HomeMy WebLinkAbout2021 Audit ReportTOWN OF TAOS
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
JUNE 30, 201
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I NTRODUCTORY SECTION
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TOWN OF TAOS
June 30, 2021
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 12-19
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 26-27
Reconciliation of the Balance Sheet to the Statement of Net Position 29
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds B-2 30-31
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 33
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget (GAAP Budgetary Basis) and Actual:
General Fund C-1 34
Capital Maintenance Operating Fund C-2 35
Statement of Net Position - Proprietary Funds D-1 36-39
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds D-2 40-41
Statement of Cash Flows - Proprietary Funds D-3 43
Statement of Fiduciary Net Position - Custodial Funds E-1 44
Statement of Changes in Fiduciary Net Position - Custodial Funds E-2 45
NOTES TO THE FINANCIAL STATEMENTS 46-86
Statement/
Schedule Page
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability A-1 88-93
Schedule of the Town's Contributions - Public Employees Retirement Association Plan A-2 94-99
Notes to Required Supplementary Information 100
Schedule of Proportionate Share of the Net OPEB Liability B-1 102
Schedule of the Town's Contributions - Retiree Health Care OPEB Plan B-2 103
SUPPLEMENTARY INFORMATION
Nonmajor Fund Descriptions 106-108
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds A-1 110-115
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Governmental Funds A-2 116-121
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TOWN OF TAOS
June 30, 2021
Table of Contents
Statement/
Schedule Page
SUPPORTING SCHEDULES
Schedule of Deposit and Investment Accounts I 124-125
Schedule of Collateral Pledged by Depository For Public Funds II 126
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 128-129
FEDERAL FINANCIAL ASSISTANCE
Report on Compliance for Each Major Federal Program and on Internal Control
Over Compliance Required by the Uniform Guidance 132-133
Schedule of Expenditures of Federal Awards III 134-135
Schedule of Findings and Questioned Costs IV 137-139
OTHER DISCLOSURES 140
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TOWN OF TAOS
Official Roster
June 30, 2021
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
U.S. Office of Management and Budget
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 and major special revenue fund of the Town of Taos (the Town), as of and for the year ended
June 30, 2021, 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 and major special
revenue fund of the Town, as of June 30, 2021, 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 19 and Schedules A-1 through B-2 and the notes to the Required
Supplementary Information on pages 88 through 103 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 District’s basic financial statements. The introductory section, the combining and individual
fund financial statements, the combining financial statements for the general fund, the Schedule of
Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)
and Supporting Schedules I and II 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, the Schedule of Expenditures of Federal Awards and
Supporting Schedules I and II required by 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 auditing standards generally accepted in the United States of America. In our opinion, the combining
and individual fund financial statements, the Schedule of Expenditures of Federal Awards and Supporting
Schedules I and II required by 2.2.2 NMAC are fairly stated, in all material respects, in relation to the basic
financial statements taken 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 13, 2021
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 13, 2021
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11
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
We are pleased to present the Town of Taos’s financial statements for the fiscal year ended June 30, 2021. 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 $90,901,408 (net position). Of this
amount, ($2,328,465) is (unrestricted net position), due to the on-going implementation of GASB Statement No. 68 and
Statement No. 75. 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. Included in the available
cash balances are approximately $8,111,019 for capital projects and $5,912,570 for special revenue projects.
The Town’s total net position increased by $6,332,579 during the fiscal year. The majority of this overall increase was due to
an increase in the gross receipts taxes versus what was originally projected. As we entered FY21, with the uncertainty of the
pandemic, we originally anticipated a decrease of approximately 20% in gross receipts tax and a decrease of 40% in lodger’s
tax, which the Town considers as our main sources of revenue. Using the same logic, we decreased our operating expenses by
approximately $1.7M. As the year progressed, we noticed our gross receipts tax distributions were significantly greater than
prior year(s) collections. We attributed that increase due to the stay-at-home orders issued by the State of New Mexico. Due
to the orders, there was less traveling by our locals for everyday essentials like groceries, fuel, supplies, and materials, thus
generating gross receipts taxes approximately 10% greater than FY19. We used this year as a benchmark since the pandemic
started in FY20 and it has been difficult to generate a comparable from this period. Along with gross receipts well above
budget, our General Fund expenditures were projected at $10,148,929 but ended with actuals of $9,359,809 which attributed to
total net position increase. Other notable increases were to operating grants associated with the CARES ACT and small
business funding in the amount of $1.5M.
As of June 30, 2021, the Town’s governmental activities reported a combined ending net position balance of $61,549,134. Of
this total, $8,323,193 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 $2,752,561, amounting to 32
percent of total general fund expenditures.
The Town of Taos’ total debt had a net decrease of $1,070,039 during the year due to scheduled principal payments being paid
and early retirements on two of the New Mexico Finance Authority loans. Compensated absences increased by $85,649 from
last fiscal year due to several reasons, increase in wages by $1.00 which affects the liability amount, administrative leave for
employees in lieu of personal leave during the pandemic and continued accruals at the maximum with several tenured
employees. The Town paid $2,362,741 towards the principal of several of its government loans, bonds, compensated absences
and contracts payable compared to the previous year of $1,434,358. The majority of the difference is that the Town elected to
use its additional revenue received to pay off two loans early, one scheduled for May 2025 and the other May 2022.
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. 12
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
The government-wide financial statements can be found in Exhibits A-1 and A-2 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have 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-eight 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, Capital Maintenance & Operating Fund and Airport Construction
Fund, which are considered major funds. Data from the other twenty-five governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements
elsewhere in this report.
The Town of Taos adopts an annual appropriated budget for its general fund, capital equipment replacement, special revenue fund, fire,
police, GRT, and all other funds. A budgetary comparison statement has been provided for the General Fund to demonstrate
compliance with this budget. In addition, the individual financial statements of the nonmajor governmental fund types include
budgetary comparison data. The basic governmental fund financial statements can be found in Exhibits B-1 through C-1 of this report
Proprietary funds. Proprietary funds are generally used to account for services for which the Town charges customers – either outside
customers or internal units or departments of the Town. Proprietary funds provide the same type of information as shown in the
government-wide financial statements, only in more detail. The Town maintains one type of proprietary fund.
Enterprise funds. Are used to report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses enterprise funds to account for the joint water and sewer services, solid waste and regional landfill
operations for the Town. The enterprise funds are considered to be major funds of the Town and can be found in Exhibits D-1 through
D-3 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary
funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the
Town of Taos’ own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The Town of Taos fiduciary funds account for the collection of street cut permits and deposits for recreation events. The basic fiduciary
fund financial statement can be found in 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 110-121 of this report.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
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 $90,901,408 at the close of the current
fiscal year.
The significant portion of the Town of Taos’ net position represents the Town’s investment of $77,652,506 in capital assets (e.g., land
improvements, buildings, infrastructure and machinery & equipment), less any related outstanding debt used to acquire those assets.
The Town of Taos uses these capital assets to provide services to its citizens, so these assets are not available for future spending.
Although the Town of Taos’ investment in its capital assets is reported net of related debt, it should be noted that the resources needed
to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Governmental Business-Type
Activities Activities Total
Assets
Current and other assets 20,951,040$ 10,183,214$ 31,134,254$
Restricted cash, cash equivalents & investments - 1,591,134 1,591,134
Restricted investments 75,400 75,400
Capital assets, net of accumulated 59,101,945 25,051,719 84,153,664
depreciation
Total assets 80,052,985 36,901,467 116,954,452
Deferred Outflows of Resources
Deferred Outflows - pension 3,754,723.00 430,478.00 4,185,201.00
Defered Outflows - OPEB 990,092.00 146,388.00 1,136,480.00
Total deferred outflows of resources 4,744,815 576,866 5,321,681
Total assets and deferred outflows of resources 84,797,800$ 37,478,333$ 122,276,133$
Liabilities `
Current Liabilities 1,378,449$ 1,451,641$ 2,830,090$
Non-current liabilities 18,766,621 6,258,945 25,025,566
Total liabilities 20,145,070 7,710,586 27,855,656
Deferred Inflows of Resources
Defered Inflows - pension 943,317 117,170 1,060,487
Deferred Inflows - OPED 2,160,279 298,303 2,458,582
Total deferred inflows of resources 3,103,596 415,473 3,519,069
Net Position
Net investment in capital assets 56,652,266 21,000,240 77,652,506
Restricted 14,235,763 1,341,604 15,577,367
Unrestricted (9,338,895) 7,010,430 (2,328,465)
Total net position 61,549,134$ 29,352,274$ 90,901,408$
Total Liabilities and Net Position 84,797,800$ 37,478,333$ 122,276,133$
A portion of the Town of Taos’ governmental restricted net position of $14,235,763 (23 percent) represents resources that are subject to
restrictions related to covenants arising from the Town’s long-term debt issuance, special revenue projects and capital projects. The
remaining balance of unrestricted net position, ($9,338,895) previously stated, continues as a negative due to the implementation of
GASB Statement 68 and Statement 75 reported in the financials. and creditors.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
In the previous year, this amount was ($10,062,701). Taking that negative into consideration, the Town still has the available cash to
meet the government’s ongoing obligations to citizens At the end of the current fiscal year, the Town of Taos is able to report positive
balances in all categories of net position for both governmental and business-type activities.
Analysis of Changes in Net Position
The Town’s net position increased by $6,332,579 during the fiscal year. This increase is primarily the result of operating and capital, in
the General Government.
`Governmental Business-type
Revenues Activities Activities Total
Program revenues:
Charges for service 632,207$ 5,522,058$ 6,154,265$
Operating grants and contributions 2,551,984 - 2,551,984
Capital grants and contributions 1,175,030 1,585,523 2,760,553
General revenues:
Property taxes, levied for general purposes 1,201,338 - 1,201,338
Gross receipts taxes 12,254,964 541,852 12,796,816
Gasoline, franchise and motor vehicle 686,564 - 686,564
Lodger's Taxes 1,033,251 - 1,033,251
Interest income (loss)5,035 7,028 12,063
Miscellaneous income 103,218 - 103,218
Total Revenues 19,643,591 7,656,461 27,300,052
Program expenses:
General government 9,121,131$ -$ 9,121,131$
Public safety 3,047,363 - 3,047,363
Public works 1,204,787 - 1,204,787
Culture and recreation 1,461,217 - 1,461,217
Interest and other costs 149,584 - 149,584
Joint water and sewer - 4,367,055 4,367,055
Solid waste - 101,460 101,460
Taos Regional Landfill - 1,514,876 1,514,876
Total Expenses 14,984,082 5,983,391 20,967,473
Change in net position 4,659,509 1,673,070 6,332,579
Net Position, beginning 56,889,625 27,679,204 84,568,829
Net Position, ending 61,549,134$ 29,352,274$ 90,901,408$
15
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
Governmental activities. Governmental activities increased the Town of Taos’ net position by $4,659,509 primarily as the result of an
increase in operating and capital grants. Along with decreases in general government expenditures added to the net position of the
Town during the year.
Tax revenues account for $15,176,117 or 77 percent of governmental revenues. Tax revenues are made up of property, gross receipts,
gasoline and motor vehicle and other taxes. Tax revenues decreased by $527,537 from last fiscal year. This was mainly from lodger’s
taxes that were hit hard by the pandemic, as we are a tourist destination that was affected by this pandemic.
The General fund received the majority of the Town’s program revenue, accounting for $9,121,826 or 46 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 $632,207 or 3 percent of total governmental revenues. These
charges are for fees, fines and forfeitures, and licenses and permits. Charges for services decreased by $748,135 from last fiscal year
due to the fact that the major facilities that account for these revenues were closed. Those included the Youth & Family Center, the
Library, the suspension of our Community and Special Events and other fee-generated activities.
Business-type activities. Business-type activities increased the Town’s net position by $1,673,070, primarily as the result of increase
in charges for services and capital grants.
The Town’s direct charges to users of business-type services made up $5,522,058 or 72 percent of total business-type revenues. These
charges are for water and sewer services, water and sewer connection fees, landfill tipping fees and solid waste services. These direct
charges for service increased by $355,163 from the previous year, primarily as the result of again, the pandemic and stay at home orders
and increased new homeowner and second homeowners relocating to the town. The Town’s direct charges for the joint water and sewer
program were the majority of the increase this year. The Town still continues looking at the joint water and sewer program, 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 $19,643,591 in the fiscal year ended June 30, 2021, which
represents an increase of $616,055 from the fiscal year ended June 30, 2020. This is largely due to the increase in operating and capital
grants. Expenditures for governmental functions, totaling $14,984,777 decreased by approximately $3,391,885 from the fiscal year
ended June 30, 2020. This is due mainly to the decrease in expenditures for all governmental functions. Culture and recreation were
the greatest decrease of $1,235,652 from the previous fiscal year due to the closure of these programs and facilities. In the fiscal year
ended June 30, 2021, revenues for governmental functions exceeded expenditures by approximately $4,658,814.
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 $2,752,561
along with a minimum fund balance of $2,900,518.
Overall, the general fund’s performance resulted in revenues over expenditures in the fiscal year ended June 30, 2021 of $4,190,668 an
increase of $1,681,558 over the comparable figure from the prior year of $2,509,110. The Town’s overall financial position improved
as stated prior under the Financial Highlights. During the year, there were also several personnel vacancies within various departments
that contributed to the expenditures being less than what was originally budgeted.
Proprietary Funds. The Town’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
At the end of the fiscal year, the unrestricted net position for enterprise funds were $7,010,430.
The total increase in net position for the enterprise funds was $1,517,422 compared to $155,648 from the prior year. This was again a
much-improved performance from the previous year due to the increase in charges for services and decrease of the overall operating
expenses. The Town continues to build up the asset management fund to a level with the intent 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, 2021. 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 $658,256 less than budgeted. This year major adjustments
were made at mid-year and end of year for several one-time capital, maintenance and operational requests in several departments within
the Town to utilize the favorable variance savings.
