HomeMy WebLinkAbout2019 Audit ReportTOWN OF TAOS FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2019
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I NTRODUCTORY SECTION
3
STATE OF NEW MEXICO
Town of Taos
June 30, 2019
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 12-20
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Position A-1 22-23
Statement of Activities A-2 24-25
Fund Financial Statements:
Balance Sheet - Governmental Funds B-1 26
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
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 29
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget (GAAP Budgetary Basis) and Actual:
General Fund C-1 31
Statement of Net Position - Proprietary Funds D-1 32-35
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds D-2 36-37
Statement of Cash Flows - Proprietary Funds D-3 39
Statement of Fiduciary Net Position - Custodial Funds E-1 40
Statement of Changes in Fiduciary Net Position - Custodial Funds E-2 41
NOTES TO THE FINANCIAL STATEMENTS 42-82
Statement/
Schedule Page
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability A-1 84-89
Schedule of the Town's Contributions - Public Employees Retirement Association Plan A-2 90-95
Notes to Required Supplementary Information 97
Schedule of Proportionate Share of the Net OPEB Liability B-1 98
Schedule of the Town's Contributions - Retiree Health Care OPEB Plan B-2 99
SUPPLEMENTARY INFORMATION
Nonmajor Fund Descriptions 102-105
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds A-1 106-111
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Governmental Funds A-2 112-117
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STATE OF NEW MEXICO
Town of Taos
June 30, 2019
Table of Contents
Statement/
Schedule Page
SUPPORTING SCHEDULES
Schedule of Deposit and Investment Accounts I 120-121
Schedule of Collateral Pledged by Depository For Public Funds II 122
Schedule of Changes in Fiduciary Assets and Liabilities - Custodial Funds III 123
COMPLIANCE SECTION
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 126-127
Schedule of Findings and Responses 128-129
OTHER DISCLOSURES 130
5
STATE OF NEW MEXICO
Town of Taos
Official Roster
June 30, 2019
Town Council
Name Title
Daniel Barrone Mayor
Nathaniel Evans Town Councilor
Darien D. Fernandez Town Councilor
George “Fritz”Hahn Town Councilor
Pascualito Maestas Town Councilor
Administration
Richard Bellis
Marietta Fambro
Francella Garcia
Richard Chavez
Stephen Ross
Town Manager
Finance Director
Town Clerk
Municipal Judge
Town Attorney
6
F INANCIAL SECTION
7
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORS cordovacpas.com
INDEPENDENT AUDITORS’ REPORT
Mr. Brian S. Colón, Esq.
New Mexico State Auditor
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 comparison for the
general fund of the Town of Taos (the Town), as of and for the year ended June 30, 2019, and the related
notes to the financial statements which 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 entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
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, the
aggregate remaining fund information, and the budgetary comparison of the General Fund of the Town, as of
June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof, for
the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis on pages 12 through 20 and Schedules A-1 through B-2 and the notes to the Required
Supplementary Information on pages 84 through 99 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 statements. The introductory section, the combining and individual fund
financial statements, and Supporting Schedules I through III 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 fund financial statements and Supporting Schedules I through III 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
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with the auditing standards generally
accepted in the United States of America. In our opinion, the combining and individual fund financial
statements and Supporting Schedules I through III 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 5, 2019
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.
Cordova CPAs LLC
Albuquerque, New Mexico
December 5, 2019
10
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11
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
We are pleased to present the Town of Taos’s financial statements for the fiscal year ended June 30, 2019. 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 $83,762,307 (net position). Of this
amount, ($3,896,587) is (unrestricted net position), due to the on-going implementation of GASB Statement No. 68 which is
reflected on the financial statements for the fifth time since its inception and the implementation of GASB Statement No. 75
which is reflected for the second time since its inception. The Town along with other governmental entities throughout the
entire state have experienced the negative effect with these two GASB Statements. 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 decreased by $333,740 during the fiscal year. The majority of this overall decrease was due to
the change in charges for services under the Solid Waste Fund due to the new contract with Waste Management of New
Mexico which has them responsible for collections, billing and revenue receipts for Town customers. Other decreases were to
capital grants due to the Airport Runway Construction project completion in the previous year with no revenue for this project
received.
As of June 30, 2019, the Town’s governmental activities reported a combined ending net position balance of $56,238,751. Of
this total, $3,217,731 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 $3,758,822, amounting to 40
percent of total general fund expenditures.
The Town of Taos’ total debt had a net decrease of $1,114,903 during the year due to scheduled principal payments being
paid. Compensated absences decreased by $36,403 from last fiscal year due to retirements and resignations during the year.
The Town paid $1,193,442 towards the principal of several 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.
12
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The Town 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.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
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 Exhibits E-1 and E-2 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 42-82 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 106-117 of this report.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
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 $83,762,307 at the close of the current
fiscal year.
The significant portion of the Town of Taos’ net position represents the Town’s investment of $79,802,707 in capital assets (e.g., land
improvements, buildings, infrastructure and machinery & equipment), less any related outstanding debt used to acquire those assets.
The Town of Taos uses these capital assets to provide services to its citizens, so these assets are not available for future spending.
Although the Town of Taos’ investment in its capital assets is reported net of related debt, it should be noted that the resources needed
to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Governmental Business-Type
Activities Activities Total
Assets
Current and other assets 13,325,740$ 8,265,553$ 21,591,293$
Restricted cash, cash equivalents & investments 370,629 1,480,796 1,851,425
Restricted investments - 75,400 75,400
Bond issuance costs and discount - - -
Capital assets, net of accumulated 63,696,894 25,078,409 88,775,303
depreciation
Total assets 77,393,263 34,900,158 112,293,421
Deferred Outflows of Resources
Deferred Outflows - pension 2,613,028.00 240,840.00 2,853,868.00
Defered Outflows - OPEB 245,593.00 33,841.00 279,434.00
Total deferred outflows of resources 2,858,621 274,681 3,133,302
Total assets and deferred outflows of resources 80,251,884$ 35,174,839$ 115,426,723$
Liabilities `
Current Liabilities 1,880,088$ 1,422,561$ 3,302,649$
Non-current liabilities 19,102,205 5,808,647 24,910,852
Total liabilities 20,982,293 7,231,208 28,213,501
Deferred Inflows of Resources
Defered Inflows - pension 1,737,187 244,147 1,981,334
Deferred Inflows - OPED 1,293,653 175,928 1,469,581
Total deferred inflows of resources 3,030,840 420,075 3,450,915
Net Position
Net investment in capital assets 58,767,904 21,034,803 79,802,707
Restricted 6,604,686 1,251,501 7,856,187
Unrestricted (9,133,839) 5,237,252 (3,896,587)
Total net position 56,238,751$ 27,523,556$ 83,762,307$
Total Liabilities and Net Position 80,251,884$ 35,174,839$ 115,426,723$
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
A portion of the Town of Taos’ governmental restricted net position of $6,604,686 (12 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, ($9,133,839) previously stated, continues as a negative due to the implementation of GASB Statement 68 in its
fifth year and the implementation of GASB Statement 75 in its second year of reporting in the financials. In the previous year, this
amount was ($10,406,140), the last four years of implementation of GASB Statement 68 and updates on what goes 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 decreased by $333,740 during the fiscal year. This decrease is primarily the result of decreased operating and
capital grants, charges for service and increased expenditures in the General Government.
Governmental Business-type
Revenues Activities Activities Total
Program revenues:
Charges for service 990,607$ 5,628,946$ 6,619,553$
Operating grants and contributions 1,190,112 167,101 1,357,213
Capital grants and contributions 445,942 445,942
General revenues:
Property taxes, levied for general purposes 1,102,202 - 1,102,202
Gross receipts taxes 11,021,156 492,806 11,513,962
Gasoline, franchise and motor vehicle 793,359 - 793,359
Lodger's Taxes 1,364,220 - 1,364,220
Interest income (loss)73,344 50,065 123,409
Miscellaneous income 96,665 30,443 127,108
Transfer to other entity - -
Loss on disposal of capital assets - - -
Total Revenues 17,077,607 6,369,361 23,446,968
Program expenses:
General government 9,706,830$ -$ 9,706,830$
Public safety 3,366,170 - 3,366,170
Public works 1,343,346 - 1,343,346
Culture and recreation 2,727,465 - 2,727,465
Health and welfare 20,000 - 20,000
Interest and other costs 198,598 - 198,598
Joint water and sewer - 4,518,704 4,518,704
Solid waste - 862,079 862,079
Taos Regional Landfill - 1,037,516 1,037,516
Total Expenses 17,362,409 6,418,299 23,780,708
Change in net position (284,802) (48,938) (333,740)
Net Position, beginning 56,523,553 26,268,929 82,792,482
Net Position,restatement (Note 16)- 1,303,565 1,303,565
Net Position, beginning as restated 56,523,553 27,572,494 84,096,047
Net Position, ending 56,238,751$ 27,523,556$ 83,762,307$
16
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
Governmental activities. Governmental activities decreased the Town of Taos’ net position by $284,802 primarily as the result of a
decrease in operating and capital grants and (as previously stated, the Airport Runway project completion in the previous year) and
increases in general government expenditures.
Tax revenues account for $14,280,937 or 84 percent of governmental revenues. Tax revenues are made up of property, gross receipts,
gasoline and motor vehicle and other taxes. Tax revenues increased by $461,600 from last fiscal year.
The General fund received the majority of the Town’s program revenue, accounting for $9,706,829 or 57 percent of total governmental
revenues. The primary recipients of these revenues are general government, public safety and culture and recreation.
The Town’s direct charges to users of governmental services made up $990,607 or 6 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 $48,938, primarily as the result of decrease in
charges for services as previously state for the Solid Waste Fund and the new contract with Waste Management of New Mexico.
The Town’s direct charges to users of business-type services made up $5,628,946 or 88 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 decreased by $795,589 from the previous year, primarily as the result of the takeover by Waste Management for
solid waste collections, billing and revenue. Even though revenues were down for solid waste, other areas were slightly up, but
expenditures exceeded revenues in the joint water and sewer program which contributed to the decrease in the net position. The Town
still 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 $17,062,329 in the fiscal year ended June 30, 2019, which
represents a decrease of $4,227,162 from the fiscal year ended June 30, 2018. This is largely due to the decrease in federal and state
capital grants. Expenditures for governmental functions, totaling $15,060,358 decreased by approximately $5,893,360 from the fiscal
year ended June 30, 2018. This is largely due to the decrease in expenditures for the Airport Runway Construction completed last fiscal
year and nothing in the current year for this 4 year project of over $20,000,000. In the fiscal year ended June 30, 2019, revenues for
governmental functions exceeded expenditures by approximately $2,001,971.
The General Fund is the chief operating fund of the Town of Taos. It is from here that the Town pays for 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 $3,758,822
along with a minimum fund balance of $2,361,659.
Overall, the general fund’s performance resulted in revenues over expenditures in the fiscal year ended June 30, 2019 of $2,509,110, an
increase of $987,241 over the comparable figure from the prior year of $1,521,869. 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. During the
year, there were also several personnel vacancies within several departments that contributed to the expenditures being less than what
was originally budgeted.
17
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
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 $5,237,252. The total decrease in net position for the
enterprise funds was ($48,938) compared to ($402,178) from the prior year. This was a much-improved performance from the previous
year’s decrease. The Town continues to build up the asset management fund to a level in meeting the required replacement of the water
and sewer system for years to come.
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.
The following table examines the summary budget performance of the general fund for the fiscal year ending June 30, 2019. 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 $519,174 less than budgeted. This year major adjustments
were made at the end of the year for several one-time capital, maintenance and operational requests in several departments within the
Town to utilize the favorable variance savings.
Budget Amounts
Original Final
Expenditures:
General government 4,942,731$ 4,373,952$ 4,035,894$ 338,058$
Public safety 3,484,224 3,072,096 2,968,669 103,427
Public works 1,182,840 988,904 958,859 30,045
Culture and recreation 1,901,616 1,530,851 1,483,213 47,638
Capital outlay - - - -
Total Expenditures 11,511,411$ 9,965,803$ 9,446,635$ 519,168$
Actual (GAAP
Basis)
Favorable
(Unfavorable)
Variance
18
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
Capital Asset and Debt Administration
Capital assets. The Town of Taos’ capital assets for its governmental and business-type activities as of June 30, 2019 amount to
$88,775,303 (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 decreased $3,090,243 for governmental
activities and decreased $597,796 for business-type activities (net of accumulated depreciation).
The significant additions to capital assets during the year were as follows:
$1,987,211 of additions to governmental infrastructure and equipment/vehicles for completion and/or purchase of the
following –Airport De-Icing Equipment, Resurfacing of Placitas, Salazar, Albright, Gusdorf, Ranchitos and Camino de Medio
Roads, Youth & Family Center Dectron and Pool Boiler, Servers, 4 new police units and a new street sweeper.
$1,455,207 of additions to the business-type infrastructure of the following – Water System Improvements and NM68
Water/Sewer Lines prepayment to NMDOT.
Governmental Business-like
Activities Activities Total
Land 6,615,288$ 262,422$ 6,877,710$
Constuction in progress 497,237 976,376 1,473,613
Land improvements 7,461,945 104,895 7,566,840
Buildings and improvements 35,874,012 4,656,981 40,530,993
Machinery and Equipment 16,741,413 9,658,758 26,400,171
Infrastructure 84,673,698 38,871,138 123,544,836
Total capital assets 151,863,593 54,530,570 206,394,163
Less: accumulated depreciation (88,166,699) (29,452,161) (117,618,860)
Total property, plant and equipment, net
of accumulated depreciation 63,696,894$ 25,078,409$ 88,775,303$
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.
19
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2019
Debt Administration. At the end of the current fiscal year, the Town of Taos had total long-term obligations outstanding of
$11,394,297. In total, outstanding debt decreased by $1,151,312 from the previous fiscal year. The Town continues to look at options
of either paying off early or refinancing those loans with higher interest rates and low balances to further reduce outstanding debt.
Governmental Business-type
Activities Activities Total
Revenue Bonds 3,275,000$ 1,597,600$ 4,872,600$
NMFA amd RUS Loans 1,626,440 2,446,006 4,072,446
USDA Contract Payable - - -
Compensated absences 644,442 91,885 736,327
Landfill Closure Liability - 409,365 409,365
Total long-term liabilities 5,545,882$ 4,544,856$ 10,090,738$
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.
