‐ ‐ ‐
Total expenditures ‐ 137,120 11,200 ‐
Excess (deficiency) of revenues over
expenditures 997,860 (14,645) (11,200) ‐
Other financing sources (uses)
Transfers in ‐ ‐ ‐ ‐
Transfers out (1,014,124) ‐ ‐ ‐
Total other financing sources (uses)(1,014,124) ‐ ‐ ‐
Net change in fund balances (16,264) (14,645) (11,200) ‐
Fund balances ‐ beginning of year 241,272 76,794 11,200 9,828
Fund balances ‐ end of year 225,008$ 62,149$ ‐$ 9,828$
See independent auditors' report.98
Statement A‐2
Page 2 of 3
Special Revenue Debt Service
Capital
Maintenance
Operating Fund
2015 NMFA
Fire Pumper
2009 NMFA
PPRF
Disadvantage
Program‐ Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
NMFA Debt
Service
Reserve Eco
Park
‐$ ‐$ ‐$ ‐$ ‐$
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ 4,443
5,800 ‐ ‐ ‐ ‐
5,800 ‐ ‐ ‐ 4,443
230,555 364 ‐ ‐ 1,833
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐
526,600 ‐ ‐ ‐ ‐
‐ 71,511 137,653 315,000 ‐
‐ 3,219 43,103 181,025 ‐
757,155 75,094 180,756 496,025 1,833
(751,355) (75,094) (180,756) (496,025) 2,610
809,501 75,094 180,753 496,025 ‐
‐ ‐ ‐ ‐ ‐
809,501 75,094 180,753 496,025 ‐
58,146 ‐ (3) ‐ 2,610
151,563 ‐ 216 1 186,716
209,709$ ‐$ 213$ 1$ 189,326$
See independent auditors' report.99
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2017
Debt Service Capital Projects
2007 NMFA
Land Purchase
2011 PPRF
Street
Improvement
2011 PPRF
Street
Improvement
Reserve
Facilities
Improvements
Revenues
Taxes:
Gross receipts ‐$ ‐$ ‐$ ‐$
Gasoline and motor vehicle taxes ‐ ‐ ‐ ‐
Intergovernmental income:
Federal operating grants ‐ ‐ ‐ ‐
Federal capital grants ‐ ‐ ‐ 178,974
State operating grants ‐ ‐ ‐ 51,733
State capital grants ‐ ‐ ‐ 198,860
Charges for services ‐ ‐ ‐ ‐
Licenses and fees ‐ ‐ ‐ ‐
Investment income 217 1,999 2,136 ‐
Miscellaneous ‐ ‐ ‐ ‐
Total revenues 217 1,999 2,136 429,567
Expenditures
Current:
General government 276 ‐ 1,720 ‐
Public safety ‐ ‐ ‐ ‐
Public works ‐ ‐ ‐ ‐
Culture and recreation ‐ ‐ ‐ ‐
Health and welfare ‐ ‐ ‐ ‐
Capital outlay ‐ ‐ ‐ 449,453
Debt service:
Principal 110,146 151,254 ‐ ‐
Interest 3,344 20,121 ‐ ‐
Total expenditures 113,766 171,375 1,720 449,453
Excess (deficiency) of revenues over
expenditures (113,549) (169,376) 416 (19,886)
Other financing sources (uses)
Transfers in 113,765 182,075 ‐ 438,984
Transfers out ‐ ‐ ‐ ‐
Total other financing sources (uses)113,765 182,075 ‐ 438,984
Net change in fund balances 216 12,699 416 419,098
Fund balances ‐ beginning of year 170 3,191 170,983 311,390
Fund balances ‐ end of year 386$ 15,890$ 171,399$ 730,488$
See independent auditors' report.100
Statement A‐2
Page 3 of 3
Capital Projects
Capital
Projects
Vehicle
Replacement
Special Events
Enterprise
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
Total Nonmajor
Governmental
Funds
748,395$ ‐$ ‐$ ‐$ 1,746,255$
‐ ‐ ‐ ‐ 96,825
‐ ‐ ‐ ‐ 69,676
‐ ‐ ‐ ‐ 178,974
‐ ‐ ‐ ‐ 544,134
‐ ‐ ‐ ‐ 198,860
‐ ‐ ‐ ‐ 60,369
‐ ‐ ‐ ‐ 137,421
2,082 ‐ ‐ 2,261 13,353
‐ ‐ ‐ ‐ 19,230
750,477 ‐ ‐ 2,261 3,065,097
‐ ‐ 20,510 ‐ 582,888
‐ ‐ ‐ ‐ 223,719
3,780 ‐ ‐ ‐ 3,780
‐ ‐ ‐ ‐ 190,055
‐ ‐ ‐ ‐ 33,354
82,486 ‐ ‐ ‐ 1,063,128
‐ ‐ ‐ ‐ 785,564
‐ ‐ ‐ ‐ 250,812
86,266 ‐ 20,510 ‐ 3,133,300
664,211 ‐ (20,510) 2,261 (68,203)
