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HomeMy WebLinkAboutDeschutes County 911 County Service District FY 24 Issued FinancialsFinancial Statements For the Fiscal Year Ended June 30, 2024Deschutes County9-1-1 County Service District A Component Unit of Deschutes County, Oregon Prepared by: Deschutes County Finance Department Robert Tintle, MPA - Chief Financial Officer Jana Cain, CPA - Controller 2 TABLE OF CONTENTS Introductory Section Listing of Principal Officials ��������������������������������������������������������������������������������������������������������������������������������������������4 Financial Section Report of Independent Auditors �����������������������������������������������������������������������������������������������������������������������������������6 Management’s Discussion and Analysis �������������������������������������������������������������������������������������������������������������������10 Basic Financial Statements ■Statement of Net Position �����������������������������������������������������������������������������������������������������������������������������������16 ■Statement of Activities �����������������������������������������������������������������������������������������������������������������������������������������18 ■Balance Sheet – Governmental Fund - General Fund ��������������������������������������������������������������������������������������19 ■Reconciliation of Governmental Fund Balance Sheet for the General Fund to the Statement of Net Position ������������������������������������������������������������������������������������������������������������������������������������������������������������������20 ■Statement of Revenues, Expenditures, and Changes in Fund Balance - General Fund ��������������������������������21 ■Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of General Fund to the Statement of Activities ��������������������������������������������������������������������������������������������������������������������22 ■Notes to Financial Statements �����������������������������������������������������������������������������������������������������������������������������23 Required Supplementary Information ■Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund �������������������������������������������������������������������������������������������������������������������������������������������������������������������������46 ■Schedule of Proportionate Share of the Net Pension Liability (Asset) ������������������������������������������������������������47 ■Schedule of Employer Contributions �����������������������������������������������������������������������������������������������������������������48 ■Schedule of Changes in Total OPEB Liability �����������������������������������������������������������������������������������������������������49 ■Notes to Required Supplementary Information ������������������������������������������������������������������������������������������������50 Other Supplementary Information ■Schedule of Property Tax Transactions �������������������������������������������������������������������������������������������������������������52 Audit Comments And Government Auditing Standards Sections Government Auditing Standards ■Report of Independent Auditors 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 ��������������������������������������������������������������������������������������������������������������������������������������������������54 Audit Comments ■Audit Comments and Disclosures Required by State Regulations �����������������������������������������������������������������56 ■Report of Independent Auditors Required by Oregon State Regulations ������������������������������������������������������57 Financial Statements 2024 Deschutes County 9-1-1 County Service District A COMPONENT UNIT OF DESCHUTES COUNTY, OREGON INTRODUCTORY SECTION INTRODUCTORY SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 4 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Listing of Principal Officials As of June 30, 2024 ELECTED OFFICIALS Board оf County Commissioners Name Position Term Expiration Patti Adair, Chair Position 3 January 4, 2027 Anthony DeBone, Vice Chair Position 1 January 4, 2027 Philip Chang Position 2 January 6, 2025 Other Elected Officers Name Office Term Expiration Scot Langton County Assessor January 4, 2027 Steve Dennison County Clerk January 4, 2027 Shane Nelson County Sheriff January 6, 2025 William Kuhn County Treasurer January 4, 2027 Steve Gunnels County District Attorney January 4, 2027 Charles Fadeley Justice of the Peace January 1, 2029 APPOINTED OFFICIALS Nick Lelack County Administrator David Doyle County Counsel Robert Tintle Chief Financial Officer Elizabeth Pape County Internal Auditor Registered Agent and Address Robert Tintle, Chief Financial Officer Deschutes County Administrative Offices 1300 NW Wall Street, Suite 200 Bend, Oregon 97703 Financial Statements 2024 Deschutes County 9-1-1 County Service District A COMPONENT UNIT OF DESCHUTES COUNTY, OREGON FINANCIAL SECTION 6 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Report of Independent Auditors Deschutes County Commissioners Deschutes County 9-1-1 County Service District (A Component Unit of Deschutes County, Oregon) Bend, Oregon Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities and the major fund of the Deschutes County 9-1-1 County Service District (the District), a component unit of Deschutes County, Oregon, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the District, as of June 30, 2024, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards (Government Auditing Standards), issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Financial Reporting Entity As discussed in Note 1, the financial statements present only the District and do not purport to, and do not, present fairly the financial position of Deschutes County, Oregon as of June 30, 2024, or the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 7 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control—related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedule of revenues, expenditures, and changes in fund balance – budget and actual – General Fund (budgetary comparison), schedule of proportionate share of the net pension liability (asset), schedule of employer contributions, schedule of changes in total OPEB liability, and notes to required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. 8 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon We have applied certain limited procedures to the management’s discussion and analysis, schedule of proportionate share of the net pension liability (asset), schedule of employer contributions, schedule of changes in total OPEB liability, and notes to required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The budgetary comparison information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary comparison information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary comparison information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The schedule of property tax transactions, 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 is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of property tax transactions is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the financial statements. The other information comprises the introductory section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 9 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 4, 2024 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance. Other Reporting Required by Minimum Standards for Audits of Oregon Municipal Corporations In accordance with the Minimum Standards for Audits of Oregon Municipal Corporations, we have also issued our report dated December 4, 2024, on our consideration of the District’s compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-010-0000 through 162- 010-0330 of the Minimum Standards for Audits of Oregon Municipal Corporations. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. Amanda McCleary-Moore, Partner For Moss Adams LLP Eugene, Oregon December 4, 2024 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Management’s Discussion and Analysis 10 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Management’s Discussion and Analysis As management of Deschutes County 9-1-1 County Service District (the District), a component unit of Deschutes County, Oregon, we offer readers of the District’s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2024. Financial Highlights ■The assets and deferred outflows of resources of Deschutes County 9-1-1 County Service District exceeded its liabilities and deferred inflows of resources at June 30, 2024, by $15,395,450. Of this amount, $7,168,862 is unrestricted. ■Total net position increased by $840,199, from June 30, 2023. ■As of June 30, 2024, Deschutes County 9-1-1 County Service District’s governmental funds reported a combined ending fund balance of $14,198,470. ■As of June 30, 2024, the unassigned fund balance in the General Fund was $14,198,470, or 97% of total General Fund FY 2024 revenues� Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to Deschutes County 9-1-1 County Service District’s basic financial statements. These basic financial statements comprise three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves� Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of Deschutes County 9-1-1 County Service District’s finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the District’s assets and deferred outflows of resources and liabilities and deferred inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of Deschutes County 9-1-1 County Service District is improving or deteriorating� The Statement of Activities presents information showing how the District’s net position changed during the fiscal year ended June 30, 2024. Changes in net position are reported when the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items, for example, accrued property taxes and accrued vacation that will result in cash flows in future fiscal periods. Each of these government-wide financial statements, Statement of Net Position and Statement of Activities, show the functions of the District that are supported primarily by taxes and intergovernmental revenues (governmental activities)� The governmental activity of the District is public safety� Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local government entities, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Each of the funds of the District is classified as governmental funds. Governmental funds Governmental funds are used to account for essentially the same functions as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 11 Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. A reconciliation from the Governmental Fund Balance Sheet for the General Fund to the Government-wide Statement of Net Position and a reconciliation from the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance of the General Fund to the Government-wide Statement of Activities have been included in this report� The District reported activity in one governmental fund during the fiscal year ended June 30, 2024. The District adopts an annual budget for its General Fund� A budgetary comparison statement has been provided for this fund to demonstrate compliance with the annual budget� Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Government-wide Financial Analysis Net position, at a specific point in time, serves as a useful indicator of an entity’s financial position. In the case of Deschutes County 9-1-1 County Service District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $15,395,450 at June 30, 2024. Approximately 53%, or $8,226,588, of the District’s net position represents its investment in capital assets. The District uses these capital assets to provide services to citizens and are, therefore, not available for future spending� The remaining 47%, or $7,168,862, of Deschutes County 9-1-1 County Service District’s net position