HomeMy WebLinkAboutFY 2015 Black Butte Ranch Service District.pdf Financial Statements
As of and For the Year Ended June 30, 2015
Black Butte Ranch Service District
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Black Butte Ranch Service District
Table of Contents
June 30, 2015
IndependentAuditor's Report.................................................................................................................................... 1
Management's Discussion and Analysis....................................................................................................................4
Financial Statements
Statementof Net Position.................................................................................................................................... 10
Statementof Activities......................................................................................................................................... 11
BalanceSheet—Governmental Fund................................................................................................................... 12
Statement of Revenues, Expenditures and Changes in Fund Balances—General Fund...................................... 13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the General
Fund to the Statement of Activities...................................................................................................................... 14
Statement of Revenues, Expenditures and Changes in Fund Balance—Budget to Actual.................................. 15
Notes to Financial Statements.............................................................................................................................. 16
Required Supplementary Information
Schedule of Proportionate Share of the Net Pension Liability ............................................................................39
Schedule of Employer Contributions...................................................................................................................40
Other Supplementary Information
Schedule of Property Tax Transactions...............................................................................................................41
Additional Reports
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.................................................................................................................................................................42
Audit Comments and Disclosures Required by State Regulations..........................................................................44
Independent Auditor's Report Required by Oregon State Regulations...................................................................45
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CPAs 8�I�USINESS ADVISC)RS
Independent Auditor's Report
Deschutes County Commissioners and Managing Board
Black Butte Ranch Service District
Black Butte Ranch, Oregon
Report on the Financial Statements
We have audited the accompanying financial statement of the governmental activities and the general
fund of Black Butte Ranch 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 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 and the respective budgetary comparison for the
general fund 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,Accounring and Financial Reporting for Pensions and GASB Statement No. 71,
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 on pages 4 through 9 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 required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
lcnowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Accounting principles generally accepted in the United States of America require that the budgetary
comparison information, 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.
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, the budgetary comparison
information is fairly stated, in all material respects,in relation to the basic financial statements as a whole.
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 property tax transactions is presented for
purposes of additional analysis and is not a required part of the financial statements. The schedule of
property tax transactions is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements. 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
2
standards generally accepted in the United States of America. In our opinion,the schedule of property tax
transactions is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other 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 financial reporting and on our tests of its
compliance with certain provisions of laws,regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit perfonned 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 of Audits 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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Boise,Idaho
November 10, 2015
3
Black Butte Ranch Service District
Management's Discussion and Analysis
June 30, 2015
As management of Black Butte Ranch Service District,we offer readers of Blacic Butte Ranch Service District's
financial statements this narrative overview and analysis of the financial activities of Black Butte Ranch Service
District, for the fiscal year ended June 30, 2015.
Financial Highlights
• The assets and deferred inflows of reources of Black Butte Ranch Service District exceeded its liabilities
and inflows of resources at June 30, 2015,by $1,001,287, all of which is unrestricted.
• Total net position increased by $254,506.
• As of June 30, 2015,Black Butte Ranch Service District's General Fund reported ending fund balance of
$979,932, all unassigned,which is 102% of total General Fund fiscal year 2014-2015 revenues.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to Black Butte Ranch Service District's basic
financial statements. These basic financial statements comprise three components: 1) government-wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of Black Butte
Ranch Service District's finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of Black Butte Ranch Service 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 Black Butte Ranch Service District is improving or deteriorating.
The Statement of Activities presents information showing how Black Butte Ranch Service 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 far 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 Black Butte Ranch Service District that are supported primarily by taxes and intergovernmental
revenues (governmental activities). The governmental activity of Black Butte Ranch Service District is public
safety.
The government-wide financial statements can be found on pages 10-11 of this report.
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Black Butte Ranch Service District
Management's Discussion and Analysis
June 30, 2015
A comparison of the summarized government-wide statements to the prior year is as follows:
Statements of Net Position
June 30, 2014
June 30, 2015 (as restated) Change
Assets
Current assets $ 1,017,071 $ 911,680 $ 105,391
Capital assets,net 163,082 31,543 131,539
Total assets 1,180,153 943,223 236,930
Deferred Outflows of Resources 54,087 50,644 3,443
Liabilities
Current liabilities 5,150 1,158 3,992
Noncurrent liabilities 42,647 245,928 (203,281)
Totalliabilities 47,797 247,086 (199,289)
Deferred Inflows of Resources 185,156 - 185,156
Net Position
Net investment in capital assets 67,126 31,543 35,583
Unrestricted 934,161 715,238 218,923
Total net position $ 1,001,287 $ 746,781 $ 254,506
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Black Butte Ranch Service District
Management's Discussion and Analysis
June 30, 2015
Statements of Activities
Year Ended
Year Ended June 30, 2014
June 30, 20l 5 (as restated) Change
Program revenues
Charges for services $ 15,400 $ 13,200 $ 2,200
General revenues
Property taxes 915,951 897,984 17,967
Investment earnings 4,737 4,864 (127)
Miscellaneous 22,812 12,939 9,873
Total general revenues 958,900 928,987 29,913
Expenses
Public safery 704,394 848,749 (144,355)
Change in Net Position 254,506 80,238 174,268
Net Position, Beginning of Year 746,781 831,928 (85,147)
Less prior period adjustment for GASB 68 - (165,385) 165,385
Net Position, End of Year $ 1,001,287 $ 746,781 $ 254,506
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Black Butte Ranch 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. Black Butte Ranch Service District, like other state and local government
entities,uses fund accounting to ensure and demonstrate compliance with finance-related legal requiretr�ents.
Black Butte Ranch Service District fund is classified as a governmental fund.
Governmental Funds- Governmental funds are used to account for essentially the same functions as
governmental activities in the government-wide financial statements. However,unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government's near-term financing decisions. A reconciliation from the Governmental
Fund Balance Sheet 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.
Black Butte Ranch Service District reported activity in one governmental fund during the fiscal year ended June
30, 2015. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental
Fund Statement of Revenues, Expenditures and Changes in Fund Balance for the General Fund.
Black Butte Ranch Service District adopts an annual budget for its fund. A budgetary comparison statement has
been provided for this fund to demonstrate compliance with the annual budget.
The Basic Governmental Fund Financial Statements can be found on pages 12-15 of this report.
Notes to the Financial Statements
The notes to the financial statements 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 16-38 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
Black Butte Ranch Service District, assets and deferred outflows of resources exceed liabilities and deferred
inflows of resources by $1,001,287 at June 30,2015.
