HomeMy WebLinkAboutFY 2015 Deschutes County 911 County Service District Financial Statements
As of and For the Year Ended June 30, 2015
Deschutes County 9-1 -1 County
Service District
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Deschutes County 9-1-1 County Service District
Table of Contents
June 30, 2015
IndependentAuditor's Report.................................................................................................................................... 1
Management's Discussion and Analysis....................................................................................................................4
Financial Statements
Statementof Net Position......................................................................................................................................9
Statementof Activities......................................................................................................................................... 10
Balance Sheet—General Fund............................................................................................................................. 11
Statement of Revenues, Expenditures and Changes in Fund Balances—General Fund...................................... 12
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the
General Fund to the Statement of Activities........................................................................................................ 13
Notesto Financial Statements.............................................................................................................................. 14
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual—General
Fund.....................................................................................................................................................................31
Schedule of Proportionate Share of the Net Pension Liability ............................................................................32
Schedule of Employer Contributions...................................................................................................................33
Notes to Required Supplementary Information...................................................................................................34
Other Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget to Actual- (Reserve
Sub-Fund of General Fund).................................................................................................................................35
Combining Balance Sheet—General Fund and Reserve Sub-Fund.....................................................................36
Combining Statement of Revenues,Expenditures and Changes in Fund Balances—General Fund and
ReserveSub-Fund................................................................................................................................................37
Schedule of Property Tax Transactions...............................................................................................................38
Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing
Standards.................................................................................................................................................................39
Audit Comments and Disclosures Required by State Regulations
Audit Comments and Disclosures Required by State Regulations......................................................................41
Independent Auditor's Report Required by Oregon State Regulations...................................................................42
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Independent Auditor's Report
The Deschutes County Commissioners
Deschutes County 9-1-1 County Service District
Bend, Oregon
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and general fund
of Deschutes County 9-1-1 Counry Service District(the District), a component unit of the Deschutes
County, as of and for the year ended June 30, 2015, and the related notes to the financial statements,
which collectively comprise the District's basic financial statements as listed in the table of contents.
Management's Responsibility 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; this includes
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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements,whether due to fraud or error.
In making those risk assessments,the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements 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 entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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Opinions
In our opinion,the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the general fund of the District, as of June
30, 2015, 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.
Emphasis of a Matter—Adoption of New Accounting Standard
As described in Notes 1 and 9 to the financial statements,the District adopted the provisions of GASB
Statement No. 68,Accounting and Financial Reporting for Pensions and GASB Statement No. 7l,
Pension Transition for Contributions Made Subsequent to the Measurement Date, which has resulted in a
restatement of the net position as of July O1,2014. Our opinions are not modified with respect to this
matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, schedule of proportionate share of the net pension liability, schedule of employer
contributions, and the schedule of revenues, expenditures, and changes in fund balances—budget and
actual—general fund and related notes (budgetary schedule), as listed in the table of contents, be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the
management's discussion and analysis, schedule of proportionate share of the net pension liability,
schedule of employer contributions and budgetary schedule in accordance with auditing standards
generally accepted in the United States of America,which consisted of inquiries of inanagement 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
managemenYs discussion and analysis, schedule of proportionate share of the net pension liability,
schedule of employer contributions and budgetary schedule 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 schedule described above is the
responsibility of management and was derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. The budgetary schedule 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
tbemselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the budgetary schedule is fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
2
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the District's financial statements. The schedule of revenues, expenditures, and changes in fund
balance—budget and actual—reserve sub-fund of general fund, combining balance sheet and combining
statement of revenues, expenditures and changes in fund balances for the General Fund and reserve sub-
fund(combining statements) and the schedule of property tax transactions are presented for purposes of
additional analysis and are not a required part of the financial statements. The schedule of revenues,
expenditures, and changes in fund balance—budget and actual—reserve sub fund of general fund,
combining statements and schedule of property tax transactions are the responsibility of management and
were derived from and relates directly to the underlying accounting and other records used to prepare the
basic financial statements. Such 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,
schedule of revenues, expenditures, and changes in fund balance—budget and actual—reserve, combining
statements and schedule of property tax transactions are fairly stated,in all material respects, in relation to
the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report dated November 10,
2015 on our consideration of the District's internal control over financia] reporting and on our tests of its
compliance with certain provisions of laws,regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on 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.
Report on Other Legal and Regulatory Requirements
In accordance with the Minimum Standards ofAudits of Oregon Municipal Corporations, we have issued
our report dated November 10, 2015 on our consideration of the District's compliance with certain
provisions of laws and regulations,including the provisions of Oregon Revised Statutes as specified in
Oregon Administrative Rules. 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.
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For Eide Bailly LLP
Boise, Idaho
November 10, 2015
3
Deschutes County 9-1-1 County Service District
Management's Discussion and Analysis
June 30, 2015
As management of Deschutes County 9-1-1 County Service District(the District), 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, 2015.
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, 2015,by$15,381,623. Of this amount,
$14,332,629 is unrestricted.
• Total net position increased by $1,322,355.
• As of June 30, 2015, Deschutes County 9-1-1 County Service District's governmental funds reported
combined ending fund balances of$15,249,982.
• As of June 30, 2015, the unassigned fund balance in the General Fund was $5,018,967 or 62%, of total
General Fund Fiscal Year 2015 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) govermnent-
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 ar deteriorating.
The Statement of Activities presents information showing how the District's net position changed during the fiscal
year ended June 30, 2015. Changes in net position are reported when the underlying event giving rise to the
change occurs, regardless of the timing of the related cash, or other financial assets, flows. Thus, revenues and
expenses are reported in this statement for some items, for example,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 protection.
The government-wide financial statements can be found on pages 9-10 of this report.
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Deschutes County 9-1-1 County Service District
Management's Discussion and Analysis
June 30, 2015
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
statetnents, 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.
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 inay better understand
the long-term impact of the government's near-term financing decisions. A reconciliation from the Governmental
Fund Balance Sheet to the Government-wide Statement of Net Position and a reconciliation from the
Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances 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, 2015. Information
on the General Fund and Sub-Fund are shown in the Combining funds Balance Sheet and in the Combining
Schedule of Revenues, Expenditures and Changes in Fund Balances that are presented as Other Supplementary
Information.
The District adopts an annual budget for its General and Sub-Fund. A budgetary coinparison statement has been
provided for each of these funds to demonstrate compliance with the annual budget.
The General Fund Financial Statements can be found on pages 11-13 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found on pages 14-
30 of this report.
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$15,381,623 at June 30, 2015.
About 7% of the Dish-ict'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 93%, $14,332,629 , of Deschutes County 9-1-1 County Service District's net positon may be used
to meet the Deschutes County's (the County) on-going obligations to citizens and creditors.