20
B ASIC
FINANCIAL STATEMENTS
21
STATE OF NEW MEXICO
Town of Taos
Statement of Net Position
June 30, 2019
Governmental
Activities
Business-type
Activities Total
Assets
Current assets
Cash and cash equivalents 8,012,895$ 5,674,703$ 13,687,598$
Investments 2,415,683 1,598,881 4,014,564
Receivables:
Property taxes 163,862 - 163,862
Taxes receivable 2,286,653 86,404 2,373,057
Due from other governments 218,690 143,570 362,260
Customer receivable, net - 731,266 731,266
Inventory 203,968 54,718 258,686
Internal balances 23,989 (23,989) -
Total current assets 13,325,740 8,265,553 21,591,293
Noncurrent assets
Restricted cash and cash equivalents 370,629 1,480,796 1,851,425
Restricted investments - 75,400 75,400
Capital assets 151,863,593 54,530,570 206,394,163
Less: accumulated depreciation (88,166,699) (29,452,161) (117,618,860)
Total noncurrent assets 64,067,523 26,634,605 90,702,128
Total assets 77,393,263 34,900,158 112,293,421
Deferred outflows of resources
Deferred outflows- pension 2,613,028 240,840 2,853,868
Deferred outflows- OPEB 245,593 33,841 279,434
Total deferred outflows of resources 2,858,621 274,681 3,133,302
Total assets and deferred outflows of resources 80,251,884$ 35,174,839$ 115,426,723$
The accompanying notes are an integral part of these financial statements.22
Exhibit A-1
Governmental
Activities
Business-type
Activities Total
Liabilities
Current liabilities
Accounts payable 363,570$ 637,331$ 1,000,901$
Accrued payroll 273,904 37,006 310,910
Accrued compensated absences 416,190 36,318 452,508
Deposits held in trust for others 5,103 304,695 309,798
Accrued interest 18,940 64,089 83,029
Current portion of bonds and notes payable 802,381 343,122 1,145,503
Total current liabilities 1,880,088 1,422,561 3,302,649
Noncurrent liabilities
Accrued compensated absences 228,252 55,567 283,819
Bond premiums, net of accumulated
amortization of $43,292 27,550 - 27,550
Bonds payable 2,860,000 1,534,600 4,394,600
Loans and notes payable 1,239,059 2,165,884 3,404,943
Landfill closure and post-closure - 409,365 409,365
Net pension liability 9,738,652 964,274 10,702,926
Net OPEB liability 5,008,692 678,957 5,687,649
Total noncurrent liabilities 19,102,205 5,808,647 24,910,852
Total liabilities 20,982,293 7,231,208 28,213,501
Deferred inflows of resources
Deferred inflows- pension 1,737,187 244,147 1,981,334
Deferred inflows- OPEB 1,293,653 175,928 1,469,581
Total deferred inflows of resources 3,030,840 420,075 3,450,915
Net position
Net investment in capital assets 58,767,904 21,034,803 79,802,707
Restricted for:
Debt service 1,048,310 - 1,048,310
Capital projects 2,169,421 - 2,169,421
Special revenue projects 3,386,955 - 3,386,955
Landfill - 1,251,501 1,251,501
Unrestricted (9,133,839) 5,237,252 (3,896,587)
Total net position 56,238,751 27,523,556 83,762,307
Total liabilities, deferred inflows of resources, and
net position 80,251,884$ 35,174,839$ 115,426,723$
The accompanying notes are an integral part of these financial statements.23
STATE OF NEW MEXICO
Town of Taos
Statement of Activities
For the Year Ended June 30, 2019
Functions/Programs
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental Activities:
General government 9,603,379$ 820,029$ 736,517$ -$
Public safety 3,492,436 - 370,609 -
Public works 1,627,609 - 82,986 445,942
Culture and recreation 2,440,387 170,578 - -
Interest 198,598 - - -
Total governmental activities 17,362,409 990,607 1,190,112 445,942
Business-type Activities:
Water and Sewer 4,518,704 3,652,886 - 167,101
Solid Waste 862,079 728,343 - -
Taos Regional Landfill 1,037,516 1,247,717 - -
Total business-type activities 6,418,299 5,628,946 - 167,101
Total 23,780,708$ 6,619,553$ 1,190,112$ 613,043$
General Revenues:
Taxes:
Gross receipts taxes
Property taxes, levied for general purposes
Gasoline, franchise and motor vehicle
Lodger's taxes
Investment income
Miscellaneous revenue
Total general revenues
Change in net position
Net position, beginning
Net position, restatement (note 16)
Net position, as restated
Net position, ending
Program Revenues
The accompanying notes are an integral part of these financial statements.24
Exhibit A-2
Governmental
Activities
Business-type
Activities Total
(8,046,833)$ -$ (8,046,833)$
(3,121,827) - (3,121,827)
(1,098,681) - (1,098,681)
(2,269,809) - (2,269,809)
(198,598) - (198,598)
(14,735,748) - (14,735,748)
- (698,717) (698,717)
- (133,736) (133,736)
- 210,201 210,201
- (622,252) (622,252)
(14,735,748) (622,252) (15,358,000)
11,021,156 492,806 11,513,962
1,102,202 - 1,102,202
793,359 - 793,359
1,364,220 - 1,364,220
73,344 50,065 123,409
96,665 30,443 127,108
14,450,946 573,314 15,024,260
(284,802) (48,938) (333,740)
56,523,553 26,268,929 82,792,482
- 1,303,565 1,303,565
56,523,553 27,572,494 84,096,047
56,238,751$ 27,523,556$ 83,762,307$
Net (Expense) Revenue and Changes in Net Position
The accompanying notes are an integral part of these financial statements.25
Exhibit B-1
Page 1 of 2
General Fund
Other
Governmental
Funds Total
Assets
Cash and cash equivalents 3,437,695$ 4,945,829$ 8,383,524$
Investments 1,209,597 1,206,086 2,415,683
Receivables:
Property taxes 163,862 - 163,862
Taxes receivable 1,806,655 479,998 2,286,653
Due from other governments 2,196 216,494 218,690
Inventory 165,521 38,447 203,968
Due from other funds 23,989 - 23,989
Total assets 6,809,515$ 6,886,854$ 13,696,369$
Liabilities, deferred inflows
of resources, and fund balances
Liabilities
Accounts payable 118,605$ 244,965$ 363,570$
Accrued payroll 260,744 13,160 273,904
Deposits held in trust for others - 5,103 5,103
Total liabilities 379,349 263,228 642,577
Deferred inflows of resources
Unavailable revenue - property taxes 144,164 - 144,164
Total deferred inflows of resources 144,164 - 144,164
Fund balances
Nonspendable:
Inventory 165,521 38,447 203,968
Spendable:
Restricted for:
General government - 172,780 172,780
Public safety - 667,587 667,587
Culture and recreation - 626,089 626,089
Transportation and roads - 15,660 15,660
Capital improvements - 593,312 593,312
Debt service - 1,050,087 1,050,087
Committed to:
General government - 121,924 121,924
Public safety - 9,828 9,828
Culture and recreation - 39,466 39,466
Transportation and roads - 923,510 923,510
Capital improvements - 2,367,259 2,367,259
Minimum fund balance 2,361,659 - 2,361,659
Unassigned 3,758,822 (2,323) 3,756,499
Total fund balances 6,286,002 6,623,626 12,909,628
Total liabilities, deferred inflows of
resources, and fund balances 6,809,515$ 6,886,854$ 13,696,369$
June 30, 2019
Governmental Funds
Balance Sheet
Town of Taos
STATE OF NEW MEXICO
The accompanying notes are an integral part of these financial statements.26
STATE OF NEW MEXICO Exhibit B-1
Town of Taos Page 2 of 2
Reconciliation of the Balance Sheet to the Statement of Net Position
Governmental Funds
June 30, 2019
Amounts reported for governmental activities in the Statement of
Net Position are different because:
Fund balances - total governmental funds 12,909,628$
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds 63,696,894
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 144,164
Deferred outflows and inflows of resources related to pensions and OPEB are
applicable to future periods and therefore, are not reported in funds:
Deferred outflows- pension 2,613,028
Deferred outflows- OPEB 245,593
Deferred inflows- pension (1,737,187)
Deferred inflows- OPEB (1,293,653)
Certain liabilities, including loans and bonds payable and related components,
accrued interest, current and long-term portions of accrued compensated
absences, and net penison and OPEB liabilites are not due and payable in the
current period and, therefore, are not reported in the funds:
Loans and bonds payable (4,901,440)
Bond premiums (27,550)
Accrued interest (18,940)
Accrued compensated absences (644,442)
Net pension liability (9,738,652)
Net OPEB liability (5,008,692)
Net position of governmental activities 56,238,751$
The accompanying notes are an integral part of these financial statements.27
Exhibit B-2
Page 1 of 2
General Fund
Other
Governmental
Funds Total
Revenues
Taxes:
Property 1,086,924$ -$ 1,086,924$
Gross receipts taxes 9,296,386 1,724,770 11,021,156
Gasoline, franchise, and motor vehicle 702,261 91,098 793,359
Lodger's tax - 1,364,220 1,364,220
Intergovernmental:
Federal operating grants 2,778 166,633 169,411
Federal capital grants - 206,670 206,670
State operating grants 132,335 888,366 1,020,701
State capital grants - 239,272 239,272
Charges for services 108,305 238,658 346,963
Licenses and fees 514,685 128,959 643,644
Investment income 37,038 36,306 73,344
Miscellaneous 75,033 21,632 96,665
Total revenues 11,955,745 5,106,584 17,062,329
Expenditures
Current:
General government 4,035,894 1,018,753 5,054,647
Public safety 2,968,669 374,356 3,343,025
Public works 958,859 307,780 1,266,639
Culture and recreation 1,483,213 943,196 2,426,409
Capital outlay - 1,987,211 1,987,211
Debt service:
Principal - 777,252 777,252
Interest - 205,175 205,175
Total expenditures 9,446,635 5,613,723 15,060,358
Excess (deficiency) of revenues over
expenditures 2,509,110 (507,139) 2,001,971
Other financing sources (uses)
Transfers in 5,476,816 4,632,408 10,109,224
Transfers (out)(6,733,266) (3,375,958) (10,109,224)
Total other financing sources (uses)(1,256,450) 1,256,450 -
Net change in fund balance 1,252,660 749,311 2,001,971
Fund balance - beginning of year 5,033,342 5,874,315 10,907,657
Fund balance - end of year 6,286,002$ 6,623,626$ 12,909,628$
For the Year Ended June 30, 2019
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
Town of Taos
STATE OF NEW MEXICO
The accompanying notes are an integral part of these financial statements.28
STATE OF NEW MEXICO Exhibit B-2
Town of Taos 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 2,001,971$
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 outlay additions reported in capital outlay expenditures 1,987,211
Depreciation expense (5,077,454)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenue in the funds:
Change in deferred inflows related to the property taxes receivable 15,278
Governmental funds report Town pension and OPEB contributions as expenditures. However
in the Statement of Activities, the cost of pension and OPEB benefits earned net of employee
contributions is reported as pension and OPEB expense:
Town pension contributions subsequent to measurement date 564,736
Pension expense (662,974)
Town OPEB contributions subsequent to measurement date 95,787
OPEB expense (25,038)
Expenses in the Statement of Activities that do not require current financial
resources are not reported as expenditures in the funds:
Decrease in accrued compensated absences 31,852
Decrease in accrued interest 2,642
The issuance of long-term debt (e.g. bonds, notes, leases) provides current financial
resources to governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net position. Also, governmental funds
report the effect of premiums and similar items when debt is first issued, whereas
these amounts are deferred and amortized in the Statement of Activities:
Amortization of bond premiums 3,935
Principal payments on loans 777,252
Change in net position of governmental activities (284,802)$
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, 2019
Governmental Funds
The accompanying notes are an integral part of these financial statements.29
Page Left Intentionally Blank
30
STATE OF NEW MEXICO Exhibit C-1
Town of Taos
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Budgetary Basis) and Actual
For the Year Ended June 30, 2019
Variances
Original Final Actual Final to Actual
Revenues
Taxes:
Property 1,041,067$ 1,047,308$ 1,086,924$ 39,616$
Gross receipts 9,051,845 9,183,027 9,296,386 113,359
Gasoline, franchise and motor vehicle 597,206 725,828 702,261 (23,567)
Intergovernmental:
Federal operating grants - - 2,778 2,778
State operating grants 90,000 90,000 132,335 42,335
Charges for services 115,679 115,679 108,305 (7,374)
Licenses and fees 494,467 494,467 514,685 20,218
Investment income 21,568 21,568 37,038 15,470
Miscellaneous 107,687 107,687 75,033 (32,654)
Total revenues 11,519,519 11,785,564 11,955,745 170,181
Expenditures
Current:
General government 4,942,731 4,373,952 4,035,894 338,058
Public safety 3,484,224 3,072,096 2,968,669 103,427
Public works 1,182,840 988,904 958,859 30,045
Culture and recreation 1,901,616 1,530,851 1,483,213 47,638
Total expenditures 11,511,411 9,965,803 9,446,635 519,168
Excess (deficiency) of revenues over
expenditures 8,108 1,819,761 2,509,110 689,349
Other financing sources (uses)
Designated cash (budgeted cash increase)283,554 552,050 - (552,050)
Transfers in 4,817,620 5,476,816 5,476,816 -
Transfers (out)(5,109,282) (7,848,627) (6,733,266) 1,115,361
Total other financing sources (uses)(8,108) (1,819,761) (1,256,450) 563,311
Net change in fund balance - - 1,252,660 1,252,660
Fund balance - beginning of year - - 5,033,342 5,033,342
Fund balance - end of year -$ -$ 6,286,002$ 6,286,002$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.31
Water and Sewer Solid Waste
Assets
Current assets
Cash and cash equivalents 3,831,337$ 472,081$
Investments 1,349,781 249,100
Taxes receivable 86,404 -
Due from other governments 143,570 -
Customer receivables, net 616,467 7,019
Inventory 54,718 -
Total current assets 6,082,277 728,200
Noncurrent assets
Restricted cash and cash equivalents 304,695 -
Restricted investments - -
Capital assets 46,519,622 1,134,674
Less: accumulated depreciation (25,948,068) (770,529)
Total noncurrent assets 20,876,249 364,145
Total assets 26,958,526 1,092,345
Deferred outflows of resources
Deferred outflows- pension 145,387 38,722
Deferred outflows- OPEB 19,644 5,668
Total deferred outflows of resources 165,031 44,390
Total assets and deferred outflows of resources 27,123,557$ 1,136,735$
Proprietary Funds
Statement of Net Position
Town of Taos
STATE OF NEW MEXICO
June 30, 2019
The accompanying notes are an integral part of these financial statements.32
Exhibit D-1
Taos Regional
Landfill Total
1,371,285$ 5,674,703$
- 1,598,881
- 86,404
- 143,570
107,780 731,266
- 54,718
1,479,065 8,289,542
1,176,101 1,480,796
75,400 75,400
6,876,274 54,530,570
(2,733,564) (29,452,161)
5,394,211 26,634,605
6,873,276 34,924,147
56,731 240,840
8,529 33,841
65,260 274,681
6,938,536$ 35,198,828$
The accompanying notes are an integral part of these financial statements.33
Water and Sewer Solid Waste
Liabilities
Current liabilities
Accounts payable 572,151$ 15,100$
Accrued payroll 23,660 4,262
Accrued compensated absences 25,506 2,120
Due to other funds 16,608 -
Deposits held in trust for others 304,695 -
Accrued interest 62,589 -
Current maturity of loans payable 169,830 -
Total current liabilities 1,175,039 21,482
Noncurrent liabilities
Accrued compensated absences 37,544 280
Bonds payable 1,534,600 -
Loans and notes payable 1,247,064 -
Landfill closure and post-closure costs - -
Net pension liability 614,783 125,827
Net OPEB liability 394,120 113,711
Total noncurrent liabilities 3,828,111 239,818
Total liabilities 5,003,150 261,300
Deferred inflows of resources
Deferred inflows- pension 145,618 37,502
Deferred inflows- OPEB 102,124 29,464
Total deferred inflows of resources 247,742 66,966
Net position
Net investment in capital assets 17,620,060 364,145
Restricted for:
Landfill - -
Unrestricted 4,252,605 444,324
Total net position 21,872,665 808,469
Total liabilities and net position 27,123,557$ 1,136,735$
June 30, 2019
Proprietary Funds
Statement of Net Position
Town of Taos
STATE OF NEW MEXICO
The accompanying notes are an integral part of these financial statements.34
Exhibit D-1
Page 2 of 2
Taos Regional
Landfill Total
50,080$ 637,331$
9,084 37,006
8,692 36,318
7,381 23,989
- 304,695
1,500 64,089
173,292 343,122
250,029 1,446,550
17,743 55,567
- 1,534,600
918,820 2,165,884
409,365 409,365
223,664 964,274
171,126 678,957
1,740,718 5,808,647
1,990,747 7,255,197
61,027 244,147
44,340 175,928
105,367 420,075
3,050,598 21,034,803
1,251,501 1,251,501
540,323 5,237,252
4,842,422 27,523,556
6,938,536$ 35,198,828$
The accompanying notes are an integral part of these financial statements.35
Water and Sewer Solid Waste
Operating revenues
Charges for services 3,652,886$ 728,343$
Total operating revenues 3,652,886 728,343
Operating expenses
Depreciation 1,670,164 59,368
Personnel services 640,352 115,261
Contractual services 1,096,220 491,118
Supplies and purchases 9,928 2,973
Maintenance and materials 130,555 48,749
Utilities 552,882 138,420
Non-capital equipment 12,264 -
Other costs 301,666 6,190
Total operating expenses 4,414,031 862,079
Operating income (loss)(761,145) (133,736)
Non-operating revenues (expenses)
Gross receipts taxes 492,806 -
Interest expense (83,257) -
Investment income 42,779 -
