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2009 Audit ReportSTATE OF NEW MEXICO TOWN OF TAOS ANNUAL FINANCIAL REPORT JUNE 30, 2009 (This page intentionally left blank.) 2 INTRODUCTORY SECTION 3 (This page intentionally left blank.) 4 STATE OF NEW MEXICO Town of Taos Official Roster June 30, 2009 Town Council Name Title Darren Cordova Mayor Michael A. Silva Councilor Rudy Abeyta Councilor Amy Quintana Councilor Gene Sanchez Councilor Administration Daniel Miera Town Manager Abigail Adame Assistant Town Manager Marietta Fambro Finance Director Renee Lucero Town Clerk Richard Chavez Municipal Judge Allen Ferguson Town Attorney 5 STATE OF NEW MEXICO Town of Taos Table of Contents June 30, 2009 Exhibit Page INTRODUCTORY SECTION Official Roster 5 Table of Contents 6-7 FINANCIAL SECTION Independent Auditors’ Report 10-11 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets A-1 14-15 Statement of Activities A-2 16-17 Fund Financial Statements Balance Sheet – Governmental Funds B-1 18 Reconciliation of the Balance Sheet to the Statement of Net Assets 19 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds B-2 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual – General Fund C-1 23 Statement of Net Assets-Proprietary Funds D-1 24-25 Statement of Revenues, Expenses, and Changes in Fund Net Assets-Proprietary Funds D-2 26-27 Statement of Cash Flows –Proprietary Funds D-3 28-29 Statement of Fiduciary Assets and Liabilities – Agency Funds E-1 31 NOTES TO THE FINANCIAL STATEMENTS 33-59 SUPPLEMENTARY INFORMATION Statement Nonmajor Governmental Fund Descriptions 62-65 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet – Nonmajor Governmental Funds A-1 66-71 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds A-2 72-77 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual Governmental Funds: Fire Protection Special Revenue Fund B-1 79 Recreation Special Revenue Fund B-2 80 Lodger’s Tax Special Revenue Fund B-3 81 Local Government Correction Special Revenue Fund B-4 82 Law Enforcement Protection Special Revenue Fund B-5 83 Civic Center Special Revenue Fund B-6 84 Domestic Violence Shelter Special Revenue Fund B-7 85 Public Transportation Special Revenue Fund B-8 86 Community Grants Special Revenue Fund B-9 87 Municipal Road Gasoline Tax Special Revenue Fund B-10 88 ¼ Cent Municipal Gross Receipts Tax Special Revenue Fund B-11 89 Communications Special Revenue Fund B-12 90 2001 Gross Receipts Tax Revenue Bond Retirement Debt Service Fund B-13 91 2008 Gross Receipts Tax Revenue Bond Retirement Debt Service Fund B-14 92 6 STATE OF NEW MEXICO Town of Taos Table of Contents June 30, 2009 Statement/Schedule Page 1999 Gasoline Tax Revenue Bond Retirement Debt Service Fund B-15 93 2008 Gross Receipts Tax Revenue Bond Reserve Debt Service Fund B-16 94 1999 Gasoline Tax Revenue Bond Reserve Debt Service Fund B-17 95 2007 NMFA Land Purchase Debt Service Fund B-18 96 2001 Gross Receipts Tax Revenue Bond Reserve Debt Service Fund B-19 97 Facilities Improvements Capital Projects Fund B-20 98 Capital Projects Fund B-21 99 Airport Construction Capital Projects Fund B-22 100 Enhanced 911 Capital Projects Fund B-23 101 Vehicle Replacement Capital Projects Fund B-24 102 1994 Gross Receipts Tax Revenue Bond Acquisition Capital Projects Fund B-25 103 1999 Gasoline Tax Acquisition Capital Projects Fund B-26 104 Statement of Revenues, Expenses, and Changes in Net Assets – Budget (GAAP Basis) and Actual –Proprietary Funds Water and Sewer Fund B-27 105 Solid Waste Fund B-28 106 Taos Regional Landfill Fund B-29 107 SUPPORTING SCHEDULES Schedule of Deposit and Investment Accounts I 111 Schedule of Collateral Pledged by Depository for Public Funds II 113 Schedule of Changes in Fiduciary Assets and Liabilities - Agency Funds III 115 Supplementary Schedule of Joint Powers Agreements IV 116-117 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 120-121 FEDERAL FINANCIAL ASSISTANCE Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 124-125 Schedule of Expenditures of Federal Awards V 126-127 Schedule of Findings and Questioned Costs VI 129-135 Other Disclosures 136 7 (This page intentionally left blank.) 8 FINANCIAL SECTION 9 INDEPENDENT AUDITORS’ REPORT Hector Balderas New Mexico State Auditor The Office of Management and Budget and The Town Council Town of Taos Taos, New Mexico We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, the budgetary comparison for the general fund and the aggregate remaining fund information of the Town of Taos, New Mexico,as of and for the year ended June 30, 2009, which collectively comprise the Town’s basic financial statements as listed in the table of contents. We also have audited the financial statements of each of the Town’s nonmajor governmental funds and the budgetar y comparisons of the proprietar y funds, the capital projects fund and the remaining nonmajor governmental funds presented as supplementary information in the accompanying combining and individual fund financial statements as of and for the ye ar ended June 30, 2009 as listed in the table of contents. These financial statements are the responsibility of the Town of Taos’ management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made b y management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Taos,New Mexico, as of June 30, 2009, and the respective changes in financial position and cash flows,where applicable, thereof and the budgetar y c omparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each nonmajor governmental fund of the Town of Taos as of June 30, 2009, and the respective changes in financial position thereof,and the budgetar y c omparisons for the proprietary funds, the capital projects fund and the remaining nonmajor governmental funds presented as supplementar y i nformation for the year then ended in conformity with accounting principles generally accepted in the United States of America. 10 In accordance with Government Auditing Standards, we have also issued our report dated November 16, 2009 on our consideration of the Town’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The Town has not presented the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessar y to supplement, although not required to be a part of, the basic financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements, the combining and individual fund financial statements, and the budgetar y c omparisons. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required b y the U.S. Office of Management and Budget Circular A-133, Audits of State, Local Governments, and Non-Profit Organizations,and is not a required part of the basic financial statements. The accompanying financial information listed as supporting Schedules I through IV in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and the combining and individual fund statements and budgetary comparisons listed above and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements and the combining and individual fund statements and budgetar y comparisons taken as a whole. Accounting & Consulting Group, LLP Albuquerque, NM November 16, 2009 11 (This page intentionally left blank.) 12 BASIC FINANCIAL STATEMENTS 13 Governmental Activities Business-type Activities Total Assets Current assets Cash and cash equivalents 878,415$ 2,744,040$ 3,622,455$ Investments 5,815,441 1,708,374 7,523,815 Receivables: Property taxes 214,215 - 214,215 Other taxes 896,766 - 896,766 Other 400,610 606,635 1,007,245 Internal balances 13,718 (13,718) - Total current assets 8,219,165 5,045,331 13,264,496 Noncurrent assets Restricted cash and cash equivalents 24,836 1,344,425 1,369,261 Bond issuance costs, net of accumulated amortization of $14,274 170,443 - 170,443 Capital assets 102,470,850 32,716,763 135,187,613 Less: accumulated depreciation (50,275,151) (12,905,074) (63,180,225) Total noncurrent assets 52,390,978 21,156,114 73,547,092 Total assets 60,610,143$ 26,201,445$ 86,811,588$ STATE OF NEW MEXICO Primary Government The accompanying notes are an integral part of these financial statements June 30, 2009 Statement of Net Assets Town of Taos 14 Exhibit A-1 Governmental Activities Business-type Activities Total Liabilities Current liabilities Accounts payable 338,151$ 221,737$ 559,888$ Accrued payroll 402,418 47,822 450,240 Deposits held in trust for others 8,466 237,066 245,532 Accrued compensated absences 369,209 42,332 411,541 Accrued interest 41,142 69,498 110,640 Current portion of long-term debt 507,293 244,791 752,084 Total current liabilities 1,666,679 863,246 2,529,925 Noncurrent liabilities Accrued compensated absences 312,215 21,663 333,878 Accrued landfill closure costs - 325,853 325,853 Bond premiums, net of accumulated accretion of $5,474 65,368 - 65,368 Bonds payable 6,545,000 2,139,600 8,684,600 Loans and contracts payable 776,379 1,913,015 2,689,394 Total noncurrent liabilities 7,698,962 4,400,131 12,099,093 Total liabilities 9,365,641 5,263,377 14,629,018 Net Assets Invested in capital assets, net of related debt 44,367,027 15,514,283 59,881,310 Restricted for: Debt service 1,116,687 1,344,425 2,461,112 Capital projects 3,878,643 - 3,878,643 Special revenue 1,079,781 - 1,079,781 Unrestricted 802,364 4,079,360 4,881,724 Total net assets 51,244,502$ 20,938,068$ 72,182,570$ Primary Government 15 Functions/Programs Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Primary Government Governmental Activities: General government 7,031,467$ 296,587$ 347,178$ -$ Public safety 2,968,470 - 259,800 - Public works 3,719,661 - - 1,960,041 Culture and recreation 3,185,944 78,079 - - Health and welfare 669,840 - 378,128 - Interest on long-term debt 339,835 - - - Total governmental activities 17,915,217 374,666 985,106 1,960,041 Business-type Activities: Water and sewer 3,886,928 2,212,865 - 142,220 Solid waste 1,101,087 1,102,161 - - Taos regional landfill 1,036,057 1,161,614 - - Total business-type activities 6,024,072 4,476,640 - 142,220 Total primary government 23,939,289$ 4,851,306$ 985,106$ 2,102,261$ General Revenues: Taxes: Property taxes, levied for general purposes Gross receipts taxes Gasoline and motor vehicle taxes Other taxes Licenses and fees Interest income Miscellaneous income Transfers Loss on disposal of capital assets Proceeds from insurance recovery Special item - donated revenue Total general revenues and transfers Change in net assets Net assets, beginning Net assets, ending The accompanying notes are an integral part of these financial statements Program Revenues STATE OF NEW MEXICO Town of Taos Statement of Activities June 30, 2009 16 Exhibit A-2 Governmental Activities Business-Type Activities Total (6,387,702)$ -$ (6,387,702)$ (2,708,670) - (2,708,670) (1,759,620) - (1,759,620) (3,107,865) - (3,107,865) (291,712) - (291,712) (339,835) - (339,835) (14,595,404) - (14,595,404) - (1,531,843) (1,531,843) - 1,074 1,074 - 125,557 125,557 - (1,405,212) (1,405,212) (14,595,404) (1,405,212) (16,000,616) 671,981 - 671,981 9,995,673 425,682 10,421,355 230,015 - 230,015 1,191,991 - 1,191,991 298,127 - 298,127 145,983 105,583 251,566 485,096 307,571 792,667 20,000 (20,000) - (2,344) - (2,344) 18,348 - 18,348 598,520 - 598,520 13,653,390 818,836 14,472,226 (942,014) (586,376) (1,528,390) 52,186,516 21,524,444 73,710,960 51,244,502$ 20,938,068$ 72,182,570$ Primary Government Net (Expense) Revenue and Changes in Net Assets 17 STATE OF NEW MEXICO Exhibit B-1 Town of Taos Page 1 of 2 Balance Sheet Governmental Funds June 30, 2009 General Fund Capital Projects Fund Other Governmental Funds Total Assets Unrestricted cash and cash equivalents 622,129$ 108,126$ 148,160$ 878,415$ Restricted cash and cash equivalents 3,384 - 21,452 24,836 Investments 993,120 1,862,990 2,959,331 5,815,441 Receivables: Property taxes 214,215 - - 214,215 Other taxes 668,615 52,577 175,574 896,766 Other 28,212 182,891 189,507 400,610 Due from other funds 191,145 - - 191,145 Total assets 2,720,820$ 2,206,584$ 3,494,024$ 8,421,428$ Liabilities Accounts payable 101,628$ 59,726$ 176,797$ 338,151$ Accrued payroll 335,360 - 67,058 402,418 Deposits held in trust for others 3,384 - 5,082 8,466 Deferred revenue 176,588 - - 176,588 Due to other funds - - 177,427 177,427 Total liabilities 616,960 59,726 426,364 1,103,050 Fund balances Reserved for: Future debt service payments - - 247,208 247,208 Unreserved, reported in: General fund 2,103,860 - - 2,103,860 Special revenue funds - - 1,106,667 1,106,667 Capital projects funds - 2,146,858 1,713,785 3,860,643 Total fund balances 2,103,860 2,146,858 3,067,660 7,318,378 Total liabilities and fund balances 2,720,820$ 2,206,584$ 3,494,024$ 8,421,428$ The accompanying notes are an integral part of these financial statements 18 STATE OF NEW MEXICO Exhibit B-1 Town of Taos Page 2 of 2 Amounts reported for governmental activities in the statement of net assets are different because: Fund balances - total governmental funds 7,318,378$ The Town has unamortized bond issuance costs. Bond issuance costs are not a current financial resource and, therefore, are not reported in the funds 170,443 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds 52,195,699 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds: Deferred property taxes 176,588 Interest on long-term debt is not accrued in the fund financial statements unless it is due and payable: Accrued interest (41,142) Some liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds: Accrued compensated absences (681,424) Bond premiums (65,368) Bonds payable (6,945,000) Loans payable (793,672) Contracts payable (90,000) Total net assets of governmental activities 51,244,502$ June 30, 2009 The accompanying notes are an integral part of these financial statements Governmental Funds Reconciliation of the Balance Sheet to the Statement of Net Assets 19 STATE OF NEW MEXICO Exhibit B-2 Town of Taos Page 1 of 2 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ending June 30, 2009 General Fund Capital Projects Fund Other Governmental Funds Total Revenues Taxes Property 663,242$ -$ -$ 663,242$ Gross receipts 8,358,951 701,453 935,269 9,995,673 Gasoline and motor vehicle taxes 186,781 - 43,234 230,015 Other 282,688 - 909,303 1,191,991 Intergovernmental income Federal operating grants 5,550 - 150,000 155,550 Federal capital grants - - 319,684 319,684 State operating grants 35,000 - 794,556 829,556 State capital grants - 1,477,405 162,952 1,640,357 Charges for services 276,531 - 98,135 374,666 Licenses and fees 268,373 - 29,754 298,127 Interest income 49,573 64,737 31,673 145,983 Miscellaneous 112,513 - 372,583 485,096 Total revenues 10,239,202 2,243,595 3,847,143 16,329,940 Expenditures Current General government 4,081,394 - 1,792,231 5,873,625 Public safety 2,697,268 - 221,060 2,918,328 Public works 1,109,619 188,605 646,809 1,945,033 Culture and recreation 2,158,081 - 506,477 2,664,558 Health and welfare - - 669,840 669,840 Capital outlay - 6,933,277 501,513 7,434,790 Debt service Principal - - 879,833 879,833 Interest - - 347,481 347,481 Total expenditures 10,046,362 7,121,882 5,565,244 22,733,488 Excess (deficiency) of revenues over expenditures 192,840 (4,878,287) (1,718,101) (6,403,548) Other financing sources (uses) Transfers in 411,461 67,663 3,278,546 3,757,670 Transfers out (899,883) (584,793) (2,252,994) (3,737,670) Proceeds from insurance recovery 16,143 - 2,205 18,348 Total other financing sources (uses)(472,279) (517,130) 1,027,757 38,348 Net change in fund balances (279,439) (5,395,417) (690,344) (6,365,200) Fund balances - beginning of year 2,383,299 7,542,275 3,758,004 13,683,578 Fund balance - end of year 2,103,860$ 2,146,858$ 3,067,660$ 7,318,378$ The accompanying notes are an integral part of these financial statements 20 STATE OF NEW MEXICO Exhibit B-2 Town of Taos Page 2 of 2 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds (6,365,200)$ Governmental funds report capital outlays as expenditures. However in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense: Capital expenditures recorded in capital outlay 7,434,790 Depreciation expense (3,601,291) Loss on disposal of capital assets (2,344) Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds: Change in deferred revenue related to property taxes receivable 8,739 Capital asset recorded as a donated item 598,520 The issuance of long-term debt (e.g. bonds, loans, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of govermental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities: Amortization of bond issuance costs (9,143) Decrease in accrued interest 7,646 Decrease in accrued compensated absences 102,930 Amortization of bond premiums 3,506 Principal payments on bonds payable 775,000 Principal payments on loans payable 86,833 Payments on contracts payable 18,000 Change in net assets of governmental activities (942,014)$ Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ending June 30, 2009 The accompanying notes are an integral part of these financial statements 21 (This page intentionally left blank.) 22 STATE OF NEW MEXICO Exhibit C-1 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis) Final to Actual Revenues Taxes Property taxes 665,593$ 665,593$ 663,242$ (2,351)$ Gross receipts 8,997,930 8,338,282 8,358,951 20,669 Gas and motor vehicle 131,817 182,666 186,781 4,115 Other 404,256 398,861 282,688 (116,173) Intergovernmental income Federal operating grants 5,550 5,550 5,550 - Federal capital grants - - - - State operating grants 35,000 35,000 35,000 - State capital grants - - - - Charges for services 337,989 284,829 276,531 (8,298) Licenses and fees 375,093 274,997 268,373 (6,624) Interest income 310,167 61,591 49,573 (12,018) Miscellaneous 141,626 135,404 112,513 (22,891) Total revenues 11,405,021 10,382,773 10,239,202 (143,571) Expenditures Current General government 5,044,500 4,318,647 4,081,394 237,253 Public safety 2,904,685 2,756,552 2,697,268 59,284 Public works 1,169,845 1,111,333 1,109,619 1,714 Culture and recreation 2,263,720 2,187,982 2,158,081 29,901 Health and welfare - - - - Capital outlay 20,000 20,000 - 20,000 Debt service Principal - - - - Interest - - - - Total expenditures 11,402,750 10,394,514 10,046,362 348,152 Excess (deficiency) of revenues over expenditures 2,271 (11,741) 192,840 204,581 Other financing sources (uses) Designated cash (4,397,393) (4,405,519) - 4,405,519 Transfers in 5,394,201 5,394,201 411,461 (4,982,740) Transfers out (999,079) (976,941) (899,883) 77,058 Proceeds from insurance recovery - - 16,143 16,143 Total other financing sources (uses)(2,271) 11,741 (472,279) (484,020) Net change in fund balance - - (279,439) (279,439) Fund balance - beginning of year - - 2,383,299 2,383,299 Fund balance - end of year -$ -$ 2,103,860$ 2,103,860$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos General Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ending June 30, 2009 23 Water and Sewer Solid Waste Assets Current assets Cash and cash equivalents 1,647,321$ 768,864$ 327,855$ Investments 1,383,874 249,100 75,400 Customer receivables 330,525 154,077 109,476 Other receivables 10,779 1,778 - Interfund receivable - - 97,000 Total current assets 3,372,499 1,173,819 609,731 ... Noncurrent assets Restricted cash and cash equivalents 311,534 - 1,032,891 Capital assets 28,390,062 416,514 3,910,187 Less: accumulated depreciation (11,857,712) (337,476) (709,886) Total noncurrent assets 16,843,884 79,038 4,233,192 Total assets 20,216,383$ 1,252,857$ 4,842,923$ Liabilities and net assets Liabilities Current liabilities Accounts payable 117,845$ 84,962$ 18,930$ Accrued payroll 31,589 3,670 12,563 Meter deposits payable 237,066 - - Accrued compensated absences 26,622 2,682 13,028 Interfund payable 4,220 97,116 9,382 Accrued interest payable 63,729 - 5,769 Current portion of long-term debt 113,220 - 131,571 Total current liabilities 594,291 188,430 191,243 Noncurrent liabilities Accrued compensated absences 13,693 - 7,970 Accrued landfill closure costs - - 325,853 Bonds payable 2,139,600 - - Loans payable 754,843 - 1,158,172 Total noncurrent