The District's net position increasedby$1,322,355 during the year ended June 30, 2015.
5
Deschutes County 9-1-1 County Service District
Management's Discussion and Analysis
June 30, 2015
A comparison of the suminarized govermnent-wide statements to the prior year is as follows:
Statements of Net Position
Year Ended
June 30, 2014
June 30, 2015 (as Restated) Change
Assets
Current and other assets $ 16,578,288 $ 14,957,338 $ 1,620,950
Capital assets 1,048,994 1,488,681 (439,687)
Total assets 17,627,282 16,446,019 1,181,263
Deferred outflows of resources 225,456 242,989 (17,533)
Liabilities
Currentliabilities 426,610 477,951 (51,341)
Noncurrent liabilities 862,350 2,ll4,077 (1,251,727)
Totalliabilities 1,288,960 2,592,028 (1,303,068)
Deferred inflows of resources 1,182,155 37,712 1,144,443
Net Position
Net investment in capital assets 1,048,994 1,488,681 (439,687)
Unrestricted 14,332,629 12,570,587 1,762,042
Total net position $ 15,381,623 $ 14,059,268 $ 1,322,355
6
Deschutes County 9-1-1 County Service District
Management's Discussion and Analysis
June 30, 2015
Statements of Activities
Year Ended
Year Ended June 30, 2014
June 30, 2015 (as Restated) Change
Program revenues
Charges for services $ 374,524 $ 402,809 $ (28,285)
General revenues
Property taxes 6,819,144 6,400,919 418,225
Investment earnings 118,6ll 84,073 34,538
Intergovernmental revenues 887,792 918,803 (31,011)
Total revenues 8,200,071 7,806,604 393,467
Expenses
Public safery 6,877,7]6 7,177,358 (299,642)
Change in Net Position 1,322,355 629,246 693,]09
Net Position, Beginning of Year 14,059,268 14,567,874 (508,606)
Less prior period adjustment - (1,137,852) 1,137,852
Net Posirion, End of Year $ 15,381,623 $ 14,059,268 $ 1,322,355
Governmental Activities
Governmental activities, the only type of activity of Deschutes County 9-1-1 County Service District, increased
net position by $1,322,355 during the Fiscal Year ended June 30, 2015. The District's voters approved a five-year
local option levy effective July 1, 2013, resulting in property taxes available to fund future operation.
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 are 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 30,2015, $15,249,982 is the reported combined ending fund balance for Deschutes County 9-]-1
County Service District's governmental funds, an increase of$1,129,649 from June 30, 2014. This increase is due
primarily to the local option levy which was effective July 1,2013.
7
Deschutes County 9-1-1 County Service District
Management's Discussion and Analysis
June 30, 2015
As of June 30, 2015,the fund balance of Deschutes County 9-1-1 County Service District's General Fund is
$15,249,982 of which$5,018,967 is unassigned. One measure of the General Fund's liquidity is the relationship
of the total fund balance to the Fund's tota] expenditures. The unassigned fund balance as of June 30,2015, for the
General Fund is 61% of total General Fund fiscal year 2015 revenues. The remainder of the governmental fund
balance, composed of the assigned fund balance, is $10,231,015, and is intended to be used far future capital asset
replacement.
The Fund Balance of the District's General Fund increased by$1,129,649 during the Fiscal Year ended June 30,
2015, primarily due to savings from unfilled positions.
General Fund Budgetary Highlights
General Fund actual revenues exceeded estimated revenues by$150,834. Property taxes were$236,148 in excess
of budget, due to conservative budgeting practices.Federal grants were budgeted to provide the resources for
certain capital outlay expenditures. Because such expenditures were deferred to the subsequent fiscal year,the
grants were not received in Fiscal Year 2015.
Capital Asset and Debt Administration
Capital Assets
Deschutes County 9-1-1 County Service District's investment in capital assets for its governmental activities as of
June 30, 2015, is $1,048,994,net of accumulated depreciation. This investment in capital assets includes
equipment,vehicles, intangibles and construction in progress on an upgrade to its facility.
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
• The five-year serial levy, $.20 per$1,000 of assessed valuation, was approved by the voters in May 2013.
The tax revenues generated by this levy will allow the District's personnel to continue to provide timely
responses to emergency calls and to maintain and upgrade communication systems.
• The District's Assessed Valuation of Taxable Property increased from fiscal year 2015 to fiscal year 2016
by 6.3%to approximately $20.9 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.
8
Deschutes County 9-1-1 County Service District
Statement of Net Position
June 30, 2015
Primary
Government
Governmental
Activities
Assets
Cash and investments $ 15,057,020
Property taxes receivable 194,055
Accounts receivable 207,444
Prepaid PERS expense 523,179
Net pension asset 596,590
Leasehold improvements 254,783
Equipment and vehicles 2,351,042
Intangible assets 1,732,830
Accumulated depreciation (3,289,661)
Total assets 17,627,282
Deferred Outflows of Resources
Contributions subsequent to measurement date 225,456
Liabilities
Accounts payable 34,691
Noncurrent liabilities -due within one year
Accrued compensation absences 391,919
Noncurrent liabilities -due in mare than one year
OPEB obligation 862,350
Total liabilities 1,288,960
Deferred Inflows of Resources
Changes in proportion 30,978
Net difference (projected and annual earnings) 1,151,177
Total deferred outflows of resources 1,182,155
Net Position
Net investment in capital assets 1,048,994
Unrestricted 14,332,629
Total net position $ 15,381,623
See Notes to Financial Statements 9
Deschutes County 9-1-1 County Service District
Statement of Activities
Year Ended June 30,2015
Primary
Government
Governmental
Activities
Expenses
Public safety $ 6,877,716
Program Revenues
Charges for services 374,524
Operating grants 887,792
Total program revenues 1,262,316
Net program expenses 5,615,400
General Revenues
Property taxes levied for general purposes 6,819,144
Interest on investments 118,611
Total general revenues 6,937,755
Changes in Net Position 1,322,355
Net Position, Beginning of Year-as restated 14,059,268
Net Position, End of Year $ 15,381,623
See Notes to Financial Statements 10
Deschutes County 9-1-1 County Service District
Balance Sheet—General Fund
June 30, 2015
Assets
Cash and investments $ 15,057,020
Property taxes receivable 194,055
Accounts receivable 207,444
Total assets $ 15,458,519
Liabilities
Accounts payable $ 34,691
Deferred Inflows of Resources
Unavailable revenue -property taxes 173,846
Fund Balance
Assigned for future expenditures 10,231,015
Unassigned 5,0]8,967
Total fund balance 15,249,982
Total Liabilities,Deferred Inflows of Resources and Fund Balance $ 15,458,519
Fund Balance $ 15,249,982
Amounts reported for governmental activities in the Statement of Net Position are different because:
Prepaid expenses are not financial resources and,therefore, are not reported in
the fund. 523,179
Net pension asset is not an available resource and,therefare is not reported in the
funds. 596,590
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported on the Balance Sheet. 1,048,994
Contributions to the pension plan subsequent to measurement date. 225,456
Some of the District's taxes will be collected after year-end, but are not currently
available resources and,therefore, are deferred in the General Fund. 173,846
Compensated absences are reported as expenditures in the period paid and,
therefore, are not reported as obligations on the Balance Sheet. (391,919)
Other post-employment benefits are not due and payable in the current period
and,therefore, are reported on the Balance Sheet. (862,350)
Net difference between projected and actual earnings on investments (1,151,177)
Differences between employer contributions and proportionate share of contributions. (30,978)
Net Position of Governmental Activities $ 15,381,623
See Notes to Financial Statements 11
Deschutes County 9-1-1 County Service District
Statement of Revenues,Expenditures and Changes in Fund Balances—General Fund
