OFFlClttL FllECOPV DO WOT SEND OUT' (Xerox necessary copies from this copy and PLACE BACK in FILE)
POOTCHARTRAINLEVEE DISTRICT STATE OF LOUISIANA
FINANCIAL REPORT
For the Year Ended June 30,2008
Under provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court.
Release Date f TABLE OF CONTENTS
Independent Auditor's Report 1
Required Supplemental Information - Part I Management's Discussion and Analysis 3
Basic Financial Statements:
Government-Wide Financial Statements (GWFS): Statement of Net Assets 8 Statement of Activities 9
Fund Financial Statements (FFS); Balance Sheet - Governmental Funds 10 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 11 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 12 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 13
Notes to Financial Statements 14
Required Supplemental Information - Part II
Budgetary Comparison Schedule - General Fund 32
Other Supplementary Information
Schedule of Per Diem Paid to Board Members 33 Non-Major Funds Descriptions 34 Combining Balance Sheet - Non-Major Governmental Funds 3 5 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds 36
Other Reports Required by Government Auditing Standards:
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 37
Schedule of Findings and Questioned Costs 39
Schedule of Prior Year Findings 40
Required Supplemental Information - Part III Division of Administration; Office of Statewide Reporting and Accounting Policy - Reporting Package 41 Hienz
Certified Pubiic^Ccountants ROBERTW.HIENZ.C.PA 110 Veterans Memorial Blvd., Suite 170 ANTHONY J. MACALUSO, JR., C.P.A. Metairie, LA 70005 DAVID V.ERNST (504)837-5434 MEMBERS FAX (504) 837-5435 American Institute of Certified Public Accountants Society of Louisiana Certified Public Accountants WWW.hienZmacaluSO.COrn
INDEPENDENT AUDITOR'S REPORT
Board of Levee Commissioners of Pontchartrain Levee District State of Louisiana Lutcher, Louisiana
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Pontchartrain Levee District (the "Levee District"), a component unit of the State of Louisiana, as of and for the year ended June 30, 2008, which collectively comprise the District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the District's management. Our responsibility is to express an opinion 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 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 by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of the District as of June 30, 2008, and the respective changes in financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated August 27, 2008, on our consideration of the District'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
1 performed in accordance with Government Auditing Standards and should be considered in conjunction with this report in considering the results of our audit.
The Management's Discussion and Analysis and budgetary comparison information listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The Annual Financial Statement Reporting Package, presented as supplementary information as listed in the table of contents, is not a required part of the basic financial statements, but is supplementary information required by Louisiana's Office of Statewide Reporting and Accounting Policy, This information has been subjected to the auditing procedures applied in the audit of the accompanying financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the accompanying financial statements taken as a whole.
LLC 3 HIENZ & MACALUSO, LLC Metairie, LA August 27, 2008 PONTCHARTRAIN LEVEE DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF JUNE 30,2008
The Management's Discussion and Analysis of the Pontchartrain Levee District's (the "Levee District") financial performance presents a narrative overview and analysis of the Levee District's financial activities for the year ended June 30, 2008. This document focuses on the current year's activities, resulting changes, and currently known facts in comparison with the prior year's information. Please read this document in conjunction with the Levee District's financial statements. FINANCIAL HIGHLIGHTS
• The Levee District's assets exceeded its liabilities at the close of fiscal year 2008 by approximately $29.9 million, which represents a 7.8% increase from the last fiscal year. • The Levee District's revenue decreased $486,772 or 5.4%. The Levee District had property tax revenues of $6,716,983 for the current year ended June 30, 2008, an increase of $704,849 or 11.7% over prior year. Property tax revenues represent 78% of all revenues. Other decreases resulted from less intergovernmental revenues in the current year. Expenses decreased by $704,201 or 9.9% primarily due to a decrease in levee maintenance in the current year. • The Levee District recorded a liability for other post-employment benefits in the amount of $925,301 as a result of the implementation of GASB 45 in the current year.
OVERVIEW OF THE FINANCIAL STATEMENTS The following graphic illustrates the minimum requirements for Special Purpose Governments Engaged in Business-Type Activities established by Governmental Accounting Standards Board Statement Number 34, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments,
Management's Discussion an.CAnalysis \ - .-.!-,-*•.-.../ . .- 7 •-."-- •- . .-"•;.: '
'Recjulfe^'Supgllmenfary Infofrhatiein- .[-
' '-^f'|J PONTCHARTRAIN LEVEE DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF JUNE 30,2008
These financial statements consist of three sections - Management's Discussion and Analysis (this section), the basic financial statements (including the notes to the financial statements), and required supplementary information.
Basic Financial Statements
The basic financial statements present information for the Levee District as a whole, in a format designed to make the statements easier for the reader to understand. The statements in this section include the Statement of Net Assets and the Statement of Activities. The Statement of Net Assets presents the current and long-term portions of assets and liabilities separately. The difference between total assets and total liabilities is net assets and may provide a useful indicator of whether the financial position of the Levee District is improving or deteriorating. The Statement of Activities presents information showing how Levee District's assets changed as a result of current year operations. Regardless of when cash is affected, all changes in net assets are reported when the underlying transactions occur. As a result, there are transactions included that will not affect cash until future fiscal periods. FINANCIAL ANALYSIS OF THE ENTITY
2008 2007
Current and other assets $ 31,198,271 $ 27,986,559 Capital assets 1,842,659 1,772,161 Total assets 33,040,930 29,758,720 Other liabilities 355,691 305,929 Long-term debt outstanding 2,875,816 1,793,000 Total liabilities 3,231,507 2,098,929 Net assets: Invested in capital assets, net of debt 1,842,659 1,772,161 Unrestricted 27,966,764 25,887,630 Total net assets S 29,809,423 $27,659.791 PONTCHARTRAIN LEVEE DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF JUNE 30,2008
FINANCIAL ANALYSIS OF THE ENTITY (CONTINUED)
Restricted net assets represent those assets that are not available for spending as a result of legislative requirements, donor agreements, or grant requirements. Conversely, unrestricted net assets are those that do not have any limitations on how these amounts may be spent
Net assets of Levee District increased by $2,149,632 or 7.8%, from June 30, 2007 to June 30, 2008, primarily due to decreased spending on hurricane protection and flood control studies.
2008 2007 Operating revenues $ 300,375 $ 548,558 Operating expenses 6,428,581 7,132.782
Operating income (loss) (6,128,206) (6,584,224)
Non-operating revenues (expenses) 8,277,838 8,516,427
Net increase in net assets $ 2.149.632 $ 1.932.203
The Levee District's total revenues decreased by $486,772 from the previous year. Expenses decreased by $704,201 from previous year as a result of decreased spending on hurricane protection and flood control studies. PONTCHARTRAEV LEVEE DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF JUNE 30,2008
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of 2008, the Levee District had $1,842,659 invested in a broad range of capital assets, including land, building, and equipment. (See Table below.) This amount represents an increase (including additions and deductions) of $70,498 or 4%, over last year.
Capital Assets at June 30 (Net of Depreciation)
2008 2007 Land $ 764,942 $ 764,942 Buildings 181,516 172,036 Equipment 896,201 835,183
Totals $1.842.659 $1.772.161
This year's additions totaled $354,070. Major additions included:
• Five tractors for $190,165 • Five mowers for $70,708
Debt The Levee District had no bonded debt at June 30,2008. The Levee District has accrued approximately $1.8 million in claims payable. This is an estimate of claims that will likely result in judgments associated with an ongoing land expropriation dispute.
The Levee District also has accrued $925,301 for other post-employment benefits due as a result of the implementation of GASB 45. PONTCHARTRAIN LEVEE DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF JUNE 30,2008
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The Levee District's elected and appointed officials considered the following factors and indicators when setting next year's budget, rates, and fees. These factors include: • Property tax millages are 3.67.