Miscellaneous income 23 30,420
Total non-operating revenues (expenses)452,351 30,420
Income (loss) before contributions and transfers (308,794) (103,316)
Capital grants 167,101 -
Transfers in 3,851,410 -
Transfers (out)(3,851,410) -
Change in net position (141,693) (103,316)
Total net position, beginning of year 22,018,883 911,785
Total net position, reclassification / restatement (Note 16)(4,525) -
Total net position, beginning as reclassified and restated 22,014,358 911,785
Total net position, end of year 21,872,665$ 808,469$
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Net Position
Town of Taos
STATE OF NEW MEXICO
For the Year Ended June 30, 2019
The accompanying notes are an integral part of these financial statements.36
Exhibit D-2
Taos Regional
Landfill Total
1,247,717$ 5,628,946$
1,247,717 5,628,946
323,471 2,053,003
264,849 1,020,462
128,415 1,715,753
677 13,578
97,316 276,620
8,374 699,676
- 12,264
214,448 522,304
1,037,550 6,313,660
210,167 (684,714)
- 492,806
(21,382) (104,639)
7,286 50,065
- 30,443
(14,096) 468,675
196,071 (216,039)
- 167,101
589,877 4,441,287
(589,877) (4,441,287)
196,071 (48,938)
3,338,261 26,268,929
1,308,090 1,303,565
4,646,351 27,572,494
4,842,422$ 27,523,556$
The accompanying notes are an integral part of these financial statements.37
Page Left Intentionally Blank
38
Exhibit D-3
Water and
Sewer Solid Waste
Taos
Regional
Landfill Total
Cash flows from operating activities:
Cash received from user charges 3,526,882$ 921,121$ 1,285,512$ 5,733,515$
Cash payments to employees for services (628,276) (122,100) (271,732) (1,022,108)
Cash payments to suppliers for goods and services (1,956,830) (717,103) (891,254) (3,565,187)
Net cash provided by operating activities 941,776 81,918 122,526 1,146,220
Cash flows from noncapital financing activities:
Gross receipts taxes 492,806 - - 492,806
Miscellaneous income 23 30,420 - 30,443
Repayment of interfund loans (18,264) (3,464) 1,413 (20,315)
Transfers (net) - - - -
Net cash provided (used) by noncapital
financing activities 474,565 26,956 1,413 502,934
Cash flows from investing activities:
Purchase of investments (2,421) - - (2,421)
Interest on investments 42,779 - 8,506 51,285
Net cash provided by investing activities 40,358 - 8,506 48,864
Cash flows from capital and related financing activities:
Interest paid (85,663) - (21,382) (107,045)
Capital grants 167,101 - - 167,101
Acquisition of capital assets (1,452,430) - (2,777) (1,455,207)
Principal payments on loans (166,711) - (170,946) (337,657)
Net cash (used) by capital and related financing activities (1,537,703) - (195,105) (1,732,808)
Net increase (decrease) in cash and cash equivalents (81,004) 108,874 (62,660) (34,790)
Cash and cash equivalents ‐ beginning of year 4,221,561 363,207 2,605,521 7,190,289
Cash and cash equivalents‐ reclassification (4,525) - 4,525 -
Cash and cash equivalents, as reclassed 4,217,036 363,207 2,610,046 7,190,289
Cash and cash equivalents ‐ end of year 4,136,032$ 472,081$ 2,547,386$ 7,155,499$
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities:
Operating income (loss)(761,145)$ (133,736)$ 210,167$ (684,714)$
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation 1,670,164 59,368 323,471 2,053,003
Net pension and OPEB expense 3,888 189 1,491 5,568
Changes in assets and liabilities:
Receivables (119,417) 192,778 37,795 111,156
Inventory (20,724) - - (20,724)
Accounts payable 167,409 (29,653) (442,024) (304,268)
Accrued payroll expenses 242 (2,136) (769) (2,663)
Customer deposits (6,587) - - (6,587)
Accrued compensated absences 7,946 (4,892) (7,605) (4,551)
Net cash provided (used) by operating activities 941,776$ 81,918$ 122,526$ 1,146,220$
For the Year Ended June 30, 2019
Proprietary Funds
Statement of Cash Flows
Town of Taos
STATE OF NEW MEXICO
The accompanying notes are an integral part of these financial statements.39
STATE OF NEW MEXICO Exhibit E-1
Assets
Cash 12,291$
Investments 60,000
Total assets 72,291$
Liabilities
Due to other entities 72,291$
Total liabilities 72,291$
Statement of Fiduciary Net Position
June 30, 2019
Town of Taos
Custodial Funds
The accompanying notes are an integral part of these financial statements.40
STATE OF NEW MEXICO Exhibit E-2
Additions:
Charges for services 14,808$
Total additions 14,808
Deductions:
Contractual services and other 16,514
Total deductions 16,514
Change in custodial funds due to others (1,706)
Beginning - custodial funds due to others 73,997
Ending - custodial funds due to others 72,291$
Statement of Changes in Fiduciary Net Position
June 30, 2019
Town of Taos
Custodial Funds
The accompanying notes are an integral part of these financial statements.41
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
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 Town and its inhabitants;
7. Preserve peace and order within the Town; and
8. Establish rates for services provided by the Town 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 Town of Taos is presented to assist in the
understanding of Town of Taos’s financial statements. The financial statements and notes are the
representation of Town of Taos’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 entities. At year
end June 30, 2019, there is no GASB Statement No. 77 disclosure requirement.
During the year ended June 30, 2019, the Town adopted GASB Statements No. 83, Certain Asset
Retirement Obligations, No. 84, Fiduciary Activities, No. 88, Certain Disclosures Related to Debt, including
Direct Borrowings and Direct Placements as required by GAAP. None of these pronouncements have a
significant impact on these financial statements.
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 and GASB Statement No. 61. 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.
42
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
A.Financial Reporting Entity (continued)
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.
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, the governmental activities column (a) is
presented on a consolidated basis by column, (b) and is reported on a full accrual, economic
resource basis, which recognizes all long-term assets and receivables as well as long-term debt
obligations. The Town’s net position is reported in three parts –net investments in capital
assets; restricted net position; and unrestricted net position.
43
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
B.Government-wide and fund financial statements (continued)
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment 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 and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function. Taxes and other items
not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, 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.
C.Measurement focus, basis of accounting, and financial statement presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting,as are the 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 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 of time, reimbursement and contingencies
imposed by the provider are met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
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. 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. 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.
Expenditure-driven grants are recognized as revenue when the qualifying expenditures have
been incurred and all other grant requirements have been met and the susceptible to accrual
criteria have been met. All other revenue items are considered to be measurable and available
only when cash is received by the Town.
44
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
C.Measurement focus, basis of accounting, and financial statement presentation (continued)
Program revenues included in the Statement of Activities are derived directly from the program
itself or from parties outside the Town’s taxpayer 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 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 long-term debt is
considered an indirect expense and is reported separately on the Statement of Activities.
Proprietary funds distinguish operating revenues and expense 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 for the Town’s
enterprise funds is charges for services for the Town’s utilities. Operating expenses 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.
Under the requirements of GASB Statement No. 34, the Town is required to present certain of
its governmental funds as major based upon certain criteria. The major funds presented in the
fund financial statements include the following, which includes funds that were not required to
be presented as major but were at the discretion of management:
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. Revenues are provided through property and other taxes, federal
sources, state sources, charges for services, licenses and fees, and other miscellaneous
recoveries and revenue. Expenditures include all costs associated with the daily
operation of the Town except for items included in other funds.
The Town reports its proprietary funds as major funds. Proprietary funds (enterprise 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 residents
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.45
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
C.Measurement focus, basis of accounting, and financial statement presentation (continued)
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.
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, street cut deposits,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 various
other functions of the government. Elimination of these charges would distort the direct costs
and program revenues reported in the Statement of Activities.
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow 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.State statutes authorize the Town to invest in Certificates of
Deposit, obligations of the U.S. Government, and the State Treasurer’s Investment Pool.
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 funds and
reduces its related cost as a reimbursement. All other interfund transactions are treated as
transfers.Transfers between governmental 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 after 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. In the government-wide and
governmental fund financial statements, delinquent property taxes are recorded as revenue
when levied net of estimated refunds and uncollectable amounts.
Property taxes are levied on November 1 based on the assessed value 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 May 10th are considered delinquent. The taxes attach as an
enforceable lien on property as of January 1st. Property taxes are collected by Taos County and
are remitted monthly to the Town.46
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
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
the recognition of the expenditures until the period in which the inventories actually are
consumed. Inventory is valued at cost.
Restricted Assets: Restricted assets consist of those funds’expendable for debt service, meter
deposits, and landfill purposes,which are restricted as to the specific purpose for which they
may be expended. Restricted cash in the amount of $1,851,425 and restricted investments in
the amount of $75,400, at June 30, 2019 are reported in the statement of net position.
Capital Assets: Capital assets, which include property, plant, equipment, and infrastructure
assets (e.g.,roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental 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 historical cost or estimated historical cost if purchased or constructed. Town of
Taos was a phase II government for purposes of implementing GASB 34. Therefore, the Town
was required to report its major general infrastructure assets retroactively to June 30, 1980.
The Town has made the required restatement for infrastructure assets retroactive to June 30,
1980, in order to properly implement GASB 34. Information Technology Equipment including
software is being capitalized and included in furniture, fixtures and equipment in accordance
with NMAC 2.20.1.9 C (5). Donated assets are recorded at fair market value when received.
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.
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 fiscal year 2019. 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 (including airport)10-50
Accrued Expenses: Accrued expenses are comprised of the payroll expenditures based on
amounts earned by the employees through June 30, 2019, along with applicable PERA, FICA,
RHC and Medicare accruals.
Deposits Held in Trust For Others: Deposits held in trust for others consists of security
deposits for the Civic Center and meter deposits as of June 30, 2019.
47
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
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, deferred
outflows of resources, 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
four types of items that qualify for reporting in this category related to the pension and OPEB
plans which are discussed at Notes 10 and 11.
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, deferred
inflows of resources, represents an acquisition of net position that applies to a future period(s)
and so will not be recognized as an inflow of resources (revenue) until that time. Revenue must
be susceptible to accrual (measurable 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 item, which arises under the modified accrual basis of accounting that qualifies for
reporting in this category. Accordingly,the item, unavailable revenue –property taxes, are
reported only in the governmental funds balance sheet. These amounts are deferred and
recognized as an inflow of resources in the period that the amounts become available. The
Town has recorded $144,164 related to property taxes that are considered “unavailable”. The
Town also has items related to the pension and OPEB plans which are discussed at Notes 10
and 11.
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 accumulated
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
issuance 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, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
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 (PERA) and additions
to/deductions from PERA’s fiduciary net position have been determined on the same basis as
they are reported by PERA, 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.
Postemployment Benefits Other Than Pensions (OPEB)For purposes of measuring the net
OPEB liability, deferred outflows of resources and deferred inflows of resources related to
OPEB, and OPEB expense, information about the fiduciary net position of the New Mexico
Retiree Health Care Authority (NMRHCA) and additions to and deductions from NMRHCA’s
fiduciary net position have been determined on the same basis as they are reported by
NMRHCA. For this purpose, NMRHCA recognizes benefit payments when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
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 because 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 nonspendable fund balance of $203,968 at June
30, 2019.
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 $3,125,515 in restricted fund balances at June 30, 2019.
49
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
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 $5,823,646 in committed funds
at June 30, 2019 for subsequent year’s 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 Town Council has delegated the authority to assign amounts to be
used for specific purposes to the Finance Director.
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 3/12th the General Fund expenditures. The Town
has also presented committed fund balance on the governmental funds balance sheet including
$2,361,659 for minimum fund balance for the year ended June 30, 2019. As these amounts are
an accumulation of resources and not a true restriction or commitment of expenditures, they
are reflected within the unassigned fund balance of the general fund.
Net Position: Equity is classified as net position and displayed in three components:a.Net Investment in Capital Assets: Net investment in capital assets consist 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.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, and capital projects” are described on pages 102-105.c.Unrestricted Net Position: All other net position that do 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.