Year Ended June 30,2015
Revenues
Property taxes $ 6,856,163
Interest ll 8,611
Charges for services 374,524
Intergovernmental revenue 887,792
Total revenues 8,237,090
Expenditures
Public safety 6,872,643
Capital outlay 234,798
Total expenditures 7,107,441
Net Change in Fund Balance 1,129,649
Fund Balance, Beginning of Year 14,120,333
Fund Balance, End of Year $ 15,249,982
See Notes to Financial Statements 12
Deschutes County 9-1-1 County Service District
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the General Fund to
the Statement of Activities
Year Ended June 30, 2015
Net Change in Fund Balance -Total Governmental Fund $ 1,129,649
Amounts reported for governmental activities in the Statement of Activities are different because:
Some expenses reported in the Statement of Activities (e.g. the change in prepaid
expenses, accrued compensated absences and OPEB obligation) do not require
the use of current financial resources and, therefore, are not reported as
expenditures in the governmental fund. (108,332)
Accounting for the District's defined benefit cost-sharing pension plan
Contributions to pension plan made subsequent to measurement date 225,456
Pension expense 552,287
Governmental funds report capital outlay as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over their estimated
useful lives and reported as depreciated expense.
Capital outlay 234,798
Depreciation (674,484)
Property tax revenue is recognized under the modified accrual basis of
accounting only to the extent it has been collected within sixty days of year-end.
On the accrual basis Statement of Activities, such revenue is recognized
regardless of when collected. (37,019)
Changes in Net Position of Governmental Activities $ 1,322,355
See Notes to Financial Statements 13
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Note 1 - Organization and Summary of Significant Accounting Policies
The District
The Deschutes County 9-1-1 Service District(the District)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.
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 ar
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 prograin revenues are reported instead as general revenues.
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 al] 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 assets are 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 and intergovernmental revenue associated with the current 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 activiry has been eliminated from the government-wide financial
statements.
14
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
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.
Reserve (a Sub-Fund of the General Fund�- The Reserve Sub-Fund is used to accumulate resources for
acquisition of capital assets. Transfers from the General Fund and interest are its principal sources of
revenue. Expenditures are for capital outlay of the District.
Budget Policy
The District meets the requirements of state law by preparing a budget for each of its funds. The budget is
prepared on the modified accrual basis of accounting. The resolution authorizing appropriations for each fund sets
the level by which expenditures cannot legally exceed appropriations. Total personnel services, materials and
services, debt service, capital outlay and other expenditures are the levels of control established by resolution. The
detailed budget document provides 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.
Reporting Entity
The District's financial statements include the accounts of all District operations. The criteria for including
organizations as component units with the District's reporting entity, as set forth in GASB 61, The Financial
Reporting Entity: Omnibus,include whether:
• The organization is legally separate(can sue and be sued in its own name).
• The District holds the corporate powers of the organization.
• The District appoints a voting inajority of the organization's board.
• The District is able to impose its will on the organization.
• The organization has the potential to impose a financial benefit/burden on the District.
• There is fiscal dependency by the organization on the District.
There were no specific agencies which required consideration under criterion in the current fiscal year for
inclusion in the District's reporting entity.
Under the above criterion,the District is includable as a component unit of the financial statements of Deschutes
County, since the District's governing board is comprised of the Deschutes Counry Commissioners. The District
also has a seven-member executive board that oversees operations.
15
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Cash and Investments
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 investrnents participate in this pool rather than specific, identi�able
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 average daily balance of the District in relation to total investments
in the 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.
Information about the pooled cash and investments is included in the County's annual financia] report and may be
obtained by contacting the Deschutes County Finance Department, 1300 NW Wall Street, Suite 200, Bend,
Oregon, 97703.
Accounts Receivable
The District considers all receivables as fully collectible; therefore,no allowance for uncollectible accounts has
been established.
Capital Assets
Capital assets,which include building improvements, equipment,vehicles, software and construction in progress
are reported in the government-wide financial statements. In the governinental fund statements, capital assets are
charged to expenditures as purchased. Capital assets are recorded at historical cost. Donated assets are recorded at
estimated fair market value as of the date of the donation.
Capital assets are defined by the District as assets with an initial cost of$5,000 ar more and an estimated useful
life greater than one year. Additions or improvements and other capital outlays that signifcantly 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
Building improvements 10 - 15 years
Equipment,vehicles and intangibles 5 years
16
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Deferred Outflows/Inflows of Resources
In addition to assets, the government-wide statement of net position 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 position that applies to a future period(s) and so will not be recognized as an
outflow of resources (expense/expenditure) until then. The District reports one item in this category—
contributions to the PERS retirement plan made subsequent to the measurement date.
In addition to liabilities,the government-wide statement of net position and/or the governmental funds balance
sheets 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 position 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 defined benefit retirement plans, are reported on the government-wide
statement of net position. Deferred inflows of resources are reported on the governmental funds balance sheets as
a result of reporting using the modified accrual method. The government funds report unavailable revenues from
three sources:property taxes, special assessments and contracts of sale. These amounts are deferred and
recognized as an inflow of resources in the period the amounts become available.
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.
Pension Plans
For purposes of ineasuring the net pension liability(asset)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.
Net Other Post-Employment Benefits Obligation (Net OPEB obligation)
The net OPEB obligation is recognized as a long-term liability in the proprietary statement of net position and in
the government-wide statement of net position. The liability reflects the present value of expected future
payments.
Property Taxes/Unavailable Revenue
Properiy 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. The Deschutes County
Treasurer is the tax collection agent for the District. The District's 2015 fiscal year tax levy was $6,993,579.
