HomeMy WebLinkAbout2022 Audit ReportTOWN OF TAOS
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
JUNE 30, 202
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I NTRODUCTORY SECTION
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TOWN OF TAOS
June 30, 2022
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 13-21
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Position A-1 24-25
Statement of Activities A-2 26-27
Fund Financial Statements:
Balance Sheet - Governmental Funds B-1 28
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
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 31
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget (GAAP Budgetary Basis) and Actual:
General Fund C-1 33
Statement of Net Position - Proprietary Funds D-1 34-37
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds D-2 38-39
Statement of Cash Flows - Proprietary Funds D-3 41
Statement of Fiduciary Net Position - Custodial Funds E-1 42
Statement of Changes in Fiduciary Net Position - Custodial Funds E-2 43
NOTES TO THE FINANCIAL STATEMENTS 44-85
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-1 102-103
Schedule of the Town's Contributions - Retiree Health Care OPEB Plan B-2 104
SUPPLEMENTARY INFORMATION
Nonmajor Fund Descriptions 106-107
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds A-1 108-113
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Governmental Funds A-2 114-119
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TOWN OF TAOS
June 30, 2022
Table of Contents
Statement/
Schedule Page
SUPPORTING SCHEDULES
Schedule of Deposit and Investment Accounts I 122-123
Schedule of Collateral Pledged by Depository For Public Funds II 124
COMPLIANCE SECTION
Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 126-127
FEDERAL FINANCIAL ASSISTANCE
Report on Compliance for Each Major Federal Program and on Internal Control
Over Compliance Required by the Uniform Guidance 130-132
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, 2022
Town Council
Name Title
Pascualito Maestas Mayor
Nathaniel Evans Town Councilor
Darien D. Fernandez Town Councilor
Marietta Fambro Town Councilor
Richard Chavez Town Councilor
Administration
Andrew Gonzales
Lupe Martinez
Francella Garcia
Richard Chavez
Christopher Stachura
Town Manager
Finance Director
Town Clerk
Municipal Judge
Town Attorney
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F INANCIAL SECTION
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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 the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, business-type
activities, each major fund, the aggregate remaining fund information, and the budgetary comparison of the
General Fund of Town of Taos (the Town), as of and for the year ended June 30, 2022, and the related notes to
the financial statements which collectively comprise the Town’s basic financial statements as listed in the
table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, business-type activities, each major fund, the
aggregate remaining fund information, and the budgetary comparison of the General Fund of Town of Taos,
as of June 30, 2022, 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.
Basis for Opinions
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. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We
are required to be independent of the Town of Taos and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
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In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the Town of Taos’s ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not
a guarantee that an audit conducted in accordance with generally accepted auditing standards and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing
Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Town of Taos’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Town of Taos’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis on pages 13 through 21 and Schedules A-1 through B-2 and notes to the Required
Supplementary Information on pages 88 through 104 be presented to supplement the basic financial
statements. Such information is the responsibility of management and, 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,
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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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town of Taos’s basic financial statements. The combining and individual fund financial
statements, the Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, and Supporting Schedules I through II required by 2.2.2 NMAC are presented for purposes of
additional analysis and are not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the 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 the Supporting Schedules I through II required by 2.2.2 NMAC are fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory section but does not include the basic financial statements and our auditor’s
report thereon. Our opinions on the basic financial statements do not cover the other information, and we do
not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If, based on
the work performed, we conclude that an uncorrected material misstatement of the other information exists,
we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 7, 2022
on our consideration of the Town of Taos’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 solely to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the Town of Taos’s internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards in considering Town of Taos’s
internal control over financial reporting and compliance.
Cordova CPAs LLC
Albuquerque, New Mexico
December 7, 2022
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
We are pleased to present the Town of Taos’ financial statements for the fiscal year ended June 30, 2022. 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 $99,585,333 (net position). Of this
amount, $3,069,784 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
currently has available cash balances to meet the government’s ongoing obligations to its citizens and creditors. Included in
the available cash balances are approximately $9,479,963 for ongoing capital projects and $5,060,502 for special revenue
projects.
The Town’s total net position increased to $8,683,925 during the fiscal year. The majority of this overall increase was due to
an increase in gross receipts taxes versus original projections. During the mid‐year budget adjustment process the increase
to gross receipts taxes was made by 13.98% as well as an increase in lodger’s tax revenue by $964,522.
As of June 30, 2022, the Town’s governmental activities reported a combined ending net position balance of $68,852,678.
Of this total, $9,481,857 is restricted for debt service and capital projects.
As illustrated in the data below, you will note the favorable increase the Town of Taos has continued to experience during the last few
years. According to the financial information, Total Assets increased by 5.38%, the Town’s Net Position increased by 9.55% and the
Operating Income posted in the General Fund experienced an increase of 11.67%, which amounts to $1.5M over the prior year. Total
Revenues increased by 19.86% and Total Expenditures increased by 14.64% over the prior year.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 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.
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 thirty 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.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
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 revenue collection of street 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 44‐85
of this report.
Combining statements. The combining statements referred to earlier in connection with non‐major governmental funds are
presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can
be found on pages 108‐119 of this report.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
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 $99,585,333 at the close of the current
fiscal year. An increase of approximately 9.55% over the prior year.
The significant portion of the Town of Taos’ net position represents the Town’s investment of $80,490,318 in capital assets (e.g., land
improvements, buildings, infrastructure and machinery & equipment), less any related outstanding debt used to acquire those assets.
The Town of Taos uses these capital assets to provide services to its citizens, so these assets are not available for future spending.
Although the Town of Taos’ investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
Governmental Business‐Type
Activities Activities Total
Assets
Current and other assets 26,529,236$ 11,338,213$ 37,867,449$
Restricted cash, cash equivalents & investments ‐ 1,741,994 1,741,994
Restricted investments ‐ 75,400 75,400
Bond issuance costs and discount ‐ ‐ ‐
Capital assets, net of accumulated 61,940,831 24,925,065 86,865,896
depreciation
Total assets 88,470,067 38,080,672 126,550,739
Deferred Outflows of Resources
Deferred Outflows ‐ pension 1,274,959 105,629 1,380,588
Defered Outflows ‐ OPEB 800,082 127,706 927,788
Total deferred outflows of resources 2,075,041 233,335 2,308,376
Total assets and deferred outflows of resources 90,545,108$ 38,314,007$ 128,859,115$
Liabilities `
Current Liabilities 3,466,448$ 1,586,357$ 5,052,805$
Non‐current liabilities 12,641,425 5,264,005 17,905,430
Total liabilities 16,107,873 6,850,362 22,958,235
Deferred Inflows of Resources
Defered Inflows ‐ pension 3,133,907 404,137 3,538,044
Deferred Inflows ‐ OPED 2,450,650 326,853 2,777,503
Total deferred inflows of resources 5,584,557 730,990 6,315,547
Net Position
Net investment in capital assets 59,370,350 21,119,968 80,490,318
Restricted 14,542,359 1,482,872 16,025,231
Unrestricted (5,060,031) 8,129,815 3,069,784
Total net position 68,852,678 30,732,655 99,585,333
Total Liabilities and Net Position 90,545,108 38,314,007 128,859,115
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
A portion of the Town of Taos’ governmental restricted net position of $14,542,359 (21%) 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, ($5,060,031) continues as a negative due to the implementation of GASB Statement 68
and Statement 75 reported in the financials. In the previous year, this amount was ($9,338,895). Taking that negative into
consideration, the Town still has the available cash to meet the government’s ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the Town of Taos is able to report positive balances in all categories of net position for both
governmental and business‐type activities.
Analysis of Changes in Net Position
The Town’s net position increased to $8,683,925 during the fiscal year. This increase is primarily the result of operating and capital, in
the General Government.
Governmental Business‐type
Revenues Activities Activities Total
Program revenues:
Charges for service 1,247,290$ 5,908,745$ 7,156,035$
Operating grants and contributions 1,909,437 213,135 2,122,572
Capital grants and contributions 4,566,566 632,744 5,199,310
General revenues:
Property taxes, levied for general purposes 1,197,463 ‐ 1,197,463
Cannabis excise tax 13,603 ‐ 13,603
Gross receipts taxes 13,768,528 611,687 14,380,215
Gasoline, franchise and motor vehicle 814,422 ‐ 814,422
Lodger's Taxes 1,685,509 ‐ 1,685,509
Interest income (loss)6,915 6,023 12,938
Miscellaneous income 119,113 20,738 139,851
Transfer to other entity 11,441 (11,441) ‐
Loss on disposal of capital assets ‐ ‐ ‐
Total Revenues 25,340,287 7,381,631 32,721,918
Program expenses:
General government 9,436,679$ ‐$ 9,436,679$
Public safety 3,719,039 ‐ 3,719,039
Public works 1,509,869 ‐ 1,509,869
Culture and recreation 3,170,673 ‐ 3,170,673
Health and welfare ‐ ‐ ‐
Interest 200,483 ‐ 200,483
Joint water and sewer ‐ 4,776,237 4,776,237
Solid waste ‐ 82,979 82,979
Taos Regional Landfill ‐ 1,142,034 1,142,034
Total Expenses 18,036,743 6,001,250 24,037,993
Change in net position 7,303,544 1,380,381 8,683,925
Net Position, beginning 61,549,134 29,352,274 90,901,408
Net Position, ending 68,852,678$ 30,732,655$ 99,585,333$
For the Year Ended June 30, 2022
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
Governmental activities. Governmental activities increased the Town of Taos’ net position to $7,303,544 primarily as the result of an
increase in operating and capital grants. Whereas, Business‐type activities increased to $1,380,381 for a combined total of $8,683,925
net position at fiscal year‐end. It is worth noting, decreases in general government expenditures added to the overall net position of
the Town during the year.
The Town is pleased to report that tax revenues account for 69% of governmental revenues, or $17,465,922. Tax revenues are made
up of property, gross receipts, gasoline and motor vehicle as well as other taxes. Tax revenues increased by $2,289,805 from last fiscal
year. Respectively, $1,513,564 in gross receipts taxes and $652,258 in lodger’s taxes that were previously impacted by the pandemic.
The General fund received the majority of the Town’s program revenue, accounting for $9,436,679 or 37% of total governmental
revenues. The primary recipients of these revenues are general government, public safety, public works and, culture and recreation.
The Town’s direct charges to users of governmental services made up $1,247,290 or 5% of total governmental revenues. These
charges are for fees, fines and forfeitures as well as licenses and permits. Charges for services increased by $615,083 from last fiscal
year due to the fact that the major facilities that account for these revenues were open to the public. Those included the Youth &
Family Center, the Library, the Swimming Pool, the return of many of our Community and Special Events as well as other fee‐
generated activities.
Business‐type activities. As referenced earlier, Business‐type activities increased the Town’s net position by $1,380,381, primarily as
the result of an increase in charges for services and capital grants.
The Town’s direct charges to users of business‐type services made up $5,908,745 or 80 % 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 $386,687 from the previous year, primarily as the result of again, the pandemic and stay at home
orders and increased number of new homeowner and second homeowners relocating to the town. The Town’s direct charges for the
joint water and sewer program were responsible for 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.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
Revenues for governmental functions overall totaled approximately $25,311,450 in the fiscal year ended June 30, 2022, which
represents an increase of $5,668,785 from the fiscal year ended June 30, 2021. This is largely due to the increase in operating and
capital grants. Expenditures for governmental functions, totaling $22,360,282 was an increase of approximately $5,841,420 from the
fiscal year ended June 30, 2021. This is due mainly to the reopening of all governmental functions. In the fiscal year ended June 30,
2022, revenues for governmental functions exceeded expenditures by approximately $7,303,544.
The General Fund is the general 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
$5,164,942 along with a minimum fund balance of $3,783,251.
Overall, the general fund’s performance resulted in revenues over expenditures in the fiscal year ended June 30, 2022 of $3,047,312 a
decrease of $1,143,356 over the comparable figure from the prior year of $4,190,668. The Town’s overall financial position improved
as stated prior under the Financial Highlights. During the year, there were several personnel vacancies within various departments
that contributed to the decrease in expenditures over those 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.
At the end of the fiscal year, the unrestricted net position for enterprise funds were $8,129,815. The total net position for the
enterprise funds were decreased by $292,689 as compared to the prior year. This performance was reflective of an increase in
charges for services and a decrease in 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. The Town defines its priorities through this process.
As compared to the prior year, the General Fund revenue increased by 11.67% or approximately $1,504,845. Notable increases were
in Gross Receipts Taxes. The prior year reflected $10,359,140 versus the current financial year reflected at $11,624,599.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
The following table examines the summary budget performance of the general fund for the fiscal year ending June 30, 2022. Detailed
budget performance is examined through the Statement of Revenues, Expenditures, and Changes in Fund Balance for the General
Fund found in Exhibit C‐1. The Town’s final budget differs from the original budget due to amendments made during the fiscal year
and the increase in expenditures. Actual general fund expenditures were $1,579,552 less than budgeted. This year, major
adjustments were made at mid‐year and end of year for several one‐time capital, maintenance and operational requests over several
departments within the Town to utilize the favorable variance savings.