Budget Amounts
Original Final
Expenditures:
General government 4,797,541$ 4,355,738$ 3,861,331$ 494,407$
Public safety 3,178,511 3,072,409 2,961,617 110,792
Public works 1,014,765 885,231 874,937 10,294
Culture and recreation 1,158,112 1,046,431 1,003,668 42,763
Capital outlay - - - -
Total Expenditures 10,148,929$ 9,359,809$ 8,701,553$ 658,256$
Actual (GAAP
Basis)
Favorable
(Unfavorable)
Variance
17
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
Capital Asset and Debt Administration
Capital assets. The Town of Taos’ capital assets for its governmental and business-type activities as of June 30, 2021 amount to
$84,153,664 (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 $908,227 for governmental
activities and increased $771,528 for business-type activities (net of accumulated depreciation).
The additions to capital assets during the year were mainly classified as either construction or projects in progress but there was also a
substantial increase in purchasing of equipment/vehicles. We continue to have many active engineering contracts for several future
capital projects that are reflected on the significant commitment list included in the financial statements. The additions to capital assets
were as follows:
$688,766 of additions to governmental infrastructure at the airport for engineering services related to the Airport Terminal
Building, Taxiway A, Airport Well and completion of Runway 4-22 rehabilitation.
$737,096 of additions to governmental equipment/vehicles including a new Pierce Enforcer Class A Pumper for the Fire
Department and manufacturing equipment for Humble; both projects in progress.
$1,077,300 of additions to governmental buildings/equipment for Town Hall HVAC and Coronado Hall HVAC both close
completion but continue as construction in progress with a close-out date in FY22.
$671,438 of additions to governmental infrastructure and equipment/vehicles for completion and/or purchase of the following
–Ultraviolet Light Disinfection, Police Responder Pursuit Vehicles, 2021 Kenworth Dump/Snowplow Truck, Caterpillar
Grader, Message Traffic Boards, ATV’s (2), Kubota Mower for Airport, Fire Safety Trailer and Computer servers/equipment.
$2,826,938 of additions to the business-type infrastructure – Wastewater Treatment Plant Solar Array, Muffin Monster Sewage
Grinder Repairs, 2020 Caterpillar Wheel Loader, Mailroom Maxi feeder, and Abeyta Settlement engineering in progress.
Governmental Business-like
Activities Activities Total
Land 6,615,288$ 262,422$ 6,877,710$
Constuction in progress 3,363,196 4,678,215 8,041,411
Land improvements 7,527,676 104,895 7,632,571
Buildings and improvements 36,133,646 4,656,981 40,790,627
Machinery and Equipment 18,302,254 9,925,925 28,228,179
Infrastructure 84,840,894 38,991,417 123,832,311
Total capital assets 156,782,954 58,619,855 215,402,809
Less: accumulated depreciation (97,681,009) (33,568,136) (131,249,145)
Total property, plant and equipment, net
of accumulated depreciation 59,101,945$ 25,051,719$ 84,153,664$
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.
18
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2021
Debt Administration. At the end of the current fiscal year, the Town of Taos had total long-term obligations outstanding of
$7,914,838. In total, outstanding debt decreased by $1,070,039 from the previous fiscal year. The Town this year took advantage of
excess revenue and paid off two New Mexico Finance Authority loans early, which were schedule for retirement in May 2022 and May
of 2025. Along with the early retirement we incurred $700,000 of new debt in the Business-type Activities associated with the
construction of the Wastewater Treatment Plant Solar Array project. The Town continues to look at options of either paying off early or
refinancing those loans with higher interest rates and low balances to further reduce outstanding debt.
Governmental Business-type
Activities Activities Total
Revenue Bonds 2,430,000$ 1,468,600$ 3,898,600$
NMFA amd RUS Loans - 2,582,879 2,582,879
Compensated absences 751,203 86,798 838,001
Landfill Closure Liability - 595,358 595,358
Total long-term liabilities 3,181,203$ 4,733,635$ 7,914,838$
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.
19
Page Left Intentionally Blank
20
B ASIC
FINANCIAL STATEMENTS
21
TOWN OF TAOS
Statement of Net Position
June 30, 2021
Governmental
Activities
Business-type
Activities Total
Assets
Current assets
Cash and cash equivalents 15,107,776$ 7,298,871$ 22,406,647$
Investments 2,415,679 1,598,881 4,014,560
Receivables:
Property taxes 237,445 - 237,445
Taxes receivable 2,562,009 97,905 2,659,914
Due from other governments 300,491 219,414 519,905
Customer receivable, net - 911,137 911,137
Inventory 303,320 81,326 384,646
Internal balances 24,320 (24,320) -
Total current assets 20,951,040 10,183,214 31,134,254
Noncurrent assets
Restricted cash and cash equivalents - 1,591,134 1,591,134
Restricted investments - 75,400 75,400
Capital assets 156,782,954 58,619,855 215,402,809
Less: accumulated depreciation (97,681,009) (33,568,136) (131,249,145)
Total noncurrent assets 59,101,945 26,718,253 85,820,198
Total assets 80,052,985 36,901,467 116,954,452
Deferred outflows of resources
Deferred outflows- pension 3,754,723 430,478 4,185,201
Deferred outflows- OPEB 990,092 146,388 1,136,480
Total deferred outflows of resources 4,744,815 576,866 5,321,681
Total assets and deferred outflows of resources 84,797,800$ 37,478,333$ 122,276,133$
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 199,800$ 649,313$ 849,113$
Accrued payroll 407,811 25,014 432,825
Accrued compensated absences 307,306 37,373 344,679
Deposits held in trust for others 5,103 324,930 330,033
Accrued interest 8,429 58,415 66,844
Current portion of bonds and loans payable 450,000 356,596 806,596
Total current liabilities 1,378,449 1,451,641 2,830,090
Noncurrent liabilities
Accrued compensated absences 443,897 49,425 493,322
Bond premiums, net of accumulated
amortization of $51,163 19,679 - 19,679
Bonds payable 1,980,000 1,398,600 3,378,600
Loans payable - 2,296,283 2,296,283
Landfill closure and post-closure - 595,358 595,358
Net pension liability 12,233,235 1,367,195 13,600,430
Net OPEB liability 4,089,810 552,084 4,641,894
Total noncurrent liabilities 18,766,621 6,258,945 25,025,566
Total liabilities 20,145,070 7,710,586 27,855,656
Deferred inflows of resources
Deferred inflows- pension 943,317 117,170 1,060,487
Deferred inflows- OPEB 2,160,279 298,303 2,458,582
Total deferred inflows of resources 3,103,596 415,473 3,519,069
Net position
Net investment in capital assets 56,652,266 21,000,240 77,652,506
Restricted for:
Debt service 212,174 - 212,174
Capital projects 8,111,019 - 8,111,019
Special revenue projects 5,912,570 - 5,912,570
Landfill - 1,341,604 1,341,604
Unrestricted (deficit)(9,338,895) 7,010,430 (2,328,465)
Total net position 61,549,134 29,352,274 90,901,408
Total liabilities, deferred inflows of resources, and
net position 84,797,800$ 37,478,333$ 122,276,133$
The accompanying notes are an integral part of these financial statements.23
TOWN OF TAOS
Statement of Activities
For the Year Ended June 30, 2021
Functions/Programs
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental Activities:
General government 9,121,131$ 598,322$ 545,996$ -$
Public safety 3,047,363 - 398,515 250,000
Public works 1,204,787 - 1,582,473 925,030
Culture and recreation 1,461,217 33,885 25,000 -
Interest 149,584 - - -
Total governmental activities 14,984,082 632,207 2,551,984 1,175,030
Business‐type Activities:
Water and Sewer 4,367,055 3,831,543 - 1,585,523
Solid Waste 101,460 136,313 - -
Taos Regional Landfill 1,514,876 1,554,202 - -
Total business‐type activities 5,983,391 5,522,058 - 1,585,523
Total 20,967,473$ 6,154,265$ 2,551,984$ 2,760,553$
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, ending
Program Revenues
The accompanying notes are an integral part of these financial statements.24
Exhibit A-2
Governmental
Activities
Business‐type
Activities Total
(7,976,813)$ -$ (7,976,813)$
(2,398,848) - (2,398,848)
1,302,716 - 1,302,716
(1,402,332) - (1,402,332)
(149,584) - (149,584)
(10,624,861) - (10,624,861)
- 1,050,011 1,050,011
- 34,853 34,853
- 39,326 39,326
- 1,124,190 1,124,190
(10,624,861) 1,124,190 (9,500,671)
12,254,964 541,852 12,796,816
1,201,338 - 1,201,338
686,564 - 686,564
1,033,251 - 1,033,251
5,035 7,028 12,063
103,218 - 103,218
15,284,370 548,880 15,833,250
4,659,509 1,673,070 6,332,579
56,889,625 27,679,204 84,568,829
61,549,134$ 29,352,274$ 90,901,408$
Net (Expense) Revenue and Changes in Net Position
The accompanying notes are an integral part of these financial statements.25
General Fund
Capital
Maintenance
Operating
Fund
Airport
Construction
Assets
Cash and cash equivalents 2,598,795$ 1,150,533$ 2,816,447$
Investments 1,454,593 190,000 -
Receivables:
Property taxes 237,445 - -
Taxes receivable 2,009,798 - -
Due from other governments 6,765 - 231,222
Inventory 274,199 - -
Due from other funds 24,320 - -
Total assets 6,605,915$ 1,340,533$ 3,047,669$
Liabilities, deferred inflows
of resources, and fund balances
Liabilities
Accounts payable 92,232$ 12,038$ 21,036$
Accrued payroll 402,477 417 -
Deposits held in trust for others - - -
Total liabilities 494,709 12,455 21,036
Deferred inflows of resources
Unavailable revenue - property taxes 183,928 - -
Total deferred inflows of resources 183,928 - -
Fund balances
Nonspendable:
Inventory 274,199 - -
Spendable:
Restricted for:
General government - - -
Public safety - - -
Culture and recreation - - -
Transportation and roads - - -
Capital improvements - - -
Debt service - - -
Committed to:
General government - 1,086,961 -
Public safety - 26,582 -
Culture and recreation - 129,240 -
Transportation and roads - 27,985 -
Capital improvements - 57,310 3,026,633
Minimum fund balance 2,900,518 - -
Unassigned 2,752,561 - -
Total fund balances 5,927,278 1,328,078 3,026,633
Total liabilities, deferred inflows of
resources, and fund balances 6,605,915$ 1,340,533$ 3,047,669$
June 30, 2021
Governmental Funds
Balance Sheet
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.26
Exhibit B-1
Page 1 of 2
Other
Governmental
Funds Total
8,542,001$ 15,107,776$
771,086 2,415,679
- 237,445
552,211 2,562,009
62,504 300,491
29,121 303,320
- 24,320
9,956,923$ 20,951,040$
74,494$ 199,800$
4,917 407,811
5,103 5,103
84,514 612,714
- 183,928
- 183,928
29,121 303,320
481,357 481,357
331,301 331,301
1,094,193 1,094,193
42,232 42,232
1,083,267 1,083,267
1,935,929 1,935,929
54,566 1,141,527
9,828 36,410
22,931 152,171
1,228,610 1,256,595
3,559,074 6,643,017
- 2,900,518
- 2,752,561
9,872,409 20,154,398
9,956,923$ 20,951,040$
The accompanying notes are an integral part of these financial statements.27
Page Left Intentionally Blank
28
TOWN OF TAOS Exhibit B-1
Reconciliation of the Balance Sheet to the Statement of Net Position Page 2 of 2
Governmental Funds
June 30, 2021
Amounts reported for governmental activities in the Statement of
Net Position are different because:
Fund balances - total governmental funds 20,154,398$
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds 59,101,945
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 183,928
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 3,754,723
Deferred outflows- OPEB 990,092
Deferred inflows- pension (943,317)
Deferred inflows- OPEB (2,160,279)
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 (2,430,000)
Bond premiums (19,679)
Accrued interest (8,429)
Accrued compensated absences (751,203)
Net pension liability (12,233,235)
Net OPEB liability (4,089,810)
Net position of governmental activities 61,549,134$
The accompanying notes are an integral part of these financial statements.29
General Fund
Capital
Maintenance
Operating Fund
Airport
Construction
Revenues
Taxes:
Property 1,200,412$ -$ -$
Gross receipts taxes 10,359,140 - -
Gasoline, franchise, and motor vehicle 608,398 - -
Lodger's tax - - -
Intergovernmental:
Federal operating grants 1,422 1,502,473 -
Federal capital grants - - 402,490
State operating grants 117,830 - -
State capital grants - - 522,540
Charges for services 131,881 - -
Licenses and fees 383,158 - -
Investment income 368 - -
Miscellaneous 89,612 - -
Total revenues 12,892,221 1,502,473 925,030
Expenditures
Current:
General government 3,861,331 983,822 258,039
Public safety 2,961,617 - -
Public works 874,937 - -
Culture and recreation 1,003,668 - -
Capital outlay - 1,378,608 688,768
Debt service:
Principal - - -
Interest - - -
Total expenditures 8,701,553 2,362,430 946,807
Excess (deficiency) of revenues over
expenditures 4,190,668 (859,957) (21,777)
Other financing sources (uses)
Transfers in 4,461,003 52,486 2,613,166
Transfers (out)(8,720,598) (1,245,162) -
Total other financing sources (uses)(4,259,595) (1,192,676) 2,613,166
Net change in fund balance (68,927) (2,052,633) 2,591,389
Fund balance - beginning of year 5,996,205 3,380,711 435,244
Fund balance - end of year 5,927,278$ 1,328,078$ 3,026,633$
For the Year Ended June 30, 2021
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.30
Exhibit B-2
Page 1 of 2
Other
Governmental
Funds Total
-$ 1,200,412$
1,895,824 12,254,964
78,166 686,564
1,033,251 1,033,251
134,063 1,637,958
250,000 652,490
796,196 914,026
- 522,540
41,085 172,966
76,083 459,241
4,667 5,035
13,606 103,218
4,322,941 19,642,665
201,404 5,304,596
232,794 3,194,411
21,491 896,428