CONTACTING THE LEVEE DISTRICT'S MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, and creditors with a general overview of the Levee District's finances and to show the Levee District's accountability for the money it receives. If you have any questions about this report or need additional financial information, contact Clinton Rouyea, Jr. at 225-869-972L PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA STATEMENT OF NET ASSETS JUNE 30,2008
ASSETS
CURRENT ASSETS: Cash $ 18,444,084 Investments 12,388,071 Receivables 164,472 Prepaid insurance 169,070 Inventories 32,574 Total current assets 31,198,271
NONCURRENT ASSETS: Capital assets - net of accumulated depreciation 1,842,659 Total noncurrent assets 1,842,659
Total assets $ 33,040,930
LIABILITIES
CURRENT LIABILITIES: Accounts payable $ 276,749 Salaries and wages payable 78,942 Total current liabilities 355,691
NONCURRENT LIABILITIES Compensated absences payable 157,515 OPEB payable 925,301 Claims payable 1,793,000 Total long term liabilities 2,875,816
Total liabilities 3,231,507
NET ASSETS Invested in capital assets, net of related debt 1,842,659 Unrestricted 27,966,764
Total Net Assets 29,809,423
Total Liabilities and Net Assets $ 33,040,930
The accompanying notes are an integral part of this financial statement. PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30,2008
Program Revenues Net (Expense) Operating Capital Revenue and Charges for Grants and Grants and Changes in Functions/Pro gram s Expenses Services Contributions Contributions Net Assets
Governmental activities: Levee maintenance $ 6,428,581 $ 300,375 $ - $ (6,128,206)
Total Governmental Activities $ 6,428,581 $ 300,375 $ (6,128,206)
General Revenues: Taxes 6,716,983 State appropriations 378,436 Investment income 1,150,641 Miscellaneous Revenue 31,778
Total general revenues 8,277,838
Change in net assets 2,149,632
Net assets - beginning of year 27,659,791
Net assets - end of year $ 29,809,423
The accompanying notes are an integral part of this financial statement. 9 PONTCHARTRADV LEVEE DISTRICT STATE OF LOUISIANA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30,2008
Non-Major Major Funds Funds Special Total Other Total General Construction Governmental Governmental Fund Fund Funds Funds Assets Cash $ 5,554,188 $ 12,672,022 !B 217,874 :S 18,444,084 Investments 7,278,562 5,109,509 - 12,388,071 Receivables - net 112,094 52,378 - 164,472 Due from other funds 2,483,600 8,275 399,387 2,891,262 Prepaid insurance 169,070 - - 169,070 Inventories 32,574 - - 32,574
Total assets S 15,630,088 $ 17,842,184 !5 617,261 $ 34,089,533
Liabilities and Fund Balances Liabilities: Accounts payable $ 166,030 $ 11,707 !S 99,012 $ 276,749 Due to other funds 407,662 2,200,000 283,600 2,891,262 Salaries and wages payable 78,942 - - 78,942
Total liabilities 652,634 2,211,707 382,612 3,246,953
Fund balances: Reserved for inventory 32,574 32,574 Reserved for emergencies 25,000 - - 25,000 Reserved for flood flight/ contingencies 50,000 - . 50,000 Unreserved, undesignated 14,869,880 15,630,477 234,649 30,735,006
Total fund balances 14,977,454 15,630,477 234,649 30,842,580
Total liabilities and fund balances $ 15,630,088 S 17,842,184 !S 617,261 $ 34,089,533
The accompanying notes are an integral part of this financial statement. 10 PONTCHARTRAEV LEVEE DISTRICT STATE OF LOUISIANA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30,2008
Total Fund Balances at June 30, 2008 - Governmental Funds $ 30,842,580
Cost of capital assets at June 30,2008 $ 4,229,172 Less: Accumulated depreciation (2,386,513) 1,842,659
Elimination of interfund assets and liabilities: Due from other funds 2,891,262 Due to other funds (2,891,262)
Long-term liabilities at June 30, 2008: Claims payable (1,793,000) OPEB payable (925,301) Compensated absences payable (157,515) (2,875,816)
Net Assets at June 30, 2008 $ 29,809,423
The accompanying notes are an integral pan of this financial statement. 11 PONTCHARTRAEV LEVEE DISTRICT STATE OF LOUISIANA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30,2008
Non -Major Major Funds Funds Special Total Other Total General Construction Governmental Governmental Fund Fund Funds Funds Revenues Taxes $ 6,716,983 S $ - :S 6,716,983 Intergovernmental revenues 378,436 - 300,375 678,811 Investment income 449,634 693,764 7,243 1,150,641 Other 31,778 - - 31,778
Total revenues 7,576,831 693,764 307,618 8,578,213
Expenditures Current: Operational Executive 102,182 1,000 103,182 General Administrative 906,214 •- 7,051 913,265 Levee Maintenance 2,969,485 186,337 468,997 3,624,819 Police Department 525,893 - - 525,893 Capital Outlay 391,022 - - 391,022
Total expenditures 4,894,796 187,337 476,048 5,558,181
Excess (deficiency) of revenues over expenditures 2,682,035 506,427 (168,430) 3,020,032
Other Financing Sources (Uses) Operating transfers in 3,336,412 292,800 392,206 4,021,418 Operating transfers out (448,902) (236,102) (3,336,414) (4,021,418)
Total other financing sources (uses;es) 2,887,510 56,698 (2,944,208)
Excess of revenues and other sourceces over (under) expenditures and 5,569,545 563,125 (3,112,638) 3,020,032 other uses
Fund balances, beginning of year 9,407,909 15,067,352 3,347,287 27,822,548
Fund balances, end of year $ 14,977,454 $ 15,630,477 $ 234,649 :$ 30,842,580
The accompanying notes are an integral part of this financial statement. 12 PONTCHARTRAEV LEVEE DISTRICT STATE OF LOUISIANA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30,2008
Total net changes in fund balance for the year ended June 30, 2008 $ 3,020,032
Add: Capital outlay 354,070 Less: Depreciation expense (283,572)
Less: Excess of compensated absences earned over compensated absences used (15,597)
Less: Increase in other post employment benefits payable (925,301)
Total change in net assets for the year ended June 30,2008 $ 2,149,632
The accompanying notes are an integral part of this financial statement. 13 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
INTRODUCTION
The Pontchartrain Levee District ("Levee District") was created by Louisiana Revised Statute (LSA- R.S.) 38:291(L). The Levee District includes all or portions of the following parishes: East Baton Rouge, Iberville, Ascension, St. James, St. John the Baptist, and St. Charles. The Levee District primarily provides flood protection for those areas contained in the District. The governing board administers the operations and responsibilities of the Levee District in accordance with provisions of Louisiana statute. The Board of Commissioners of the Pontchartrain Levee District consists of nine members appointed by the governor.
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report has been prepared in conformity with the standards established by the Governmental Accounting Standards Board (GASB). The following is a summary of the Levee District's significant policies: A. Basis of Presentation
In accordance with GASB, the accompanying financial statements have been prepared in accordance with such principles.
B. Reporting Entity
The governmental reporting entity is the State of Louisiana. The Levee District is considered a component unit of the State of Louisiana because the state exercises oversight responsibility in that the governor appoints the commissioners, and public service is rendered within the state's boundaries. The accompanying statements present information only as to the transactions of the Pontchartrain Levee District, a component unit of the State of Louisiana. Annually, the State of Louisiana issues basic financial statements, which include the activity contained in the accompanying financial statements.
C. Fund Accounting
The Levee District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions relating to certain government functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.
Funds of the Levee District that are presented in the financial statements are classified as governmental funds.
14 PONTCHARTRABV LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Fund Accounting (continued) Governmental funds account for the Levee District's general activities, including the collection and disbursement of specific or legally restricted monies, the acquisition or construction of general fixed assets, and the servicing of general long-term debt. Governmental funds of the Levee District include:
1. General Fund - the general operating fund of the Levee District and accounts for all financial resources, except those required to be accounted for in other funds.
2. Capital Projects Fund - accounts for financial resources received and used for the acquisition, construction, or improvements of capital facilities not reported in the other governmental funds.
D. Basis of Accounting/Measurement Focus
The Governmental Wide Financial Statements (GWFS) were prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange or exchange-like transactions are recognized when the exchange occurs (regardless of when cash is received or disbursed). 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, Program Revenues
Program revenues included in the Statement of Activities are derived directly from parties outside the Levee District's taxpayers or citizenry, as a whole; program revenues reduce the cost of the function to be financed from the Levee District's general revenues.
Fund Financial Statements (FFS)
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
15 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30.2008
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Basis of Accounting/Measurement Focus (continued) Governmental and Agency Funds are accounted for on the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized in the accounting period in which they become susceptible to accrual - that is, when they become measurable and available to pay current period liabilities. Commissions on fines and bond forfeitures are reported in the year they are collected by the tax collector. Grants and state appropriations are recorded when the Levee District is entitled to the funds. Interest income on investments is recorded when earned. Substantially all other revenues are recorded when received.
Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Costs of accumulated unpaid vacation, sick leave and other employee benefit amounts are reported in the period due and payable rather than the period earned by employees, and general long-term obligations principal and interest payments are recognized only when due.
Transfers between funds that are not expected to be repaid are accounted for as other financing sources and uses.
E. Budget Practices
The proposed General Fund budget for the fiscal year ended June 30, 2008 was completed and made available for public inspection at the Levee District's main office and formally adopted. The budget, which included proposed expenditures and the means of financing them for the General Fund, was published in the official journal. In addition to the budget, the official journal published a solicitation for comments and questions that could be addressed in the public meeting.
All appropriations lapse at year end. The Levee District does not recognize encumbrances. Budget amounts included in the accompanying financial statements include the original adopted budget amounts as amended. The budget practices-of the Levee District are subject to the provisions of LSA-R.S. 38:318.
F. Cash and Certificates of Deposit
Cash includes petty cash, money market accounts, and cash in the state treasury. Under state law, the Levee District may deposit funds and invest in certificates of deposit within a fiscal agent bank organized under the laws of the State of Louisiana, the laws of any other state in the Union, or the laws of the United States.
16 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Investments
The Levee District may also invest in bonds, debentures and other indebtedness which are fully guaranteed by the United States, issued or guaranteed by federal agencies backed by the full faith and credit of the United States and issued or guaranteed by United States government instrumentalities which are federally sponsored. Investments are stated at fair value determined by quoted market prices.
Investment income includes interest earned, realized gains and losses and unrealized gains and losses (changes in fair value).
H. Inventories
Inventories of fuel and mower parts are valued at the lower of cost or market and are recorded as expenditures at the time individual inventory hems are purchased. The Levee District uses a periodic inventory system and values its inventory using the flrst-in, first-out (FIFO) valuation method. Reported inventories are equally offset by a fund balance reserve which indicates that they do not constitute available expendable resources even though they are a component of net current assets.
I. Capital Assets
All capital assets are capitalized at historical cost, or estimated historical costs for assets where actual cost is not available. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation. The Levee District maintains a threshold level of $5,000 or more for capitalizing capital assets. Capital assets are recorded in the GWFS, but are not reported in the FFS. All capital assets are depreciated using the straight-line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed by the District, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from 5 to 7 years. J. Compensated Absences
Employees earn and accumulate annual and sick leave at various rates depending on their years of service. The amount of annual and sick leave that may be accumulated by each employee is unlimited. Upon termination, employees or their heirs are compensated for up to 300 hours of unused annual leave at the employees hourly rate of pay at the time of termination, Upon retirement, unused annual leave in excess of 300 hours plus unused sick leave are used to compute retirement benefits.
17 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30.2008
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The cost of current leave privileges, computed in accordance with GASB Codification Section C60, is recognized as current year expenditure in the General Fund when the leave is actually taken.
K. Postemplovment Health Care and Life Insurance Benefits
The Levee District provides certain continuing health care and life insurance benefits for its retired employees. The Levee District recognized the cost of providing these retiree benefits as an expenditure when paid during the year. L. Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
NOTE 2 - DEPOSITS AND INVESTMENTS
1. DEPOSITS WITH FINANCIAL INSTITUTIONS
For reporting purposes, deposits with financial institutions include savings, demand deposits, time deposits, and certificates of deposit. Under state law the Levee District may deposit funds within a fiscal agent bank selected and designated by the Interim Emergency Board. Further, the Levee District may invest in time certificates of deposit in any bank domiciled or having a branch office in the state of Louisiana; in savings accounts or shares of savings and loan associations and savings banks and in share accounts and share certificate accounts of federally or state chartered credit unions.