Budget Amounts
Original Final
Expenditures:
General government 5,695,279$ 5,478,864$ 4,636,566$ 842,298$
Public safety 3,750,966 3,766,248 3,543,758 222,490
Public works 1,181,070 1,176,925 980,541 196,384
Culture and recreation 1,909,107 1,749,769 1,431,389 318,380
Capital outlay ‐ ‐ ‐ ‐
Total Expenditures 12,536,422$ 12,171,806$ 10,592,254$ 1,579,552$
Actual (GAAP
Basis)
Favorable
(Unfavorable)
Variance
Capital Asset and Debt Administration
Capital assets. The Town of Taos’ capital assets for its governmental and business‐type activities as of June 30, 2022 amount to
$86,291,158 (net of accumulated depreciation). Capital assets include land, land improvements, buildings and improvements,
furniture, fixtures and equipment as well as infrastructure. The Town’s capital assets for the current fiscal year increased $2,264,148
for governmental activities and decreased $126,654 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, however 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: 20
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2022
$3,112,110 for the reconstruction of Taxiway A at the Taos Regional Airport; $757,933 of additions to governmental
equipment and machinery for the purchase of an ambulance, John Deere Model 410‐L, 623 H CAT Scraper and; $144,501 for
the completion of the Solar Array Project located at the Waste Water Treatment Plant.
Governmental Business‐type
Activities Activities Total
Land 6,615,288$ 262,422$ 6,877,710$
Constuction in progress 5,239,837 3,539,981 8,779,818
Land improvements 7,527,676 104,895 7,632,571
Buildings and improvements 37,287,682 6,756,693 44,044,375
Machinery and Equipment 19,790,394 10,175,770 29,966,164
Infrastructure 87,345,085 39,766,796 127,111,881
Total capital assets 163,805,962 60,606,557 224,412,519
Less: accumulated depreciation (102,439,869) (35,681,492) (138,121,361)
Total property, plant and
equipment, net of accumulated
depreciation 61,366,093$ 24,925,065$ 86,291,158$
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 7 in the
accompanying Notes to the Financial Statements for further information regarding capital assets.
Debt Administration. At the end of the current fiscal year, the Town of Taos had total long‐term obligations outstanding of
$7,276,395. The Town’s outstanding debt decreased by $638,443 from prior year. Upon review of the compensated absences,
Governmental Activities increased slightly by $3,613 from prior year while Business‐type Activities increased $22,805 from prior year.
The Town continues to look at options such as, early loan payoffs and refinancing of those loans with higher interest rates and low
balances in order to further reduce outstanding debt.
Governmental Business‐type
Activities Activities Total
Revenue Bonds 1,980,000$ 1,398,600$ 3,378,600$
NMFA amd RUS Loans ‐ 2,406,497 2,406,497
Compensated absences 745,816 109,603 864,419
Landfill Closure Liability ‐ 626,879 626,879
Total long‐term liabilities $ 2,725,816 4,541,579$ 7,276,395$
See Note 8 in the accompanying Notes to the Financial Statements for further information regarding the Town of Taos’ long‐term
debt.
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, 400 Camino de la Placita, Taos, New Mexico, 87571, (575) 751‐2002.
21
Page Left Intentionally Blank
22
B ASIC
FINANCIAL STATEMENTS
23
TOWN OF TAOS
Statement of Net Position
June 30, 2022
Governmental
Activities
Business-type
Activities Total
Assets
Current assets
Cash and cash equivalents 19,098,119$ 7,906,832$ 27,004,951$
Investments 2,415,679 1,598,881 4,014,560
Receivables:
Property taxes 240,771 - 240,771
Taxes receivable 2,719,942 105,075 2,825,017
Due from other governments 1,728,191 679,907 2,408,098
Customer receivable, net - 989,406 989,406
Inventory 303,320 81,326 384,646
Internal balances 23,214 (23,214) -
Total current assets 26,529,236 11,338,213 37,867,449
Noncurrent assets
Restricted cash and cash equivalents - 1,741,994 1,741,994
Restricted investments - 75,400 75,400
Right of use assets, net 574,738 - 574,738
Capital assets 163,805,962 60,606,557 224,412,519
Less: accumulated depreciation (102,439,869) (35,681,492) (138,121,361)
Total noncurrent assets 61,940,831 26,742,459 88,683,290
Total assets 88,470,067 38,080,672 126,550,739
Deferred outflows of resources
Deferred outflows- pension 1,274,959 105,629 1,380,588
Deferred outflows- OPEB 800,082 127,706 927,788
Total deferred outflows of resources 2,075,041 233,335 2,308,376
Total assets and deferred outflows of resources 90,545,108$ 38,314,007$ 128,859,115$
The accompanying notes are an integral part of these financial statements.24
Exhibit A-1
Governmental
Activities
Business-type
Activities Total
Liabilities
Current liabilities
Accounts payable 2,382,300$ 738,455$ 3,120,755$
Accrued payroll 162,475 18,326 180,801
Accrued compensated absences 364,359 71,096 435,455
Deposits held in trust for others 5,103 334,522 339,625
Accrued interest 6,891 60,355 67,246
Current portion of leases payable 80,320 - 80,320
Current portion of bonds and loans payable 465,000 363,603 828,603
Total current liabilities 3,466,448 1,586,357 5,052,805
Noncurrent liabilities
Accrued compensated absences 381,457 38,507 419,964
Bond premiums, net of accumulated
amortization of $55,099 15,743 - 15,743
Leases payable 502,757 - 502,757
Bonds payable 1,515,000 1,325,600 2,840,600
Loans payable - 2,115,894 2,115,894
Landfill closure and post-closure - 626,879 626,879
Net pension liability 7,253,668 714,871 7,968,539
Net OPEB liability 2,972,800 442,254 3,415,054
Total noncurrent liabilities 12,641,425 5,264,005 17,905,430
Total liabilities 16,107,873 6,850,362 22,958,235
Deferred inflows of resources
Deferred inflows- pension 3,133,907 404,137 3,538,044
Deferred inflows- OPEB 2,450,650 326,853 2,777,503
Total deferred inflows of resources 5,584,557 730,990 6,315,547
Net position
Net investment in capital assets 59,370,350 21,119,968 80,490,318
Restricted for:
Debt service 1,894 - 1,894
Capital projects 9,479,963 - 9,479,963
Special revenue projects 5,060,502 - 5,060,502
Landfill - 1,482,872 1,482,872
Unrestricted (deficit)(5,060,031) 8,129,815 3,069,784
Total net position 68,852,678 30,732,655 99,585,333
Total liabilities, deferred inflows of resources, and
net position 90,545,108$ 38,314,007$ 128,859,115$
The accompanying notes are an integral part of these financial statements.25
TOWN OF TAOS
Statement of Activities
For the Year Ended June 30, 2022
Functions/Programs
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental Activities:
General government 9,436,679$ 1,217,565$ 1,395,358$ -$
Public safety 3,719,039 - 387,179 -
Public works 1,509,869 - 61,355 4,566,566
Culture and recreation 3,170,673 29,725 65,545 -
Interest 200,483 - - -
Total governmental activities 18,036,743 1,247,290 1,909,437 4,566,566
Business-type Activities:
Water and Sewer 4,776,237 4,038,602 - 825,879
Solid Waste 82,979 35,246 - -
Taos Regional Landfill 1,142,034 1,834,897 - 20,000
Total business-type activities 6,001,250 5,908,745 - 845,879
Total 24,037,993$ 7,156,035$ 1,909,437$ 5,412,445$
General Revenues and transfers:
Taxes:
Gross receipts taxes
Cannabis excise tax
Property taxes, levied for general purposes
Gasoline, franchise and motor vehicle
Lodger's taxes
Investment income
Miscellaneous revenue
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning
Net position, ending
Program Revenues
The accompanying notes are an integral part of these financial statements.26
Exhibit A-2
Governmental
Activities
Business-type
Activities Total
(6,823,756)$ -$ (6,823,756)$
(3,331,860) - (3,331,860)
3,118,052 - 3,118,052
(3,075,403) - (3,075,403)
(200,483) - (200,483)
(10,313,450) - (10,313,450)
- 88,244 88,244
- (47,733) (47,733)
- 712,863 712,863
- 753,374 753,374
(10,313,450) 753,374 (9,560,076)
13,768,528 611,687 14,380,215
13,603 - 13,603
1,197,463 - 1,197,463
814,422 - 814,422
1,685,509 - 1,685,509
6,915 6,023 12,938
119,113 20,738 139,851
11,441 (11,441) -
17,616,994 627,007 18,244,001
7,303,544 1,380,381 8,683,925
61,549,134 29,352,274 90,901,408
68,852,678$ 30,732,655$ 99,585,333$
Net (Expense) Revenue and Changes in Net Position
The accompanying notes are an integral part of these financial statements.27
Exhibit B-1
Page 1 of 1
General Fund
Airport
Construction
Other
Governmental
Funds Total
Assets
Cash and cash equivalents 5,596,611$ 2,855,172$ 10,646,336$ 19,098,119$
Investments 1,454,593 - 961,086 2,415,679
Receivables:
Property taxes 240,771 - - 240,771
Taxes receivable 2,173,823 - 546,119 2,719,942
Due from other governments 11,747 1,575,880 140,564 1,728,191
Inventory 274,199 - 29,121 303,320
Due from other funds 23,214 - - 23,214
Total assets 9,774,958$ 4,431,052$ 12,323,226$ 26,529,236$
Liabilities, deferred inflows
of resources, and fund balances
Liabilities
Accounts payable 192,987$ 1,578,618$ 610,695$ 2,382,300$
Accrued payroll 158,255 - 4,220 162,475
Deposits held in trust for others - - 5,103 5,103
Total liabilities 351,242 1,578,618 620,018 2,549,878
Deferred inflows of resources
Unavailable revenue - property taxes 201,324 - - 201,324
Total deferred inflows of resources 201,324 - - 201,324
Fund balances
Nonspendable:
Inventory 274,199 - 29,121 303,320
Spendable:
Restricted for:
General government - - 1,069,933 1,069,933
Public safety - - 420,931 420,931
Culture and recreation - - 1,662,792 1,662,792
Transportation and roads - - 12,640 12,640
Capital improvements - - 2,573,865 2,573,865
Debt service - - 356 356
Committed to:
General government - - 765,571 765,571
Public safety - - 9,828 9,828
Culture and recreation - - 36,633 36,633
Transportation and roads - - 1,026,819 1,026,819
Capital improvements - 2,852,434 4,094,719 6,947,153
Minimum fund balance 3,783,251 - - 3,783,251
Unassigned 5,164,942 - - 5,164,942
Total fund balances 9,222,392 2,852,434 11,703,208 23,778,034
Total liabilities, deferred inflows of
resources, and fund balances 9,774,958$ 4,431,052$ 12,323,226$ 26,529,236$
Balance Sheet
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.
June 30, 2022
Governmental Funds
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, 2022
Amounts reported for governmental activities in the Statement of
Net Position are different because:
Fund balances - total governmental funds 23,778,034$
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds 61,366,093
Right of use assets, net of accumulated amortization, used in governmental activities
are not financial resources and, therefore, are not reported in the funds 574,738
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 201,324
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 1,274,959
Deferred outflows- OPEB 800,082
Deferred inflows- pension (3,133,907)
Deferred inflows- OPEB (2,450,650)
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 (1,980,000)
Leases payable (583,077)
Bond premiums (15,743)
Accrued interest (6,891)
Accrued compensated absences (745,816)
Net pension liability (7,253,668)
Net OPEB liability (2,972,800)
Net position of governmental activities 68,852,678$
The accompanying notes are an integral part of these financial statements.29
Exhibit B-2
Page 1 of 2
General Fund
Airport
Construction
Other
Governmental
Funds Total
Revenues
Taxes:
Property 1,180,067$ -$ -$ 1,180,067$
Gross receipts taxes 11,624,599 - 2,143,929 13,768,528
Gasoline, franchise, and motor vehicle 736,453 - 77,969 814,422
Lodger's tax - - 1,685,509 1,685,509
Cannabis excise tax - - 13,603 13,603
Intergovernmental:
Federal operating grants 1,748 - 969,818 971,566
Federal capital grants - 4,135,037 - 4,135,037
State operating grants 93,670 - 844,201 937,871
State capital grants - 326,066 105,463 431,529
Charges for services 177,339 - 484,662 662,001
Licenses and fees 491,258 - 94,031 585,289
Investment income 5,819 - 1,096 6,915
Miscellaneous 86,113 - 33,000 119,113
Total revenues 14,397,066 4,461,103 6,453,281 25,311,450
Expenditures
Current:
General government 4,636,566 81,217 1,117,193 5,834,976
Public safety 3,543,758 - 250,299 3,794,057
Public works 980,541 - 126,091 1,106,632
Culture and recreation 1,431,389 - 1,977,513 3,408,902
Capital outlay 661,027 4,836,810 2,070,260 7,568,097
Debt service:
Principal - - 450,000 450,000
Interest - - 101,145 101,145
Lease payments 96,473 - - 96,473
Total expenditures 11,349,754 4,918,027 6,092,501 22,360,282
Excess (deficiency) of revenues over
expenditures 3,047,312 (456,924) 360,780 2,951,168
Other financing sources (uses)
Lease proceeds 661,027 - - 661,027
Transfers in 6,032,993 282,725 3,396,509 9,712,227
Transfers (out)(6,446,218) - (3,254,568) (9,700,786)
Total other financing sources (uses)247,802 282,725 141,941 672,468
Net change in fund balance 3,295,114 (174,199) 502,721 3,623,636
Fund balance - beginning of year 5,927,278 3,026,633 11,200,487 20,154,398
Fund balance - end of year 9,222,392$ 2,852,434$ 11,703,208$ 23,778,034$
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.