Approximately 7%of Black Butte Ranch Service District's net position represents its investment in capital assets
(vehicles and tenant improvements)Black Butte Ranch Service District uses these capital assets to provide service
to citizens and these net capital assets are not available for future spending. The remaining 93%of Black Butte
Ranch's net position may be used to meet on-going obligations to citizens and creditors.
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Black Butte Ranch Service District
Management's Discussion and Analysis
June 30, 2015
Black Butte Ranch Service District's net position increased by $254,506 during the year ended June 30, 2015.
This was primarily due to an increase in property taxes as the result of an operating serial levy.
Governmental Activities
Governmental activities resulted in an increase of$254,506 in Black Butte Ranch Service District's net position
during the fiscal year ended June 30, 2015, an increase of$174,268 from the fiscal year ended June 30, 2014.
Financial Analysis of the District's Fund
Black Butte Ranch Service District uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Govermnental Fund The focus of Black Butte Ranch Service District's governmental fund is to provide
information on near-term inflows, outflows and balances of spendable resources. Such information is useful in
assessing Black Butte Ranch 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, $979,932 is the reported ending fund balance for Black Butte Ranch Service District's only
fund,the General Fund,which is an increase of$106,572 from June 30, 2014.
General Fund Budgetary Highlights
There were no differences between the B1ack Butte Ranch Service District's General Fund budget as originally
adopted and the final budget. Actual property taxes were $2,930 more than estimated;total General Fund actual
revenues were more than estimated revenues by$29,479.
Capital Asset and Debt Administration Capital Assets
Black Butte Ranch Service District's investment in capital assets for its governmental activities as of June 30,
2015, is $67,126, net of accumulated depreciation. This investment in capital assets includes vehicles and tenant
improvements.
Additional information on Black Butte Ranch Service District's depreciable capital assets is included in Note 3.
Long-term Debt
Black Butte Ranch 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 Budget Information for the Future
Property tax revenue increased for the fiscal year ended June 30, 2015, due to improvements in the local
economy. The District also has a voter approval serial levy that will generate additional tax revenue through fiscal
year 2015.
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Black Butte Ranch Service District
Management's Discussion and Analysis
June 30, 2015
Requests for Information
This financial report is designed to provide a general overview to those parties interested in Black Butte Ranch
Service District's finances. Questions concerning any of the infonnation provided in this report or requests for
additional information should be addressed to Black Butte Ranch Service District, 13885 Bishops Cap, Black
Butte Ranch, Oregon, 97759.
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Black Butte Ranch Service District
Statement of Net Position
June 30, 2015
Primary
Government-
Governmental
Activities
Assets
Cash and investments $ 982,333
Property taRes receivable 26,326
Prepaid items g,�12
Net pension asset 95,956
Vehicles 235,656
Tenant improvements 6,530
Accumulated depreciation (175,060)
Total assets 1,180,153
Deferred Outflows of Resources
Changes in employer proportion and differences between employer contributions
and proportionate share of contributions 8,231
Contributions subsequent to measurement date 45,856
Total deferred outflows of resources 54,087
Liabilities
Current liabilities
Accounts payable and accrued expenses 5,150
Noncurrent liabilities, due within one year
Accrued compensation absences 42,647
Total liabilities 47,797
Deferred inflows of resources
Differences between projected and actual investment earnings 185,156
Net Position
Net investment in capital assets 67,126
Unrestricted 934,161
Total net position $ 1,001,287
See Notes to Financial Statements 10
Black Butte Ranch Service District
Statement of Activities
Year Ended June 30, 2015
Primary
Government-
Governmental
Activities
Expenses
Public safety $ 704,394
Program Revenues
Charges for services 15,400
Total program revenues 15,400
Net program expenses (688,994)
General Revenues
Property taxes levied for general purposes 915,951
Earnings on investments 4,737
Miscellaneous ZZ�g 12
Total general revenues 943,500
Changes in Net Position 254,506
Net Position, Beginning of Year(as restated) 746,781
Net Position, End of Year $ 1,001,287
See Notes to Financial Statements 11
Black Butte Ranch Service District
Balance Sheet—Governmental Fund
June 30, 2015
Assets
Cash and investments $ 982,333
Property taxes receivable 26,326
Total assets $ 1,008,659
Liabilities
Accounts payable and accrued expenses $ 5,150
Total liabilities 5,150
Deferred Inflows of Resources
Unavailable revenue -property taxes 23,577
Fund Balance
Unassigned 979,932
Total fund balance 979,932
Total Liabilities, Deferred Inflows of Resources and Fund Balance $ 1,008,659
Fund Balance $ 979,932
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported on the Balance Sheet. 67,126
Net pension assets and related deferred outflows of resources are not financial
resources and, therefore, are not reported on the Balance Sheet. 150,043
Prepaid items are reported as expenditures in the period paid and are not reported
as assets on the Balance Sheet. 8,412
Some of the District's taxes will be collected after year-end, but are not currently
available resources and,therefore, are deferred in the funds. 23,577
Deferred inflows of resources are not expenditures expected to be liquidated
with expendable available �nancial resources and, therefore, are not reported
on the Balance Sheet. (185,156)
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported on the Balance Sheet. (42,647)
Net Position of Governmental Activities $ 1,001,287
See Notes to Financial Statements 12
Black Butte Ranch Service District
Statement of Revenues, Expenditures and Changes in Fund Balances—Genera] Fund
Year Ended June 30, 2015
Revenues
Properry taxes $ 921,314
Charges for services 4,737
Interest 15,400
Miscellaneous 22,812
Total revenues 964,263
Expenditures
Personal services 624,612
Materials and services 183,287
Capital outlay 49,792
Total expenditures 857,691
Excess of Revenues over Expenditures 106,572
Net Change in Fund Balance 106,572
Fund Balance, Beginning of Year 873,360
Fund Balance, End of Year $ 979,932
See Notes to Financial Statements 13
Black Butte Ranch 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 $ 106,572
Amounts reported for governmental activities in the statement of activities are different because:
Some expenses are reported in the statement of activities (e.g. accrued
compensated absences) do not require the use of current financial resources and,
therefore, are not reported as expenditures in the governmental fund. 117,524
Some expenditures are deferred and reported as expenses in subsequent periods. 190
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities,the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Capital outlay 49,792
Depreciation (14,209)
Properly 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. (5,363)
Increase in Net Position of Governmental Activities $ 254,506
See Notes to Financial Statements 14
Black Butte Ranch Service District
Statement of Revenues, Expenditures and Changes in Fund Balance-Budget to Actual
Year Ended June 30, 2015
Budgeted Amounts Variance With
Original Final Actual Final Budget
Revenues
Property taxes $ 9]8,384 $ 918,384 $ 921,314 $ 2,930
Interest income ]4,400 14,400 15,400 1,000
Charges for services 2,000 2,000 4,737 2,737
Miscellaneous - - 22,812 22,812
Total revenues 934,784 934,784 964,263 29,479
Expenditures
Personal services 727,975 727,975 624,612 ]03,363
Materials and services 214,500 214,500 183,287 31,213
Capital outlay 45,000 45,000 49,792 (4,792)
987,475 987,475 857,691 129,784
Operating contingency 100,000 100,000 - 100,000
Total expenditures 1,087,475 1,087,475 857,691 229,784
Net Change in Fund Balance (152,691) (152,691) 106,572 259,263
Fund Balance, Beginning of Year 804,326 804,326 873,360 69,034
Fund Balance, End of Year $ 651,635 $ 651,635 $ 979,932 $ 328,297
See Notes to Financial Statements 15
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Note 1 - Organization and Summary of Significant Accounting Policies
The District
The Black Butte Ranch Service District(the District)was formed as a political subdivision of Deschutes County,
Oregon, on October 18, 1989, under the authority of Oregon Revised Statutes Chapter 451 to provide services to
the unincorporated coinmunity of Black Butte Ranch, Oregon. Services provided by the District are currently
limited to law enforcement.