514,957 1,518,625
1,707,224 3,774,600
1,669,059 1,669,059
161,143 161,143
4,508,072 16,518,862
(185,131) 3,123,803
5,261,200 12,387,855
(2,422,095) (12,387,855)
2,839,105 -
2,653,974 3,123,803
7,218,435 17,030,595
9,872,409$ 20,154,398$
The accompanying notes are an integral part of these financial statements.31
Page Left Intentionally Blank
32
TOWN OF TAOS Exhibit B-2
Amounts reported for governmental activities in the Statement of Activities
are different because:
Net change in fund balances - total governmental funds 3,123,803$
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 3,774,600
Depreciation expense (4,682,827)
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 926
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) income:
Town pension contributions subsequent to measurement date 516,859
Pension expense (58,024)
Town OPEB contributions subsequent to measurement date 88,447
OPEB income 314,755
Expenses in the Statement of Activities that do not require current financial
resources are not reported as expenditures in the funds:
Increase in accrued compensated absences (99,648)
Decrease in accrued interest 7,624
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 1,669,059
Change in net position of governmental activities 4,659,509$
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2021
Reconciliation of the Statement of Revenues, Expenditures, and Changes
Governmental Funds
The accompanying notes are an integral part of these financial statements.33
TOWN OF TAOS Exhibit C-1
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Budgetary Basis) and Actual
General Fund
For the Year Ended June 30, 2021
Variances
Original Final Actual Final to Actual
Revenues
Taxes:
Property 1,143,226$ 1,143,226$ 1,200,412$ 57,186$
Gross receipts 7,404,868 10,050,538 10,359,140 308,602
Gasoline, franchise and motor vehicle 549,873 658,156 608,398 (49,758)
Intergovernmental:
Federal operating grants 3,257 3,257 1,422 (1,835)
State operating grants 90,000 119,054 117,830 (1,224)
Charges for services 110,666 110,666 131,881 21,215
Licenses and fees 370,316 370,316 383,158 12,842
Investment income 22,809 22,809 368 (22,441)
Miscellaneous 86,241 96,241 89,612 (6,629)
Total revenues 9,781,256 12,574,263 12,892,221 317,958
Expenditures
Current:
General government 4,797,541 4,355,738 3,861,331 494,407
Public safety 3,178,511 3,072,409 2,961,617 110,792
Public works 1,014,765 885,231 874,937 10,294
Culture and recreation 1,158,112 1,046,431 1,003,668 42,763
Total expenditures 10,148,929 9,359,809 8,701,553 658,256
Excess (deficiency) of revenues over
expenditures (367,673) 3,214,454 4,190,668 976,214
Other financing sources (uses)
Designated cash (budgeted cash increase)196,880 843,542 - (843,542)
Transfers in 4,493,191 4,816,826 4,461,003 (355,823)
Transfers (out)(4,322,398) (8,874,822) (8,720,598) 154,224
Total other financing sources (uses)367,673 (3,214,454) (4,259,595) (1,045,141)
Net change in fund balance - - (68,927) (68,927)
Fund balance - beginning of year - - 5,996,205 5,996,205
Fund balance - end of year -$ -$ 5,927,278$ 5,927,278$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.34
TOWN OF TAOS Exhibit C-2
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Budgetary Basis) and Actual
Capital Maintenance Operating Fund
For the Year Ended June 30, 2021
Variances
Original Final Actual Final to Actual
Revenues
Taxes:
Property -$ -$ -$ -$
Gross receipts - - - -
Gasoline, franchise and motor vehicle - - - -
Intergovernmental:
Federal operating grants - 1,502,473 1,502,473 -
State operating grants - - - -
Charges for services - - - -
Licenses and fees - - - -
Investment income - - - -
Miscellaneous - - -
Total revenues - 1,502,473 1,502,473 -
Expenditures
Current:
General government 802,048 1,701,021 983,822 717,199
Capital outlay 2,578,339 1,989,163 1,378,608 610,555
Total expenditures 3,380,387 3,690,184 2,362,430 1,327,754
Excess (deficiency) of revenues over
expenditures (3,380,387) (2,187,711) (859,957) 1,327,754
Other financing sources (uses)
Designated cash (budgeted cash increase)3,380,387 3,380,387 - (3,380,387)
Transfers in - 52,486 52,486 -
Transfers (out)- (1,245,162) (1,245,162) -
Total other financing sources (uses)3,380,387 2,187,711 (1,192,676) (3,380,387)
Net change in fund balance - - (2,052,633) (2,052,633)
Fund balance - beginning of year - - 3,380,711 3,380,711
Fund balance - end of year -$ -$ 1,328,078$ 1,328,078$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.35
Water and Sewer Solid Waste
Assets
Current assets
Cash and cash equivalents 4,726,819$ 640,088$
Investments 1,349,781 249,100
Taxes receivable 97,905 -
Due from other governments 219,414 -
Customer receivables, net 736,682 4,907
Inventory 81,326 -
Total current assets 7,211,927 894,095
Noncurrent assets
Restricted cash and cash equivalents 324,930 -
Restricted investments - -
Capital assets 50,608,907 1,134,674
Less: accumulated depreciation (29,311,733) (874,073)
Total noncurrent assets 21,622,104 260,601
Total assets 28,834,031 1,154,696
Deferred outflows of resources
Deferred outflows- pension 264,558 48,961
Deferred outflows- OPEB 84,975 24,517
Total deferred outflows of resources 349,533 73,478
Total assets and deferred outflows of resources 29,183,564$ 1,228,174$
June 30, 2021
Proprietary Funds
Statement of Net Position
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.36
Exhibit D-1
Page 1 of 2
Taos Regional
Landfill Total
1,931,964$ 7,298,871$
- 1,598,881
- 97,905
- 219,414
169,548 911,137
- 81,326
2,101,512 10,207,534
1,266,204 1,591,134
75,400 75,400
6,876,274 58,619,855
(3,382,330) (33,568,136)
4,835,548 26,718,253
6,937,060 36,925,787
116,959 430,478
36,896 146,388
153,855 576,866
7,090,915$ 37,502,653$
The accompanying notes are an integral part of these financial statements.37
Water and Sewer Solid Waste
Liabilities
Current liabilities
Accounts payable 574,543$ 14,098$
Accrued payroll 15,010 1,089
Accrued compensated absences 22,375 -
Due to other funds 16,550 232
Deposits held in trust for others 324,930 -
Accrued interest 57,406 -
Current maturity of bonds and loans payable 177,064 -
Total current liabilities 1,187,878 15,419
Noncurrent liabilities
Accrued compensated absences 38,252 -
Bonds payable 1,398,600 -
Loans payable 1,733,145 -
Landfill closure and post-closure costs - -
Net pension liability 880,901 148,937
Net OPEB liability 320,473 92,462
Total noncurrent liabilities 4,371,371 241,399
Total liabilities 5,559,249 256,818
Deferred inflows of resources
Deferred inflows- pension 60,303 30,067
Deferred inflows- OPEB 173,160 49,959
Total deferred inflows of resources 233,463 80,026
Net position
Net investment in capital assets 17,988,365 260,601
Restricted for:
Landfill - -
Unrestricted 5,402,487 630,729
Total net position 23,390,852 891,330
Total liabilities and net position 29,183,564$ 1,228,174$
June 30, 2021
Proprietary Funds
Statement of Net Position
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.38
Exhibit D-1
Page 2 of 2
Taos Regional
Landfill Total
60,672$ 649,313$
8,915 25,014
14,998 37,373
7,538 24,320
- 324,930
1,009 58,415
179,532 356,596
272,664 1,475,961
11,173 49,425
- 1,398,600
563,138 2,296,283
595,358 595,358
337,357 1,367,195
139,149 552,084
1,646,175 6,258,945
1,918,839 7,734,906
26,800 117,170
75,184 298,303
101,984 415,473
2,751,274 21,000,240
1,341,604 1,341,604
977,214 7,010,430
5,070,092 29,352,274
7,090,915$ 37,502,653$
The accompanying notes are an integral part of these financial statements.39
Water and Sewer Solid Waste
Operating revenues
Charges for services 3,831,543$ 136,313$
Total operating revenues 3,831,543 136,313
Operating expenses
Depreciation 1,682,615 47,305
Personnel services 357,426 26,579
Contractual services 1,086,065 -
Supplies and purchases 16,982 2,190
Maintenance and materials 148,937 4,381
Utilities 639,864 17,312
Non-capital equipment 64,090 -
Other costs 294,473 3,693
Total operating expenses 4,290,452 101,460
Operating income (loss)(458,909) 34,853
Non-operating revenues (expenses)
Gross receipts taxes 541,852 -
Interest expense (76,603) -
Investment income 5,054 -
Total non-operating revenues (expenses)470,303 -
Income (loss) before contributions and transfers 11,394 34,853
Capital grants 1,585,523 -
Transfers in 3,604,973 7,402
Transfers (out)(3,604,973) -
Change in net position 1,596,917 42,255
Total net position, beginning of year 21,793,935 849,075
Total net position, end of year 23,390,852$ 891,330$
For the Year Ended June 30, 2021
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Net Position
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.40
Exhibit D-2
Taos Regional
Landfill Total
1,554,202$ 5,522,058$
1,554,202 5,522,058
325,490 2,055,410
438,876 822,881
207,693 1,293,758
236 19,408
126,572 279,890
8,057 665,233
8,416 72,506
384,491 682,657
1,499,831 5,891,743
54,371 (369,685)
- 541,852
(15,045) (91,648)
1,974 7,028
(13,071) 457,232
41,300 87,547
- 1,585,523
478,788 4,091,163
(486,190) (4,091,163)
33,898 1,673,070
5,036,194 27,679,204
5,070,092$ 29,352,274$
The accompanying notes are an integral part of these financial statements.41
Page Left Intentionally Blank
42
Exhibit D-3
Water and
Sewer Solid Waste
Taos
Regional
Landfill Total
Cash flows from operating activities:
Cash received from user charges 3,596,847$ 136,136$ 1,530,349$ 5,263,332$
Cash payments to employees for services (464,497) (43,996) (484,591) (993,084)
Cash payments to suppliers for goods and services (2,146,288) (27,470) (703,351) (2,877,109)
Net cash provided by operating activities 986,062 64,670 342,407 1,393,139
Cash flows from noncapital financing activities:
Gross receipts taxes 541,852 --541,852
Landfill closure costs --162,374 162,374
Repayment of interfund loans 476 232 (471)237
Transfers (net)-7,402 (7,402) -
Net cash provided by noncapital
financing activities 542,328 7,634 154,501 704,463
Cash flows from investing activities:
Purchase of investments (2,421) --(2,421)
Interest income 5,054 -1,974 7,028
Net cash provided by investing activities 2,633 -1,974 4,607
Cash flows from capital and related financing activities:
Interest paid (79,256)-(15,312)(94,566)
Capital grants 1,585,523 --1,585,523
Acquisition of capital assets (2,826,938)--(2,826,940)
Proceeds from issuance of long-term debt 700,000 --700,000
Principal payments on loans (172,855) -(176,148)(349,003)
Net cash (used) by capital and related financing activities (793,526) -(191,460)(984,986)
Net increase in cash and cash equivalents 737,497 72,304 307,422 1,117,223
Cash and cash equivalents - beginning of year 4,314,252 567,784 2,890,746 7,772,782
Cash and cash equivalents - end of year 5,051,749$ 640,088$ 3,198,168$ 8,890,005$
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities:
Operating income (loss)(458,909)$ 34,853$ 54,371$ (369,685)$
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation 1,682,615 47,305 325,490 2,055,410
Net pension and OPEB expense (83,451) (14,333) (38,721) (136,505)
Changes in assets and liabilities:
Receivables (244,392) (177)(23,853)(268,422)
Accounts payable 104,123 106 32,114 136,343
Accrued payroll expenses (14,164) (840)(4,695)(19,699)
Customer deposits 9,696 --9,696
Accrued compensated absences (9,456) (2,244) (2,299) (13,999)
Net cash provided (used) by operating activities 986,062$ 64,670$ 342,407$ 1,393,139$
For the Year Ended June 30, 2021
Proprietary Funds
Statement of Cash Flows
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.43
TOWN OF TAOS Exhibit E-1
Custodial Funds
Assets
Cash 17,857$
Investments 60,000
Total assets 77,857$
Liabilities
Due to other entities 77,857$
Total liabilities 77,857$
Statement of Fiduciary Net Position
June 30, 2021
The accompanying notes are an integral part of these financial statements.44
TOWN OF TAOS Exhibit E-2
Custodial Funds
Additions:
Charges for services 12,634$
Total additions 12,634
Deductions:
Contractual services and other 6,816
Total deductions 6,816
Change in custodial funds due to others 5,818
Beginning - custodial funds due to others 72,039
Ending - custodial funds due to others 77,857$
For the Year Ended June 30, 2021
Statement of Changes in Fiduciary Net Position
The accompanying notes are an integral part of these financial statements.45
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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, 2021, there is no GASB Statement No. 77 disclosure requirement.
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.
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.
46
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 1. Summary of Significant Accounting Policies (continued)
A. Financial Reporting Entity (continued)
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.
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.
47
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 1. Summary of Significant Accounting Policies (continued)
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.
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.
48
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 1. Summary of Significant Accounting Policies (continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
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 Capital Maintenance Operating Fund was created to receive additional amounts
that are paid for onetime costs by the Town of Taos. Authority is Town Council
resolution.