17
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Tax revenue is considered available for expenditure upon receipt by the County,which serves as the interinediary
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 deferred revenue on the modified accrual basis of accounting since they are not deemed available to
finance operations of the current period.
Fund Balance Reporting
The Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and
Governmenta] 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:
1. 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).
2. Restricted fund balance category includes amounts that can be spent only for specific
purposes stipulated by constitution, external resource providers or through enabling
legislation.
3. Committed fund balance classification includes amounts that can be used only for the specific
purposes determined by a fon�nal 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.
4. 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.
5. 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.
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.
18
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
New Aceounting Pronouncement
As of July 1,2014, the District adopted GASB Statement No. 68,Accounting and Financial Reporting for
Pensions and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the
Measurement Date. The implementation of these standards requires governments calculate and report the costs
and obligations associated with pensions in their basic financial statements. Employers are required to recognize
pension amounts for all benefits provided through the plan which include the net pension liability, deferred
outflows of resources, deferred inflows of resources, and pension expense. The effect of the implementation of
these standards on beginning net position is disclosed in Note 8 and the additional disclosures required by these
standards are included in Note 4.
Note 2 - Cash and Investments
As of June 30, 2015,the District had a deposit of$15,057,020 with the Deschutes County Treasurer. All of 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.
Note 3 - Capital Assets
Capital asset activity for the fiscal year ended June 30, 2015,is as follows:
Balance Balance
June 30, 2014 Additions Dispositions Transfers June 30, 2015
Construction in progress $ ll 0,841 $ - $ - $ (ll 0,841) $ -
Leasehold improvements - 234,797 - 19,986 254,783
Software 1,732,830 - - - 1,732,830
Equipment and vehicles 2,260,187 - - 90,855 2,351,042
Total 4,103,858 234,797 - - 4,338,655
Less accumulated depreciation
Leasehold improvements - (9,099) - - (9,099)
Software (1,027,183) (252,025) - - (1,279,208)
Equipment (1,587,994) (413,360) - - (2,001,354)
Total accumulated
depreciation (2,615,177) (674,484) - - (3,289,661)
$ 1,488,681 $ (439,68'7) $ - $ - $ 1,048,994
19
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Note 4 - 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
http://www.oregon.�ov/pers/Pa�es/section/financial reports/financials.aspx.
Benefits Provided Under the Programs
Chapter 238-Tier One and Tier Two Chapter 238A-OPERS Pension Program
(OPSRP-DB)
Pension The OPERS retirement allowance is payable The ORS 238A Defined Benefit Pension Program
Benefits monthly for life. The allowance may be selected provides benefits to members hired on or after
from 13 retirement benefit options. These options August 29, 2003. This portion of the OPSRP
include survivorship benefits and lump-sum provides a life pension funded by employer
refunds. The basic benefit is based on years of contributions. Benefits are calculated with the
service and final average salary. A percentage (2.0 following formula for members who attain
percent for police and fire employees, 1.67 percent normal retirement age:
for general service employees)is multiplied by the
number of years of service and the final average Police and fire: 1.8 percent is multiplied by the
salary. Benefits may also be calculated under a number of years of service and the final average
formula plus an annuity (far members who were salary.Normal retirement age for police and fire
contributing before August 21, 1981,) or a money members is age 60 or age 53 with 25 years of
match computation if a greater benefit results. retirement credit. To be classified as a police or
fire member, the individual must have been
employed continuously as a police or fire member
for at least five years immediately preceding
retirement.
General service: 1.5 percent is multiplied by the
number of years of service and the final average
salary. Normal retirement age for general service
members is 65, or age 58 with 30 years of
retirement credit.
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, and, if
the pension program is terminated, the date on
which termination becomes effective.
20
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Disability A member with 10 or more years of A member who has accrued 10 or more years of
Benefits creditable service who becomes disabled retirement credits before the member becomes
from other than duty-connected causes may disabled or a member who becomes disabled due
receive a non-duty disability benefit. A to job-related injury shall receive a disability
disability resulting from a job-incurred benefit of 45 percent of the member's salary
injury or illness qualifies a member determined as the]ast full month of employment
(including OPERS judge members) for before the disability occurred.
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.
Benefit Members may choose to continue No ability to change.
Changes participation in a variable equities
after investment account after retiring and may
Retirement experience annual benefit fllictuations due
to changes in the market value of equity
investments.
Cost of Under ORS 238.360 monthly benefits are Under ORS 238Z210 monthly bene�ts are
Living adjusted annually through cost-of-living adjusted annually through cost-of-living changes.
Adjustments changes (COLA). The cap on the COLA in The cap on the COLA in fiscal year 2015 and
fiscal year 2015 and beyond will vary based beyond will vary based on the amount of the
on the amount of the annual benefit. annual benefit.
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 accumulated sufficient assets to pay
benefits when due. This funding policy applies to the OPERS Defined Benefit Plan and the Other
Postemployment 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, 2011 actuarial valuation,which
became effective July 1, 2013. The state of Oregon and certain schools, community colleges, and political
subdivisions have made unfunded actuarial liability payments, and their rates have been reduced. Employer
contributions for the year ended June 30, 2015 were $225,456, excluding amounts to fund employer specific
liabilities. The rates,presented as a percentage of covered payroll, for the District in effect for the fiscal year
ended June 30, 2015 were:
Chapter 238 -Tier One and Tier Chapter 238A-OPERS Pension
Two Prograin(OPSRP -DB)
General Service 8.78% 6.70°/o
Police and Fire 15.62% 9.43%
21
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At June 30, 2015,the District reported an asset of$596,590 for its proportionate share of the net pension asset.
The net pension asset was measured as of June 30, 2014, and the total pension liability used to calculate the net
pension asset was determined by an actuarial valuation as of December 31, 2013 and rolled forward to June 30,
2014. 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.
Rates of every employer have at least two major components:
1. Normal Cost Rate: 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 seroice.
2. UAL Rate: If system assets are less than the actuarial liability, an Unfunded Actuarial Liability(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 UTier 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 far 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.
At June 30, 2015,the District's proportion was 0.000102521 percent,which is the same as its proportion
measured as of June 30, 2014.
22
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Far the year ended June 30, 2015, the District recognized a negative pension expense of$554,388. At June 30,
2015, the District reports deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources.
Deferred Outflow Deferred Inflow
of Resources of Resources
Net difference between projected and actual earnings on $ - $ 1,151,177
investments
Changes in proportion and difference between employer
contributions and proportionate share of contributions - 30,978
Contributions made to the defined bene�t plan subsequent to
measurement date 225,456 -
Total $ 225,456 $ 1,182,155
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.