liabilities 2,908,136 - 1,491,995 Total liabilities 3,502,427 188,430 1,683,238 Net assets Invested in capital assets, net of related debt 13,524,687 79,038 1,910,558 Unrestricted 3,189,269 985,389 1,249,127 Total net assets 16,713,956$ 1,064,427$ 3,159,685$ June 30, 2009 The accompanying notes are an integral part of these financial statements STATE OF NEW MEXICO Taos Regional Landfill Enterprise Funds Town of Taos Statement of Net Assets Proprietary Funds 24 Exhibit D-1 Total 2,744,040$ 1,708,374 594,078 12,557 97,000 5,156,049 1,344,425 32,716,763 (12,905,074) 21,156,114 26,312,163$ 221,737$ 47,822 237,066 42,332 110,718 69,498 244,791 973,964 21,663 325,853 2,139,600 1,913,015 4,400,131 5,374,095 15,514,283 5,423,785 20,938,068$ 25 Water and Sewer Solid Waste Operating revenues: Charges for services 2,212,865$ 1,182,520$ 1,161,614$ Total operating revenues 2,212,865 1,182,520 1,161,614 Operating expenses: Personnel services 625,507 77,927 306,512 Contractual services 1,341,958 718,119 405,116 Supplies 33,214 10,961 12,165 Maintenance and materials 145,690 43,425 138,374 Utilities 310,994 247,563 6,871 Depreciation 1,178,578 2,466 106,611 Other costs 34,181 626 15,496 Total operating expenses 3,670,122 1,101,087 991,145 Operating income (loss) (1,457,257) 81,433 170,469 Non-operating revenues (expenses): Gross receipts taxes 425,682 - - Interest expense (216,806) - (44,912) Interest income 63,844 - 41,739 Miscellaneous income 66,191 51,853 109,168 Total non-operating revenues (expenses)338,911 51,853 105,995 Government contributions 142,220 - - Transfers in 6,130 12,015 - Transfers out - - (38,145) Change in net assets (969,996) 145,301 238,319 Net assets, beginning of year 17,683,952 919,126 2,921,366 Net assets, end of year 16,713,956$ 1,064,427$ 3,159,685$ STATE OF NEW MEXICO Town of Taos Statement of Revenues, Expenses and Changes in Fund Net Assets The accompanying notes are an integral part of these financial statements Taos Regional Landfill Enterprise Funds Proprietary Funds For the Year Ended June 30, 2009 26 Exhibit D-2 Total 4,556,999$ 4,556,999 1,009,946 2,465,193 56,340 327,489 565,428 1,287,655 50,303 5,762,354 (1,205,355) 425,682 (261,718) 105,583 227,212 496,759 142,220 18,145 (38,145) (586,376) 21,524,444 20,938,068$ 27 Water and Sewer Solid Waste Cash flows from operating activities: Cash received from user charges 2,226,299$ 1,157,632$ 1,085,064$ Cash payments to employees for services (591,100) (77,861) (290,633) Cash payments to suppliers for goods and services (1,994,022) (1,019,104) (707,687) Net cash provided (used) by operating activities (358,823) 60,667 86,744 Cash flows from noncapital financing activities: Gross receipts taxes 425,682 - - Miscellaneous income 66,191 51,853 109,168 Change in noncurrent accrued compensated absences (25,937) (1,738) (16,705) Interfund advances (payments) and transfers 5,678 116 (38,797) Net cash provided (used) by noncapital financing activities 471,614 50,231 53,666 Cash flows from capital and related financing activities State capital grants 142,220 - - Interest paid (153,077) - (39,143) Proceeds from issuance of long-term debt 32,480 - - Principal payments on long-term debt (114,038) - (151,425) Acquisition of capital assets (471,557) - (639,488) Net cash provided (used) by capital and related financing activities (563,972) - (830,056) Cash flows from investing activities: Proceeds from sales and maturities 284,552 - - Purchases of investments (205,000) (100,000) (75,400) Interest on investments 63,844 - 41,739 Net cash provided (used) by investing activities 143,396 (100,000) (33,661) Net increase (decrease) in cash and cash equivalents (307,785) 10,898 (723,307) Cash and cash equivalents - beginning of year 2,266,640 757,966 2,084,053 Cash and cash equivalents - end of year 1,958,855$ 768,864$ 1,360,746$ Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss)(1,457,257)$ 81,433$ 170,469$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 1,178,578 2,466 106,611 Changes in assets and liabilities Receivables 13,434 (24,888) (76,550) Accounts payable (138,346) 1,590 (219,943) Accrued payroll expenses 7,785 (2,616) 2,851 Current accrued compensated absences 26,622 2,682 13,028 Accrued landfill closure costs - - 90,278 Meter deposits 10,361 - - Net cash provided (used) by operating activities (358,823)$ 60,667$ 86,744$ The accompanying notes are an integral part of these financial statements Enterprise Funds Taos Regional Landfill STATE OF NEW MEXICO Town of Taos Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2009 28 Exhibit D-3 Total 4,468,995$ (959,594) (3,720,813) (211,412) 425,682 227,212 (44,380) (33,003) 575,511 142,220 (192,220) 32,480 (265,463) (1,111,045) (1,394,028) 284,552 (380,400) 105,583 9,735 (1,020,194) 5,108,659 4,088,465$ (1,205,355)$ 1,287,655 (88,004) (356,699) 8,020 42,332 90,278 10,361 (211,412)$ 29 (This page intentionally left blank.) 30 STATE OF NEW MEXICO Exhibit E-1 Town of Taos Statement of Fiduciary Assets and Liabilities - Agency Funds June 30, 2009 Assets Cash 863$ Investments 68,500 Total assets 69,363$ Liabilities Deposits payable 68,260$ Due to other entities 1,103 Total liabilities 69,363$ The accompanying notes are an integral part of these financial statements 31 (This page intentionally left blank.) 32 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies The Town of Taos (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, wastewater, and solid waste), health and social services, culture- recreation,education, public improvements, planning and zoning,and general administrative services. The Town of Taos is a body politic and corporate under the name and form of government selected by its qualified electors. The Town may: 1.Sue or be sued; 2.Enter into contracts and leases; 3.Acquire and hold property, both real and personal; 4.Have common seal, which may be altered at pleasure; 5.Exercise such other privileges that are incident to corporations of like character or degree that are not inconsistent with the laws of New Mexico; 6.Protect generally the property of its municipality and its inhabitants; 7.Preserve peace and order within the municipality; and 8.Establish rates for services provided b y municipal utilities and revenue-producing projects, including amounts which the governing body determines to be reasonable in the operation of similar facilities. This summar y o f significant accounting policies of the Town is presented to assist in the understanding of Town’s financial statements. The financial statements and notes are the representation of Town’s management who is responsible for their integrity and objectivity. The financial statements of the Town have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standard Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. The government- wide and the proprietar y fu nds financial statements have incorporated all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins of the Committee on Accounting Procedures issued after November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. Governments also have the option of following subsequent private sector guidance for their government-wide financial statements and enterprise funds, subject to the same limitation. The Town has elected not to follow the subsequent private sector guidance. The more significant of the Town ’s accounting policies are described below. A.Financial Reporting Entity The financial reporting entity consists of (a) the primar y government, (b) organizations for which the primar y government is financially accountable and (c) other organizations for which the nature and significance of their relationship with the primar y 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.’s 14 and 39. 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. 33 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) A.Financial Reporting Entity (continued) The basic-but not the only-criterion for including a potential component unit within the reporting entity is the governing body’s ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of p ublic 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 does not have any component units required to be reported under GASB Statements No. 14 and No. 39. B.Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciar y a ctivities 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 b y 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 Assets 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 Assets, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, (b) and are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The Town’s net assets are reported in three parts –invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. 34 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) B.Government-wide and fund financial statements (continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset b y p rogram revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietar y fu nds and fiduciar y funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C.Measurement focus, basis of accounting, and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting,as are the proprietar y fund and fiduciar y fu nd financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes, net of estimated refunds,are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 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 da ys 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, subject to the availability criterion. Sales and use taxes are classified as derived tax revenues and are recognized as revenue when the underlying exchange takes place and the revenues are measurable and available. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed b y t he provider have been met, subject to the availability criterion. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. 35 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) C.Measurement focus, basis of accounting, and financial statement presentation (continued) The Town reports the following major governmental funds: The General Fund is the government’s primar y operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Capital Projects Fund was created to accumulate revenue and other financing sources for the purpose of financing general-purpose capital projects. The Town reports its proprietar y funds as major funds. Proprietar y 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 the County. All activities necessar y t o 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. Additionally, the government reports the following fund types: The Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The Debt Service Funds account for the services of general long-term debt not being financed by proprietar y or nonexpendable trust funds. The Capital Projects Funds account for the acquisition of capital assets or construction of major capital projects not being financed by proprietar y or nonexpendable trust funds. The Fiduciary Funds account for resources held for others. They are purely custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. These funds are used to account for assets that the Town holds for others in an agency capacity. As a general rule, the effect of interfund activit y has b een eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government’s enterprise funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported in the Statement of Activities. 36 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) C.Measurement focus, basis of accounting, and financial statement presentation (continued) Program revenues included in the Statement of Activities are derived directly from the program itself or from parties outside the Town’s taxpayer or citizenr y, as a whole; program revenues reduce the cost of the function to be financed from the Town ’s general revenues. Program revenues are categorized as (a) charges for services, which include revenues collected for fees and use of Town facilities, etc., (b) program-specific operating grants, which includes revenues received from state and federal sources such as small cities assistance to be used as specified within each program grant agreement, and (c) program-specific capital grants and contributions, which include revenues from state sources to be used for capital projects. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. The Town reports all direct expenses b y 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 b y fu nction and is included in the direct expense of each function. Interest on general long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the fund’s principal ongoing operations. The principal operating revenue of the Town’s enterprise fund is charges for services for the Town’s utilities. Operating 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. D.Assets, Liabilities and Net Assets 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 fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or between proprietary 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 b y a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources in the event they are not received within 60 days of year end. 37 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) D.Assets, Liabilities and Net Assets or Equity (continued) All receivables are reported at their gross value and, where appropriate, are reduced b y t he estimated portion that is expected to be uncollectible. In the government-wide and governmental fund financial statements, delinquent property taxes are recorded when levied.Property taxes are considered to be 100% collectible. Property taxes are levied on November 1 based on the assessed value of property as listed on the previous January 1 and are due in two payments b y N ovember 10th and April 10th. Property taxes uncollected after November 10th and April 10th are considered delinquent and the Town ma y a ssess penalties and interest. The taxes attach as an enforceable lien on property thirty (30) days thereafter, at which time they become delinquent.Property taxes are collected by San Juan County and remitted monthly to the Town . Restricted Assets: Restricted assets consist of those funds expendable for operating purposes but restricted b y donors or other outside agencies as to the specific purpose for which they may be used. 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 or business-type activities columns in the government-wide financial statements. Capital assets are defined b y t he 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. Pursuant to the implementation of GASB Statement No. 34, the historical cost of infrastructure assets, (retroactive to 1979) are included as part of the governmental capital assets reported in the government wide statements. Information Technology Equipment including software is being capitalized and included in furniture, fixtures and equipment in accordance with NMAC 2.20.1.9 C (5). Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.Librar y b ooks and periodicals are estimated to have a useful life of less than one year or are under the capitalization threshold and are expensed when purchased. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense capitalized b y t he Town during the current fiscal year was $0. No interest was included as part of the cost of capital assets under construction. 38 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) D.Assets, Liabilities and Net Assets or Equity (continued) Property,plant, and equipment of the primary government are depreciated using the straight line method over the following estimated useful lives: Assets Years Land Improvements 20 Buildings and improvements 10-50 Machinery and equipment 5-25 Infrastructure 10-50 Deferred Revenues: Accounting principles generally accepted in the United States of America require that grant revenue (voluntary nonexchange transactions) be recognized as revenue in the government-wide financial statements when all eligibility requirements have been met and recognized as revenue in the governmental fund financial statements based on the same factors subject to the availability criterion. Amounts received from reimbursement basis grants are recorded as deferred revenue in the governmental fund financial statements when received more than 60 days after year end. Compensated Absences: The Town’s employees earn personal leave at a rate of 22 to 27 days per ye ar based on years of service. Employees can carr y over unused personal leave each year with a cap of 500 hours. On an appointed day each year employees may sell back unused personal leave based on the following: 200 to 299 hours –25% of hourly salary; 300 to 399 hours –50% of hourly salar y; 400 to 499 –75% of hourly salary;500 hours and above –100% of hourly salar y. Once the employee achieves the 500 hour cap, they can only sell back a total of 136 hours annually; the other 80 hours accrued annually must be used b y December 31 or forfeited. At retirement or separation all leave may be sold back at 100% of hourly salary. 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 proprietar y fund that will pay it. In prior years, substantially all of the related expenditures have been liquidated b y t he 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 assets. 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 assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. 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. Net Assets or Fund Equity: In the fund financial statements, governmental funds report reservations of fund balance that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. 39 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 1.Summary of Significant Accounting Policies (continued) D.Assets, Liabilities and Net Assets or Equity (continued) Net Assets or Fund Equity (continued) Equity is classified as net assets and displayed in three components: a. Net assets invested in capital assets, net of accumulated depreciation and reduced b y t he 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 Assets: Consist of net assets with constraints placed on the use either b y (1) external groups such as creditors, grantors, contributors, or laws or regulation of other governments; or (2) law through constitutional provisions or enabling legislation. c. Unrestricted Net assets:All other net assets that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.” Interfund Transactions:Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund from expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions, except quasi-external transactions and reimbursements are reported as transfers. Nonrecurring or non-routine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.Significant estimates in the Town’s financial statements include the allowance for uncollectible accounts in the joint utility fund and depreciation on capital assets. Reclassifications: Certain amounts included in the financial statements have been reclassified to conform to the current year presentation. NOTE 2.Stewardship, Compliance and Accountability Budgetary Information Annual budgets of the Town are prepared prior to June 1 and must be approved b y resolution of the Town Commissioners, and submitted to the Department of Finance and Administration for State approval. Once the budget has been for mally approved, any amendments must also be approved b y 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 b y fun d. These 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. 