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 a11 of the activities of the government. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. The District has no business-type activities or
fiduciary funds.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or
segment. Program revenues include: 1) charges to customers or applicants who purchase,use ar directly benefit
from goods, services or privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general revenues.
Measurement Focus,Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is
incurred. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. It is the
District's policy to first apply restricted resources when an expense is incurred for purposes for which both
restricted and unrestricted resources 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 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. The District reports only
one governmental fund:
General Fund - The General Fund is utilized to account for the transactions of the District. Property taxes are the
principal sources of revenue. Expenditures are for the operation and administration of the District.
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Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Budget Policy
The District prepares a budget far its fund which meets the requirements of state law. The resolution authorizing
appropriations sets the level by which it is unlawful to over expend appropriations. The levels of control are
personal services, materials and services and capital outlay established by resolution. The detailed budget
document contains more 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 ordinance. The original budget requires hearings before the public,publications in newspapers and
approval by the governing body. Original and supplemental budgets may be modified by the use of appropriation
transfers between the levels of control. Such transfers require approval by the governing body. 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 within the District's reporting entity, as set forth in Section 2100 of Government
Accounting Standards Board's (GASB's), Codification of Govermnental Accounting and Financial Reporting
Standards, 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 majoriry 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 the criterion in the current fiscal year for
inclusion in the District's reporting entity.
Under the above criteria,the District is includable as a component unit in the financial statements of Deschutes
County, since the District's governing board is comprised of the Deschutes County Commissioners. The District
also has a managing board of seven members that oversee operations.
Cash and Investments
Cash includes amounts in demand deposits and amounts in investment pools that have the general characteristics
of demand deposit accounts, such as the State of Oregon Treasurer's Local Governmental Investment Pool.
Capital Assets
Capital assets, consisting primarily of police vehicles, are reported in the government-wide financial statements.
In the governmental fund statements, capital assets are charged to expenditures as purchased. Capital assets are
recorded at historical cost. Donated assets are recorded at estimated fair market value as of the date of the
donation.
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Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Capital assets are defined by the District as assets with an initial cost of$5,000 or more and an estimated useful
life greater than one year. Additions or improvements and other capital outlays that significantly extend the useful
life of an asset, or that significantly increase the capacity of an asset, are capitalized. Other costs incurred for
repairs and maintenance are expensed as incurred. Major outlays for capital assets and improvements are
capitalized as projects are constructed.
Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with
accumulated depreciation reflected in the Statement of Net Position and is calculated on the straight-line basis
over estimated useful lives of five years.
Compensated Absences
Accumulated vested vacation pay is accrued as it is earned. Accrued vacation payable is recorded at actual
accrued hours rimes 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.
Property Taxes/Unavailable Revenue
Property taxes are assessed on a July 1 —June 30 fiscal year basis. The taxes are levied 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 far the District. The District's 2015 fiscal year tax levy was $939,057.
Tax revenue is considered available for expenditure upon receipt by the County,which serves as the intermediary
collection agency. Uncollected property taxes are shown on the general fund balance sheet as receivables.
Collections within sixty days subsequent to year-end have been accrued and the remaining taxes receivable are
recorded as unavailable revenue on the modified accrual basis of accounting, since they are not deemed available
to finance operations of the current period.
Deferred Outflows/Inflows of Resources
In addition to assets, the government-wide statement of net position and proprietary funds 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 in this category the contributions to the PERS retirement plan made subsequent to the
measurement date and the changes in employer proportion.
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 tbat 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 and proprietary funds 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
18
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
government funds report unavailable revenues from property taxes. These amounts are deferred and recognized as
an inflow of resources in the period the amounts become available.
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.
Fund Balance Reporting
The Governmental Accounting Standards Board(GASB)has issued Statement No. 54,Fund Balance Reporting
and Governmental Fund Type Defi-nitions(GASB 54). This Statement 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 list
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 formal action of the District's governing board(the District's highest
level of decision-making authority),
4. Assigned fund balance classification are intended to be used by the government for specific
purposes but do not meet the criteria to be classified as restricted or committed; and,
5. Unassigned fund balance is the residual classification far the government'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 then unassigned amounts when expenditures are incurred for
purposes 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.
19
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
New Accounting 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
Measurei�nent Date. The implet�nentation 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 far 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 9 and the additional disclosures required by these
standards are included in Note 4.
Note 2 - Deposits with Financial Institutions and Investments
Deposits with Financial Institutions
At June 30, 20l 5, the District's bank balances were fully insured by the Federal Deposit Insurance Corporation
(FDIC).
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a banlc failure, the District's deposits may not be returned to it.
State statutes require that all bank deposits in excess of the FDIC or FSLIC insurance amounts be collateralized
through the Oregon State Treasurer's Public Funds Collateralization Program. This program provides a structure
for specified depositories to participate in a shared liability collateral pool. Securities pledged by individual
institutions may range from 10%to 110%of public fund deposits depending on the financial institution's level of
capitalization as determined by its federal regulatory authority. The custodian,Federal Home Loan Bank of
Seattle, is the agent for the depository bank. The securities pledged are designated as subject to the Pledge
Agreement between the depository bank, custodian bank and Office of the State Treasurer(OST) and are held for
the benefit of OST on behalf of the public depositors. The District's funds were held by financial institutions that
participated in the State Treasurer's program and were in compliance with statutory requirements.