Amounts
Subsequent fiscal.�� Reported
2015 -2016 $ (294,529)
2016 -2017 (294,529)
2017 -2018 (294,529)
2018 -2019 (294,529)
2019 -2020 (4,039)
Total $ (1,182,155)
Actuarial Assumptions
The employer contribution rates effective July 1, 2013, through June 30, 2015,were set using the entry age
normal actuarial cost method. For the Tier One/Tier Two component of the OPERS Defined Benefit Plan, this
metbod produced an employer contribution rate consisting of(1) an amount for nonnal 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 anlortized over a fixed period with
new unfunded actuarial accrued liabilities being amortized over 20 years.
For the OPSRP Pension Program coinponent 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.
23
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
For comparison purposes a summary of the economic assumptions used for the December 31, 2011 actuarial
valuation and those approved for the December 31,2012 and 2013 actuarial valuations are shown below:
Assumption December 31,2011 December 31,2012 and
Valuation December 31,2013 Valuations
�Inflation(other than healthcare) 2.75% � No Change
Real wage growth 1.00% No Change
Payroll growth 3.75% No Change
Regular investment return 8.00% 7.75%
Variable account investment return 8.25% Same as regular investment return �
OPSRP administrative expenses $6.6 million/year $5.5 million/year
Healthcare cost inflation rates
■ 2013 rate 7.00% 8.00%
• Ultimate inflation rate 4.50% 4.70%
• Year reaching ultimate rate 2029 2083
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 3151 of even numbered years. The experience study used to
develop assumptions and estimates for the December 2012 actuarial valuation upon which the GASB 68 reporting
data is based was adopted on September 18, 2013.
Mortality assumptions are shown in the table below.
� December 31,2012 and
Assumptions December 31,2011 Valuation December 31,2013
Valuations
Healthy Annuitant Mortality RP2000 Generational,Combined No change �
Active/Healthy Annuitant,Sex
■ School District male White collar, set back 18 months �No collar, set back 24 months
• Other General Service Blended 25%blue collar, set back 12 No change
male(and male months
beneficiarv�
■ Police&Fire male � Blended 33%blue collar,no setback Blended 25%blue collar,
set back 12 months
• School District female White collar, set back 24 months No change �
• Other female(and female White collar,no setback No change
beneficiary)
24
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
December 31, 2012 and
� Assumptions December 31,2011 Valuation December 31, 2013
' Valuations
Disabled Retiree Mortality RP 2000 Static,Combined RP 2000 Static,
� Active/Healthy Annuitant,No Disabled,No Collar,
Collar,Sex distinct Sex distinct
■ Male , Set forward 60 months,minimum of 65%of Disabled table
2.25%
■ Female Set forward 48 months,miniinum of 90%of Disabled table
2.25%
Non-Annuitant Mortality Fixed Percentage of Healthy No change
' Annuitant Mortality
i ■ School District male 75% �70%
■ Other General Service II 85% N No change
male
■ Police&Fire inale 70% 95%
■ School District female 60% No change
■ Other feinale 50% 55%
The long-term expected rate of return on plan investments was developed based on the forward loolcing capital
market economic model. The table below presents the assumptions related to asset allocation and expected rates
of return by major asset class using the 50�'percentile. The target allocation and best estimates of arithmetic real
rates of return for each major class are summarized in the following table:
Asset Class Target Compound Annual Standard
Core Fixed Income 7.20% 4.50% 4.70% 6.60%
Short-Term Bonds 8.00% 3.70% 3.76% 3.45%
Intermediate-Term Bonds 3.00% 4.10% 4.23% 5.15%
High Yield Bonds 1.80% 6.66% 7.21% ] 1.10%
Large Cap US Equities 11.65°/o 7.20% 8.60% 17.90%
Mid Cap US Equities 3.88% 7.30% 9.38% 22.00%
Small Cap US Equities 2.27% 7.45% 10.38% 26.40%
Developed Foreign Equities 14.21% 6.90% 8.73% 20.55%
Emerging Market Equities 5.49°/o 7.40% l 1.51% 31.70%
Private Equity 20.00% 8.26% ]1.95% 30.00%
Hedge Funds/Absolute Return 5.00% 6.01% 6.46°/a 10.00%
Real Estate (Property) 13.75% 6.51% 7.27% 13.00%
Real Estate (REITS) 2.50% 6.76% 8.41% 19.45%
Commodities 1.25% 6.07% 7.71% 19.70%
Portfolio -Gross of Expenses 100.00% 7.62% 8.39% 13.01%
Portfolio-Net of Expenses 100.00% 7.57°/a 8.34% 13.01%
25
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Discount Rate
The discount rate used to measure the total pension liability was 7.75 percent for the De�ned 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 County's Proportionate share of the Net Pension Liability(Asset)to Changes in the
Discount Rate
The following presents the County's proportionate share of the net pension liability(asset) calculated using the
discount rate of 7.75 percent, as well as what the County's proportionate share of the net pension liability would
be if it were calculated using a discount rate that is 1-percentage point lower(6.75 percent) or 1-percentage point
higher(8.75 percent)than the current rate:
1%Decrease Current 1%Increase
Proportionate share of net pension liability(asset) $ 1,206,734 $ (596,590) $ (2,072,421)
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.ore�on•_�ov/pers.
Note 5 - Other Post-Employment Benefits
Oregon Public Employees Retirement System—Retirement Health Insurance Account(RHIA)
Plan Description As a member of Oregon Public Employees Retirement System(OPERS)the District contributes
to the Retirement Health Insurance Account(RHIA) far each of its eligible employees. RHIA is a cost-sharing
multiple-employer defined benefit other postemployment benefit plan administered by OPERS. 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 after January l, 2004. OPERS issues a publicly available financial report that includes financial
statements and required supplementary infonnation. That report may be obtained by writing to Oregon Public
Employees Retirement System,PO Box 23700,Tigard, OR 97281-3700.
26
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Funding PolicX Because RHIA was created by enabling legislation(ORS 238.420), contribution requireinents of
the plan members and the participating employers were established and may be amended only by the Oregon
Legislature. ORS requires that an amount equal to $60 or the total monthly cost of Medicare companion health
insurance premiums coverage,whichever is less, shall be paid from the Retirement Health Insurance Account
established by the employer, and any monthly cost in excess of$60 shall be paid by the eligible retired member in
the manner provided in ORS 238.410. To be eligible to receive this monthly payment toward the premium cost
the member must: (1)have eight years or more of qualifying service in PERS at the time of retirement or receive a
disability allowance as if the member had eight years or more of creditable service in PERS; (2)receive both
Medicare Parts A and B coverage; and(3) enroll in a PERS-sponsored health plan. A surviving spouse or
dependent of a deceased PERS retiree who was eligible to receive the subsidy is eligible to receive the subsidy if
he or she(1)is receiving a retirement benefit or allowance from PERS, or(2)was insured at the time the member
died and the member retired before May 1, 1991.