The Airport Construction 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.
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.
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.
49
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 1. Summary of Significant Accounting Policies (continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
Additionally, the Town reports the following fund type:
The Fiduciary Fund is purely custodial (assets equal liabilities) and does not involve the
measurement of results of operations. This fund accounts for assets held by the Town
as a trustee for the judicial system bonds, 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.
50
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 $1,591,134 and restricted investments in
the amount of $75,400, at June 30, 2021 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 2021. 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, 2021, 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, street deposits, and meter deposits as of June 30, 2021.
51
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 $183,928 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.
52
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 $303,320 at June
30, 2021.
Restricted – This classification includes amounts that are restricted to a specific purpose. Fund
balances are restricted when constraints placed on the use of resources are either: (a)
externally imposed by creditors (such as debt covenants) grantors, contributors, or laws or
regulations of other governments; (b) enabling legislation, as the term is used authorizes the
Town to assess, levy, charge, or otherwise mandate payment of resources and includes a legally
enforceable requirement that those resources be used only for the specific purposes stipulated
in the legislation. The Town has $4,968,279 in restricted fund balances at June 30, 2021.
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 $12,130,238 in
committed funds at June 30, 2021 for governmental, public safety, transportation and roads,
and capital 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.
53
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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)
Minimum Fund Balance Policy: The Town’s policy for maintaining a minimum amount of
fund balance for operations is to minimize any sudden and unplanned discontinuity to
programs and operations and for unforeseen contingencies. At a minimum, the budget shall
ensure that the Town holds cash reserves of 1/12th the General Fund expenditures, however the
Town has committed fund balance of 4/12th per Town Council. The Town has also presented
committed fund balance on the governmental funds balance sheet including $2,900,518 for
minimum fund balance for the year ended June 30, 2021. 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 106-108.
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.
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.
54
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 (367,673)$ 3,214,454$
Capital Maintenance Operating Fund (3,380,387)$ (2,187,711)$
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.
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, 2021. 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. 55
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 3. Deposits and Investments (continued)
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, 2021, $24,798,580 of the Town’s deposits of $25,298,580 was exposed to
custodial credit risk. $16,994,706 was uninsured and collateralized by collateral held by the pledging
bank’s trust department, not in the Town’s name, and $7,803,874 was uninsured and uncollateralized.
Total
Amount of deposits 8,758,992$ 16,539,588$ 25,298,580$
FDIC Coverage (250,000) (250,000) (500,000)
Total uninsured public funds 8,508,992 16,289,588 24,798,580
8,508,992 8,485,714 16,994,706
Uninsured and uncollateralized -$ 7,803,874$ 7,803,874$
Collateral requirement
(50% of uninsured funds)4,254,496$ 8,144,794$ 12,399,290$
Pledged Collateral 10,000,000 8,485,714 18,485,714
Over (Under) collateralized 5,745,504$ 340,920$ 6,086,424$
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
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.
56
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 3. Deposits and Investments (continued)
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, 2021, the Town had the following investments and maturities:
Weighted Average
Investment Type Maturities Fair Value Rating
New Mexico Local Government
Investment Pool 48 Days ( R ); 78 Days ( F ) 4,149,964$ AAAm
U.S. Treasury Notes <1 year 154,458 Aaa
4,304,422$
The Town has presented $4,149,964 in investments at year end that is invested in the Local Government
Investment Pool. Of the $4,304,422 noted above $154,458 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 96% and 4%, 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).
57
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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, 2021:
Total Level 1 Level 2 Level 3
4,304,422$ -$ 4,149,964$ -$
58
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 3. Deposits and Investments (continued)
Reconciliation to the Statement of Net Position:
Cash and cash equivalents per Exhibit A-1 22,406,647$
Restricted cash and cash equivalents per Exhibit A-1 1,591,134
Cash and investments - Statement of Fiduciary Assets and Liabilities per Exhibit E-1 77,857
Investments per Exhibit A-1 4,014,560
Restricted investments per Exhibit A-1 75,400
Total cash, investments, and cash equivalents 28,165,598
Add: outstanding checks and other reconciling items 1,439,033
Less: NMFA restricted accounts (154,458)
Less: New Mexico Government Local Investment Pool (4,149,964)
Less: petty cash (1,629)
Bank balance of deposits 25,298,580$
NOTE 4. Receivables
Governmental receivables as of June 30, 2021 are comprised of the following:
Other
Airport Governmental
General Construction Funds Total
Property taxes 237,445$ -$ -$ 237,445$
Taxes receivable:
Gross receipts taxes 1,901,113 - 342,632 2,243,745
Franchise taxes 78,281 - - 78,281
Lodger's taxes - - 194,865 194,865
Oil and gas taxes 24,243 - 14,714 38,957
MVD taxes 6,161 - - 6,161
Total taxes receivable 2,009,798 - 552,211 2,562,009
Due from other governments:
State grants 6,765 154,390 62,504 146,101
Federal grants - 76,832 - 154,390
Total due from other governments 6,765 231,222 62,504 300,491
Accounts receivable, net 2,254,008$ 231,222$ 614,715$ 3,099,945$
In accordance with GASB Statement No. 33, property tax revenues in the amount of $183,928 that were
not collected within the period of availability have been reclassified as deferred inflows in the
governmental fund financial statements as of June 30, 2021.
59
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 4. Receivables (continued)
Business-type activity receivables as of June 30, 2021 are comprised of the following:
Water and
Sewer Solid Waste
Taos Regional
Landfill
Taxes receivable
Gross receipts taxes 97,905$ -$ -$
Customer receivable 1,481,898 57,509 187,033
Due from other governments:
State grants 200,200 - -
Federal grants 19,214 - -
Less: allowance for
uncollectable accounts (745,216) (52,602) (17,485)
Accounts receivable, net 1,054,001$ 4,907$ 169,548$
Total
Taxes receivable
Gross receipts taxes 97,905$
Customer receivable 1,726,440
Due from other governments:
State grants 200,200
Fedeal grants 19,214
Less: allowance for
uncollectable accounts (815,303)
Accounts receivable, net 1,228,456$
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 and Sewer Fund 16,550$
General Fund Solid Waste 232
General Fund Taos Regional Landfill 7,538
Total 24,320$
Net operating transfers, made to supplement other funding sources were as follows:
60
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 5. Interfund Receivables, Payables, and Transfers (continued)
Transfers Out Transfers In Amount
Fire Protection 2015 NMFA Fire Pumper Loan 75,094$
1/4 cent Municipal Gross Receipts Tax 2008 Gross Receipts Tax Revenue Bond 547,325
1/4 cent Municipal Gross Receipts Tax 2009 NMFA Disadvantaged Prog Eco Park 164,815
1/4 cent Municipal Gross Receipts Tax Vehicle Replacement Fund 31,766
2011 PPRF Street Improvement 1999 Gasoline Tax Acquisition 10,964
2011 PPRF Street Improvement Reserve 2011 PPRF Street Improvement 177,960
Capital Maintenance Operating 1999 Gasoline Tax Acquisition 118,617
Capital Maintenance Operating Airport Construction Fund 1,126,545
Capital Projects 1999 Gasoline Tax Acquisition 568,156
General Fund 2009 NMFA Disadvantaged Prog Eco Park 475,534
General Fund 2011 PPRF Street Improvement 31,656
General Fund 2011 PPRF Street Improvement 73,177
General Fund Airport Construction Fund 1,486,621
General Fund Capital Maintenance Operation 52,486
General Fund Community Grants 59,374
General Fund Facilities Improvement Fund 628,756
General Fund Facilities Improvement Fund 77,000
General Fund Facilities Improvement Fund 470,439
General Fund General Fund 4,460,556
General Fund Historical District 5,000
General Fund Special Events Enterprise 400,000
General Fund Vehicle Replacement Fund 500,000
Lodger's Tax Fund Civic Center 2,323
Lodger's Tax Fund Lodger's Tax Promotional 472,142
Lodger's Tax Fund Public Transportation 118,035
Municipal Road Gas Tax 2011 PPRF Street Improvement 49,018
NMFA Debt Service Reserve Eco Park 2009 NMFA Disadvantaged Prog Eco Park 190,065
NMFA Debt Service Reserve Eco Park 1/4 Cent Municipal Gross Receipts Tax 13,984
Recreation General Fund 446
Taos Regional Landfill Solid Waste 7,402
Taos Regional Landfill Taos Regional Landfill 478,788
Water and Sewer Water and Sewer 3,604,974
Total 16,479,018$
61
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 6. Capital Assets
The following is a summary of capital assets and changes occurring during the year ended June 30,
2021. Land and construction in progress are not subject to depreciation.
Governmental Activities:
Balance
June 30, 2020 Additions
Balance
June 30, 2021
Capital assets not being
depreciated:
Land 6,615,288$ -$ -$ 6,615,288$
Construction in progress 860,034 2,503,162 - 3,363,196
Total not being depreciated 7,475,322 2,503,162 - 9,978,484
Capital assets being depreciated:
Land improvements 7,527,676 - - 7,527,676
Buildings and improvements 36,028,513 105,133 - 36,133,646
Machinery and Equipment 17,135,949 1,166,305 - 18,302,254
Infrastructure 84,840,894 - - 84,840,894
Total being depreciated 145,533,032 1,271,438 - 146,804,470
Total capital assets 153,008,354 3,774,600 - 156,782,954
Accumulated depreciation:
Land improvements 5,759,314 157,149 - 5,916,463
Buildings and improvements 22,218,782 1,075,635 - 23,294,417
Machinery and Equipment 14,829,928 534,298 - 15,364,226
Infrastructure 50,190,158 2,915,745 - 53,105,903
Total accumulated depreciation 92,998,182 4,682,827 - 97,681,009
Capital assets, net 60,010,172$ (908,227)$ -$ 59,101,945$
Deletions
and
Transfers
Depreciation expense for the year ended June 30, 2021 was charged to the functions of the
governmental activities as follows:
General 4,260,509$
Public safety 93,849
Public works 328,469
Total 4,682,827$
62
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 6. Capital Assets (continued)
Balance
June 30, 2020 Additions
Deletions and
Transfers
Balance
June 30, 2021
Capital assets not being
depreciated:
Land 262,422$ -$ -$ 262,422$
Construction in progress 2,103,348 2,574,867 - 4,678,215
Total not being depreciated 2,365,770 2,574,867 - 4,940,637
Capital assets being depreciated:
Land improvements 104,895 - - 104,895
Buildings and improvements 4,656,981 - - 4,656,981
Machinery and Equipment 9,673,854 252,071 - 9,925,925
Infrastructure 38,991,417 - - 38,991,417
Total being depreciated 53,427,147 252,071 - 53,679,218
Total capital assets 55,792,917 2,826,938 - 58,619,855
Accumulated depreciation:
Land improvements 97,352 163 - 97,515
Buildings and improvements 3,306,015 134,882 - 3,440,897
Machinery and Equipment 8,605,451 299,162 - 8,904,613
Infrastructure 19,503,908 1,621,203 - 21,125,111
Total accumulated depreciation 31,512,726 2,055,410 - 33,568,136
Capital assets, net 24,280,191$ 771,528$ -$ 25,051,719$
Depreciation expense for the year ended June 30, 2021 was charged to the proprietary funds as follows:
Water and Sewer 1,682,615$
Solid Waste 47,305
Taos Regional Landfill 325,490
Total 2,055,410$
63
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 7. Long‐term Debt
During the year ended June 30, 2021, the following changes occurred in the liabilities reported in the
government-wide statement of net position:
Governmental Activities:Balance
June 30,
2020 Additions Retirements
Balance
June 30,
2021
Due Within
One Year
Revenue Bonds 2,860,000$ -$ 430,000$ 2,430,000$ 450,000$
NMFA Loans 1,239,059 - 1,239,059 - -
Compensated Absences 651,555 406,954 307,306 751,203 307,306
Total 4,750,614$ 406,954$ 1,976,365$ 3,181,203$ 757,306$
Revenue Bonds
At June 30, 2021, 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, 2021, including interest
payments, are as follows:
2022 450,000$ 101,145$ 551,145$
2023 465,000 82,695 547,695
2024 485,000 63,630 548,630
2025 505,000 43,260 548,260
2026 525,000 22,050 547,050
Total 2,430,000$ 312,780$ 2,742,780$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
64
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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. All
three loans were paid in full during year end 2021.The NMFA loans were 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$
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, 2021, government-wide
compensated absences increased $99,648 from the prior year accrual. Compensated absences are
liquidated by the respective funds in which they are accrued.
Proprietary Funds:
The proprietary funds have incurred various forms of debt which were used for the purposes of
constructing, expanding, repairing and making improvements to its property, plant and equipment. The
following schedule shows the changes to its various forms of debt during the fiscal year ended June 30,
2021:
Business‐type Activities:Balance
June 30,
2020 Additions Retirements
Balance
June 30,
2021
Due Within
One Year
Revenue Bonds 1,534,600$ -$ 66,000$ 1,468,600$ 70,000$
NMFA and RUS Loans 2,165,882 700,000 283,003 2,582,879 286,596
Landfill closure and
postclosure 432,984 162,374 - 595,358 -
Compensated Absences 100,797 23,374 37,373 86,798 37,373
Total 4,234,263$ 885,748$ 386,376$ 4,733,635$ 393,969$
65
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 7. Long‐term Debt (continued)
Revenue Bonds
At June 30, 2021, 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 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, 2021, including interest payments,
are as follows:
2022 70,000$ 75,812$ 145,812$
2023 73,000 72,165 145,165
2024 77,000 68,358 145,358
2025 81,000 64,346 145,346
2026 85,000 60,117 145,117
2027-2031 498,000 229,096 727,096
2032-2036 512,600 91,603 604,203
2037-2041 72,000 6,936 78,936
Total 1,468,600$ 668,433$ 2,137,033$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
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
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 Landfill Facility Loan 8/28/2015 6/1/2025 0.38-2.24% 1,376,046$
NMED Solar Array Project 5/24/2016 7/1/2031 0.50%700,000$
66
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 7. Long‐term Debt (continued)
The annual requirements to amortize the loans as of June 30, 2021, including interest payments are as
follows:
2022 286,596$ 12,108$ 298,704$
2023 316,959 11,888 328,847
2024 321,507 7,640 329,147
2025 326,040 3,236 329,276
2026 134,292 3,103 137,395
2027-2031 599,301 13,493 612,794
2032-2033 598,184 19,707 617,891
Total 2,582,879$ 71,175$ 2,654,054$
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, 2021, business-type compensated
absences decreased $13,999 from the previous year accrual. Compensated absences are liquidated by
the respective funds in which they are accrued
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. There were no funds that had a deficit fund balance for
the year ended June 30, 2021.