9,000 ‐ 350,000 ‐ 3,141,495
(784,000) ‐ ‐ ‐ (1,952,518)
(775,000) ‐ 350,000 ‐ 1,188,977
(110,789) ‐ 329,490 2,261 1,120,774
588,715 27,401 ‐ 507,151 3,029,905
477,926$ 27,401$ 329,490$ 509,412$ 4,150,679$
See independent auditors' report.101
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102
SUPPORTING SCHEDULES
103
Schedule III
Account Bank Deposits Outstanding Reconciled
Bank Name/Account Name Type Balance in Transit Checks Balance
US Bank
Clearing Account Checking 430,001$ 309,891$ 595,015$ 144,877$
Judicial Bond Fund Municipal Court Checking 2,653 ‐ 2,653 ‐
Utility Construction Fund Checking 39,530 ‐ ‐ 39,530
Water & Sewer System Income Fund Checking 5,078,482 173,455 49,448 5,202,489
Certificate of Deposit ‐ Investment CD 170,500 ‐ ‐ 170,500
Total US Bank 5,721,166 483,346 647,116 5,557,396
Centinel Bank
General Fund Checking 4,917,100 2,947 143 4,919,904
Water/Wastewater Improvement Fund Checking 730,396 ‐ 107,610 622,786
Payroll Clearing Checking ‐ ‐ ‐ ‐
1994 GRT Revenue Bond Acquisition
Fund Checking 84,040 ‐ ‐ 84,040
HUD Account ‐ Domestic Violence
Shelter Checking 1 ‐ ‐ 1
ACH Transfer Account Checking 51,766 221 51,887 100
Total Centinel Bank 5,783,303 3,168 159,640 5,626,831
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
New Mexico Finance Authority ‐ Investments
2001A Water & Sewer Revenue Bond
Retirement
State
Treasurer 60,723$ ‐$ ‐$ 60,723$
2004 Taos Regional Landfill Revenue
Bond Reserve
State
Treasurer 98,368 ‐ ‐ 98,368
2008A Taos Regional Landfill Debt
Service
State
Treasurer 166,653 ‐ ‐ 166,653
2010 Phase I Multi‐phased Rec. Park State
Treasurer 157,134 ‐ ‐ 157,134
New Cell for SW Landfill Facility State
Treasurer 135,360 ‐ ‐ 135,360
Total New Mexico Finance Authority 618,238 ‐ ‐ 618,238
Total 12,122,707$ 486,514$ 806,756$ 11,802,465
Add: New Mexico State Treasurer Local Government Investment Pool 4,268,250
Add: petty cash 1,850
Total deposits and investments 16,072,565$
Cash and cash equivalents and investments per financial statements:
Cash and cash equivalents ‐ Exhibit A‐1 8,314,655$
Investments ‐ Exhibit A‐1 4,576,440
Restricted cash and cash equivalents ‐ Exhibit A‐1 2,733,016
Restricted investments ‐ Exhibit A‐1 374,570
Fiduciary funds cash and investments ‐ Exhibit E‐1 73,884
Total cash and cash equivalents and investments 16,072,565$
STATE OF NEW MEXICO
Town of Taos
Schedule of Deposit and Investment Accounts
June 30, 2017
See independent auditors' report.104
Schedule IV
Description of Fair Market
Name of Pledged CUSIP Value at Location
Depository Collateral Maturity Number June 30, 2017 of Safekeeper
US Bank
FNMA POOL 890193 N/A 523118 10,000,000$ Federal Home Loan Bank, Dallas, TX
10,000,000
Centinel Bank
CLOVIS SCH DIST 8/1/2022 189414KC8 200,000 Independent Bankers Bank, Dallas TX
LEA COUNTY SCH 7/15/2021 521513AL5 200,000 Independent Bankers Bank, Dallas TX
LOS ALAMOS SD GO 8/1/2019 5422NBL9 400,000 Independent Bankers Bank, Dallas TX
CLOVIS SCH DIST 8/1/2024 189414JA4 250,000 Independent Bankers Bank, Dallas TX
ESPANOLA SCH 9/1/2025 29662RBA5 150,000 Independent Bankers Bank, Dallas TX
LEA COUNTY SCH 6/15/2020 521213AW1 685,125 Independent Bankers Bank, Dallas TX