may be used to meet the District’s on-going obligations to citizens and creditors� The District’s net position increased by $840,199 during the fiscal year ended June 30, 2024. A comparison of the summarized government-wide statements to the prior year is as follows: Statements of Net Position June 30, 2024 June 30, 2023 Change ASSETS Current and other assets $ 15,090,603 $ 13,689,290 $ 1,401,313 Capital assets 11,441,707 11,523,860 (82,153) Total assets 26,532,310 25,213,150 1,319,160 DEFERRED OUTFLOWS OF RESOURCES 3,085,321 3,054,378 30,943 LIABILITIES Current liabilities 1,577,465 1,647,424 (69,959) Noncurrent liabilities 11,155,254 9,371,955 1,783,299 Total liabilities 12,732,719 11,019,379 1,713,340 DEFERRED INFLOWS OF RESOURCES 1,489,462 2,692,898 (1,203,436) NET POSITION Net investment in capital assets 8,226,588 8,330,542 (103,954) Unrestricted 7,168,862 6,224,709 944,153 Total net position $ 15,395,450 $ 14,555,251 $ 840,199 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Management’s Discussion and Analysis 12 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Government-wide Financial Analysis (Continued) Statements of Activities Fiscal Year Ended June 30, 2024 Fiscal Year Ended June 30, 2023 Change PROGRAM REVENUES Charges for services $ 2,809,899 $ 3,239,239 $ (429,340) GENERAL REVENUES Property taxes 11,151,351 10,599,952 551,399 Investment earnings 708,643 203,759 504,884 Total revenues 14,669,893 14,042,950 626,943 EXPENSES Public safety 13,829,694 11,427,096 2,402,598 Change in net position 840,199 2,615,854 (1,775,655) Net position - beginning of year 14,555,251 11,939,397 2,615,854 Net position - end of year $ 15,395,450 $ 14,555,251 $ 840,199 Governmental Activities Government-wide Financial Analysis (Continued) Governmental activities, the only type of activity of Deschutes County 9-1-1 County Service District, increased net position by $840,199 during the fiscal year ended June 30, 2024. The increase by 5.2% in property tax revenue compared to the previous year was largely attributed to the District’s assessed valuation of taxable property increased by 5.6%. This growth was primarily driven by the new construction throughout the District and an average increase of approximately 3% in the taxable property values. Investment revenue increased by $504,884 because of rising investment interest rates. Financial Analysis of the District’s Funds Deschutes County 9-1-1 County Service District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. General Fund The focus of Deschutes County 9-1-1 County Service District’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing Deschutes County 9-1-1 County Service District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending as of the end of the fiscal year. As of June 30, 2024, $14,198,470 is the reported ending fund balance for Deschutes County 9-1-1 County Service District’s governmental fund, an increase of $1,223,329 from June 30, 2023. This increase is due primarily to lower than expected expenditures and partially due to higher than anticipated property tax collections and investment earnings. The unassigned fund balance as of June 30, 2024, for the General Fund is 102% of total General Fund fiscal year 2024 expenditures. Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 13 General Fund Budgetary Highlights During fiscal year 2024, actual revenues decreased by $1,579,217. Property taxes were $110,378 in excess of budget, due to conservative budgeting practices in the estimated taxable assessed value growth rate� The amount received for investments was $150,507 greater than budgeted. The amount received for intergovernmental revenue was $89,393 more than budgeted, and the charges for services received were $19,947 greater than budgeted. Capital Asset and Debt Administration Capital Assets Deschutes County 9-1-1 County Service District’s capital assets for its governmental activities as of June 30, 2024, were $11,441,707, net of accumulated depreciation and amortization. Capital assets include equipment, vehicles, communication systems, and software subscription assets� Additional information on Deschutes County 9-1-1 County Service District’s depreciable capital assets is included in Note 3� Long-term Debt Deschutes County 9-1-1 County Service District has no long-term debt; therefore, the District has not been separately rated by any of the bond rating agencies� Key Economic Factors and Budgets Information for the Future ■In May 2016, the voters approved authorization to form a new district upon withdrawal of territory from the existing District, effective July 1, 2017. Upon the withdrawal and formation, the assets and liabilities of the District were transferred to the new district� The permanent tax rate for the new District is higher than that of the former District thereby eliminating the need to rely on serial levies� ■The District’s Assessed Valuation of Taxable Property increased by 5.6% from fiscal year 2023 to fiscal year 2024 to approximately $32.2 billion. Request for Information This financial report is designed to provide a general overview to those parties interested in Deschutes County 9-1-1 County Service District’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Deschutes County Finance Department, 1300 NW Wall Street, Suite 200, Bend, Oregon 97703� 14 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Basic Financial Statements FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 16 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon The notes to the financial statements are an integral part of this statement. Statement of Net Position June 30, 2024 Primary Government - Governmental Activities ASSETS Current assets: Cash and investments $ 13,949,954 Property taxes receivable 199,256 Accounts receivable 486,484 Prepaid expense 354,121 Total current assets 14,989,815 Noncurrent assets: Capital assets not being depreciated 2,679,793 Capital assets, net of accumulated depreciation/amortization 8,761,914 Net OPEB RHIA asset 100,788 Total noncurrent assets 11,542,495 Total assets 26,532,310 DEFERRED OUTFLOWS OF RESOURCES Pension plan 2,865,751 OPEB County plan 217,431 OPEB RHIA 2,139 Total deferred outflows of resources 3,085,321 TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 29,617,631 Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 17 The notes to the financial statements are an integral part of this statement. Statement of Net Position June 30, 2024 Primary Government - Governmental Activities LIABILITIES Current liabilities: Accounts payable 22,825 Compensated leave 895,805 Payroll liabilities 229,811 Lease payable 248,047 Subscription liabilities 170,977 Unearned Revenues 10,000 Total current liabilities 1,577,465 Noncurrent liabilities: Compensated leave 77,896 Lease payable 2,052,685 Subscription liabilities 743,410 Net pension plan liability 7,072,228 Total OPEB County plan 1,209,035 Total noncurrent liabilities 11,155,254 Total liabilities 12,732,719 DEFERRED INFLOWS OF RESOURCES Pension plan 606,458 OPEB County plan 871,613 OPEB RHIA 11,391 Total deferred inflows of resources 1,489,462 TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 14,222,181 NET POSITION Net investment in capital assets 8,226,588 Unrestricted 7,168,862 TOTAL NET POSITION $ 15,395,450 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 18 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon The notes to the financial statements are an integral part of this statement. Statement of Activities Fiscal Year Ended June 30, 2024 Primary Government - Governmental Activities PROGRAM EXPENSES Public safety $ 13,829,694 PROGRAM REVENUES Charges for services 2,809,899 Net program expense (11,019,795) GENERAL REVENUES Property taxes levied for general purposes 11,151,351 Earnings on investments 708,643 Total general revenues 11,859,994 Change in net position 840,199 Net position - beginning of year 14,555,251 Net position - end of year $ 15,395,450 Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 19 The notes to the financial statements are an integral part of this statement. Balance Sheet - Governmental Fund - General Fund June 30, 2024 ASSETS Cash and investments $ 13,949,954 Property taxes receivable 199,256 Accounts receivable 486,484 Total assets $ 14,635,694 LIABILITIES Accounts payable $ 22,825 Payroll liabilities 229,811 Unearned revenue 10,000 Total liabilities 262,636 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 174,588 Total deferred inflows of resources 174,588 FUND BALANCES Unassigned 14,198,470 Total fund balances 14,198,470 Total liabilities, deferred inflows of resources and fund balances $ 14,635,694 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 20 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon The notes to the financial statements are an integral part of this statement. Reconciliation of Governmental Funds Balance Sheet for the General Fund to the Statement of Net Position June 30, 2024 Fund balances for governmental fund $ 14,198,470 Amounts reported for governmental activities in the statement of net position are different because: A portion of the District’s receivables will be not be collected soon enough to pay for the current year’s expenditures and, therefore, are reported as deferred inflows of resources in the governmental funds� 174,588 Prepaid expenses are not financial resources and, therefore, are not reported in the governmental funds� 354,121 Capital assets are not financial resources and therefore are not reported in the governmental funds. 11,441,707 Deferred outflows of resources related to pension and other post-employment benefits are applicable to future periods and, therefore, are not reported in the governmental funds: Deferred outflows of resources - Pension plan 2,865,751 Deferred outflows of resources - OPEB County plan 217,431 Deferred outflows of resources - OPEB RHIA 2,139 Compensated absences are reported as expenditures in the period paid and, therefore, are not reported as obligations on the balance sheet� (973,701) Leases and subscriptions payable are not recorded in the governmental funds, but rather are recorded as liabilities in the statement of net position� (3,215,119) Net pension liability is not due and payable in the current period and, therefore, is not reported on the balance sheet� (7,072,228) Total OPEB County plan liability is not due and payable in the current period and, therefore, is not reported on the balance sheet� (1,209,035) OPEB RHIA plan assets are not financial resources and, therefore, are not reported in the fund. 100,788 Deferred inflows of resources are applicable to future periods and, therefore, are not reported in the governmental funds: Deferred inflows of resources - Pension plan (606,458) Deferred inflows of resources - OPEB County plan (871,613) Deferred inflows of resources - OPEB RHIA (11,391) Net position of governmental activities $ 15,395,450 Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 21 The notes to the financial statements are an integral part of this statement. Statement of Revenues, Expenditures, and Changes in Fund Balance - General Fund Fiscal Year Ended June 30, 2024 REVENUES Property taxes $ 11,132,378 Investment earnings 708,643 Charges for services 613,625 Intergovernmental revenue 2,196,274 Total revenues 14,650,920 EXPENDITURES Public safety 11,691,160 Debt service Principal 283,595 Capital outlay 1,897,946 Total expenditures 13,872,701 OTHER FINANCING SOURCES (USES) Issuance of long-term debt - leases 430,120 Issuance of long-term debt - subscriptions 14,990 Total other financing sources (uses) 445,110 Net change in fund balance 1,223,329 Fund balance - beginning of year 12,975,141 Fund balance - end of year $ 14,198,470 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 22 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon The notes to the financial statements are an integral part of this statement. Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of General Fund to the Statement of Activities Fiscal Year Ended June 30, 2024 Net change in fund balance - total governmental fund $ 1,223,329 Amounts reported for governmental activities in the statement of activities are different because: Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds Unavailable revenue - property taxes 18,973 Financial resources received that are not revenues in the statement of activities Issuance of long-term debt - leases and subscriptions (445,110) Repayment of lease and subscription liabilities is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the statement of net position 423,309 Governmental funds report capital outlay as expenditures� However, in the statement of activities, the cost of those assets is allocated over their estimated of useful lives and reported as depreciation and amortization expense� Capital outlay 1,897,946 Depreciation and amortization (1,980,099) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds (Increase) / decrease in compensated leave (99,112) Increase / (decrease) in prepaid expense (986,151) (Increase) / decrease in total OPEB County plan liability (90,755) (Increase) / decrease in deferred outflows - OPEB County plan (15,934) (Increase) / decrease in deferred inflows - OPEB County plan 114,115 Increase / (decrease) in net OPEB RHIA asset 20,361 Increase / (decrease) in deferred outflows - OPEB RHIA (5,453) (Increase) / decrease in deferred inflows - OPEB RHIA (396) (Increase) / decrease in net Pension plan liability (1,642,592) Increase / (decrease) in deferred outflows - Pension plan (231,419) (Increase) / decrease in deferred inflows - Pension plan 2,639,187 Total of reconciling items (383,130) Changes in net position of governmental activities $ 840,199 Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 23 NOTES TO FINANCIAL STATEMENTS June 30, 2024 Note 1 - Organization and Summary of Significant Accounting Policies 24 A� The District 24 B� Government-wide and Fund Financial Statements 24 C� Measurement Focus, Basis of Accounting and Financial Statement Presentation 24 D� Budget Policy 25 E� Reporting Entity 25 F� Cash, Investments in External Investment Pool and Investment Income 25 G� Accounts Receivable 26 H� Capital Assets 26 I� Lease Assets 26 J� Subscription Assets 26 K. Deferred Outflows / Inflows of Resources 26 L� Compensated Absences 27 M� Leases and Subscriptions Payable 27 N� Pension Plans 27 O. Other Post-Employment Benefits Obligation (Total OPEB liability) 27 P� Total OPEB (Asset)/Liability 27 Q. Property Taxes/Unavailable Revenue 27 R� Net Position 28 S� Fund Balance Reporting 28 T� Use of Estimates 28 Note 2 - Cash and Investments 28 Note 3 - Capital Assets 29 Note 4 - Deferred Outflows of Resources 30 Note 5 - Changes in Non-Current Liabilities 30 Note 6 - Leases Payable 30 Note 7 - Subscription Liabilities 31 Note 8 - Deferred Inflows of Resources 32 Note 9 - Participation in Public Employees Retirement System 32 Note 10 - Other Post-Employment Benefits 38 Note 11 - Risk Management 42 Note 12 - Adoption of New Standards 42 Note 13 - Tax Abatement 42 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 24 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Notes to Financial Statements Note 1 - Organization and Summary of Significant Accounting Policies A. The District The Deschutes County 9-1-1 Service District (the District), a component unit of Deschutes County, Oregon, was established under ORS 401�720 on April 13, 1988, for the purpose of providing emergency communication (9-1-1) services for Deschutes County (the County)� The County Board of Commissioners is the governing body of the District� B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the activities of the government� Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District has no business-type activities or fiduciary funds. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment� Taxes and other items not properly included among program revenues are reported instead as general revenues� C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting� Revenues are recorded when earned and expenses are recorded when a liability is incurred� Property taxes are recognized as revenues in the year for which they are levied� Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. It is the District’s policy to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available� Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available� Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period� For this purpose, the District considers revenues to be available if they are collected within sixty days of the end of the current fiscal period. Revenues received after this period, are considered unavailable� Expenditures are recorded when a liability is incurred, as under accrual accounting� However, expenditures related to compensated absences and other post-employment benefits are recorded only when payment is due. Property taxes associated with the fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District� As a general rule, the effect of any interfund activity has been eliminated from the government-wide financial statements� The District reports the following governmental funds: General Fund - The General Fund is utilized to account for the transactions of the District� Property taxes and law enforcement contracts are its principal sources of revenue� Expenditures are for the operation and administration of the District� Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 25 Note 1 - Organization and Summary of Significant Accounting Policies (Continued) D. Budget Policy The District prepares a budget for all funds, which meets the requirements of state laws� The resolution authorizing appropriations for each fund sets the level by which expenditures cannot legally exceed appropriations. Appropriations are established on a programmatic basis. Budget categories are: public safety, debt service, transfers, and contingency. The detailed budget document contains specific detailed information for the above-mentioned expenditure categories� Unexpected additional resources may be added to the budget through the use of a supplemental budget and appropriations resolution� Original and supplemental budgets may be modified by the use of appropriation transfers between the levels of control. Appropriations lapse as of year-end� Note 1 - Organization and Summary of Significant Accounting Policies (Continued) E. Reporting Entity The District’s financial statements include the accounts of all District operations. The District is includable as a component unit in the financial statements of Deschutes County, Oregon since the District’s governing board is comprised of the Deschutes County Commissioners; the District also has a seven-member executive board that oversees operations. The District is included in the financial statements of the County as a special revenue fund, a blended component unit� New Accounting Pronouncements During the fiscal year ended June 30, 2024, the District implemented GASB Statement No. 100, Accounting Changes and Error Corrections. This Statement’s primary objective is to enhance the accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability� As a result, only presentation adjustments to the financial statements were necessary, and the adoption of this pronouncement had no effect on the net position, results of operations, or cash flows for the period. GASB has issued the following pronouncements that may affect future financial position, results of operations, cash flows, or financial presentation of the County upon implementation. These pronouncements have not yet been implemented by the County: GASB Statement No. GASB Accounting Standard Fiscal Year Effective 101 Compensated Absences 2025 102 Certain Risk Disclosures 2025 103 Financial Reporting Model Improvements 2026 104 Disclosure of Certain Capital Assets 2026 F. Cash, Investments in External Investment Pool and Investment Income Cash and investments are comprised of funds held by the Deschutes County Treasurer in the County’s cash and investment pool. The District’s cash and investments participate in this pool rather than specific, identifiable securities� The District’s share of County pooled cash and investments can be drawn upon demand, and therefore, the entire amount on deposit with the County is considered cash and cash equivalents� Interest earned on pooled investments is allocated monthly based on the District’s average daily balance in relation to the total investment pool� It is not practical to determine the investment risk, collateral, or insurance coverage for the District’s share of these pooled investments� This pool generally includes demand deposits, investments in the Oregon State Treasurer’s Local Government Investment Pool (LGIP), obligations of the United States Treasury and United States Government agencies and instrumentalities, certain high-grade commercial paper and corporate bonds. This policy is in accordance with ORS 294.035 which specifies the types of investments authorized for municipal corporations� State statutes authorize the County to invest in obligations of the U�S� Treasury, commercial paper, corporate bonds, municipal bonds, banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government Investment Pool (LGIP)� Investments for the County, as well as for its component units, are reported at fair value� The LGIP operates in accordance with appropriate state laws and regulations� FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 26 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 1 - Organization and Summary of Significant Accounting Policies (Continued) Information about the pooled cash and investments is included in the County’s annual comprehensive financial report and may be obtained by contacting the Deschutes County Finance Department, 1300 NW Wall Street, Suite 200, Bend, Oregon, 97703� G. Accounts Receivable The District considers all receivables as fully collectible; therefore, no allowance for uncollectible accounts has been established� H. Capital Assets Capital assets, which include land improvements, equipment, vehicles, intangibles and construction in progress are reported in the government-wide financial statements. In the governmental fund statements, capital assets are charged to expenditures as purchased� Capital assets are recorded at historical cost� Per GASB 72, Fair Value Measurement and Application, donated assets are recorded at acquisition value as of the date of the donation� Capital assets are defined by the District as assets with an initial cost of $5,000 or more and an estimated useful life greater than one year. Additions or improvements and other capital outlays that significantly extend the useful life of an asset, or that significantly increase the capacity of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Major outlays for capital assets and improvements are capitalized as projects are constructed. Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Position and is calculated on the straight-line basis over the following estimated useful lives: Asset Years Land improvements 10-15 Equipment, vehicles and intangible 5 I. Lease Assets Lease assets are assets which the District leases for a term of more than one year� The value of leases is determined by the net present value of the leases at the County’s incremental borrowing rate at the time of the lease agreement, amortized over the term of the agreement� J. Subscription Assets Subscription assets are subscription-based information technology arrangements with a term of more than one year� The value of subscription assets is determined by the net present value of the subscription at the County’s incremental borrowing rate at the time of the license agreement, amortized over the term of the agreement� K. Deferred Outflows / Inflows of Resources In addition to assets, the Government-wide Statement of Net Position and/or the Governmental Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows arising from the District’s participation in the Oregon Public Employees Retirement System (OPERS) and the District’s post-employment retirement plan comprise this statement element� In addition to liabilities, the Government-wide Statement of Net Position and/or the Governmental Fund Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Deferred inflows of resources, as a result of the accounting for the District’s participation in OPERS and post-employment retirement plans, are reported on the Government-wide Statement of Net Position. Deferred inflows of resources are Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 27 Note 1 - Organization and Summary of Significant Accounting Policies (Continued) reported on the Governmental Fund Balance Sheet of the General Fund as a result of reporting using the modified accrual method. The government fund reports unavailable revenues from property taxes. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. L. Compensated Absences Accumulated vested vacation pay is accrued as it is earned� Accrued vacation payable is recorded at actual accrued hours times current pay rates plus related fringe benefits. The amount represents a reconciling item between the fund-level and government-wide presentations� Sick pay, which does not vest, is recognized when leave is taken� M. Leases and Subscriptions Payable In the government-wide financial statements, leases and subscriptions payable are reported as liabilities in the Statement of Net Position. In the governmental fund financial statements, the present value of lease and subscription payments are reported as other financing sources. N. Pension Plans For purposes of measuring the net pension asset/liability and pension expense, information about the fiduciary net position of the Oregon Public Employee Retirement System cost-sharing multiple-employer defined benefit pension plan (benefit plan) and additions to/deductions from the benefit plan’s fiduciary net position have been determined on the same basis as they are reported by the benefit plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. O. Other Post-Employment Benefits Obligation (Total OPEB liability) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and the OPEB expense information about the fiduciary net position of the District’s Retiree Health Plan (the Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with the benefit terms. P. Total OPEB (Asset)/Liability The total OPEB asset or liability is reported as non-current asset or as non-current liability, as applicable, in the government-wide statement of net position. The asset or liability reflects the present value of expected future payments� Q. Property Taxes/Unavailable Revenue Property taxes are assessed on a July 1 - June 30 fiscal year basis. The taxes are levied as of July 1 based on assessed values as of January 1� Property tax payments are due in three equal installments, on November 15, February 15 and May 15. A discount of 3% is available if taxes are paid in full by November 15 and a discount of 2% on the unpaid balance is available if taxes are paid in full by February 15. Property taxes attach as an enforceable lien July 1 and are considered delinquent if not paid by the following May 15� Deschutes County is the tax collection agent for the District. The District’s FY 2024 tax levy was $11,460,003. Tax revenue is considered available for expenditure upon receipt by the County, which serves as the intermediary collecting agency� Uncollected property taxes are shown on the government funds balance sheet as receivables� Collections within sixty days subsequent to year-end have been accrued and the remaining taxes receivable are recorded as unavailable revenue on the modified accrual basis of accounting since they are not deemed available to finance operations of the current period. FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 28 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 1 - Organization and Summary of Significant Accounting Policies (Continued) R. Net Position Net position represents the difference between assets plus deferred outflows of resources less liabilities and deferred inflows of resources. The District reports the following subcategories of net position: ■Net investment in capital assets represents the difference between capital assets less accumulated depreciation and amortization, and outstanding lease and subscription liabilities� ■Unrestricted represents all other net positions that are not restricted and do not meet the definition of net investment in capital assets� S. Fund Balance Reporting The Governmental Accounting Standards Board Statement No� 54, Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54), defines the different types of fund balances that a governmental entity must use for financial reporting purposes. GASB 54 requires the fund balance amounts to be properly reported within one of the fund balance categories listed below: A� Nonspendable such as fund balance associated with inventories, prepaids, long-term loans and notes receivable, and property held for resale (unless the proceeds are restricted, committed or assigned)� B� Restricted fund balance category includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers or through enabling legislation� C� Committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the District’s governing board (the District’s highest level of decision- making authority)� Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation� D� Assigned fund balance classification is intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. Assignments are made by the District Administrator based on the District Governing Board’s direction� E� Unassigned fund balance is the residual classification for the District’s general fund and includes all spendable amounts not contained in the other classifications. The District reduces restricted amounts first when expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned or unassigned) amounts are available� The District reduces committed amounts first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for the purpose for which amounts in any of those unrestricted fund balance classifications could be used� T. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. Note 2 - Cash and Investments As of June 30, 2024, the District had a deposit of $13,949,954 with the Deschutes County Treasurer. All the District’s deposits were adequately insured or collateralized by securities held by the pledging financial institution in the financial institution’s name during the year. Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 29 Note 3 - Capital Assets Capital asset activity for the fiscal year ended June 30, 2024, is as follows: Balance June 30, 2023 Increases Decreases Balance June 30, 2024 Capital assets, not being depreciated or amortized: Construction in progress $ 1,529,993 $ 1,149,800 $ - $ 2,679,793 Total capital assets, not being depreciated or amortized 1,529,993 1,149,800 - 2,679,793 Capital assets, being depreciated or amortized: Land improvements 254,783 - - 254,783 Right-to-use lease land 235,937 - - 235,937 Lease buildings 856,681 - - 856,681 Software 2,857,361 - (405,086) 2,452,275 Equipment and vehicles 11,290,599 303,036 (387,485) 11,206,150 Lease equipment 9,957 21,175 (9,957) 21,175 Lease infrastructure 1,323,358 408,945 (47,167) 1,685,136 Subscription assets 1,855,136 14,990 - 1,870,126 Total capital assets being depreciated or amortized 18,683,812 748,146 (849,695) 18,582,263 Accumulated depreciation and amortization: Land improvements (154,690) (18,198) - (172,888) Right-to-use lease land (10,035) (9,508) - (19,543) Lease buildings (142,780) (142,780) - (285,560) Software (2,442,903) (248,396) 405,086 (2,286,213) Equipment and vehicles (5,567,150) (1,154,614) 387,485 (6,334,279) Lease equipment (7,742) (4,568) 9,957 (2,353) Lease infrastructure (215,940) (132,297) 47,167 (301,070) Subscription assets (148,705) (269,738) - (418,443) Total accumulated depreciation and amortization (8,689,945) (1,980,099) 849,695 (9,820,349) Total capital assets being depreciated and amortized, net 9,993,867 (1,231,953) - 8,761,914 Governmental activities capital assets, net $ 11,523,860 $ (82,153) $ - $ 11,441,707 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 30 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 4 - Deferred Outflows of Resources On the Statement of Net Position, contributions made to OPERS and the OPEB plans applicable to a future reporting period, are reported as deferred outflows of resources. At the end of the current fiscal year, these are the balances related to the District’s defined benefit pension and other post-employment benefits (OPEB) plans: Deferred Outflows of Resources Governmental Activities Deferred outflows - Defined Benefit Pension Plan: Contributions subsequent to the measurement date $ 960,185 Differences between expected and actual experience 345,854 Changes in proportionate share 634,497 Changes of assumptions 628,255 Differences between employer contribution and employer’s proportionate share of system contributions 169,843 Net difference between projected and actual earnings on investments 127,117 Total deferred outflows - pension plan 2,865,751 Deferred outflows - OPEB County Plan: Differences between expected and actual experience 113,109 Changes of assumption or other inputs 104,322 Total deferred outflows - OPEB County Plan 217,431 Deferred outflows - OPEB RHIA: Contributions subsequent to the measurement date 143 Differences between expected and actual experience 286 Changes in proportionate share 1,710 Total deferred outflows - OPEB RHIA 2,139 Total deferred outflows of resources $ 3,085,321 Note 5 - Changes in Non-Current Liabilities Changes in non-current liabilities, OPEB and Net Pension Liability, for the year ended June 30, 2024, are as follows: Balance June 30, 2023 Increases Decreases Balance June 30, 2024 Governmental activities: Lease payable $ 2,113,520 $ 430,120 $ (242,908) $ 2,300,732 Subscription liabilities 1,079,798 14,990 (180,401) 914,387 Compensated absences 874,589 899,618 (800,506) 973,701 $ 4,067,907 $ 1,344,728 $ (1,223,815) $ 4,188,820 Note 6 - Leases Payable The District is committed under various leases for buildings, equipment, infrastructure (9-1-1 radio towers) and land. As of June 30, 2024, the District has 11 financing leases in which it is acting as the Lessee. Under GASB 87, an implicit rate is calculated for each individual lease using the internal rate of return method� That method measures cash flow, beginning fair value, and projected ending fair value of the underlying asset. For the governmental fund, lessee leases are only presented in the Government-Wide Statement of Net Position. Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 31 Note 6 - Leases Payable (Continued) The total expended for such leases for the fiscal year ended June 30, 2024, was approximately $242,905. The future minimum lease payments for these leases are as follows: Governmental Activities Principal Payments Interest Payments Total Payments Fiscal Year 2025 $ 248,047 $ 83,300 $ 331,347 2026 262,556 74,167 336,723 2027 230,458 64,580 295,038 2028 205,558 55,388 260,946 2029 48,023 45,791 93,814 2030-2034 309,887 201,018 510,905 2035-2039 450,921 138,289 589,210 2040-2044 366,477 59,593 426,070 2045-2048 178,805 10,503 189,308 $ 2,300,732 $ 732,629 $ 3,033,361 Note 7 - Subscription Liabilities The District has Subscription-Based Information Technology Arrangement (SBITAs) with the noncancellable right to use software provided by vendors� As of June 30, 2024, the District has two agreements in which a right-to-use subscription assets are reported� Under GASB 96, an implicit rate is calculated for each individual arrangement using the internal rate of return method. That method measures cash flow, beginning fair value, and projected ending fair value of the underlying asset. For the governmental fund, SBITAs are only presented in the Government-Wide Statement of Net Position� The total expended for these software arrangements for the fiscal year ended June 30, 2024, was approximately $202,000. The future minimum lease payments for these leases are as follows: Governmental Activities Principal Payments Interest Payments Total Payments Fiscal Year 2025 $ 170,977 $ 30,769 $ 201,746 2026 176,730 25,016 201,746 2027 182,677 19,069 201,746 2028 188,824 12,922 201,746 2029 195,179 6,568 201,747 $ 914,387 $ 94,344 $ 1,008,731 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 32 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 8 - Deferred Inflows of Resources On the Statement of Net Position, an acquisition of net position applicable to a future reporting period, is reported as deferred inflows of resources. At the end of the current fiscal year, these balances related to the District’s defined benefit pension, and other post-employment benefits (OPEB) plans: Deferred Inflows of Resources Governmental Activities Deferred inflows - Defined Benefit Pension Plan: Differences between expected and actual experience $ 28,042 Changes in assumptions 4,684 Changes in proportionate share 38,766 Differences between employer contributions and employer’s proportionate share of system contributions 534,966 Total deferred inflows - pension plan 606,458 Deferred inflows - OPEB County Plan: Differences between expected and actual experience 509,319 Changes of assumption or other inputs 362,294 Total deferred inflows - OPEB County Plan 871,613 Deferred inflows - OPEB RHIA: Differences between expected and actual experience 2,530 Changes of assumptions or other inputs 1,087 Changes in proportionate share 7,774 Total deferred inflows - OPEB RHIA 11,391 Total deferred inflows of resources $ 1,489,462 Note 9 - Participation in Public Employees Retirement System Plan descriptions: Employees of the District are provided with pensions through the Oregon Public Employees Retirement System, (OPERS), which is a cost-sharing multiple-employer defined benefit plan. All the benefits of OPERS are established by the Oregon legislature pursuant to Oregon Revised Statute (ORS) Chapters 238 and 238A. The ORS Chapter 238 Defined Benefit Pension Plan, known as Tier 1/Tier 2 is closed to new members hired on or after August 29, 2003� A second program, the Chapter 238A-OPERS Pension Program (OPSRP-DB), is described in the second portion of this note� Membership in the programs is delineated based on date of hire� OPERS issues a publicly available financial report which can be obtained at https://www.oregon.gov/pers/EMP/Pages/Actuarial-Financial-Information.aspx Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 33 Note 9 - Participation in Public Employees Retirement System (Continued) Benefits Provided Under the Programs Chapter 238-Tier One and Tier Two Chapter 238A-OPSRP-DB Pension Benefits The OPERS retirement allowance is payable monthly for life� The allowance may be selected from 13 retirement benefit options that are actuarially equivalent to the base benefit. These options include survivorship benefits and lump-sum refunds. The basic benefit is most commonly based on years of service and final average salary. A percentage (2.0% for Police and Fire employees, 1.67% for General Service employees) is multiplied by the number of years of service and the final average salary. Benefits may also be calculated under a formula plus an annuity (for members who were contributing before August 21, 1981,) or a money match computation if a greater benefit results. Monthly payments must be a minimum of $200 per month or the member will receive a lump-sum payment of the actuarial equivalent of benefits to which they are entitled. Under Senate Bill 1049, passed during the 2019 legislative session, the salary included in the determination of final average salary will be limited for all members beginning in 2021� The limit was equal to $225,33 as of January 1, 2023, and is indexed with inflation every year. Police and Fire members may purchase increased benefits that are payable between the date of retirement and age 65� A member is considered vested and will be eligible at minimum retirement age for a service retirement allowance if they have contributions in each of five calendar years or have reached at least 50 years of age before ceasing employment with a participating employer (age 45 for Police and Fire members)� General Service employees may retire after reaching age 55� Police and Fire members are eligible after reaching age 50� Tier One General Service employee benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service� Police and Fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service� Tier Two members are eligible for full benefits at age 60� The plans are closed to new members hired on or after August 29, 2003� The ORS 238A Defined Benefit Pension Program provides benefits to members hired on or after August 29, 2003� This portion of the OPSRP provides a life pension funded by employer contributions. Benefits are calculated with the following formula for members who attain normal retirement age: Police and fire: 1.8% multiplied by the number of years of service and the final average salary. Normal retirement age for Police and Fire members is age 60 or age 53 with 25 years of retirement credit� To retire under the Police and Fire classification, the individual’s last 60 months of retirement credit preceding retirement eligibility must be classified as retirement credit for service as a police officer or a firefighter. General service: 1.5% multiplied by the number of years of service and the final average salary. Normal retirement age for General Service members is age 65 or age 58 with 30 years of retirement credit� Under Senate Bill 1049, passed during the 2019 legislative session, the salary included in the determination of final average salary is limited for all members beginning in 2021� The limit was equal to $225,533 as of January 1, 2023, and is indexed with inflation every year. A member of the pension program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, or, if the pension program is terminated, the date on which termination becomes effective. FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 34 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 9 - Participation in Public Employees Retirement System (Continued) Chapter 238-Tier One and Tier Two Chapter 238A-OPSRP-DB Disability Benefits A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member (including OPERS judge members) for disability benefits regardless of the length of OPERS-covered service� Upon qualifying for either a non-duty or duty disability, service time is computed to age 58 (55 for Police and Fire members) when determining the monthly benefit. A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a member who becomes disabled due to job-related injury shall receive a disability benefit of 45% of the member’s salary determined as the last full month of employment before the disability occurred� Benefit Changes after Retirement Members may choose to continue participation in a variable account after retiring and may experience annual benefit fluctuations due to changes in the fair value of the underlying global equity investments of that account� No ability to change� Cost of Living Adjustments Under ORS 238.360 monthly benefits are adjusted annually through cost-of-living changes (COLA)� The COLA is capped at 2�0 percent� Under ORS 238.360, monthly benefits are adjusted annually through cost-of-living changes (COLA)� The COLA is capped at 2�0 percent� Contributions OPERS funding policy provides for monthly employer contributions at actuarially determined rates� These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. This funding policy applies to the OPERS Defined Benefit Plan and the Other Post-Employment Benefit Plans. Ultimate authority for setting and changing the laws governing contributions rests with the Oregon legislature� Employer contribution rates during the period were based on the December 31, 2021, actuarial valuation, which became effective July 1, 2023. The state of Oregon and certain schools, community colleges, and political subdivisions have made unfunded actuarial liability payments, and their rates have been reduced. Effective January 1, 2020, Senate Bill 1049 requires employers to pay contributions on reemployed OPERS retirees’ salaries as if they were active members, excluding IAP (6%) contributions. Reemployed retirees do not accrue additional benefits while they work after retirement. The District’s employer contributions for the year ended June 30, 2024 were $960,185, excluding amounts to fund employer specific liabilities, or employer specific side-accounts. The rates, presented as a percentage of covered payroll, for the County in effect for the fiscal year ended June 30, 2024 were: Chapter 238 - Tier One and Tier Two Chapter 238A - OPSRP-DB General Service 20.03% 17.00% Police and Fire 27.16% 21.79% Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2024, the District reported a liability of $7,072,228 for its proportionate share of the net pension liability� The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2021� The District’s proportion of the net pension liability was based on the District’s projected long-term contribution effort as compared to the total projected long-term contribution effort of all employers. Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 35 Note 9 - Participation in Public Employees Retirement System (Continued) Rates of every employer have at least two major components: Normal Costs: The economic value, stated as a percent of payroll, for the portion of each active member’s total projected retirement benefit that is allocated to the upcoming year of service. The rate is in effect for as long as each member continues in OPERS-covered employment. The current value of all projected future Normal Cost Rate contributions is the Present Value of Future Normal Costs (PVFNC)� The PVFNC represents the portion of the projected long-term contribution effort related to future service. Unfunded Actuarial Liability Rate (UAL): If system assets are less than the actuarial liability, a UAL exists. UAL can arise in a biennium when an event such as experience differing from the assumptions used in the actuarial valuation occurs� An amortization schedule is established to eliminate the UAL that arises in a given biennium over a fixed period of time if future experience follows assumptions. The UAL Rate is the upcoming year’s fixed component of the cumulative amortization schedules, stated as a percent of payroll� The employer’s PVFNC depends on both the normal cost rates charged on the employer’s payrolls, and on the underlying demographics of the respective payrolls. For OPERS funding, employers have up to three different payrolls, each with a different normal cost rate: (1) Tier 1/Tier 2 payroll, (2) OPSRP general service payroll, and (3) OPSRP police and fire payroll. Since many governments in Oregon have sold pension obligation bonds and deposited the proceeds with OPERS (referred to as side accounts or transitional liability or surplus), adjustments are required. After each employer’s projected long-term contribution effort is calculated, that amount is reduced by the value of the employer’s side account, transitional liability/surplus, and the pre-SLGRP liability/surplus (if any)� This is done as those balances increase/decrease the employer’s projected long-term contribution effort because side accounts are effectively pre-paid contributions. Looking at both rate components, the projected long-term contribution effort is the sum of the PVFNC and UAL. The PVFNC part of the contribution effort pays for the value of future service while the UAL part of the contribution effort pays for the value of past service not already funded by accumulated contributions and investment earnings. Each of the two contribution effort components are calculated at the employer-specific level. The sum of these components across all employers is the total projected long-term contribution effort. As the County’s share in the Oregon Public Employees Retirement System is 0.760%, which is an increase of 4.41% from its proportion presented on June 30, 2023. The County’s allocation to the District is 4.951% a increase of 0.10%, and the District’s share of OPERS is 0.038% which is the same as the prior year. For the year ended June 30, 2024, the District recognized