Deposits in bank accounts are stated at cost, which approximates market. Under state law these deposits must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These pledged securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank in the form of safekeeping receipts held by the State Treasurer
18 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 2 - DEPOSITS AND INVESTMENTS (CONTINUED)
The deposits at June 30, 2008 consisted of the following: Cash Deposits in Bank Accounts per Balance Sheet $ 343.925
Bank Balances of Deposits Exposed to Custodial Credit Risk: Uninsured and collateralized with securities held by the pledging institution $ 338,900
FDIC Insured 100,000
Total Bank Balances - All Deposits $ 438.900
The "Total Bank Balances - All Deposits" will not necessarily equal the "Deposits in Bank Account per Balance Sheet" due to outstanding items.
The following is a breakdown by banking institution, program, and amount of the balances shown above:
Banking Institution Governmental Fund Amount
1. Regions Bank General Fund $ 430,241 2. Regions Bank General Fund 1,684 3. Regions Bank Special Construction Fund 1,748 4. Regions Bank Westshore Feasibility Study Fund 1,034 5. Regions Bank Amite Rivers and Tributaries Bayou Manchac 1,024 6. Regions Bank St. Charles Parish Urban Flood Control 1,053 7. Regions Bank St. James Hurricane Protection 1,114 8. Regions Bank Amite Rivers and Tributaries Ecosystem Restoration 1.002
Total Bank Balances - All Deposits
19 NOTE 2 - DEPOSITS AND INVESTMENTS (CONTINUED)
Cash in petty cash and in escrow is not required to be reported in the note disclosure. However, to aid in reconciling amounts reported on the balance sheet to amounts reported in this note, shown below is any additional cash that is included on the balance sheet.
Petty Cash $ 100 Cash in Escrow 18.100,059 Total Petty Cash and Escrow $18.100.159
2. INVESTMENTS
The Levee District maintains investment accounts as authorized by Louisiana Revised Statute 33:2955.
Custodial Credit Risk Investments can be exposed to custodial credit risk if the securities underlying the investment are uninsured, not registered in the name of the entity, and are either held by the counterparty or the counterparty's trust department or agent but not in the entity's name. The following table shows each type of investment and discloses the total carrying amounts and market values. All investments listed below are registered in the name of the District.
Reported Fair Type of investment Amount Value U.S. Government Securities $12.388.071 $ 12.388.071
20 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 2 - DEPOSITS AND INVESTMENTS (CONTINUED)
3. CREDIT RISK, CONCENTRATION OF CREDIT RISK AND INTEREST RATE RISK DISCLOSURES
A. Credit Risk of Debt Investments
All investments are obligations of or guaranteed by the U.S. Government.
Rating AAA $12388.071
B. Interest Rate Risk
In accordance with its investment policy, the Levee District manages its exposure to declines in fair values by permitting shifts along the yield curve and between sectors of the fixed income market. The Levee District minimizes risk through diversification, thus the portfolio may not hold more than thirty percent (30%) at cost of any single bond issue.
Investment Maturities (In Years) Fair Less Type of Debt Investment Value Than 1 1-5 U.S. Government Securities $ 12.388,071 $1.164.524 $ 11.223.547
C. Concentration of Credit Risk
The Levee District's investment policy does not allow for funds contracted with an investment advisor, for management purposes to exceed ten percent (10%) of the advisor's assets under management.
4. POLICIES
Per the Louisiana Revised Statute 33:2955, the Levee District may only invest in specified obligations. The current investment obligations are in accordance with the State statute and rated AAA by Standard and Poor's, Moody's Investors Service, and Fitch Ratings.
21 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 3 - RECEIVABLES
The following is a summary of receivables at June 30, 2008:
Special General Construction Fund Fund Total Ad valorem taxes $ 17,626 $ $ 17,626 Use of money and property Interest earnings 94,468 52,378 146,846
Total $ 52.378 $ 164.472
NOTE 4 - CAPITAL ASSETS
Balance Balance July 1,2007 Additions Deletions June 30. 2008 Land $ 764,942 $ $ 764,942 Buildings 474,325 26,490 500,815 Equipment 2,635,835 327,580 $ 2,963.415 Total S 3.875.102 $ 354.070 $ 4.229.172
Accumulated Depreciation: Balance Balance July 1,2007 Additions Deletions June 30,2008 Land $ $ $ $ Buildings (302,289) (17,010) (319,299) Equipment 0,800,652) (266,562) (2,067,214) Total (2,102,941) (283,572) (2.386.513)
Capital Assets, Net $ 1.772.161 $ 70.498 $ 1.842.659
NOTE 5 - PENSION PLAN The Levee District contributes to the Louisiana State Employees Retirement System (LASERS), a single employer defined benefit pension plan. LASERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. LASERS issues a publicity available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to LASERS, 8401 United Plaza Blvd., Baton Rouge, LA 70809 or by calling (225) 922-0600. Plan members are required to contribute 8.0% of their annual covered salary and the Levee District is required to contribute at an actuarially determined rate.
22 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 5 - PENSION PLAN (CONTINUED)
The current rate is 20.4% of annual covered payroll. The contribution requirements of plan members are established by Louisiana Revised Statute 11:61. The contribution requirements of the Levee District are established under Louisiana Revised Statute 11:101 - 11:104 annually by the Actuarial Forecasting Committee. The Levee District's contributions for the years ending June 30, 2008, 2007 and 2006 were $292,900, $277,001, and $241,999 respectively, equal to the required contributions each year.
NOTE 6 - POSTEMPLOYMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
Plan description Louisiana State employees may participate in the State's Other Postemployment Benefit Plan (OPEB Plan), an agent multiple-employer defined benefit OPEB Plan (for FY 2008) that provides medical and life insurance to eligible active employees, retirees and their beneficiaries. The Office of Group Benefits administers the plan. LRS 42:801-883 provides the authority to establish and amend benefit provisions of the plan. The Office of Group Benefits does not issue a publicly available financial report of the OPEB Plan; however, it is included in Louisiana Comprehensive Annual Financial Report (CAFR). You may obtain a copy of the CAFR on the Office of Statewide Reporting and Accounting Policy's website at www.doa.Ia.gov/osrap,
Funding Policy The contribution requirements of plan members and the Levee District are established and may be amended by LRS 42:801-883. Employees do not contribute to their postemployment benefits cost until they become retirees and begin receiving those benefits. The retirees contribute to the cost of retiree healthcare based on a service schedule. Contribution amounts vary depending on what healthcare provider is selected from the plan and if the member has Medicare coverage. The Office of Group Benefits offers three standard plans for both active and retired employees: the Preferred Provider Organization (PPO) Plan, the Exclusive Provider Organization (EPO) plan and the Health Maintenance Organization (HMO) plan. Retired employees who have Medicare Part A and Part B coverage also have access to two OGB Medicare Advantage plans which includes one HMO plan and one private fee-for-service (PFFS) plan. Depending upon the plan selected, during fiscal year 2008, employee premiums for a single member receiving benefits range from $34 to $92 per month for retiree-only coverage with Medicare or from $125.52 to $170 per month for retiree-only coverage without Medicare. The fiscal year 2008 premiums for a retiree and spouse range from $69 to $165 per month for those with Medicare or from $408 to 493 per month for those without Medicare.
The plan is currently financed on a pay as you go basis, with the Levee District contributing anywhere from $103 to $237 per month for retiree-only coverage with Medicare or from $809 to $842 per month for retiree-only coverage without Medicare during fiscal year 2008. Also, the Levee District's contributions range from $207 to $427 per month for retiree and spouse with Medicare or $1,242 to $1,293 for retiree and spouse without Medicare. 23 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 6 - POSTEMPLOYMENT HEALTH CARE AND LIFE INSURANCE BENEFITS (CONTINUED)
OGB also provides eligible retirees Basic Term Life, Basic Plus Supplemental Term Life, Dependent Term Life and Employee Accidental Death and Dismemberment coverage, which is underwritten by The Prudential Insurance Company of America. The total premium is approximately $1 per thousand dollars of coverage of which the employer pays one half of the premium. Maximum coverage is capped at $50,000 with a reduction formula of 25% at age 65 and 50% at age 70, with AD&D coverage ceasing at age 70 for retirees,
Annual OPEB Cost The Levee District's Annual Required Contribution (ARC) is an amount actuarially determined in accordance with GASB 45. The ARC represents a level of funding that, if paid on an ongoing basis, would cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. A level percentage of payroll amortization method, open period, was used. The total ARC for the fiscal year beginning July 1, 2007 is $1,064,100 as set forth below:
Normal Cost $ 561,400 30-year UAL amortization amount 461,773 Interest on the above 40,927 Annual required contribution (ARC) $ 1.064.100
The following table presents the Levee District's OPEB Obligation for the fiscal year 2008:
Beginning Net OPEB Obligation My 1,2007 $ 0 Annual required contribution 1,064,100 Interest on Net OPEB Obligation 0 ARC Adjustment 0 OPEB Cost 1,064,100 Contributions made (retiree cost) 138,799 Change in Net OPEB Obligation 925,301
Ending Net OPEB Obligation June 30,2008 $ 925,301
The following table reflects the LA OPEB's Fund annual postemployment benefits cost, percentage of that cost contributed, and the net unfunded postemployment obligation at the end of the year (amounts in thousands). Since this fiscal year is the first fiscal year for which GASB 45 is applicable for the Levee District, no information for prior years is presented.
Utilizing the pay-as-you-go method, the Levee District contributed 13.04% of the annual post employment benefits cost during 2008.
24 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 6 - POSTEMPLOYMENT HEALTH CARE AND LIFE INSURANCE BENEFITS (CONTINUED)
Funded Status and Funding Progress As of June 30, 2008, the Levee District did not have an OPEB trust. A trust was established with an effective date of July 1, 2008, but was not funded at all, has no assets, and hence has a funded ratio of zero. Since the plan was not funded, the entire actuarial accrued liability of $12,083,300 was unfunded.