RUIDOSO SD GO 8/1/2021 781338HR2 250,000 Independent Bankers Bank, Dallas TX
WEST LAS VEGAS 8/15/2018 953769JW7 50,000 Independent Bankers Bank, Dallas TX
HOBBS SCH DIST 7/15/2021 433866EV8 200,000 Independent Bankers Bank, Dallas TX
FHBL 12/14/2018 3133XSUN6 812,896 Independent Bankers Bank, Dallas TX
WEST LAS VEGAS 8/15/2022 953769KX3 150,000 Independent Bankers Bank, Dallas TX
GALLUP MCKINLEY 7/15/2021 364010RJ9 175,030 Independent Bankers Bank, Dallas TX
3,523,051
Total Pledged Collateral 13,523,051$
June 30, 2017
Town of Taos
Schedule of Collateral Pledged by Depository for Public Funds
STATE OF NEW MEXICO
See independent auditors' report.105
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106
STATE OF NEW MEXICO Schedule V
Town of Taos
Schedule of Changes in Fiduciary Assets and Liabilities ‐ Agency Funds
For the Year Ended June 30, 2017
Balance Balance
June 30, 2016 Additions Deletions June 30, 2017
Assets
Cash 13,615$ $ 269 $ ‐ 13,884$
Investments 60,000 ‐ ‐ 60,000
Total assets 73,615$ 269$ ‐$ 73,884$
Liabilities
Due to other entities 73,615$ 269$ ‐$ 73,884$
Total liabilities 73,615$ 269$ ‐$ 73,884$
See independent auditors' report.107
Agreement
The Town
Participates with
Party Responsible
for Operation Description
Salazar Property and
Sports Facilities
Taos Municipal
Schools Board of
Education
Taos Municipal
School District
Develop, manage and maintain a multi‐
purpose athletic facility on the Salazar
Property
Public Restroom Facility County of Taos County of Taos Designing, constructing, operating, and
maintaining a public restroom facility
Enhanced 911‐Response
System
County of Taos,
Town of Questa,
Village of Taos Ski
Valley
County of Taos Provide an answering point for information
regarding needed emergency services
Taos Regional Landfill
Board
County of Taos,
Village of Questa,
Village of Red River,
Village of Taos Ski
Valley
Town of Taos Establish the Taos Regional Landfill Board
June 30, 2017
STATE OF NEW MEXICO
Town of Taos
Schedule of Joint Powers Agreements
See independent auditors' report.108
Schedule VI
Period Cost to Town
Town
Contributions Audit Responsibility
40 Years from 2009, with option to
renew
$2,140,012 for Phase I;
unknown for other phases
None to date Taos Municipal School
District
November 20, 2007 to January 31,
2028
Indeterminate Indeterminate County of Taos
August 05, 2014 until terminated Estimated $340,000 per
year
$330,950 County of Taos
50 years from November 2, 2000 Dependent on landfill
expenses
None to date Town of Taos
See independent auditors' report.109
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110
COMPLIANCE SECTION
111
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITORS’ REPORT Wayne A. Johnson New Mexico State Auditor The United States Office of Management and Budget and The Town Council Town of Taos Taos, New Mexico We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, the aggregate remaining fund information, and the budgetary comparison of the general fund and major special revenue fund of the Town of Taos (the Town) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements and have issued our report thereon dated December 6, 2017.
Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
112
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that is required to be reported under
Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the result of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control
over compliance. This report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the Town’s internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
RPC CPAs + Consultants, LLP
Albuquerque, NM
December 6, 2017
113
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114
FEDERAL FINANCIAL ASSISTANCE
115
REPORT ON COMPLIANCE FOR THE MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
INDEPENDENT AUDITORS’ REPORT Wayne A. Johnson New Mexico State Auditor The United States Office of Management and Budget and The Town Council Town of Taos Taos, New Mexico
Report on Compliance for the Major Federal Program We have audited the Town of Taos’ (the Town) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect the Town’s major federal program for the year ended June 30, 2017. The Town’s major federal program is identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.
Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs.
Auditors’ Responsibility Our responsibility is to express an opinion on compliance of the Town’s major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Town’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination of the Town’s compliance.
Opinion on the Major Federal Program In our opinion, the Town complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2017.
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Report on Internal Control Over Compliance
Management of the Town is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the Town’s internal control over compliance with the types of
requirements that could have a direct and material effect on the major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on
compliance for the major federal program and to test and report on internal control over compliance in
accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the
Town’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of Uniform
Guidance. Accordingly, this report is not suitable for any other purpose
RPC CPAs + Consultants, LLP
Albuquerque, NM
December 6, 2017
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Federal Grantor or Pass‐Through Grantor/ Program Title
CFDA
Number Federal Grant Number
Department of Public Safety
16.523 16‐690‐18442
16.588 2016‐WF‐233
Total U.S. Department of Justice
Community Development Block Grant ‐ Youth & Family Center 14.228 15‐C‐NR‐I‐03‐G‐01
Total U.S. Department of Housing & Urban Development
Federal Aviation Administration (FAA) Airport Improvement Grant:
Runway 12/30 Construction ‐ Phase 2 20.106 *35‐0041‐032‐2015
Memorandum of Agreement Overflight Stipulators 20.106 *3‐35‐0041‐027‐2012
Total U.S. Department of Transportation
Community Forestry Assistance Grant ‐ Facilities 10.664 17‐521‐0410‐0069
Total U.S. Department of Agriculture
National Park Service Passed Through Department of Cultural Affairs
Historical Preservation Division
Historic Preservation Fund Grants‐In‐Aid ‐ Cultural Landscape Report 15.904 35‐15‐131230.18
Total National Park Service
* Denotes Major Federal Financial Assistance Program
Total Federal Financial Assistance
U.S. Department of Housing & Urban Development Passed Through
State of New Mexico, Department of Finance & Administration
U.S. Department of Agriculture Passed Through Energy Minerals
Natural Resources
U.S. Department of Justice Passed Through the State of New Mexico,
Taos County Juvenile Accountability Block Grants
U.S. Department of Transportation
STATE OF NEW MEXICO
Town of Taos
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2017
STOP VAWA (Violence Against Women)
See independent auditors' report.
See accompanying notes to the schedule of expenditures of federal awards.118
Schedule VII
Page 1 of 2
Federal
Expenditures
Funds Provided to
Subrecipients
Noncash
Assistance
$ 97,793 $ ‐ $ ‐
53,959 ‐ ‐
151,752 ‐ ‐
357,948 ‐ ‐
357,948 ‐ ‐
9,734,991 ‐ ‐
9,000 ‐ ‐
9,743,991 ‐ ‐
2,520 ‐ ‐
2,520 ‐ ‐
16,265 ‐ ‐
16,265 ‐ ‐
10,272,476$ ‐$ ‐$
See independent auditors' report.