Investments
The District's investments are reported at fair value, as discussed in Note 1. At June 30, 2015, the LGIP was not
rated by an independent rating agency. The District's investment in LGIP at June 30, 2015 and related maturity
was as follows:
Maturities 2015
Oregon State Local Government
Investment Pool Daily $ 875,953
Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates beyond the limits provided by state statutes.
20
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Credit Risk
State law limits investments to obligations of the United States Treasury and United States Government agencies
and instrumentalities, certain bankers' acceptances, repurchase agreements, certain high-grade commercial paper
and corporate bonds and obligations of states and municipalities. The District has no investment policy that would
further limit its investrnent choices. The District's investment in the LGIP is not rated. The Pool is not registered
with the SEC as an investment company, and does not operate in a manner consistent with Rule 2a7 of the
Investment Company Act of 1940.
Custodial Credit Risk
For an investment, custodia] credit risk is the risk that, in the event of the failure of the counterparty, the District
will not be able to recover the value of its investments or collateral securities that are in the possession of an
outside party. The investment in the LGIP is not deemed to be a security,which is a transferable financial
instrument that evidences ownership, and is, therefore, not subject to custodial credit risk.
Note 3 - Capital Assets
Capital asset activity for the fiscal year ended June 30, 2015, is as follows:
Balance Balance
June 30,2014 Additions Deletions June 30, 2015
Police vehicles $ 185,864 $ 49,792 $ - $ 235,656
Tenant improvements 6,530 - - 6,530
192,394 49,792 - 242,186
Less accumulated depreciation (160,851) (14,209) - (175,060)
$ 3],543 $ 35,583 $ - $ 67,126
Depreciation expense of$14,209 was charged to public safety.
Note 4 - Participation in Public Employees Retirement System
Name of Pension Plan
The Oregon Public Employees Retirement Systems (PERS or the System) consists of a single cost-sharing
multiple employer defined benefit pension plan.
Description of Benefit Terms
All benefits of OPERS are established by the legislature pursuant to ORS Chapters 238 and 238A.
21
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Tier Once/Tier Two Retirement Benefit Chapter 238: Tier Once/Tier Two Retirement Benefit plan is closed to
new members hired on ar after August 29, 2003.
Pension Benefits
The PERS retirement allowance is payable monthly for life. It may be selected from 13 retirement benefit
options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on
years of service and final average salary. A percentage(2.0 percent for police and fire employees, 1.67
percent for general service employees) is multiplied by the number of years of service and the final average
salary. Benefits may also be calculated under either a formula plus annuity(for members who were
contributing before August 21, 1981) or a money match computation if a greater benefit results.
A member is considered vested and will be eligible at minimum retirement age for a service retirement
allowance if he or she has had a contribution in each of five calendar years or has reached at least 50 years of
age before ceasing employment with a participating employer(age 45 for police and fire members). General
service employees may retire after reaching age 55.Police and fire members are eligible after reaching age
50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58 with fewer
than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55
with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60.
The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29,
2003.
Death Benefits
Upon the death of a non-retired member, the beneficiary receives a hunp-sum refund of the member's
account balance(accumulated contributions and interest). In addition,the beneficiary will receive a lump-
sum payment from employer funds equal to the account balance,provided one or more of the following
conditions are met:
• the member was employed by a PERS employer at the time of death,
• the member died within 120 days after termination of PERS-covered employment,
• the member died as a result of injury sustained while employed in a PERS-covered job, or
• the member was on an official leave of absence from a PERS-covered job at the time of death.
Disability Benefits
A member with 10 or more years of creditable service who becomes disabled from other than duty-connected
causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness
qualifes a member(including PERS judge members)for disability benefits regardless of the length of PERS-
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 Changes after Retirement
Members may choose to continue participation in a variable equities investment account after retiring and
may experience annual benefit fluctuations due to changes in the market value of equity investrnents.
22
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Under ORS 238.360 monthly benefits are adjusted annually through cost-of-living changes. Under current
law,the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25 percent on the first
$60,000 of annual benefit and 0.15 percent on annual benefits above $60,000.
OPSRP Pension Pro r� am (OPSRP DB�
Pension Benefzts
The Pension Program (ORS Chapter 238A)provides benefits to members bired on or after August 29, 2003.
This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated
with the following formula for members who attain normal retirement age:
• Police and fire: 1.8 percent is multiplied by the number of years of service and the final average
salary. Normal retirement age for police and fire members is age 60 or age 53 with 25 years of
retirement credit. To be classified as a police and fire member, the individual must have been
employed continuously as a police and 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 age 65, or age 58 with 30 years of
retirement credit.
A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the
member completed 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.
Death Benefits
Upon the death of a non-retired member,the spouse or other person who is constitutionally required to be
treated in the same manner as the spouse,receives for life 50 percent of the pension that would otherwise
have been paid to the deceased member.
Disability Benefits
A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a
member who becomes disabled due to job-related injury shall receive a disability benefit of 45 percent of the
member's salary determined as of the last full month of employment before the disability occurred.
Benefit Changes after Retirement
Under ORS 238A.210 monthly benefits are adjusted annually through cost-of-living changes. Under current
law,the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25 percent on the first
$60,000 of annual benefit and 0.15 percent on annual benefits above $60,000.
23
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Contributions
PERS funding policy provides for monthly employer contributions at actuarially determined rates. These
contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay
benefits when due. This funding policy applies to the PERS Defined Benefit Plan and the Other Postemployment
Benefit Plans.
Employer contribution rates during the period were based on the December 31, 20ll actuarial valuation as
subsequently modified by 2013 legislated changes in benefit provisions. The rates based on a percentage of
payroll,first became effective July 1, 2013. The state of Oregon and certain schools, community colleges, and
political subdivisions have made lump sum payments to establish side accounts, and their rates have been
reduced.
The employer rate for fiscal year 2014-2015 was 15.03% for Tier 1/Tier 2, 6.42% for OPSRP general employees
and 9.15% for OPSRP Police and Fire employees. The above described amount is in addition to the required 6%
IAP contribution described later. Effective July 1,2015, the rates will be 13.66% for Tier 1/Tier 2, 5.54%for
OPSRP general employees and 9.65% for OPSRP Police and Fire employees based on the December 31, 2013
actuarial valuation.
Employer contributions for the year ended June 30,2015 were$45,856, excluding amounts to fund employer
specific liabilities.
A 10 year schedule of system-wide Defined Benefit Pension Plan Contributions can be found beginning on page
58 of the June 30, 2014 PERS CAFR. A 10 year schedule of the District's Defined Benefit Pension Plan
Contributions can be found in the Required Supplementary Information of this financial statement.
