Housing Authority of the City of Las Cruces, New Mexico (The “Housing Authority”)
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CITY OF LAS CRUCES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011 Prepared by Finance Department Pat Degman, CGFM Comptroller Cover photo by Amy Garcia Enhanced by Leesa Mandlman City of Las Cruces Table of Contents Page I. INTRODUCTORY SECTION Letter of Transmittal 1-6 List of Principal Officials 7 Organizational Chart 8 GFOA Certificate 9 II. FINANCIAL SECTION Independent Auditors’ Report 11-12 Management’s Discussion and Analysis 13-26 Basic Financial Statements Government-Wide Financial Statements Statement of Net Assets 29 Statement of Activities 30-31 Fund Financial Statements Major Government Funds Balance Sheet—Governmental Funds 34-35 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 37 Statement of Revenues, Expenditures and Changes in Fund Balance—Governmental Funds 38-39 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities 40 Budgetary Comparison Statements—General Fund and Major Special Revenue Funds General Fund 41 Community Development Block Grant 42 Sonoma Ranch 43 Telshor Facility 44 Proprietary Funds Statement of Net Assets 46-49 Statement of Revenues, Expenses and Changes in Net Assets 50-53 Statement of Cash Flows 54-57 Agency Funds Statement of Fiduciary Assets and Liabilities 58 Notes to Basic Financial Statements Note 1–Description and Reporting Entity 59 Note 2–Basis of Presentation, Basis of Accounting 60-67 Note 3–Cash and Investments 67-70 Note 4–Capital Assets 71-75 Note 5–Receivables and Payables 75-77 Note 6–Interfund Assets, Liabilities and Transfers 77-80 City of Las Cruces Table of Contents — continued Page II. FINANCIAL SECTION — CONTINUED Notes to Basic Financial Statements — continued Note 7–Long–Term Liabilities 81-90 Note 8–Internal Service Fund Allocations 91 Note 9–Landfill Closure and Post-Closure Care Cost 91-92 Note 10–Pollution Remediation Obligation 92-93 Note 11–Deferred Compensation Plan 93 Note 12–Employee Benefit Plans 93-96 Note 13–Risk Management 96-98 Note 14–Development Impact Fees 98-99 Note 15–Telshor Facility Lease Memorial Medical Center / Province Hospital (Telshor Facility) 99-101 Note 16–Las Cruces Convention Center 101-102 Note 17–Individual Fund Deficits and Budget Variances 102 Note 18–Major Construction Commitments 103-104 Note 19–Contingent Liabilities 104 Note 20–Downtown Tax Increment Development District (TIDD) 104 Note 21–Affiliated Organizations and Joint Powers Agreements 105-108 Note 22– Subsequent Events 108-109 Combining Financial Statements Nonmajor Governmental Funds Combining Balance Sheet 112-125 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 128-141 Nonmajor Enterprise Funds Combining Statement of Net Assets 144 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 145 Combining Statement of Cash Flows 146 Internal Service Funds Combining Statement of Net Assets 148 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 149 Combining Statement of Cash Flows 150 Agency Funds Schedule of Changes in Assets and Liabilities 152-155 Budgetary Comparison Schedules Nonmajor Governmental Funds 164-223 Proprietary Funds 225-233 Supplementary Information Schedule of Insurance in Force 235 Schedule of Pledged Collateral 236 Schedule of Special Appropriations 237 Schedule of Deposit Accounts and Investments 238-239 City of Las Cruces Table of Contents — continued Page III. STATISTICAL SECTION Financial Trends Net Assets by Category 241 Changes in Net Assets 242-243 Fund Balances, Governmental Funds 244 Changes in Fund Balances, Governmental Funds 245-246 Revenue Capacity Taxable Assessed Value and Actual Value of Property 247 Direct and Overlapping Property Tax Rates 248 Principal Property Tax Payers 249-250 Property Tax Levies and Collections 251 Debt Capacity Ratios of Outstanding Debt by Type 252 Ratios of General Bonded Debt Outstanding 253 Direct and Overlapping Governmental Activities Debt 254 Legal Debt Margin Information 255 Pledged-Revenue Bond/Note Coverage 256 Demographic and Economic Information Demographic and Economic Statistics 257 Principal Employers 258 Operating Information City Government Employees by Function/Program 259 Operating Indicators by Function/Program 260-261 Capital Asset and Infrastructure Statistics by Function/Program 262 Sales Tax Revenue Payers by Industry 263 IV. SINGLE AUDIT SECTION City of Las Cruces Independent Auditors’ Report on Schedule of Expenditures of State and Federal Awards 265 Schedule of Expenditures of State and Federal Awards 266-269 Notes to Schedule of Expenditures of State and Federal Awards 270 Independent Auditors’ 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 271-272 Independent Auditors’ Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 273-274 City of Las Cruces Table of Contents — continued Page IV. SINGLE AUDIT SECTION — CONTINUED City of Las Cruces — continued Schedule of Findings and Questioned Costs 275-281 Schedule of State Auditor Rule Findings 282-290 Summary Schedule of Prior Audit Findings 291 Corrective Action Plan 292 City of Las Cruces Housing Authority Schedule of Expenditures of Federal Awards 293 Notes to Schedule of Expenditures of Federal Awards 294 Independent Auditors’ 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 295-296 Independent Auditors’ Report on Compliance With Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133 297-299 Schedule of Findings and Questioned Costs 300-304 Summary Schedule of Prior Audit Findings 305 Corrective Action Plan 306 Exit Conference and Financial Statement Preparation 307 City of Las Cruces June 30, 2011 LIST OF PRINCIPAL OFFICIALS Councilors Ken Miyagishima Mayor Sharon Thomas Mayor Pro-Tem Miguel Silva Councilor Dolores Connor Councilor Olga Pedroza Councilor Nathan P. Small Councilor Gill M. Sorg Councilor City officials Robert Garza, P.E. City Manager Brian Denmark Assistant City Manager Robert Scaling Interim Financial Services Director 7 City of Las Cruces 8 9 10 Independent Auditors’ Report Mr. Hector H. Balderas, New Mexico State Auditor and the Honorable Mayor and City Council Members of the City of Las Cruces We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Las Cruces, New Mexico (the “City”), as of and for the year ended June 30, 2011, which collectively comprise the City’s basic financial statements as listed in the table of contents. We have also audited the financial statements of each of the City’s nonmajor governmental, nonmajor enterprise, internal service and agency funds presented in the accompanying combining financial statements and the budgetary comparison schedules as of and for the year ended June 30, 2011, as listed in the table of contents. These financial statements and schedules are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements and schedules 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 and schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and schedules. An audit also includes assessing the accounting principles used and significant estimates made by 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 respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Las Cruces, New Mexico, as of June 30, 2011, and the respective changes in financial position and cash flows, where applicable, thereof, and the general fund and major special revenue funds budgetary comparisons 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 and schedules referred to above present fairly, in all material respects, the respective financial position of each nonmajor governmental, nonmajor enterprise, 11 internal service and agency fund of the City of Las Cruces, New Mexico as of June 30, 2011, and the respective changes in financial position, cash flows, and budgetary comparisons, where applicable, thereof, and the budgetary comparisons of each major debt service fund and major capital projects fund