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, 2021.
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, 2021.
67
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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.
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.
68
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 FY20
Coverage Plan
Employee Contribution
Percentage
Employer
Contribution
Percentage
Pension Factor per year
of Service
Pension
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% 17.24% 3.0% 2.5% 90%
MUNICIPAL PLANS 1 - 4
Municipal Plan 1
(plan open to new employers)
7.0%
8.50%
7.65%
2.0%
2.0%
90%
Municipal Plan 2
(plan open to new employers) 9.15% 10.65% 9.80% 2.5% 2.0% 90%
Municipal Plan 3
(plan closed to new employers 6/95) 13.15% 14.65% 9.80% 3.0% 2.5% 90%
Municipal Plan 4
(plan closed to new employers 6/00) 15.65% 17.15% 12.30% 3.0% 2.5% 90%
MUNICIPAL POLICE PLANS 1 - 5
Municipal Police Plan 1 7.0% 8.50% 10.70% 2.0% 2.0% 90%
Municipal Police Plan 2 7.0% 8.50% 15.70% 2.5% 2.0% 90%
Municipal Police Plan 3 7.0% 8.50% 19.20% 2.5% 2.0% 90%
Municipal Police Plan 4 12.35% 13.85% 19.20% 3.0% 2.5% 90%
Municipal Police Plan 5 16.30% 17.80% 19.20% 3.5% 3.0% 90%
MUNICIPAL FIRE PLANS 1 - 5
Municipal Fire Plan 1 8.0% 9.50% 11.65% 2.0% 2.0% 90%
Municipal Fire Plan 2 8.0% 9.50% 18.15% 2.5% 2.0% 90%
Municipal Fire Plan 3 8.0% 9.50% 21.90% 2.5% 2.0% 90%
Municipal Fire Plan 4 12.80% 14.30% 21.90% 3.0% 2.5% 90%
Municipal Fire Plan 5 16.20% 17.70% 21.90% 3.5% 3.0% 90%
MUNICIPAL DETENTION OFFICER PLAN 1
Municipal Detention Officer Plan 1 16.65% 18.15% 17.30% 3.0% 3.0% 90%
STATE POLICE AND ADULT CORRECTIONAL OFFICER PLANS, ETC.
State Police and Adult Correctional
Officer Plan 1 7.60% 9.1% 25.50% 3.0% 3.0% 90%
State Plan 3 - Peace Officer 7.42% 8.92% 17.24% 3.0% 3.0% 90%
Juvenile Correctional Officer Plan 2 4.78% 6.28% 26.37% 3.0% 3.0% 90%
69
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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, 2021, the Town reported a liability of $7,876,575
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2020, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2019. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2020 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2020.
There were no significant events or changes in benefit provision that required an adjustment to the roll-
forward liabilities as of June 30, 2020.
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, 2020, the Town’s proportion was 0.3895 percent, which was
a decrease of 0.0187 percent from its proportion measured as of June 30, 2019.
For the year ended June 30, 2021, the Town recognized pension expense of $75,702. At June 30, 2021,
the Town reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 145,733$ -$
Changes in proportion 361,693 556,466
Difference between expected and actual experience 218,279 -
Net difference between projected and actual
earnings on pension plan investments 1,440,390 -
Town's contributions subsequent to the
measurement date 325,110 -
Total 2,491,205$ 556,466$
$325,110 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2022 311,481$
2023 586,674
2024 358,048
2025 353,426
Thereafter -
Total $ 1,609,629
70
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Police: At June 30, 2020, The Town reported a liability of $3,615,841
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2020, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2019. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2020 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2020. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2020.
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, 2019, the Town’s proportion was 0.4210 percent, which
was an decrease of 0.0829 percent from its proportion measured as of June 30, 2019.
For the year ended June 30, 2021, the Town recognized pension income of $(70,865). At June 30, 2021,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 85,625$ -$
Changes in proportion 31,920 430,021
Difference between expected and actual experience 210,121 -
Net difference between projected and actual
earnings on pension plan investments 620,631 -
Town's contributions subsequent to the
measurement date 185,304 -
Total 1,133,601$ 430,021$
$185,304 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2022 182,184$
2023 92,917
2024 90,804
2025 152,371
Thereafter -
Total 518,276$
71
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Fire: At June 30, 2021, The Town reported a liability of $2,108,014 for
its proportionate share of the net pension liability. The net pension liability was measured as of June 30,
2020, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2019. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2020 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2020. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2020.
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, 2020, the Town’s proportion was 0.2787 percent, which
was a increase of 0.041 percent from its proportion measured as of June 30, 2019.
For the year ended June 30, 2021, the Town recognized pension expense of $75,458. At June 30, 2021,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 25,263$ -$
Changes in proportion 201,583 74,000
Difference between expected and actual experience 46,735 -
Net difference between projected and actual
earnings on pension plan investments 195,104 -
Town's contributions subsequent to the
measurement date 91,710 -
Total 560,395$ 74,000$
$91,710 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2022 101,108$
2023 128,593
2024 117,078
2025 47,906
Thereafter -
394,685$
72
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
Actuarial assumptions. The total pension liability in the June 30, 2020 actuarial valuation was
determined using the following significant actuarial assumptions, applied to all periods included in the
measurement:
PERA FUND
Actuarial Valuation Date June 30, 2019
Actuarial Cost Method Entry Age Normal
Amortization Period Level Percentage of Pay
Asset Valuation Method Solved for based on statutory rates
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 mortality assumptions are based on the RPH-2014 Blue
Collar mortality table with female ages set forward one year.
Future improvement in mortality rates is assumed using 60%
of the MP-2017 projection scale generational. 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, 2013
through June 30, 2017 (economic)
The total pension liability, net pension liability, and certain sensitivity information are based on an
actuarial valuation performed as of June 30, 2019. The total pension liability was rolled-forward from
the valuation date to the plan year ended June 30, 2020. These assumptions were adopted by the Board
use in the June 30, 2019 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:
73
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
Asset Class
Target
Allocation
Long-term
Expected Real
Rate of Return
Global Equity 35.50% 5.90%
Risk Reduction & Mitigation 19.50% 1.00%
Credit Oriented Fixed Income 15.00% 4.20%
Real Assets to include Real Estate Equity 20.00%
Multi-Risk Allocation 10.00%
6.00%
6.40%
Total 100.00%
Discount rate for the PERA Funds. The discount rate used to measure the total pension liability is 7.25%.
The projection of cash flows used to determine the discount rate assumed that future contributions will
be made in accordance with statutory rates. On this basis, the pension plan’s fiduciary net position
together with the expected future contributions are sufficient to provide all projected future benefit
payments of current plan members as determined in accordance with GASB Statement No. 67.
Therefore, the 7.25% assumed long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
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 11,277,207$ 7,876,575$ 5,056,767$
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 5,189,080$ 3,615,841$ 2,328,229$
74
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 2,728,045$ 2,108,014$ 1,598,396$
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, 2021, the Town had payables to the plan in the amount of
$54,103.
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.
75
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan (continued)
Employees covered by benefit terms – At June 30, 2020, the Fund’s measurement date, the following
employees were covered by the benefit terms:
Plan membership
Current retirees and surviving spouses 52,179
Inactive and eligible for deferred benefit 10,916
Current active members 91,082
154,177
Active membership
State general 17,097
State police and corrections 1,830
Municipal general 17,538
Municipal police 3,159
Municipal FTRE 1,966
Educational Retirement Board 49,492
91,082
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 $106,685 for the year ended June 30, 2020.
76
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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, 2021, the Town reported a liability of $4,641,894 for its proportionate share of the net
OPEB liability. The net OPEB liability was measured as of June 30, 2020, 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, 2020. At June 30, 2021, the Town’s proportion was 0.11055 percent.
For the year ended June 30, 2021, the Town recognized OPEB income of $343,106. At June 30, 2019 the
Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from
the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Differences between expected and actual experience -$ 824,274$
Net difference between expected and actual
investments on OPEB plan investments 25,313 -
Change of assumptions 911,237 824,368
Changes in proportion 98,144 809,940
Town's contributions subsequent to the measurement date 101,786 -
Total 1,136,480$ 2,458,582$
Deferred outflows of resources totaling $101,786 represent Town contributions to the Fund made
subsequent to the measurement date and will be recognized as a reduction of net OPEB liability in the
year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred
inflows of resources will be recognized in OPEB expense as follows:
Year ended June 30:
2022 (547,383)$
2023 (475,509)
2024 (293,512)
2025 (152,407)
2026 44,923
Total (1,423,888)$
77
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan (continued)
Actuarial assumptions. The total OPEB liability as of June 30, 2020 was determined by an actuarial
valuation using the following actuarial assumptions:
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; 2.55% for PERA
Projected payroll increases 3.25% to 13.50% 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-2014 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
Long-Term
Rate of Return
U.S. core fixed income 2.1%
U.S. equity - large cap 7.1
Non U.S. - emerging markets 10.2
Non U.S. - developed equities 7.8
Private equity 11.8
Credit and structured finance 5.3
Real estate 4.9
Absolute return 4.1
U.S. equity - small/mid cap 7.1
78
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 2.86% as of June 30,
2020. 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, 2039. Thus, the 7.25%
discount rate was used to calculate the net OPEB liability through 2040. The index rate for 20-year, tax
exempt general obligation municipal bonds with an average rating of AA/Aa or higher was used beyond
2041, resulting in a blended discount rate of 2.86%.
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 (1.86 percent) or 1-
percentage-point higher (3.86 percent) than the current discount rate:
Current Discount
1% Decrease Rate 1% Increase
(1.86%) (2.86%) (3.86%)
Town's proportionate share of the
net OPEB liability 5,769,892$ 4,641,894$ 3,770,066$
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 3,810,126$ 4,641,894$ 5,272,810$
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, 2021.
Payable Changes in the Net OPEB Liability. At June 30, 2021, the Town reported a payable of $6,053
for outstanding contributions due to NMRHCA for the year ended June 30, 2021.
79
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 $595,358
as of June 30, 2021, 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, 2021. 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, 2021 cash of $1,266,204 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 80
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 Self Insurer’s Fund. 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.
81
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 15. Construction and Other Significant Commitments
The Town has committed to pay for several construction contracts that were not completed at June 30,
2021 in the amount of $4,099,723 as follows:
Contract Amount
Remaining
1,419,077$ Daniel B. Stephens & Associates
44,618 Daniel B. Stephens & Associates
Well 3 Replacement 630,331 Rodgers & Co., Inc.
Develop Airport Master Plan 81,217 Armstrong Consultants, Inc.
25,280 Armstrong Consultants, Inc.
Terminal Building Design & Development 818,339 Armstrong Consultants, Inc.
385,495 Armstrong Consultants, Inc.
36,486 Armstrong Consultants, Inc.
Project Management to the WWTP Solar Array 24,517 Miller Engineers, Inc.
Design/Build Solar Array WWTP 130,421 Affordable Solar Installation Inc.
NM 68 Utility Relocation Engineering Design 20,731 Miller Engineers, Inc.
10,108 Miller Engineers, Inc.
18,547 Miller Engineers, Inc.
80,943 Miller Engineers, Inc.
149,741 Miller Engineers, Inc.
Development of Landfill Cell 4B Engineering 117,759 Miller Engineers, Inc.
72,795 Miller Engineers Inc.
29,112 Smith Engineering Company
4,207 Smith Engineering Company
Total 4,099,723$
Project Description
Environmental Services at Taos Regional Landfill
2019-2020 Carryover
Environmental Services at Taos Regional Landfill
FY 2020-2021
Additional Permit Renewal for Taos Regional
Landfill
Contractor
Cordoba and Destino Lane Water Line
Engineering Services for Metering Vault at Taos
Pueblo Interconnection
Bureau of Reclamation - Abeyta Settlement
Agreement
Engineering/R-O-W Services for Camino del
Medio
Tank Replacement and Well House Improvements
Design of an Airport Hangar - General Aviation
Hangars and Taxilane/Apron Deisgn
Design & Redesign and Project Management of
Reconstruction of Taxiway A & Conector
Design of Taxiway A and Associated Taxiways
Taos Regional Airport
Well 3 Replacement Design, Bid Package &
Construction Administration
NOTE 16. Subsequent Events
The date to which events occurring after June 30, 2021, the date of the most recent statement of net
position, have been evaluated for possible adjustment to the financial statements or disclosures is
December 13, 2021 which is the date on which the financial statements were issued. No issues were
noted for disclosure at December 13, 2021.
82
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 17. Concentrations
The Town depends on financial resources flowing from, or associated with, both the Federal
Government and the State of New Mexico. Because of this dependency, the Town is subject to changes
in specific flows of intergovernmental revenues based on modifications to Federal and State laws and
Federal and State Appropriations.
NOTE 18. Restricted Net Position
The government-wide statement of net position reports $15,577,367 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 49-50 and 106-108.