40 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 2.Stewardship, Compliance and Accountability (continued) Budgetary Information (continued) 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: Excess (deficiency) of revenues over expenditures Original Final Budget Budget Budgeted Funds: General Fund $2,271 $(11,741) Capital Projects Fund $(7,151,311)$(6,903,755) Nonmajor Governmental Funds $(2,536,203)$(3,062,890) Water and Sewer $(925,470)$(861,827) Solid Waste $(378,074)$(338,076) Taos Regional Landfill $(841,213)$(933,891) The accompanying Statements of Revenues, Expenditures and Changes in Fund Balance –Budget (GAAP Basis) and Actual presents comparisons of the legally adopted budget with actual data on a budgetar y basis. NOTE 3.Deposits and Investments State statutes authorize the investment of Town funds in a wide variety of instruments including certificates of deposit and other similar obligations, state investment pool, money market accounts, and United States Government obligations. The Town is not aware of any invested funds that did not meet the State investment requirements as of June 30, 2009. 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 rate of interest in non-demand interest-bearing accounts shall be set b y t he 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 treasur y bills of the same maturity on the day of deposit. Excess of funds may be temporarily invested in securities which are issued b y t he State or b y t he United States government, or b y t heir departments or agencies, and which are either direct obligations of the State or the United States or are backed b y t he full faith and credit of those governments. According to the Federal Deposit Insurance Corporation, public unit deposits are funds owned by the public unit. Time deposits, savings deposits and interest bearing NOW accounts of a public unit in an institution in the same state will be insured up to $250,000 in aggregate and separate from the $250,000 coverage for public unit demand deposits at the same institution. On October 14, 2008, the FDIC announced its temporar y Tr ansaction Account Guarantee Program, providing depositors with unlimited coverage for noninterest-bearing transaction accounts if their bank is a participant in the FDIC’s Temporar y Liq uidity Guarantee Program. Noninterest-bearing checking accounts include Demand Deposit Accounts and any transaction account that has unlimited withdrawals and that cannot earn interest. Also included are low-interest NOW accounts that cannot earn more than 0.5% interest. Interest-bearing accounts include NOW accounts that can earn more than 0.5% interest, other-interest bearing checking accounts, Money Market Deposit Accounts, savings accounts, and Certificates of Deposit. This program is scheduled to end on December 31, 2009. 41 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 3.Deposits and Investments (continued) 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, 2009, $3,848,554 of the Town’s deposits of $6,053,483 was exposed to custodial credit risk. $3,848,554 was uninsured and collateralized b y collateral held b y the pledging bank’s trust department, not in the Town’s name and $0 was uninsured and uncollateralized. Amount of deposits 4,426,252$ 1,627,231$ 6,053,483$ Transactions Deposits Accounts covered by th e "T ransactions Accoun t Guarantee Program"(77,698) (1,449,731) (1,527,429) FDIC Coverage (500,000) (177,500) (677,500) Total uninsured public funds 3,848,554 - 3,848,554 3,848,554 - 3,848,554 Un insured and uncollateralized -$ -$ -$ Collateral requirement (50% of uninsured funds)1,924,277$ -$ 1,924,277$ Pledged Collateral 4,272,008 390,000 4,662,008 Over (Under) collateralized 2,347,731$ 390,000$ 2,737,731$ TotalCentinel Bank Collateralized by securities held by pledging institutions or by its trust department or agent in other than the Town 's name First Community Bank The collateral pledged is listed on Schedule II in this report. The types of collateral allowed are limited to direct obligations of the United States Government and all bonds issued by any agency, district or political subdivision of the State of New Mexico. 42 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 3.Deposits and Investments (continued) Investments The Town invests excess cash in the State Treasurer Local Government Investment Pool. The Pool’s investments are valued at fair value based on quoted market prices as of the valuation date. The New Mexico State Treasurer Investment Pool is not SEC registered. Section 6-10-10 I, NMSA 1978, empowers the State Treasurer, with the advice and consent of the State Board of Finance, to invest money held in the short-term investment fund in securities that are issued or backed by the United States Government or by its departments or agencies and are either direct obligations of the United States Government or agencies sponsored b y t he United States Governments. The Local Government Investment Pool’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 6-10- 10.1 F, NMSA 1978, at the end of each month all interest earned is distributed b y t he State Treasurer to the contribution entities in amounts directly proportionate to the respective amounts deposited in the fund and the length of time the amounts were invested. Participation in the fund is voluntar y. See Note 16, Subsequent Events, for additional information concerning the Town’s investments in the State Treasurer Local Government Investment Pool. Additionally, the Town has investments held in U.S. Treasury Money Market Mutual Funds at the Bank of Albuquerque in connection with New Mexico Finance Authority (NMFA) loans. Also, the Town has investments which are managed by NMFA, on deposit with the State Treasurer’s office, in NMFA’s name for the benefit of the Town. The Town’s investments at June 30, 2009 include the following: Investments Rated New Mexico Grow Local Government Investment Pool AAAm 43 Days 6,785,629$ Reserve Contingency Fund Unrated Does not earn interest 263,186$ U.S. Treasury Money Market Mutual Funds *AAA >365 Days 637,927$ New Mexico State Treasurer Debt Service *AAA >365 Days 71,236$ Weighted Average Maturity Fair Value *Restricted cash and cash equivalents per Exhibit A-1 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. Recon ci liation to the Statement of Net Assets: Unrestricted cash and cash equivalents per Exhibit A-1 3,622,455$ Agency funds cash per Exhibit E-1 863 Certificates of deposits (maturity > 3 months)543,500 Taos Regional Landfill restricted cash 419,566 Judicial Bond Fund Municipal Court restricted cash 3,384 Meter deposits restricted cash 237,066 Civic Center security deposits restricted cash 82 Plus reconciling items 1,228,067 Less petty cash (1,500) Bank balance of deposits 6,053,483$ 43 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 4.Receivables Receivables as of June 30, 2009, are as follows: Gover nmental Activities:Total Capital Non major General Projects Funds Total Pr operty taxes receivable 214,215$ -$ -$ 214,215$ Other taxes receivable: Gr oss receipts 658,963 52,577 70,102 781,642 Lodgers tax - - 101,233 101,233 Gasoline tax 9,652 - 3,737 13,389 Cigarette tax - - 502 502 Other receivables: Licenses and fees 28,212 - - 28,212 State grants - 182,891 189,507 372,398 Total gross receivables 911,042$ 235,468$ 365,081$ 1,511,591$ Business-type Activities:Water and Solid Sewer Waste Landfill Total Customer receivables 655,593$ 214,773$ 133,465$ 1,003,831$ Other receivables: Licenses and fees - 1,778 - 1,778 State grants 10,779 - - 10,779 Total gross receivables 666,372 216,551 133,465 1,016,388 Less: allowance for doubtful accounts 325,068 60,696 23,989 409,753 Total net receivables 341,304$ 155,855$ 109,476$ 606,635$ Receivables for governmental activities are considered to be 100% collectible. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities in the current period. Governmental funds also defer revenue recognition in connection with resources that have been received but not yet earned. Deferred revenue related to property taxes receivable for the Town for the ye ar ended June 30, 2009 was $176,588. 44 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 5.Transfers and Interfund Receivables Net operating transfers, made to close out funds and to supplement other funding sources, were as follows: Transfers In Tr ansfers Out Amount Gener al Fund 1/4 Cent Municipal GRT 214,860$ Gener al Fund 2008 GRT Revenue Bond Reserve 174,601 Gener al Fund Airport Construction 22,000 Lodger 's Tax General Fund 138,388 Lodger 's Tax Ca pital Projects 96,370 Lodger 's Tax Community Grants 70,000 Lodger 's Tax Facilities Improvements 31,772 Local Gover nment Correction General Fund 9,000 Civic Center General Fund 72,047 Civic Center Lodger's Tax 337,287 Civic Center Facilities Improvements 28,902 Public Transportation General Fund 42,688 Public Transportation Lodger's Tax 180,426 Community Grants General Fund 230,000 Communications General Fund 243,694 2001 GRT Revenue Bond Retirement 1/4 Cent Municipal GRT 74,510 2001 GRT Revenue Bond Retirement Ca pital Projects 200 2001 GRT Revenue Bond Retirement 2001 GRT Revenue Bond Reserve 419,928 2008 GRT Revenue Bond Retirement 1/4 Cent Municipal GRT 402,606 1999 Gas Tax Revenue Bond Retirement General Fund 164,066 1999 Gas Tax Revenue Bond Retirement Municipal Road Gasoline Tax 45,555 1999 Gas Tax Revenue Bond Retirement 1999 Gas Tax Revenue Bond Reserve 4,112 2007 NMFA Land Purchase 1/4 Cent Municipal GRT 107,000 Fa cilities Improvements 1/4 Cent Municipal GRT 91,772 Fa cilities Improvements Ca pital Projects 237,104 Capital Projects 1/4 Cent Municipal GRT 47,663 Capital Projects Taos Regional Landfill 20,000 1999 Gasoline Tax Acquisition Ca pital Projects 251,119 Water and Sewer Taos Regional Landfill 6,130 Sol id Waste Taos Regional Landfill 12,015 3,775,815$ Internal balances have primarily been recorded when funds overdraw their share of pooled cash. The composition of interfund balances as of June 30, 2009 is as follows: Due from Other Funds Due to Other Funds Amount Gener al Fund 2001 GRT Revenue Bond Retirement 177,427$ Gener al Fund Water and Sewer 4,220 Gener al Fund Solid Waste 116 Gener al Fund Taos Regional Landfill 9,382 Taos Regional Landfill Solid Waste 97,000 288,145$ All interfund transactions are short-term and are expected to be repaid within a month. 45 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 6.Capital Assets A summar y of capital assets and changes occurring during the year ended June 30, 2009 follows. Land is not subject to depreciation. Balance Balance Governmental activities:June 30, 2008 Adjustments Additions Deletions June 30, 2009 Capital assets, not depreciated: Land 5,943,036$ -$ 108,900$ -$ 6,051,936$ Construction in progress 2,553,198 (427,699) 6,100,643 - 8,226,142 Total capital assets, not depreciated 8,496,234 (427,699) 6,209,543 - 14,278,078 Capital assets, depreciated: Land improvements 4,490,477 13,616 104,871 - 4,608,964 Buildings and improvements 22,111,118 259,529 920,438 - 23,291,085 Machinery and equipment 13,923,069 28,761 425,713 126,457 14,251,086 Infrastructure 45,543,099 125,793 372,745 - 46,041,637 Total capital assets, depreciated 86,067,763 427,699 1,823,767 126,457 88,192,772 Less accumulated depreciation: Land improvements (2,864,120) - (244,213) - (3,108,333) Buildings and improvements (9,010,998) - (745,067) - (9,756,065) Machinery and equipment (8,915,523) - (1,064,249) (124,113) (9,855,659) Infrastructure (26,007,332) - (1,547,762) - (27,555,094) Total accumulated depreciation (46,797,973) - (3,601,291) (124,113) (50,275,151) Net book value 47,766,024$ -$ 4,432,019$ 2,344$ 52,195,699$ Depreciation expense for the year ended June 30, 2009 was charged to governmental activities as follows: General Government 883,332$ Public Safety 613,048 Public Works 1,701,393 Culture and recreation 403,518 3,601,291$ 46 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 6.Capital Assets (continued) Balance Balance Busines-type activities:June 30, 2008 Adjustments Additions Deletions June 30, 2009 Capital assets, not depreciated: Land 262,422$ -$ -$ -$ 262,422$ Construction in progress 3,383,782 (2,663,298) 823,292 - 1,543,776 Total capital assets, not depreciated 3,646,204 (2,663,298) 823,292 - 1,806,198 Capital assets, depreciated: Land improvements 104,895 - - - 104,895 Buildings and improvements 3,976,878 - 25,030 - 4,001,908 Machinery and equipment 8,251,571 - 98,930 1,871 8,348,630 Infrastructure 15,612,248 2,663,298 179,586 - 18,455,132 Total capital assets, depreciated 27,945,592 2,663,298 303,546 1,871 30,910,565 Less accumulated depreciation: Land improvements (71,002) - (5,792) - (76,794) Buildings and improvements (1,534,557) - (137,198) - (1,671,755) Machinery and equipment (5,187,668) (3,380) (302,959) (1,473) (5,492,534) Infrastructure (4,822,285) - (841,706) - (5,663,991) Total accumulated depreciation (11,615,512) (3,380) (1,287,655) (1,473) (12,905,074) Net book value 19,976,284$ (3,380)$ (160,817)$ 398$ 19,811,689$ Depreciation expense for the year ended June 30, 2009 was charged to business-type activities as follows: Water and sewer 1,178,578$ Solid waste 2,466 Landfill 106,611 1,287,655$ 47 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 7.Long-term Debt Governmental Activities: During the year ended June 30, 2009, the following changes occurred in the liabilities reported in the government-wide statement of net assets: Balance Ba lance Due Within June 30, 2008 Additions Retirements June 30, 2009 One Year Revenue Bonds 7,720,000$ -$ 775,000$ 6,945,000$ 400,000$ NMFA Loan 880,505 - 86,833 793,672 89,293 USDA Contract Payable 108,000 - 18,000 90,000 18,000 Compensated Absences 784,354 266,279 369,209 681,424 369,209 Total Long-Term Debt 9,492,859$ 266,279$1,249,042$ 8,510,096$ 876,502$ Revenue Bonds At June 30, 2009, the Town had several revenue bonds outstanding. For the Series 1999 Gasoline Tax Revenue Bonds, the Town pledged revenues from the General and Municipal Road Gasoline Tax revenues. For the Series 2008 Gross Receipts Tax Revenue Bonds, the Town pledged revenues from the State-Shared Gross Receipts Tax revenues. The revenue bonds are as follows: Original Date of Due Interest Amount Ba lance Descr iption Issue Date Ra te of Issue June 30, 2009 Series 1999 Gasoline Tax 03/01/99 10/01/12 3.60-4.75%1,955,000$ 700,000$ Series 2008 Gross Receipts Tax 01/30/08 06/01/26 4.00-5.00%6,395,000 6,245,000 Total Revenue Bonds 6,945,000$ The annual requirements to amortize the revenue bonds as of June 30, 2009, including interest payments,are as follows: Fi scal Year Total Debt Ending June 30,Principal Interest Service 2010 400,000$ 282,000$ 682,000$ 2011 415,000 265,278 680,278 2012 435,000 247,755 682,755 2013 450,000 229,188 679,188 2014 280,000 209,800 489,800 2015-2019 1,690,000 1,081,250 2,771,250 2020-2024 1,760,000 248,260 2,008,260 2025-2029 1,515,000 63,630 1,578,630 6,945,000$ 2,627,161$ 9,572,161$ 48 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 7.Long-term Debt (continued) NMFA Loan The Town entered into a loan agreement with the New Mexico Finance Authority, wherein the Town pledged revenue derived from State-Shared Gross Receipts Tax to cover debt service. This revenue is not subject to intercept agreements. The NMFA loan is as follows: Or iginal Da te of Due Interest Amount Ba lance Description Issue Date Rate of Issue June 30, 2009 NMFA Land Purchase Loan 04/13/07 05/01/17 3.32-3.73%954,000$ 793,672$ The annual requirements to amortize the NMFA loan as of June 30, 2009, including interest payments, are as follows: Fi scal Year Total Debt Ending June 30,Principal Interest Service 2010 89,293$ 22,437$ 111,730$ 2011 91,860 20,100 111,960 2012 94,540 17,656 112,196 2013 97,362 15,077 112,439 2014 100,326 12,364 112,690 2015-2019 320,291 19,363 339,654 793,672$ 106,997$ 900,669$ USDA Contract Payable At June 30, 2009, the Town had the following USDA contract payable: Or iginal Da te of Due Interest Amount Ba lance Description Issue Date Rate of Issue June 30, 2009 USDA Contract Payable 02/01/95 06/30/14 0.00%360,000$ 90,000$ The annual requirements to amortize the USDA contract payable as of June 30, 2008,including interest payments, are as follows: Fiscal Year Total Debt Ending June 30,Principal Interest Service 2010 18,000$ -$ 18,000$ 2011 18,000 - 18,000 2012 18,000 - 18,000 2013 18,000 - 18,000 2014 18,000 - 18,000 90,000$ -$ 90,000$ 49 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 7.Long-term Debt (continued) In prior years, the debt service funds have typically been used to liquidate long-term liabilities other than debt associated with the USDA contract payable which is liquidated b y t he facilities improvements capital projects fund. Proprietary Funds The proprietar y 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, 2009: Balance Ba lance Due Within June 30, 2008 Additions Retirements June 30, 2009 One Year Revenue Bonds 2,216,600$ -$ 37,000$ 2,179,600$ 40,000$ NMFA and RUS Loans 2,313,789 32,480 228,463 2,117,806 204,791 Landfill Closure Liability 235,575 90,278 - 325,853 - Compensated Absences 66,043 40,284 42,332 63,995 42,332 Total Long-Term Debt 4,832,007$ 163,042$307,795$ 4,687,254$ 287,123$ Revenue Bonds At June 30, 2009, the Town had the following revenue bonds outstanding: Original Date of Due Interest Amount Balance Description Issue Date Rate of Issue June 30, 2009 Series 1993A Water & Sewer 03/16/93 03/16/33 5.63%635,600$ 527,600$ Series 1993B Water & Sewer 03/16/93 03/16/33 5.50%123,000 103,000 Series 1995A Utility 12/05/95 12/05/35 5.125%1,315,000 1,126,000 Series 1998A Water & Sewer 07/01/99 01/01/38 4.75%475,000 423,000 Total Revenue Bonds 2,179,600$ 50 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 7.Long-term Debt (continued) The annual requirements to amortize the revenue bonds as of June 30, 2009, including interest payments, are as follows: Fi scal Year Total Debt Ending June 30,Principal Interest Service 2010 40,000$ 113,477$ 153,477$ 2011 41,000 111,382 152,382 2012 43,000 109,235 152,235 2013 46,000 106,982 152,982 2014 49,000 104,572 153,572 2015-2019 286,000 481,498 767,498 2020-2024 369,000 398,309 767,309 2025-2029 477,000 290,787 767,787 2030-2034 577,600 150,979 728,579 2035-2039 251,000 24,576 275,576 2,179,600$ 1,891,797$ 4,071,397$ 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: Or iginal Da te of Due Interest Amount Ba lance Description Issue Date Rate of Issue June 30, 2009 RUS Ser ies 2000A Water & Sewer 12/18/00 12/18/40 5.00%250,000$ 231,000$ NMFA Ser ies 2001A Water & Sewer 05/11/01 05/01/21 4.16-5.41%950,391 597,063 NMFA Taos Regional Landfill 04/23/04 05/01/14 .79-3.34%1,372,684 372,554 NMFA Ser ies 2008A Landfill 04/11/08 05/01/18 2.72-3.58%1,000,000 917,189 Total Loans 2,117,806$ 51 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 7.Long-term Debt (continued) The annual requirement to amortize the loans as of June 30, 2009,including interest payments, are as follows: Fiscal Year Total Debt Ending June 30,Principal Interest Service 2010 204,791$ 71,014$ 275,805$ 2011 210,349 65,728 276,077 2012 216,353 59,921 276,274 2013 222,851 53,597 276,448 2014 230,776 46,765 277,541 2015-2019 762,051 141,497 903,548 2020-2024 103,635 50,321 153,956 2025-2029 33,000 38,600 71,600 2030-2034 44,000 29,350 73,350 2035-2039 56,000 17,150 73,150 2040-2044 34,000 2,750 36,750 2,117,806$ 576,693$ 2,694,499$ NOTE 8.Risk Management The Town is exposed to various risks of loss related to torts, thefts of, damage to, and destruction of property, errors and omissions and natural disasters. The Town participates in the New Mexico Self-Insurers’ Fund risk pool. The Town has not filed any claims for which the settlement amount exceeded the insurance coverage during the past three years. However, should a claim be filed against the Town which exceeds the insurance coverage, the Town would be responsible for a loss in excess of the coverage amounts. As claims are filed, the New Mexico Self-Insurers’ Fund assesses and estimates the potential for loss and handles all aspects of the claim. Insurance coverage’s have not changed significantly from prior years and coverage’s are expected to be continued. At June 30, 2009, no unpaid claims have been filed which exceed the policy limits and to the best of management’s knowledge and belief all known and unknown claims will be covered by insurance. No