50
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 1.Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources,and Net Position or
Equity (continued)
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 for the Town include the depreciable
lives of capital assets,estimated allowance for uncollectible accounts receivables,the Town’s
estimate landfill closure and post closure costs, and the Town’s net pension and OPEB liabilities
and related deferred inflows and outflows of resources.
NOTE 2.Stewardship, Compliance,and Accountability
Budgetary Information
Annual budgets of the Town are prepared prior to June 1 and must 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:
Original Final
Budget Budget
Budgeted Funds:
General Fund 8,108$ 1,819,761$
Excess (deficiency) of
revenues over expenditures
Operating income (loss)
The accompanying Statements of Revenues, Expenditures and Changes in Fund Balance –Budget (GAAP
Basis) and Actual and Statements of Revenues, Expenses and Changes in Net Position- Budget (GAAP
Basis)and Actual present comparisons of the legally adopted budget with actual data on a budgetary
basis.
51
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
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. All invested funds of the Town properly followed State
investment requirements as of June 30, 2019. There are no specific state laws governing the ability to
spend net appreciation and investment income.
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 on 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 an insured depository institution, including all noninterest-bearing
transaction accounts, will be insured by the FDIC up to the standard maximum deposit insurance
amount of $250,000.
Custodial Credit Risk –Deposits Custodial credit risk is the risk that in the event of a bank failure, the
Town’s deposits may not be returned to it. The Town does not have a deposit 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, 2019, $14,581,836 of the Town’s deposits of $15,081,836 was exposed to
custodial credit risk. $10,741,642 was uninsured and collateralized by collateral held by the pledging
bank’s trust department,not in the Town’s name, and $3,840,194 was uninsured and uncollateralized.
Total
Amount of deposits 6,824,271$ 8,257,565$ 15,081,836$
FDIC Coverage (250,000) (250,000) (500,000)
Total uninsured public funds 6,574,271 8,007,565 14,581,836
6,574,271 4,167,371 10,741,642
Uninsured and uncollateralized -$ 3,840,194$ 3,840,194$
Collateral requirement
(50% of uninsured funds)3,287,136$ 4,003,783$ 7,290,919$
Pledged Collateral 8,000,000 4,167,371 12,167,371
Over (Under) collateralized 4,712,864$ 163,588$ 4,876,452$
Collateralized by securities held
by pledging institution or by its
trust department or agent in
other than the Town's name
US Bank Centinel Bank
52
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 3.Deposits and Investments (continued)
The collateral pledged is listed on Schedule II of this report. The types of collateral are limited to direct
obligations of the United States Government and all bonds issued by any agency, district, or political
subdivision of the State of New Mexico.
Investments
Credit Risk
The New MexiGROW 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 LGIP’s investments are monitored by the same policies and
procedures that apply to all other state investments. The pool does not have unit shares. Per Section 6-
10-10.1(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, 2019, the Town had the following investments and maturities:
Weighted Average
Investment Type Maturities Fair Value Rating
New Mexico Local Government
Investment Pool 35 Days ( R ); 112 Days ( F ) 4,149,964$ AAAm
U.S. Treasury Notes <1 year 532,355 Aaa
4,682,319$
The Town has presented $4,149,964 in investments at year end that is invested in the Local Government
Investment Pool. Of the $4,682,319 noted above $532,355 is considered restricted cash and cash
equivalents as these are invested by NMFA in US Treasury notes. For purposes of cash flows at Exhibit
D-3 ending cash is considered to be cash and cash equivalents,restricted cash and cash equivalents.
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 89% and 11%, 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).
53
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 3.Deposits and Investments (continued)
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 to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the 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.
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 following table sets forth by level within the fair value hierarchy, the Town’s assets at fair value as
of June 30, 2019:
Total Level 1 Level 2 Level 3
4,682,319$ 532,355$ 4,149,964$ -$
54
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 3.Deposits and Investments (continued)
Reconciliation to the Statement of Net Position:
Cash and cash equivalents per Exhibit A-1 13,687,598$
Restricted cash and cash equivalents per Exhibit A-1 1,851,425
Cash and investments - Statement of Fiduciary Assets and Liabilities per Exhibit E-1 72,291
Investments per Exhibit A-1 4,014,564
Restricted investments per Exhibit A-1 75,400
Total cash, investments, and cash equivalents 19,701,278
Add: outstanding checks and other reconciling items 64,727
Less: NMFA restricted accounts (532,355)
Less: New Mexico Government Local Investment Pool (4,149,964)
Less: petty cash (1,850)
Bank balance of deposits 15,081,836$
55
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 4.Receivables
Governmental receivables as of June 30, 2019 are comprised of the following:
Other
Governmental
General Funds Total
Taxes receivable:
Property taxes 163,862$ -$ 163,862$
Gross receipts taxes 1,638,399 302,384 1,940,783
Franchise taxes 142,076 - 142,076
Lodger's taxes - 161,954 161,954
Oil and gas taxes 19,939 15,660 35,599
MVD taxes 6,241 - 6,241
Total taxes receivable 1,970,517 479,998 2,450,515
Due from other governments:
State grants 2,196 209,728 211,924
Federal grants - 6,766 6,766
Total due from other governments 2,196 216,494 218,690
Accounts receivable, net 1,972,713$ 696,492$ 2,669,205$
In accordance with GASB Statement No. 33, property tax revenues in the amount of $144,164 that were
not collected within the period of availability have been reclassified as deferred inflows in the
governmental fund financial statements as of June 30, 2019.
Business-type activity receivables as of June 30, 2019 are comprised of the following:
Water and
Sewer Solid Waste
Taos Regional
Landfill
Taxes receivable
Gross receipts taxes 86,404$ -$ -$
Customer receivable 1,361,683 59,621 125,265
Due from other governments:
State grants 143,570 - -
Less: allowance for
uncollectable accounts (745,216) (52,602) (17,485)
Accounts receivable, net 846,441$ 7,019$ 107,780$
Total
Taxes receivable
Gross receipts taxes 86,404$
Customer receivable 1,546,569
Due from other governments:
State grants 143,570
Less: allowance for
uncollectable accounts (815,303)
Accounts receivable, net 961,240$
56
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 5. Interfund Receivables, Payables, and Transfers
The Town records temporary interfund receivables and payables to cover cash deficits related to
accounts payable. All interfund balances are to be repaid within one year.
Due from other funds Due to other funds Amount
General Fund Water & Sewer Fund 16,608$
General Fund Taos Regional Landfill Fund 7,381
Total 23,989$
Net operating transfers, made to supplement other funding sources were as follows:
Transfers Out Transfers In Amount
Fire Protection 2015 NMFA Fire Pumper Loan 75,095$
1/4 cent Municipal Gross Receipts Tax Public Transportation 157,623
1/4 cent Municipal Gross Receipts Tax Capital Projects Fund 28,000
1/4 cent Municipal Gross Receipts Tax
2009 NMFA PPRF Disadvantage Program
Eco Park 180,753
1/4 cent Municipal Gross Receipts Tax
2008 GRT Revenue Bond Retirement
Fund 551,825
1/4 cent Municipal Gross Receipts Tax 1999 Gas Tax Fund 157,169
Capital Projects Fund Facilities Improvement Fund 97,733
Capital Projects Fund Vehicle Replacement Fund 201,000
Capital Projects Fund 1999 Gas Tax Fund 450,000
General Fund Community Grants 65,308
General Fund 2011 PPRF Street Improvement 129,293
General Fund Facilities Improvement Fund 450,695
General Fund Capital Projects Fund 80,000
General Fund Capital Maintenance Operating Fund 481,154
General Fund Vehicle Replacement Fund 50,000
General Fund General Fund 5,476,816
Lodger's Tax Fund Lodger's Tax Promotional 939,158
Lodger's Tax Fund Public Transportation 446,867
Municipal Road Gas Tax 2011 PPRF Street Improvement 55,373
Municipal Road Gas Tax 1999 Gas Tax Fund 35,362
Taos Regional Landfill Taos Regional Landfill 49,912
Water and Sewer Water and Sewer 3,851,410
Taos Regional Landfill Taos Regional Landfill 539,965
Total 14,550,511$
57
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 6.Capital Assets
The following is a summary of capital assets and changes occurring during the year ended June 30,
2019. Land and construction in progress are not subject to depreciation.
Balance
June 30, 2018 Additions
Deletions and
Transfers
Balance
June 30, 2019
Capital assets not being
depreciated:
Land 6,615,288$ -$ -$ 6,615,288$
Construction in progress 369,610 127,627 - 497,237
Total not being depreciated 6,984,898 127,627 - 7,112,525
Capital assets being depreciated:
Land improvements 7,461,945 - - 7,461,945
Buildings and improvements 35,637,895 236,117 - 35,874,012
Machinery and Equipment 16,171,287 570,126 - 16,741,413
Infrastructure 83,620,357 1,053,341 - 84,673,698
Total being depreciated 142,891,484 1,859,584 - 144,751,068
Total capital assets 149,876,382 1,987,211 - 151,863,593
Accumulated depreciation:
Land improvements 5,315,607 241,925 - 5,557,532
Buildings and improvements 20,011,146 1,119,297 - 21,130,443
Machinery and Equipment 13,823,423 508,199 - 14,331,622
Infrastructure 43,939,069 3,208,033 - 47,147,102
Total accumulated depreciation 83,089,245 5,077,454 - 88,166,699
Capital assets, net 66,787,137$ (3,090,243)$ -$ 63,696,894$
Depreciation expense for the year ended June 30, 2019 was charged to the functions of the governmental
activities as follows:
General 4,620,483$
Public safety 101,550
Public works 355,421
Total 5,077,454$
58
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 6. Capital Assets (continued)
Business-type Activities:
Balance
June 30, 2018 Additions
Deletions and
Transfers
Balance
June 30, 2019
Capital assets not being
depreciated:
Land 262,422$ -$ -$ 262,422$
Construction in progress 21,447 954,929 - 976,376
Total not being depreciated 283,869 954,929 - 1,238,798
Capital assets being depreciated:
Land improvements 104,895 - - 104,895
Buildings and improvements 4,656,981 - - 4,656,981
Machinery and Equipment 9,646,954 11,804 - 9,658,758
Infrastructure 38,382,664 488,474 - 38,871,138
Total being depreciated 52,791,494 500,278 - 53,291,772
Total capital assets 53,075,363 1,455,207 - 54,530,570
Accumulated depreciation:
Land improvements 96,623 403 - 97,026
Buildings and improvements 3,035,839 135,294 - 3,171,133
Machinery and Equipment 8,008,541 301,838 - 8,310,379
Infrastructure 16,258,155 1,615,468 - 17,873,623
Total accumulated depreciation 27,399,158 2,053,003 - 29,452,161
Capital assets, net 25,676,205$ (597,796)$ -$ 25,078,409$
Depreciation expense for the year ended June 30, 2019 was charged to the proprietary funds as follows:
Water and Sewer 1,670,164$
Solid Waste 59,368
Taos Regional Landfill 323,471
Total 2,053,003$
59
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 7.Long-term Debt
During the year ended June 30, 2018, the following changes occurred in the liabilities reported in the
government-wide statement of net position:
Governmental Activities:Balance
June 30,
2018 Additions Retirements
Balance
June 30,
2019
Due Within
One Year
Revenue Bonds 3,675,000$ -$ 400,000$ 3,275,000$ 415,000$
NMFA Loans 2,003,692 - 377,252 1,626,440 387,381
Compensated Absences 676,294 384,338 416,190 644,442 416,190
Total 6,354,986$ 384,338$ 1,193,442$ 5,545,882$ 1,218,571$
Revenue Bonds
At June 30, 2019, 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:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
Series 2008 Gross Receipts Tax 1/30/2008 6/1/2026 4.00-5.00%6,395,000$
The annual requirements to amortize the revenue bond as of June 30, 2019, including interest
payments,are as follows:
2020 415,000$ 135,375$ 550,375$
2021 430,000 118,775 548,775
2022 450,000 101,145 551,145
2023 465,000 82,695 547,695
2024 485,000 63,630 548,630
2025-2026 1,030,000 65,310 1,095,310
Total 3,275,000$ 566,930$ 3,841,930$
Fiscal Year
Ending June 30,Principal Interest
Total Debt
Service
60
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
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:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
NMFA Phase I Multi-Phase Eco Park 11/25/2009 5/1/2025 .62-3.67%2,213,469$
NMFA Revolving Loan Fund
Road Projects 11/4/2011 5/1/2022 1.90%1,694,457$
NMFA Fire Truck Pumper Loan 5/8/2015 5/1/2021 0.92%434,994$
The annual requirements to amortize the NMFA loans as of June 30, 2019, including interest payments,
are as follows:
2020 387,381$ 45,952$ 433,333$
2021 398,774 36,964 435,738
2022 334,977 28,099 363,076
2023 162,665 18,091 180,756
2024 168,293 12,463 180,756
2025 174,350 6,406 180,756
Total 1,626,440$ 147,975$ 1,774,415$
Interest
Total Debt
Service
Fiscal Year
Ending June 30, Principal
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, 2019,government-wide
compensated absences decreased $31,852 from the prior year accrual. Compensated absences are
liquidated by the respective funds in which they are accrued.