a pension expense of $500,546. At June 30, 2024, the District reports deferred outflows of resources and deferred inflows of resources related to pensions from the following sources� Deferred Outflow of Resources Deferred Inflow of Resources Net difference between projected and actual earnings on investments $ 127,117 $ - Differences between expected and actual experience 345,854 28,042 Changes in proportionate share 634,497 46,540 Changes of assumptions or other inputs 628,255 4,684 Contributions subsequent to measurement date 960,185 - Differences between employer contribution and employer’s proportionate share of system contributions 169,843 534,966 Total $ 2,865,751 $ 614,232 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 36 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 9 - Participation in Public Employees Retirement System (Continued) The District’s contributions made subsequent to the measurement date will be recognized in the District’s pension expense in the following year. The net amount of the District’s remaining deferred outflows of resources and deferred inflows of resources that will be recognized in the District’s pension expense in the subsequent five years in the aggregate are shown in the table below. Subsequent Fiscal Years Deferred Outflow/(Inflow) of Resources (prior to post-measurement date contributions) FY 2025 $ 315,730 FY 2026 (91,587) FY 2027 766,469 FY 2028 278,572 FY 2029 29,924 Total $ 1,299,108 Actuarial Assumptions The employer contribution rates effective July 1, 2023, through June 30, 2025, were set using the entry age normal actuarial cost method. For the Tier One / Tier Two component of the OPERS Defined Benefit Plan, this method produced an employer contribution rate consisting of (1) an amount for normal cost (the estimated amount necessary to finance benefits earned by the employees during the current service year), and (2) an amount for the amortization of unfunded actuarial accrued liabilities, which are being amortized over a fixed period with new unfunded actuarial accrued liabilities being amortized over 22 years� For the OPSRP Pension Program component of the PERS Defined Benefit Plan, this method produced an employer contribution rate consisting of (a) an amount for the normal cost (the estimated amount necessary to finance benefits earned by the employees during the current service year), (b) an actuarially determined amount for funding a disability benefit component, and (c) an amount for the amortization of unfunded actuarially accrued liabilities, which are being amortized over a fixed period with new unfunded actuarially accrued liabilities being amortized over 16 years� A summary of the economic assumptions used for the December 31, 2021 actuarial valuation are shown below: Valuation Date December 31, 2021 Measurement Date June 30, 2023 Experience Study Report 2020, published July 20, 2021 Actuarial assumptions: Actuarial cost method Entry Age Normal Inflation rate 2�40 percent Long-term expected rate of return 6�90 percent Discount rate 6�90 percent Projected salary increases 3�40 percent Cost of living adjustments (COLA) Blend of 2.00% COLA and graded COLA (1.25%/0.15%) in accordance with Moro Decision; blend based on service Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 37 Note 9 - Participation in Public Employees Retirement System (Continued) Mortality Healthy retirees and beneficiaries: Pub-2010 Healthy Retiree, sex distinct, generational with Unisex, Social Security Data Scale, with job category adjustments and set-backs as described in the valuation� Active members: Pub-2010 Employee, sex distinct, generational with Unisex, Social Security Data Scale, with job category adjustments and set-backs as described in the valuation� Disabled retirees: Pub-2010 Disabled Retiree, sex distinct, generational with Unisex, Social Security Data Scale, with job category adjustments and set-backs as described in the valuation. Actuarial valuations of an on-going plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future� Experience studies are performed as of December 31st of even numbered years� The economic assumptions and estimates shown above are based on the experience study which reviewed experience for the four-year period ended December 31, 2020� The long-term expected rate of return on plan investments was developed based on the forward-looking capital market economic model� The table below presents the assumptions related to asset allocation and expected rates of return by major asset class. The target allocation and best estimates of arithmetic real rates of return for each major class are summarized in the following table: Long-Term Expected Rate of Return* Asset Class Target Allocation 20-Year Annualized Geometric Mean Global Equity 27.50% 7.07% Private Equity 25.50% 8.83% Core Fixed Income 25.00% 4.50% Real Estate 12.25% 5.83% Master Limited Partnerships 0.75% 6.02% Infrastructure 1.50% 6.51% Hedge Fund of Funds - Multistrategy 1.25% 6.27% Hedge Fund Equity - Hedge 0.63% 6.48% Hedge Fund - Macro 5.62% 4.83% Portfolio, net of investment expenses 100.00% Assumed Inflation, mean 2.35% * Based on the OIC Statement of Investment Objectives and Policy Framework for the Oregon Public Employees Retirement, revised as of January 5, 2023 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 38 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 9 - Participation in Public Employees Retirement System (Continued) Discount Rate The discount rate used to measure the total pension liability was 6.90 percent for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those of the contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the District’s Proportionate share of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportionate share of the net pension liability (asset) calculated using the discount rate of 6�90 percent, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5�90 percent) or 1-percentage point higher (7.90 percent) than the current rate: 1% Decrease (5.90%) Current Discount Rate (6.90%) 1% Increase (7.90%) Employers’ Net Pension Liability Employer-Specific $ 11,681,989 $ 7,072,228 $ 3,214,346 Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued OPERS financial report that can be found at http://www.oregon.gov/pers. Note 10 - Other Post-Employment Benefits The District participates in two OPEB plans to provide certain healthcare benefits to retirees. The first is a multi-employer, cost-sharing, defined benefit, other postemployment benefit plan administered by the Oregon Public Employees Retirement System (OPERS) known as the Retirement Health Insurance Account (RHIA)� The second is a single-employer, defined benefit, post-employment healthcare plan administered by the County known as the County Plan� The RHIA plan reports a net OPEB asset, while the County Plan reports a total OPEB liability on the Statement of Net Position� OPEB Activity and Balances for the Year Ended June 30, 2024 (RHIA & County Plan) Category RHIA County Plan Total Total OPEB Liability $ - $ 1,209,035 $ 1,209,035 Net OPEB Asset 100,788 - 100,788 Deferred Outflows Contributions subsequent to the measurement date 143 - 143 Changes in proportionate share 1,710 - 1,710 Differences between expected and actual experience 286 113,109 113,395 Changes of assumption or other inputs - 104,322 104,322 Deferred Outflows - Total 2,139 217,431 219,570 Deferred Inflows Changes in proportionate share 7,774 - 7,774 Differences between expected and actual experience 2,530 509,319 511,849 Changes of assumption or other inputs 1,087 362,294 363,381 Deferred Inflows - Total 11,391 871,613 883,004 OPEB (Income) Expenses 5,849 (7,426) (1,577) Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 39 Note 10 - Other Post - Employment Benefits (Continued) Oregon Public Employees Retirement System — Retirement Health Insurance Account (RHIA) Plan Description Retirement Health Insurance Account (RHIA) is a cost-sharing, multiple-employer, defined benefit, other postemployment benefit plan administered by OPERS. As a member of OPERS, the County contributes to RHIA for each of its eligible employees. RHIA pays a monthly contribution (currently $60 per month) toward the cost of Medicare companion health insurance premiums of eligible retirees� Oregon Revised Statute (ORS) 238.420 established this trust fund. Authority to establish and amend the benefit provisions of RHIA reside with the Oregon Legislature� The Plan is closed to new entrants hired on or after August 29, 2003� OPERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Oregon Public Employees Retirement System, PO Box 23700, Tigard, OR 97281-3700� The reports and other related schedules including plan assumptions, methods and plan provisions may also be found on the PERS website at https://www.oregon.gov/pers/EMP/Pages/GASB.aspx. Contributions Participating public employers are contractually required to contribute to RHIA at a rate assessed each biennium by OPERS. For FY 2024, the rate is 0.04% of annual covered payroll for Tier 1/Tier 2 employees and 0.00% for OPSRP employees� The OPERS sets the net-retiree healthcare rate based on the estimated OPEB expense of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The OPEB expense represents the annual cost allocated to the current year (service cost) and the amortization of any unfunded accrued liabilities of the plan� The unfunded accrued liabilities are amortized over a closed period equal to the average of the expected remaining lives of all employees that are provided with OPEB through the OPEB plan (active employees and inactive employees)� The District’s contributions to RHIA were consistent with the net-retiree healthcare rate as charged by OPERS. The District paid $143 for RHIA during fiscal year 2024. Actuarial methods and assumptions for the RHIA plan mirror those of the PERS retirement system itself and can be found in Note 8 - Participation in Public Employees Retirement System� Healthcare cost trends are not applicable to this plan as the benefits are a fixed dollar amount per month. Note 10 - Other Post - Employment Benefits (Continued) As the County’s share of the RHIA plan for FY 2024 is .55595159% and the County’s allocation to the District is 4.95%. The proportionate share for each employer participating in the Plan was determined by the actuaries based upon each employer’s contribution to the RHIA program during the measurement period� The District’s proportionate share declined to .24037000% from the prior measurement period. The following presents the District’s proportionate share of the net OPEB liability (asset) for the RHIA calculated using the discount rate of 6�90 percent, as well as what the District’s proportionate share of the net OPEB liability (asset) would be if it were calculated using a discount rate that is 1-percentage point lower (5�90 percent) or 1-percentage point higher (7.90 percent) than the current rate: 1% Decrease (5.90%) Current Discount Rate (6.90%) 1% Increase (7.90%) Proportionate share of net RHIA OPEB liability (asset) $ (91,616) $ (100,788) $ (108,657) The RHIA plan assets are included in the PERS retirement system cash management efforts. Information related to the PERS Plan assets investment allocations are included in Note 8 - Participation in Public Employees Retirement System included in these financial statements. FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 40 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 10 - Other Post - Employment Benefits (Continued) The District’s contributions made subsequent to the measurement date will be recognized in the District’s OPEB expense in the following year. The net amount of the District’s share of the RHIA remaining deferred outflows of resources and deferred inflows of resources that will be recognized in the District’s OPEB expense in the subsequent four years in the aggregate are shown in the table below� Subsequent Fiscal Years Deferred Outflow/(Inflow) of Resources (prior to post-measurement date contributions) FY 2025 $ (8,872) FY 2026 (5,584) FY 2027 3,725 FY 2028 1,336 Total $ (9,395) Other