The funded status of the plan as of July I, 2007, was as follows (in thousands):
Actuarial accrued liability (AAL) $ 12,083,300 Actuarial value of plan assets Q Unfunded actuarial accrued liability (UAAL) 12,083,300 Funded ratio (actuarial value of plan assets/AAL) 0%
Covered payroll (annual payroll of active employee covered by the plan) $ 1,674,685 UAAL as a percentage of covered payroll 722%
Actuarial Methods and Assumptions
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities consistent with the long-term perspective of the calculations.
In the July 1, 2007, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.0 percent investment rate of return (net of administrative expenses) and initial annual healthcare cost trend rate of 9.5% and 10.6% for pre-Medicare and Medicare eligibles, respectively ,scaling down to ultimate rates of 5% per year. The Custodian's unfunded actuarial accrued liability is being amortized as a level percentage of payroll on an open basis. The remaining amortization period at June 30, 2007, was thirty years. 25 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 6 - POSTEMPLOYMENT HEALTH CARE AND LIFE INSURANCE BENEFITS (CONTINUED)
Required Supplementary Information Schedule of Funding Progress for Louisiana's State OPEB Plan
Actuarial Covered UAAL as a Actuarial Actuarial Accrued Unfunded Funded Payroll Percentage Valuation Value of Liability AAL Ratio of Covered Date Assets (AAL) (UAAL) Payroll Projected Unit Cost 07/01/2007 $0 $12,083,300 $12,083,300 0% $1,674,685 722%
NOTE 7 - COMPENSATED ABSENCES
At June 30, 2008, employees of the Levee District have accumulated and vested $157,515 of employees leave benefits, which was computed in accordance with GASB Codification Section C60.
The following is a summary of the long-term obligations for the year ended June 30,2008:
Balance Balance July 1,2007 Additions Deletions June 30.2008 Compensated absences $ 141.918 S 15.597 $ 157.515
NOTE 8 - LITIGATION AND CLAIMS
At June 30,2008, the Levee District was a defendant or co-defendant in various lawsuits principally arising from the normal course of operations. The Levee District's legal counsel has reviewed the claims and lawsuits in order to evaluate the likelihood of an unfavorable outcome to the Levee District and to arrive at the estimate, if any, of the amount or range of potential claims and lawsuits that have been categorized into "probable/1 "reasonably possible", or "remote," as defined by the GASB Codification Section C50. The Levee District is a defendant in several lawsuits arising from the same expropriation. Further, there are several unasserted claims arising from the same expropriation that will likely be asserted In the opinion of legal counsel for the Levee District, these lawsuits and unasserted claims will likely result in judgments against the Levee District of between approximately $1.8 million and $20 million. Approximately $1.8 million has been recorded in the government-wide Statement of Net Assets included under the caption "Claims Payable". The Levee District is a defendant or co-defendant in two (2) other personal injury lawsuits. In both cases the Levee District is a defendant behind other defendants and in the opinion of legal counsel for the Levee District, it is too early to determine the potential losses associated with these cases. 26 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30.2008
NOTE 9 - INTERGOVERNMENTAL REVENUES The following is a summary of intergovernmental revenues at June 30, 2008:
General Amite River Fund & Tributaries Total State revenue sharing $378,436 S - $378,436 LA Division of Administration ^ 300,375 300.375 Total $378.436 $ 300375 $678.811
NOTE 10 - CONSTRUCTION AND FEASIBILITY STUDY COMMITMENTS
Lake Pontchartrain and Vicinity Hurricane Protection Project
The federal government has agreed to finance 70 percent of the cost of the Lake Pontchartrain and Vicinity Hurricane Protection Project, and the Pontchartrain Levee District will pay the remaining 30 percent of the cost. This agreement is in accordance with the Flood Control Act of 1965 as modified by the Water Resources Development Act of 1974. Local non-federal sources are required to pay at least 30 percent of the total project costs for the St. Charles portion of the Lake Pontchartrain and Vicinity Hurricane Protection Project. The local and non-federal portion of the project is estimated to be approximately $31 million. The Pontchartrain Levee District has entered into an agreement with St Charles Parish whereby the Pontchartrain Levee District will pay 80 percent of the non-federal portion of project costs, and St. Charles Parish will provide the remaining 20 percent.
St. Charles Parish's 20 percent commitment will be paid in 25 annual installments due and payable before the 15th day of June of each year, commencing on June 15, 1991. In August 2007 Levee District requested approximately $549,000 from St. Charles Parish.
On February 9,1996, the Pontchartrain Levee District entered into a cooperative endeavor agreement with the Louisiana Department of Transportation and Development (DOTD), These funds were used to provide the required local match for the cost of the Lake Pontchartrain and Vicinity Hurricane Protection Project. From inception through June 30, 2008, the Pontchartrain Levee District's total accumulated expenditures for this project were approximately $34,000,000. The expenditures incurred by the Levee District exceed their portion of the estimated total cost of the project. Therefore, no commitment is estimated for the Levee District as of June 30,2008.
West Shore Feasibility Study
The Pontchartrain Levee District has entered into an agreement with the U.S. Corps of Engineers whereby the Corps will conduct a "Feasibility Phase Study" to assess the extent of Federal
27 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 10 - CONSTRUCTION AND FEASIBILITY STUDY COMMITMENTS (CONTINUED) interest in participating in a solution to the problem of hurricane protection and flood control in St. John the Baptist Parish. The Water Resources Act of 1996 requires local non-federal funding of 50% of the study cost.
The local non-federal portion of the study is estimated to be $1,500,000. The Pontchartrain Levee District has entered into a cooperative agreement with St. John the Baptist Parish whereby the Pontchartrain Levee District will pay 77.5% of the nonfederal portion of the study cost, and St. John the Baptist Parish will provide the remaining 22.5%.
From inception through June 30, 2008, the Pontchartrain Levee District's total accumulated expenditures for this project were approximately $1,700,000. The estimated remaining cost to be incurred by the Pontchartrain Levee District is $30,000. These study costs are estimates and as such, the amounts could change.
St. Charles Parish Urban Flood Control Feasibility Study
The Pontchartrain Levee District has entered into an agreement with the U.S. Corps of Engineers whereby the Corps will conduct a "Feasibility Phase Study" to assess the extent of Federal interest in participating in a solution to the problem of hurricane protection and flood control in St. Charles Parish. The Water Resources Act of 1996 requires local non-federal funding of 50% of the study cost. The local non-federal portion of the study is estimated to be $2,745,500. The Pontchartrain Levee District has entered into a cooperative agreement with St. Charles Parish whereby the Pontchartrain Levee District will pay $1,800,000 of that amount and St. Charles Parish will pay the remaining $945,500.
28 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 10 - CONSTRUCTION AND FEASIBILITY STUDY COMMITMENTS (CONTINUED)
Amite River and Tributaries, Bayou Manchac. LA Feasibility Study
The Pontchartrain Levee District has entered into a Feasibility Study with the U.S. Corps of Engineers on November 29, 2001 to develop alternatives to provide for ecosystem restoration and flood damage reduction for the Bayou Manchac Watershed. Various alternatives are being evaluated including, watershed management, water-control structure improvements, channel improvements, fresh water diversion, and exotic weed control. Funding cost share for this feasibility phase is 50% Federal and 50% Non-Federal. The local non- federal portion of the study is estimated to be $2 million. From inception through June 30, 2007, the Pontchartrain Levee District's total accumulated expenditures for this project have been approximately $1.7 million. The feasibility study phase would be completed in the fiscal year ending June 30, 2007, provided adequate funding is received from both the Federal and Non-Federal sponsors. Construction could begin as early as the fiscal year ending June 30,2008, provided a recommended plan is authorized by Congress and the non-federal sponsor executes the Project Cooperation Agreement. The cost share for the construction would be a 65% Federal and 35% Non-Federal, Amite River and Tributaries., Ecosystem Restoration, LA Feasibility Study
The Pontchartrain. Levee District has entered into a Feasibility Study with the U.S. Corps of Engineers on March 4, 2005 to develop and recommend alternatives to restore the Amite River ecosystem to provide for flood-damage reduction, fish and wildlife habitat, improved water quality, reduced erosion, and develop recreational opportunities. About 25 miles of river has been degraded and channelized such that 12,000 acres of forested habitat and 60 miles of riparian habitat have been lost. This river degradation is believed to be increasing flood stages along the Amite River in East Baton Rouge, Livingston, Iberville and Ascension Parishes.
Funding cost share for this feasibility phase is 50% Federal and 50% Non-Federal. The local non- federal portion of the study is estimated to be $2.6 million. Topographic surveys and hydrologic modeling began in 2005. The feasibility study phase would be completed in the fiscal year ending June 30, 2009, provided adequate funding is received from both the Federal and Non-Federal sponsors. Construction could begin in fiscal year 2011, provided a recommended plan is authorized by Congress and the non-federal sponsor executes the Project Cooperation Agreement The cost share for the construction would be a 65% Federal and 35% Non-Federal. From inception through June 30,2008, the Levee District's total accumulated expenditures for this project have been approximately $100,000.
29 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 10 - CONSTRUCTION AND FEASIBILITY STUDY COMMITMENTS (CONTINUED)
St. James Hurricane Protection Levee and Study Project Feasibility Study
This study is the result of recommendations from earlier work by the U.S. Army Corps of Engineers and others to evaluate the need and costs for flood control and hurricane protection in the areas upstream of the Lake Pontchartrain Hurricane Protection Levee. The initial study yielded three (3) potential routes and approximate construction costs in order to evaluate the potential routes. After careful consideration, the chosen route was along and north of 1-10. This route not only protects the residents but closes the gap between Reserve and Sorrento. This route also protects the interstate travel lanes during hurricane situations, and also allows a much faster response time for emergency personnel and repopulation. The work on the initial study report has been completed, and the final conceptual route has been chosen by the Levee District. The current phase of the project is to finalize and detail the approved route, This will include survey, geotechnical, hydrological, and land ownership considerations. Preliminary environmental, wetlands, and endangered species reports were done in the previous portion of the study. The purpose of this phase is to revise and update the Estimate of Probable Construction Cost The initial study was begun and completed in the fiscal year ending June 30, 2006. The second phase (the Final Alignment) was begun in the fiscal year ending June 30,2006. Funding for this project has been entirely borne by the Levee District, 100%. It is the intention of the Levee District to seek federal reimbursement for portions of this project at the appropriate time. The Levee District has allocated approximately $1 million for this project. From inception through June 30, 2008, the Levee District's total accumulated expenditures for this project have been approximately $625,000.