61
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 7.Long-term Debt (continued)
Proprietary Funds:
The proprietary funds have incurred various forms of debt which were used for the purposes of
constructing, expanding, repairing and making improvements to its property, plant and equipment. The
following schedule shows the changes to its various forms of debt during the fiscal year ended June 30,
2019:
Business-type Activities:Balance
June 30,
2018 Additions Retirements
Balance
June 30,
2019
Due Within
One Year
Revenue Bonds 1,657,600$ -$ 60,000$ 1,597,600$ 63,000$
NMFA and RUS Loans 2,723,657 - 277,651 2,446,006 280,122
Landfill closure and postclosure 1,712,930 - 1,303,565 409,365 -
Compensated Absences 96,436 31,767 36,318 91,885 36,318
Total 6,190,623$ 31,767$ 1,677,534$ 4,544,856$ 379,440$
Revenue Bonds
At June 30, 2019, the Town had the following revenue bonds outstanding:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
Series 1993A Water and Sewer 3/16/1993 3/16/2033 5.63%635,600$
Series 1993B Water and Sewer 3/16/1993 3/16/2033 5.50%123,000$
Series 1995A Water and Sewer 12/5/1995 12/5/2035 5.13%1,315,000$
Series 1998A Water and Sewer 7/1/1999 1/1/2038 4.75%475,000$
The annual requirements to amortize the NMFA loans as of June 30, 2019, including interest payments,
are as follows:
2020 63,000$ 82,535$ 145,535$
2021 66,000 79,254 145,254
2022 70,000 75,812 145,812
2023 73,000 72,164 145,164
2024 77,000 68,358 145,358
2025-2029 449,000 277,216 726,216
2030-2034 540,600 146,897 687,497
2035-2039 259,000 27,985 286,985
Total 1,597,600$ 830,221$ 2,427,821$
Fiscal Year
Ending June 30,Principal Interest
Total Debt
Service
62
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
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:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
RUS Series 2000A Water & Sewer 12/18/2000 12/18/2040 5.00%250,000$
NMFA Series 2001A Water & Sewer 5/11/2001 5/1/2021 4.16-5.41%950,391$
NMFA Series 2008A Landfill 4/11/2008 5/1/2018 2.72-3.58%1,000,000$
NMFA/WTB Water Project Fund Loan 9/11/2009 6/1/2029 0.00%130,000$
NMFA/WTB Water Project Fund Loan 9/11/2009 6/1/2029 0.00%600,000$
NMED/ARRA Water State Revolving
Fund Loan 11/23/2009 6/30/2030 0.00%1,200,000$
NMFA/WTB Water Project Fund Loan 4/19/2013 6/1/2033 0.00%197,390$
NMFA New Cell for Lanfill Facility Loan 8/28/2015 6/1/2025 0.38-2.24%1,376,046$
The annual requirements to amortize the loans as of June 30, 2019, including interest payments are as
follows:
2020 280,116$ 18,000$ 298,116$
2021 283,095 15,312 298,407
2022 286,596 12,108 298,704
2023 290,603 8,388 298,991
2024 295,021 4,272 299,293
2025-2029 730,287 - 730,287
2030-2033 280,288 - 280,288
Total 2,446,006$ 58,080$ 2,504,086$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
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, 2019, business-type compensated
absences decreased $4,551 from the previous 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, 2019
NOTE 8.Risk Management
The Town is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets; errors and omissions; injuries and natural disasters. The Town is a member and is insured
through the New Mexico Town Insurance Authority. The Authority was created to provide
comprehensive core insurance programs by expanding the pool of subscribers to maximize cost
containment opportunities for required insurance coverage. The Authority acts as the common carrier
for the State of New Mexico cities. The Town pays an annual premium to the Authority based on claim
experience and the status of the pool. The Risk Management Program includes Workers Compensation,
General and Automobile Liability, Automobile Physical Damage, and Property and Crime coverage. The
Town is not liable for more than the premiums paid. The Town has not had any insurance settlements
that exceeded insurance coverage amounts in the preceding three fiscal years.
NOTE 9.Other Required Individual Fund Disclosures
Generally accepted accounting principles require disclosures of certain information concerning
individual funds including:
A.Deficit fund balance of individual funds. The following fund had a deficit fund balance for the
year ended June 30, 2019:
Civic Center $(2,323)
B.Excess of expenditures over appropriations. There were no funds in which fund expenditures
were in excess of the budgeted appropriations for the year ended June 30, 2019.
C.Designated cash appropriations in excess of available balances. There were no funds with
designated cash appropriation in excess of available balances for the year ended June 30, 2019.
NOTE 10. Pension Plan –Public Employee Retirement Association of NM
Public Employees Retirement 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 Officers,
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 Public Employees Retirement 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 Retirement Act (Chapter 22, Article 11, NMSA 1978),each employee and elected official
of every affiliated public employer is required to be a member in the Public Employees Retirement
Fund, unless specifically excluded.
64
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
Benefits Provided –Benefits are generally available at age 65 with five or Benefits are generally
available at age 65 with five or more years of service or after 25 years of service regardless of age for
TIER I members. Provisions also exist for retirement between ages 60 and 65,with varying amounts of
service required. Certain police and fire members may retire at any age with 20 or more years of service
for Tier I members.
Generally, the amount of retirement pension is based on final average salary, which is defined under
Tier I as the average of salary for the 36 consecutive months of credited service producing the largest
average; credited service;and the pension factor of the applicable coverage plan. Monthly benefits vary
depending upon the plan under which the member qualifies, ranging from 2% to 3.5% of the member’s
final average salary per year of service. The maximum benefit that can be paid to a retiree may not
exceed a range of 60% to 90%of the final average salary, depending on the division. Benefits for duty
and non-duty death and disability and for post-retirement survivors’ annuities are also available.
TIER II
The retirement age and service credit requirements for normal retirement for PERA state and municipal
general members hired increased effective July 1, 2013 with the passage of Senate Bill 27 in the 2013
Legislative Session. Under the new requirements (Tier II), general members are eligible to retire at any
age if the member has at least eight years of service credit and the sum of the member’s age and service
credit equals at least 85 or at age 67 with 8 or more years of service credit. General members hired on
or before June 30, 2013 (Tier I)remain eligible to retire at any age with 25 or more years of service
credit. Under Tier II, police and firefighters in Plans 3, 4 and 5 are eligible to retire at any age with 25 or
more years of service credit. State police and adult correctional officers, peace officers and municipal
juvenile detention officers will remain in 25-year retirement plans, however, service credit will no
longer be enhanced by 20%. All public safety members in Tier II may retire at age 60 with 6 or more
years of service credit. Generally, under Tier II pension factors were reduced by .5%, employee
Contribution increased 1.5 percent and effective July 1, 2014 employer contributions were raised .05
percent. The computation of final average salary increased as the average of salary for 60 consecutive
months.
65
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
Contributions –See PERA’s compressive annual financial report for Contribution provided description.
PERA Contribution Rates and Pension Factors in effect during FY18
Coverage Plan
Employee Contribution
Percentage
Employer
Contribution
Percentage
Pe nsion Factor per year
of Service
Pe nsion
Maximum
as a
Percentage
of the Final
Average
Salary
Annual
Salary less
than
$20,000
Annual
Salary
greater than
$20,000
TIER 1 TIER 2
STATE PLAN
State Plan 3 7.42% 8.92%16.99%3.0%2.5%90%
MUNICIPAL PLANS 1 - 4
Municipal Plan 1
(plan open to new employers)7.0% 8.5% 7.4% 2.0%2.0%90%
Municipal Plan 2
(plan open to new employers)9.15%10.65%9.55%2.5%2.0%90%
Municipal Plan 3
(plan closed to new employers 6/95)13.15%14.65%9.55%3.0%2.5%90%
Municipal Plan 4
(plan closed to new employers 6/00)15.65% 17.15% 12.05%3.0%2.5%90%
MUNICIPAL POLICE PLANS 1 - 5
Municipal Police Plan 1 7.0%8.5%10.40%2.0%2.0%90%
Municipal Police Plan 2 7.0%8.5%15.40%2.5%2.0%90%
Municipal Police Plan 3 7.0%8.5%18.90%2.5%2.0%90%
Municipal Police Plan 4 12.35% 13.85% 18.90%3.0%2.5%90%
Municipal Police Plan 5 16.3%17.8%18.90%3.5%3.0%90%
MUNICIPAL FIRE PLANS 1 - 5
Municipal Fire Plan 1 8.0%9.5%11.40%2.0%2.0%90%
Municipal Fire Plan 2 8.0% 9.5% 17.9% 2.5%2.0%90%
Municipal Fire Plan 3 8.0% 9.5%21.65%2.5%2.0%90%
Municipal Fire Plan 4 12.8%14.3%21.65%3.0%2.5%90%
Municipal Fire Plan 5 16.2% 17.7% 21.65%3.5%3.0%90%
MUNICIPAL DETENTION OFFICER PLAN 1
Municipal Detention Officer Plan 1 16.65% 18.15% 17.05%3.0%3.0%90%
STATE POLICE AND ADULT CORRECTIONAL OFFICER PLANS, ETC.
State Police and Adult Correctional
Officer Plan 1 7.6% 9.1%25.50%3.0%3.0%90%
State Plan 3 -Peace Officer 7.42%8.92%16.99%3.0%3.0%90%
Juvenile Correctional Officer Plan 2 4.78% 6.28%26.12%3.0%3.0%90%
66
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
Pension Liabilities, Pension Expense,and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions –
PERA Fund Division Municipal General:At June 30, 2019, the Town reported a liability of $5,624,937
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2018, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2017. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2018 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2018.
There were no significant events or changes in benefit provision that required an adjustment to the roll-
forward liabilities as of June 30, 2018.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term
share of contributions to the pension plan relative to the projected contributions of all participating
entities, actuarially determined. At June 30, 2018,the Town’s proportion was 0.3528 percent,which was
a decrease of 0.1102 percent from its proportion measured as of June 30, 2017.
For the year ended June 30, 2019,the Town recognized pension expense of $228,711.At June 30,2019,
the Town reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 509,981$ 32,341$
Changes in proportion - 1,181,347
Difference between expected and actual experience 162,572 147,681
Net difference between projected and actual
earnings on pension plan investments 417,174 -
Town's contributions subsequent to the
measurement date 373,107 -
Total 1,462,834$ 1,361,369$
$373,107 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2019 123,515$
2020 (129,966)
2021 (282,746)
2022 17,555
Thereafter -
Total (271,642)$
67
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Police:At June 30, 2019, The Town reported a liability of $3,479,752
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2018, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2017. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2018 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2018. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2018.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term
share of contributions to the pension plan relative to the projected contributions of all participating
entities,actuarially determined.At June 30, 2018, the Town’s proportion was 0.5100 percent, which
was an increase of 0.0226 percent from its proportion measured as of June 30, 2017.
For the year ended June 30, 2019, the Town recognized pension expense of $415,578. At June 30, 2019,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 397,044$ 21,273$
Changes in proportion 122,859 10,849
Difference between expected and actual experience 170,353 344,934
Net difference between projected and actual
earnings on pension plan investments 239,456 -
Town's contributions subsequent to the
measurement date 211,817 -
Total 1,141,529$ 377,056$
$211,817 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2019 319,996$
2020 107,059
2021 112,766
2022 12,835
Thereafter -
Total 552,656$
68
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Fire:At June 30, 2019, The Town reported a liability of $1,598,237 for
its proportionate share of the net pension liability. The net pension liability was measured as of June 30,
2018, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2017. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2018 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2018. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2018.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term
share of contributions to the pension plan relative to the projected contributions of all participating
entities, actuarially determined. At June 30,2018, the Town’s proportion was 0.2497 percent, which
was a decrease of 0.0256 percent from its proportion measured as of June 30, 2017.
For the year ended June 30, 2019, the Town recognized pension expense of $137,633. At June 30, 2019,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 92,303$ 5,836$
Changes in proportion 7,002 120,514
Difference between expected and actual experience 25,684 116,559
Net difference between projected and actual
earnings on pension plan investments 56,046 -
Town's contributions subsequent to the
measurement date 68,470 -
Total 249,505$ 242,909$
$68,470 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2019 10,722$
2020 (49,848)
2021 (25,195)
2022 2,447
Thereafter -
(61,874)$
69
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
Actuarial assumptions.The total pension liability in the June 30, 2018 actuarial valuation was
determined using the following significant actuarial assumptions, applied to all periods included in the
measurement:
PERA FUND
PERA
Actuarial valuation date June 30, 2017
Actuarial cost method Entry Age Normal
Amortization method Level Percentage of Pay
Amortization period Solved for based on statutory rates
Asset valuation method
Actuarial Assumptions:
Investment rate of return 7.25% annual rate, net of investment expense
Projected benefit payment 100 years
Payroll Growth 3.00%
Projected salary increases 3.25% to 13.50% annual rate
Includes inflation at 2.50%
2.75% all other years
Mortality Assumption
The morality assumptions are based on the RPH-2014 Blue Collar
mortality table with female ages set forward oneyear. Future
improvement in mortality rates is assumed using 60% of the MP-2017
projection scale generationally. For non-public safety groups, 25% of in-
service deaths are assumed to be duty related and 35% are assumed to be
duty-related for public safety groups.
Experience Study Dates
July 1, 2008 to June 30, 2017 (demographic) and July 1, 2010 through June
30, 2018 (economic)
The total pension liability, net pension liability, and certain sensitivity information are based on an
actuarial valuation performed as of June 30,2017. The total pension liability was rolled-forward from
the valuation date to the plan year ended June 30, 2018. These assumptions were adopted by the Board
use in the June 30, 2017 actuarial valuation.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return (expected returns,
net of pension plan investment expense and inflation) are developed for 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
allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
70
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10. Pension Plan –Public Employee Retirement Association of NM (continued)
Lo ng-Te rm Exp ected
Real Rate of Return
Global Equit y 7.39%
Risk Reduction & Mitiga tion 1.79
Credit Orie nt ed Fixe d Inc ome 5.77
Re al Assets 7.35
To tal 100.00%
ALL FUN DS - Asset Cla ss Ta rget Allo cation
21.5
15.0
20.00
43.50%
Discount rate.A single discount rate of 7.25% was used to measure the total pension liability as of June
30, 2018. This single discount rate was based on a long-term expected rate of return on pension plan
investments of 7.25%, compounded annually, net of expense. Based on the stated assumptions and the
projection of cash flows, the plan’s fiduciary net position and future contributions were projected to be
available to finance all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all period
of projected benefit payments to determine the total pension liability.
The projections of cash flows used to determine this single discount rate assumed that plan member and
employer contributions will be made at the current statutory levels.
Sensitivity of the Town’s proportionate share of the net pension liability to changes in the discount rate.
The following presents the Town’s proportionate share of the net pension liability calculated using the
discount rate of 7.25 percent, as well as what the Town’s proportionate share of the net pension liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (6.25 percent) or 1-
percentage-point higher (8.25 percent) than the current rate:
PERA Fund Municipal General Division
1% Decrease
(6.25%)
Current
Discount Rate
(7.25%)
1% Increase
(8.25%)
Town's proportionate share of the
net pension liability 8,667,652$ 5,624,937$ 3,109,647$
PERA Fund Municipal Police Division
1% Decrease
(6.25%)
Current
Discount Rate
(7.25%)
1% Increase
(8.25%)
Town's proportionate share of the
net pension liability 5,350,430$ 3,479,752$ 1,954,706$
71
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 10.Pension Plan –Public Employee Retirement Association of NM (continued)
PERA Fund Municipal Fire Division
1% Decrease
(6.25%)
Current
Discount Rate
(7.25%)
1% Increase
(8.25%)
Town's proportionate share of the
net pension liability 2,133,525$ 1,598,237$ 1,159,725$
Pension plan fiduciary net position.Detailed information about the pension plan’s fiduciary net position
is available in separately issued PERA’S financial reports.
Payables to the pension plan. At June 30, 2019, the Town had payables to the plan in the amount of
$54,100.