Post-Employment Benefits – Deschutes County Plan Plan Description The District participates in Deschutes District’s single-employer defined benefit post employment healthcare plan that provides medical benefits to eligible retired employees of Deschutes County and Deschutes County 9-1-1 Service District and their beneficiaries. Benefits Provided Eligibility for subsidized retiree health benefits requires retirement from the County with more than 15 years of service� Retirees with more than 15 years of service but less than 30 years of service receive a monthly County contribution towards their monthly insurance premiums until they are 65 years of age or until eligible for Medicare, in accordance with a schedule recommended by the Employee Benefit Advisory Committee (EBAC) and approved by the Board of County Commissioners. Retirees with 30 or more years of service contribute $85 per month towards their medical insurance and $5 per month towards their dental insurance while the County covers the remainder of the premiums� Retirees with less than 15 years of service can continue their medical coverage but must pay 100% of the premium amount. Employees Covered by Benefit Terms At the time of most recent valuation, June 30, 2024, there were 1,063 active employees that could be eligible for the plan� As of that date, 72 retirees and surviving spouses were insured through the County Plan� The County pays benefits as they come due. As a result, there are no assets being accumulated by the County to pay for future benefits. Resources received in excess of paying benefits as they come due are set aside for the payment of future benefits. Actuarial Assumptions and Other Inputs The Total OPEB liability in the June 30, 2024 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Measurement date June 30, 2024 Valuation date June 30, 2023 Report date June 30, 2024 Actuarial cost method Entry age normal Discount rate 3.97% Inflation 2.40% Salary increases 3.40% Mortality Rates Based on SOA Mortality Tables Healthcare cost trend rate 6.80% Trending down to 0.00% over 52 years. Applies to calendar years Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 41 Note 10 - Other Post - Employment Benefits (Continued) The discount rate used to measure the total OPEB liability is 3�97 percent� The County’s OPEB Plan is an unfunded plan; therefore, the discount rate was set to the rate of the tax-exempt, high-quality 20-year municipal bonds, as of the valuation date� The actuarial cost method used in the valuation of this plan is the Entry Age Normal Method� Under this method, the actuarial present value of the projected benefits of each active employee included in the valuation is allocated on a level dollar basis over the service of the active employee between assumed Entry Age (date of hire) and assumed Exit Age(s)� The portion of this actuarial present value allocated to the valuation year is called the service cost for that active employee� The sum of these individual service costs is the Plan’s Service Cost for the valuation year. The present value of benefits for current retirees plus the accumulated value of all prior service costs is the Total OPEB Liability� Under this method, the actuarial gains (losses), as they occur, reduce (increase) the Total OPEB Liability� The Deschutes County Retiree Health Plan is deemed “unfunded” in accordance with the relevant GASB statements� 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 Total OPEB Liability of the plan and the annual OPEB expense 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 changes in the County’s Total OPEB Liability, presented as required supplementary information, presents trend information about whether the Total OPEB Liability is increasing or decreasing over time relative to the covered-employee payroll� The measurement date of the actuarial results presented is June 30, 2024� Changes in Total OPEB Liability Category County Plan Balance at 06/30/2023 $ 1,118,280 Changes for the year: Service cost 107,506 Interest 60,945 Change in assumptions or other inputs (14,377) Differences between expected and actual experience 9,731 Benefit payments (33,383) Implicit subsidy credit (39,667) Net changes 90,755 Balance at 6/30/2024 $ 1,209,035 Sensitivity of the Liability to Changes in the Discount Rate and Healthcare Cost Trend Rate Changes in the discount rate affect the measurement of the total OPEB liability. Lower discount rates produce a higher total OPEB liability and higher discount rates produce a lower total OPEB liability� The following presents the total OPEB liability of the plan calculated using the discount rate of 3.97%, as well as what the District’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.97%) or one percentage point higher (4.97%) than the current rate: 1% Decrease (2.97%) Current Discount Rate (3.97%) 1% Increase (4.97%) Total OPEB Liability on June 30, 2024 $ 1,310,455 $ 1,209,035 $ 1,113,611 FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 42 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 10 - Other Post - Employment Benefits (Continued) Changes in healthcare trends also affect the measurement of the total OPEB liability. Lower healthcare trends produce a lower total OPEB liability and higher healthcare trends produce a higher total OPEB liability� The following presents the total OPEB liability of the plan, calculated using the healthcare cost trend rate of 6.80% and decreased to 4.14% over 52 years, as well as what the District’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.80%) or one percentage point higher (7.80%) than current healthcare cost trend rate: 1% Decrease (5.80%) Current Health Care Trend Rates (6.80%) 1% Increase (7.80%) Total OPEB Liability on June 30, 2024 $ 1,048,943 $ 1,209,035 $ 1,400,792 The District’s contributions made subsequent to the measurement date will be recognized in the County’s OPEB expense in the following year. The net amount of the County’s deferred outflows of resources and deferred inflows of resources that will be recognized in the County’s OPEB expense in the subsequent five years, and in the aggregate, are shown in the table below� Subsequent Fiscal Years Deferred Outflow/(Inflow) of Resources (prior to post-measurement date contributions) FY 2025 $ (116,573) FY 2026 (116,573) FY 2027 (116,573) FY 2028 (116,573) FY 2029 (116,573) Remaining (71,317) Total $ (654,182) Note 11 - Risk Management The District is exposed to various risks of loss related to torts; theft of, damage and destruction of assets; errors and omissions; injuries to employees and others; and natural disasters for which the District participates in the County’s self-insurance program� There have been no settlements in excess of insurance coverage and reserves in any of the past three fiscal years. Note 12 - Adoption of New Standards GASB 100 – Accounting Changes and Error Corrections The Governmental Accounting Standards Board (GASB) issued GASB Statement No� 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62, effective for fiscal years beginning after June 15, 2023. This standard provides updated guidance on accounting and financial reporting for changes in accounting principles, estimates, and error corrections. As a result, no adjustments to the financial statements were necessary, and the adoption of GASB 101 had no effect on the net position, results of operations, or cash flows for the period. Note 13 - Tax Abatement As of June 30, 2024, four property tax abatement programs are administered as authorized by Oregon Revised Statutes: Property for Low-income Rental 307�517 & 307�537 Enterprise Zone Businesses 285C�175 Construction in Process in an Enterprise Zone 285C�170 Solar Projects 2015 laws c� 571 (Note 3 following ORS 307�175) Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 43 Note 13 - Tax Abatement (Continued) Property for Low-income Rental (307.517) The intent of the Property for Low-income Rental program is to assist in providing housing equity throughout the state and reduce homelessness� Newly constructed rental housing occupied by low-income persons or property held for a reasonably short period of time for future development as low-income rental housing is exempt from property taxes for 20 years if the property is: ■Located in a city or county that adopts standards and guidelines to be used in administering applications for exemption� ■Built after the city or county adopts the state statutes� ■Approved by the city or county upon application� ■For projects requesting an exemption after October 5, 2015, any additional criteria established by the city or county prior to the application� ■Rented only to persons with income at or below 60 percent of area median income based on U�S� Department of Housing and Urban Development criteria� ■Rented at rates that reflect the full property tax reduction. Legislation in 2015 (HB 2130) amended the law to allow cities or counties to establish reasonable maximum holding times for land designated for low-income housing development� The legislation also permitted cities or counties to elect additional qualifying criteria before granting the exemption� Legislation in 2019 (HB 2130) extended the sunset to June 30, 2029� Note 13 - Tax Abatement (Continued) Enterprise Zone Businesses (285C.175) The purpose of the Enterprise Zone Business program is to stimulate and protect economic success by providing tax incentives for employment, business, industry and commerce and by providing adequate levels of complementary assistance to community strategies for such interrelated goals as environmental protection, growth management and efficient infrastructure. Qualified real and personal property owned or leased and newly placed into service by a qualified business firm in an enterprise zone is exempt from property tax for three to five consecutive years. A new or expanding business can qualify if the business meets all of the conditions outlined in ORS 285C�135 and 285C�200, such as applying locally for authorization prior to construction, engaging in eligible business operations, entering into a “first source” hiring agreement with local publicly funded job training providers, and increasing the number of jobs in the enterprise zone by the greater of one additional job or 10 percent. To be exempt, the property owned or leased by the business must satisfy applicable timing, location, minimum cost, and other requirements described in ORS 285C.180. Property is disqualified if used for an ineligible activity, such as retail operations, or if the business firm substantially curtails operations or closes during the exemption period. When property becomes disqualified, previously exempt taxes must be repaid. Construction in Process in an Enterprise Zone (285C.170) The purpose of the Construction in Process in an Enterprise Zone program is to stimulate and protect economic success by providing tax incentives for employment, business, industry, and commerce and by providing adequate levels of complementary assistance to community strategies for such interrelated goals as environmental protection, growth management and efficient infrastructure (ORS 285C.055). Property undergoing construction, addition, modification, or installation is exempt from property taxation for up to two consecutive years provided that the property satisfies all the program requirements. This exemption is effectively an extension of expenditure 2.011, Commercial Buildings Under Construction, specifically to properties that are expected to qualify for a standard enterprise zone exemption when they are completed� If a property is exempt under both 2�011 and this expenditure, the combined duration of the exemptions cannot exceed two consecutive years� Note 13 - Tax Abatement (Continued) Solar Projects (2015 laws c. 571) The intent of the Solar Projects program is to provide tax relief and tax stability to utility scale solar production property owners and developers, which subsequently encourages the development of utility scale solar FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Notes to Financial Statements 44 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 