Participating public employers are contractually required to contribute to RHIA at a rate assessed each
year by OPERS, currently 0.59% of annual covered payroll for Tier 1/Tier 2 employees and 0.50% for OPSRP
employees. The OPERS Board of Trustees sets the employer contribution rate based on the annual required
contribution of the employers (ARC), an amount actuarially determined in accordance with the parameters of
GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to
cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) of the Plan over a
period not to exceed thirty years. The District's contributions to RHIA for which equaled the required
contributions each year were included with the payments for the retirement plan described in Note 4.
Deschutes County Retiree Health Plan
Plan Description The District participates in Deschutes County's single-employer defined benefit postemployment
healthcare plan, Deschutes County Retiree Health Plan which provides medical benefits to eligible retired
employees of Deschutes County,Deschutes Counry Extension and 4-H Service District and Deschutes County 9-
1-1 Service District and their bene�ciaries. The Plan has two components: the Self-Pay Health Plan which is
required by Oregon Revised Statutes 243.303 to provide retirees with group health and dental insurance from the
date of retirement to age 65 at the same rate provided to current employees and the Subsidized Health Plan under
which the District pays all or part of the health care costs for eligible retirees under several collective bargaining
agreements. The criteria to determine whether an employee is eligible include: years of service, employee age,
disability due to line of duty and whether the employee has vested in the respective retirement plan. The District
had 41.5 full-time equivalent current employees at June 30, 2015, compared to 918 in the entire plan.
Fundin�Policy The District funds the benefits on a pay-as-you-go basis. Since the total annual contribution in the
cur►-ent year was less than the Annual Required Contribution, a liability is presented on the District's Statement of
Net Position.
27
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Annual OPEB Cost and Net OPEB Obli a� tion The District's annual other postemployment benefit(OPEB) cost
(expense)is calcula�ed based on its share of the County's annual required contribution of the employer(ARC), an
amount actuarially determined in accardance with the parameters of GASB No. 45. The ARC represents a level of
funding that,if paid on an ongoing basis, is projected to cover nonnal cost each year and amortize any unfunded
actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the
components of the District's annual OPEB cost for the 2015 year, the amount actually contributed to the Plan, and
changes in the District's net OPEB obligation to Deschutes County Retiree Health Plan:
Annual required contribution $ 150,824
Interest on net OPEB obligation 22,315
Adjustment to annual required contribution (37,950)
Annual OPEB cost 135,189
Contributions made (43,789)
Increase in net OPEB obligation 91,400
Net OPEB Obligation, Beginning of Year 770,950
Net OPEB Obligation, End of Year $ 862,350
The District's share of the County's annual OPEB cost, the percentage of annual OPEB cost contributed to the
Plan, and the net OPEB obligation for 2015 was as follows:
Percentage
of Annual Net
Fiscal Annual OPEB Cost OPEB
Year Ended OPEB Cost Contributed Obligation
June 30, 2015 $ 135,189 32.39% $ 862,350
June 30, 2014 $ 176,865 25.74% $ 770,950
June 30, 2013 $ 183,857 21.12% $ 639,617
Funded Status and Fundin�Pro�ress As of June 30, 2015, the most recent actuarial valuation date, the plan was
considered unfunded. The actuarial accrued liability for benefits far the District's portion of the Deschutes County
Retiree Health Plan was $1,446,598, and the actuarial value of assets was $0,resulting in an unfunded actuarial
accrued liability(UAAL) of$1,446,598. Of these amounts, $716,245 related to the Subsidized Health Plan and
$730,353 related to the Self-Pay Health P1an. The covered payroll(annual payroll of active employees covered by
the Plan)was $2,614,576, and the ratio of the UAAL to the covered payroll was 63.77%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about
the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan
and the annual required contributions of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future. The schedule of funding progress,
presented as required supplementary information included below,presents trend information about whether the
actuarial value of plan assets is increasing ar decreasing over time relative to the actuarial accrued liabilities for
benefits.
28
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the
substantive plan(the Plan as understood by the employer and the plan members) and include the types of benefits
provided at the time of each valuation and the histarical pattern of sharing of benefit costs between the employer
and plan members to that point. The actuarial methods and assumptions used include techniques that are designed
to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with the long-term perspective of the calculations.
Assumptions used in calculating the actuarialliabilities associated with the Deschutes County Retiree Health Plan
include a 3%investment return and discount rate; an insurance premium annual trend rate of 8.5% and 8% for the
2015 fiscal year, reducing 0.5%per year until they reach the ultimate trend of 5%; a retiree health claims annual
trend rate of 9.5% and 9% for the 2015 fiscal year reducing by 0.5%per year until they reach the ultimate trend of
5%; and retirement rates used by Oregon PERS adjusted for County trends.
The Entry Age Normal (EAN)Actuarial Cost Method is used to determine the Normal Cost and Actuarial
Accrued Liability. 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 normal cost for that active employee. The sum of these individual
normal costs is the Plan's Normal Cost for the valuation year. The portion of the actuarial present value of all
projected benefits (including benefits for non-active participants)that is not provided for at the valuation date by
the actuarial present value of future normal costs is called the Actuarial Accrued Liability. Under this method, the
actuarial gains (losses), as they occur,reduce (increase)the Unfunded Actuarial Accrued Liability. The Deschutes
County Retiree Health Plan is deemed"unfunded" in accordance with the relevant GASB statements.
The table below presents a schedule of funding progress for the most recent actuarial valuations for the District's
portion of the Deschutes County Retiree Health Plan:
Actuarial
Accrued Unfunded UAAL as a
Actuarial Liability (Overfunded) Percentage
Value of (AAL) ALL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) (b-a/c)
June 30, 2015 $ - $ 1,446,598 $ 1,446,598 0.00% $ 2,614,576 55.33%
June 30, 2014 - 1,851,490 1,851,490 0.00% 2,903,539 63.77%
June 30, 2013 - 1,807,387 1,807,387 0.00% 2,432,804 74.29%
Note 6 - 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.
29
Deschutes County 9-1-1 County Service District
Notes to Financial Statements
June 30, 2015
Note 7 - Intergovernmental Agreement
The District entered into an intergovernmental agreement with the County in fiscal year 2009. Under this
agreement, the District is responsible to pay its share of debt incurred by the County,which was issued to finance
the construction of a building to be used by the District for its operations.