72
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 11.Post-Employment Benefits –State Retiree Health Care Plan
General Information about the OPEB
Plan description. Employees of the Town are provided with OPEB through the Retiree Health Care
Fund (the Fund)—a cost-sharing multiple-employer defined benefit OPEB plan administered by the
New Mexico Retiree Health Care Authority (NMRHCA). NMRHCA was formed February 13, 1990,under
the New Mexico Retiree Health Care Act (the Act) of New Mexico Statutes Annotated, as amended
(NMSA 1978), to administer the Fund under Section 10-7C-1-19 NMSA 1978. The Fund was created to
provide comprehensive group health insurance coverage for individuals (and their spouses, dependents
and surviving spouses) who have retired or will retire from public service in New Mexico.
NMRHCA is an independent agency of the State of New Mexico. The funds administered by NMRHCA are
considered part of the State of New Mexico financial reporting entity and are OPEB trust funds of the
State of New Mexico. NMRHCA’s financial information is included with the financial presentation of the
State of New Mexico.
Benefits provided. The Fund is a multiple employer cost sharing defined benefit healthcare plan that
provides eligible retirees (including terminated employees who have accumulated benefits but are not
yet receiving them), their spouses, dependents and surviving spouses and dependents with health
insurance and prescription drug benefits consisting of a plan, or optional plans of benefits, that can be
contributions to the Fund and by co-payments or out-of-pocket payments of eligible retirees.
Employees covered by benefit terms –At June 30, 2018, the Fund’s measurement date, the following
employees were covered by the benefit terms:
Plan membership
Current retirees and surviving spouses 51,205
Inactive and eligible for deferred benefit 11,471
Current active members 93,349
156,025
Active membership
State general 19,593
State police and corrections 1,886
Municipal general 17,004
Municipal police 3,820
Municipal FTRE 2,290
Educational Retirement Board 48,756
93,349
Contributions –Employer and employee contributions to the Fund total 3% for non-enhanced
retirement plans and 3.75% of enhanced retirement plans of each participating employee’s salary as
required by Section 10-7C-15 NMSA 1978. The contributions are established by statute and are not based
on an actuarial calculation. All employer and employee contributions are non-refundable under any
circumstance, including termination of the employer’s participation in the Fund. Contributions to the
Fund from the Town were $163,686 for the year ended June 30, 2019.
73
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 11.Post-Employment Benefits –State Retiree Health Care Plan (continued)
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
At June 30, 2019, the Town reported a liability of $5,687,649 for its proportionate share of the net
OPEB liability. The net OPEB liability was measured as of June 30, 2018, and the total OPEB liability
used to calculate the net OPEB liability was determined by an actuarial valuation as of that date. The
Town’s proportion of the net OPEB liability was based on actual contributions provided to the Fund
for the year ending June 30, 2018. At June 30, 2018, the Town’s proportion was 0.13080 percent.
For the year ended June 30, 2019, the Town recognized OPEB expense of $38,771.At June 30, 2018 the
Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from
the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Differences between expected and actual experience -$ 336,745$
Net difference between expected and actual
investments on OPEB plan investments - 70,980
Change of assumptions - 1,061,856
Changes in proportion 170,308 -
Town's contributions subsequent to the measurement date 109,126 -
Total 279,434$ 1,469,581$
Deferred outflows of resources totaling $109,126 represent Town contributions to the Fund made
subsequent to the measurement date and will be recognized as a reduction of net OPEB liability in the
year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred
inflows of resources will be recognized in OPEB expense as follows:
2020 (337,307)$
2021 (337,307)
2022 (337,307)
2023 (252,269)
2024 (35,083)
74
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 11.Post-Employment Benefits –State Retiree Health Care Plan (continued)
Actuarial assumptions. The total OPEB liability was determined by an actuarial valuation using the
following actuarial assumptions:
Valuation Date June 30,2017
Actuarial cost method Entry age normal, level percent of pay,calculated
on individual employee basis
Asset valuation method Market value of assets
Actuarial assumptions:
Inflation 2.50% for ERB; 2.25% for PERA
Projectedpayroll increases 3.50%to 12.50%, based on years of service,
including inflation
Investment rate of return 7.25%,net of OPEB plan investment expense
and margin for adverse deviation
including inflation
Health care cost trend rate 8% graded down to 4.5% over 14 years
for Non-Medicare medical plan costs and 7.5% graded
down to 4.5% over 12 for Medicare medical plan costs
Mortality ERB members: RP-2000 Combined Healthy
Mortality Table with White Collar Adjustment (males)
and GRS Southwest Region Teacher Mortality Table
(females) PERA members: RP-2000 Combined
Healthy Mortality
Rate of Return. The long-term expected rate of return on OPEB plan investments was determined using
a building-block method in which the expected future real rates of return (net of investment fees and
inflation) are developed for each major asset class. These returns 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, adding expected inflation and subtracting expected investment expenses
and a risk margin. The target allocation and projected arithmetic real rates of return for each major
asset class, after deducting inflation, but before investment expenses, used in the derivation of the
long-term expected investment rate of return assumptions.
The best estimates for the long-term expected rate of return is summarized as follows:
Asset
Class
Target
Allocation
Long-Term
Rate of Return
U.S. core fixed income 20%2.1%
U.S. equity - large cap 20%7.1%
Non U.S. - emerging markets 15%10.2%
Non U.S. - developed equities 12%7.8%
Private equity 10%11.8%
Credit and structured finance 10%5.3%
Real estate 5%4.9%
Absolute return 5%4.1%
U.S. equity - small/mid cap 3%7.1%
75
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 11.Post-Employment Benefits –State Retiree Health Care Plan (continued)
Discount Rate. The discount rate used to measure the Fund’s total OPEB liability is 4.08% as of June
30, 2018. The projection of cash flows used to determine the discount rate assumed that employer
contributions will be made at rates proportional to the actuary determined contribution rates. For this
purpose, employer contributions that are intended to fund benefits of current plan members and their
beneficiaries are included. Projected employer contributions that are intended to fund the service costs
for future plan members and their beneficiaries are not included. Based on those assumptions, the
Fund's fiduciary net position was projected to be available to make all projected future benefit
payments for current plan members through the fiscal year ending June 30, 2029.Thus,the 7.25%
discount rate was used to calculate the net OPEB liability through 2029. Beyond 2029, the index rate
for 20-year, tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher
(3.87%) was applied. Thus, 4.08% is the blended discount rate.
Sensitivity of the net OPEB liability to changes in the discount rate and healthcare cost trend rates.
The following presents the net OPEB liability of the Town, as well as what the Town’s net OPEB liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (3.08 percent) or
1-percentage-point higher (5.08 percent)than the current discount rate:
Current Discount
1% Decrease Rate 1% Increase
(3.08%)(4.08%)(5.08%)Town's proportionate share of the
net OPEB liability 6,883,394$ 5,687,649$ 4,745,134$
The following presents the net OPEB liability of the Town, as well as what the Town’s net OPEB liability
would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or
1-percentage-point higher than the current healthcare cost trend rates:
1% Decrease Rate 1% Increase
Town's proportionate share of the
net OPEB liability 4,808,057$ 5,687,649$ 6,377,268$
Trend Rate Sensitivity Analysis
OPEB plan fiduciary net position. Detailed information about the OPEB plan’s fiduciary net position is
available in NMRHCA’s audited financial statements for the year ended June 30, 2018.
Payable Changes in the Net OPEB Liability. At June 30, 2019, the Town reported a payable of $6,165
for outstanding contributions due to NMRHCA for the year ended June 30,2019.
76
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 12. 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 $409,365
as of June 30, 2019, which is based on 24 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 30,2019. 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 post closure care. The Town is in compliance with these
requirements, and at June 30,2019 cash of $1,176,101 and investments of $75,400 is part of the pooled
funds held by the Town and is presented as restricted cash on the statement of net position.
NOTE 13.Joint Powers Agreements
Salazar Property and Sports Facilities
Participants Town of Taos, Taos Municipal Schools Board of Education
Responsible party Taos Municipal School District
Description Develop, manage and maintain a multi-purpose athletic
facility on the Salazar property
Term of agreement 40 years from 2009, with option to renew
Amount of project $2,140,012 for Phase I; unknown for other phases
Town contributions $ 180,756 Principal/ Interest-Debt Payment
Audit responsibility Town of Taos
Public Restroom Facility
Participants Town of Taos, County of Taos
Responsible party County of Taos
Description Designing,constructing, operating, and maintaining a public
restroom facility
Term of agreement November 20, 2007 to January 31, 2028
Amount of project Indeterminate
Town contributions Indeterminate
Audit responsibility County of Taos 77
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 13.Joint Powers Agreements (continued)
Enhanced 911-Response System
Participants Town of Taos, County of Taos, Town of Questa, Village of Taos
Ski Valley, Taos Pueblo
Responsible party County of Taos
Description Provide an answering point for information regarding needed
emergency services
Term of agreement October 19, 2017 until terminated
Amount of project Estimated $973,873 per year
Town contributions None in Fiscal year 2018-2019
Audit responsibility County of Taos
Taos Regional Landfill Board
Participants Town of Taos, County of Taos, Village of Questa, Village of Red
River, Village of Taos Ski Valley
Responsible party Town of Taos
Description Establish the Taos Regional Landfill Board
Term of agreement Until terminated
Amount of project Dependent on landfill expenses
Town contributions none to date
Audit responsibility Town of Taos
NOTE 14.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 Town Insurance Authority. In the opinion of management, the
outcome of these matters will not have a material effect on the financial position of the Town.
In the normal course of operations, the Town receives grant funds 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.
78
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 15. Construction and Other Significant Commitments
The Town has committed to pay for several construction contracts that were not completed at June 30,
2019 in the amount of $3,005,024 as follows:
Project Description
Contract Amount
Remaining Contractor
Bureau of Reclamation - Abeyta Settlement Agreement 2,494,913$ Daniel B. Stephens & Associates
NM 68 Utility Relocation Engineering Design 35,470 Miller Engineers, Inc.
Tank Replacement and Well House Improvements 163,590 Miller Engineers, Inc.
Development of Landfill Cell 4B Engineering 126,175 Miller Engineers, Inc.
Engineering/R-O-W Services for Camino del Medio 72,795 Miller Engineers Inc.
Cordoba and Destino Lane Water Line Replacement - Engineering 64,992 Smith Engineering Company
La Lomita Road and Valverde Street Sewer Line Conceptual Design 47,089 Smith Engineering Company
3,005,024$
NOTE 16.Prior Period Adjustments and Reclassification
Landfill closure and post-closure liability restatement:
The Town has a prior period adjustment for Business-type Activities of ($1,303,565) which was
required for adjusting the estimated landfill liability in accordance with GASB Statement No. 18. The
prior methodology did not include the portion of used capacity as a variable of the computation of the
estimated landfill liability at year end.
The Town also reclassified a fund from the prior year that should have been presented within the Taos
Regional Landfill proprietary fund in the amount of $4,525. In prior years, this fund was included as
part of the Water and Sewer proprietary fund.
NOTE 17.Subsequent Events
The date to which events occurring after June 30, 2019, the date of the most recent statement of net
position, have been evaluated for possible adjustment to the financial statements or disclosures is
December 5, 2019 which is the date on which the financial statements were issued. No issues were
noted for disclosure at December 5, 2019.
NOTE 18.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 specific flows of intergovernmental revenues based on modifications to Federal and State laws and
Federal and State Appropriations.
79
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 19.
NOTE 20.
Restricted Net Position
The government-wide statement of net position reports $7,856,187 of restricted net position, all of
which is restricted by enabling legislation. For descriptions of the related enabling legislation for special
revenue, debt service, and capital projects funds see pages 102-105.
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 $367,600 and $182,555,
respectively. Principal and interest paid for the current year and total customer net revenues were
$40,759 and $3,652,884, respectively.
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 from 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 $838,000 and $454,383,
respectively. Principal and interest paid for the current year and total customer net revenues were
$78,279 and $3,652,884, 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 $329,000 and $193,282
respectively. Principal and interest paid for the current year and total customer net revenues were
$26,625 and $3,652,884, respectively.
80
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 20.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 $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 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 $66,718 with no interest due. Principal for the current year and total customer net
revenues were $6,580 and $3,652,884, 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 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 $307,931 with no interest due. Principal for the current year and total customer net
revenues were $30,370 and $3,652,884, 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
January 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 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 $840,000 with no interest due.Principal for the
current year and total customer net revenues were $60,000 and $3,652,884, respectively.
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 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 $129,459 with no interest due. Principal for the current year and total customer net
revenues were $9,761 and $3,652,884, respectively.
81
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2019
NOTE 20. Utility Revenues Pledged (continued)
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 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 $918,814 and $58,080, respectively. Principal for the current year and total customer net
revenues were $170,946 and $1,247,717, respectively.Interest for the current year was 20,162.
NOTE 21. Subsequent Accounting Pronouncements
In June 2017, GASB Statement No. 87 Leases, was issued.Effective Date: The provisions of this
Statement are effective for fiscal years beginning after December 15, 2019.The Town is still evaluating
the significance of the impact from this pronouncement on its financial statements.
In June 2018, GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a
Construction Period, was issued.Effective Date: The requirements of this Statement are effective for
reporting periods beginning after December 15, 2019.The standard will be implemented during the
fiscal year ended June 30, 2021.The Town is still evaluating how this pronouncement will affect the
financial statements.
In August 2019, GASB Statement No. 90, Majority Equity Interest-an amendment of GASB Statements No.
14 and No.61, was issued.Effective Date: The provisions of this Statement are effective for fiscal years
beginning after December 15, 2020.The Town does not expect this pronouncement to have a material
effect on the financial statements.
In May 2019, GASB Statement No. 91, Conduit Debt Obligations, was issued.Effective Date: The
requirements of this Statement are effective for reporting periods beginning after December 15, 2020.
The Town does not expect this pronouncement to have a material effect on the financial statements.
82
R EQUIRED SUPPLEMENTARY INFORMATION
83
2019
Measurement
Date (As of and
for the year
ended
June 30, 2018)
2018
Measurement
Date (As of and
for the year
ended
June 30, 2017)
0.3528%0.4630%
Town of Taos's proportionate share of the net pension liability 5,624,937$ 6,362,011$
3,793,609$ 3,909,077$
148.27% 162.75%
Plan fiduciary net position as a percentage of the total pension liability 71.13%73.74%
of PERA Fund Municipal General Division
Schedule of the Town's Proportionate Share of the Net Pension Liability
Town of Taos's proportion of the net pension liability
Town of Taos's covered payroll
Town of Taos's proportionate share of the net pension liability as a percentage
of its covered payroll
* 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.
Town of Taos
STATE OF NEW MEXICO
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
See independent auditors' report.
See notes to required supplementary information.84
Schedule A-1
Page 1 of 3
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)
0.4710%0.5054%0.5476%
7,524,994$ 5,152,991$ 4,271,868$
4,069,174$ 4,513,593$ 4,457,324$
184.93% 114.17%95.84%
69.18%76.99%81.29%
See independent auditors' report.