13 - Tax Abatement (Continued) production (Note 3 following ORS 307.175). Property constituting a solar project located in an unincorporated county area is exempt from property taxes when an agreement has been made between the governing body of the county and the owner of the solar project. The agreement is limited to 20 consecutive years. The last day an agreement could be made was January 1, 2022� Tax Abatement For the fiscal year ended June 30, 2024, the District’s property tax revenues were abated by an estimated $66,095 under the following programs: Tax Abatement Program Taxes Abated Fiscal Year Ended June 30, 2024 Property for Low-income Rental $ 40,749 Enterprise Zone Businesses 22,077 Construction in Process in an Enterprise Zone 754 Solar Projects 2,515 Total property tax abated $ 66,095 For the fiscal year ended June 30, 2024, the District’s property tax revenues were not impacted by tax abatement programs administered by other governments� Required Supplementary Information FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Required Supplementary Information 46 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual - General Fund Fiscal Year Ended June 30, 2024 Budgeted Amounts Actual Amounts Variance with Final Budget Original Final REVENUES Charges for services $ 592,770 $ 592,770 $ 612,717 $ 19,947 Intergovernmental 2,106,882 2,106,882 2,196,275 89,393 Investment earnings 312,321 312,321 462,828 150,507 Other 350 350 908 558 Taxes - property 11,022,000 11,022,000 11,132,378 110,378 Transfers in 1,950,000 1,950,000 - (1,950,000) Total revenues 15,984,323 15,984,323 14,405,106 (1,579,217) EXPENDITURES Current: Public safety 15,113,760 15,113,760 13,427,591 1,686,169 Not allocated to organizational units: Contingency 4,937,834 4,937,834 - 4,937,834 Transfers out 1,950,000 1,950,000 - 1,950,000 Total expenditures 22,001,594 22,001,594 13,427,591 8,574,003 Net change in fund balances (6,017,271) (6,017,271) 977,515 6,994,786 Fund balances, budget basis - beginning of year 13,202,343 13,202,343 13,393,953 191,610 Fund balances, budget basis - end of year $ 7,185,072 $ 7,185,072 14,371,468 $ 7,186,396 Unrealized loss on investments (172,998) Fund balances, GAAP basis - end of year $ 14,198,470 Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 47 Schedule of Proportionate Share of the Net Pension Liability (Asset) Oregon Public Employee Retirement System Last 9 Fiscal Years* 2016 2017 2018 2019 2020 2021 2022 2023 2024 Proportionate of net pension liability (asset) 0.03% 0.03% 0.03% 0.03% 0.04% 0.03% 0.04% 0.04% 0.04% Proportionate share of the net pension liability (asset) $ 1,736,619 $ 4,723,906 $ 4,667,224 $ 5,141,779 $ 6,267,240 $ 7,558,545 $ 4,224,106 $ 5,429,635 $ 7,072,228 Covered payroll $ 2,943,341 $ 3,208,843 $ 3,644,740 $ 4,359,939 $ 4,343,589 $ 4,387,355 $ 4,710,083 $ 4,512,720 $ 4,959,625 Proportionate share of the net pension liability (asset) as a percentage of its covered payroll 59.00% 147.22% 128.05% 117.93% 144.29% 172.28% 89.68% 120.32% 142.60% Plan fiduciary net position as a percentage of the total pension liability 91.88% 80.53% 83.12% 82.07% 80.23% 75.79% 87.57% 84.55% 81.68% *GASB Statement No� 68 requires ten years of information to be presented in this table� However, until a full 10- year trend is compiled, the District will present information for those years for which information is available� The amounts presented for each fiscal year were determined as of June 30. FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Required Supplementary Information 48 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Schedule of Employer Contributions Oregon Public Retirement System Defined Benefit Pension Plan Last 10 Fiscal Years* 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Contractually required contributions $ 225,456 $ 287,456 $ 319,262 $ 519,614 $ 519,818 $ 716,449 $ 746,398 $ 785,809 $ 803,554 $ 960,185 Contributions in relation to the contractually required contribution $ 225,456 $ 287,456 $ 319,262 $ 519,614 $ 519,818 $ 716,449 $ 746,398 $ 785,809 $ 803,554 $ 960,185 Contribution deficiency (excess) - - - - - - - - - - District’s covered payroll $ 2,943,341 $ 3,208,843 $ 3,644,740 $ 4,359,939 $ 4,343,589 $ 4,387,355 $ 4,710,083 $ 4,512,720 $ 4,959,625 $ 5,495,743 Contributions as a percentage of covered payroll 7.66% 8.96% 8.76% 11.92% 11.97% 16.33% 15.85% 17.41% 16.20% 17.47% *The amounts presented for each fiscal year were determined as of June 30. Financial Statements For the Fiscal Year Ended June 30, 2024 FINANCIAL SECTION Deschutes County Extension and 9-1-1 County Service District DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 49 Schedule of Changes in Total OPEB Liability Last 7 Fiscal Years* 2018 2019 2020 2021 2022 2023 2024 Service cost $ 105,011 $ 77,870 $ 78,267 $ 126,203 $ 122,384 $ 134,451 $ 107,506 Interest 68,868 68,855 47,975 29,510 36,547 44,011 60,945 Changes in assumptions or other inputs (292,284) (696,769) (41,660) 274,351 - (822,510) (4,646) Benefit payments and implicit subsidy credit (85,419) (62,792) (59,320) (58,646) (177,463) (57,848) (73,050) Net change in total OPEB liability (203,824) (612,836) 25,262 371,418 (18,532) (701,896) 90,755 Total OPEB liability - beginning 2,258,688 2,054,864 1,442,028 1,467,290 1,838,708 1,820,176 1,118,280 Total OPEB liability - ending $ 2,054,864 $ 1,442,028 $ 1,467,290 $ 1,838,708 $ 1,820,176 $ 1,118,280 $ 1,209,035 Covered employee payroll** $ 4,359,939 $ 4,343,589 $ 4,387,355 $ 4,710,083 $ 4,512,720 $ 4,959,625 $ 5,495,743 Total OPEB liability as a percentage of covered employee payroll 47% 33% 33% 39% 40% 23% 22% *GASB Statement No� 75 requires ten years of information to be presented in this table� However, until a full 10- year trend is compiled, the District will present information for those years for which information is available� **Data reported is measured as of July 1st of each fiscal year. There are no assets accumulated in the OPEB plan that meets the criteria of GASB codification P22.101 to pay related benefits for the Pension/OPEB plan� FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Required Supplementary Information 50 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Note 1 - Stewardship, Compliance and Accountability The District adopts a resolution authorizing appropriations for each fund, which establishes the level by which expenditures cannot lawfully exceed appropriations. Appropriations are established at the principal object level for each fund – programmatic (personnel, materials and services, capital outlay), debt service, transfers to other funds and operating contingency� Other Supplementary Information FINANCIAL SECTION Financial Statements For the Fiscal Year Ended June 30, 2024 Other Supplementary Information 52 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Schedule of Property Tax Transactions Fiscal Year Ended June 30, 2024 Tax Year Beginning Balance and 2023-24 Levy Adjustments Interest (Discounts) Collections Taxes Receivable June 30, 2024 2023-2024 $ 11,460,003 $ (10,315) $ (298,420) $ 11,029,967 $ 121,301 2022-2023 98,441 (350) 2,680 59,391 41,380 2021-2022 40,108 (272) 2,001 17,870 23,967 2020-2021 20,414 (151) 2,609 15,777 7,095 2019-2020 7,028 (136) 1,111 5,962 2,041 2018-2019 1,683 (81) 137 514 1,225 2017-2018 921 (29) 71 235 728 2016-2017 517 (29) 20 53 455 2015-2016 (747) (28) 50 123 (848) Prior 2,336 (109) 252 567 1,912 Totals $ 11,630,704 $ (11,500) $ (289,489) $ 11,130,459 $ 199,256 Adjustments for accruals June 30, 2023 (15,086) June 30, 2024 24,668 Other tax distribution (7,663) Modified accrual basis tax revenue $ 11,132,378 Financial Statements 2024 Deschutes County 9-1-1 County Service District A COMPONENT UNIT OF DESCHUTES COUNTY, OREGON Audit Comments and Government Auditing Standards Sections Audit Comments and Government Auditing Standards Sections Financial Statements For the Fiscal Year Ended June 30, 2024 54 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Report of Independent Auditors 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 Deschutes County Commissioners Deschutes County 9-1-1 County Service District (A Component Unit of Deschutes County, Oregon) Bend, Oregon We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and the major fund of the Deschutes County 9-1-1 County Service District (the District), a component unit of Deschutes County, Oregon, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated December 4, 2024. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the District's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. Financial Statements For the Fiscal Year Ended June 30, 2024 Audit Comments and Government Auditing Standards Sections DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 55 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Eugene, Oregon December 4, 2024 Audit Comments and Government Auditing Standards Sections Financial Statements For the Fiscal Year Ended June 30, 2024 56 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Audit Comments and Disclosures Required by State Regulations Oregon Administrative Rules 162-010-0000 through 162-010-0320 of the Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State in cooperation with the Oregon State Board of Accountancy, enumerate the financial statements, schedules, comments, and disclosures required in audit reports� The required statements and schedules are set forth in the preceding sections of this report� Required comments and disclosures related to the audit of such statements and schedules are set forth in the following pages� Financial Statements For the Fiscal Year Ended June 30, 2024 Audit Comments and Government Auditing Standards Sections DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 57 Report of Independent Auditors Required by Oregon State Regulations Deschutes County Commissioners Deschutes County 9-1-1 County Service District (A Component Unit of Deschutes County, Oregon) Bend, Oregon We have audited, 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 the financial statements of the governmental activities and the major fund of Deschutes County 9-1-1 County Service District (the District), a component unit of Deschutes County, Oregon, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated December 4, 2024. Compliance As part of obtaining reasonable assurance about whether the District’s basic financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including provisions of Oregon Revised Statutes (ORS) as specified in Oregon Administrative Rules (OAR) 162-010-0000 to 162-010-0330, of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the financial statements. 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. We performed procedures to the extent we considered necessary to address the required comments and disclosures which included, but were not limited to, the following:  Accounting records and internal control  Public fund deposits  Budget  Insurance and fidelity bonds  Investments  Public contracts and purchasing In connection with our testing, nothing came to our attention that caused us to believe the District was not in substantial compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the provisions of ORS as specified in OAR 162-010-0000 through 162-010-0330 of the Minimum Standards for Audits of Oregon Municipal Corporations. Audit Comments and Government Auditing Standards Sections Financial Statements For the Fiscal Year Ended June 30, 2024 58 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. Accordingly, this communication is not suitable for any other purpose. This report is intended solely for the information and use of the County Commissioners and management of the District and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties. Amanda McCleary-Moore, Partner For Moss Adams LLP Eugene, Oregon December 4, 2024 DESCHUTES COUNTY 9-1-1 COUNTY SERVICE DISTRICT | A Component Unit of Deschutes County, Oregon 59 Deschutes County 1300 NW Wall St. Suite 200 Bend, OR 97703 www.deschutes.org Deschutes County 9-1-1 20355 Poe Sholes Dr., Bend (541) 388-0185 www.deschutes.org/911