NOTE 11- LEVEE DISTRICT TAXES
Article 6, Section 39 of the 1974 Louisiana Constitution provides that for the purpose of constructing and maintaining levees, levee drainage, flood protection, hurricane flood protection, and for all other purposes incidental thereto, the Levee District may levy annually a tax not to exceed five mills. If the Levee District needs to raise additional funds in excess of the amount collected constitutionally, the taxes in excess of five mills must be approved by a. majority vote of the electors. The Levee District has levied a tax of 3.74 mills.
NOTE 12 - INFRASTRUCTURE The Pontchartrain Levee District does not own any infrastructure. The United States Corps of Engineers owns the levees and provides the major maintenance to the levees. The levees are along the corridor along the river. The Pontchartrain Levee District provides minor maintenance such as grass cutting along the east bank of the levee from East Baton Rouge Parish to St. Charles Parish which is approximately 115 miles long. The approximate cost of the levees as determined by the Corps of Engineers is $484,064 per mile for the total cost of $55,667,360. As such, the levees provide vital 30 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30,2008
NOTE 12 - INFRASTRUCTURE (CONTINUED) protection to the large petro-chemical industries located along the river from the annual spring rise in river levels.
NOTE 13 - EXPENDITURES IN EXCESS OF REVENUES AND DEFICIT FUND BALANCES
The following funds had expenditures in excess of revenues:
Expenditures over Revenues West Shore Feasibility Study $ 404,803 St. Charles Urban Flood Control 1,691,756 Amite River & Tributaries 146,521 St. James Hurricane Protection 674,993 AR&T Ecosystem Restoration 194,565
The following funds had deficit fund balances for the year ended June 30, 2008:
St. Charles Urban Flood Control $ 98,847 St. James Hurricane Protection 182,486
31 REQUIRED SUPPLEMENTAL INFORMATION - PART H PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA GENERAL FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30,2008
Original Variance and Final Positive Budget Actual (Negative) REVENUES Local Sources: Taxes $ 5,745,517 $ 6,716,983 $ 971,466 Intergovernmental revenueLiess 328,200 378,436 50,236 Interest earnings 248,500 449,634 201,134 Other - 31,778 31,778 Total revenues 6,322,217 7,576,831 1,254,614
EXPENDITURES Executive 110,749 102,182 8,567 General administrative 863,744 906,214 (42,470) Levee maintenance 2,881,169 2,969,485 (88,316) Police department 589,041 525,893 63,148 Capital outlay 646,360 391,022 255,338 Total expenditures 5,091,063 4,894,796 196,267
)F REVENUES OVER EXPENDITUREES 1,231,154 2,682,035 1,450,881
RCES (USES) Operating transfers in - 3,336,412 3,336,412 Operating transfers out (1,200,000) (448,902) 751,098 sources (uses) (1,200,000) 2,887,510 4,087,510
BALANCE 31,154 5,569,545 5,538,391
VBVG OF YEAR 8,412,753 9,407,909 995,156
FUND BALANCE, END OF YEAR $ 8,443,907 $ 14,977,454 $ 6,533,547
32 OTHER SUPPLEMENTARY INFORMATION PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA SCHEDULE OF PER DIEM PAD) TO BOARD MEMBERS For the Year Ended June 30,2008
The schedule of per diem paid to the board members of tie Pontchartrain Levee District is presented in compliance with House Concurrent Resolution No. 54ofthe 1979 Session of the Louisiana Legislature. Per diem payments are authorized by Louisiana Revised Statute 38:308 and are included in the general administrative expenditures of the General Fund. Board members are paid $75 per meeting for up to 36 meetings each year, except the Board President who receives a per diem of $ 1,000 per month.
Name Amount
William Addison Geri Broussard-Baloney Jesse Bartley Michael Delaune Webb Harrelson Robert Roussel Blaine Sheets Chucky Tillis Total
33 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA
NON-MAJOR FUNDS DESCRIPTIONS
CAPITAL PROJECTS FUNDS
Capital Projects Funds account for the acquisition or construction of major capital facilities.
West Shore Feasibility Study Fund
The West Shore Feasibility Study Fund is used to account for expenditures made for the purpose of building and maintaining the levee on the West shore of the Mississippi river in St. John the Baptist Parish.
St. Charles Urban Flood Control Fund
The SL Charles Urban Flood Control Fund is used to account for expenditures made for the purpose of building and maintaining flood prevention measures in urban and residential areas in St. Charles Parish.
Amite River and Tributaries Fund
The Amite River and Tributaries Fund is used to account for expenditures made for the purpose of building and maintaining flood prevention measures in urban and residential areas near the Amite River in Ascension Parish.
St. James Hurricane Protection Fund
The St. James Hurricane Protection Fund is used to account for expenditures made for the purpose of conducting a preliminary study to determine necessary hurricane protection measures in St. James Parish.
34 t- 'rt ^t r- i—i (N ON r-- oo *O oo^ ro Tfr VO 1r-i =CD in (N ^O (N^ 3^ g -o r-" ON" I>" (N •*" r-" a 3 i—i ON ^H OO ro ro 5-z cse f3o (N ro VO ro CM CM 0 > -t 0 O
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MACALUSO, JR., C.P.A. Metairie, LA 70005 DAVID V.ERNST (504)837-5434 MEMBERS FAX (504) 837-5435 American Institute of Certified Public Accountants Society of Louisiana Certified Public Accountants WWW.hienzmaCaluSO.com REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Levee Commissioners of Pontchartrain Levee District State of Louisiana Lutcher, Louisiana We have audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Pontchartrain Levee District (the "Levee District"), a component unit of the State of Louisiana, as of and for the year ended June 30, 2008, which collectively comprise the District's basic financial statements and have issued our report thereon dated August 27, 2008. 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 the District's 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 District's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over financial reporting. 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 District'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 the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. 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 the District's 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 internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the District's 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 an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, the Board of Directors, others within the organization, and the Legislative Auditor and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. >6/ HIENZ & MACALUSO, LLC Metairie, LA August 27, 2008 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2008 A. SUMMARY OF AUDIT RESULTS 1. The auditor's report expressed an unqualified opinion of the financial statements of the Pontchartrain Levee District. 2. There are no significant deficiencies reported relating to the audit of the financial statements. 3. No instance of noncompliance material to the financial statements of the Pontchartrain Levee District was disclosed during the audit. 4. There was no management letter issued for the year ended June 30, 2008. B. FINDINGS - FINANCIAL STATEMENT AUDIT There were no findings related to the financial statements for the year ended June 30,2008. 39 PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA SCHEDULE OF PRIOR YEAR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30,2008 A. INTERNAL CONTROL AND COMPLIANCE There were no findings related to the internal control and compliance reported for the year ended June 30,2007. 40 REQUIRED SUPPLEMENTAL INFORMATION DIVISION OF ADMINISTRATION: OFFICE. OF STATEWIDE REPORTING AND ACCOUNTING POLICY-REPORTING PACKAGE PONTCHARTRAIN LEVEE DISTRICT STATE OF LOUISIANA Annual Financial Statements June 30, 2008 CONTENTS AFFIDAVIT Statements MD&A (See audit report pages 3-7) Balance Sheet A Statement of Revenues, Expenses, and Changes in Fund Net Assets B Statement of Activities (Additional information in Appendix A) C Statement of Cash Flows D Notes to the Financial Statements A. Summary of Significant Accounting Policies B. Budgetary Accounting C. Deposits with Financial Institutions and Investments (Information in Appendix B) D. Capital Assets - Including Capital Lease Assets E. Inventories F. Restricted Assets G. Leave H. Retirement System I. Other Postemployment Benefits (Additional information in Appendix F) J. Leases K, Long-Term Liabilities L. Contingent Liabilities M. Related Party Transactions N. Accounting Changes O. In-Kind Contributions P. Defeased Issues Q. Revenues - Pledged or Sold (GASB 48) (Additional information in Appendix G) R. Government-Mandated Nonexchange Transactions (Grants) S. Violations of Finance-Related Legal or Contractual Provisions T. Short-Term Debt U. Disaggregation of Receivable Balances V. Disaggregation of Payable Balances W. Subsequent Events X. Segment Information Y. Due to/Due from and Transfers Z. Liabilities Payable from Restricted Assets AA. Prior-Year Restatement .of Net Assets BB. Net Assets Restricted by Enabling Legislation (Information in Appendix C) CC. Impairment of Capital Assets (Information in Appendix D) DD. Employee Termination Benefits Schedules 1 Schedule of Per Diem Paid to Board Members 2 Not Applicable 3 Schedules of Long-Term Debt 4 Schedules of Long-Term Debt Amortization 15 Schedule of Comparison Figures and Instructions 16 Schedule of Cooperative Endeavors Schedule Number STATE OF LOUISIANA Annual Financial Statements Fiscal Year Ending June 30, 2008 PONTCHARTRAIN LEVEE DISTRICT 2204 ALBERT STREET LUTCHER, LA 70071 Division of Administration Legislative Auditor Office of Statewide Reporting P. O. Box 94397 and Accounting Policy Baton Rouge, Louisiana 70804-9397 P. O. Box 94095 Baton Rouge, Louisiana 70804-9095 AFFIDAVIT Personally came and appeared before the undersigned authority, Monica Salins, Executive Director of the Pontchartrain Levee District, who duly sworn, deposes and says, that the financial statements herewith given present fairly the financial position of the Pontchartrain Levee District at June 30, 2008 and the results of operations for the year then ended in accordance with policies and practices established by the Division of Administration or in accordance with Generally Accepted Accounting Principles as prescribed by the Governmental Accounting Standards Board. Sworn and subscribed before me, this Z9> day of , 200 B. Signaturp of Agency Official ( ) Dwight D. Poirrier, Notary Public \ — Prepared by: HIENZ & MACALUSO, LLC Title: CERTIFIED PUBLIC ACCOUNTANTS Telephone No.: 504-837-5434 Date: August 26, 2008 STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT BALANCE SHEET AS OF JUNE 30, 2008 ASSETS CURRENT ASSETS: Cash and cash eauivalents S 18.444084 Investments 12.388071 Receivables (net of allowance for doubtful accountsVNote U) 164.472 Due from other funds (Note Y) Due from federal Government Inventories 32.574 Preoavments 169.070 Notes receivable