For the Year Ended June 30, 2022
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
30
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 3,623,636$
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 7,023,008
Depreciation expense (4,758,860)
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 17,396
Expenses in the Statement of Activities that are not paid from current financial
resources are not reported as expenditures in the funds:
Amortizaton and interest expense on right of use asset (104,812)
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 618,430
Pension expense (309,217)
Town OPEB contributions subsequent to measurement date 120,245
OPEB income 516,384
Expenses in the Statement of Activities that do not require current financial
resources are not reported as expenditures in the funds:
Decrease in accrued compensated absences 5,387
Decrease in accrued interest 1,538
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 3,936
Principal payments on leases 96,473
Principal payments on loans 450,000
Change in net position of governmental activities 7,303,544$
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2022
Reconciliation of the Statement of Revenues, Expenditures, and Changes
Governmental Funds
The accompanying notes are an integral part of these financial statements.31
Page Left Intentionally Blank
32
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, 2022
Variances
Original Final Actual Final to Actual
Revenues
Taxes:
Property 1,182,822$ 1,182,822$ 1,180,067$ (2,755)$
Gross receipts 9,639,080 11,580,882 11,624,599 43,717
Gasoline, franchise and motor vehicle 628,363 709,799 736,453 26,654
Intergovernmental:
Federal operating grants 3,257 3,257 1,748 (1,509)
State operating grants 90,000 96,881 93,670 (3,211)
Charges for services 156,418 156,418 177,339 20,921
Licenses and fees 454,372 540,872 491,258 (49,614)
Investment income 3,722 3,722 5,819 2,097
Miscellaneous 66,866 68,561 86,113 17,552
Total revenues 12,224,900 14,343,214 14,397,066 53,852
Expenditures
Current:
General government 5,695,279 5,478,864 4,636,566 842,298
Public safety 3,750,966 3,766,248 3,543,758 222,490
Public works 1,181,070 1,176,925 980,541 196,384
Culture and recreation 1,909,107 1,749,769 1,431,389 318,380
Total expenditures 12,536,422 12,171,806 10,592,254 1,579,552
Excess (deficiency) of revenues over
expenditures (311,522) 2,171,408 3,804,812 1,633,404
Other financing sources (uses)
Designated cash (budgeted cash increase)555,897 (1,759,902) - 1,759,902
Transfers in 4,822,712 7,467,902 6,032,993 (1,434,909)
Transfers (out)(5,067,087) (7,879,408) (6,446,218) 1,433,190
Total other financing sources (uses)311,522 (2,171,408) (413,225) 1,758,183
Net change in fund balance - - 3,391,587 3,391,587
Fund balance - beginning of year - - 5,927,278 5,927,278
Fund balance - end of year -$ -$ 9,318,865$ 9,318,865$
Adjustments to revenues for lease proceeds 661,027
Adjustments to expenditures for lease payements and lease capital outlay 757,500
Fund balance - end of year 9,222,392$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.33
Water and Sewer Solid Waste
Assets
Current assets
Cash and cash equivalents 4,936,449$ 651,394$
Investments 1,349,781 249,100
Taxes receivable 105,075 -
Due from other governments 659,907 -
Customer receivables, net 757,353 -
Inventory 81,326 -
Total current assets 7,889,891 900,494
Noncurrent assets
Restricted cash and cash equivalents 334,522 -
Restricted investments - -
Capital assets 52,264,809 1,067,079
Less: accumulated depreciation (31,097,891) (864,071)
Total noncurrent assets 21,501,440 203,008
Total assets 29,391,331 1,103,502
Deferred outflows of resources
Deferred outflows- pension 58,722 44,033
Deferred outflows- OPEB 73,135 24,234
Total deferred outflows of resources 131,857 68,267
Total assets and deferred outflows of resources 29,523,188$ 1,171,769$
June 30, 2022
Proprietary Funds
Statement of Net Position
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.34
Exhibit D-1
Page 1 of 2
Taos Regional
Landfill Total
2,318,989$ 7,906,832$
- 1,598,881
- 105,075
20,000 679,907
232,053 989,406
- 81,326
2,571,042 11,361,427
1,407,472 1,741,994
75,400 75,400
7,274,669 60,606,557
(3,719,530) (35,681,492)
5,038,011 26,742,459
7,609,053 38,103,886
2,874 105,629
30,337 127,706
33,211 233,335
7,642,264$ 38,337,221$
The accompanying notes are an integral part of these financial statements.35
Water and Sewer Solid Waste
Liabilities
Current liabilities
Accounts payable 706,724$ 13,521$
Accrued payroll 12,261 -
Accrued compensated absences 53,495 -
Due to other funds 17,594 -
Deposits held in trust for others 334,522 -
Accrued interest 58,957 -
Current maturity of bonds and loans payable 180,183 -
Total current liabilities 1,363,736 13,521
Noncurrent liabilities
Accrued compensated absences 27,350 -
Bonds payable 1,325,600 -
Loans payable 1,736,172 -
Landfill closure and post-closure costs - -
Net pension liability 467,565 139,041
Net OPEB liability 250,867 90,799
Total noncurrent liabilities 3,807,554 229,840
Total liabilities 5,171,290 243,361
Deferred inflows of resources
Deferred inflows- pension 242,136 34,420
Deferred inflows- OPEB 191,254 50,391
Total deferred inflows of resources 433,390 84,811
Net position
Net investment in capital assets 17,924,963 203,008
Restricted for:
Landfill - -
Unrestricted 5,993,545 640,589
Total net position 23,918,508 843,597
Total liabilities and net position 29,523,188$ 1,171,769$
June 30, 2022
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 2 of 2
Taos Regional
Landfill Total
18,210$ 738,455$
6,065 18,326
17,601 71,096
5,620 23,214
- 334,522
1,398 60,355
183,420 363,603
232,314 1,609,571
11,157 38,507
- 1,325,600
379,722 2,115,894
626,879 626,879
108,265 714,871
100,588 442,254
1,226,611 5,264,005
1,458,925 6,873,576
127,581 404,137
85,208 326,853
212,789 730,990
2,991,997 21,119,968
1,482,872 1,482,872
1,495,681 8,129,815
5,970,550 30,732,655
7,642,264$ 38,337,221$
The accompanying notes are an integral part of these financial statements.37
Water and Sewer Solid Waste
Operating revenues
Charges for services 4,038,602$ 35,246$
Total operating revenues 4,038,602 35,246
Operating expenses
Depreciation 1,786,158 -
Personnel services 553,170 9,322
Contractual services 1,150,649 -
Supplies and purchases 33,851 -
Maintenance and materials 154,234 582
Utilities 676,347 -
Non-capital equipment 47,762 70,156
Other costs 301,065 2,919
Total operating expenses 4,703,236 82,979
Operating income (loss)(664,634) (47,733)
Non-operating revenues (expenses)
Gross receipts taxes 611,687 -
Interest expense (73,001) -
Investment income 3,825 -
Miscellaneous income 738 -
Total non-operating revenues (expenses)543,249 -
Income (loss) before contributions and transfers (121,385) (47,733)
Capital grants 825,879 -
Transfers in 4,922,280 -
Transfers (out)(5,099,118) -
Change in net position 527,656 (47,733)
Total net position, beginning of year 23,390,852 891,330
Total net position, end of year 23,918,508$ 843,597$
For the Year Ended June 30, 2022
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.38
Exhibit D-2
Taos Regional
Landfill Total
1,834,897$ 5,908,745$
1,834,897 5,908,745
337,200 2,123,358
344,184 906,676
125,547 1,276,196
1,701 35,552
133,062 287,878
8,583 684,930
- 117,918
179,261 483,245
1,129,538 5,915,753
705,359 (7,008)
- 611,687
(12,496) (85,497)
2,198 6,023
20,000 20,738
9,702 552,951
715,061 545,943
20,000 845,879
694,397 5,616,677
(529,000) (5,628,118)
900,458 1,380,381
5,070,092 29,352,274
5,970,550$ 30,732,655$
The accompanying notes are an integral part of these financial statements.39
Page Left Intentionally Blank
40
Exhibit D-3
Water and
Sewer Solid Waste
Taos
Regional
Landfill Total
Cash flows from operating activities:
Cash received from user charges 3,579,860$ 40,153$ 1,752,392$ 5,372,405$
Cash payments to employees for services (601,040) (11,974) (380,651) (993,665)
Cash payments to suppliers for goods and services (1,900,927) (16,641) (889,011) (2,806,579)
Net cash provided by operating activities 1,077,893 11,538 482,730 1,572,161
Cash flows from noncapital financing activities:
Gross receipts taxes 611,687 - - 611,687
Miscellaneous income 738 - - 738
Landfill closure costs - - 31,521 31,521
Repayment of interfund loans 1,044 (232) (1,918) (1,106)
Transfers (net)(176,838) - 165,397 (11,441)
Net cash provided (used) by noncapital
financing activities 436,631 (232) 195,000 631,399
Cash flows from investing activities:
Interest income 3,825 - 2,198 6,023
Net cash provided by investing activities 3,825 - 2,198 6,023
Cash flows from capital and related financing activities:
Interest paid (71,450) - (12,107) (83,557)
Capital grants 825,879 - 20,000 845,879
Acquisition of capital assets (1,986,702) - - (1,986,702)
Miscellaneous income - - 20,000 20,000
Proceeds from issuance of long-term debt 110,662 - - 110,662
Principal payments on loans (177,516) - (179,528) (357,044)
Net cash provided (used) by capital and related financing
activities (1,299,127) - (151,635) (1,450,762)
Net increase in cash and cash equivalents 219,222 11,306 528,293 758,821
Cash and cash equivalents ‐ beginning of year 5,051,749 640,088 3,198,168 8,890,005
Cash and cash equivalents ‐ end of year 5,270,971$ 651,394$ 3,726,461$ 9,648,826$
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities:
Operating income (loss)(664,634)$ (47,733)$ 705,359$ (7,008)$
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation 1,786,158 - 337,200 2,123,358
Adjustments to capital asset accounts 330,800 57,593 (398,395) (10,002)
Net pension and OPEB expense (65,339) (1,563) (36,204) (103,106)
Changes in assets and liabilities:
Receivables (468,334) 4,907 (82,505) (545,932)
Accounts payable 132,181 (577) (42,462) 89,142
Accrued payroll expenses (2,749) (1,089) (2,850) (6,688)
Customer deposits 9,592 - - 9,592
Accrued compensated absences 20,218 - 2,587 22,805
Net cash provided (used) by operating activities 1,077,893$ 11,538$ 482,730$ 1,572,161$
For the Year Ended June 30, 2022
Proprietary Funds
Statement of Cash Flows
TOWN OF TAOS
The accompanying notes are an integral part of these financial statements.41
TOWN OF TAOS Exhibit E-1
Custodial Funds
Assets
Cash 30,423$
Investments 60,000
Total assets 90,423$
Liabilities
Due to other entities 90,423$
Total liabilities 90,423$
Statement of Fiduciary Net Position
June 30, 2022
The accompanying notes are an integral part of these financial statements.42
TOWN OF TAOS Exhibit E-2
Custodial Funds
Additions:
Charges for services 19,200$
Total additions 19,200
Deductions:
Contractual services and other 6,634
Total deductions 6,634
Change in custodial funds due to others 12,566
Beginning - custodial funds due to others 77,857
Ending - custodial funds due to others 90,423$
For the Year Ended June 30, 2022
Statement of Changes in Fiduciary Net Position
The accompanying notes are an integral part of these financial statements.43
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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, 2022, 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.