NOTE 19. Utility Revenues Pledged
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $635,600 in Series 1993A Water & Sewer Revenue Bonds, issued in
1993. The bonds are payable solely from utility customer net revenues and are payable through March
2033. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest
and other amounts due under the bond agreement, including an amount sufficient to cure any
deficiencies in the debt service account or the bond agreement reserve account, to the USDA or the
Trustee, as its assignee, to be deposited in the debt service reserve account or the bond agreement
reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues.
The total principal and interest remaining to be paid on the bonds is $347,600 and $140,129,
respectively. Principal and interest paid for the current year and total customer net revenues were
$40,678 and $3,831,543, 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 $803,000 and $366,799,
respectively. Principal and interest paid for the current year and total customer net revenues were
$77,948 and $3,831,543, 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 $318,000 and $161,504,
respectively. Principal and interest paid for the current year and total customer net revenues were
$26,628 and $3,831,543, respectively.
83
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
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 $53,524 with no interest due. Principal for the current year and total customer net
revenues were $6,597 and $3,831,543, 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 $247,036 with no interest due. Principal for the current year and total customer net
revenues were $30,448 and $3,831,543, 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 $720,000 with no interest due. Principal for the
current year and total customer net revenues were $60,000 and $3,831,543, 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 $119,649 with no interest due. Principal for the current year and total customer net
revenues were $9,810 and $3,831,543, respectively.
The Town of Taos has pledged future revenues from the New Cell for Landfill Facility, net of operation
and maintenance expenses, to repay $1,376,046 in NMFA loan issued 2015. The loans are payable solely
from utility customer net revenues and are payable through June 2025. The pledged revenues shall be in
an amount sufficient to pay principal, premium, if any, interest and other amounts due under the loan
agreement, including an amount sufficient to cure any deficiencies in the debt service account or the
loan agreement reserve account, to the NMFA or the Trustee, as its 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. 84
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 20. Utility Revenues Pledged (continued)
The total principal and interest remaining to be paid on the loan is $742,670 and $24,768, respectively.
Principal for the current year and total customer net revenues were $176,148 and $1,554,202,
respectively. Interest for the current year was 15,312.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $700,000 in NMED Solar Array Project, issued in 2016. The loans are
payable solely from utility customer net revenues and are payable through July 2031. 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 and interest
remaining to be paid on the bonds is $700,000 and $46,407, respectively. No amounts were paid for
principal and interest for the current year and total customer net revenues were $3,831,543.
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 June 15, 2021. The Town does not expect this
pronouncement to have a material effect on the 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, 2020. 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 May 2020, 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, 2021.
The Town does not expect this pronouncement to have a material effect on the financial statements.
In January 2020, GASB Statement No. 92 Omnibus, was issued. Effective Date: The provisions of this
Statement are effective for fiscal years beginning after June 15, 2021. The Town does not expect this
pronouncement to have a material effect on the financial statements.
In March 2020, GASB Statement No. 93 Replacement of Interbank Offered Rates, was issued. Effective
Date: The provisions of this Statement are effective for fiscal years beginning after June 15, 2021. The
Town does not expect this pronouncement to have a material effect on the financial statements.
In March 2020, GASB Statement No. 94 Public-Private and Public-Public Partnerships and Availability
Payment Arrangements, was issued. Effective Date: The provisions of this Statement are effective for
fiscal years beginning after June 15, 2022. The Town does not expect this pronouncement to have a
material effect on the financial statements.
In May 2020, GASB Statement No. 95 Postponement of the Effective Dates of Certain Authoritative
Guidance, was issued. Effective Date: The provisions of this Statement are effective immediately for
fiscal years beginning after December 15, 2021. The Town is still evaluating how this pronouncement
will affect the financial statements.
85
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2021
NOTE 21. Subsequent Accounting Pronouncements (continued)
In May 2020, GASB Statement No. 96 Subscription-Based Information Technology Arrangements, was
issued. Effective Date: The provisions of this Statement are effective for fiscal years beginning after June
15, 2022. The Town does not expect this pronouncement to have a material effect on the financial
statements.
In June 2020, GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial
Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans‐and amendment of GASB
Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32, was issued. Effective Date:
The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.
The Town does not expect this pronouncement to have a material effect on the financial statements.
86
R EQUIRED SUPPLEMENTARY INFORMATION
87
2021
Measurement
Date (As of and
for the year
ended
June 30, 2020)
2020
Measurement
Date (As of and
for the year
ended
June 30, 2019)
Town of Taos's proportion of the net pension liability 0.3895%0.4082%
Town of Taos's proportionate share of the net pension liability 7,876,575$ 7,066,348$
Town of Taos's covered payroll 3,676,714$ 3,606,337$
214.23% 195.94%
Plan fiduciary net position as a percentage of the total pension liability 66.36%70.52%
Town of Taos's proportionate share of the net pension liability as a
percentage
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
of PERA Fund Municipal General Division
Schedule of the Town's Proportionate Share of the Net Pension Liability
TOWN OF TAOS
* Governmental Accounting Standards Board Statement 68 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of the information is available. Complete information for Town of Taos is not
available prior to fiscal year 2015, the year the statement requirements became effective.
See independent auditors' report.
See notes to required supplementary information.88
Schedule A-1
Page 1 of 3
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)
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)
0.3528%0.4630%0.4710%0.5054%0.5476%
5,624,937$ 6,362,011$ 7,524,994$ 5,152,991$ 4,271,868$
3,793,609$ 3,909,077$ 4,069,174$ 4,513,593$ 4,457,324$
148.27% 162.75% 184.93% 114.17%95.84%
71.13%73.74%69.18%76.99%81.29%
See independent auditors' report.
See notes to required supplementary information.89
2021
Measurement
Date (As of and
for the year
ended
June 30, 2020)
2020
Measurement
Date (As of and
for the year
ended
June 30, 2019)
Town of Taos's proportion of the net pension liability 0.4210%0.5039%
Town of Taos's proportionate share of the net pension liability 3,615,841$ 3,722,153$
Town of Taos's covered payroll 994,304$ 1,120,723$
Plan fiduciary net position as a percentage of the total pension liability 66.36%70.52%
363.66%
Schedule of the Town's Proportionate Share of the Net Pension Liability
332.12%
Town of Taos's proportionate share of the net pension liability as a
percentage
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
of PERA Fund Municipal Police Division
TOWN OF TAOS
* Governmental Accounting Standards Board Statement 68 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of the information is available. Complete information for Town of Taos is not
available prior to fiscal year 2015, the year the statement requirements became effective.
See independent auditors' report.
See notes to required supplementary information.90
Schedule A-1
Page 2 of 3
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)
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)
0.5100%0.4874%0.4766%0.4844%0.4887%
3,479,752$ 2,707,827$ 3,516,497$ 2,329,267$ 1,593,109$
1,020,869$ 911,949$ 953,345$ 949,833$ 937,534$
71.13%73.74%69.18%76.99%81.29%
340.86%368.86%169.93%245.23%296.93%
See independent auditors' report.
See notes to required supplementary information.91
2021
Measurement
Date (As of and
for the year
ended
June 30, 2020)
2020
Measurement
Date (As of and
for the year
ended
June 30, 2019)
Town of Taos's proportion of the net pension liability 0.2787%0.2377%
Town of Taos's proportionate share of the net pension liability 2,108,014$ 1,633,562$
Town of Taos's covered payroll 389,109$ 316,260$
Plan fiduciary net position as a percentage of the total pension liability 66.36%70.52%
516.53%
Town of Taos's proportionate share of the net pension liability as a
percentage 541.75%
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
of PERA Fund Municipal Fire Division
Schedule of the Town's Proportionate Share of the Net Pension Liability
TOWN OF TAOS
* Governmental Accounting Standards Board Statement 68 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of the information is available. Complete information for Town of Taos is not
available prior to fiscal year 2015, the year the statement requirements became effective.
See independent auditors' report.
See notes to required supplementary information.92
Schedule A-1
Page 3 of 3
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)
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)
0.2497%0.2753%0.2784%0.2769%0.2567%
1,598,237$ 1,575,114$ 1,857,210$ 1,429,131$ 1,071,464$
317,344$ 321,046$ 336,796$ 315,617$ 285,100$
71.13%73.74%69.18%76.99%81.29%
375.82%490.62% 551.43%503.63%452.81%
See independent auditors' report.
See notes to required supplementary information.93
As of and for the
year ended
June 30, 2021
As of and for the
year ended
June 30, 2020
Contractually required contribution 325,110$ 350,621$
Contributions in relation to the contractually required contribution (325,110) (350,621)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 3,404,290$ 3,676,714$
Contributions as a percentage of covered payroll 9.55%9.54%
Last 10 Fiscal Years*
PERA Fund Municipal General Division
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
TOWN OF TAOS
* Governmental Accounting Standards Board Statement 68 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of the information is available. Complete information for Town of Taos is not
available prior to fiscal year 2015, the year the statement requirements became effective.
See independent auditors' report.
See notes to required supplementary information.94
Schedule A-2
Page 1 of 3
As of and for the
year ended
June 30, 2019
As of and for the
year ended
June 30, 2018
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
344,405$ 362,290$ 373,065$ 386,572$ 428,791$
(344,405) (362,290) (373,065) (386,572) (428,791)
-$ -$ -$ -$ -$
3,606,337$ 3,793,609$ 3,909,077$ 4,069,174$ 4,513,593$
9.55%9.55%9.54%9.50%9.50%
See independent auditors' report.
See notes to required supplementary information.95
As of and for the
year ended
June 30, 2021
As of and for the
year ended
June 30, 2020
Contractually required contribution 185,304$ 187,924$
Contributions in relation to the contractually required contribution (185,304)(187,924)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 980,451$ 994,304$
Contributions as a percentage of covered payroll 18.90%18.90%
PERA Fund Municipal Police Division
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
TOWN OF TAOS
Last 10 Fiscal Years*
* Governmental Accounting Standards Board Statement 68 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of the information is available. Complete information for Town of Taos is not
available prior to fiscal year 2015, the year the statement requirements became effective.
See independent auditors' report.
See notes to required supplementary information.96
Schedule A-2
Page 2 of 3
As of and for the
year ended
June 30, 2019
As of and for the
year ended
June 30, 2018
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
211,817$ 192,944$ 161,795$ 169,123$ 168,500$
(211,817)(192,944)(161,795)(169,123)(168,500)
-$ -$ -$ -$ -$
1,120,723$ 1,020,869$ 911,949$ 953,345$ 949,833$
18.90%18.90%17.74%17.74%17.74%
See independent auditors' report.
See notes to required supplementary information.97
As of and for the
year ended
June 30, 2021
As of and for the
year ended
June 30, 2020
Contractually required contribution 91,710$ 84,242$
Contributions in relation to the contractually required contribution (91,710)(84,242)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 423,601$ 389,109$
Contributions as a percentage of covered payroll 21.65%21.65%
* Governmental Accounting Standards Board Statement 68 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of the information is available. Complete information for Town of Taos is not
available prior to fiscal year 2015, the year the statement requirements became effective.
Last 10 Fiscal Years*
PERA Fund Municipal Fire Division
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
TOWN OF TAOS
See independent auditors' report.
See notes to required supplementary information.98
Schedule A-2
Page 3 of 3
As of and for the
year ended
June 30, 2019
As of and for the
year ended
June 30, 2018
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
68,470$ 68,705$ 69,503$ 72,748$ 68,173$
(68,470)(68,705)(69,503)(72,748)(68,173)
-$ -$ -$ -$ -$
316,260$ 317,344$ 321,046$ 336,796$ 315,617$
21.65%21.65%21.65%21.60%21.60%
See independent auditors' report.
See notes to required supplementary information.99
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 2020 report is available at http://www.nmpera.org/
For the Year Ended June 30, 2021
Notes to Required Supplementary Information
TOWN OF TAOS
See independent auditors' report.
See notes to required supplementary information.100
Page Left Intentionally Blank
101
TOWN OF TAOS Schedule B-1
2021
Measurement
Date (As of and
for the Year
Ended June 30,
2020)
2020
Measurement
Date (As of and
for the Year
Ended June 30,
2019)
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)
0.11055% 0.12328% 0.13080% 0.12709%
4,641,894$ 3,997,218$ 5,687,649$ 5,759,303$
5,003,183 5,111,405 5,250,703 5,294,121
92.78%78.20% 108.32% 108.79%
16.50%18.92%13.14%11.34%
Retiree Health Care OPEB Plan
Schedule of Proportionate Share of the Net OPEB Liability
* This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-
year trend is compiled, the Town will present information for available years.
Town of Taos's proportion of the net
OPEB liability (asset)
Town of Taos's covered payroll
Town of Taos's proportionate share
of the net OPEB liability as a
percentage of its covered payroll
Last 10 Fiscal Years*
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.102
TOWN OF TAOS Schedule B-2
As of and for
the
Year Ended
June 30,
2021
As of and for
the
Year Ended
June 30,
2020
As of and for
the
Year Ended
June 30,
2019
As of and for
the
Year Ended
June 30,
2018
Contractually required contribution 101,786$ 106,685$ 109,126$ 111,708$
101,786 106,685 109,126 111,708
Contribution deficiency (excess)-$ -$ -$ -$
4,753,407 5,003,183 5,111,405 5,250,703
2.14%2.13%2.13%2.13%
Notes to Required Supplementary Information
RHC Plan
In the June 30, 2019 actuarial valuation rolled forward to the measurement date of June 30, 2020, changes in
assumptions and differences between expected and actual experience include adjustments resulting from an decrease
in the discount rate from 4.16% to 2.86%, changes in medical carrier election assumptions based on recent enrollment,
and updated Medicare Advantage trends to reflect 2020 and 2021 premiums.
* This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-
year trend is compiled, the Town will present information for available years.
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
Contribution as a percentage of covered payroll
See independent auditors' report.