Other current assets ..... Total current assets 31.198.271 NONCURRENT ASSETS: Restricted assets (Note R: Cash Investments Receivables Investments Notes receivable Caoital assets fnet of deoreciationVNote D) Land 764.942 Buildinas and imorovements 181.516, Machinery and eauioment 896201 Infrastructure Construction in oroaress Other noncurrent assets Total noncurrent assets 1.842659 Total assets S a nan o^n LIABILITIES CURRENT LIABILITIES: Accounts oavable and accruals (Note V) $ 35,5.691 Due to other funds (Note Y1 Due to federal aovemment Deferred revenues Amounts held in custody for others Other current liabilities Current portion of lona-term liabilities: (Note K) Contracts payable Compensated absences oavable Capital lease oblioations Claims and litiaation oavable Notes oavable Bonds payable ... Other lona-term liabilities Total current liabilities 355.691 NONCURRENT LIABILITIES: (Note K) Contracts payable Compensated absences payable 157.515 Capital lease pbliaations Claims and litiaation payable 1.793.0QQ_ Notes oavable Bonds payable OPEB oavable 925301 Other lona-term liabilities Total noncurrent liabilities 2.875.818 Total liabilities 3 231 507 NET ASSETS Invested in capital assets, net of related debt 1842.659 Restricted for: Capital projects Debt service Unemployment compensation Other specific purposes Unrestricted 27 9fiB 764 Total net assets 29 809 423 Total liabilities and net assets S 33 o.an qsjL The accompanying notes are an integral part of this financial statement. Statement A STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2008 OPERATING REVENUES Sale s of commodities and services $ Taxes 6,716.983 Use of money and property 1,150,641 Intergovernmental revenues 678.811 Other 31,778 Total operating revenues 8,578,213 OPERATING EXPENSES Cost of sales and services 6,145,009 Administrative Depreciation 283,572 Amortization Total operating expenses 6,428,581 Operating income(loss) 2,149,632 NON-OPERATING REVENUES(EXPENSES) State appropriations Intergovernmental revenues (expenses) Taxes Use of money and property Gain on disposal of fixed assets Loss on disposal of fixed assets Federal grants Interest expense Other revenue Other expense Total non-operating revenues(expenses) In come(loss) before contributions, extraordinary items, & transfers 2,149,632 Capital contributions Extraordinary item - Loss on impairment of capital assets Transfers in Transfers out Change in net assets 2,149.632 Total net assets - beginning 27,659,791 Total net assets - ending $ 29,809.423 The accompanying nptes are an integral part of this financial statement. Statement B STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2008 See Appendix A for instructions Program Revenues Net (Expense) Operating Capital Revenue and Charges for Grants and Grants and Changes in Expenses Services Contributions Contributions Net Assets Entity $ 6,428,531 $ 300,375 $ (6,128,206) General revenues: Taxes 6,716,983 State appropriations 378,436 Grants and contributions not restricted to specific programs Interest 1.150.641 Miscellaneous 31,778 Special items Extraordinary item - Loss on impairment of capital assets Transfers Total general revenues, special items, and transfers 8,277,838 Change in net assets 2,149,632 Net assets - beginning as restated 27,659.791 Net assets-ending 29,809,423 The accompanying notes are an integral part of this statement Statement C STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2008 Cash flews from operating activities Cash received from customers $ Cash payments to suppli ers for goods and sen/ices Cash payments to employees for services Payments in lieuofta>es I ntema I activity-payments to other funds Claims paid to outs'd ers Other operating revenuesfejqsenses) 3,472.016 Nst cash provided(used) by operating activities 3,472,016 Cash flows from non-capital financing activities State appropriations Proceeds from sale of bonds Principal paid on bonds I nterest paid on bond maturities Proceeds from issuance of notes payable Principal paid on notes payable Interest paid on notes payable Operating grants received Transfers in Transfers out ~^^~~'^~~~~~^^~_ Other H^ZHZH^Z Nst cash prcvided(used) by non-capital fi nanting activities Cash flews from capital and related financing activities Proceeds from sale of bonds Principal paid on bonds Interest paid on bond maturities Proceeds from issuance of notes payable Principal paid on notes payable Interest paid on notes payable Acquisition/construction of capital assets (354,070)^ Proceeds from sale of capital assets Capital contributions Other ^IZ^ZTZZ^^ Nst cash provided(used) by capital and related financing activities (354,070) Cash flews from investing activities Purchases of investment securities (5,240,615) Proceeds from sale of investment securities 750,000 I nterest and dividends earned on investment securities 1,083,832 Nat cash provided(used) by investing activities (3,406,783) Nst increasefdeoease) in cash and cash equivalents (288,837) Cash and cash equivalents at beginning of year 18 732,921 Cash and cash equivalents at end of year $ 18.444.084 Statement D (Continued) STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2008 Reconciliation of operating income(loss) to net cash provided(used) by operating activities: Operating income(loss) 2.149,632 Adjustments to reconcile operating income(loss) to net cash Depreciation/amortization 283,572 Provision for uncollectible accounts Other Changes in assets and liabilities: (Increase)decrease in accounts receivable, net (62,842) (Increase)decrease in due from other funds (Increase)decrease in prepayments (12.920) ttncrease)decrease in inventories (18,004) (Increase)decrease in other assets Increase(decrease) in accounts payable and accruals 191,680 In crease (deer ease) in compensated absences payable 15,597 Increase(decrease) in due to other funds Increase(decrease) in deferred revenues Increase(decrease) in OPEB payable 925,301 In crease (decrease) in other liabilities Net cash provided(used) by operating activities 3,472,016 Schedule of noncash investing, capital, and financing activities: Borrowing under capital lease Contributions of fixed assets Purchases of equipment on account Asset trade-ins Other (specify) Total noncash investing, capital, and financing activities: The accompanying notes are an integral part of this statement. Statement D (concluded) STATE OF LOUISIANA PONTCHARTRA1N LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 INTRODUCTION The Pontchartrain Levee District was created by the Louisiana State Legislature under the provisions of Louisiana Revised Statute 38:291{L). The Levee District includes all or portions of the following parishes: East Baton Rouge, Iberville, Ascension, St. James, St. John the Baptist, and St. Charles. The Levee District primarily provides flood protection for those areas contained in the District The governing board administers the operations and responsibilities of the Levee District in accordance with provisions of Louisiana statutes. The Board of Commissioners of the Levee District consists of nine members appointed by the Governor. A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING In April of 1984, the Financial Accounting Foundation established the Governmental Accounting Standards Board (GASB) to promulgate generally accepted accounting principles and reporting standards with respect to activities and transactions of state and local governmental entities. The GASB has issued a Codification of Governmental Accounting and Financial Reporting Standards (GASB Codification). This codification and subsequent GASB pronouncements are recognized as generally accepted accounting principles for state and local governments. The accompanying financial statements have been prepared in accordance with such principles. The accompanying financial statements of Pontchartrain Levee District present information only as to the transactions of the programs of the Pontchartrain Levee District as authorized by Louisiana statutes and administrative regulations. Basis of accounting refers to when revenues and expenses are recognized and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The accounts of the Pontchartrain Levee District are maintained in accordance with applicable statutory provisions and the regulations of the Division of Administration - Office of Statewide Reporting and Accounting Policy as follows: Revenue Recognition Revenues are recognized using the full accrual basis of accounting; therefore, revenues are recognized in the accounting period in which they are earned and become measurable. Expense Recognition Expenses are recognized on the accrual basis; therefore, expenses, including salaries, are recognized in the period incurred, if measurable. B. BUDGETARY ACCOUNTING - NOT APPLICABLE C. DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS (If all agency cash and investments are deposited in the State Treasury, disregard Note C.) See Appendix B for information related to Note C. 1. DEPOSITS WITH FINANCIAL INSTITUTIONS For reporting purposes, deposits with financial institutions include savings, demand deposits, time deposits, and certificates of deposit. Under state law the Pontchartrain Levee District may deposit funds within a fiscal agent bank selected and designated by the Interim Emergency Board. Further, the Pontchartrain Levee District may invest in time certificates of deposit in any bank domiciled or having a branch office in the state 1 STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 of Louisiana; in savings accounts or shares,of savings and loan associations and savings banks and in share accounts and share certificate accounts of federally or state chartered credit unions. For the purpose of the Statement of Cash Flows and balance sheet presentation, all highly liquid investments (including negotiable CDs and restricted cash and cash equivalents) and deposits (including nonnegotiable CDs and restricted cash and cash equivalents) with a maturity of three months or less when purchased are considered to be cash equivalents. Deposits in bank accounts are stated at cost, which approximates market. Under state law these deposits must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These pledged securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank in the form of safekeeping receipts held by the State Treasurer. GASB Statement 40, which amended GASB Statement 3, eliminated the requirement to disclose all deposits by the three categories of risk. GASB Statement 40 requires only the disclosure of deposits that are considered to be exposed to custodial credit risk. An entity's deposits are exposed to custodial credit risk if the deposit balances are either 1) uninsured and uncollateralized, 2) uninsured and col lateral ized with securities held by the pledging financial institution, or 3) uninsured and collateralized with securities held by the pledging financial institution's trust department or agent, but not in the entity's name. The deposits at June 30, 2008, consisted of the following: N on negotiable Certificates Other Cash of Deposit (Describe) Total Balance per agency books $ 343.925 $ $ $ 343,925 Deposits in bank accounts per bank S 438,900 $ $ $ 438,900 Bank balances of deposits exposed to custodial credit risk: a. Deposits not insured and uncollateralized $ $ $ $ - b. Deposits not insured and collateralized with securities held by the pledging institution. $ 338,900 $ $ $ 338,900 c. Deposits not insured and collateralized with securities held by the pledging institution's trust department or ageny but not in the entity's name. $ $ $ $ - NOTE: The "Deposits in bank accounts per bank" will not necessarily equal the "Balance per agency books" due to outstanding items. The following is a breakdown by banking institution, program, account number, and amount of the "Deposits in bank accounts per bank" balances shown above: STATE OF LOUISIANA PONTCHARTRA1N LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 Banking Institution Program Amount 1. Regions Bank General Fund $ 430,241 2. Regions Bank General Fund Payroll 1,684 3. Regions Bank Special Construction 1,748 4. Regions Bank West Shore Feasibility 1,034 5. Regions Bank AR&T Bayou Manchac 1,024 6. Regions Bank St. Charles Parish UFC 1,053 7. Regions Bank St. James Hurricane Prot 1,114 8. Regions Bank AR&T Ecosystem 1,002 Total $ 438.900 Cash in escrow and petty cash are not required to be reported in the note disclosure. However, to aid in reconciling amounts reported on the balance sheet to amounts reported in this note, list below any cash in escrow and petty cash that are included on the balance sheet. Cash in Escrow $ 18,100,059 Petty cash $ 100 2. INVESTMENTS The Pontchartrain Levee District does maintain investment accounts as authorized by Louisiana Revised Statute 33:2955. Custodial Credit Risk Investments can be exposed to custodial credit risk if the securities underlying the investment are uninsured, not registered in the name of the entity, and are either held by the counterparty or the counterparty's trust department or agent but not in the entity's name. Repurchase agreements are not subject to credit risk if the securities underlying the repurchase agreement are exempt from credit risk disclosure. Using the table on this page, list each type of investment disclosing the total carrying amounts and market values, and any amounts exposed to custodial credit risk. GASB Statement 40 amended GASB Statement 3 to eliminate the requirement to disclose all investments by the three categories of risk. GASB Statement 40 requires only the separate disclosure of investments that are considered to be exposed to custodial credit risk. Those investments exposed to custodial credit risk are reported by type in one of two separate columns depending upon whether they are held by a counterparty, or held by a counterparty's trust department or agent not in the entity's name. In addition, the total reported amount and fair value columns still must be reported for total investments regardless of exposure to custodial credit risk. STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 * Unregistered, and Held by Uninsured, Counterparty's Reported * Unregistered, Trust Dept. or Amount and Held by Agent Not in Per Balance Fair Type of Investment Counterparty Entity's Name Sheet Value Negotiable CDs $ $ $ $ Repurchase agreements . U.S. Government Obligations ** 12.388.071 12.388.071 U.S. Agency Obligations Common & preferred stock Mortgages (including CMOs SMBSs) Corporate bonds Mutual funds Real estate Other: (identify) Total investments $ - $ - $ 12,388,071 $ 12,388,071 * Unregistered -not registered in the name of the government or entity * 'These obligations generally are not exposed to custodial credit risk because they are backed by the full faith and credit of the U.S. government. (See Appendix B for the defriition of U.S. Go\ernment Obligations) 3. DERIVATIVES - NOT APPLICABLE 4. CREDIT RISK, INTEREST RATE RISK, CONCENTRATION OF CREDIT RISK, AND FOREIGN CURRENCY RISK DISCLOSURES A. Credit Risk of Debt Investments Disclose the credit risk of debt investments by credit quality ratings as described by rating agencies as of the fiscal year end, including the rating agency used (Moody's, S&P, etc.). All debt investments regardless of type can be aggregated by credit quality rating (if any are un-rated, disclose that amount). STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 Rating Agency Rating Fair Value Moody's/Standard & Poors AAA $ 12,388,071 Total $ 12,388.071 B. Interest Rate Risk of Debt Investments 1. Disclose the interest rate risk of debt investments by listing the investment type, total fair value, and breakdown of maturity in years for each debt investment type. (Note - This is the prescribed method, segmented time distribution, for the CAFR. Also, total debt investments reported in this table should equal total debt investments reported in Section A - Credit Risk of Debt Investments.) Investment Maturities (in Years) __ Fair Less Greater Type of Debt Investment Value Than 1 1 -5 6-10 Than 10 U.S. Government obligations £ 12,388.071 $ 1,164.524 £ 11 ,223.547 $ U.S. Agency obligations Mortgage backed securities Collateralized mortgage obligations _ _ Corporate bonds Other bonds Mutual bond funds Other Total debt investments $ 12,388,071 $ 1,164,524 $ 11,223,547 $ 2. List the fair value and terms of any debt investments that are highly sensitive to changes in interest rates due to the terms (e.g. coupon multipliers, reset dates, etc.) of the investment. See Appendix B for examples of debt investments that are highly sensitive to changes in interest rates. - NOT APPLICABLE C. Concentration of Credit Risk List, by amount and issuer, investments in any one issuer that represents 5% or more of total external investments (not including U.S. government securities, mutual funds, and investmentpools).NOTAPPLICABLE D. Foreign Currency Risk- NOT APPLICABLE 5. POLICIES Briefly describe the deposit and/or investment policies related to the custodial credit risk, credit risk of debt investments, concentration of credit risk, interest rate risk, and foreign currency risk disclosed in this note. If no policy exists concerning the risks disclosed, please state that fact. STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 The Levee District has no policies related to custodial credit risk or foreign currency risk. The Levee District may only invest in specified obligations per LRS 33:2955. The Levee District minimizes interest rate risk through diversification, thus the portfolio may not hold more than 30: at cost of any single bond issue. The Levee District's policy does not allow for funds contracted with an investment advisor for management purposes to exceed 10% of the advisor's assets under management. 6. OTHER DISCLOSURES REQUIRED FOR INVESTMENTS - NOT APPLICABLE D. CAPITAL ASSETS - INCLUDING CAPITAL LEASE ASSETS The fixed assets used in the Special Purpose Government Engaged only in Business-Type Activities are included on the balance sheet of the entity and are capitalized at cost. Depreciation of all exhaustible fixed assets used by the entity is charged as an expense against operations. Accumulated depreciation is reported on the balance sheet. Depreciation for financial reporting purposes is computed by the straight line method over the useful lives of the assets. STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 Year ended June 30, 2008 Prior Adjusted Balan ce Period Balance Balance 6/30/2007 Adjustment 6/30/2007 Additions Transfers* Retirements 6/302008 Capita] assets not being depreciated Land S 764,942 $ 3 764,942 $ 3 764,942 Non-depreciable land improvements Capital'zed collections Construction in progress Total capital assets not being depreciated 764.942 764.942 764.942 Other capital assets Machinery and equipment 2,635,835 2,635,835 327,580 2,963,415 Less accumulated depreciation (1,800,652) (1 ,800,652) (266,562) (2,057,214) Total Machhery and equipment 835,183 835,183 61,018 896,201 Buidhgs and improvements 474,325 474,325 26,490 500,815 Less accumulated depreciation (302,289) (302,289) (17,010) (319,299) Total buildings and improvements 172,036 172,036 9,480 181,516 Depreciable land improvements Less accumulated depreciation Total depreciable land improvements Infrastructure Less accumulated depreciation Total infrastructure Total othercapital assets 1,007,219 1,007,219 70,498 1,077,717 Capital AssetSummary: Capita! assets not being depreciated 764,942 764,942 764,942 Other capital assets, at cost 3,110,160 3,110,160 354,070 3,464,230 Total cost of capital assets 3,875,102 3,875,102 354,070 4,229,172 Less accumulated depreciation (2,102,941) (2,102,941) (283,572) (2,386,513) Capital assets, net 1,772,161 $ - 3 1,772,161 5 70,498 3 - 3 - 3 1,842,659 * Should be used only for those completed prqects coming out of construction-in-progress to fixed assets; not associated with transfers reported elsewhere in this packet INVENTORIES The Pontchartrain Levee District's inventories are valued using the FIFO valuation method. Reported inventories are equally offset by a fund balance reserve which indicates that they do not constitute available expendable resources even though they are a component of current net assets. RESTRICTED ASSETS - NOT APPLICABLE STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 G. LEAVE 1. COMPENSATED ABSENCES The Pontchartrain Levee District has the following policy on annual and sick leave: Employees earn and accumulate annual and sick leave at various rates depending on their years of service. The amount of annual and sick leave that may be accumulated by each employee is unlimited. Upon termination, employees or their heirs are compensated for up to 300 hours of unused annual leave at the employee's hourly rate of pay at the time of termination. Upon retirement, unused annual leave in excess of 300 hours plus unused sick leave is used to compute retirement benefits. The cost of leave privileges, computed in accordance with GASB Codification Section C60, is recognized as a current year expenditure in the fund when leave is actually taken; it is recognized in the enterprise funds when the leave is earned. The cost of leave privileges applicable to general government operations not requiring current resources is recorded in long-term obligations. 