Proportionate Share Allocation Methodology
The basis for the employer's proportion is actuarially determined by comparing the employer's projected long-
term contribution effort to the Plan with the total projected long-term contribution effort of all employers. The
rate for every employer has at least two major components;Normal Cost Rate and Unfunded Actuarial Liability
(UAL) Rate.
The projected long-term contribution effort is esrimated by projecting the present value of all future Normal Cost
Rate Contributions (PVFNC). The PVFNC represents the portion of the projected long-term contribution effort
related to future service.
An 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 PERS funding, employers have three different payrolls,
each with a different Normal Cost Rate:
• Tier 1/Tier 2 payroll
• OPSRP General Service payroll
• OPSRP Police &Fire payroll
24
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
A UAL exists when Plan assets are less than actuarialliability as measured by the Plan's actuarial funding
valuations. 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 assumption. The UAL Rate is the upcoming
year's component of the cumulative amortization schedules, stated as a percent of payroll. The UAL represents
the portion of the projected long-term contribution effort related to past service.
The projected long-term contribution effort is equal to the sum of the PVFNC and the UAL. After the einployer's
projected long-term contribution effort is calculated,that amount is reduced by the value of the employer's
supplemental lump-sum payments, known as side accounts,transition surpluses and pre-SLGRP (State and Local
Government Rate Pool) surpluses. Side accounts decrease the employer's projected long-term contribution effort
because side accounts are effectively pre-paid contributions.
The employer's projected long-term contribution effort does not include contributions toward the current value of
transition liabilities and pre-SLGRP liabilities,which PERS has determined meet the definition of separately
financed employer liabilities.
If the calculation of the employer's projected long-term contribution effort yields a negative number, the
employer's portion of the projected long-tenn contribution effort will be set to zero and the employer will be
allocated no proportionate share of pension amounts.
Pension Plan CAFR
Oregon PERS produces an independently audited CAFR which can be found at:
http://www.oregon.gov/pers/Pages/section/financial_reports/financials.aspx.
Actuarial Valuations
The employer contributions rates effective July 1, 2013, through June 30, 2015,were set using the projected unit
credit actuarial cost method.For the Tier One/Tier Two component of the PERS Defined Benefit Plan,this
method produced an employer contribution rate consisting of(1) an amount for normal cost(the estimated
amount necessary to finance benefits earned by the employees during the current service year), (2) an amount for
the amortization of unfunded actuarial accrued liabilities,which are being amortized over a fiXed period with new
unfunded actuarial accrued liabilities being amortized over 20 years. For the OPSRP Pension Program component
of the PERS Defined Benefit Plan,this method produced an employer contribution rate consisting of(a) an
amount for normal cost(the estimated amount necessary to finance benefits earned by the employees during the
current service year), (b) an amount for the amortization of unfunded actuarial accrued liabilities,which are being
amortized over a fixed period with new unfunded actuarial accrued liabilities being amortized over 16 years.
25
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Actuarial Methods and Assumptions Used in Developing Total Pension Liability
Valuation Date December 31, 2012 rolled forward to June 30, 2014.
Experience Study Report 2012,published September 18, 2013
Actuarial cost method Entry Age Normal
A�nortized as a level percentage of payroll as layered
Amortization method amartization bases over a closed period; Tier One/Tier Two UAL
is amortized over 20 years and OPSRP pension UAL is amortized
over 16 years.
Asset valuation method Market value of assets
Actuarial assumptions:
Inflation rate 2.75 percent
Investment rate of return 7.75 percent
3.75 percent overall payroll growth; salaries for individuals are
Projected salary increases assumed to grow at 3.75 percent plus assumed rates of
merit/longevity increases based on service.
Healthy retirees and beneficiaries:
RP-2000 Sex-distinct, generational per Scale AA,with collar
adjustments and set-backs as described in the valuation.
Active members:
Mortality
Mortality rates are a percentage of healthy retiree rates that vary
by group, as described in the valuation.
Disabled retirees:
Mortality rates are a percentage (65%for males, 90%for
females) of the RP-2000 static combined disabled mortality sex-
distinct table.
Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits 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 31 of even numbered years. The methods and assumptions
shown above are based on the 2012 experience Study which reviewed experience for the four-year period ending
on December 31, 2012.
Discount Rate
The discount rate used to measure the total pension liability was 7.75 percent for the Defined Benefit Pension
Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan
members and those of the contributing employers are made at the contractually required rates, as actuarially
determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected
benefit payments to determine the total pension liability.
26
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Depletion Date Projection
GASB 67 generally requires that a blended discount rate be used to measure the Total Pension Liability(the
Actuarial Accrued Liability calculated using the Individual Entry Age Normal Cost Method). The long-term
expected return on plan investments may be used to discount liabilities to the extent that the plan's Fiduciary Net
Position(fair marlcet value of assets) is projected to cover benefit payments and administrative expenses. A 20-
year high quality(AA/Aa or higher) municipal bond rate must be used for periods where the Fiduciary Net
Position is not projected to cover benefit payments and administrative expenses. Determining the discount rate
under GASB 67 will often require that the actuary perform complex projections of future benefit payments and
asset values. GASB 67 (paragraph 67) does allow for alternative evaluations of projected solvency, if such
evaluation can reliably be made. GASB does not contemplate a specific method for making an alternative
evaluation of sufficiency; it is left to professional judgment.
The following circumstances justify an alternative evaluation of sufficiency for Oregon PERS:
• Oregon PERS has a formal written policy to calculate an Actuarially Determined Contribution(ADC),
which is articulated in the actuarial valuation report.
• The ADC is based on a closed,layered amortization period, which means that payment of the full ADC
each year will bring the plan to a 100%funded position by the end of the amortization period if future
experience follows assumption.
• GASB 67 specifies that the projections regarding future solvency assume that plan assets earn the
assumed rate of return and there are no future changes in the plan provisions or actuarial methods and
assumptions, which means that the projections would not reflect any adverse future experience which
might impact the plan's funded position.
Based on these circumstances, it is the independent plan actuary's opinion that the detailed depletion date
projections outlined in GASB 67 would clearly indicate that the Fiduciary Net Position is always projected to be
sufficient to cover benefit payments and administrative expenses.