44
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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.
45
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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.
46
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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 Airport Construction Fund (Capital Projects Fund)was created to receive proceeds
from federal and state grants for the purpose of financing improvements to the Taos
Municipal Airport. Authority is Town Council resolution.
The 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.
47
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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.
48
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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 $1,741,994, and restricted investments in
the amount of $75,400, at June 30, 2022 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 2022. 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, 2022, 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, 2022.
49
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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 11 and 12.
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 $201,324 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 11
and 12.
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.
50
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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, 2022.
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 $5,740,517 in restricted fund balances at June 30, 2022.
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 $12,569,255 in
committed funds at June 30, 2022 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.
51
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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 $3,783,251 for
minimum fund balance for the year ended June 30, 2022. 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 47 and 106-107.
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.
52
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 1.Summary of Significant Accounting Policies (continued)
E.Newly Adopted Accounting Pronouncements
During the year ended June 30, 2022 the Town assessed GASB Statements No. 87, Lease’s effect
on its financial statements and management has made the changes to the financial statements.
The Town’s accounting policy for accounting for Right of Use Assets and related liabilities under
GASB Statement No. 87 is to capitalize amounts more than $25,000. See Note 6 for more detail.
The Town also adopted GASB Statements No. 89, Accounting for Interest Cost Incurred before
the End of a Construction period, No. 92 Omnibus, No. 95 Postponement of the Effective Dates
of Certain Authoritative Guidance, No. 97, Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans-and
amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No.
32. None of these pronouncements have a significant impact on these financial statements.
NOTE 2.Stewardship, Compliance,and Accountability
Budgetary Information
Annual budgets of the Town are prepared prior to June 1 and must be approved by resolution of the
Town Councilors, and submitted to the Department of Finance and Administration for State approval.
Once the budget has been formally approved, any amendments must also be approved by the Town
Council Members and the Department of Finance and Administration. A separate budget is prepared for
each fund. Line items within each budget may be over-expended; however, it is not legally permissible
to over-expend any budget in total by fund.
Governmental fund budgets are prepared on the GAAP basis, excluding encumbrances, and secure
appropriation of funds for only one year. Carryover funds must be re-appropriated in the budget of the
subsequent fiscal year.
Proprietary fund budgets are prepared on the GAAP basis, excluding encumbrances, and secure
appropriation of funds for only one year. Carryover funds must be re-appropriated in the budget of the
subsequent fiscal year. The Town does not budget for depreciation expense, only capital outlay. The
budgetary information presented in these financial statements has been properly amended by Town
Council in accordance with the above procedures. These amendments resulted in the following changes:
Original Final
Budget Budget
Budgeted Funds:
General Fund (311,522)$ 2,171,408$
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.
53
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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, 2022. There are no specific state laws governing the ability to
spend net appreciation and investment income.
Deposits of funds may be made in interest or non-interest-bearing checking accounts in one or more
banks or savings and loan associations within the geographical boundaries of the Town. Deposits may
be made to the extent that they are insured by an agency of the United States or collateralized as
required by statute. The financial institution must provide pledged collateral for 50% of the deposit
amount in excess of the deposit insurance.
The rate of interest on non-demand interest-bearing accounts shall be set by the State Board of Finance,
but in no case,shall the rate of interest be less than one hundred percent of the asked price on United
States treasury bills of the same maturity on the day of deposit.
Excess funds may be temporarily invested in securities which are issued by the State or by the United
States government, or by their departments or agencies, and which are either direct obligations of the
State or the United States or are backed by the full faith and credit of those governments.
All of the Town’s accounts at an insured depository institution, including all noninterest-bearing
transaction accounts, will be insured by the FDIC up to the standard maximum deposit insurance
amount of $250,000.
Custodial Credit Risk –Deposits Custodial credit risk is the risk that in the event of a bank failure, the
Town’s deposits may not be returned to it. The Town does not have a deposit policy for custodial credit
risk, other than following state statutes as set forth in the Public Money Act (Section 6-10-1 to 6-10-63,
NMSA 1978). At June 30, 2022, $28,901,875 of the Town’s deposits of $29,401,875 was exposed to
custodial credit risk. $19,277,220 was uninsured and collateralized by collateral held by the pledging
bank’s trust department,not in the Town’s name, and $9,624,655 was uninsured and uncollateralized.
Total
Amount of deposits 9,007,220$ 20,394,655$ 29,401,875$
FDIC Coverage (250,000) (250,000) (500,000)
Total uninsured public funds 8,757,220 20,144,655 28,901,875
8,757,220 10,520,000 19,277,220
Uninsured and uncollateralized -$ 9,624,655$ 9,624,655$
Collateral requirement
(50% of uninsured funds)4,378,610$ 10,072,328$ 14,450,938$
Pledged Collateral 11,000,000 10,520,000 21,520,000
Over (Under) collateralized 6,621,390$ 447,672$ 7,069,062$
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
54
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 3.Deposits and Investments (continued)
The collateral pledged is listed on Schedule II of this report. The types of collateral are limited to direct
obligations of the United States Government and all bonds issued by any agency, district, or political
subdivision of the State of New Mexico.
Investments
Credit Risk
The New MexiGROW Local Government Investment Pool’s (LGIP) investments are valued at fair value
based on quoted market prices as of the valuation date. The LGIP is not SEC registered. The New Mexico
State Treasurer is authorized to invest the short-term investment funds, with the advice and consent of
the State Board of Finance, in accordance with Sections 6-10-10(I) through 6-10-10(P) and Sections 6-
10-10.1(A) and (E), NMSA 1978. The LGIP’s investments are monitored by the same policies and
procedures that apply to all other state investments. The pool does not have unit shares. Per Section 6-
10-10.1(F), NMSA 1978, at the end of each month all interest earned is distributed by the State
Treasurer to the contributing entities in amounts directly proportionate to the respective amounts
deposited in the fund and the length of time the fund amounts were invested.Participation in the LGIP is
voluntary.
As of June 30, 2022, the Town had the following investments and maturities:
Weighted Average
Investment Type Maturities Fair Value Rating
New Mexico Local Government
Investment Pool 49 Days ( R ); 89 Days ( F ) 4,149,560$ AAAm
U.S. Treasury Notes <1 year 156,534 Aaa
4,306,094$
The Town has presented $4,306,094 in investments at year end that is invested in the Local Government
Investment Pool. Of the $4,306,094 noted above $156,534 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).
55
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
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, 2022:
Total Level 1 Level 2 Level 3
4,306,094$ -$ 4,306,094$ -$
56
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 3. Deposits and Investments (continued)
Reconciliation to the Statement of Net Position:
Cash and cash equivalents per Exhibit A-1 27,004,951$
Restricted cash and cash equivalents per Exhibit A-1 1,741,994
Cash and investments - Statement of Fiduciary Assets and Liabilities per Exhibit E-1 90,423
Investments per Exhibit A-1 4,014,560
Restricted investments per Exhibit A-1 75,400
Total cash, investments, and cash equivalents 32,927,328
Add: outstanding checks and other reconciling items 782,644
Less: NMFA restricted accounts (156,534)
Less: New Mexico Government Local Investment Pool (4,149,964)
Less: petty cash (1,599)
Bank balance of deposits 29,401,875$
NOTE 4. Receivables
Governmental receivables as of June 30, 2022 are comprised of the following:
Other
Airport Governmental
General Construction Funds Total
Property taxes 240,771$ -$ -$ 240,771$
Taxes receivable:
Gross receipts taxes 2,043,049 - 367,701 2,410,750
Franchise taxes 94,475 - - 94,475
Lodger's taxes - - 165,778 165,778
Oil and gas taxes 29,624 - 12,640 42,264
MVD taxes 6,675 - - 6,675
Total taxes receivable 2,173,823 - 546,119 2,719,942
Due from other governments:
State grants 11,747 - 140,564 152,311
Federal grants - 1,575,880 - 1,575,880
Total due from other governments 11,747 1,575,880 140,564 1,728,191
Accounts receivable, net 2,426,341$ 1,575,880$ 686,683$ 4,688,904$
In accordance with GASB Statement No. 33, property tax revenues in the amount of $201,324 that were
not collected within the period of availability have been reclassified as deferred inflows in the
governmental fund financial statements as of June 30, 2022.
57
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 4.Receivables (continued)
Business-type activity receivables as of June 30, 2022 are comprised of the following:
Water and
Sewer Solid Waste
Taos Regional
Landfill
Taxes receivable
Gross receipts taxes 105,075$ -$ -$
Customer receivable 1,672,647 46,866 249,538
Due from other governments:
State grants 636,794 - 20,000
Federal grants 23,113 - -
Less: allowance for
uncollectable accounts (915,294) (46,866) (17,485)
Accounts receivable, net 1,522,335$ -$ 252,053$
Total
Taxes receivable
Gross receipts taxes 105,075$
Customer receivable 1,969,051
Due from other governments:
State grants 656,794
Fedeal grants 23,113
Less: allowance for
uncollectable accounts (979,645)
Accounts receivable, net 1,774,388$
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 17,594$
General Fund Taos Regional Landfill 5,620
Total 23,214$
Net operating transfers, made to supplement other funding sources were as follows:
58
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 5.Interfund Receivables, Payables, and Transfers (continued)
Transfers Out Transfers In Amount
General Fund Community Grants 82,763$
1/4 Cent Municipal Gross Receipts Tax 2008 Shared GRT Revenue Bond 551,000
General Fund Airport Construction Fund 216,296
1/4 Cent Municipal Gross Receipts Tax Vehicle Replacement Fund 432,808
1/4 Cent Municipal Gross Receipts Tax Airport Construction Fund 66,429
General Fund 1999 Gas Tax Fund Acquisition 166,083
Municipal Road Gas Tax 1999 Gas Tax Fund Acquisition 107,561
1/4 cent Municipal Gross Receipts Tax 1999 Gas Tax Fund Acquisition 18,333
Capital Projects 1999 Gas Tax Fund Acquisition 658,156
Capital Projects General Fund 17,162
Cannabis Excise Tax General Fund 408
General Fund General Fund 5,981,076
Lodger's Tax Fund Public Transportation 218,982
Lodger's Tax Fund Lodger's Tax Promotional 1,160,823
1/4 GRT Capital Improvements Fund General Fund 22,906
Water and Sewer Taos Regional Landfill 165,397
Water and Sewer General Fund 11,441
Taos Regional Landfill Taos Regional Landfill 529,000
Water and Sewer Water and Sewer 4,922,280
Total 15,328,904$
NOTE 6.Leases
As Lessee
During the year 2022 the Town implemented GASB Statement No.87, Leases and the Town has long
term agreements for the use of land and equipment which began on July 1, 2021 and will continue
through fiscal year 2032. These leases are as follows:
The Town paid monthly for copiers,with payments of $2,589.40,and started on July 1, 2021.
The equipment has a useful life of 5 years with no purchase option,and a discount rate of 3%.
The Town paid monthly for three pieces of land used for public parking, with monthly
payments of $3,750 and which started on July 1, 2021. The land has useful lives of 10 years each
with no purchase options and a discount rate of 3%.