2. COMPENSATORY LEAVE - NOT APPLICABLE H. RETIREMENT SYSTEM Substantially all of the employees of the Pontchartrain Levee District are members of the Louisiana State Employees Retirement System (LASERS), a single employer defined benefit pension plan. The System is a statewide public employee retirement system (PERS) for the benefit of state employees, which is administered and controlled by a separate board of trustees. (Note: If LASERS is not your entity's retirement system, indicate the retirement system that is and replace any wording in this note that doesn't apply to your retirement system with the applicable wording.) AH full-time Pontchartrain Levee District employees are eligible to participate in the System unless they elect to continue as a contributing member in any other retirement system for which they remain eligible for membership. Certain elected officials and officials appointed by the governor may, at their option, become members of LASERS. Normal benefits vest with 10 years of service. Generally, retirement age employees are entitled to annual benefits equal to $300 plus 2.5% of their highest consecutive 36 months' average salary multiplied by their years of credited service except for members eligible to begin participation in the Defined Benefit Plan (DBP) on or after July 1, 2006. Act 75 of the 2005 Regular Session changes retirement eligibility and final average compensation for members who are eligible to begin participation in the DBP beginning July 1, 2006. Retirement eligibility for these members is limited to age 60, or thereafter, upon attainment of ten years of creditable service. Final average compensation will be based on the member's average annual earned compensation for the highest 60 consecutive months of employment. Vested employees eligible to begin participation in the DBP before July 1, 2006, are entitled to a retirement benefit, payable monthly for life at (a) any age with 30 years of service, (b) age 55 with 25 years of service, or (c) age 60 with 10 years of service. In addition, these vested employees have the option of reduced benefits at any age with 20 years of service. Those hired on or after July 1, 2006 have only a single age option. They cannot retire until age 60 with a minimum of 10 years of service. The System also provides death and disability benefits and deferred benefit options, with qualifications and amounts defined by statute. Benefits are established or amended by state statute. The System issues a publicly available annual financial report that includes financial statements and required supplementary information for the System. For a full description of the LASERS defined benefit plan, please refer to the LASERS 2007 Financial Statements, specifically, footnotes A - Plan Description and C - Contributions. That report may be obtained by writing to the Louisiana State Employees Retirement System, Post Office Box 44213, Baton Rouge, Louisiana 70804-4213, or by calling (225) 922-0608 or (800) 256-3000. The footnotes to the Financial Statements contain additional details and are also available on-line at: STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 http://www.lasers.state.la.us/PDFs/Publications and Reports/Fiscal Documents/Comprehensive Financial Re ports/Comprehensive%20Financiai%20Reports 07.pdf Members are required by state statute to contribute with the single largest group ("regular members") contributing 7.5% of gross salary, and the Pontchartrain Levee District is required to contribute at an actuarially determined rate as required by R.S. 11:102. The contribution rate for the fiscal year ended June 30, 2008, increased to 20.4% of annual covered payroll from the 19.1% and 19.1% required in fiscal years ended June 30, 2007 and 2006 respectively. The Pontchartrain Levee District's contributions to the System for the years ending June 30, 2008, 2007, and 2006, were $292,900, $277,001, and $241,999, respectively, equal to the required contributions for each year. I. OTHER POSTEMPLOYMENT BENEFITS GASB Statement 45 requires Other Postemployment Benefit disclosures. If your only subsidized healthcare and life insurance provider for retirees is OGB, your entity will have no additional note disclosures for OS RAP; however, if your entity issues separately issued financial statements, then you should include the GASB Statement No. 45 note disclosures in your separately issued financial statements. Also, please provide OSRAP with the applicable GASB 45 note disclosures if your entity's healthcare or life insurance provider for retirees is administered by an entity other than OGB. See separately issued financial statements. J. LEASES - NOT APPLICABLE K. LONG-TERM LIABILITIES The following is a summary of long-term debt transactions of the entity for the year ended June 30, 2008: (Balances at June 30th should include current and non-current portion of long-term liabilities.) 2007 Additions Reductions 2008 Notes and bonds payable: Notes payable Bonds payable Total notes and bonds Other liabilities: Contracts payable Compensated absences payable 141,918 15,597 157,515 Capital lease obligations Claims and litigation 1,793,000 1,793,000 OPEB payable 925,301 925,301 Other long-term liabilities Total other liabilities 1.934.918 940.898 2.875,816 Total long-term liabilities $ 1,934,918 $ 940,898 $ - $ 2,875,816 $ (Send OSRAP a copy of the amortization schedule for any new debt issued.) STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30,2008 L. CONTINGENT LIABILITIES At June 30, 2008, the Levee District was a defendant or co-defendant in various lawsuits principally arising from the normal course of operations. The Levee Districts legal counsel has reviewed the claims and lawsuits in order to evaluate the likelihood of an unfavorable outcome to the Levee District and to arrive at the estimate, if any, of the amount or range of potential claims and lawsuits that have been categorized into "probable," "reasonably possible", or "remote," as defined by the GASB Codification Section C50. The Levee District is a defendant in several lawsuits arising from the same expropriation. Further, there are several unasserted claims arising from the same expropriation that will likely be asserted. In the opinion of legal counsel for the Levee District, these lawsuits and unasserted claims will likely result in judgments against the Levee District of between approximately $1.8 million and $20 million. Approximately $1.8 million has been recorded in the government-wide Statement of Net Assets included under the caption "Claims Payable". The Levee District is a defendant or co-defendant in two (2) other personal injury lawsuits. In both cases the Levee District is a defendant behind other defendants and in the opinion of legal counsel for the Levee District, it is too early to determine the potential losses associated with these cases. M. RELATED PARTY TRANSACTIONS - NOT APPLICABLE N. ACCOUNTING CHANGES - NOT APPLICABLE O. IN-KIND CONTRIBUTIONS - NOT APPLICABLE P. DEFEASED ISSUES - NOT APPLICABLE Q. REVENUES - PLEDGED OR SOLD (GASB 48) - NOT APPLICABLE R. GOVERNMENT-MANDATED NONEXCHANGE TRANSACTIONS (GRANTS) - NOT APPLICABLE S. VIOLATIONS OF FINANCE-RELATED LEGAL OR CONTRACTUAL PROVISIONS - NOT APPLICABLE T. SHORT-TERM DEBT - NOT APPLICABLE U. DISAGGREGATION OF RECEIVABLE BALANCES Receivables at June 30, 2008, were as follows: Receivables Fund Customer from other Other Total (gen, fund, gas tax fund, etc.) Receivables Taxes Governments Receivables Receivables General Fund 17,626 $ 94,468 JG 112,094 Special Construction Fund 52,378 52,378 Gross receivables 0 $ 17,626 $ 0 $ 146,846 $ 164,472 Less allowance for uncollectible accounts 0 0 0 0 0 Receivables, net 0 $ 17,626 $ 0 $ 146,846 $ 164,472 Amounts not scheduled for collection during the subsequent year 10 STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT Notes to the Financial Statement As of and for the year ended June 30, 2008 V. DISAGGREGATION OF PAYABLE BALANCES Payables at June 30, 2008, were as follows: Salaries and Accrued Other Total Fund Vendors Benefits Interest Payables Payables General Fund $ 166,030 $ 78,942 $ $ $ 244,972 Special Construction Fund 11,707 1 1 ,707 West Shore heasibility Study 2,910 2,910 Amite Kiver& inoutanes 96,102 9b,1U2 Total payables $ 276,749 $ 78,942 $ - $ - $ 355,691 W. SUBSEQUENT EVENTS - NOT APPLICABLE X. SEGMENT INFORMATION - NOT APPLICABLE Y. DUE TO/DUE FROM AND TRANSFERS - NOT APPLICABLE Z. LIABILITIES PAYABLE FROM RESTRICTED ASSETS - NOT APPLICABLE AA. PRIOR-YEAR RESTATEMENT OF NET ASSETS - NOT APPLICABLE BB. NET ASSETS RESTRICTED BY ENABLING LEGISLATION (GASB STATEMENT 46) - NOT APPLICABLE CC. IMPAIRMENT OF CAPITAL ASSETS - NOT APPLICABLE DD. EMPLOYEE TERMINATION BENEFITS - NOT APPLICABLE 11 STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT SCHEDULE OF PER DIEM PAID TO BOARD MEMBERS For the Year Ended June 30, 2008 Name Amount William Addison $ 225 Geri Broussard-Baloney 2,475 Jesse Bartey 2,700 Michael DeLaune 2,475 Webb Harrel son 2.700 Robert Roussel 2,025 Blaine Sheets 2,250 ChuckyTillis 2,475 17,325 Note: The per diem payments are authorized by Louisiana Revised Statute, and are presented in compliance with House Concurrent Resolution No. 54 of the 1979 Session of the Legislature. SCHEDULE 1 STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT SCHEDULE OF NOTES PAYABLE JUNE 30, 2008 NOT APPLICABLE Principal Principal Interest Date of Original Outstanding Redeemed Outstanding Interest Outstanding Issue Issue Issue 6/30/PY (Issued) 6/30/CY Rates 6/30/CY Total *Send copies of new amortization schedules SCHEDULE 3-A STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT SCHEDULE OF BONDS PAYABLE JUNE 30,2008 NOT APPLICABLE Principal Principal Interest Date of Original Outstanding Redeemed Outstanding Interest Outstanding Issue Issue Issue 6/30/PY (Issued) 6/30/CY Rates 6/30/CY Total *Send copies of new amortization schedules SCHEDULE 3-B STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT SCHEDULE OF CAPITAL LEASE AMORTIZATION For The Year Ended June 30, 2008 NOT APPLICABLE Ending: Payment Interest Principal Balance 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 Total SCHEDULE 4-A STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT SCHEDULE OF NOTES PAYABLE AMORTIZATION For the Year Ended June 30,2008 NOT APPLICABLE Fiscal Year Ending: PrincipsJ Interest 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 Total SCHEDULE 4-B STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT SCHEDULE OF BONDS PAYABLE AMORTIZATION For The Year Ended June 30, 2008 NOT APPLICABLE Interest 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Total SCHEDULE 4-C STATE OF LOUISIANA PONTCHARTRAIN LEVEE DISTRICT COMPARISON FIGURES To assist OSRAP in determining the reason for the change in financial position for the State, please complete the schedule below. If the change is greater than $1 million, explain the reason for the change. Percentage 2008 2007 Difference Change 1) Revenues $ 8,578,213 $ 9,064,985 $ (486,772)$ (5.37%) Expenses 6,428,581 7,132,782 (704,201) (9.87%) 2) Capital assets 1,842,659 1,772,161 70,498 3.98% Long-term debt 2,875,816 1,934,918 940,898 48.63% Net Assets 29,809,423 27,659,791 2,149,632 7.78% Increase in net assets is primarily due to a decrease in the spending on hurricane protection and flood control Explanation for change: studies. o o o o o o o o o o o o o o Q O a o o o o o o o o o o o o o o a o o o o o o o o o 8 O O o o o o o o o a o o o o o o o o o o o o o o o o o o O o o o o o o o o o o u d o *- o O CM •z?j. a n o j o o d c to i O t> TS a to S 01. 1u o C cB c o o o e >e n o c o a " E a: o UJ U CD LU o q d # H o 3 CO *; o o o 0> CM o o Z Z E o" d LU LU a> n # E £ Q> s ^ O O D C ~t D M- O o o O (A o O ra o* k. ^ o 0) *o ^n Q ™^* *• d 01 !a n d 3 o C o 6 O ^ g S C c O o (3 o o d LU o a ° to a. < c o ^ « •D Z 0 a a a Z •a u a_ O •a O " 2 U UJ i < O "3 'Z. 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