See notes to required supplementary information.85
2019
Measurement
Date (As of and
for the year
ended
June 30, 2018)
2018
Measurement
Date (As of and
for the year
ended
June 30, 2017)
Town of Taos's proportion of the net pension liability 0.5100%0.4874%
Town of Taos's proportionate share of the net pension liability 3,479,752$ 2,707,827$
Town of Taos's covered payroll 1,020,869$ 911,949$
Plan fiduciary net position as a percentage of the total pension liability 71.13%73.74%
340.86%
Town of Taos's proportionate share of the net pension liability as a percentage
of its covered payroll 296.93%
* 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.
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
of PERA Fund Municipal Police Division
Schedule of the Town's Proportionate Share of the Net Pension Liability
Town of Taos
STATE OF NEW MEXICO
See independent auditors' report.
See notes to required supplementary information.86
Schedule A-1
Page 2 of 3
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)
0.4766%0.4844%0.4887%
3,516,497$ 2,329,267$ 1,593,109$
953,345$ 949,833$ 937,534$
69.18%76.99%81.29%
368.86%169.93%245.23%
See independent auditors' report.
See notes to required supplementary information.87
2019
Measurement
Date (As of and
for the year
ended
June 30, 2018)
2018
Measurement
Date (As of and
for the year
ended
June 30, 2017)
Town of Taos's proportion of the net pension liability 0.2497%0.2753%
Town of Taos's proportionate share of the net pension liability 1,598,237$ 1,575,114$
Town of Taos's covered payroll 317,344$ 321,046$
Plan fiduciary net position as a percentage of the total pension liability 71.13%73.74%
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
Town of Taos's proportionate share of the net pension liability as a percentage
of its covered payroll 490.62%503.63%
* 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.
of PERA Fund Municipal Fire Division
Schedule of the Town's Proportionate Share of the Net Pension Liability
Town of Taos
STATE OF NEW MEXICO
See independent auditors' report.
See notes to required supplementary information.88
Schedule A-1
Page 3 of 3
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)
0.2784%0.2769%0.2567%
1,857,210$ 1,429,131$ 1,071,464$
336,796$ 315,617$ 285,100$
69.18%76.99%81.29%
452.81% 375.82%551.43%
See independent auditors' report.
See notes to required supplementary information.89
As of and for the
year ended
June 30, 2019
As of and for the
year ended
June 30, 2018
Contractually required contribution 344,405$ 362,290$
Contributions in relation to the contractually required contribution (344,405) (362,290)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 3,606,337$ 3,793,609$
Contributions as a percentage of covered payroll 9.55%9.55%
* 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.
Last 10 Fiscal Years*
PERA Fund Municipal General Division
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
Town of Taos
STATE OF NEW MEXICO
See independent auditors' report.
See notes to required supplementary information.90
Schedule A-2
Page 1 of 3
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
373,065$ 386,572$ 428,791$
(373,065) (386,572) (428,791)
-$ -$ -$
3,909,077$ 4,069,174$ 4,513,593$
9.54%9.50%9.50%
See independent auditors' report.
See notes to required supplementary information.91
As of and for the
year ended
June 30, 2019
As of and for the
year ended
June 30, 2018
Contractually required contribution 211,817$ 192,944$
Contributions in relation to the contractually required contribution (211,817)(192,944)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 1,120,723$ 1,020,869$
Contributions as a percentage of covered payroll 18.90%18.90%
* 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.
Last 10 Fiscal Years*
PERA Fund Municipal Police Division
Town of Taos
STATE OF NEW MEXICO
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
See independent auditors' report.
See notes to required supplementary information.92
Schedule A-2
Page 2 of 3
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
161,795$ 169,123$ 168,500$
(161,795)(169,123)(168,500)
-$ -$ -$
911,949$ 953,345$ 949,833$
17.74%17.74%17.74%
See independent auditors' report.
See notes to required supplementary information.93
As of and for the
year ended
June 30, 2019
As of and for the
year ended
June 30, 2018
Contractually required contribution 68,470$ 68,705$
Contributions in relation to the contractually required contribution (68,470)(68,705)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 316,260$ 317,344$
Contributions as a percentage of covered payroll 21.65%21.65%
Last 10 Fiscal Years*
PERA Fund Municipal Fire Division
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
Town of Taos
STATE OF NEW MEXICO
* 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.94
Schedule A-2
Page 3 of 3
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
69,503$ 72,748$ 68,173$
(69,503)(72,748)(68,173)
-$ -$ -$
321,046$ 336,796$ 315,617$
21.65%21.60%21.60%
See independent auditors' report.
See notes to required supplementary information.95
Page Left Intentionally Blank
96
PERA
Changes of benefit terms: The PERA and COLA and retirement eligibility benefits changes in recent years are
described in Note 1 of PERA’s CFAR. https://www.saonm.org
Assumptions: The Public Employee Retirement Association of New Mexico Annual Actuarial Valuations as of
June 2018 report is available at http://www.nmpera.org/
For the Year Ended June 30, 2019
Notes to Required Supplementary Information
Town of Taos
STATE OF NEW MEXICO
See independent auditors' report.
See notes to required supplementary information.97
STATE OF NEW MEXICO Schedule B-1
2019
Measurement
Date (As of and
for the Year
Ended June 30,
2018)
2018
Measurement Date
(As of and for the
Year Ended June
30, 2017)
0.13080%0.12709%
5,687,649$ 5,759,303$
5,250,703 5,294,121
108.32%108.79%
13.14%11.34%
* Governmental Accounting Standards Board Statement No. 75 requires ten years of historical information be
presented; however, until a full 10-year trend is compiled, the statement only requires presentation of information for
those years that information is available. Complete information for Town of Taos is not available prior to fiscal year
2018, the year the statement’s requirements became effective.
Town of Taos's proportion of the net OPEB liability (asset)
Last 10 Fiscal Years*
Schedule of Proportionate Share of the Net OPEB Liability
Town of Taos
Town of Taos's covered payroll
Town of Taos's proportionate share of the net OPEB liability as
a percentage of its covered payroll
Retiree Health Care OPEB Plan
Plan fiduciary net position as a percentage of the total OPEB
liability
Town of Taos's proportionate share of the net OPEB liability
(asset)
See independent auditors' report.
See notes to required supplementary information.98
STATE OF NEW MEXICO Schedule B-2
As of and for the
Year Ended June
30, 2019
As of and for the
Year Ended June
30, 2018
Contractually required contribution 109,126$ 111,708$
109,126 111,708
Contribution deficiency (excess)-$ -$
5,111,405 5,250,703
2.13%2.13%
Notes to Required Supplementary Information
RHC Plan
Changes of Benefit Terms
Recent changes in benefits are described in the financial statement note disclosure covering the Other Post-
Employment Benefits (OPEB) – Retiree Health Trust.
Changes of Assumptions
Changes in actuarial assumptions are described in the financial statement note disclosure covering the Other
Post-Employment Benefits (OPEB) – Retiree Health Trust.
Additional financial information supporting the preparation of the Schedule of Employer Allocations and
the Schedule of OPEB Amounts by Employer, including the disclosure of the net OPEB liability and the
unmodified audit opinion on the financial statements, is located in the New Mexico Retiree Health Care
Authority financial statements for the fiscal year ended June 30, 2018. Additional financial information is
available at www.nmrhca.state.nm.us or by contacting New Mexico Retiree Health Care Authority at 4308
Carlisle NE, Suite 104, Albuquerque, NM 87107.
Contribution as a percentage of covered payroll
* Governmental Accounting Standards Board Statement No. 75 requires ten years of historical information be
presented; however, until a full 10-year trend is compiled, the statement only requires presentation of information for
those years that information is available. Complete information for Town of Taos is not available prior to fiscal year
2018, the year the statement’s requirements became effective.
Town of Taos
Schedule of Contributions
Retiree Health Care OPEB Plan
Last 10 Fiscal Years*
Contributions in relation to the contractually required contribution
Town of Taos's covered payroll
See independent auditors' report.
See notes to required supplementary information.99
Page Left Intentionally Blank
100
S UPPLEMENTARY INFORMATION
101
STATE OF NEW MEXICO
Town of Taos
Nonmajor Fund Descriptions
June 30, 2019
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 and maintaining recreational programs in the Town. Financing is provided
by program revenue.
Lodgers’ Tax Special Revenue Fund – 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.
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.
102
STATE OF NEW MEXICO
Town of Taos
Nonmajor Fund Descriptions
June 30, 2019
Special Revenue Funds (continued)
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.
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
onetime costs by the Town of Taos. Authority is Town Council resolution.
Capital Projects Fund
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 financing sources for the purpose of
financing general-purpose capital projects. Authority is Town Council resolution.
Airport Construction Capital Project Fund–This 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.
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.
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 agreement 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 fund was created for the purpose of repayment of the
bond 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.
1999 Gasoline Tax Acquisition Debt Service Fund –This 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.103
Page Left Intentionally Blank
104
STATE OF NEW MEXICO
Town of Taos
Nonmajor Fund Descriptions
June 30, 2019
Debt Service Funds (continued)
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.
105
Fire Protection Recreation
Lodgers' Tax
Special Revenue
Fund
Local
Governmental
Correction
Assets
Cash and cash equivalents 464,521$ 13,884$ 483,247$ 53,145$
Investments 223,258 - - -
Receivables:
Taxes receivable - - 161,954 -
Due from other governments - - 21,951 -
Inventory - - 38,447 -
Total assets 687,779$ 13,884$ 705,599$ 53,145$
Liabilities
Accounts payable 59,012$ -$ 41,787$ 14,325$
Accrued payroll expenses - - 13,160 -
Deposits held in trust for others - - - -
Total liabilities 59,012 - 54,947 14,325
Fund balances
Nonspendable
Inventory - - 38,447 -
Spendable
Restricted for:
General government - - - -
Public safety 628,767 - - 38,820
Culture and recreation - 13,884 612,205 -
Transportation and roads - - - -
Capital improvements - - - -
Debt service - - - -
Committed to:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Unassigned - - - -
Total fund balances 628,767 13,884 650,652 38,820
Total liabilities and fund balances 687,779$ 13,884$ 705,599$ 53,145$
June 30, 2019
Combining Balance Sheet
Nonmajor Governmental Funds
Special Revenue
Town of Taos
STATE OF NEW MEXICO
See independent auditors' report.106
Statement A-1
Page 1 of 3
Law
Enforcement
Protection Civic Center
Domestic
Violence
Shelter
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
6,269$ 780$ -$ 713,510$ 146,861$ -$
- 2,000 - 210,000 50,000 -
- - - - - 15,660
- - - - 37,554 -
- - - - - -
6,269$ 2,780$ -$ 923,510$ 234,415$ 15,660$
6,269$ -$ -$ -$ 112,491$ -$
- - - - - -
- 5,103 - - - -
6,269 5,103 - - 112,491 -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - 15,660
- - - - - -
- - - - - -
- - - - 121,924 -
- - - - - -
- - - - - -
- - - 923,510 - -
- - - - - -
- (2,323) - - - -
- (2,323) - 923,510 121,924 15,660
6,269$ 2,780$ -$ 923,510$ 234,415$ 15,660$
Special Revenue
See independent auditors' report.107
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District Communications
Confidential
Informant
Assets
Cash and cash equivalents -$ 39,466$ -$ 9,828$
Investments - - - -
Receivables:
Taxes receivable 172,780 - - -
Due from other governments - - - -
Inventory - - - -
Total assets 172,780$ 39,466$ -$ 9,828$
Liabilities
Accounts payable -$ -$ -$ -$
Accrued payroll expenses - - - -
Deposits held in trust for others - - - -
Total liabilities - - - -
Fund balances
Nonspendable
Inventory - - - -
Spendable
Restricted for:
General government 172,780 - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Debt service - - - -
Committed to:
General government - - - -
Public safety - - - 9,828
Culture and recreation - 39,466 - -
Transportation and roads - - - -
Capital improvements - - - -
Unassigned - - - -
Total fund balances 172,780 39,466 - 9,828
Total liabilities and fund balances 172,780$ 39,466$ -$ 9,828$
STATE OF NEW MEXICO
Special Revenue
Combining Balance Sheet
June 30, 2019
Town of Taos
Nonmajor Governmental Funds
See independent auditors' report.108
Statement A-1
Page 2 of 3
Special Revenue
Capital
Maintenance
Operating Fund
Facilities
Improvements
Capital
Projects
Airport
Construction
Capital Projects
Fund
Vehicle
Replacement
Special Events
Enterprise
591,283$ 797,527$ 451,042$ 120,870$ 38,432$ 71,334$
190,000 - (969) - - -
- - 129,604 - - -
- - - 6,766 50,000 -
- - - - - -
781,283$ 797,527$ 579,677$ 127,636$ 88,432$ 71,334$
7,296$ -$ -$ -$ -$ -$
- - - - - -
- - - - - -
7,296 - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - 71,334
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - -
773,987 797,527 579,677 127,636 88,432 -
- - - - - -
773,987 797,527 579,677 127,636 88,432 71,334
781,283$ 797,527$ 579,677$ 127,636$ 88,432$ 71,334$
Capital Projects
See independent auditors' report.109
Capital Projects
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
2015 NMFA
Fire Pumper
2009 NMFA PPRF
Disadvantage
Program- Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
Assets
Cash and cash equivalents 91,605$ -$ 208$ 501$
Investments 430,373 - - -
Receivables:
Taxes receivable - - - -
Due from other governments - - - -
Inventory - - - -
Total assets 521,978$ -$ 208$ 501$
Liabilities
Accounts payable -$ -$ -$ -$