See notes to required supplementary information.103
Page Left Intentionally Blank
104
S UPPLEMENTARY INFORMATION
105
TOWN OF TAOS
Nonmajor Fund Descriptions
June 30, 2021
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.
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.
106
TOWN OF TAOS
Nonmajor Fund Descriptions
June 30, 2021
Special Revenue Funds (continued)
Confidential Informant – A structured accounting system, operated within the department, providing officers with
investigative expense monies to support operations related to the detection, investigation or enforcement of the laws
related to crime. This includes but is not limited to: paying documented confidential informants and confidential
sources; purchasing contraband as evidence; and paying expenses for surveillance activities and equipment.
Authority is Town Council resolution.
Capital 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.
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
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.
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.
107
TOWN OF TAOS
Nonmajor Fund Descriptions
June 30, 2021
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.
108
Page Left Intentionally Blank
109
Fire Protection Recreation
Lodgers' Tax
Special Revenue
Fund
Local
Governmental
Correction
Assets
Cash and cash equivalents 223,665$ -$ 927,043$ 80,916$
Investments 23,258 - - -
Receivables:
Taxes receivable - - 194,865 -
Due from other governments - - - -
Inventory - - 29,121 -
Total assets 246,923$ -$ 1,151,029$ 80,916$
Liabilities
Accounts payable 1,609$ -$ 22,798$ 1,200$
Accrued payroll expenses - - 4,917 -
Deposits held in trust for others - - - -
Total liabilities 1,609 - 27,715 1,200
Fund balances
Nonspendable
Inventory - - 29,121 -
Spendable
Restricted for:
General government - - - -
Public safety 245,314 - - 79,716
Culture and recreation - - 1,094,193 -
Transportation and roads - - - -
Capital improvements - - - -
Debt service - - - -
Committed to:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Total fund balances 245,314 - 1,123,314 79,716
Total liabilities and fund balances 246,923$ -$ 1,151,029$ 80,916$
Nonmajor Governmental Funds
TOWN OF TAOS
Special Revenue
June 30, 2021
Combining Balance Sheet
See independent auditors' report.110
Statement A-1
Page 1 of 3
Law
Enforcement
Protection Civic Center
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
7,149$ 3,103$ 1,018,610$ 40,071$ 27,518$
- 2,000 210,000 - -
- - - - 14,714
- - - 62,504 -
- - - - -
7,149$ 5,103$ 1,228,610$ 102,575$ 42,232$
878$ -$ -$ 48,009$ -$
- - - - -
- 5,103 - - -
878 5,103 - 48,009 -
- - - - -
- - - - -
6,271 - - - -
- - - - -
- - - - 42,232
- - - - -
- - - - -
- - - 54,566 -
- - - - -
- - - - -
- - 1,228,610 - -
- - - - -
6,271 - 1,228,610 54,566 42,232
7,149$ 5,103$ 1,228,610$ 102,575$ 42,232$
Special Revenue
See independent auditors' report.111
Capital Projects
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District
Confidential
Informant
Facilities
Improvements
Assets
Cash and cash equivalents 285,581$ 22,931$ 9,828$ 2,028,757$
Investments - - - -
Receivables:
Taxes receivable 195,776 - - -
Due from other governments - - - -
Inventory - - - -
Total assets 481,357$ 22,931$ 9,828$ 2,028,757$
Liabilities
Accounts payable -$ -$ -$ -$
Accrued payroll expenses - - - -
Deposits held in trust for others - - - -
Total liabilities - - - -
Fund balances
Nonspendable
Inventory - - - -
Spendable
Restricted for:
General government 481,357 - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Debt service - - - -
Committed to:
General government - - - -
Public safety - - 9,828 -
Culture and recreation - 22,931 - -
Transportation and roads - - - -
Capital improvements - - - 2,028,757
Total fund balances 481,357 22,931 9,828 2,028,757
Total liabilities and fund balances 481,357$ 22,931$ 9,828$ 2,028,757$
Special Revenue
TOWN OF TAOS
June 30, 2021
Nonmajor Governmental Funds
Combining Balance Sheet
See independent auditors' report.112
Statement A-1
Page 2 of 3
Debt Service
Capital
Projects
Vehicle
Replacement
Special Events
Enterprise
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
1999 Gasoline
Tax Acquisition
Debt Service
Fund
825,543$ 553,887$ 550,843$ 102,051$ 1,834,004$
4,031 - - 430,373 101,424
146,856 - - - -
- - - - -
- - - - -
976,430$ 553,887$ 550,843$ 532,424$ 1,935,428$
-$ -$ -$ -$ -$
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - 550,843 532,424 -
- - - - 1,935,428
- - - - -
- - - - -
- - - - -
- - - -
976,430 553,887 - - -
976,430 553,887 550,843 532,424 1,935,428
976,430$ 553,887$ 550,843$ 532,424$ 1,935,428$
Capital Projects
See independent auditors' report.113
2015 NMFA
Fire Pumper
2009 NMFA PPRF
Disadvantage
Program- Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
NMFA Debt
Service Reserve
Eco Park
Assets
Cash and cash equivalents -$ -$ 501$ -$
Investments - - - -
Receivables:
Taxes receivable - - - -
Due from other governments - - - -
Inventory - - - -
Total assets -$ -$ 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 - - - -
Debt service - - 501 -
Committed to:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Total fund balances - - 501 -
Total liabilities and fund balances -$ -$ 501$ -$
June 30, 2021
Combining Balance Sheet
Nonmajor Governmental Funds
TOWN OF TAOS
Debt Service
See independent auditors' report.114
Statement A-1
Page 3 of 3
2007 NMFA
Land Purchase
2011 PPRF
Street
Improvement
2011 PPRF
Street
Improvement
Reserve
Total Nonmajor
Governmental
Funds
-$ -$ -$ 8,542,001$
- - - 771,086
- - - 552,211
- - - 62,504
- - - 29,121
-$ -$ -$ 9,956,923$
-$ -$ -$ 74,494$
- - - 4,917
- - - 5,103
- - - 84,514
- - - 29,121
- - - 481,357
- - - 331,301
- - - 1,094,193
- - - 42,232
- - - 1,083,267
- - - 1,935,929
- - - 54,566
- - - 9,828
- - - 22,931
- - - 1,228,610
- - - 3,559,074
- - - 9,872,409
-$ -$ -$ 9,956,923$
Debt Service
See independent auditors' report.115
Fire Protection Recreation
Lodgers' Tax
Special Revenue
Fund
Local
Governmental
Correction
Revenues
Taxes:
Gross receipts -$ -$ -$ -$
Gasoline and motor vehicle - - - -
Lodgers tax - - 1,033,251 -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants 368,315 - 25,000 -
Charges for services - - 4,290 29,595
Licenses and fees - - - 17,779
Investment income 2 - - -
Miscellaneous - - 250 -
Total revenues 368,317 - 1,062,791 47,374
Expenditures
Current:
General government - - - -
Public safety 181,948 - - 26,917
Public works - - - -
Culture and recreation - - 441,256 -
Capital outlay 489,907 - - -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 671,855 - 441,256 26,917
Excess (deficiency) of revenues over
expenditures (303,538) - 621,535 20,457
Other financing sources (uses)
Transfers in - - 472,142 -
Transfers (out)(75,094) (445) (592,501) -
Total other financing sources (uses)(75,094) (445) (120,359) -
Net change in fund balances (378,632) (445) 501,176 20,457
Fund balances - beginning of year 623,946 445 622,138 59,259
Fund balances - end of year 245,314$ -$ 1,123,314$ 79,716$
TOWN OF TAOS
Special Revenue
For the Year Ended June 30, 2021
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
See independent auditors' report.116
Statement A-2
Page 1 of 3
Law
Enforcement
Protection Civic Center
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
-$ -$ -$ -$ -$
- - - - 78,166
- - - - -
- - - 134,063 -
- - - - -
30,200 - - 292,681 -
- - - - -
- - - - -
- - - - -
- - - - -
30,200 - - 426,744 78,166
- - - 177,383 -
23,929 - - - -
- - - - -
- - - - -
- - - 456,719 -
- - - - -
- - - - -
23,929 - - 634,102 -
6,271 - - (207,358) 78,166
- 2,323 118,035 59,374 -
- - - - (49,018)
- 2,323 118,035 59,374 (49,018)
6,271 2,323 118,035 (147,984) 29,148
- (2,323) 1,110,575 202,550 13,084
6,271$ -$ 1,228,610$ 54,566$ 42,232$
Special Revenue
See independent auditors' report.117
Capital Projects
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District
Confidential
Informant
Facilities
Improvements
Revenues
Taxes:
Gross receipts 1,083,067$ -$ -$ -$
Gasoline and motor vehicle - - - -
Lodgers tax - - - -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants - - - 80,000
Charges for services - - - -
Licenses and fees - 58,304 - -
Investment income - - - -
Miscellaneous - - - -
Total revenues 1,083,067 58,304 - 80,000
Expenditures
Current:
General government 22,837 - - -
Public safety - - - -
Public works - - - -
Culture and recreation - 73,701 - -
Capital outlay - - - 106,701
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 22,837 73,701 - 106,701
Excess (deficiency) of revenues over
expenditures 1,060,230 (15,397) - (26,701)
Other financing sources (uses)
Transfers in - 5,000 - 1,176,195
Transfers (out)(743,908) - - -
Total other financing sources (uses)(743,908) 5,000 - 1,176,195
Net change in fund balances 316,322 (10,397) - 1,149,494
Fund balances - beginning of year 165,035 33,328 9,828 879,263
Fund balances - end of year 481,357$ 22,931$ 9,828$ 2,028,757$
For the Year Ended June 30, 2021
Special Revenue
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
TOWN OF TAOS
See independent auditors' report.118
Statement A-2
Page 2 of 3
Debt Service
Capital Projects
Vehicle
Replacement
Special Events
Enterprise
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
1999 Gasoline
Tax Acquisition
Debt Service
Fund
812,757$ -$ -$ -$ -$
- - - - -
- - - - -
- - - -
- 250,000 - - -
- - - - -
- - - 7,200 -
- - - - -
5 - - 543 126
- - - - 13,356
812,762 250,000 - 7,743 13,482
- - - 1,109 -
- - - - -
19,247 2,244 - - -
- - - - -
- 653,897 - - -
- - - - -
- - - - -
19,247 656,141 - 1,109 -
793,515 (406,141) - 6,634 13,482
- 531,766 400,000 - 697,737
(568,156) - - - -
(568,156) 531,766 400,000 - 697,737
225,359 125,625 400,000 6,634 711,219
751,071 428,262 150,843 525,790 1,224,209
976,430$ 553,887$ 550,843$ 532,424$ 1,935,428$
Capital Projects
See independent auditors' report.119
2015 NMFA Fire
Pumper
2009 NMFA
PPRF
Disadvantage
Program- Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
NMFA Debt
Service Reserve
Eco Park
Revenues
Taxes:
Gross receipts -$ -$ -$ -$
Gasoline and motor vehicle - - - -
Lodgers tax - - - -
Intergovernmental:
Federal operating grants - - -
Federal capital grants - - - -
State operating grants - - - -
Charges for services - - - -
Licenses and fees - - - -
Investment income - - - 2,159
Miscellaneous - - - -
Total revenues - - - 2,159
Expenditures
Current:
General government 75 - - -
Public safety - - - -
Public works - - - -
Culture and recreation - - - -
Capital outlay - - - -
Debt service:
Principal 75,019 815,417 430,000 -
Interest - 31,140 118,775 -
Total expenditures 75,094 846,557 548,775 -
Excess (deficiency) of revenues over
expenditures (75,094) (846,557) (548,775) 2,159
Other financing sources (uses)
Transfers in 75,094 846,352 547,325 -
Transfers (out)- - - (204,049)
Total other financing sources (uses)75,094 846,352 547,325 (204,049)
Net change in fund balances - (205) (1,450) (201,890)
Fund balances - beginning of year - 205 1,951 201,890
Fund balances - end of year -$ -$ 501$ -$
Debt Service Fund
For the Year Ended June 30, 2021
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
TOWN OF TAOS
See independent auditors' report.120
Statement A-2
Page 3 of 3
2007 NMFA
Land Purchase
2011 PPRF
Street
Improvement
2011 PPRF
Street
Improvement
Reserve
Total Nonmajor
Governmental
Funds
-$ -$ -$ 1,895,824$
- - - 78,166
- - - 1,033,251
- - - 134,063
- - - 250,000
- - - 796,196
- - - 41,085
- - - 76,083
- - 1,832 4,667
- - - 13,606
- - 1,832 4,322,941
- - - 201,404
- - - 232,794
- - - 21,491
- - - 514,957
- - - 1,707,224
- 348,623 - 1,669,059
- 11,228 - 161,143
- 359,851 - 4,508,072
- (359,851) 1,832 (185,131)
- 329,857 - 5,261,200
- (10,964) (177,960) (2,422,095)
- 318,893 (177,960) 2,839,105
- (40,958) (176,128) 2,653,974
- 40,958 176,128 7,218,435
-$ -$ -$ 9,872,409$
Debt Service Fund
See independent auditors' report.121
Page Left Intentionally Blank
122
S UPPORTING SCHEDULES
123
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
US Bank
Clearing Account Checking 964,062$ 304,667$ 1,052,780$ 215,949$
Judicial Bond Fund Municipal Court Checking 1,853 - - 1,853
Water & Sewer System Income Fund Checking 7,793,077 18,248 1,908 7,809,417
Total US Bank 8,758,992 322,915 1,054,688 8,027,219
Centinel Bank
General Fund Checking 14,730,764 75,190 - 14,805,954
1994 GRT Revenue Bond Acquisition Fund Checking 102,701 74 724 102,051
Water Wastewater Improvements Fund Checking 1,690,242 - 765,913 924,329
ACH Transfer Account Checking 15,873 - 15,887 (14)
Payroll Clearing Checking 8 - - 8
Total Centinel Bank 16,539,588 75,264 782,524 15,832,328
Bank balance of deposits 25,298,580$ 398,179$ 1,837,212$ 23,859,547$
New Mexico Finance Authority-Investment
Taos 49 - Debt Service Funds 9,611$ -$ -$ 9,611$
Taos 49 - Debt Service Reserve Funds Funds 144,847 - - 144,847
Total New Mexico Finance Authority 154,458 - - 154,458
*All checking accounts are non-interest bearing
TOWN OF TAOS
Schedule of Deposit and Investment Accounts
June 30, 2021
See independent auditors' report.124
Schedule I
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
Total investments 154,458$ -$ -$ 154,458$
Total 25,453,038$ 398,179$ 1,837,212$ 24,014,005
Add: New Mexico State Treasurer Local Government Investment Pool 4,149,964
Add: petty cash 1,629
Total deposits and investments 28,165,598$
Deposits and investments per financial statements:
Cash and cash equivalents - Exhibit A-1 22,406,647$
Investments - Exhibit A-1 4,014,560
Restricted cash and cash equivalents - Exhibit A-1 1,591,134
Restricted investments - Exhibit A-1 75,400
Fiduciary funds cash - Exhibit E-1 17,857
Investments - Exhibit E-1 60,000
Total cash, cash equivalents, and investments 28,165,598$
See independent auditors' report.125
Schedule II
Fair Market
Name of Description of CUSIP Value at
Depository Pledged Collateral Maturity Number June 30, 2021
US Bank
FHLB N/A LOC NO. 554871 10,000,000$
Total US Bank 10,000,000
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$
FHLB Bullet 2.38%09/10/21 313378JP7 507,254
Clovis SD 2.05%08/01/24 189414JA4 250,000
Espanola SD 2.125%09/01/25 29662RBA5 150,000
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
Torrance ETC County 2.00%09/01/23 891400PE7 150,000
Alamogordo NM Muni 3.00%08/01/25 11464KQ6 250,000
FFCB 2.01%12/08/21 3133EGT47 1,008,460
Dona Ana Branch Community 3.00%08/01/24 257578EG5 300,000
Torrance ETC County 2.00%09/01/24 891400PF4 310,000
Jal NM Public Schools 2.00%10/01/24 470143AJ7 300,000
Clovis NM Municipal Sch Dist 2.25%08/01/32 189414PN9 325,000
Ruidoso SD 3.00%08/01/29 781338LT3 265,000
Ruidoso SD 2.50%08/01/31 781338KR8 300,000
Bernalillo NM Sch Dist 08/01/30 085279VG9 375,000
Taos NM Sch Dist 4.00%09/01/28 87601UBY8 215,000
FHMS K091 A2 3.51%03/25/29 3137FLN91 600,000
FHMS K091 A2 3.51%03/25/29 3137FLN91 300,000
Silver City NM Consol SC 4.00%08/01/34 827513GCO 200,000
Clovis NM Muni 3.00%08/01/34 189414QE8 200,000
Los Alamos NM Public Sch 2.25%08/01/23 54422NDM5 400,000
Taos NM Sch Dist 5.15%09/01/27 876014GE5 505,000
Bernalillo NM Sch Dist 2.00%08/01/27 085279UD7 275,000
Uni of New Mexico 1.882%06/01/32 9146924S4 500,000
Total Centinel Bank 8,485,714
The location of the safekeeper of the above securities is Independent Bankers Bank, Dallas, TX
Total Pledged Collateral 18,485,714$
TOWN OF TAOS
Schedule of Collateral Pledged by Depository
For Public Funds
June 30, 2021
See independent auditors' report.126
C OMPLIANCE SECTION
127
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
U.S. Office of Management and Budget
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, 2021,
and the related notes to the financial statements, which collectively comprise Town’s basic financial
statements, and have issued our report thereon dated December 13, 2021.