Assumed Asset Allocation
Asset Class/Strategy Low Range High Range OIC Target
Cash 0.0% 3.0% 0.0%
Debt Securities 15.0% 25.0% 20.0%
Public Equity 32.5% 42.5% 37.5%
Private Equity 16.0% 24.0% 20.0%
Real Estate 9.5% 15.5% 12.5%
Alternative Equity 0.0% 10.0% 10.0%
Opportunity Portfolio 0.0% 3.0% 0.0%
Total 100%
27
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Long-Term Expected Rate of Return
To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2013
the PERS Board reviewed long-term assumptions developed by both the plan actuary's capital market
assumptions team and the Oregon Investment Council's (OIC) investment advisors. The table below shows the
plan actuary's assumptions for each of the asset classes in which the plan was invested at that time based on the
OIC long-term target asset allocation. The OIC's description of each asset class was used to map the target
allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying
assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on histarical
returns, but instead are based on a forward-looking capital market economic model.
Asset Class Target Compound
Core Fixed Income 7.20% 4.50%
Short-Term Bonds 8.00% 3.70°/a
Intermediate-Term Bonds 3.00% 4.10%
High Yield Bonds 1.80% 6.66%
Large Cap US Equities ll.65% 7.20%
Mid Cap US Equities 3.88% 7.30%
Small Cap US Equities 2.27% 7.45%
Developed Foreign Equities 14.21°/a 6.90%
Emerging Foreign Equities 5.49% 7.40%
Private Equity 20.00% 8.26%
Opportunity Funds/Absolute Return 5.00% 6.01%
Real Estate (Property) 13.75% 6.51%
Real Estate (REITS) 2.50% 6.76%
Comrnodities 7.71% 6.07%
Assumed Inflation-Mean 2.75%
Sensitivity Analysis of Net Pension (Asset)/Liability to Changes in the Discount Rate
1%Decrease Current Discount 1%Increase
Employers'Net Pension Liability/(Asset) -
System-Wide $4,800,084,328 $(2,266,715,991) $(8,243,569,472)
Employers'Net Pension Liability/(Asset) -
Employer-Specific $ 216,029 $ (95,956) $ (348,971)
Changes in Plan Provisions
Senate Bi11822, signed into law in May 2013, eliminated the SB 656/HB 3349 tax remedy payments for benefit
recipients who are not subject to Oregon income tax,because they do not reside in Oregon, and limited the 2013
post-retirement COLA to 1.5% of annual benefit.
Senate Bill 861, signed into law October 2013,limited the post-retirement COLA for years beyond 2013 to ].25%
on the first$60,000 of annual benefit and.I S% on annual benefits above $60,000.
28
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Senate Bi11862, signed into law in October 2013,makes targeted changes such as allowing garnishment of PERS
benefits for convicted felons. These changes do not significantly affect Plan liabilities and were not reflected in
the valuation.
For GASB 67 and 68, the Total Pension Liability must be calculated based on the benefit terms legally in effect as
of the relevant fiscal year-end for the plan. Due to the timing of the benefit changes,this means only Senate Bill
822 is reflected in the June 30, 2013 Total Pension Liability,but that the combined effects of Senate Bills 822 and
861 are reflected in the June 30,2014 Total Pension Liability. The decrease in the Total Pension Liability
resulting from Senate Bill 861, measured as of June 30, 2014, created a($2,423.6) million reduction in Plan
pension liabilities.
Changes in Assumptions
A summary of key changes implemented since the December 31, 2011 valuation are described briefly below.
Additional detail and a comprehensive list of changes in methods and assumptions can be found in the 2012
Experience Study for the System,which was published on September 18, 2013, and can be found at:
http://www.ore o�n.gov/pers/docs/2012%20Exp%20Studv°/o20Updated.pdf
Changes in Actuarial Methods and Allocation Procedures
Actuarial Cost Method—The Actuarial Cost Method was changed from the Projected Unit Credit(PUC) Cost
Metllod to the Entry Age Normal (EAN) Cost Method. This change will allow PERS to use the same cost method
for contribution rate calculations as required for financial reporting under GASB Statements 67 and 68.
Tier UTier 2 UAL Amortization—In combination with the change in cost method,the Board chose to re-amortize
the outstanding Tier 1/Tier 2 UAL as of December 31, 2013 over a closed period of 20 years as a level percentage
of projected payrolL Gains and losses between subsequent rate-setting valuations will be amortized over a closed
20 year period from the valuation in which they are first recognized.
Contribution Rate Stabilization Method
The "grade-in range"over which the rate collar gradually doubles was modified so that the collar doubles as
funded status (excluding side accounts) decreases from 70%to 60% or increases from 130%to 140%.Previously
the ranges had been 80%to 70% and 120%to 130%. The modification to the grade-in range was made in
combination with the change to actuarial cost method, as discussed at the July 2013 PERS Board public meeting.
Allocation of Liability for Service Se_�
For purposes of allocating Tier 1/Tier 2 member's actuarial accrued liability at�nong multiple employers, the
valuation uses a weighted average of the Money Match methodology and the Full Formula methodology used by
PERS when the member retires. The weights are determined based on the prevalence of each formula among the
current Tier 1/Tier 2 population. For the December 31, 2010 and December 3l, 2011 valuations, the Money
Match was weighted 40 percent for General Service members and 10 percent for Police &Fire members. For the
December 31,2012 and December 31, 2013 valuations, this weighting has been adjusted to 30 percent for
General Service members and 5 percent for Police&Fire members, based on a projection of the proportion of
liability attributable to Money Match benefits at those valuation dates.
29
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Chan�es in Economic Assumptions
Investment Return and Interest Crediting—The assumed investrnent return and interest crediting to both regular
and variable account balances was reduced to 7.75%. Previously, the assumed investment return and interest
crediting to regular account balances was 8.00% and the assumed interest crediting to variable account balances
was 8.25%. OPSRP Administrative Expenses—Assumed administrative expenses for the OPSRP System were
reduced from$6.6 million per year to $5.5 million per year. Healthcare Cost Inflarion—The healthcare cost
inflation for the maximum RHIPA subsidy was updated based on analysis performed by the Plan actuary's
healthcare actuaries. This analysis includes the consideration of the excise tax that will be introduced in 20]8 by
the Patient Protection and Affordable Care Act.
Chan�es in Demo�raphic Assumptions
Healthy Mortality—The healthy mortality assumption is based on the RP2000 generational mortality tables with
group-specific class and setback adjustments. The group-specific adjustments have been updated to more closely
match recently observed system experience.
Disabled Mortality—The disabled mortality assumption base was changed from the RP2000 healthy tables to the
RP2000 disabled tables. Gender-specific adjustments were applied to align the assumption with recently observed
system experience.
Disability, Retirement from Active Status, and Termination—Rates for disability,retirement from active status,
and termination were adjusted. Termination rates were changed from being indexed upon age to being indexed
upon duration from hire date.
Changes in Salary Increase Assumptions
Merit Increases, Unused Sick Leave, and Vacation Pay—Assumed merit increases were lowered for School
District members. Unused Sick Leave and Vacation Pay rates were adjusted.