major lawsuits have been filed against the Town of Taos. New Mexico Self-Insurers’ Fund has not pr ovided information on an entity b y e ntity basis that would allow for a reconciliation of changes in the aggregate liabilities for claims for the current fiscal year and the prior fiscal ye ar. During 2009, the Town contributed $663,003 to the New Mexico Self-Insurer’s Fund. 52 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 9.Other Required Individual Fund Disclosures Generally accepted accounting principles require disclosures of certain information concerning individual funds including: A.Deficit fund balance of individual funds.The deficit fund balances as of June 30, 2009 were as follows: Governmental Funds: Airport Construction $1,877 The fund balance has a deficit because expenditures were in excess of revenues and available cash and there were not sufficient transfers to cover the deficit. Budget line items will be strictly monitored and reviewed to ensure funds operate within the approved budget. B.Actual expenditures in excess of amount budgeted at the budgetar y a uthority level. Budgetar y l evel is fund level. The following fund exceeded approved budgetary authority for the year ended June 30, 2009: Excess Lodger’s Tax $33,509 The Town will revise and strictly enforce a year-end process throughout all departments. C.Designated cash appropriations in excess of available balances. Budgetar y l evel is fund level. There were not any funds in which there were designated cash appropriations in excess of available balances for the ye ar ended June 30, 2009. NOTE 10.PERA Pension Plan Plan Description. Substantially all of the Town of Taos’s full-time employees participate in a public employee retirement system authorized under the Public Employees Retirement Act (Chapter 10, Article 11 NMSA 1978.) The Public Employee Retirement Association (PERA) is the administrator of the plan, which is a cost- sharing, multiple-employer defined benefit retirement plan. The plan provides for retirement, disability benefits, survivor benefits, and cost-of-living adjustments to plan members and beneficiaries. PERA issues a separate, publicly available financial report that includes financial statements and required supplementar y information. That report may be obtained b y writing to PERA, P. O. Box 2123, Santa Fe, New Mexico 87504- 2123.The report is also available on PERA’s website at www.pera.state.nm.us. Funding Policy. Municipal general member coverage plan 1 members are required to contribute 9.15% of their gross salary. The Town is required to contribute 13.15% of the covered salary for “municipal general member coverage plan 1” members. Municipal police coverage plan 1 members are required to contribute 9.15% of their gross salar y. The Town is required to contribute 25.65% of the covered salar y for “municipal police coverage plan 1” members. Municipal fire member coverage plan 1 members are required to contribute 9.15% of their gross salar y.The Town is required to contribute 28.30% of the covered salary for “municipal fire member coverage plan 1” members. The contribution requirements of plan members and the Town are established in State statute under Chapter 10, Article 11, NMSA 1978. The requirements may be amended b y acts of the legislature. The Town ’s contributions to PERA for the fiscal years ending June 30, 2009, 2008 and 2007 were $964,168, $640,410 and $581,742, respectively, which equal the amount of the required contributions for each fiscal year. 53 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 11.Post-Employment Benefits –State Retiree Health Care Plan Plan Description. The Town contributes to the New Mexico Retiree Health Care Fund, a cost-sharing multiple-employer defined postemployment healthcare plan administered by the New Mexico Retiree Health Care Authority (RHCA). The RHCA provides health care insurance and prescription drug benefits to retired employees of participating New Mexico government agencies, their spouses, dependents, and surviving spouses and dependents. The RHCA Board was established by the Retiree Health Care Act (Chapter 10, Article 7C, NMSA 1978). The Board is responsible for establishing and amending benefit provisions of the healthcare plan and is also authorized to designate optional and/or voluntar y benefits like dental, vision, supplemental life insurance, and long-term care policies. Eligible retirees are: 1) retirees who make contributions to the fund for at least five years prior to retirement and whose eligible employer during that period of time made contributions as a participant in the RHCA plan on the person’s behalf unless that person retires before the employer’s RHCA effective date, in which the event the time period required for employee and employer contributions shall become the period of time between the employer’s effective date and the date of retirement; 2) retirees defined b y t he Act who retired prior to July 1, 1990; 3) former legislators who served at least two years; and 4) former governing authority members who served at least four years. The RHCA issues a publicly available stand-alone financial report that includes financial statements and required supplementar y i nformation for the postemployment healthcare plan. That report and further information can be obtained b y wr iting to the Retiree Health Care Authority at 4308 Carlisle NE, Suite 104, Albuquerque, NM 87107. Funding Policy.The Retiree Health Care Act (Section 10-7C-13 NMSA 1978) authorizes the RHCA Board to establish the monthly premium contributions that retirees are required to pay for healthcare benefits. Each participating retiree pays a monthly premium according to a service based subsidy rate schedule for the medical plus basic life plan plus an additional participation fee of five dollars if the eligible participant retired prior to the employer’s RHCA effective date or is a former legislator or former governing authority member. Former legislators and governing authority members are required to pay 100% of the insurance premium to cover their claims and the administrative expenses of the plan. The monthly premium rate schedule can be obtained from the RHCA or viewed on their website at www.nmrhca.state.nm.us. The Retiree Health Care Act (Section 10-7C-15 NMSA 1978) is the statutor y authority that establishes the required contributions of participating employers and their employees. The statute requires each participating employer to contribute 1.3% of each participating employee’s annual salar y; each participating employee is required to contribute .65% of their salary. Employers joining the program after 1/1/98 are also required to make a surplus-amount contribution to the RHCA based on one of two formulas at agreed-upon intervals. The RHCA plan is financed on a pay-as-you-go basis. The employer, employee and retiree contributions are required to be remitted to the RCHA on a monthly basis. The statutor y r equirements for the contributions can be changed b y the New Mexico State Legislature. The Town’s contributions to the RHCA for the ye ars ended June 30, 2009,2008 and 2007 were $76,488, $75,902 and $66,225, respectively, which equal the required contributions for each year. 54 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 12.Contingent Liabilities There is not any pending litigation that would warrant disclosure in the notes to the financial statements. NOTE 13.Federal and State Grants 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 b y gr antor agencies, the purpose of which is to ensure compliance with conditions precedent to the granting of funds. Any liability for reimbursement which may arise as a result of these audits is not believed to be material. NOTE 14.Landfill Closure and Post Closure Care Costs State and Federal laws and regulations require that the Town place a final cover on its landfill site and perform certain maintenance and monitoring functions at the landfill site for a minimum of thirty years after closure. In addition to operating expenses related to current activities of the landfill site, an expense provision and related liability are being recognized based on the future closure and postclosure care costs that will be incurred near or after the date the landfill no long accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the ye ar. The estimated liability for landfill closure and postclosure care costs is $325,853 as of June 30, 2009, which is based on 25 percent usage (filled) of the landfill. It is estimated that an additional $977,557 will be recognized as closure and postclosure care expenses between the date of the balance sheet and the date the landfill is currently expected to be filled to capacity. The estimated total current cost of the landfill closure and postclosure care ($1,303,410) 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, 2009. However, the actual cost of closure and postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. In addition, the Town is required b y S tate and Federal laws and regulations to make annual contributions to finance closure and postclosure care. The Town is in compliance with these requirements, and at June 30, 2009, cash of $419,566 is part of the pooled funds held b y t he Town and is presented as restricted cash on the statement of net assets. NOTE 15.Construction and Other Significant Commitments The Town has committed to pay for several construction contracts that were not completed at June 30, 2009 in the amount of $818,053 as follows: Project Description Contractor Town Hall Construction 221,090$ November 2009 Ger ald Martin Taos Community Auditorium 105,323 November 2009 Michael S. Rich Contractors Sn ow Removal Equipment 302,150 November 2009 Kodiak Northwest Cell No. 2A & 2B Landfill 189,490 November 2009 Parker Excavating 818,053$ Contract Amount Remaining Estimated Date of Completion 55 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 16.Subsequent Events In July 2009, the Town entered into a grant/loan agreement with the New Mexico Water Trust Board (grantors) and the New Mexico Finance Authority (lenders) totaling $1,300,000. The funding breakdown will consist of a loan in the amount of $130,000 and a grant in the amount of $1,170,000 for the cost associated with phase two of a four phase Wastewater Treatment Plant Rehabilitation Project. In July 2009, the Town entered into a grant/loan agreement with the New Mexico Water Trust Board (grantors) and the New Mexico Finance Authority (lenders) totaling $3,000,000. The funding breakdown will consist of a loan in the amount of $600,000 and a grant in the amount of $2,400,000 for the cost associated with the beginning of phase three of a four phase Wastewater Treatment Plant Rehabilitation Project. In October 2009, The Town accepted funding under the American Recovery and Reinvestment Act (ARRA) for wastewater treatment plant phase two and three upgrades. The funding for this project consists of $1,000,000 in loan funds from the base Clean Water State Revolving Fund (CWSRF) program and $2,100,000 in grant funds from the ARRA CWSRF grant. Both of the funds are through the New Mexico Environment Department Construction Programs Bureau. In October 2009, the Town entered into a loan/intercept agreement with the New Mexico Finance Authority (NMFA), in the principal amount of $2,213,469 for the purpose of constructing phase one of a multi-phase recreation park. A portion of the Town’s municipal infrastructure gross receipts tax will be redirected by the New Mexico State Taxation and Revenue Department to NMFA for debt service payments. LGIP Investment in the Reserve Primary Fund The New Mexico State Treasurer’s Office invested a portion of the LGIP in the Reserve Primar y Fund (“the Fund”), a money market fund, in fiscal years 2006, 2007, 2008 and 2009. On September 15, 2008, the balance of the LGIP’s investment in the Fund was $381.7 million. On September 16, 2008, the Reserve Primary Fund’s net asset value fell below $1.00 and holdings in the Fund were frozen. Since September 2008, the Reserve Primary Fund has returned approximately $0.90 per share to shareholders. On February 26, 2009, the Reserve Primary Fund announced that it was withholding $3.5 billion of the Fund’s assets for anticipated and pending litigation against it, which amount could increase or decrease as the Fund evaluates information related to such litigation. As a result, the State Treasurer’s Office cannot anticipate what the actual loss to the LGIP from the Reserve Primar y Fund may be or when the actual loss may be realized. No actual loss has been realized to date. The total remaining Reserve Primar y Fund position as of June 30, 2009 is $39.5 million. The LGIP’s remaining position in the Reserve Primar y Fund is a non-performing asset. On May 5, 2009, the U.S. Securities and Exchange Commission (“SEC”) filed a civil lawsuit in federal court against the operators of the Reserve Primar y F und, alleging fraud; seeking the pro rata distribution of the remaining Fund’s assets; and seeking the release of the $3.5 billion currently being withheld from investors pending the outcome of the lawsuits against the Reserve Primar y Fund. The court is scheduled to hold a hearing on the SEC’s proposed plan of distribution on September 23, 2009. On May 20, 2009, the New Mexico Attorney General filed a civil complaint and injunction petition in state district court against the Reserve Primar y Fund. The Attorney General’s complaint alleges that the Fund setting aside $3.5 billion to pay legal fees and expenses is a willful and intentional conversion of the investors’ assets and a breach of contract. The complaint further alleges that the Fund’s failure to honor redemption requests on September 16, 2008 is a breach of contract. Additionally, the Attorney General’s injunction petition seeks the release of the investors’ pro rata share of the $3.5 billion the Reserve Primar y Fund set aside for its anticipated and pending legal costs. The New Mexico State Treasurer’s Office believes that the Reserve Primary Fund will ultimately end up distributing between 98.38% and 98.77% of the balance that the LGIP had in the Reserve Primar y Fund as of September 15, 2008. This means that of the remaining undistributed balance as of June 30, 2009, it is expected the LGIP is to recover between 83.84% and 87.78%. Uncertainty remains, however, as to the timing of these distributions. 56 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 17.Restricted Net Assets The government-wide statement of net assets reports $7,419,536 of restricted net assets, all of which is restricted b y e nabling legislation. See pages 62 to 65 for descriptions of the related restrictions for special revenue, debt service and capital projects funds. NOTE 18.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 b y t he trustee, payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on the bonds is $527,600 and $447,324, respectively. Principal and interest paid for the current year and total customer net revenues were $40,240 and $(1,457,257), respectively. The Town of Taos has pledged future revenues from the water and sewer system, net of operation and maintenance expenses, to repay $123,000 in Series 1993B Water & Sewer Revenue Bonds, issued in 1993. The bonds are payable solely from utility customer net revenues and are payable through March 2033. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due under the bond agreement, including an amount sufficient to cure any deficiencies in the debt service account or the bond agreement reserve account, to the USDA or the Trustee, as its assignee, to be deposited in the debt service reserve account or the bond agreement reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on the bonds is $103,000 and $89,760, respectively. Principal and interest paid for the current year and total customer net revenues were $7,775 and $(1,457,257), 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 b y t he trustee, payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on the bonds is $1,126,000 and $978,265, respectively. Principal and interest paid for the current year and total customer net revenues were $77,682 and $(1,457,257), 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 Januar y 2038. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due under the bond agreement, including an amount sufficient to cure any deficiencies in the debt service account or the bond agreement reserve account, to the USDA or the Trustee, as its assignee, to be deposited in the debt service reserve account or the bond agreement reserve account held b y t he trustee, payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on the bonds is $423,000 and $376,448, respectively. Principal and interest paid for the current year and total customer net revenues were $26,377 and $(1,457,257), respectively. 57 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 18.Utility Revenues Pledged (continued) The Town of Taos has pledged future revenues from the water and sewer system, net of operation and maintenance expenses, to repay $250,000 in RUS Series 2000A Water & Sewer Loan, issued in 2000. The loans are payable solely from utility customer net revenues and are payable through December 2040. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service account or the loan agreement reserve account, to the USDA or the Trustee, as its assignee, to be deposited in the debt service reserve account or the loan agreement reserve account held b y 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 $231,000 and $241,800, respectively. Principal and interest paid for the current year and total customer net revenues were $14,700 and $(1,457,257), respectively. The Town of Taos has pledged future revenues from the water and sewer system, net of operation and maintenance expenses, to repay $950,391 in NMFA Series 2001A Water & Sewer Loan, issued in 2001. The loans are payable solely from utility customer net revenues and are payable through May 2021. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any,interest and other amounts due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited in the debt service reserve account or the loan agreement reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on the loan is $597,063 and $169,253, respectively. Principal and interest paid for the current year and total customer net revenues were $67,861 and $(1,457,257), respectively. The Town of Taos has pledged future revenues from the distribution of the Municipal Environmental Services Gross Receipts Tax revenue, to repay $1,372,684 in NMFA Taos Regional Landfill Loan, issued in 2004. The loans are payable solely from the Municipal Environmental Services GRT revenue and are payable through May 2014. 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 b y t he trustee, payable from and constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on the loan is $372,554 and $35,341, respectively. Principal and interest paid for the current year and total customer net revenues were $80,921 and $151,037, respectively. The Town of Taos has pledged future revenues from the Taos Regional Landfill system, net of operation and maintenance expenses, to repay $1,000,000 in NMFA Series 2008A Landfill Loan, issued in 2008. The loans are payable solely from utility customer net revenues and are payable through May 2018. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt service account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited in the debt service reserve account or the loan agreement 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 $917,189 and $130,299, respectively. Principal and interest paid for the current year and total customer net revenues were $109,647 and $260,747, respectively. NOTE 19.Related Parties The Town had transactions with two entities during the year ended June 30, 2009 which are considered to be related parties. DMC Broadcasting, Inc., owned by Mayor Darren Cordova, performed advertising services for the Town for a total amount of $30,876 during the year and Abeyta Engineering, Inc., owned by Council Member Abeyta’s brother, performed engineering services for the Town for a total amount of $44,686 during the year. 58 STATE OF NEW MEXICO Town of Taos Notes to Financial Statements June 30, 2009 NOTE 20.Subsequent Pronouncements In July 2007, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, which is effective for periods beginning after June 15, 2009. For governments that were classified as phase 1 or phase 2 governments, retroactive reporting is required for intangible assets acquired in fiscal years ending after June 30, 1980, except for those considered to have indefinite useful lives as of the effective date of this Statement and those that would be considered internally generated. Retroactive reporting of these intangible assets by phase 3 governments is encouraged but not required. Retroactive reporting is not required but is permitted for intangible assets considered to have indefinite useful lives as of the effective date of this Statement and those considered to be internally generated. The objective of this Statement is to establish accounting and financial reporting requirements for intangible assets to reduce these inconsistencies, thereb y e nhancing the comparability of the accounting and financial reporting of such assets among state and local governments. The Town is analyzing the effect that this standard will have on the financial statements, and currently believes it will have no significant effect on the financial statements for the upcoming year. In March 2009, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, which is effective for financial statements for periods beginning after June 15, 2010 with earlier implementation encouraged. GASB Statement No. 54 distinguishes fund balance between amounts that are considered nonspendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that control the purpose for which specific amounts can be spent. This statement is intended to improve the usefulness of information provided to financial report users about fund balance b y providing clearer, more structured fund balance classifications, and b y c larifying the definitions of existing governmental fund types. The Town is analyzing the effect that this standard will have on the financial statements. 59 (This page intentionally left blank.) 60 SUPPLEMENTARY INFORMATION 61 STATE OF NEW MEXICO Town of Taos Nonmajor Governmental Funds June 30, 2009 Special Revenue Funds Fire Protection To account for the operations and maintenance of the fire department. Financing is provided by an allotment from the State of New Mexico Fire Marshall’s Office. State Statute Section 59A-53-2, NMSA, 1978 compilation, requires the allotment be used only to operate fire departments. Recreation To account for establishing and maintaining recreational programs in the Town. Financing is provided b y p rogram revenue and by a 1- cent tax on cigarette sales, which is collected and distributed by the State of New Mexico. State Statute Section 7-12-15, NMSA, 1978 compilation requires this tax be used in the above manner. Lodger’s Tax 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. Additionally, revenues received pursuant to the Lodger’s Tax Act (Section 3-38-15, NMSA 1978). Monies in the Lodger’s 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 is 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 lodger’s tax receipts allocated for Civic Center operations and promotional expenditures, as well as the revenues earned from Civic Center operations, including rentals, catering fees, and related charges for services. Authority is Town Council resolution. Domestic Violence Shelter This fund was created to receive the appropriations and grants for the purpose of construction and maintaining the Domestic Violence Shelter Home. Authority is Town Council resolution. Public Transportation To account for the portion of Lodger’s Tax receipts allocated for the purpose of providing transportation to the public. Authority is Town Council resolution. 62 STATE OF NEW MEXICO Town of Taos Nonmajor Governmental Funds June 30, 2009 Special Revenue Funds (continued) Community Grants To account for various small grants for various community purposes. Each grant is authorized b y t he granting agency. The fund is authorized b y T own 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. ¼ 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 Series 1988 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. Communications To account for money collected b y t he Town from three other government entities to share centralized dispatch services throughout the County of Taos. Funding is authorized b y a joint power agreement as authorized b y S ections 11-1-1 through 11-1-7 NMSA 1978. 63 STATE OF NEW MEXICO Town of Taos Nonmajor Governmental Funds June 30, 2009 Debt Service Funds 2001 Gross Receipts Tax Revenue Bond Retirement This fund was created with transfers from Gross Receipts Tax revenues for the purpose of accumulating monies for payment of principal and interest on Series 2001 Gross Receipts Tax Revenue Bonds. Authority is Town Council resolution. 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. 1999 Gasoline Tax Revenue Bond Retirement This fund was created with transfers from the Gas Tax Fund for the purpose of repayment of the Series 1999 Gasoline Tax Revenue Bonds. Authority is Town Council resolution. 2008 Gross Receipts Tax Revenue Bond Reserve This fund was created for the purpose of accumulating monies for payment of principal and interest on Series 2008 Gross Receipts Tax Revenue Bonds. Authority is Town Council resolution. 1999 Gasoline Tax Revenue Bond Reserve This fund was created with transfers from the Gas Tax Fund for the purpose of accumulating monies for the payment of principal and interest on Series 1999 Gasoline Tax Revenue Bonds. Authority is Town Council resolution. 2007 NMFA Land Purchase This fund was created to be credited with transfers from the General Fund for the purpose of accumulating monies for payment of principal and interest on the debt for repayment of land purchase. Authority is Town Council resolution. 2001 Gross Receipts Tax Revenue Bond Reserve To accumulate monies for the payment of interest and principal on Series 2001 Gross Receipts Tax Revenue Bonds. Authority is Town Council resolution. 64 STATE OF NEW MEXICO Town of Taos Nonmajor Governmental Funds June 30, 2009 Capital Projects Funds Facilities Improvements This fund was created to receive transfers fr om other funds for the purpose of improving facilities of the Town. Authority is Town Council resolution. Airport Construction This fund was created to receive proceeds from federal and state grants for the purpose of financing improvements to the Taos Municipal Airport. Authority is Town Council resolution. Enhanced 911 This fund was created to receive grants and transfers for the purpose of expanding benefits of the basic 911 emergency telephone number to achieve faster response time. Authority is Town Council resolution. Vehicle Replacement This fund is created to receive transfers from other funds for the purpose of purchasing vehicles for the Town of Taos. 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 the bond proceeds and to account for the capital outlay associated with the bond issue.Authority is Town Council resolution. 65 Fire Protection Recreation Lodger's Tax Local Government Correction Assets Unrestricted cash and cash equivalents 9,059$ 14,691$ 182$ 10,258$ Restricted cash and cash equivalents - - - - Investments 299,220 72,000 40,000 7,000 Receivables: Other taxes - 502 101,233 - Other - - - - Total assets 308,279$ 87,193$ 141,415$ 17,258$ Liabilities Accounts payable -$ 87$ 57,105$ 14,430$ Accrued payroll - - 8,275 - Deposits held in trust for others - - - - Due to other funds - - - - Total liabilities - 87 65,380 14,430 Fund balances Reserved for: Future debt service payments - - - - Unreserved Special revenue 308,279 87,106 76,035 2,828 Capital projects - - - - Total fund balances 308,279 87,106 76,035 2,828 Total liabilities and fund balances 308,279$ 87,193$ 141,415$ 17,258$ Town of Taos Nonmajor Governmental Funds Combining Balance Sheet STATE OF NEW MEXICO The accompanying notes are an integral part of these financial statements June 30, 2009 Special Revenue 66 Statement A-1 Page 1 of 3 Law Enforcement Protection Civic Center Domestic Violence Shelter Public Transportation Community Grants Municipal Road Gasoline Tax 7,594$ 30,488$ 1$ 3,895$ 5,498$ -$ - 82 - - - - - 27,000 - - 277,000 - - - - - - 3,737 32,000 - 451 19,473 43,898 - 39,594$ 57,570$ 452$ 23,368$ 326,396$ 3,737$ 2,565$ 3,565$ -$ 3,794$ 22,661$ -$ - 15,551 - 15,845 3,823 - - 5,082 - - - - - - - - - - 2,565 24,198 - 19,639 26,484 - - - - - - - 37,029 33,372 452 3,729 299,912 3,737 - - - - - - 37,029 33,372 452 3,729 299,912 3,737 39,594$ 57,570$ 452$ 23,368$ 326,396$ 3,737$ Special Revenue 67 1/4 Cent Municipal Gross Receipts Tax Communications 2001 Gross Receipts Tax Revenue Bond Retirement 2008 Gross Receipts Tax Revenue Bond Retirement Assets Unrestricted cash and cash equivalents -$ 25,766$ -$ 230$ Restricted cash and cash equivalents - - - - Investments - 182,000 177,500 - Receivables: Other taxes 70,102 - - - Other - - - - Total assets 70,102$ 207,766$ 177,500$ 230$ Liabilities Accounts payable -$ 116$ -$ -$ Accrued payroll - 23,564 - - Deposits held in trust for others - - - - Due to other funds - - 177,427 - Total liabilities - 23,680 177,427 - Fund balances Reserved for: Future debt service payments - - 73 230 Unreserved Special revenue 70,102 184,086 - - Capital projects - - - - Total fund balances 70,102 184,086 73 230 Total liabilities and fund balances 70,102$ 207,766$ 177,500$ 230$ Special Revenue Debt Service STATE OF NEW MEXICO Town of Taos Nonmajor Governmental Funds Combining Balance Sheet The accompanying notes are an integral part of these financial statements June 30, 2009 68 Statement A-1 Page 2 of 3 Capital Projects 1999 Gasoline Tax Revenue Bond Retirement 2008 Gross Receipts Tax Revenue Bond Reserve 1999 Gasoline Tax Revenue Bond Reserve 2007 NMFA Land Purchase 2001 Gross Receipts Tax Revenue Bond Reserve Facilities Improvements 6,614$ -$ -$ 3,421$ -$ 9,348$ - - - 21,370 - - 20,000 - 195,500 - - 70,000 - - - - - - - - - - - 5,198 26,614$ -$ 195,500$ 24,791$ -$ 84,546$ -$ -$ -$ -$ -$ 2,881$ - - - - - - - - - - - - - - - - - - - - - - - 2,881 26,614 - 195,500 24,791 - - - - - - - - - - - - - 81,665 26,614 - 195,500 24,791 - 81,665 26,614$ -$ 195,500$ 24,791$ -$ 84,546$ Debt Service 69 Airport Construction Enhanced 911 Vehicle Replacement 1994 Gross Receipts Tax Revenue Bond Acquisition Assets Unrestricted cash and cash equivalents 4,398$ 309$ 2,028$ 7,707$ Restricted cash and cash equivalents - - - - Investments 34,000 25,000 201,000 771,238 Receivables: Other taxes - - - - Other 23,818 - - - Total assets 62,216$ 25,309$ 203,028$ 778,945$ Liabilities Accounts payable 64,093$ -$ -$ 5,500$ Accrued payroll - - - - Deposits held in trust for others - - - - Due to other funds - - - - Total liabilities 64,093 - - 5,500 Fund balances Reserved for: Future debt service payments - - - - Unreserved Special revenue - - - - Capital projects (1,877) 25,309 203,028 773,445 Total fund balances (1,877) 25,309 203,028 773,445 Total liabilities and fund balances 62,216$ 25,309$ 203,028$ 778,945$ Capital Projects Town of Taos Combining Balance Sheet June 30, 2009 Nonmajor Governmental Funds STATE OF NEW MEXICO The accompanying notes are an integral part of these financial statements 70 Statement A-1 Page 3 of 3 Capital Projects 1999 Gasoline Tax Acquisition Total Nonmajor Governmental Funds 6,673$ 148,160$ - 21,452 560,873 2,959,331 - 175,574 64,669 189,507 632,215$ 3,494,024$ -$ 176,797$ - 67,058 - 5,082 - 177,427 - 426,364 - 247,208 - 1,106,667 632,215 1,713,785 632,215 3,067,660 632,215$ 3,494,024$ 71 Fire Protection Recreation Lodger's Tax Local Governmental Correction Revenues Taxes Gross receipts -$ -$ -$ -$ Gasoline and motor vehicle taxes - - - - Other - 15,548 893,755 - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants 195,200 - - - State capital grants - - - - Charges for services - - 20,056 - Licenses and fees - - - 29,279 Interest income - - - - Miscellaneous 249 20,535 5,411 - Total revenues 195,449 36,083 919,222 29,279 Expenditures Current General government - - 756,109 - Public safety 101,311 - - 92,172 Public works - - - - Culture and recreation - 24,193 - - Health and welfare - - - - Capital outlay 46,429 - - - Debt service Principal - - - - Interest - - - - Total expenditures 147,740 24,193 756,109 92,172 Excess (deficiency) of revenues over expenditures 47,709 11,890 163,113 (62,893) Other financing sources (uses) Transfers in - - 336,530 9,000 Transfers out - - (517,713) - Proceeds from insurance recovery - - - - Total other financing sources (uses)- - (181,183) 9,000 Net change in fund balances 47,709 11,890 (18,070) (53,893) Fund balances - beginning of year 260,570 75,216 94,105 56,721 Fund balances - end of year 308,279$ 87,106$ 76,035$ 2,828$ The accompanying notes are an integral part of these financial statements Special Revenue For the Year Ended June 30, 2009 STATE OF NEW MEXICO Town of Taos Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 72 Statement A-2 Page 1 of 3 Law Enforcement Protection Civic Center Domestic Violence Shelter Public Transportation Community Grants Municipal Road Gasoline Tax -$ -$ -$ -$ -$ -$ - - - - - 43,234 - - - - - - - - 150,000 - - - - - - - - - 64,600 - - 228,128 306,628 - - - - - - - - 78,079 - - - - - 475 - - - - - - - - - - - 276 - 54,867 - - 64,600 78,830 150,000 282,995 306,628 43,234 - - - - 485,036 - 27,577 - - - - - - - - - - - - 482,284 - - - - - - 149,549 520,291 - - - - - - 8,358 - - - - - - - - - - - - - 27,577 482,284 149,549 520,291 493,394 - 37,023 (403,454) 451 (237,296) (186,766) 43,234 - 438,236 - 223,114 230,000 - - - - - (70,000) (45,555) - - - 2,205 - - - 438,236 - 225,319 160,000 (45,555) 37,023 34,782 451 (11,977) (26,766) (2,321) 6 (1,410) 1 15,706 326,678 6,058 37,029$ 33,372$ 452$ 3,729$ 299,912$ 3,737$ Special Revenue 73 1/4 Cent Municipal Gross Receipts Tax Communications 2001 Gross Receipts Tax Revenue Bond Retirement 2008 Gross Receipts Tax Revenue Bond Retirement Revenues Taxes Gross receipts 935,269$ -$ -$ -$ Gasoline and motor vehicle taxes - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - 270,695 - - Total revenues 935,269 270,695 - - Expenditures Current General government - 548,383 - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - 6,948 - - Debt service Principal - - 470,000 150,000 Interest - - 24,675 261,825 Total expenditures - 555,331 494,675 411,825 Excess (deficiency) of revenues over expenditures 935,269 (284,636) (494,675) (411,825) Other financing sources (uses) Transfers in - 243,694 494,638 402,606 Transfers out (938,411) - - - Proceeds from insurance recovery - - - - Total other financing sources (uses)(938,411) 243,694 494,638 402,606 Net change in fund balances (3,142) (40,942) (37) (9,219) Fund balances - beginning of year 73,244 225,028 110 9,449 Fund balances - end of year 70,102$ 184,086$ 73$ 230$ Town of Taos Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances The accompanying notes are an integral part of these financial statements For the Year Ended June 30, 2009 Debt ServiceSpecial Revenue STATE OF NEW MEXICO 74 Statement A-2 Page 2 of 3 Capital Projects 1999 Gasoline Tax Revenue Bond Retirement 2008 Gross Receipts Tax Revenue Bond Reserve 1999 Gasoline Tax Revenue Bond Reserve 2007 NMFA Land Purchase 2001 Gross Receipts Tax Revenue Bond Reserve Facilities Improvements -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 20,910 - - - - - - - - - - - - - 4,101 4,112 612 7,428 - - - - - - - - 4,101 4,112 612 7,428 20,910 500 - - 2,203 - - - - - - - - - - - - - 215,466 - - - - - - - - - - - - - - - - - 66,487 155,000 - - 86,833 - 18,000 36,308 - - 24,673 - - 191,808 - - 113,709 - 299,953 (191,808) 4,101 4,112 (113,097) 7,428 (279,043) 213,733 - - 107,000 - 328,876 - (174,601) (4,112) - (419,928) (60,674) - - - - - - 213,733 (174,601) (4,112) 107,000 (419,928) 268,202 21,925 (170,500) - (6,097) (412,500) (10,841) 4,689 170,500 195,500 30,888 412,500 92,506 26,614$ -$ 195,500$ 24,791$ -$ 81,665$ Debt Service 75 Airport Construction Enhanced 911 Vehicle Replacement 1994 Gross Receipts Tax Revenue Bond Acquisition Revenues Taxes Gross receipts -$ -$ -$ -$ Gasoline and motor vehicle taxes - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants 319,684 - - - State operating grants - - - - State capital grants 9,771 - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - 10,102 Miscellaneous - - 1,560 18,990 Total revenues 329,455 - 1,560 29,092 Expenditures Current General government - - - - Public safety - - - - Public works 331,075 - - 93,576 Culture and recreation - - - - Health and welfare - - - - Capital outlay 35,300 - 56,145 13,232 Debt service Principal - - - - Interest - - - - Total expenditures 366,375 - 56,145 106,808 Excess (deficiency) of revenues over expenditures (36,920) - (54,585) (77,716) Other financing sources (uses) Transfers in - - - - Transfers out (22,000) - - - Proceeds from insurance recovery - - - - Total other financing sources (uses)(22,000) - - - Net change in fund balances (58,920) - (54,585) (77,716) Fund balances - beginning of year 57,043 25,309 257,613 851,161 Fund balances - end of year (1,877)$ 25,309$ 203,028$ 773,445$ The accompanying notes are an integral part of these financial statements STATE OF NEW MEXICO Capital Projects Town of Taos Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2009 76 Statement A-2 Page 3 of 3 Capital Projects 1999 Gasoline Tax Acquisition Total Nonmajor Governmental Funds -$ 935,269$ - 43,234 - 909,303 - 150,000 - 319,684 - 794,556 132,271 162,952 - 98,135 - 29,754 5,318 31,673 - 372,583 137,589 3,847,143 - 1,792,231 - 221,060 6,692 646,809 - 506,477 - 669,840 268,614 501,513 - 879,833 - 347,481 275,306 5,565,244 (137,717) (1,718,101) 251,119 3,278,546 - (2,252,994) - 2,205 251,119 1,027,757 113,402 (690,344) 518,813 3,758,004 632,215$ 3,067,660$ 77 (This page intentionally left blank.) 