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. We did identify a certain deficiency in internal control, described in the
accompanying schedule of findings and questioned costs as item 2021-001 that we consider to be a
significant deficiency.
128
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.
We noted a certain matter that is required to be reported per section 12-6-5 NMSA 1978 that we have
described in the accompanying schedule of Section 12-6-5 NMSA 1978 findings as item 2021-002.
Town of Taos’s Responses to Findings
The Town’s responses to the finding identified in our audit were described in the accompanying schedule of
findings and questioned costs. The Town’s responses were not subjected to the auditing procedures applied
in the audit of the financial statements and, accordingly, we express no opinion on them.
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 13, 2021
129
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130
F EDERAL FINANCIAL ASSISTANCE
131
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORS cordovacpas.com
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
INDEPENDENT AUDITORS’ REPORT
Mr. Brian S. Colón, Esq.
New Mexico State Auditor
Town Council
Town of Taos
U.S. Office of Management and Budget
Taos, New Mexico
Report on Compliance for Each Major Federal Program
We have audited the Town of Taos’s (the Town) compliance with the types of compliance requirements
described in the OMB Compliance Supplement that could have a direct and material effect on each of the
Town’s major federal programs for the year ended June 30, 2021. The Town’s major federal program is
identified in the summary of auditors’ results section of the accompanying schedule of findings and
questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of
its federal awards applicable to its federal programs.
Auditors’ Responsibility
Our responsibility is to express an opinion on compliance for each of the Town’s major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the Town’s compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of the Town’s compliance.
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Opinion on Major Federal Program
In our opinion, the Town complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for the
year ended June 30, 2021.
Report on Internal Control Over Compliance
Management of the Town is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the Town’s internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness
of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the
Town’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Cordova CPAs LLC
Albuquerque, NM
December 13, 2021
133
Assistance
Listing
Number
Federal
Expenditures
Funds
Provided to
Subrecipients
Noncash
Assistance
U.S. Department of the Interior - Bureau of Reclamation
Abeyta 15.565 469,362$ -$ -$
Total U.S Department of the Interior - Bureau of Reclamation 469,362 - -
U.S. Department of Housing and Urban Development
Passed through State of New Mexico Department of Finance and Administration
CDBG- Eco Dev- Hotel Willa 14.228 27,877 - -
CDBG- Comprehensive Plan 14.228 25,036 - -
Total U.S. Department of Housing and Urban Development 52,913 - -
U.S. Department of Justice
Passed Through State of New Mexico Energy Minerals Natural Resources
Juvenile Justice Program 16.523 28,440 - -
Total U.S. Department of Justice 28,440 - -
U.S. Department of Agriculture
Passed Through State of New Mexico Children, Youth and Families
Humble Equipment 10.351 136,718 - -
Total U.S. Department of Agriculture 136,718 - -
Environmental Protection Agency
Passed Through State of New Mexico Environment Department
Wastewater Treatment Plant Solar Array 66.458 *1,116,161 - -
Wastewater Treatment Plant Solar Array Loan 66.458 *700,000 - -
Total Environmental Protection Agency 1,816,161 - -
U.S. Department of Transportation
Passed through NM Department of Transportation
Federal Aviation Administration (FAA) Airport Improvement Grant
Taxiway-A PER, Phase I Design 20.106 24,692 - -
Airport Runway 422 20.106 377,388 - -
Total U.S. Department of Transportation 402,080 - -
U.S. Department of Treasury
Passed through NM Department of Finance and Administration
CARES- Small Business Continuity Grant 21.019 *479,250 - -
CARES- Local Government 21.019 *860,151 - -
Passed through New Mexico Humanities Council
CARES Act Grant- Library 45.129 4,958 - -
Total U.S. Department of Treasury 1,344,359 - -
Total Federal Financial Assistance 4,250,033$ -$ -$
* Denotes Major Federal Financial Assistance Program
TOWN OF TAOS
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Grantor or Pass-Through
Grantor / Program Title
See independent auditors' report.
See accompanying notes to schedule of expenditures of federal awards.134
Schedule III
Notes to Schedule of Expenditures of Federal Awards
1.Basis of Presentation
2.Loans
3.10% de minimus Indirect Cost Rate
4.Federally Funded Insurance
The accompanying Schedule of Expenditures of Federal Awards (Schedule)includes the federal grant activity of the
Town of Taos and is presented on the modified accrual basis of accounting,which is the same basis as was used to
prepare the fund financial statements.The information in this Schedule is presented in accordance with the
requirements of Uniform Administrative Requirements,Cost Principles,and Audit Requirements for Federal Awards
(Uniform Guidance).Therefore,some amounts presented in this schedule may differ from amounts presented in,or
used in the preparation of the financial statements.
The Town has no federally funded insurance.
The Town did not elect to use the allowed 10% indirect cost rate.
The Town expended $700,000 in federal awards related to loans or loan guarantees during the year.
See independent auditors' report.135
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136
TOWN OF TAOS Schedule IV
Schedule of Findings and Questioned Costs Page 1 of 3
June 30, 2021
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? Yes
c. Noncompliance material to the financial statements noted? None Noted
Federal Awards:
1. Internal control over major programs:
a. Material weaknesses identified? None noted
b. Significant deficiencies identified not considered to be material weaknesses? None noted
2. Type of auditors’ report issued on compliance for major programs Unmodified
3. Any audit findings disclosed that are required to be reported in accordance
with 2 CFR section 200.516(a)? No
4. Identification of major programs:
Assistance Listing
Number Federal Program
66.458 Capitalization Grants for Clean Water Program
21.019 CARES Act- Small Business Continuity Grant
21.019 CARES Act- Local Government
5. Dollar threshold used to distinguish between type A and type B programs: $750,000
6. Auditee qualified as low-risk auditee? No
137
TOWN OF TAOS Schedule IV
Schedule of Findings and Questioned Costs Page 2 of 3
June 30, 2021
Section II – Financial Statement Findings
2021‐001 —Consumable Inventory (Significant Deficiency)
Condition: During inquiry and gathering of client prepared documents to support audited financial numbers it
was noted that the Town was not able to provide evidence of the consumable inventory on hand as of year-
end. Inventory in the amount of $384,646 from prior year was reported in current year.
Criteria: Sections 6-5-1 through 6-5-6 NMSA, 1978 require internal accounting controls designed to prevent
accounting errors and violations of state and federal laws and rules related to financial matters.
Effect: Without proper inventory controls, the Town cannot verify what inventory they have on hand or is
available for use and may be misappropriated without the knowledge of management. Also, the inventory
balance at year end may be misstated as the balance cannot be supported by the sufficient evidence.
Cause: The Town was unsuccessful at completing a proper report at year end and therefore did not have a
printed copy available when it was requested.
Auditors’ Recommendations: We recommend the Town ensures policies and procedures designed to prevent
or detect possible misstatements in its inventory at year end.
Agency’s Response: Management agrees with the auditor’s recommendations. We have established policies and
procedures as it relates to consumable inventory, issued a standardized excel workbook or approved individualized
workbooks by Department. This information is communicated to them with our standard end of year memorandum
issued in April of each year. This past year has been a challenge with staffing shortages in several of our
departments including the Finance Department Fixed Assets position which ultimately oversees this function.
Along with the department staffing shortage, COVID has also made it difficult on the staff that are employed and
trying to do several jobs to maintain the level of performance, unfortunately this is one area that the majority of the
departments have not been able to keep on top of. As we go forward, we anticipate this fixed asset position to be
filled during the first quarter of 2022, we have hired an additional Assistant Finance Director to help with the
Town’s succession plan in order to address any areas that need attention such as the consumable inventory. The
personnel responsible for this are Department Directors and/or their designee.
138
TOWN OF TAOS Schedule IV
Schedule of Findings and Questioned Costs Page 3 of 3
June 30, 2021
Section III – Federal Award Findings
None noted
Section IV – Section 12‐6‐5 NMSA 1978 Findings
2021‐002 — Retiree Health Care Contributions (Other Matter)
Condition: During testwork over payroll and the human resource functions, we noted that the Town is including car
allowances in the calculation for the Retiree Health Care Contribution.
Criteria: According NMAC 6.20.2.18, the local board shall establish written payroll policies and procedures which
comply with state and federal regulations on payroll as well as maintaining strict internal controls, close supervision
and financial accounting in accordance with GAAP. In addition, the Retiree Health Care Act 10-7C-15 “Retiree
Health Care Fund Contributions (b)” states that each participating employee as a condition of employment … shall
contribute to the fund an employee contribution… based on the employee's salary.
Effect: The RHC contribution of one employee in the amount of $30 for the transaction tested, was incorrectly
calculated to include the car allowance.
Cause: This was a mistake and oversight when the original code in the system was set up.
Auditors’ Recommendations: We recommend that the Town properly code car allowances so that it is excluded
from the Retiree Health Care contributions. In addition, management should perform a retrospective evaluation of
the effect, as a result of this, and ensure the Town complies with all regulations.
Agency’s Response: Management agrees with the auditor’s recommendations. The Human Resources Department
has corrected the code set up for the car allowances on December 10, 2021 along with the Finance Department’s
review for accuracy. In the future, the Human Resources Department will follow the same process as new codes are
created, they will perform a test run and review with Finance prior to the implementation into an actual payroll.
The responsible parties are the Human Resources Department and the Finance Department.
Section V – Prior Year Audit Findings
2020‐001 — Reporting– (Material Weakness and Noncompliance) ‐ Resolved
2020‐002 — Procurement Code Violation (Other Matter) ‐ Resolved
2020‐003 — Lodger’s Tax Audit Violation (Other Matter) ‐ Resolved
139
TOWN OF TAOS
Other Disclosures
June 30, 2021
Exit Conference
An exit conference was held on December 10, 2021. In attendance were the following:
Representing the Town of Taos:
Daniel Barrone - Mayor
Rick Bellis – Town Manager
Marietta Fambro – Finance Director
Josephine Fresquez – Assistant Finance Director
Lupe Martinez- CPO
Representing Cordova CPAs LLC:
Robert Gonzales, CPA, Principal
Robert Cordova, 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.
140