Retiree Healthcare Participation—The RHIA participation rate for healthy retirees was reduced from 48%to 45%.
The RHIPA participation rate was changed from a uniform rate of l 3%to a service-based table of rates.
Plan Fiduciary Net Posirion as a Percentape of Total Pension Liability
See Schedule of Changes in Net Pension (Asset)/Liability on page 57 of the PERS June 30, 2014 CAFR. Also see
Required Supplementary Information Schedule of Defined Benefit Plan Proportionate Share included in this
statement.
Covered Pavroll for Emplo.�
See Schedule of Proportionate Shares which can be found at http://www.oregon.gov/pers/EMP/pages/index.aspx.
30
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Mortality
Healthy Retired Members—The following healthy retired mortality tables were first adopted in the December 31,
2010 valuation, except for the School District male and Police and Fire male table, which was adopted in the
December 31, 2012 valuation.
Basic Table �2000, Generational Combined Active/Healthy Annuitant, Sex
Distinct
School District male No collar set back 24 months
Other General Service male Blended 25 percent blue collar/75 percent white collar, set back
(including male beneficiary) 12 months
Police and Fire male Blended 25 percent blue collar/75 percent white collar, set back
12 months
School District female White collar, set back 24 months
Other female (including
female beneficiar White collar, no set back
Disabled Retired Members—The following disabled retiree mortality rates were first adopted for the December
31, 2012 actuarial valuation.
Basic Table RP 2000 Static Combined Disabled No Collar Sex Distinct
Male 65 ercent of Disabled table
Female 90 ercent of Disabled table
Non-Annuitant Members—The following mortality rates were first adopted for non-annuitant members for the
December 31, 2012 actuarial valuation, except for the Other General Service male and School district female rates
which were adopted in the December 31, 2010 valuation.
Basic Table Percent of Healthy Retired Mortality Tables
School District male 70%
Other General Service male 85
Police and Fire male 95
School District female 60
Other female 55
Ad Hoc Postemployrnent Benefit Changes
See changes in plan provisions.
Chan�e in Proportionate Share
There was no change in proportionate share for fiscal years ending June 30, 2013 and June 30, 2014. Because the
proportionate share is actuarially determined, it was calculated as of the December 31, 2012 valuation date used to
develop results for both the June 30, 2013 and June 30, 2014 Measurement Dates. In future measurement periods,
there will be changes in proportionate shares from the beginning of the period to the end.
31
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Deferred Items
Deferred items are calculated at the system-wide level and are allocated to employers based on their proportionate
share. For fiscal year ending June 30, 2014,there was:
• No difference between expected and actual experience.
• No difference due to changes of assumptions.
• A net difference between projected and actual earnings which is being at�nortized over a closed five year
period. One year's amortization is being recognized in the employer's total pension expense for fiscal
year 2014.
• No changes in proportion.
• A difference between employer contributions and proportionate share of contributions, which is being
amortized over 5.6 years,the remaining service lives of all plan participants,including retirees. One year
of this amortization is included in the employer's total pension expense for fiscal year 2014.
• The amortization schedule on the employer specific actuarial schedule shows the remaining 4 years
amortization for the difference in investment returns and 4.6 years for the difference between
proportionate share and actual contributions.
Independent Auditors Report
The independent auditors report on the Schedule of Allocations (Proportionate Shares) and Schedule of Pension
Amounts will be published on the PERS employer website. http://www.oregon.gov/pers/EMP/pages/index.aspx
Changes in Plan Provisions
Senate Bill 822, signed into law in May 2013, eliminated the SB 656/HB 3349 tax remedy payments for
beneficiaries not subject to Oregon income tax and limited the 2013 post-retirement COLA to 1.5 percent of
annual benefit. The effects of this legislation were reflected in the December 31, 2012 valuation.
Senate Bill 861, signed into law in October 2013, limited the post-retirement COLA for years beyond 2013 to
1.25 percent on the first$60,000 of annual benefit and 0.15 percent on annual benefits above $60,000. The effects
of this legislation were reflected in the December 31, 2012 valuation. The December 31, 2012 valuation was
rolled forward to the measurement date of June 30,2014.
Employer Contributions
PERS includes accrued contributions when due pursuant to legal requirements, as of June 30 in its Statement of
Changes in Fiduciary Net Position. These are normally included in the employer statements cut off as of the fifth
of the following month. PERS does not try to accrue contributions based on paydate.
Beginning with fiscal year 2015,PERS will be able to report cash contributions and UAL side account
amortization by employer, and will publish this information on the PERS Website.Prior to fiscal year 2015,
contributions to the OPSRP Defined Benefit plan were not accounted for by employer, as all employers were
pooled for actuarial purposes.
32
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Elements of Changes in Net Position
Information regarding system-wide changes in net position can be found in the Schedule of Changes in Net
Pension Liability found on page 57, of the June 30, 2014 CAFR at
http://www.ore�on.�ov/pers/Pages/section/financial_reports/financials.aspx
Net Pension Liability
Net pension liabilities are calculated at the system-wide level and are allocated to employers based on their
proportionate share. UAL Side Accounts are included as assets in this calculation. The rate setting actuarial
valuation will continue to allocate the UAL Side Account,transitional or pre-SLGRP liabilities or surpluses as
adjustments to the respective employers.
IAP Plan Description—OPSRP Individual Account Program (OPSRP IAP)
Pension Benefits
An IAP member becomes vested on the date the employee account is established or on the date the rollover
account was established. If the employer makes optional employer contributions for a member,the member
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, the date the IAP is terminated, the date
the active member becomes disabled, or the date the active member dies.
Upon retirement, a member of the OPSRP Individual Account Program(IAP) may receive the amounts in his or
her employee account,rollover account, and vested employer account as a lump-sum payment or in equal
installments over a 5-, 10-, 15-, 20-year period or an anticipated life span option. Each distribution option has a
$200 minimum distribution limit.
The required employee contribution of 6% is paid by the District as a result of a collective bargaining agreement.
Death Benefits
Upon the death of a non-retired member,the beneficiary receives in a lump sum the member's account balance,
rollover account balance, and vested employer optional contribution account balance. If a retired member dies
before the installment payments are completed, the beneficiary may receive the remaining installment payments
or choose a lump-sum payment.
Recordkeeping
PERS contracts with VOYA Financial to maintain IAP participant records.