59
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 6.Leases (continued)
A summary of the right to use the assets and changes occurring during the year ended June 30, 2022
follows:
Balance Balance
June 30, 2021 Additions Dispositions June 30, 2022
Right of Use Asset
Land -$144,466$ -$144,466$
Equipment -516,561 -516,561
Total right of use asset -661,027 -661,027
Less accumulated amortization for:
Land -$28,893$ -$28,893$
Equipment -57,396 -57,396
Total accumulated amortization -86,289 -86,289
Right of use asset, net -$574,738$ -$574,738$
During the year ended June 30, 2022, the following changes occurred in the lease liabilities related to
the right of use assets reported above in the government-wide statement of net position:
Balance Balance Due Within
June 30, 2021 Additions Retirements June 30, 2022 One Year
Lease liability -$661,027$ 77,950$ 583,077$ 80,320$
-$661,027$ 77,950$ 583,077$ 80,320$
The annual requirements to amortize the leases as of June 30, 2022, including interest payments, is as
follows:
Fiscal Year
Ending June 30, Principal Interest
2023 80,320$ 16,153$ 96,473$
2024 82,763 13,710 96,473
2025 85,280 11,192 96,472
2026 87,874 8,598 96,472
2027 58,965 6,435 65,400
2028-2032 187,875 8,325 196,200
583,077$ 64,413$ 647,490$
Total Debt
Service
60
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 7.Capital Assets
The following is a summary of capital assets and changes occurring during the year ended June 30,
2022. Land and construction in progress are not subject to depreciation.
Governmental Activities:
Balance
June 30, 2021 Additions
Balance
June 30, 2022
Capital assets not being
depreciated:
Land 6,615,288$ -$ -$ 6,615,288$
Construction in progress 3,363,196 4,068,758 2,192,117 5,239,837
Total not being depreciated 9,978,484 4,068,758 2,192,117 11,855,125
Capital assets being depreciated:
Land improvements 7,527,676 - - 7,527,676
Buildings and improvements 36,133,646 76,736 (1,077,300) 37,287,682
Machinery and Equipment 18,302,254 751,044 (737,096) 19,790,394
Infrastructure 84,840,894 2,126,470 (377,721) 87,345,085
Total being depreciated 146,804,470 2,954,250 (2,192,117) 151,950,837
Total capital assets 156,782,954 7,023,008 - 163,805,962
Accumulated depreciation:
Land improvements 5,916,463 151,635 - 6,068,098
Buildings and improvements 23,294,417 1,101,478 - 24,395,895
Machinery and Equipment 15,364,226 656,912 - 16,021,138
Infrastructure 53,105,903 2,848,835 - 55,954,738
Total accumulated depreciation 97,681,009 4,758,860 - 102,439,869
Capital assets, net 59,101,945$ 2,264,148$ -$ 61,366,093$
Deletions
and
Transfers
Depreciation expense for the year ended June 30, 2022 was charged to the functions of the
governmental activities as follows:
General 4,330,563$
Public safety 95,178
Public works 333,119
Total 4,758,860$
61
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 7. Capital Assets (continued)
Balance
June 30, 2021 Additions
Deletions and
Transfers
Balance
June 30, 2022
Capital assets not being
depreciated:
Land 262,422$ -$ -$ 262,422$
Construction in progress 4,678,215 1,021,066 2,159,300 3,539,981
Total not being depreciated 4,940,637 1,021,066 2,159,300 3,802,403
Capital assets being depreciated:
Land improvements 104,895 - - 104,895
Buildings and improvements 4,656,981 167,842 (1,931,870) 6,756,693
Machinery and Equipment 9,925,925 249,845 - 10,175,770
Infrastructure 38,991,417 547,949 (227,430) 39,766,796
Total being depreciated 53,679,218 965,636 (2,159,300) 56,804,154
Total capital assets 58,619,855 1,986,702 - 60,606,557
Accumulated depreciation:
Land improvements 97,515 - - 97,515
Buildings and improvements 3,440,897 176,482 - 3,617,379
Machinery and Equipment 8,904,613 312,967 - 9,217,580
Infrastructure 21,125,111 1,623,907 - 22,749,018
Total accumulated depreciation 33,568,136 2,113,356 - 35,681,492
Capital assets, net 25,051,719$ (126,654)$ -$ 24,925,065$
62
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 8.Long-term Debt
During the year ended June 30, 2022, the following changes occurred in the liabilities reported in the
government-wide statement of net position:
Governmental Activities:Balance
June 30,
2021 Additions Retirements
Balance
June 30,
2022
Due Within
One Year
Revenue Bonds 2,430,000$ -$ 450,000$ 1,980,000$ 465,000$
Compensated Absences 751,203 325,249 330,636 745,816 364,359
Total 3,181,203$ 325,249$ 780,636$ 2,725,816$ 829,359$
Revenue Bonds
At June 30, 2022, 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, 2022,including interest
payments,are as follows:
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 1,980,000$ 211,635$ 2,191,635$
Fiscal Year
Ending June 30,Principal Interest
Total Debt
Service
63
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 8. 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 2022.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, 2022, government-wide
compensated absences increased $3,613 from the prior year accrual. Compensated absences are
liquidated by the respective funds in which they are accrued.
Proprietary Funds:
The proprietary funds have incurred various forms of debt which were used for the purposes of
constructing, expanding, repairing and making improvements to its property, plant and equipment. The
following schedule shows the changes to its various forms of debt during the fiscal year ended June 30,
2022:
Business‐type Activities:Balance
June 30,
2021 Additions Retirements
Balance
June 30,
2022
Due Within
One Year
Revenue Bonds 1,468,600$ -$ 70,000$ 1,398,600$ 73,000$
NMFA and RUS Loans 2,582,879 110,662 287,044 2,406,497 290,603
Landfill closure and
postclosure 595,358 31,521 - 626,879 -
Compensated Absences 86,798 56,529 33,724 109,603 71,096
Total 4,733,635$ 198,712$ 390,768$ 4,541,579$ 434,699$
64
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 8.Long-term Debt (continued)
Revenue Bonds
At June 30, 2022, 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, 2022, including interest payments,
are as follows:
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 90,000 55,684 145,684
2028-2032 524,000 203,102 727,102
2033-2037 419,600 65,333 484,933
2038-2040 49,000 3,516 52,516
Total 1,398,600$ 592,621$ 1,991,221$
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$
65
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 8.Long-term Debt (continued)
The annual requirements to amortize the loans as of June 30, 2022, including interest payments are as
follows:
2023 290,603$ 12,749$ 303,352$
2024 335,518 4,353 339,871
2025 339,918 77 339,995
2026 148,041 73 148,114
2027 148,165 69 148,234
2028-2032 628,093 285 628,378
2033-2037 272,791 182 272,973
2038-2042 202,796 80 202,876
2043 40,572 4 40,576
Total 2,406,497$ 17,872$ 2,424,369$
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, 2022, business-type compensated
absences increased $22,805 from the previous year accrual. Compensated absences are liquidated by
the respective funds in which they are accrued
NOTE 9. 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 10.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, 2022.
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, 2022.
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, 2022.66
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11. 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.PERA issues a publicly available annual comprehensive financial
report that can be obtained at https://www.nmpera.org/financial-overview/.
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.
67
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11.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 FY21
Coverage Plan
Employee Contribution
Percentage
Employer
Contribution
Percentage
Pe nsion Factor per year
of Service
Pe nsion
Maximum
as a
Percentage
of the Final
Average
Salary
Annual
Salary less
than
$20,000
Annual
Salary
greater than
$20,000
TIER 1 TIER 2
STATE PLAN
State Plan 3 7.42% 9.42%17.74%3.00%2.50%90.00%
MUNICIPAL PLANS 1 - 4
Municipal Plan 1
(plan open to new employers)7.00%8.50%7.65%2.00%2.00%
90.00%
Municipal Plan 2
(plan open to new employers)9.15%10.65%9.80%2.50%2.00%90.00%
Municipal Plan 3
(plan closed to new employers 6/95)13.15% 14.65%9.80%3.00%2.50%90.00%
Municipal Plan 4
(plan closed to new employers 6/00)15.65% 17.15%12.30%3.00%2.50%90.00%
MUNICIPAL POLICE PLANS 1 - 5
Municipal Police Plan 1 7.00%8.50%10.65%2.00%2.00%90.00%
Municipal Police Plan 2 7.00%8.50%15.65%2.50%2.00%90.00%
Municipal Police Plan 3 7.00%8.50% 19.15%2.50%2.00%90.00%
Municipal Police Plan 4 12.35% 13.85%19.15%3.00%2.50%90.00%
Municipal Police Plan 5 16.30%17.80% 19.15%3.50%3.00%90.00%
MUNICIPAL FIRE PLANS 1 - 5
Municipal Fire Plan 1 8.00%9.50%11.65%2.00%2.00%90.00%
Municipal Fire Plan 2 8.00%9.50% 18.15%2.50%2.00%90.00%
Municipal Fire Plan 3 8.00%9.50%21.90%2.50%2.00%90.00%
Municipal Fire Plan 4 12.80%14.30%21.90%3.00%2.50%90.00%
Municipal Fire Plan 5 16.20% 17.70%21.90%3.50%3.00%90.00%
MUNICIPAL DETENTION OFFICER PLAN 1
Municipal Detention Officer Plan 1 16.65% 18.15%17.30%3.00%3.00%90.00%
STATE POLICE AND ADULT CORRECTIONAL OFFICER PLANS, ETC.
State Police and Adult Correctional
Officer Plan 1 7.60%9.10%25.50%3.00%3.00%90.00%
State Plan 3 -Peace Officer 7.42% 8.92%17.24%3.00%3.00%90.00%
Juvenile Correctional Officer Plan 2 4.78% 6.28%26.37%3.00%3.00%90.00%
68
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11.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, 2022, the Town reported a liability of $4,068,350
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2021, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2020. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2021 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, 2021.
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, 2021,the Town’s proportion was 0.3611 percent,which was
a decrease of 0.0284 percent from its proportion measured as of June 30, 2020.
For the year ended June 30, 2022,the Town recognized pension expense of $12,334.At June 30, 2022,
the Town reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 1,338$ -$
Changes in proportion 172,324 466,461
Difference between expected and actual experience 101,276 13,929
Net difference between projected and actual
earnings on pension plan investments - 1,671,858
Town's contributions subsequent to the
measurement date 357,570 -
Total 632,508$ 2,152,248$
$357,570 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2023 (258,671)$
2024 (481,649)
2025 (450,602)
2026 (686,388)
Thereafter -
Total (1,877,310)$
69
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11.Pension Plan –Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Police:At June 30, 2022, The Town reported a liability of $2,101,501
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2021, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2020. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2021 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2021. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2021.
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, 2021, the Town’s proportion was 0.4064 percent, which
was an decrease of 0.0146 percent from its proportion measured as of June 30, 2020.
For the year ended June 30, 2022, the Town recognized pension expense of $134,688.At June 30, 2022,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 818$ -$
Changes in proportion 317 341,243
Difference between expected and actual experience 158,877 -
Net difference between projected and actual
earnings on pension plan investments - 761,766
Town's contributions subsequent to the
measurement date 205,839 -
Total 365,851$ 1,103,009$
$205,839 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2023 (231,921)$
2024 (232,550)
2025 (167,738)
2026 (310,788)
Thereafter -
Total (942,997)$
70
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11.Pension Plan –Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Fire:At June 30, 2022, The Town reported a liability of $1,798,688 for
its proportionate share of the net pension liability. The net pension liability was measured as of June 30,
2021, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2020. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2021 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, 2021.
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, 2021, the Town’s proportion was 0.2963 percent, which
was a increase of 0.018 percent from its proportion measured as of June 30, 2020.
For the year ended June 30, 2022, the Town recognized pension expense of $219,274. At June 30, 2022,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 266$ -$
Changes in proportion 214,423 17,673
Difference between expected and actual experience 26,949 2,496
Net difference between projected and actual
earnings on pension plan investments - 262,618
Town's contributions subsequent to the
measurement date 140,591 -
Total 382,229$ 282,787$
$140,591 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30,2022. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2023 56,137$
2024 43,782
2025 (33,739)
2026 (107,329)
Thereafter -
(41,149)$
71
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11.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, 2020
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, 2020. The total pension liability was rolled-forward from
the valuation date to the plan year ended June 30, 2021. These assumptions were adopted by the Board
use in the June 30, 2020 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:
72
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11. 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 7,297,725$ 4,068,350$ 1,389,489$
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 3,679,164$ 2,101,501$ 810,449$
73
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 11.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 2,483,044$ 1,798,688$ 1,236,244$
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, 2022, the Town had payables to the plan in the amount of
$66,380.
NOTE 12.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.
74
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 12.Post-Employment Benefits –State Retiree Health Care Plan (continued)
Employees covered by benefit terms –At June 30, 2021, the Fund’s measurement date, the following
employees were covered by the benefit terms:
Plan membership
Current retirees and surviving spouses 53,092
Inactive and eligible for deferred benefit 11,754
Current active members 92,484
157,330
Active membership
State general 18,691
State police and corrections 1,919
Municipal general 20,357
Municipal police 1,573
Municipal fire 756
Educational Retirement Board 49,188
92,484
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 $101,786 for the year ended June 30, 2022.
75
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 12.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, 2022, the Town reported a liability of $3,415,054 for its proportionate share of the net
OPEB liability. The net OPEB liability was measured as of June 30, 2021, 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, 2021. At June 30, 2022, the Town’s proportion was 0.10379 percent.
For the year ended June 30, 2022, the Town recognized OPEB income of $568,709.At June 30, 2022 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 49,933$544,630$
Net difference between expected and actual
investments on OPEB plan investments -97,890
Change of assumptions 683,725 1,234,663
Changes in proportion 62,062 900,320
Town's contributions subsequent to the measurement date 132,068 -
Total 927,788$ 2,777,503$
Deferred outflows of resources totaling $132,068 represent Town contributions to the Fund made
subsequent to the measurement date and will be recognized as a reduction of net OPEB liability in the
year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred
inflows of resources will be recognized in OPEB expense as follows:
Year ended June 30:
2023 (687,463)$
2024 (517,212)
2025 (384,718)
2026 (196,468)
2027 (195,922)
Total (1,981,783)$
76
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 12.Post-Employment Benefits –State Retiree Health Care Plan (continued)
Actuarial assumptions. The total OPEB liability as of June 30, 2021 was determined by an actuarial
valuation using the following actuarial assumptions:
Validation date June 30, 2021
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 2.30%for ERB; 2.50% for PERA members
Projectedpayroll increases 3.25%to 13.00%, based on years of service,
including inflation
Investment rate of return 7.00%,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 years for Medicare medical plan
costs
Mortality ERB members: 2020 GRS Southwest Region Teacher
Mortality Table, set back one year (and scaled at 95%
for males). Generational mortality improvements in
accordance with the Ultimate MP scales are projected
from the year 2020. PERA members: Headcount-
Weighted RP-2014 Blue Collar Annuitant Mortality, set
forward one year for females, projected generationally
with Scale MP-2017 times 60%.