The future minimum payments under this agreement, subject to continued funding are as follows:
Fiscal Year Ending June 30,
2016 $ 255,696
2017 254,696
2018 253,496
2019 252,096
2020 255,496
2021-2025 1,263,275
2026-2028 754,130
Total $ 3,288,885
Note 8 - Adoption of New Standard
As of July 1,2014,the District adopted GASB Statement No. 68,Accounting and Financial Reporting for
Pensions and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the
Measurement Date. The implementation of these standards requires governments calculate and report the cost and
obligations associated with pensions in their financial statements, including additional note disclosures and
required supplementary information. Beginning net position was restated to retroactively report the beginning net
pension liability and deferred outflows of resources related to contributions made after the measurement date as
follows:
Net position at June 30, 2014, as previously reported $ 15,197,118
Net pension liability at June 30, 2014 (1,343,127)
Deferred outflows of resources related to contributions made during the year
ended June 30, 2014 205,277
Net position at July 1, 2014, as restated $ 14,059,268
30
Required Supplementary Information
June 30, 2015
Deschutes County 9-1 -1 County
Service District
www. debaill� .com
Deschutes County 9-1-1 County Service District
Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual—General Fund
Year Ended June 30, 2015
Budgeted Amounts Variance With
Original Final Actual Final Budget
Revenues
Property taxes $ 6,620,015 $ 6,620,015 $ 6,856,163 $ 236,148
Interest 30,600 30,600 39,758 9,]58
Charges for services 360,788 360,788 374,524 13,736
Intergovernmental
Local 60,000 60,000 72,489 12,489
State 786,000 786,000 815,303 29,303
Federal 150,000 150,000 - (150,000)
Total revenues 8,007,403 8,007,403 8,158,237 150,834
Expenditures
Personnel services 5,521,419 5,521,419 4,885,485 635,934
Materials and services 2,077,868 2,077,868 1,987,158 90,710
Capital outlay 350,000 350,000 234,798 ll5,202
Operating contingency 3,468,116 3,468,ll6 - 3,468,ll6
Total expenditures 11,417,403 11,417,403 7,107,441 4,309,962
Excess (deficiency) of revenues
over expenditures (3,410,000) (3,410,000) 1,050,796 4,460,796
Other Financing Uses
Transfers out - - - -
Total other financing uses - - - -
Net Change in Fund Balance (3,410,000) (3,410,000) 1,050,796 4,460,796
Fund Balance, Beginning of Year 3,410,000 3,410,000 3,968,171 558,171
Fund Balance, End of Year $ - $ - 5,018,967 $ 5,018,967
Adjustment to generally accepted accounting principles
(US GAAP)basis:
Deschutes County 9-1-1 Reserve Fund 10,23],015
Fund Balance-US GAAP Basis $ 15,249,982
31
Deschutes County 9-1-1 County Service District
Schedule of Proportionate Share of the Net Pension Liability
Oregon Public Retirement Systet�n Defined Benefit Pension Plan
Last 10 Fiscal Years*
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Proportionate of net
pension liability(asset) N/A N/A N/A N/A N/A N/A N/A N/A 0.01% 0.01%
Proportionate share of the
net pension liability(asset) N/A N/A N/A N/A N/A N/A N/A N/A 1,343,127 $ (596,590)
Covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A 2,432,804 $ 2,903,539
Proportionate share of the
net pension liability(asset) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
as a percentage of its
covered-employeepayroll N/A N/A N/A N/A N/A N/A N/A N/A 55.21% 20.55%
Plan fiduciary net position
as a percentage of the
tota]pension liability N/A N/A N/A N/A N/A N/A N/A N/A 91.97% 103.59%
*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 use for which information is available.
32
Deschutes County 9-1-1 County Service District
Schedule of Employer Contributions
Oregon Public Retirement Systei�n Defined Benefit Pension Plan
Last 10 Fiscal Years*
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Contractually required contributions N/A N/A N/A N/A N/A N/A N/A N/A N/A $ 225,456
Contributions in relation to the
contractually required contribution N/A N/A N/A N/A N/A N/A N/A N/A N/A 225,456
Contribution deficiency(excess) N/A N/A N/A N/A N/A N/A N/A N/A N/A $ -
District's covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A $2,614,576
Contributions as a percentage of
covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A 8.62%
*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 use for which information is available.
33
Deschutes County 9-1-1 County Service District
Notes to Required Supplementary Information
June 30, 2015
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 department of the General Fund—personnel services, materials and services, capital outlay, debt service,
transfers to other funds and operating contingency. For all other funds,the appropriations are established at the
principal object level.
34
Other Supplementary Information
June 30, 2015
Deschutes County 9-1 -1 County
Service District
www. debaill� .com
Deschutes County 9-1-1 County Service District
Schedule of Revenues,Expenditures and Changes in Fund Balance—Budget to Actual- (Reserve Sub-Fund of
General Fund)
Year Ended June 30, 2015
Budgeted Amounts Actual Variance With
Original Final Amounts Final Budget
Revenues
Interest $ 54,000 $ 54,000 $ 78,853 $ 24,853
Total revenues 54,000 54,000 78,853 24,853
Expenditures
Materials and services 1,000 1,000 - 1,000
Capital outlay 5,000 5,000 - 5,000
Total expenditures 6,000 6,000 - 6,000
Excess of revenue over
expenditures 48,000 48,000 78,853 30,853
Net Change in Fund Balance 48,000 48,000 78,853 30,853
Fund Balance, Beginning of Year 10,150,000 10,150,000 10,152,162 2,162
Fund Balance, End of Year $ 10,198,000 $ 10,198,000 $ 10,231,015 $ 33,015
35
Deschutes County 9-1-1 County Service District
Combining Balance Sheet—General Fund and Reserve Sub-Fund
June 30, 2015
Reserve
General Fund Sub-Fund Total
Assets
Cash and investments $ 4,826,005 $ 10,231,015 $ 15,057,020
Property taxes receivable 194,055 - 194,055
Accounts receivable 207,�44 - 207,444
Total assets 5,227,504 10,231,015 15,458,519
Liabilities
Accounts payable 34,691 - 34,691
Total liabilities 34,691 - 34,691
Deferred Inflows of Resources
Unavailable revenue -property taxes l 73,846 - 173,846
Total deferred inflows of resources 173,846 - 173,846
Fund Balances
Assigned for future expenditures - 10,231,015 10,231,015
Unassigned 5,018,967 - 5,018,967
Total fund balances 5,018,967 10,231,015 15,249,982
Total Liabilities, Deferred Inflows of Resources
and Fund Balances $ 5,227,504 $ 10,231,015 $ 15,458,519
36
Deschutes County 9-1-1 County Service District
Combining Statement of Revenues, Expenditures and Changes in Fund Balances—General Fund and Reserve
Sub-Fund
Year Ended June 30, 2015
Reserve
General Fund Sub-Fund Total
Revenues
Property taxes $ 6,856,163 $ - $ 6,856,163
Interest 39,758 78,853 118,611
Charges for services 374,524 - 374,524
Intergovernmental
Local 72,489 - 72,489
State 815,303 - 815,303
Federal - - -
Total revenues 8,158,237 78,853 8,237,090
Expenditures
Personnel services 4,885,485 - 4,885,485
Materials and services 1,987,158 - 1,987,158
Capital outlay 234,798 - 234,798