Accrued payroll expenses - - - -
Deposits held in trust for others - - - -
Total liabilities - - - -
Fund balances
Nonspendable
Inventory - - - -
Spendable
Restricted for:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements 521,978 - - -
Debt service - - 208 501
Committed to:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Unassigned - - - -
Total fund balances 521,978 - 208 501
Total liabilities and fund balances 521,978$ -$ 208$ 501$
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2019
Debt Service
See independent auditors' report.110
Statement A-1
Page 3 of 3
NMFA Debt
Service Reserve
Eco Park
1999 Gasoline
Tax Acquisition
Debt Service
Fund
2007 NMFA
Land Purchase
2011 PPRF
Street
Improvement
2011 PPRF
Street
Improvement
Reserve
Total Nonmajor
Governmental
Funds
197,507$ 435,966$ -$ 44,921$ 173,122$ 4,945,829$
- 101,424 - - - 1,206,086
- - - - - 479,998
- 100,223 - - - 216,494
- - - - - 38,447
197,507$ 637,613$ -$ 44,921$ 173,122$ 6,886,854$
-$ 3,785$ -$ -$ -$ 244,965$
- - - - - 13,160
- - - - - 5,103
- 3,785 - - - 263,228
- - - - - 38,447
- - - - - 172,780
- - - - - 667,587
- - - - - 626,089
- - - - - 15,660
- - - - - 593,312
197,507 633,828 - 44,921 173,122 1,050,087
- - - - - 121,924
- - - - - 9,828
- - - - - 39,466
- - - - - 923,510
- - - - - 2,367,259
- - - - - (2,323)
197,507 633,828 - 44,921 173,122 6,623,626
197,507$ 637,613$ -$ 44,921$ 173,122$ 6,886,854$
Debt Service
See independent auditors' report.111
Fire Protection Recreation
Lodgers' Tax
Special Revenue
Fund
Local
Governmental
Correction
Revenues
Taxes:
Gross receipts -$-$-$-$
Gasoline and motor vehicle ----
Lodgers tax --1,364,220 -
Intergovernmental:
Federal operating grants ----
Federal capital grants ----
State operating grants 336,431 ---
State capital grants ----
Charges for services --111,388 59,190
Licenses and fees --234 21,059
Investment income 1,268 ---
Miscellaneous --8,033 -
Total revenues 337,699 -1,483,875 80,249
Expenditures
Current:
General government ----
Public safety 215,152 --77,803
Public works ----
Culture and recreation -5,154 823,907 -
Capital outlay 5,068 ---
Debt service:
Principal ----
Interest ----
Total expenditures 220,220 5,154 823,907 77,803
Excess (deficiency) of revenues over
expenditures 117,479 (5,154)659,968 2,446
Other financing sources (uses)
Transfers in --939,158 -
Transfers (out)(75,095)-(1,386,025)-
Total other financing sources (uses)(75,095)-(446,867)-
Net change in fund balances 42,384 (5,154)213,101 2,446
Fund balances - beginning of year 586,383 19,038 437,551 36,374
Fund balances - end of year 628,767$ 13,884$ 650,652$ 38,820$
Town of Taos
For the Year Ended June 30, 2019
Nonmajor Governmental Funds
STATE OF NEW MEXICO
Special Revenue
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
See independent auditors' report.112
Statement A-2
Page 1 of 3
Law
Enforcement
Protection Civic Center
Domestic
Violence Shelter
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
-$ -$ -$ -$ -$ -$
- - - - - 91,098
- - - - - -
- - - - 166,633 -
- - - - - -
31,400 - - - 162,549 -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
31,400 - - - 329,182 91,098
- - 1 - 357,591 -
31,400 - - - - -
- - - - - -
- - - 20,000 - -
- - - - 28,391 -
- - - - - -
- - - - - -
31,400 - 1 20,000 385,982 -
- - (1) (20,000) (56,800) 91,098
- - - 604,490 65,308 -
- - - - - (90,735)
- - - 604,490 65,308 (90,735)
- - (1) 584,490 8,508 363
- (2,323) 1 339,020 113,416 15,297
-$ (2,323)$ -$ 923,510$ 121,924$ 15,660$
Special Revenue
See independent auditors' report.113
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District Communications
Confidential
Informant
Revenues
Taxes:
Gross receipts 985,586$ -$ -$ -$
Gasoline and motor vehicle - - - -
Lodgers tax - - - -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants - - - -
State capital grants - - - -
Charges for services - - - -
Licenses and fees - 107,666 - -
Investment income - - - -
Miscellaneous - - - -
Total revenues 985,586 107,666 - -
Expenditures
Current:
General government 21,911 - - -
Public safety - - - -
Public works - - - -
Culture and recreation - 94,135 - -
Capital outlay - - - -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 21,911 94,135 - -
Excess (deficiency) of revenues over
expenditures 963,675 13,531 - -
Other financing sources (uses)
Transfers in - - - -
Transfers (out)(1,075,370) - - -
Total other financing sources (uses)(1,075,370) - - -
Net change in fund balances (111,695) 13,531 - -
Fund balances - beginning of year 284,475 25,935 - 9,828
Fund balances - end of year 172,780$ 39,466$ -$ 9,828$
Town of Taos
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2019
Special Revenue
STATE OF NEW MEXICO
See independent auditors' report.114
Statement A-2
Page 2 of 3
Special Revenue
Capital
Maintenance
Operating Fund
Facilities
Improvements Capital Projects
Airport
Construction
Capital Projects
Fund
Vehicle
Replacement
Special Events
Enterprise
-$ -$ 739,184$ -$ -$
- - - - - -
- - - - - -
- - - - -
- - - 156,670 50,000 -
- - - 243,156 - -
- - - 139,049 - -
- - - - - 57,380
- - - - - -
- - 13,082 4 - -
- - - - - -
- - 752,266 538,879 50,000 57,380
- - - 382,970 - 248,321
- 50,001 - - - -
284,263 - 23,517 - - -
- - - - - -
302,765 21,755 - 242,891 309,415 -
- - - - - -
- - - - - -
587,028 71,756 23,517 625,861 309,415 248,321
(587,028) (71,756) 728,749 (86,982) (259,415) (190,941)
481,154 548,428 108,000 - 251,000 -
- - (748,733) - - -
481,154 548,428 (640,733) - 251,000 -
(105,874) 476,672 88,016 (86,982) (8,415) (190,941)
879,861 320,855 491,661 214,618 96,847 262,275
773,987$ 797,527$ 579,677$ 127,636$ 88,432$ 71,334$
Capital Projects
See independent auditors' report.115
Capital Projects
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
2015 NMFA Fire
Pumper
2009 NMFA
PPRF
Disadvantage
Program- Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
Revenues
Taxes:
Gross receipts -$ -$ -$ -$
Gasoline and motor vehicle - - - -
Lodgers tax - - - -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants - - - -
State capital grants - - - -
Charges for services 10,700 - - -
Licenses and fees - - - -
Investment income 10,247 - - -
Miscellaneous - - - -
Total revenues 20,947 - - -
Expenditures
Current:
General government 7,739 220 - -
Public safety - - - -
Public works - - - -
Culture and recreation - - - -
Capital outlay - - - -
Debt service:
Principal - 72,797 144,488 400,000
Interest - 2,078 36,267 151,375
Total expenditures 7,739 75,095 180,755 551,375
Excess (deficiency) of revenues over
expenditures 13,208 (75,095) (180,755) (551,375)
Other financing sources (uses)
Transfers in - 75,095 180,753 551,825
Transfers (out)- - - -
Total other financing sources (uses)- 75,095 180,753 551,825
Net change in fund balances 13,208 - (2) 450
Fund balances - beginning of year 508,770 - 210 51
Fund balances - end of year 521,978$ -$ 208$ 501$
Town of Taos
STATE OF NEW MEXICO
Nonmajor Governmental Funds
Debt Service Fund
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2019
See independent auditors' report.116
Statement A-2
Page 3 of 3
NMFA Debt
Service Reserve
Eco Park
1999 Gasoline
Tax Acquisition
Debt Service
Fund
2007 NMFA
Land Purchase
2011 PPRF
Street
Improvement
2011 PPRF
Street
Improvement
Reserve
Total Nonmajor
Governmental
Funds
-$ -$ -$ -$ 1,724,770$
- - - - - 91,098
- - - - - 1,364,220
- - - - 166,633
- - - - - 206,670
- 114,830 - - - 888,366
- 100,223 - - - 239,272
- - - - - 238,658
- - - - - 128,959
4,830 2,241 - 1,883 2,751 36,306
- 13,599 - - - 21,632
4,830 230,893 - 1,883 2,751 5,106,584
- - - - - 1,018,753
- - - - - 374,356
- - - - - 307,780
- - - - - 943,196
- 1,076,926 - - - 1,987,211
- - - 159,967 - 777,252
- - - 15,455 - 205,175
- 1,076,926 - 175,422 - 5,613,723
4,830 (846,033) - (173,539) 2,751 (507,139)
- 642,531 - 184,666 - 4,632,408
- - - - - (3,375,958)
- 642,531 - 184,666 - 1,256,450
4,830 (203,502) - 11,127 2,751 749,311
192,677 837,330 - 33,794 170,371 5,874,315
197,507$ 633,828$ -$ 44,921$ 173,122$ 6,623,626$
Debt Service Fund
See independent auditors' report.117
Page Left Intentionally Blank
118
S UPPORTING SCHEDULES
119
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
US Bank
Clearing Account Checking 122,285$ 160,678$ 282,963$ -$
Judicial Bond Fund Municipal Court Checking 493 - - 493
Water & Sewer System Income Fund Checking 6,701,493 87,111 2,589 6,786,015
Total US Bank 6,824,271 247,789 285,552 6,786,508
Centinel Bank
General Fund Checking 7,877,697 44,525 16,501 7,905,721
1994 GRT Revenue Bond Acquisition Fund Checking 89,008 2,597 - 91,605
HUD Account- Domestic Violence Checking - - - -
Water Wastewater Improvements Fund Checking 231,746 - 57,585 174,161
ACH Transfer Account Checking 59,111 - - 59,111
Payroll Clearing Checking 3 - - 3
Total Centinel Bank 8,257,565 47,122 74,086 8,230,601
Bank balance of deposits 15,081,836$ 294,911$ 359,638$ 15,017,109$
New Mexico Finance Authority-Investment
Taos 57 - Debt Service Funds 12,797$ -$ -$ 12,797$
Taos 57 - Debt Service Reserve Funds 184,710 - - 184,710
Taos 41 - Debt Service Funds 11,315 - - 11,315
Taos 41- Debt Service Reserve Funds 173,122 - - 173,122
Taos 48 - Debt Service Funds 1,270 - - 1,270
Taos 49 - Debt Service Funds 8,526 - - 8,526
Taos 49 - Debt Service Reserve Funds Funds 140,615 - - 140,615
Total New Mexico Finance Authority 532,355 - - 532,355
*All checking accounts are non-interest bearing
STATE OF NEW MEXICO
Town of Taos
Schedule of Deposit and Investment Accounts
June 30, 2019
See independent auditors' report.120
Schedule I
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
Total investments 532,355 - - 532,355
Total 15,614,191$ 294,911$ 359,638$ 15,549,464
Add: New Mexico State Treasurer Local Government Investment Pool 4,149,964
Add: petty cash 1,850
Total deposits and investments 19,701,278$
Deposits and investments per financial statements:
Cash and cash equivalents - Exhibit A-1 13,687,598$
Investments - Exhibit A-1 4,014,564
Restricted cash and cash equivalents - Exhibit A-1 1,851,425
Restricted investments - Exhibit A-1 75,400
Fiduciary funds cash - Exhibit E-1 12,291
Investments - Exhibit E-1 60,000
Total cash, cash equivalents, and investments 19,701,278$
See independent auditors' report.121
Schedule II
Fair Market
Name of Description of CUSIP Value at
Depository Pledged Collateral Maturity Number June 30, 2019
US Bank
FHLB N/A LOC NO. 527529 7,000,000$
FHLB N/A LOC NO. 528159 1,000,000
Total US Bank 8,000,000
The location of the safekeeper of the above securities is 221 East Fourth Street, Cincinnati, OH 45202
Centinel Bank
Clovis SD 3.00%08/01/22 189414KC8 200,000
Los Alamos SD 3.90%08/01/19 54422NBL9 400,000
Clovis SD 2.05%08/01/24 189414JA4 250,000
Espanola SD 2.125%09/01/25 29662RBA5 150,000
Lea County 3.50%06/15/20 521513AW1 685,125
Ruidoso SD 2.50%08/01/21 781338HR2 250,000
West Las Vegas 2.00%08/15/22 953769KX3 150,000
Hobbs SD 2.25%07/15/21 433866EV8 200,000
Gallup McKinley 2.00%07/15/21 364010RJ9 176,684
Torrance ETC County 2.00%09/01/23 891400PE7 150,000
Alamogordo NM Muni 3.00%08/01/25 11464KQ6 250,000
FFCB 12/08/21 3133EGT47 1,005,562
Dona Ana Branch Community 08/01/24 257578EGS 300,000
Total Centinel Bank 4,167,371
The location of the safekeeper of the above securities is Independent Bankers Bank, Dallas, TX
Total Pledged Collateral 12,167,371$
STATE OF NEW MEXICO
Town of Taos
Schedule of Collateral Pledged by Depository
For Public Funds
June 30, 2019
See independent auditors' report.122
STATE OF NEW MEXICO Schedule III
Deposits‐ Streets and Meter
Balance Balance
June 30, 2018 Additions Deletions June 30, 2019
Assets
Cash- streets and meters 13,567$ 7,500$ $ 9,500 11,567$
Cash- recreation 430 7,308 7,014 724
Investments- streets and meters 60,000 - - 60,000
Total assets 73,997$ 14,808$ 16,514$ 72,291$
Liabilities
Due to other entities 73,997$ 14,808$ 16,514$ 72,291$
Total liabilities 73,997$ 14,808$ 16,514$ 72,291$
Town of Taos
Schedule of Changes in Fiduciary Assets and Liabilities
Custodial Fund
For the Year Ended June 30, 2019
See independent auditors' report.123
Page Left Intentionally Blank
124
C OMPLIANCE SECTION
125
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORS cordovacpas.com
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
Mr. Brian S. Colón, Esq.
New Mexico State Auditor
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 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 for the General Fund of the Town of Taos (the Town), as of and for the year ended June 30, 2019,
and the related notes to the financial statements, which collectively comprise Town’s basic financial
statements, and have issued our report thereon dated December 5, 2019.
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 a reasonable possibility that a material misstatement of the Town’s
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material weaknesses
or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in
internal control that we consider to be material weaknesses. However, material weaknesses may exist that
have not been identified.
126
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 are 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 Town’s internal control or
on compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Town’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Cordova CPAs LLC
Albuquerque, NM
December 5, 2019
127
STATE OF NEW MEXICO Schedule V
Town of Taos Page 1 of 2
Schedule of Findings and Responses
June 30, 2019
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
128
STATE OF NEW MEXICO Schedule V
Town of Taos Page 2 of 2
Schedule of Findings and Responses
June 30, 2019
Section II – Financial Statement Findings
None noted
Section III – Section 12-6-5 NMSA 1978 Findings
None noted
Section IV – Prior Year Audit Findings
2018-001 Cafeteria Plan Deductions (Other Noncompliance)- Resolved
129
STATE OF NEW MEXICO
Town of Taos
Other Disclosures
June 30, 2019
Exit Conference
An exit conference was held on December 11, 2019. In attendance were the following:
Representing the Town of Taos:
Daniel Barrone - Mayor
Rick Bellis – Town Manager
Marietta Fambro – Finance Director
Nathaniel Evans – Town Councilor and Finance Audit Chair
Josephine Fresquez – Assistant Finance Director
Francisco Espinoza – Public Works Director
Robert Miller – Facilities Services Director
Representing Cordova CPAs LLC:
Robert Gonzales, CPA, Principal
Auditor Prepared Financial Statements
Cordova CPAs LLC prepared the GAAP-basis financial statements and footnotes of 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.
130