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.
77
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 12.Post-Employment Benefits –State Retiree Health Care Plan (continued)
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 0.4%
U.S. equity - large cap 6.6%
Non U.S.- emerging markets 9.2%
Non U.S. - developed equities 7.3%
Private equity 10.6%
Credit and structured finance 3.1%
Real estate 3.7%
Absolute return 2.5%
U.S. equity - small/mid cap 6.6%
Discount Rate. The discount rate used to measure the Fund’s total OPEB liability is 3.62% as of June
30, 2021. 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, 2052.Thus,the 7.00%
discount rate was used to calculate the net OPEB liability through 2052. The index rate for 20-year, tax
exempt general obligation municipal bonds with an average rating of AA/Aa or higher was used
beyond 2052, resulting in a blended discount rate of 3.62%.
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 Tpwn’s net OPEB liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (2.62percent) or
1-percentage-point higher (4.62 percent) than the current discount rate:
Current Discount
1% Decrease Rate 1% Increase
(2.62%)(3.62%)(4.62%)
Town's proportionate share of the
net OPEB liability 4,290,936$ 3,415,054$ 2,733,714$
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 2,746,804$ 3,415,054$ 3,953,196$
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, 2022.78
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 12.Post-Employment Benefits –State Retiree Health Care Plan (continued)
Payable Changes in the Net OPEB Liability. At June 30, 2022, the Town reported a payable of $29,417
for outstanding contributions due to NMRHCA for the year ended June 30,2022.
NOTE 13. 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 $626,879
as of June 30, 2022,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 30,2022. 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 30,2022 cash of $1,330,444 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 14.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
79
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 14.Joint Powers Agreements (continued)
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
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
80
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 15.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.
NOTE 16. Construction and Other Significant Commitments
The Town has committed to pay for several construction contracts that were not completed at June 30,
2022 in the amount of $10,912,921 as follows:
Project Description
Contract Amount
Remaining
Reconstruction of Taxiway A & Connector Taxiways
A1, A2, A3, A4, A5 2,597,427$ K. Barnett & Sons, Inc.
Engineering, Hydrogeologic & Construction Support -
Phase II Abeyta 2,533,499 Daniel B. Stephens & Associates
Runway 13/31 & Taxiway B 34,485 American Road Maintenance
Redesign & Project Management of Taxiway A &
Connector Taxiways 178,504 Armstrong Consultants
Element #3 - Site Civil and Airside Design 584,489 Armstrong Consultants
Finalize Element #1 - General Aviation Hangars &
Taxilane/Apron Design 27,901 Armstrong Consultants
Ranchitos Road Improvements 244,998 WH Pacific, Inc.
Road Rehabilitation pursuant to Task Order No. 2 1,650,694 Cutler Paving Inc.
Completion of Design for Construction of Cell 4B 120,597 Miller Engineers Inc.
Continuation of Implementation of Abeyta
Settlement Agreement 1,291,418 Daniel B. Stephens & Associates
Airport On-Site Utilities 54,371 Daniel B. Stephens & Associates
Design Services for SW Interconnect Transmission
Line 104,023 Daniel B. Stephens & Associates
Water System Improvements & Electrical Upgrades 1,490,515 File Construction, LLC
Total 10,912,921$
Contractor
81
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 17. Subsequent Events
The date to which events occurring after June 30, 2022, the date of the most recent statement of net
position, have been evaluated for possible adjustment to the financial statements or disclosures is
December 7, 2022 which is the date on which the financial statements were issued. No issues were
noted for disclosure at December 7, 2022.
NOTE 18. Concentrations
The Town depends on financial resources flowing from, or associated with, both the Federal
Government and the State of New Mexico. Because of this dependency, the Town is subject to changes
in specific flows of intergovernmental revenues based on modifications to Federal and State laws and
Federal and State Appropriations.
NOTE 19. Restricted Net Position
The government-wide statement of net position reports $16,025,231 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 47 and 106-107.
NOTE 20. 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 $326,600 and $120,576,
respectively. Principal and interest paid for the current year and total customer net revenues were
$40,553 and $4,083,601 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 $727,000 and $325,645
respectively. Principal and interest paid for the current year and total customer net revenues were
$78,154 and $4,083,601 , 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 82
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 20. Utility Revenues Pledged (continued)
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 $306,000 and $146,399,
respectively.Principal and interest paid for the current year and total customer net revenues were
$27,105 and $4,083,601, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $130,000 in NMFA/WTB Water Project, issued in 2009. The loans are
payable solely from utility customer net revenues and are payable through June 2029. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts
due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account,to the NMFA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement 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 $40,169 with no interest due. Principal for the current year and total customer net
revenues were $6,708 and $4,083,601, 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 $185,397 with no interest due. Principal for the current year and total customer net
revenues were $30,677 and $4,083,601, 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 $600,000 with no interest due.Principal for the
current year and total customer net revenues were $60,000 and $4,083,601 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 $99,944 with no interest due. Principal for the current year and total customer net
revenues were $9,859 and $4,083,601 , respectively.
83
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 20.Utility Revenues Pledged (continued)
The Town of Taos has pledged future revenues from the New Cell for Landfill Facility, net of operation
and maintenance expenses, to repay $1,376,046 in NMFA loan issued 2015. The loans are payable solely
from utility customer net revenues and are payable through June 2025. The pledged revenues shall be in
an amount sufficient to pay principal, premium, if any, interest and other amounts due under the loan
agreement, including an amount sufficient to cure any deficiencies in the debt service account or the
loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited in the debt
service reserve account or the loan agreement reserve account held by the trustee, payable from and
constituting a lien upon the pledged revenues.
The total principal and interest remaining to be paid on the loan is $379,722 and $16,660, respectively.
Principal and interest paid for the current year and total customer net revenues were $191,636 and
$1,834,898, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $810,662 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 $810,662 and $5,212, respectively. No amounts were paid for
principal and interest for the current year and total customer net revenues were $4,083,601.
NOTE 21. Subsequent Accounting Pronouncements
In May 2021, 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 March 2021, 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 2021, 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 October 2021, GASB Statement No. 98 The Annual Comprehensive Financial Report, was issued.
Effective Date:The provisions of this Statement are effective for fiscal years beginning after December
15, 2021. The Town does not expect this pronouncement to have a material effect on the financial
statements.
In April 2022,GASB Statement No. 99 Omnibus 2022, 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.
84
TOWN OF TAOS
Notes to the Financial Statements
June 30, 2022
NOTE 21. Subsequent Accounting Pronouncements
In June 2022, GASB Statement No.100 Accounting Changes and Error Corrections-an amendment of
GASB Statement No. 62, was issued. Effective Date: The provisions of this Statement are effective for
fiscal years beginning after June 15, 2023. The Town does not expect this pronouncement to have a
material effect on the financial statements.
In June 2022, GASB Statement No. 101 Compensated Absences,was issued. Effective Date: The
provisions of this Statement are effective for fiscal years beginning after December 15, 2023. The Town
does not expect this pronouncement to have a material effect on the financial statements.
85
Page Left Intentionally Blank
86
R EQUIRED SUPPLEMENTARY INFORMATION
87
2022
Measurement
Date (As of and
for the year
ended
June 30, 2021)
2021
Measurement
Date (As of and
for the year
ended
June 30, 2020)
Town of Taos's proportion of the net pension liability 0.3611%0.3895%
Town of Taos's proportionate share of the net pension liability 4,068,350$ 7,876,575$
Town of Taos's covered payroll 3,404,290$ 3,676,714$
119.51% 214.23%
Plan fiduciary net position as a percentage of the total pension liability 77.25%66.36%
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.
Town of Taos's proportionate share of the net pension liability as a
percentage
See independent auditors' report.
See notes to required supplementary information.88
Schedule A-1
Page 1 of 3
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)
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)
0.4082%0.3528%0.4630%0.4710%0.5054%0.5476%
7,066,348$ 5,624,937$ 6,362,011$ 7,524,994$ 5,152,991$ 4,271,868$
3,606,337$ 3,793,609$ 3,909,077$ 4,069,174$ 4,513,593$ 4,457,324$
195.94% 148.27% 162.75% 184.93% 114.17%95.84%
70.52%71.13%73.74%69.18%76.99%81.29%
See independent auditors' report.
See notes to required supplementary information.89
2022
Measurement
Date (As of and
for the year
ended
June 30, 2021)
2021
Measurement
Date (As of and
for the year
ended
June 30, 2020)
Town of Taos's proportion of the net pension liability 0.4064%0.4210%
Town of Taos's proportionate share of the net pension liability 2,101,501$ 3,615,841$
Town of Taos's covered payroll 980,451$ 994,304$
Plan fiduciary net position as a percentage of the total pension liability 77.25%66.36%
Schedule of the Town's Proportionate Share of the Net Pension Liability
* 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.
TOWN OF TAOS
Last 10 Fiscal Years*
Public Employees Retirement Association (PERA) Plan
of PERA Fund Municipal Police Division
363.66%214.34%
Town of Taos's proportionate share of the net pension liability as a
percentage
See independent auditors' report.
See notes to required supplementary information.90
Schedule A-1
Page 2 of 3
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)
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)
0.5039%0.5100%0.4874%0.4766%0.4844%0.4887%
3,722,153$ 3,479,752$ 2,707,827$ 3,516,497$ 2,329,267$ 1,593,109$
1,120,723$ 1,020,869$ 911,949$ 953,345$ 949,833$ 937,534$
70.52%71.13%73.74%69.18%76.99%81.29%
340.86%368.86%332.12%169.93%245.23%296.93%
See independent auditors' report.
See notes to required supplementary information.91
2022
Measurement
Date (As of and
for the year
ended
June 30, 2021)
2021
Measurement
Date (As of and
for the year
ended
June 30, 2020)
Town of Taos's proportion of the net pension liability 0.2963%0.2787%
Town of Taos's proportionate share of the net pension liability 1,798,688$ 2,108,014$
Town of Taos's covered payroll 423,601$ 389,109$
Plan fiduciary net position as a percentage of the total pension liability 77.25%66.36%
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
424.62%
Town of Taos's proportionate share of the net pension liability as a
percentage 541.75%
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
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)
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)
0.2377%0.2497%0.2753%0.2784%0.2769%0.2567%
1,633,562$ 1,598,237$ 1,575,114$ 1,857,210$ 1,429,131$ 1,071,464$
316,260$ 317,344$ 321,046$ 336,796$ 315,617$ 285,100$
70.52%71.13%73.74%69.18%76.99%81.29%
375.82%490.62%516.53%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, 2022
As of and for the
year ended
June 30, 2021
Contractually required contribution 357,570$ 325,110$
Contributions in relation to the contractually required contribution (357,570) (325,110)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 3,740,630$ 3,404,290$
Contributions as a percentage of covered payroll 9.56%9.55%
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, 2020
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
350,621$ 344,405$ 362,290$ 373,065$ 386,572$ 428,791$
(350,621) (344,405) (362,290) (373,065) (386,572) (428,791)
-$ -$ -$ -$ -$ -$
3,676,714$ 3,606,337$ 3,793,609$ 3,909,077$ 4,069,174$ 4,513,593$
9.54%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, 2022
As of and for the
year ended
June 30, 2021
Contractually required contribution 205,839$ 185,304$
Contributions in relation to the contractually required contribution (205,839)(185,304)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 1,089,093$ 980,451$
Contributions as a percentage of covered payroll 18.90%18.90%
Last 10 Fiscal Years*
PERA Fund Municipal Police Division
Public Employees Retirement Association (PERA) Plan
Schedule of the Town's Contributions
* 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.
TOWN OF TAOS
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, 2020
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
187,924$ 211,817$ 192,944$ 161,795$ 169,123$ 168,500$
(187,924)(211,817)(192,944)(161,795)(169,123)(168,500)
-$ -$ -$ -$ -$ -$
994,304$ 1,120,723$ 1,020,869$ 911,949$ 953,345$ 949,833$
18.90%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, 2022
As of and for the
year ended
June 30, 2021
Contractually required contribution 140,591$ 91,710$
Contributions in relation to the contractually required contribution (140,591)(91,710)
Contribution deficiency (excess)-$ -$
Town of Taos’s covered payroll 649,380$ 423,601$
Contributions as a percentage of covered payroll 21.65%21.65%
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.