Total expenditures 7,107,441 - 7,107,441
Excess of Revenues over Expenditures 1,050,796 78,853 1,]29,649
Other Financing Sources (Uses)
Transfers in - - -
Transfers out - - -
Total other financing sources (uses) - - -
Net Change in Fund Balances 1,050,796 78,853 1,129,649
Fund Balances, Beginning of Year 3,968,171 10,152,162 14,120,333
Fund Balances, End of Year $ 5,018,967 $ 10,231,015 $ 15,249,982
37
Deschutes County 9-1-1 County Service District
Schedule of Property Tax Transactions
Year Ended June 30, 2015
Beginning Taxes
Balance and Interest Receivable
Tax Year 2014-15 Levy Adjustments (Discounts) Collections June 30, 2015
2014-2015 $ 6,993,579 $ (25,051) $ (173,584) $ 6,683,235 $ 111,709
2013-2014 127,337 (2,056) 6,160 89,045 42,396
2012-2013 58,979 (196) 5,189 40,092 23,880
2011-2012 33,971 (215) 5,798 30,456 9,098
2010-2011 11,670 (109) 2,568 11,447 2,682
2009-2010 3,615 (181) 660 2,186 1,908
2008-2009 1,963 (50) 239 683 1,469
2oo�-zoos I9s ��� s 21 l�s
2006-2007 174 (3) 3 9 165
Prior 605 - 29 61 573
Totals $ 7,232,088 $ (27,868) $ (152,930) 6,857,235 $ 194,055
Proceeds from sale of land 6,358
Adjustments for Accruals
June 30, 2014 (27,639)
June 30, 2015 20,209
Modified accrual basis tax revenue $ 6,856,163
38
�����
Eic�eBaill :
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CP�4s�.�Uti1NES5.AnVI5t�R5
Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial StatemenYs Performed in Accordance with
Government Auditing Standards
To the Deschutes County Commissioners
Deschutes County 9-1-1 County Service District
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 general fund of Deschutes Counry 9-1-] County Service District(the District) as of and
for the year ended June 30, 2015, and the related notes to the financial statements, which collectively
comprise the District's basic financial statements, and have issued our report thereon dated November 10,
2015.
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)to determine the audit procedures ihat 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 over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies. Given these limitations,
during our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not yet been identified.
www.eidebailly.com 39
877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.344.7150 I. F 208.344.7435 � EOE
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 determination of
financial statement amounts. However,providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly,we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
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 District's internal control and compliance. Accordingly,this communication is not
suitable for any other purpose.
� � �
Boise, Idaho
November 10, 2015
40
Audit Comments and Disclosures Required by State
Regulations
June 30, 2015
Deschutes County 9-1 -1 County
Service District
www. debaill� .com
Deschutes County 9-1-1 County Service District
Audit Comments and Disclosures Required by State Regulations
June 30, 2015
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.
41
�����
Eic�eBaill :
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Y
CP�4s�.�Uti1NES5.AnVI5t�R5
Independent Auditor's Report Required by Oregon State Regulations
To Deschutes County Commissioners
Deschutes County 9-1-1 County Service District
Bend, Oregon
We have audited the basic financial statements of Deschutes County 9-1-1 County Service District(the
District) as of and for the year ended June 30, 2015, and have issued our report thereon dated November
10, 2015. We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the provisions of the Minimum Standards of Audits of Oregon Municipal
Corporations,prescribed by the Secretary of State. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the basic financial statements are free from material
misstatement.
Compliance
As part of obtaining reasonable assurance about whether the District's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,regulations,
contracts, and grants, including provisions of Oregon Revised Statutes as specified in Oregon
Administrative Rules 162-010-0000 through 162-010-0320, as set forth below, noncompliance with
which could have a direct and material effect on the determination of financial statements amounts:
Instances of Non-
OAR Section Compliance identified
162-010-0000 Preface Not Applicable
162-010-0010 Definitions Not Applicable
162-010-0020 General Requirements None noted
162-010-0030 Contracts None noted
162-010-0050 Financial Statements None noted
162-0]0-01 l 5 Required Supplementary Information(RSI) None noted
162-010-0120 Supplementary Financial Information None noted
162-010-0130 Schedule of Revenues,Expenditures/Expenses,and Changes in Fund None noted
Balances/Net Position,Budget and Actual(Each Fund)
162-010-0140 Schedule of Accountabiliry for Independently Elected Officials Not Applicable
162-010-0150 Schedule of Property Tax Transacrions ar Acreage Assessments None noted
162-010-0190 Other Financial or Statistical Information Not Applicable
162-010-0200 Independent Auditor's Review of Fiscal Affairs None noted
162-010-0230 Accounting Records and Internal Control None noted
162-010-0240 Public Fund Deposits None noted
162-010-0250 Indebtedness Not Applicable
162-010-0260 Budget None noted
162-010-0270 Insurance and Fidelity Bonds None noted
162-010-0280 Programs Funded from Outside Sow•ces Not Applicable
162-010-0295 Highway Funds Not Applicable
162-010-0300 Investments None noted
162-010-0310 Public Contracts and Purchasing Not Applicable
162-010-0315 State School Fund Not Applicable
162-010-0316 Public Charter Schools Not Applicable
162-010-0320 Other Comments and Disclosures NoY Applicable
www.eidebailly.com 42
877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.344.7150 I. F 208.344.7435 � EOE
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 test disclosed no instances of
noncompliance that are required to be reported under Minimum Standards for Audits of Oregon
Municipal Corporations,prescribed by the Secretary of State.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the District's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements,but not for the purpose of expressing an opinion on the effectiveness of the District's
internal control over financial reporting. Accordingly,we do not express an opinion on the effectiveness
of the District's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of perfonning 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 over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting 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,inaterial weaknesses may exist that have not yet 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 District's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Minimum Standards for Audits of Oregon Municipal Corporations,prescribed by the Secretary of State,
in considering the District's internal control and coinpliance. Accordingly, this communication is not
suitable for any other purpose.
�
�
For Eide Bailly LLP
Boise Idaho
November 10, 2015
43