78 STATE OF NEW MEXICO Statement B-1 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants 195,200 195,200 195,200 - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - 249 249 Total revenues 195,200 195,200 195,449 249 Expenditures Current General government - - - - Public safety 354,770 348,812 101,311 247,501 Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay 101,000 106,958 46,429 60,529 Debt service Principal - - - - Interest - - - - Total expenditures 455,770 455,770 147,740 308,030 Excess (deficiency) of revenues over expenditures (260,570) (260,570) 47,709 308,279 Other financing sources (uses) Designated cash 260,570 260,570 - (260,570) Transfers in - - - - Transfers out - - - - Total other financing sources (uses)260,570 260,570 - (260,570) Net change in fund balance - - 47,709 47,709 Fund balance - beginning of year - - 260,570 260,570 Fund balance - end of year -$ -$ 308,279$ 308,279$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Fire Protection Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 79 STATE OF NEW MEXICO Statement B-2 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other 18,690 18,690 15,548 (3,142) Intergovernmental income - Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous 11,824 11,824 20,535 8,711 Total revenues 30,514 30,514 36,083 5,569 Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation 36,895 36,895 24,193 12,702 Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures 36,895 36,895 24,193 12,702 Excess (deficiency) of revenues over expenditures (6,381) (6,381) 11,890 18,271 Other financing sources (uses) Designated cash 6,381 6,381 - (6,381) Transfers in - - - - Transfers out - - - - Total other financing sources (uses)6,381 6,381 - (6,381) Net change in fund balance - - 11,890 11,890 Fund balance - beginning of year - - 75,216 75,216 Fund balance - end of year -$ -$ 87,106$ 87,106$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Recreation Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 80 STATE OF NEW MEXICO Statement B-3 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other 999,074 946,484 893,755 (52,729) Intergovernmental income - Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - 6,964 20,056 13,092 Licenses and fees - - - - Interest income - - - - Miscellaneous - 3,150 5,411 2,261 Total revenues 999,074 956,598 919,222 (37,376) Expenditures Current General government 572,782 722,600 756,109 (33,509) Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures 572,782 722,600 756,109 (33,509) Excess (deficiency) of revenues over expenditures 426,292 233,998 163,113 (70,885) Other financing sources (uses) Designated cash 4,792 (98,646) - 98,646 Transfers in 556,194 754,336 336,530 (417,806) Transfers out (987,278) (889,688) (517,713) 371,975 Total other financing sources (uses)(426,292) (233,998) (181,183) 52,815 Net change in fund balance - - (18,070) (18,070) Fund balance - beginning of year - - 94,105 94,105 Fund balance - end of year -$ -$ 76,035$ 76,035$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Lodger's Tax Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 81 STATE OF NEW MEXICO Statement B-4 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees 50,621 50,621 29,279 (21,342) Interest income - - - - Miscellaneous - - - - Total revenues 50,621 50,621 29,279 (21,342) Expenditures Current General government - - - - Public safety 109,000 109,000 92,172 16,828 Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures 109,000 109,000 92,172 16,828 Excess (deficiency) of revenues over expenditures (58,379) (58,379) (62,893) (4,514) Other financing sources (uses) Designated cash 42,379 42,379 - (42,379) Transfers in 16,000 16,000 9,000 (7,000) Transfers out - - - - Total other financing sources (uses)58,379 58,379 9,000 (49,379) Net change in fund balance - - (53,893) (53,893) Fund balance - beginning of year - - 56,721 56,721 Fund balance - end of year -$ -$ 2,828$ 2,828$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Local Government Correction Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 82 STATE OF NEW MEXICO Statement B-5 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants 33,200 33,200 64,600 31,400 State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 33,200 33,200 64,600 31,400 Expenditures Current General government - - - - Public safety 33,205 32,605 27,577 5,028 Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures 33,205 32,605 27,577 5,028 Excess (deficiency) of revenues over expenditures (5) 595 37,023 36,428 Other financing sources (uses) Designated cash 5 (595) - 595 Transfers in - - - - Transfers out - - - - Total other financing sources (uses)5 (595) - 595 Net change in fund balance - - 37,023 37,023 Fund balance - beginning of year - - 6 6 Fund balance - end of year -$ -$ 37,029$ 37,029$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Law Enforcement Protection Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 83 STATE OF NEW MEXICO Statement B-6 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services 80,052 85,957 78,079 (7,878) Licenses and fees - - 475 475 Interest income - - - - Miscellaneous 1,640 1,640 276 (1,364) Total revenues 81,692 87,597 78,830 (8,767) Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation 525,198 492,001 482,284 9,717 Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures 525,198 492,001 482,284 9,717 Excess (deficiency) of revenues over expenditures (443,506) (404,404) (403,454) 950 Other financing sources (uses) Designated cash (8,189) (75,519) - 75,519 Transfers in 451,695 479,923 438,236 (41,687) Transfers out - - - - Total other financing sources (uses)443,506 404,404 438,236 33,832 Net change in fund balance - - 34,782 34,782 Fund balance - beginning of year - - (1,410) (1,410) Fund balance - end of year -$ -$ 33,372$ 33,372$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Civic Center Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 84 STATE OF NEW MEXICO Statement B-7 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants 150,000 150,000 150,000 - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 150,000 150,000 150,000 - Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare 150,000 150,000 149,549 451 Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures 150,000 150,000 149,549 451 Excess (deficiency) of revenues over expenditures - - 451 451 Other financing sources (uses) Designated cash - - - - Transfers in - - - - Transfers out - - - - Total other financing sources (uses)- - - - Net change in fund balance - - 451 451 Fund balance - beginning of year - - 1 1 Fund balance - end of year -$ -$ 452$ 452$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Domestic Violence Shelter Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 85 STATE OF NEW MEXICO Statement B- 8 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis) Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants 296,460 296,460 228,128 (68,332) State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous 57,705 57,705 54,867 (2,838) Total revenues 354,165 354,165 282,995 (71,170) Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare 526,658 528,031 520,291 7,740 Capital outlay 40,213 40,213 - 40,213 Debt service Principal - - - - Interest - - - - Total expenditures 566,871 568,244 520,291 47,953 Excess (deficiency) of revenues over expenditures (212,706) (214,079) (237,296) (23,217) Other financing sources (uses) Designated cash (10,159) (30,215) - 30,215 Transfers in 222,865 244,294 223,114 (21,180) Transfers out - - - - Proceeds from insurance recovery - - 2,205 2,205 Total other financing sources (uses)212,706 214,079 225,319 11,240 Net change in fund balance - - (11,977) (11,977) Fund balance - beginning of year - - 15,706 15,706 Fund balance - end of year -$ -$ 3,729$ 3,729$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Public Transportation Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 86 STATE OF NEW MEXICO Statement B-9 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants 505,367 607,498 306,628 - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 505,367 607,498 306,628 - Expenditures Current General government 838,801 994,878 485,036 509,842 Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay 87,865 96,118 8,358 87,760 Debt service Principal - - - - Interest - - - - Total expenditures 926,666 1,090,996 493,394 597,602 Excess (deficiency) of revenues over expenditures (421,299) (483,498) (186,766) 597,602 Other financing sources (uses) Designated cash 81,299 291,195 - (291,195) Transfers in 340,000 262,303 230,000 (32,303) Transfers out - (70,000) (70,000) - Total other financing sources (uses)421,299 483,498 160,000 (323,498) Net change in fund balance - - (26,766) 274,104 Fund balance - beginning of year - - 326,678 326,678 Fund balance - end of year -$ -$ 299,912$ 600,782$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Community Grants Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 87 STATE OF NEW MEXICO Statement B-10 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle 79,460 79,460 43,234 (36,226) Other - - - - Intergovernmental income - Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 79,460 79,460 43,234 (36,226) Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures 79,460 79,460 43,234 (36,226) Other financing sources (uses) Designated cash - - - - Transfers in - - - - Transfers out (79,460) (79,460) (45,555) 33,905 Total other financing sources (uses)(79,460) (79,460) (45,555) 33,905 Net change in fund balance - - (2,321) (2,321) Fund balance - beginning of year - - 6,058 6,058 Fund balance - end of year -$ -$ 3,737$ 3,737$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Municipal Road Gasoline Tax Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 88 STATE OF NEW MEXICO Statement B-11 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts 1,013,745 938,411 935,269 (3,142) Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income - Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 1,013,745 938,411 935,269 (3,142) Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures 1,013,745 938,411 935,269 (3,142) Other financing sources (uses) Designated cash - - - - Transfers in - - - - Transfers out (1,013,745) (938,411) (938,411) - Total other financing sources (uses)(1,013,745) (938,411) (938,411) - Net change in fund balance - - (3,142) (3,142) Fund balance - beginning of year - - 73,244 73,244 Fund balance - end of year -$ -$ 70,102$ 70,102$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 1/4 Cent Municipal Gross Receipts Tax Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 89 STATE OF NEW MEXICO Statement B-12 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous 299,996 271,095 270,695 (400) Total revenues 299,996 271,095 270,695 (400) Expenditures Current General government 609,147 553,311 548,383 4,928 Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay 6,948 6,948 6,948 - Debt service Principal - - - - Interest - - - - Total expenditures 616,095 560,259 555,331 4,928 Excess (deficiency) of revenues over expenditures (316,099) (289,164) (284,636) 4,528 Other financing sources (uses) Designated cash 43,503 45,470 - (45,470) Transfers in 272,596 243,694 243,694 - Transfers out - - - - Total other financing sources (uses)316,099 289,164 243,694 (45,470) Net change in fund balance - - (40,942) (40,942) Fund balance - beginning of year - - 225,028 225,028 Fund balance - end of year -$ -$ 184,086$ 184,086$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Communications Special Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 90 STATE OF NEW MEXICO Statement B-13 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues - - - - Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal 470,000 470,000 470,000 - Interest 24,675 24,675 24,675 - Total expenditures 494,675 494,675 494,675 - Excess (deficiency) of revenues over expenditures (494,675) (494,675) (494,675) - Other financing sources (uses) Designated cash - (4,428) - 4,428 Transfers in 494,675 499,103 494,638 (4,465) Transfers out - - - - Total other financing sources (uses)494,675 494,675 494,638 (37) Net change in fund balance - - (37) (37) Fund balance - beginning of year - - 110 110 Fund balance - end of year -$ -$ 73$ 73$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 2001 Gross Receipts Tax Revenue Bond Retirement Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 91 STATE OF NEW MEXICO Statement B-14 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income - Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues - - - - Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal 150,000 150,000 150,000 - Interest 261,825 261,825 261,825 - Total expenditures 411,825 411,825 411,825 - Excess (deficiency) of revenues over expenditures (411,825) (411,825) (411,825) - Other financing sources (uses) Designated cash 9,219 9,219 - (9,219) Transfers in 402,606 402,606 402,606 - Transfers out - - - - Total other financing sources (uses)411,825 411,825 402,606 (9,219) Net change in fund balance - - (9,219) (9,219) Fund balance - beginning of year - - 9,449 9,449 Fund balance - end of year -$ -$ 230$ 230$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 2008 Gross Receipts Tax Revenue Bond Retirement Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 92 STATE OF NEW MEXICO Statement B-15 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues - - - - Expenditures Current General government 750 750 500 250 Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal 155,000 155,000 155,000 - Interest 39,873 39,873 36,308 3,565 Total expenditures 195,623 195,623 191,808 3,815 Excess (deficiency) of revenues over expenditures (195,623) (195,623) (191,808) 3,815 Other financing sources (uses) Designated cash 3,930 (14,385) - 14,385 Transfers in 191,693 210,008 213,733 3,725 Transfers out - - - - Total other financing sources (uses)195,623 195,623 213,733 18,110 Net change in fund balance - - 21,925 21,925 Fund balance - beginning of year - - 4,689 4,689 Fund balance - end of year -$ -$ 26,614$ 26,614$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 1999 Gasoline Tax Revenue Bond Retirement Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 93 STATE OF NEW MEXICO Statement B-16 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income 1,491 (1,120) 4,101 5,221 Miscellaneous - - - - Total revenues 1,491 (1,120) 4,101 5,221 Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures 1,491 (1,120) 4,101 5,221 Other financing sources (uses) Designated cash 170,500 175,722 - (175,722) Transfers in - - - - Transfers out (171,991) (174,602) (174,601) 1 Total other financing sources (uses)(1,491) 1,120 (174,601) (175,721) Net change in fund balance - - (170,500) (170,500) Fund balance - beginning of year - - 170,500 170,500 Fund balance - end of year -$ -$ -$ -$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 2008 Gross Receipts Tax Revenue Bond Reserve Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 94 STATE OF NEW MEXICO Statement B-17 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income 3,726 3,339 4,112 773 Miscellaneous - - - - Total revenues 3,726 3,339 4,112 773 Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures 3,726 3,339 4,112 773 Other financing sources (uses) Designated cash - 774 - (774) Transfers in - - - - Transfers out (3,726) (4,113) (4,112) 1 Total other financing sources (uses)(3,726) (3,339) (4,112) (773) Net change in fund balance - - - - Fund balance - beginning of year - - 195,500 195,500 Fund balance - end of year -$ -$ 195,500$ 195,500$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 1999 Gasoline Tax Revenue Bond Reserve Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 95 STATE OF NEW MEXICO Statement B-18 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - 612 612 Miscellaneous - - - - Total revenues - - 612 612 Expenditures Current General government 2,201 1,991 2,203 (212) Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal 86,834 87,243 86,833 410 Interest 24,673 24,484 24,673 (189) Total expenditures 113,708 113,718 113,709 9 Excess (deficiency) of revenues over expenditures (113,708) (113,718) (113,097) 621 Other financing sources (uses) Designated cash 6,708 6,718 - (6,718) Transfers in 107,000 107,000 107,000 - Transfers out - - - - Total other financing sources (uses)113,708 113,718 107,000 (6,718) Net change in fund balance - - (6,097) (6,097) Fund balance - beginning of year - - 30,888 30,888 Fund balance - end of year -$ -$ 24,791$ 24,791$ Town of Taos 2007 NMFA Land Purchase Debt Service Fund The accompanying notes are an integral part of these financial statements Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 Budgeted Amounts 96 STATE OF NEW MEXICO Statement B-19 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income 3,000 (1,428) 7,428 8,856 Miscellaneous - - - - Total revenues 3,000 (1,428) 7,428 8,856 Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures 3,000 (1,428) 7,428 8,856 Other financing sources (uses) Designated cash 412,500 421,356 - (421,356) Transfers in - - - - Transfers out (415,500) (419,928) (419,928) - Total other financing sources (uses)(3,000) 1,428 (419,928) (421,356) Net change in fund balance - - (412,500) (412,500) Fund balance - beginning of year - - 412,500 412,500 Fund balance - end of year -$ -$ -$ -$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 2001 Gross Receipts Tax Revenue Bond Reserve Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 97 STATE OF NEW MEXICO Statement B-20 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants 1,107,091 1,107,091 20,910 (1,086,181) Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 1,107,091 1,107,091 20,910 (1,086,181) Expenditures Current General government - - - - Public safety - - - - Public works 345,119 288,577 215,466 73,111 Culture and recreation - - - - Health and welfare - - - - Capital outlay 1,156,223 1,152,782 66,487 1,086,295 Debt service Principal 18,000 18,000 18,000 - Interest - - - - Total expenditures 1,519,342 1,459,359 299,953 1,159,406 Excess (deficiency) of revenues over expenditures (412,251) (352,268) (279,043) 73,225 Other financing sources (uses) Designated cash 55,647 55,664 - (55,664) Transfers in 356,604 356,604 328,876 (27,728) Transfers out - (60,000) (60,674) (674) Total other financing sources (uses)412,251 352,268 268,202 (84,066) Net change in fund balance - - (10,841) (10,841) Fund balance - beginning of year - - 92,506 92,506 Fund balance - end of year -$ -$ 81,665$ 81,665$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Facilities Improvements Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 98 STATE OF NEW MEXICO Statement B-21 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts 757,325 757,325 701,453 (55,872) Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants 2,314,259 2,255,562 1,477,405 (778,157) Charges for services - - - - Licenses and fees - - - - Interest income - (4,774) 64,737 69,511 Miscellaneous - - - - Total revenues 3,071,584 3,008,113 2,243,595 (764,518) Expenditures Current General government - - - - Public safety - - - - Public works 116,939 262,141 188,605 73,536 Culture and recreation - - - - Health and welfare - - - - Capital outlay 10,105,956 9,649,727 6,933,277 2,716,450 Debt service Principal - - - - Interest - - - - Total expenditures 10,222,895 9,911,868 7,121,882 2,789,986 Excess (deficiency) of revenues over expenditures (7,151,311) (6,903,755) (4,878,287) 2,025,468 Other financing sources (uses) Designated cash 7,359,311 7,382,158 - (7,382,158) Transfers in 109,104 109,104 67,663 (41,441) Transfers out (317,104) (587,507) (584,793) 2,714 Total other financing sources (uses)7,151,311 6,903,755 (517,130) (7,420,885) Net change in fund balance - - (5,395,417) (5,395,417) Fund balance - beginning of year - - 7,542,275 7,542,275 Fund balance - end of year -$ -$ 2,146,858$ 2,146,858$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 99 STATE OF NEW MEXICO Statement B-22 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants 734,659 835,534 319,684 (515,850) State operating grants - - - - State capital grants 113,234 115,888 9,771 (106,117) Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues 847,893 951,422 329,455 (621,967) Expenditures Current General government - - - - Public safety - - - - Public works 357,757 357,757 331,075 26,682 Culture and recreation - - - - Health and welfare - - - - Capital outlay 509,203 615,386 35,300 580,086 Debt service Principal - - - - Interest - - - - Total expenditures 866,960 973,143 366,375 606,768 Excess (deficiency) of revenues over expenditures (19,067) (21,721) (36,920) (15,199) Other financing sources (uses) Designated cash 59,067 58,807 - (58,807) Transfers in - 2,914 - (2,914) Transfers out (40,000) (40,000) (22,000) 18,000 Total other financing sources (uses)19,067 21,721 (22,000) (43,721) Net change in fund balance - - (58,920) (58,920) Fund balance - beginning of year - - 57,043 57,043 Fund balance - end of year -$ -$ (1,877)$ (1,877)$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Airport Construction Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 100 STATE OF NEW MEXICO Statement B-23 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - - - Total revenues - - - - Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay - - - - Debt service Principal - - - - Interest - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures - - - - Other financing sources (uses) Designated cash - - - - Transfers in - - - - Transfers out - - - - Total other financing sources (uses)- - - - Net change in fund balance - - - - Fund balance - beginning of year - - 25,309 25,309 Fund balance - end of year -$ -$ 25,309$ 25,309$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Enhanced 911 Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 101 STATE OF NEW MEXICO Statement B-24 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants - - - - Charges for services - - - - Licenses and fees - - - - Interest income - - - - Miscellaneous - - 1,560 1,560 Total revenues - - 1,560 1,560 Expenditures Current General government - - - - Public safety - - - - Public works - - - - Culture and recreation - - - - Health and welfare - - - - Capital outlay 56,000 56,300 56,145 155 Debt service Principal - - - - Interest - - - - Total expenditures 56,000 56,300 56,145 155 Excess (deficiency) of revenues over expenditures (56,000) (56,300) (54,585) 1,715 Other financing sources (uses) Designated cash 56,000 56,300 - (56,300) Transfers in - - - - Transfers out - - - - Total other financing sources (uses)56,000 56,300 - (56,300) Net change in fund balance - - (54,585) (54,585) Fund balance - beginning of year - - 257,613 257,613 Fund balance - end of year -$ -$ 203,028$ 203,028$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos Vehicle Replacement Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 102 STATE OF NEW MEXICO Statement B-25 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants 25,000 - - - Charges for services - - - - Licenses and fees - - - - Interest income 26,400 26,400 10,102 (16,298) Miscellaneous 110,941 110,941 18,990 (91,951) Total revenues 162,341 137,341 29,092 (108,249) Expenditures Current General government - - - - Public safety - - - - Public works 170,191 179,391 93,576 85,815 Culture and recreation - - - - Health and welfare - - - - Capital outlay 151,466 142,266 13,232 129,034 Debt service Principal - - - - Interest - - - - Total expenditures 321,657 321,657 106,808 214,849 Excess (deficiency) of revenues over expenditures (159,316) (184,316) (77,716) 106,600 Other financing sources (uses) Designated cash 159,316 184,316 - (184,316) Transfers in - - - - Transfers out - - - - Total other financing sources (uses)159,316 184,316 - (184,316) Net change in fund balance - - (77,716) (77,716) Fund balance - beginning of year - - 851,161 851,161 Fund balance - end of year -$ -$ 773,445$ 773,445$ The accompanying notes are an integral part of these financial statements Budgeted Amounts Town of Taos 1994 Gross Receipts Tax Revenue Bond Acquisition Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 103 STATE OF NEW MEXICO Statement B-26 Variances Actual Favorable (Unfavorable) Original Final (GAAP Basis)Final to Actual Revenues Taxes Property taxes -$ -$ -$ -$ Gross receipts - - - - Gasoline and motor vehicle - - - - Other - - - - Intergovernmental income Federal operating grants - - - - Federal capital grants - - - - State operating grants - - - - State capital grants 2,269,558 2,170,645 132,271 - Charges for services - - - - Licenses and fees - - - - Interest income 12,015 12,015 5,318 (6,697) Miscellaneous - - - - Total revenues 2,281,573 2,182,660 137,589 (6,697) Expenditures Current General government - - - - Public safety - - - - Public works - 6,692 6,692 - Culture and recreation - - - - Health and welfare - - - - Capital outlay 2,764,080 2,945,192 268,614 2,676,578 Debt service Principal - - - - Interest - - - - Total expenditures 2,764,080 2,951,884 275,306 2,676,578 Excess (deficiency) of revenues over expenditures (482,507) (769,224) (137,717) 2,669,881 Other financing sources (uses) Designated cash 402,507 518,105 - (518,105) Transfers in 80,000 251,119 251,119 - Transfers out - - - - Total other financing sources (uses)482,507 769,224 251,119 (518,105) Net change in fund balance - - 113,402 2,151,776 Fund balance - beginning of year - - 518,813 518,813 Fund balance - end of year -$ -$ 632,215$ 2,670,589$ The accompanying notes are an integral part of these financial statements Town of Taos 1999 Gasoline Tax Acquisition Capital Projects Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual For the Year Ended June 30, 2009 Budgeted Amounts 104 STATE OF NEW MEXICO Statement B-27 Budget (GAAP Budgetary Basis) and Actual Variances Budget Amounts Favorable Original Final Actual (Unfavorable) Operating revenues: Charges for services 2,219,071$ 2,219,071$ 2,212,865$ (6,206)$ Total operating revenues 2,219,071 2,219,071 2,212,865 (6,206) Operating expenses: Personnel services 632,546 639,849 625,507 14,342 Contractual services 1,339,081 1,400,869 1,341,958 58,911 Supplies 35,000 36,165 33,214 2,951 Maintenance and materials 319,852 325,508 145,690 179,818 Utilities 336,500 296,359 310,994 (14,635) Equipment 7,076,631 6,388,397 - 6,388,397 Depreciation - - 1,178,578 (1,178,578) Miscellaneous 175,959 166,467 34,181 132,286 Total operating expenses 9,915,569 9,253,614 3,670,122 5,583,492 Operating income (loss) (7,696,498) (7,034,543) (1,457,257) 5,577,286 Non-operating revenues (expenses): Gross receipts taxes 528,584 528,584 425,682 (102,902) Interest expense (172,728) (171,040) (216,806) (45,766) Interest income 167,261 167,261 63,844 (103,417) Government contributions 5,962,400 4,599,920 142,220 (4,457,700) Miscellaneous income 285,511 1,047,991 66,191 (981,800) Total non-operating revenues (expenses)6,771,028 6,172,716 481,131 (5,691,585) Transfers - - 6,130 6,130 Change in net assets (925,470)$ (861,827)$ (969,996) (108,169)$ Total net assets, beginning of year 17,683,952 Total net assets, end of year 16,713,956$ The accompanying notes are an integral part of these financial statements For the Year Ended June 30, 2009 Town of Taos Statement of Revenues, Expenses and Changes in Net Assets Water and Sewer Fund 105 STATE OF NEW MEXICO Statement B-28 Budget (GAAP Budgetary Basis) and Actual Variances Budget Amounts Favorable Original Final Actual (Unfavorable) Operating revenues: Charges for services 1,038,812$ 1,038,812$ 1,182,520$ 143,708$ Total operating revenues 1,038,812 1,038,812 1,182,520 143,708 Operating expenses: Personnel services 132,612 104,592 77,927 26,665 Contractual services 712,353 730,813 718,119 12,694 Supplies 6,426 11,190 10,961 229 Maintenance and materials 23,647 58,077 43,425 14,652 Utilities 336,471 283,189 247,563 35,626 Equipment 218,000 200,000 - 200,000 Depreciation - - 2,466 (2,466) Miscellaneous 2,663 4,313 626 3,687 Total operating expenses 1,432,172 1,392,174 1,101,087 291,087 Operating income (loss) (393,360) (353,362) 81,433 434,795 Non-operating revenues (expenses): Gross receipts taxes - - - - Interest expense - - - - Interest income - - - - Government contributions - - - - Miscellaneous income 15,286 15,286 51,853 36,567 Total non-operating revenues (expenses)15,286 15,286 51,853 36,567 Transfers - - 12,015 12,015 Change in net assets (378,074)$ (338,076)$ 145,301 483,377$ Total net assets, beginning of year 919,126 Total net assets, end of year 1,064,427$ The accompanying notes are an integral part of these financial statements For the Year Ended June 30, 2009 Town of Taos Statement of Revenues, Expenses and Changes in Net Assets Solid Waste Fund 106 STATE OF NEW MEXICO Statement B-29 Budget (GAAP Budgetary Basis) and Actual Variances Budget Amounts Favorable Original Final Actual (Unfavorable) Operating revenues: Charges for services 1,190,800$ 1,190,800$ 1,161,614$ (29,186)$ Total operating revenues 1,190,800 1,190,800 1,161,614 (29,186) Operating expenses: Personnel services 355,083 345,734 306,512 39,222 Contractual services 412,934 483,899 405,116 78,783 Supplies 13,178 16,458 12,165 4,293 Maintenance and materials 127,121 145,694 138,374 7,320 Utilities 5,468 6,824 6,871 (47) Equipment 1,289,983 1,289,983 - 1,289,983 Depreciation - - 106,611 (106,611) Miscellaneous 162,257 169,791 15,496 154,295 Total operating expenses 2,366,024 2,458,383 991,145 1,467,238 Operating income (loss) (1,175,224) (1,267,583) 170,469 1,438,052 Non-operating revenues (expenses): Gross receipts taxes - - - - Interest expense (40,062) (40,381) (44,912) (4,531) Interest income 8,000 8,000 41,739 33,739 Government contributions - - - - Miscellaneous income 366,073 366,073 109,168 (256,905) Total non-operating revenues (expenses)334,011 333,692 105,995 (227,697) Transfers - - (38,145) (38,145) Change in net assets (841,213)$ (933,891)$ 238,319 1,172,210$ Total net assets, beginning of year 2,921,366 Total net assets, end of year 3,159,685$ The accompanying notes are an integral part of these financial statements For the Year Ended June 30, 2009 Town of Taos Statement of Revenues, Expenses and Changes in Net Assets Taos Regional Landfill Fund 107 (This page intentionally left blank.) 108 SUPPORTING SCHEDULES 109 (This page intentionally left blank.) 110 STATE OF NEW MEXICO Schedule I Town of Taos Schedule of Deposit and Investment Accounts For the Year Ended June 30, 2009 Account Bank Deposits Outstanding Book Bank Name/Account Name Type Balance in Transit Checks Balance First Community Bank Clearing Account Checking 801,061$ -$ 800,603$ 458$ Judicial Bond Fund Municipal Court Checking 4,015 - 631 3,384 Debt Service Fund Checking 338 - - 338 Utility Construction Fund Checking 39,530 - - 39,530 Water & Sewer System Income Fund Checking 3,181,493 12,243 6,403 3,187,333 Utility Improvement Fund Checking 33,815 - - 33,815 General CD 170,500 - - 170,500 1999 Gasoline Tax Revenue Bond Reserve CD 195,500 - - 195,500 Total First Community Bank 4,426,252 12,243 807,637 3,630,858 Centinel Bank General Fund Checking 1,221,045 11,783 361,510 871,318 Water/Wastewater Improvement Fund Checking 137,363 - - 137,363 Payroll Clearing Checking 38 - - 38 1994 GRT Revenue Bond Acquisition Fund Checking 16,040 - 8,333 7,707 HUD Account - Domestic Violence Shelter Checking 1 - - 1 ACH Transfer Account Checking 75,244 - 74,613 631 2001 Gross Receipts Tax Revenue Bond Retirement CD 177,500 - - 177,500 Total Centinel Bank 1,627,231 11,783 444,456 1,194,558 Bank of Albuquerque - Investments 2001A Water & Sewer Revenue Bond Retirement U.S. Treasury Mutual Fund 61,762 - - 61,762 2004 Taos Regional Landfill Acquisition U.S. Treasury Mutual Fund 7,386 - - 7,386 2004 Taos Regional Landfill Revenue Bond Reserve U.S. Treasury Mutual Fund 137,343 - - 137,343 2008A Taos Regional Landfill Debt Service U.S. Treasury Mutual Fund 100,054 - - 100,054 2004 Taos Regional Landfill Acquisition U.S. Treasury Mutual Fund 331,382 - - 331,382 Total Bank of Albuquerque 637,927 - - 637,927 New Mexico Finance Authority - Investments 2007 NMFA Land Purchase State Treasurer Debt Service 21,370 - - 21,370 2001A Water & Sewer Revenue Bond Retirement State Treasurer Debt Service 12,706 - - 12,706 2004 Taos Regional Landfill Revenue Bond Reserve State Treasurer Debt Service 16,189 - - 16,189 2008A Taos Regional Landfill Debt Service State Treasurer Debt Service 20,971 - - 20,971 Total New Mexico Finance Authority 71,236 - - 71,236 Total deposits and investments 6,762,646$ 24,026$ 1,252,093$ 5,534,579 New Mexico State Treasurer Local Government Investment Pool 7,048,815 Add: petty cash 1,500 Total deposits and investments 12,584,894$ Deposits and investments per financial statements: Cash and cash equivalents - Exhibit A-1 3,622,455$ Investments - Exhibit A-1 7,523,815 Restricted cash and cash equivalents - Exhibit A-1 1,369,261 Fiduciary funds cash and cash equivalents and investments - Exhibit E-1 69,363 Total deposits and investments 12,584,894$ See accompanying independent auditors' report 111 (This page intentionally left blank.) 112 STATE OF NEW MEXICO Schedule II Par / Description of Type of Fair Market Name of Pledged Pledged CUSIP Value at Location Depository Collateral Collateral Maturity Number June 30, 2009 of Safekeeper First Community Bank FHR 3229 VA Loan 10/15/2017 31397BRX1 426,709$ Federal Home Loan Bank, Dallas, TX FNR 2001-71 QE Loan 12/25/2016 31392AXR4 347,615.00 Federal Home Loan Bank, Dallas, TX Hobbs NM Sch Dist #16 Bond *7/15/2018 433866CP3 1,000,000.00 Federal Home Loan Bank, Dallas, TX San Juan County NM ISD #22 Bond *8/1/2020 798359HS7 900,000.00 Federal Home Loan Bank, Dallas, TX MBS FHLMC Gold 15 Yr Loan 3/1/2021 3128M1BF5 158,065.00 Federal Home Loan Bank, Dallas, TX FNR 2003-64 YA Loan 5/25/2023 31393DKW0 323,391.00 Federal Home Loan Bank, Dallas, TX Clovis NM Muni SD #001 Bond *8/1/2023 189414GR0 775,000.00 Federal Home Loan Bank, Dallas, TX MBS GNMA II Loan 11/20/2038 36202EXM6 164,358.00 Federal Home Loan Bank, Dallas, TX MBS GNMA I Platinum Loan 11/15/2023 36241KWU8 176,870.00 Federal Home Loan Bank, Dallas, TX Total First Community Bank 4,272,008 Centinel Bank FHLB Loan 12/9/2011 3133XHRKO 390,000 Texas Independent Bank, Irving, TX Total Pledged Collateral 4,662,008$ * Bonds are presented at par value See accompanying independent auditors' report June 30, 2009 Town of Taos Schedule of Collateral Pledged by Depository for Public Funds 113 (This page intentionally left blank.) 114 STATE OF NEW MEXICO Schedule III Balance Balance June 30, 2008 Additions Deletions June 30, 2009 Assets Cash 1,950$ $ 30,225 $ 31,312 863$ Investments 61,500 7,000 - 68,500 Total assets 63,450$ 37,225$ 31,312$ 69,363$ Liabilities Deposits payable 23,700$ 58,060$ 13,500$ 68,260$ Due to other entities 39,750 9,955 48,602 1,103 Total liabilities 63,450$ 68,015$ 62,102$ 69,363$ Town of Taos Schedule of Changes in Fiduciary Assets and Liabilities - Agency Funds For the Year Ended June 30, 2009 See accompanying independent auditors' report 115 Agreement The Town Participates with Party Responsible for Operation Description Salazar Property and Sports Facilities Taos Municipal Schools Board of Education Taos Municipal School District Develop, manage and maintain a multi-purpose athletic facility on the Salazar Property Public Restroom Facility County of Taos County of Taos Designing, constructing, operating, and maintaining a public restroom facility Enhanced 911-Response System County of Taos, Town of Questa, Village of Taos Ski Valley Town of Taos Provide an answering point for information regarding needed emergency services Taos Regional Landfill Board County of Taos, Village of Questa, Village of Red River, Village of Taos Ski Valley Town of Taos Establish the Taos Regional Landfill Board See accompanying independent auditors' report June 30, 2009 STATE OF NEW MEXICO Town of Taos Supplementary Schedule of Joint Powers Agreements 116 Schedule IV Period Cost to Town Town Contributions Audit Responsibility 40 Years from 2009, with option to renew $2,140,012 for Phase I; unknown for other phases None to date Taos Municipal School District November 20, 2007 to January 31, 2028 Indeterminate Indeterminate County of Taos July 6, 1998 until terminated Estimated $219,494 per year $243,694 Town of Taos 50 years from November 2, 2000 Dependent on landfill expenses $900,867 during 2009 Town of Taos 117 (This page intentionally left blank.) 118 COMPLIANCE SECTION 119 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 Hector Balderas New Mexico State Auditor The Office of Management and Budget and The Town Council Town of Taos Taos, New Mexico We have audited the financial statements of the governmental activities, the business-type activities, each major fund, the budgetar y c omparison for the general fund, and the aggregate remaining fund information of Town of Taos, New Mexico, as of and for the year ended June 30, 2009, which collectively comprise the Town’s basic financial statements as listed in the table of contents and have issued our report thereon dated November 16, 2009.We also have audited the financial statements of each of the Town’s nonmajor governmental funds, the budgetary comparisons for the proprietar y funds and capital projects fund, and the remaining nonmajor governmental funds presented as supplementary information in the accompanying combining and individual fund financial statements as of and for the year ended June 30, 2009 as listed in the table of contents. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered Town of Taos’internal control over financial reporting as a basis for designing our auditing procedures 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 of Taos’internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of Taos’internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identity all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of Town of Taos’financial statements that is more than inconsequential will not be prevented or detected b y Town of Taos’internal control. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as items FS 2007-01, FS 2009-01, FS 2009-03, FS 2009-05 and FS 2009-06 to be significant deficiencies in internal control over financial reporting. 120 A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by Town of Taos’internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to material weaknesses. However, of the significant deficiencies described above, we consider item FS 2007-01 to be a material weakness. Compliance and Other Matters As part of obtaining reasonable assurance about whether Town of Taos’financial statements are free of 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 a n opinion. The results of our tests did not disclose any instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that are required to be reported under Government Auditing Standards January 2007 Revision paragraphs 5.14 and 5.16, and Section 12-6-5, NMSA 1978, which are described in the accompanying schedule of findings and questioned costs as findings FS 2009-01, FS 2009-02,FS 2009-04 and FS 2009-07. Town of Taos’responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit Town of Taos’responses and, accordingly, we express no opinion on them. This report is intended solely for the information and use of management, others within Town of Taos, the audit committee, the State Auditor, the New Mexico Legislature,the New Mexico Department of Finance and Administration,and applicable federal grantors, and is not intended to be and should not be used b y an yone other than these parties. Accounting & Consulting Group, LLP Albuquerque, NM November 16, 2009 121 (This page intentionally left blank.) 122 FEDERAL FINANCIAL ASSISTANCE 123 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Hector Balderas New Mexico State Auditor The Office of Management and Budget and The Town Council Town of Taos Town of Taos, New Mexico Compliance We have audited the compliance of Town of Taos, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2009. Town of Taos’ major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of Town of Taos’ management. Our responsibility is to express an opinion on Town of Taos’ compliance based on our audit. 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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Town of Taos’ compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Town of Taos’ compliance with those requirements. In our opinion, Town of Taos complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009. However, the results of our auditing procedures disclosed an instance of noncompliance with those requirements, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item FA 2009-01. Internal Control Over Compliance The management of Town of Taos is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered Town of Taos’ internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Town of Taos’ internal control over compliance. 124 Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in Town of Taos’ internal control that might be significant deficiencies or material weaknesses as defined below. However, as discussed below, we identified a certain deficiency in internal control over compliance that we consider to be a significant deficiency. A control deficiency in Town of Taos’ internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects Town of Taos’ ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by Town of Taos’ internal control. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item FA 2009-01 to be a significant deficiency in internal control over compliance. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by Town of Taos’ internal control. We do not consider any of the deficiencies described in the accompanying schedule of findings and questioned costs to be a material weakness in internal control over compliance. Town of Taos’ response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit Town of Taos’ response and, accordingly, we express no opinion on it. This report is intended solely for the information and use of management, others within Town of Taos, the audit committee, the State Auditor, the Town Council, the New Mexico Legislature, the New Mexico Department of Finance and Administration, and applicable federal grantors, and is not intended to be and should not be used by anyone other than these parties. Accounting & Consulting Group, LLP Albuquerque, NM November 16, 2009 125 STATE OF NEW MEXICO Schedule V Town of Taos (Page 1 of 2) Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2009 CFDA Number Expenditures 16.58 $ 82,019 14.235 149,549 14.xxx 07-C-NR-I-06-G-17,000 Total U.S. Department of Housing & Urban Development 166,549 Federal Aviation Administration (FAA) 20.106 21,080 Airport Improvements Program - Equipment (1)20.106 10,710 Airport Improvements Program - EIS (1)20.106 314,351 Federal Transportation Administration (FTA) Federal Assistance 20.5xx 9,138 Total U.S. Department of Transportation 355,279 81.xxx 06-521-0500-0053 102,963 10.xxx 9,148 RUS - San Juan Chama 10.xxx 50,000 Total U.S. Department of Agriculture 59,148 $ 765,958 (1) Denotes Major Federal Financial Assistance Program State of New Mexico, Department of Finance & Administration 3-35-0041-019-2008 3-35-0041-017-2007 NM-03-0041 Community Development Block Grant - Sustainable Building Ordinance Community Against Violence NM02B601005 3-35-0041-016-2006 Funding Source/Grant or Contact Name Federal Grantors Number U.S. Department of Justice U.S. Department of Transportation Airport Improvements Program - PAPI (1) Enforcement Assistance 2005-DD-BX-1109 U.S. Department of Housing & Urban Development Pass Through the U.S. Department of Energy Energy, Minerals & Natural Resources - 2004 Recreational Trails Program U.S. Department of Agriculture RUS - Police Equipment Total Federal Financial Assistance See accompanying independent auditors' report 126 STATE OF NEW MEXICO Schedule V Town of Taos (Page 2 of 2) Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2009 Notes to Schedule of Expenditures of Federal Awards Reconciliation of Schedule of Expenditures of Federal Awards to Financial Statements: 765,958$ 21,967,530 22,733,488$ Total expenditures The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity of the Town of Taos (the Town) and is presented on the modified accrual basis of accounting, which is the same basis as was used to prepare the governmental fund financial statements. The information in this Schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations . The Town did not provide any federal awards to subrecipients during the year. Total expenditures funded by other sources 2. Subrecipients Total federal awards expended per Schedule of Expenditures of Federal Awards 1. Basis of Presentation 127 (This page intentionally left blank.) 128 STATE OF NEW MEXICO Schedule VI Town of Taos Page 1 of 7 Schedule of Findings and Questioned Costs June 30, 2009 Section I – Summary of Audit Results Financial Statements: 1. Type of auditors’ report issued Unqualified 2. Internal control over financial reporting: a. Material weaknesses identified? Yes b. Significant deficiencies identified not considered to be material weaknesses? Yes c. Noncompliance material to the financial statements noted? No Federal Awards: 1. Internal control over major programs: a. Material weaknesses identified? No b. Significant deficiencies identified not considered to be material weaknesses? Yes 2. Type of auditors’ report issued on compliance for major programs Unqualified 3. Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133? Yes 4. Identification of major programs: CFDA Number Federal Program 20.106 Airport Improvements Program 5. Dollar threshold used to distinguish between type A and type B programs: $300,000 6. Auditee qualified as low-risk auditee? Yes 129 STATE OF NEW MEXICO Schedule VI Town of Taos Page 2 of 7 Schedule of Findings and Questioned Costs June 30, 2009 Section II –Prior Year Audit Findings Prior Year Audit Findings Financial Statement Findings Disposition 2007-1 Bank Reconciliations Repeated and Revised 2007-3 Lodgers Tax Resolved Section III –Financial Statement Findings and Questioned Costs FS 2007-01 Bank Reconciliations Condition: The Town’s clearing bank accounts were not reconciled to the general ledger. In the Town’s clearing bank account, an adjustment was made to increase cash in the amount of $217,871, and $189,413 of incorrect outstanding checks were removed from the bank reconciliation. Also, the Town did not prepare a bank reconciliation for the ACH transfer account; thus, $74,613 of outstanding checks were missing. Criteria: NMSA 6-10-2 discusses the duty of public officials to balance public money at the close of each business day. Good accounting practices also require that bank reconciliations are prepared at least monthly. Effect: Before the adjustments were made, the Town’s cash per the trial balance was understated by $217,871. Cause: There were internal errors in the daily and monthly procedures regarding bank reconciliations due to employee turnover within the Finance Department.. Auditors’ Recommendation: We recommend that the Town prepare its bank reconciliations in a timely manner and ensure that the ban k accounts reconcile to the general ledger. Agency’s Response: The Finance Department is current with its bank reconciliations for the first quarter of FY 09-10 and will continue as such throughout the remainder of the fiscal year. Finance staff will also adopt a written policy regarding the internal control processes and procedures, which will include daily, monthly and quarterly monitoring, self-audits and strict scheduled planning to ensure proper compliance in the future. FS 2009-01 —Stale-dated Checks Condition: During cash test work, we found 147 checks totaling $26,064.63 that were written over a year ago and listed as outstanding checks on the bank reconciliations. The Town has not reported the payees or turned over the funds to the Unclaimed Property Division of the New Mexico Taxation and Revenue Department. Criteria: Section 7-8A, NMSA 1978, and related regulations require that the Town provide information about the payees and the related funds to the Un claimed Property Division of the New Mexico Taxation and Revenue Department for outstanding checks that were distributed but not cashed within one year. Effect:The Town’s cash balances could be misstated due to old outstanding items on bank reconciliations. In addition, this increases the risk of errors or irregularities in the area of cash. Cause: The Town failed to review the reconciliations for old outstanding checks. In addition, the Town was not aware of the requirement to remit the stale-dated check funds to the New Mexico Taxation and Revenue Department. Auditors’ Recommendation: We recommend that the Town implement a monthly review of bank reconciliations and ensure that all outstanding checks that are older than one year old be voided.We also recommend that the Town remit the stale-dated check funds to the New Mexico Taxation and Revenue Department. Agency’s Response: The Finance Department will implement a monthly review of bank reconciliations and will ensure all outstanding checks that are older than one year are processed according to state statute. The Finance Department will also review and become familiarized with the governing state statute. 130 STATE OF NEW MEXICO Schedule VI Town of Taos Page 3 of 7 Schedule of Findings and Questioned Costs June 30, 2009 FS 2009-02—Travel and Per Diem Condition: In one instance out of five tested the employee was incorrectly paid a high-cost area per diem rate of $95 for travel to Albuquerque and Ruidoso. Criteria: The Per Diem and Mileage Act sets limits on travel and per diem expenses of $85 per day per diem for in- state travel and $135 for in-state high cost areas. Effect: The Town is overpaying their employees in the amount of $10.00 per day for per diem when they travel to Ruidoso. Cause: The Town was under the impression that the Per Diem and Mileage Act allowed for them to develop and adhere to their own policy; therefore, they instituted their own policy as to which in-state areas qualified for high cost. The Town’s policy considered Ruidoso to be a high-cost area. Auditors’ Recommendation: We recommend that Town contact the Department of Finance and Administration and request information related to the Act, and modify their travel policy to reflect the limits set by the Act. Agency’s Response: Management agrees with the auditors’ recommendation and will adopt a new travel policy within this fiscal year, which will reflect the limits set by the Per Diem and Mileage Act and has corrected the immediate problem and will continue until the policy is adopted. 131 STATE OF NEW MEXICO Schedule VI Town of Taos Page 4 of 7 Schedule of Findings and Questioned Costs June 30, 2009 FS 2009-03 Preparation of Financial Statements Condition: The financial statements and related disclosures are not being prepared by the Town. Criteria: According to the American Institute of Certified Public Accountants’ Statement on Auditing Standards No. 112, a system of internal control over financial reporting does not stop at the general ledger. Well designed systems include controls over financial statement preparation, including footnote disclosures. Effect: Wh en sufficient controls over the preparation of financial statements and related disclosures are not designed, implemented and operating effectively, an entity’s ability to prevent,detect, and correct misstatements in its financial statements is limited. Cause: The Town’s personnel did not have the time and have not been adequately trained in understanding the elements of external financial reporting,including the preparation of financial statements and related footnote disclosures. Auditors’ Recommendation: We recommend Town management and personnel receive training on understanding the requirements of external financial reporting. The training should include, but not be limited to: •Selection of appropriate accounting policies: §Governmental Accounting Standards Board (GASB) §Generally Accepted Accounting Principles (specifically as applied to governmental units) §Financial Accounting Standards Board (FASB) •Un derstanding the financial reporting entity •Government-wide financial statements •Fund financial statements •Notes to the financial statements •Required supplementary information §Management’s discussion and analysis •Supplementary information required by the Office of the State Auditor In addition, we recommend that the Town develop and implement policies and procedures designed to prevent or detect possible misstatements in its financial statements and related footnote disclosures. Agency’s Response:The Town will change and update the recording and reporting processes to better facilitate the preparation of financial statements. The Finance Department will prepare a plan of action detailing the training program for staff, which will include the services of a consultant who will review and improve upon the internal accounting processes. 132 STATE OF NEW MEXICO Schedule VI Town of Taos Page 5 of 7 Schedule of Findings and Questioned Costs June 30, 2009 FS 2009-04—Expenditures in Excess of Budget Condition: The Town exceeded the budgeted expen ditures in the following fund: Governmental Funds Amount Lodger’s Tax $ 33,509 Criteria: All Town funds, with the exception of agency funds, are to be budgeted by the local governing body and submitted to the State of New Mexico Department of Finance and Administration –Local Government Division for approval. Once adopted, any claims or warrants in excess of budget are a violation of New Mexico State Statute 6-6- 6, NMSA 1978 Compilation. Effect: An y expenditure in excess of the approved budget(s) shall be a liability against the officials so allowing or paying such claims or warrants, and recovery of such excess amounts so allowed or paid may be had against the bondsmen of such official. Cause: Inadequate monitoring of budgeting procedures at year-end. Auditors’ Recommendation:Budget for future years should be revised to insure all funds have adequate budget authority for appropriations. Greater attention should be given to the budget monitoring process at year-end. Agency’s Response:Management agrees with the auditors’ recommendation and will revise and strictly enforce a year-end process throughout all departments. FS 2009-05 —Gross Pay is Not Correct Condition: Dur ing payroll testwork, we noted that 1 out of 5 employees was not being paid in accordance with the employee’s authorized wages. The employee was being paid correctly for the employee’s regular time but incorrectly for the employee’s overtime. The employee’s overtime rate was based on the employee’s previous pa y rate prior to the employee’s promotion. Criteria: As indicated in NMSA 1978 Section 6-6-3, the Town is required to maintain proper and sufficient internal controls which reduce the risk of fraudulent activities. Chapter XI, Section 11-1-11, F. Pay Range requires employees to paid according to scale and in agreement with years of service and annual appraisal document. Sound business practice requires personnel files to have written authorization on pay rates for each employee and whenever rates change. Effect: The Town underpaid the aforementioned employee for the employee’s overtime after the employee wa s promoted to a new position in November of 2008. Cause: There was a conflict with whether the employee’s new position was salaried or hourly and the system was incorrectly calculating the employee’s overtime pay based on the employee’s previous wage rate. Auditors’ Recommendation: We recommend the Town reimburse the employee for the employee’s overtime based on the correct wage rate. Also, we recommend the Town make the necessary corrections to the required payroll forms. Further, we recommend that the Town resolve the issue regarding whether that position is salaried or hourly. Agency’s Response:The Town has reimbursed the employee in the amount of $396.79 in overtime compensation and has determined this position should be salaried. The proper documentation reflects this change. The finance staff will conduct an internal audit of any position changes that have occurred since December 1, 2008. 133 STATE OF NEW MEXICO Schedule VI Town of Taos Page 6 of 7 Schedule of Findings and Questioned Costs June 30, 2009 FS 2009-06 —Salary/Fringe Benefits Not Appropriately Authorized Condition: Dur ing the course of the audit, we noted one instance where there was an increase in an employee’s salary or fringe benefit without being properly supported by a personnel action notice. Also, the increase in the employee’s salary/fringe benefit was not approved by someone above that employee’s position. Criteria: Town policies require personnel action notices to be filled out and authorized by the appropriate personnel prior to a change in salary or fringe benefits. At the very least, changes in salary or fringe benefits should be authorized by a person above the respective employee’s position. Effect: The Town is allowing unauthorized expenditures. Cause: The increase in salary/fringe benefits was only authorized by an employee that is below the respective employee’s position. Auditors’ Recommendation: We recommend that the Town follow their policy requiring any changes in an employee’s salary or fringe benefits to be supported by the personnel action notice with the appropriate authorization, including at least one person who is above the respective employee’s position. Agency’s Response: This increase in salary/fringe benefits was authorized by this employee’s superior; however, the documentation is not reflective of such action. Moving forward, management will ensure proper adherence to their policy regarding changes to an employee’s salary or fringe benefits. FS 2009-07 Lodgers Tax Condition: The required lodgers tax audit for the year ended June 30, 2008 has not been completed for the Town. Criteria: The Lodgers Tax Act, Sections 3-38-13 through 3-38-24 NMSA, in conjunction with the Ordinance imposing the local tax, Ordinance No. 627, Section 19-55 of the Town of Taos Municipal Code, as amended by Ordinance 83-6, 91-6, 92-4 and 97-32 impose requirements for a yearly audit of the Town’s lodgers tax. Effect: By the Town not enforcing their policy and following State Constitution the Town is potentially not collecting funds that are due, which could be utilized for promoting and publicizing such facilities and tourist attractions. Cause: The Town has not timely scheduled an audit of their lodgers tax for the year ended June 30, 2008. Auditors’ Recommendation: We recommend that the Town schedule and ensure timely completion of the lodgers tax audit for the year ended June 30, 2008. Agency’s Response: The Finance Department acknowledges the oversight and will enter into a contract within sixty (60) days of this response to remedy this finding. Finance staff will adopt a written policy establishing deadlines in procuring, contracting and completing this process on a fiscal year basis. 134 STATE OF NEW MEXICO Schedule VI Town of Taos Page 7 of 7 Schedule of Findings and Questioned Costs June 30, 2009 FINDINGS –FEDERAL AWARDS FA 2009-01 –Davis Bacon Federal program information: Funding agency:Federal Aviation Administration Title:Airport Improvement Program CFDA number:20.106 Condition: The Town did not submit certified payroll or use Davis-Bacon wages in accordance with the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement. Criteria: The Town is required to submit certified payroll and use Davis-Bacon wages in accordance with U.S. Office of Management and Budget (OMB) Circular A-133. Effect: Non-compliance with the reporting requirement of U.S. Office of Management and Budget (OMB) Circular A-133 may affect the Town’s federal award future funding. Cause:The Town was improperly informed by the State of New Mexico Department of Transportation that they were not required to submit certified payroll or use Davis-Bacon wages. Auditors’Recommendation: The Town must ensure that they follow the compliance supplements for all future federal award funding. Management’s Response:Management agrees with the auditors’ recommendation and will follow the compliance supplements for all future federally awarded funding per the grant agreements. The Finance Department will also create a checklist, which describes the proper steps/requirements to follow when receiving and processing grant agreements. 135 STATE OF NEW MEXICO Town of Taos Other Disclosures June 30, 2009 OTHER DISCLOSURES Exit Conference An exit conference was held on November 16, 2009. In attendance were the following: Representing the Town of Taos: Darren Cordova Mayor Daniel Miera Town Manager Marietta Fambro Finance Director Abigail Adame Assistant Town Manager Representing Accounting & Consulting Group, LLP: Jeff W. McWhorter, CPA Audit Director Auditor Prepared Financial Statements Although it would be preferred and desirable for the Town to prepare its own financial statements, the Town’s personnel did not have the time to prepare them. Accounting & Consulting Group, LLP prepared the financial statements of the Town of Taos from the original books and records provided to them by the management of the Town.Management is responsible for the financial statements. 136