Last 10 Fiscal Years*
PERA Fund Municipal Fire Division
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, 2020
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
84,242$ 68,470$ 68,705$ 69,503$ 72,748$ 68,173$
(84,242)(68,470)(68,705)(69,503)(72,748)(68,173)
-$ -$ -$ -$ -$ -$
389,109$ 316,260$ 317,344$ 321,046$ 336,796$ 315,617$
21.65%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 ACFR. http://www.nmpera.org/financial-overview/.
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, 2022
Notes to Required Supplementary Information
TOWN OF TAOS
See independent auditors' report.
See notes to required supplementary information.100
Page Left Intentionally Blank
101
2022
Measurement
Date (As of and
for the Year
Ended June 30,
2021)
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)
0.10379% 0.11055% 0.12328%
3,415,054$ 4,641,894$ 3,997,218$
4,753,407 5,003,183 5,111,405
71.84%92.78%78.20%
25.39%16.50%18.92%Plan fiduciary net position as a
percentage of the total OPEB liability
Town of Taos's proportionate share
of the net OPEB liability (asset)
TOWN OF TAOS
Last 10 Fiscal Years*
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
See independent auditors' report.
See notes to required supplementary information.102
Schedule B-1
2019
Measurement
Date (As of and
for the Year
Ended June 30,
2018)
2018
Measurement
Date (As of and
for the Year
Ended June 30,
2017)
0.13080% 0.12709%
5,687,649$ 5,759,303$
5,250,703 5,294,121
108.32%108.79%
13.14%11.34%
See independent auditors' report.
See notes to required supplementary information.103
TOWN OF TAOS Schedule B-2
As of and
for the
Year
Ended
June 30,
2022
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 132,068$ 101,786$ 106,685$ 109,126$ 111,708$
132,068 101,786 106,685 109,126 111,708
Contribution deficiency (excess)-$ -$ -$ -$ -$
6,023,917 4,753,407 5,003,183 5,111,405 5,250,703
2.19%2.14%2.13%2.13%2.13%
Notes to Required Supplementary Information
RHC Plan
In the June 30, 2021 actuarial valuation and the total OPEB liability measured as of June 30, 2021, changes in
assumptions include adjustments resulting from an decrease in the discount rate from 2.86% to 3.62%.
* 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.104
S UPPLEMENTARY INFORMATION
105
TOWN OF TAOS
Nonmajor Fund Descriptions
June 30, 2022
Special Revenue Funds
Cannabis Excise Tax – To account for the monies received pursuant to the Cannabis Regulation Act. Authority is
Town Council resolution
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.
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, 2022
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.
American Rescue Plan – To account for monies received to aid for state and local governments affected by the
COVID-19 public health emergency as well make strategic investments in long-lived assets, rebuild reserves to
enhance financial stability, and cover temporary operating shortfalls until economic conditions and operations
normalize.
Capital Maintenance Operating Fund – This fund was created to receive additional amounts that are paid for
onetime costs by the Town of Taos. Authority is Town Council resolution.
Capital Projects Fund
Facilities Improvements – This fund was created to receive transfers from other funds for the purpose of improving
facilities of the Town. Authority is Town Council resolution.
Capital Projects – This fund was created to accumulate revenue and other financing sources for the purpose of
financing general-purpose capital projects. Authority is Town Council resolution.
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.
1999 Gasoline Tax Acquisition– 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.
Debt Service Funds
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.
107
Cannabis Excise
Tax Fire Protection
Lodgers' Tax
Special Revenue
Fund
Assets
Cash and cash equivalents 13,195$ 329,562$ 1,527,049$
Investments - 23,258 -
Receivables:
Taxes receivable - - 165,778
Due from other governments - - -
Inventory - - 29,121
Total assets 13,195$ 352,820$ 1,721,948$
Liabilities
Accounts payable -$ 579$ 25,815$
Accrued payroll expenses - - 4,220
Deposits held in trust for others - - -
Total liabilities - 579 30,035
Fund balances
Nonspendable
Inventory - - 29,121
Spendable
Restricted for:
General government 13,195 - -
Public safety - 352,241 -
Culture and recreation - - 1,662,792
Transportation and roads - - -
Capital improvements - - -
Debt service - - -
Committed to:
General government - - -
Public safety - - -
Culture and recreation - - -
Transportation and roads - - -
Capital improvements - - -
Total fund balances 13,195 352,241 1,691,913
Total liabilities and fund balances 13,195$ 352,820$ 1,721,948$
June 30, 2022
Combining Balance Sheet
Nonmajor Governmental Funds
TOWN OF TAOS
Special Revenue
See independent auditors' report.108
Statement A-1
Page 1 of 3
Local
Governmental
Correction
Law
Enforcement
Protection Civic Center
Public
Transportation
Community
Grants
68,690$ 3,482$ 3,103$ 1,061,482$ 140,624$
- - 2,000 210,000 -
- - - - -
- - - 122,837 17,727
- - - - -
68,690$ 3,482$ 5,103$ 1,394,319$ 158,351$
-$ 3,482$ -$ 367,500$ 4,210$
- - - - -
- - 5,103 - -
- 3,482 5,103 367,500 4,210
- - - - -
- - - - -
68,690 - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - 154,141
- - - - -
- - - - -
- - - 1,026,819 -
- - - - -
68,690 - - 1,026,819 154,141
68,690$ 3,482$ 5,103$ 1,394,319$ 158,351$
Special Revenue
See independent auditors' report.109
Municipal Road
Gasoline Tax
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District
Assets
Cash and cash equivalents -$ 393,911$ 36,918$
Investments - - -
Receivables:
Taxes receivable 12,640 210,088 -
Due from other governments - - -
Inventory - - -
Total assets 12,640$ 603,999$ 36,918$
Liabilities
Accounts payable -$ -$ 285$
Accrued payroll expenses - - -
Deposits held in trust for others - - -
Total liabilities - - 285
Fund balances
Nonspendable
Inventory - - -
Spendable
Restricted for:
General government - 603,999 -
Public safety - - -
Culture and recreation - - -
Transportation and roads 12,640 - -
Capital improvements - - -
Debt service - - -
Committed to:
General government - - -
Public safety - - -
Culture and recreation - - 36,633
Transportation and roads - - -
Capital improvements - - -
Total fund balances 12,640 603,999 36,633
Total liabilities and fund balances 12,640$ 603,999$ 36,918$
TOWN OF TAOS
Nonmajor Governmental Funds
Special Revenue
June 30, 2022
Combining Balance Sheet
See independent auditors' report.110
Statement A-1
Page 2 of 3
Confidential
Informant
American
Rescue Plan
Capital
Maintenance
Operating Fund
Facilities
Improvements
Capital
Projects
9,828$ 452,739$ 426,037$ 2,028,757$ 1,033,561$
- - 190,000 - 4,031
- - - - 157,613
- - - - -
- - - - -
9,828$ 452,739$ 616,037$ 2,028,757$ 1,195,205$
-$ -$ 4,607$ -$ -$
- - - - -
- - - - -
- - 4,607 - -
- - - - -
- 452,739 - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - 611,430 - -
9,828 - - - -
- - - - -
- - - -
- - - 2,028,757 1,195,205
9,828 452,739 611,430 2,028,757 1,195,205
9,828$ 452,739$ 616,037$ 2,028,757$ 1,195,205$
Special Revenue Capital Projects
See independent auditors' report.111
Vehicle
Replacement
Special Events
Enterprise
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
Assets
Cash and cash equivalents 986,695$ 393,656$ 108,953$
Investments - - 430,373
Receivables:
Taxes receivable - - -
Due from other governments - - -
Inventory - - -
Total assets 986,695$ 393,656$ 539,326$
Liabilities
Accounts payable 115,938$ 446$ -$
Accrued payroll expenses - - -
Deposits held in trust for others - - -
Total liabilities 115,938 446 -
Fund balances
Nonspendable
Inventory - - -
Spendable
Restricted for:
General government - - -
Public safety - - -
Culture and recreation - - -
Transportation and roads - - -
Capital improvements - 393,210 539,326
Debt service - - -
Committed to:
General government - - -
Public safety - - -
Culture and recreation - - -
Transportation and roads - - -
Capital improvements 870,757 - -
Total fund balances 870,757 393,210 539,326
Total liabilities and fund balances 986,695$ 393,656$ 539,326$
June 30, 2022
Combining Balance Sheet
Nonmajor Governmental Funds
TOWN OF TAOS
Capital Projects
See independent auditors' report.112
Statement A-1
Page 3 of 3
Capital Projects Debt Service
1999 Gasoline
Tax Acquisition
Debt Service
Fund
2008 Gross
Receipts Tax
Revenue Bond
Retirement
Total Nonmajor
Governmental
Funds
1,627,738$ 356$ 10,646,336$
101,424 - 961,086
- - 546,119
- - 140,564
- - 29,121
1,729,162$ 356$ 12,323,226$
87,833$ -$ 610,695$
- - 4,220
- - 5,103
87,833 - 620,018
- - 29,121
- - 1,069,933
- - 420,931
- - 1,662,792
- - 12,640
1,641,329 - 2,573,865
- 356 356
- - 765,571
- - 9,828
- - 36,633
- - 1,026,819
- - 4,094,719
1,641,329 356 11,703,208
1,729,162$ 356$ 12,323,226$
See independent auditors' report.113
Cannabis Excise
Tax Fire Protection
Lodgers' Tax
Special Revenue
Fund
Revenues
Taxes:
Gross receipts -$ -$ -$
Gasoline and motor vehicle - - -
Lodgers tax - - 1,685,509
Cannabis excise tax 13,603 - -
Intergovernmental:
Federal operating grants - - -
State operating grants - 355,179 65,545
State capital grants - - -
Charges for services - - 130
Licenses and fees - - -
Investment income - - -
Miscellaneous - - -
Total revenues 13,603 355,179 1,751,184
Expenditures
Current:
General government - - -
Public safety - 159,215 -
Public works - - -
Culture and recreation - - 963,603
Capital outlay - 89,037 -
Debt service:
Principal - - -
Interest - - -
Total expenditures - 248,252 963,603
Excess (deficiency) of revenues over
expenditures 13,603 106,927 787,581
Other financing sources (uses)
Transfers in - - 1,160,823
Transfers (out)(408) - (1,379,805)
Total other financing sources (uses)(408) - (218,982)
Net change in fund balances 13,195 106,927 568,599
Fund balances - beginning of year - 245,314 1,123,314
Fund balances - end of year 13,195$ 352,241$ 1,691,913$
TOWN OF TAOS
Special Revenue
For the Year Ended June 30, 2022
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
See independent auditors' report.114
Statement A-2
Page 1 of 3
Local
Governmental
Correction
Law
Enforcement
Protection Civic Center
Public
Transportation
Community
Grants
-$ -$ -$ -$ -$
- - - - -
- - - - -
- - - - -
- - - - 238,501
- 32,000 - 77,163 252,959
- - - - -
29,595 - - 447,837 -
12,192 - - - -
- - - - -
- - - - -
41,787 32,000 - 525,000 491,460
- - - - 295,486
52,813 38,271 - - -
- - - - -
- - - 945,773 -
- - - - 179,162
- - - - -
- - - - -
52,813 38,271 - 945,773 474,648
(11,026) (6,271) - (420,773) 16,812
- - - 218,982 82,763
- - - - -
- - - 218,982 82,763
(11,026) (6,271) - (201,791) 99,575
79,716 6,271 - 1,228,610 54,566
68,690$ -$ -$ 1,026,819$ 154,141$
Special Revenue
See independent auditors' report.115
Municipal Road
Gasoline Tax
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District
Revenues
Taxes:
Gross receipts -$ 1,222,736$ -$
Gasoline and motor vehicle 77,969 - -
Lodgers tax - - -
Cannabis excise tax - - -
Intergovernmental:
Federal operating grants - - -
State operating grants - - -
State capital grants - - -
Charges for services - - -
Licenses and fees - - 81,839
Investment income - - -
Miscellaneous - - -
Total revenues 77,969 1,222,736 81,839
Expenditures
Current:
General government - 8,618 -
Public safety - - -
Public works - - -
Culture and recreation - - 68,137
Capital outlay - - -
Debt service:
Principal - - -
Interest - - -
Total expenditures - 8,618 68,137
Excess (deficiency) of revenues over
expenditures 77,969 1,214,118 13,702
Other financing sources (uses)
Transfers in - - -
Transfers (out)(107,561) (1,091,476) -
Total other financing sources (uses)(107,561) (1,091,476) -
Net change in fund balances (29,592) 122,642 13,702
Fund balances - beginning of year 42,232 481,357 22,931
Fund balances - end of year 12,640$ 603,999$ 36,633$
For the Year Ended June 30, 2022
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
TOWN OF TAOS
Special Revenue
See independent auditors' report.116
Statement A-2
Page 2 of 3
Confidential
Informant
American
Rescue Plan
Capital
Maintenance
Operating Fund
Facilities
Improvements Capital Projects
-$ -$ -$ -$ 921,193$
- - - - -
- - - - -
- - - - -
- 731,317 - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - 8
- - - - -
- 731,317 - - 921,201
- 17,147 604,229 - -
- - - - -
- - - - 10,153
- - - - -
- 261,431 112,419 - 16,955
- - - - -
- - - - -
- 278,578 716,648 - 27,108
- 452,739 (716,648) - 894,093
- - - - -
- - - - (675,318)
- - - - (675,318)
- 452,739 (716,648) - 218,775
9,828 - 1,328,078 2,028,757 976,430
9,828$ 452,739$ 611,430$ 2,028,757$ 1,195,205$
Capital ProjectsSpecial Revenue
See independent auditors' report.117
Vehicle
Replacement
Special Events
Enterprise
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
Revenues
Taxes:
Gross receipts -$ -$ -$
Gasoline and motor vehicle - - -
Lodgers tax - - -
Cannabis excise tax - - -
Intergovernmental:
Federal operating grants - -
State operating grants - - -
State capital grants - - -
Charges for services - - 7,100
Licenses and fees - - -