See accompanying notes to the schedule of expenditures of federal awards.119
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Schedule VII
Page 2 of 2
Notes to Schedule of Expenditures of Federal Awards
Basis of Presentation
Loans
The Town did not expend federal awards related to loans or loan guarantees during the year.
10% de minimus Indirect Cost Rate
The Town did not elect to use the allowed 10% indirect cost rate.
Federally Funded Insurance
The Town has no federally funded insurance.
Reconciliation of Schedule of Expenditures of Federal Awards to Financial Statements:
Total federal awards expended per Schedule of Expenditures of Federal Awards 10,272,476$
Total expenditures funded by other sources 16,835,376
Total expenditures of governmental funds 27,107,852$
The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity of the Town of
Taos and is presented on the modified accrual basis of accounting, which is the same basis as was used to prepare the fund
financial statements. The information in this Schedule is presented in accordance with the requirements of Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
See independent auditors' report.121
STATE OF NEW MEXICO Schedule VIII
Town of Taos Page 1 of 3
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2017
SECTION I – SUMMARY OF AUDITORS’ RESULTS
Financial Statements:
1. Type of auditors’ report issued Unmodified
2. Internal control over financial reporting:
a. Material weaknesses identified? None noted
b. Significant deficiencies identified not considered to be material weaknesses? None noted
c. Noncompliance material to the financial statements noted? None noted
Federal Awards:
1. Type of auditors’ report issued on compliance for the major program Unmodified
2. Internal control over major programs:
a. Material weaknesses identified? None noted
b. Significant deficiencies identified not considered to be material weaknesses? None noted
3. Any audit findings disclosed that are required to be reported in accordance with 2CFR
section 200.516(a)? None Noted
4. Identification of major program:
CFDA
Number Federal Program
20.106 Airport Improvement Grant
5. Dollar threshold used to distinguish between type A and type B programs: $750,000
6. Auditee qualified as a low‐risk auditee? Yes
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STATE OF NEW MEXICO Schedule VIII
Town of Taos Page 2 of 3
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2017
SECTION II – FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
None noted
SECTION III – NEW MEXICO STATE AUDIT RULE SECTION 12‐6‐5 NMSA 1978 FINDINGS
None noted
SECTION IV – FEDERAL AWARD FINDINGS
None noted
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STATE OF NEW MEXICO Schedule VIII
Town of Taos Page 3 of 3
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2017
SECTION V – PRIOR YEAR AUDIT FINDINGS
FS 2015‐002 Segregation of Duties and Improper Access of IT (Significant Deficiency)—Resolved
FS 2016‐001 Unbilled Utility Billing Adjustment (Significant Deficiency) —Resolved
NM 2016‐001 Sole Source Procurement (Finding that does not rise to level of significant deficiency)‐‐Resolved
NM 2016‐002 Segregation of Duties over Landfill Adjustments and Billing Process (Finding that does not rise to level of
significant deficiency)‐‐Resolved
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STATE OF NEW MEXICO
Town of Taos
Other Disclosures
June 30, 2017
Exit Conference
An exit conference was held on November 29, 2017. In attendance were the following:
Representing the Town of Taos:
Daniel Barrone Mayor
Rick Bellis Town Manager
Marietta Fambro Finance Director
Nathaniel Evans Audit Chair
Josephine Fresquez Assistant Finance Director
Representing RPC CPAs + Consultants, LLP:
Danny Martinez, CPA, CGFM, CGMA Audit Partner
Auditor Prepared Financial Statements
RPC CPAs + Consultants, LLP prepared the GAAP‐basis financial s tatements and footnotes of the Town of Taos from
the original books and records provided to them by the management of the Town. The responsibility for the financial
statements remains with the Town.
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