Investment income - - 882
Miscellaneous - 33,000 -
Total revenues - 33,000 7,982
Expenditures
Current:
General government - 190,633 1,080
Public safety - - -
Public works 115,938 - -
Culture and recreation - - -
Capital outlay - - -
Debt service:
Principal - - -
Interest - - -
Total expenditures 115,938 190,633 1,080
Excess (deficiency) of revenues over
expenditures (115,938) (157,633) 6,902
Other financing sources (uses)
Transfers in 432,808 - -
Transfers (out)- - -
Total other financing sources (uses)432,808 - -
Net change in fund balances 316,870 (157,633) 6,902
Fund balances - beginning of year 553,887 550,843 532,424
Fund balances - end of year 870,757$ 393,210$ 539,326$
Capital Projects
For the Year Ended June 30, 2022
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 3 of 3
Capital Projects Debt Service
1999 Gasoline
Tax Acquisition
Debt Service
Fund
2008 Gross
Receipts Tax
Revenue Bond
Retirement
Total Nonmajor
Governmental
Funds
-$ -$ 2,143,929$
- - 77,969
- - 1,685,509
- - 13,603
- - 969,818
61,355 - 844,201
105,463 - 105,463
- - 484,662
- - 94,031
206 - 1,096
- - 33,000
167,024 - 6,453,281
- - 1,117,193
- - 250,299
- - 126,091
- - 1,977,513
1,411,256 - 2,070,260
- 450,000 450,000
- 101,145 101,145
1,411,256 551,145 6,092,501
(1,244,232) (551,145) 360,780
950,133 551,000 3,396,509
- - (3,254,568)
950,133 551,000 141,941
(294,099) (145) 502,721
1,935,428 501 11,200,487
1,641,329$ 356$ 11,703,208$
See independent auditors' report.119
Page Left Intentionally Blank
120
S UPPORTING SCHEDULES
121
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
US Bank
Clearing Account *Checking 731,751$ -$ 731,747$ 4$
Judicial Bond Fund Municipal Court Checking 1,378 - - 1,378
Water & Sewer System Income Fund *Checking 8,274,091 6,023 2,541 8,277,573
Total US Bank 9,007,220 6,023 734,288 8,278,955
Centinel Bank
General Fund *Checking 19,018,477 - 625 19,017,852
1994 GRT Revenue Bond Acquisition Fund *Checking 108,317 636 - 108,953
Water Wastewater Improvements Fund *Checking 1,237,297 - 23,986 1,213,311
ACH Transfer Account Checking 21,801 201 21,846 156
Payroll Clearing *Checking 8,763 - 8,759 4
Total Centinel Bank 20,394,655 837 55,216 20,340,276
Bank balance of deposits 29,401,875$ 6,860$ 789,504$ 28,619,231$
New Mexico Finance Authority‐Investment
Taos 49 - Debt Service Funds 5,791$ -$ -$ 5,791$
Taos 49 - Debt Service Reserve Funds Funds 150,743 - - 150,743
Total New Mexico Finance Authority 156,534 - - 156,534
* Interest bearing Bank Accounts
TOWN OF TAOS
Schedule of Deposit and Investment Accounts
June 30, 2022
See independent auditors' report.122
Schedule I
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
Total investments 156,534$ -$ -$ 156,534$
Total 29,558,409$ 6,860$ 789,504$ 28,775,765
Add: New Mexico State Treasurer Local Government Investment Pool 4,149,964
Add: petty cash 1,599
Total deposits and investments 32,927,328$
Deposits and investments per financial statements:
Cash and cash equivalents - Exhibit A-1 27,004,951$
Investments - Exhibit A-1 4,014,560
Restricted cash and cash equivalents - Exhibit A-1 1,741,994
Restricted investments - Exhibit A-1 75,400
Fiduciary funds cash - Exhibit E-1 30,423
Investments - Exhibit E-1 60,000
Total cash, cash equivalents, and investments 32,927,328$
See independent auditors' report.123
Schedule II
Fair Market
Name of Description of CUSIP Value at
Depository Pledged Collateral Maturity Number June 30, 2022
US Bank
FHLB N/A LOC NO. 554871 11,000,000$
Total US Bank 11,000,000
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$
Clovis SD 2.05%08/01/24 189414JA4 250,000
Espanola SD 2.125%09/01/25 29662RBA5 150,000
West Las Vegas 2.00%08/15/22 953769KX3 150,000
Torrance ETC County 2.00%09/01/23 891400PE7 150,000
Alamogordo NM Muni 3.00%08/01/25 11464KQ6 250,000
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
FNA 2021-M11 A2 1.459%03/25/31 3136BF4D2 2,000,000
Bernalillo County, NM 2.000%08/15/35 0852752F1 500,000
Uni of New Mexico 1.782%06/01/31 9146924R6 500,000
FHMS K086 A2 3.859%11/25/28 3137FKSHO 1,000,000
Total Centinel Bank 10,520,000
The location of the safekeeper of the above securities is Independent Bankers Bank, Dallas, TX
Total Pledged Collateral 21,520,000$
TOWN OF TAOS
Schedule of Collateral Pledged by Depository
For Public Funds
June 30, 2022
See independent auditors' report.124
C OMPLIANCE SECTION
125
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORS cordovacpas.com
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITORS’ REPORT
Mr. Brian S. Colón, Esq.
New Mexico State Auditor
Town Council
Town of Taos
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, 2022,
and the related notes to the financial statements, which collectively comprise Town’s basic financial
statements, and have issued our report thereon dated December 7, 2022.
Report on 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.
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Report on 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.
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 7, 2022
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F EDERAL FINANCIAL ASSISTANCE
129
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
Opinion on Each Major Federal Program
We have audited Town of Taos’s compliance with the types of compliance requirements identified as subject to audit
in the OMB Compliance Supplement that could have a direct and material effect on each of Town of Taos’s major
federal programs for the year ended June 30, 2022. Town of Taos’s major federal programs are identified in the
summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, Town of Taos 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,
2022.
Basis for Opinion on Each Major Federal Program
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). Our responsibilities under those standards and the Uniform Guidance are further described in the
Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of Town of Taos and to meet our other ethical responsibilities, in accordance with
relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not
provide a legal determination of Town if Taos’s compliance with the compliance requirements referred to above.
130
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of laws,
statutes, regulations, rules, and provisions of contracts or grant agreements applicable to Town of Taos’s federal
programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on Town of Taos’s
compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards,
Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists.
The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial
likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the
report on compliance about Town of Taos’s compliance with the requirements of each major federal program as a
whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and
the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding Town if Taos’s compliance with the compliance requirements referred to above and
performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of Town if Taos’s internal control over compliance relevant to the audit in order to
design audit procedures that are appropriate in the circumstances 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 Town if Taos’s internal control over compliance. Accordingly, no such opinion is
expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over
compliance that we identified during the audit.
Report on 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 a 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.
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Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal
control over compliance that might be material weaknesses or significant deficiencies in internal control over
compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
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 7, 2022
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Assistance
Listing
Number
Federal
Expenditures
Funds
Provided to
Subrecipients
Noncash
Assistance
U.S. Department of the Interior ‐ Bureau of Reclamation
Impl. of the Taos Pueblo Indian Water Rights Settlement 15.565 169,822$ -$ -$
Total U.S Department of the Interior ‐ Bureau of Reclamation 169,822 - -
U.S. Department of Housing and Urban Development
Passed through State of New Mexico Department of Finance and Administration
Water System Improvements 14.228 622,714 - -
CDBG- Comprehensive Plan 14.228 24,964 - -
Total U.S. Department of Housing and Urban Development 647,678 - -
U.S. Department of Justice
Passed Through State of New Mexico Energy Minerals Natural Resources
Juvenile Justice Program 16.523 36,022 - -
Total U.S. Department of Justice 36,022 - -
U.S. Department of Agriculture
Passed Through State of New Mexico Children, Youth and Families
Humble Equipment 10.351 128,162 - -
Total U.S. Department of Agriculture 128,162 - -
Environmental Protection Agency
Passed Through State of New Mexico Environment Department
Wastewater Treatment Plant Solar Array 66.458 33,829 - -
Wastewater Treatment Plant Solar Array Loan 66.458 110,662 - -
Total Environmental Protection Agency 144,491 - -
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* 3,319,102 - -
Airport Runway 13/31 20.106* 815,252 - -
Airport Monitoring System 20.106* 52,837
Total U.S. Department of Transportation 4,187,191 - -
U.S. Department of the Institute of Museum and Library Services
Passed through NM State Library
Grants to States- ARPA Library 45.310 16,223
Total U.S. Department of the Institute of Museum and Library Services 16,223 - -
U.S. Department of Treasury
Passed through NM Department of Finance and Administration
American Rescue Plan 21.027 278,577
Total U.S. Department of Treasury 278,577 - -
Total Federal Financial Assistance 5,608,166$ -$ -$
* Denotes Major Federal Financial Assistance Program
TOWN OF TAOS
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
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 $110,662 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, 2022
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
20.106 Federal Aviation Administration
(FAA) Airport Improvement Grant
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, 2022
Section II – Financial Statement Findings
2022‐001 (2021-001) — Consumable Inventory (Significant Deficiency) (Repeated)
Condition: During inquiry and gathering of client prepared documents to support audited financial numbers it
was noted that the Town was able to provide evidence of the consumable inventory on hand as of year-end
for all departments of the Town with the exception of two departments.
The Town made progress in this area during the fiscal year 2022, and was able to complete all inventory
counts with the exception of 2 departments. Also, the Town was able to complete a formal procedure manual
for all departments to implement moving forward.
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 for two departments.
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: The Town of Taos has filled a Procurement/Assets Officer position that will provide
guidance to the departments requiring assistance in completing the inventory count. The Finance
Department has prepared a Standard Operating Procedural Manual to aid the departments in completing the
inventory count at the end of the fiscal year and in an effort to ensure compliance is being monitored, will also
provide training to the departments requiring assistance. As part of this training, the inventory count will be
reviewed to ensure the accuracy of the count which will allow the departments to gain an understanding of
the financial expectations at fiscal year-end. The personnel responsible for this are the Department Directors
and the Finance Director.
138
TOWN OF TAOS Schedule IV
Schedule of Findings and Questioned Costs Page 3 of 3
June 30, 2022
Section III – Federal Award Findings
None noted
Section IV – Section 12‐6‐5 NMSA 1978 Findings
None noted
Section V – Prior Year Audit Findings
2021‐001 — Consumable Inventory (Significant Deficiency) (Repeated 2022-001)
2021‐002 — Retiree Health Care Contributions (Other Matter) (Resolved)
139
TOWN OF TAOS
Other Disclosures
June 30, 2022
Exit Conference
An exit conference was held on December 7, 2022. In attendance were the following:
Representing the Town of Taos:
Nathaniel Evans –Town Councilor
Pascualito Maestas –Mayor
Andrew Gonzales –Town Manager
Lupe E. Martinez –Finance Director
Josephine Fresquez –Assistant Finance Director
Jonathan Montoya –Deputy Finance Director
Charlotte Jeantete, CPA –Audit Committee Member
Jack Meyers –Audit Committee Member
Representing Cordova CPAs LLC: Robert Gonzales, CPA, Principal
Auditor Prepared Financial Statements
Cordova CPAs LLC prepared the GAAP-basis financial statements and footnotes of Town of Taos from the original
books and records provided to them by the management of the Town. The responsibility for the financial
statements remains with the Town.
140