33
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Changes in Plan Provisions Subsequent to Measurement Date
The Oregon Supreme Court on April 30, 2015, ruled that the provisions of Senate Bill 861, signed into law in
October 2013, that limited the post-retirement COLA on benefits accrued prior to the signing of the law was
unconstitutional. Benefits could be modified prospectively,but not retrospectively. As a result, those who retired
before the bills were passed will continue to receive a COLA tied to the Consumer Price Index that normally
results in a 2%increase annually. PERS will make restoration payments to those benefit recipients.
PERS members who have accrued benefits before and after the effective dates of the 2013 legislation will have a
blended COLA rate when they retire.
This is a change in benefit terms subsequent to the measurement date of June 30,20]4,which will be reflected in
the next year's actuarial valuations. The impact of the Moro decision on the total pension liability and employer's
net pension liability(asset)has not been fully determined. However,PERS' third-party actuaries have estimated
tbe impact of the Moro decision under one possible methodology,which is summarized below.
June 30, 2014 Measurement Date
Prior to Moro After Moro
Net pension liability(asset) $ (95,956) $ ll2,181
Schedule of Pension Amounts under GASB 68
Measurement Date [MD] of the Net Pension
Liabiliry/(Asset) [NPU(A)] June 30, 2014
Actuarial Valuation Date (liability rolled forward to MD) December 31, 2012
The District's proportionate share at prior MD 0.00423325°/o
The District's proportionate share at MD 0.00423325°/o
The District's proportionate share of system NPL/(A) at prior MD $ 216,029
The District's proportionate share of system NPU(A) at MD $ (95,956)
District Pension Expense for Measurement Period
District's proportionate share of system Pension Expense/(Income) $ (88,085)
Net amortization of deferred amounts from:
Changes in proportionate share -
Differences between District contributions and
District's proportionate share of system
contributions 1,789
District's Total Pension Expense/(Income) $ (86,296)
34
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Deferred Deferred Inflow
Outflow of Resources
Net difference between projected and actual earnings on $ - $ 185,156
investments
Changes in proportion and differences between employer
contributions and proportionate share of contributions 8,231 -
Contributions made subsequent to measurement date 45,856 -
Total $ 54,087 $ 185,156
The District's contributions made subsequent to the measurement date will be recognized in the District's pension
expense in the following year.
Amounts reported as deferred outflows or inflows of resources related to pension will be recognized in pension
expense/(income) as follows:
Subsequent fiscal.�� Amounts Reported
2015 -2016 $ (44,311)
2016 -2017 (44,311)
2017 -2018 (44,311)
2018 -2019 (44,311)
2019 -2020 319
Thereafter -
Total $ (176,925)
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) for each of its eligible employees. RHIA is a cost-sharing
multiple-employer defined benefit other postemployinent 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 1, 2004. OPERS issues a publicly available financial report that includes financial
statements and required supplementary information. That report may be obtained by writing to Oregon Public
Employees Retirement System, PO Box 23700, Tigard, OR 97281-3700.
35
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Fundin_�y-Because RHIA was created by enabling legislation ORS 238.420 contribution requirements of
the plan members and the participating employers were established and may be amended only by the Oregon
Legislature. ORS require that an amount equal to $60 or the total monthly cost of Medicare companion healxh
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 musr (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 tune the member
died and the member retired before May 1, l 991.
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 and 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 a��nortize 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 above.
Black Butte Ranch Service District Retiree Health Plan
Plan Description The District does not have a formal post-employment benefits plan for any employee groups.
However,the District is required by Oregon Revised Statutes 243.303 to provide retirees with group health
insurance from the date of retirement to age 65 at the same rate provided to current employees. Although the
District does not pay any portion of the retirees' healthcare insurance, a retired employee could receive an implicit
benefit of a lower healthcare premium which is subsidized among the premium cost of coverage for active
employees. GASB Statement 45 is applicable to the District only to the extent of any implicit rate subsidy. This
"plan" is not a stand-alone plan and, therefore, does not issue its own financial statements.
Fundin�Policy Although the District does not currently have any retirees participating in their health insurance
plan,it will,when applicable, collect insurance premiuins from all retirees each month and deposit them in the
General Fund. The District will then pay healthcare insurance premiums for all retirees at the blended rate for
each family classification. Since the existing coverage is through a multiple-employer plan, given the District's
small size in relation to the other employers, the District's rate is not affected by the age of its participants in the
Plan. Therefore, as there is no implicit benefit considered to be earned by current employees, the District does not
report a liability for any potential accrued liability under GASB Statement No. 45.
36
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Note 6 - Lease Commitment
The District leases facilities from Black Butte Ranch Corporation under an operating lease agreement. The lease
commenced in January 2008 and automatically renewed January 1, 20ll, for a five-year term. The agreement
includes indefinite renewal options of five years each based on the District obtaining additional funding through
voter approved tax levies.
Future minimum payments under the lease are the following for the fiscal years ending June 30:
2016 $ 46,589
2017 47,277
2018 47,277
2019 47,277
2020 47,277
2021 -2025 242,767
$ 478,464
Rental expense on the lease totaled$45,900 for the year ended June 30,2015.
Note 7 - Compensated Absences
The following is a summary of compensated absences transactions for the year ended June 30, 2015:
Balance Balance Due Within
July 1, 2014 Additions Reductions June 30, 2015 One Year
Compensated
absences $ 29,899 $ 42,647 $ (29,899) $ 42,647 $ 42,647
Note 8 - Risk Management
The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
and omissions; injuries to employees and others; and natural disasters. To reduce the risk of incurring material
losses related to the above, the District pays annual insurance premiums to a commercial supplier. Limitations on
claims are as follows: General liability up to $5,000,000 and pollution liability up to $100,000. The District also
carries cammercial insurance for workers' compensation and employee health and accident insurance. Settled
claims from those risks have not exceeded commercial insurance coverage in any of the past three years.
37
Black Butte Ranch Service District
Notes to Financial Statements
June 30, 2015
Note 9 - 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 $ 912,]66
Net pension]iability at June 30, 2014 (216,029)
Deferred outflows of resources related to contributions made during the year
ended June 30, 2014 50,644
Net position at July 1, 2014, as restated $ 746,781
38
Required Supplementary Information
June 30, 2015
Black Butte Ranch Service District
www. debaill� .com
Black Butte Ranch Service District
Schedule of Proportionate Share of the Net Pension Liability
Oregon Public Employee Retirement System Defined Benefit Pension Plan
Last 10 Fiscal Years*
Schedule of Employer's Share of Net Pension Liability
Oregon Public Employee Retirement System
Last 10 Fiscal Years*
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Proportion of the net
pension liability(asset) N/A N/A N/A N/A N/A N/A N/A N/A 0.004% 0.004%
Proportionate share of the
net pension liability(asset) N/A N/A N/A N/A N/A N/A N/A N/A 216,029 (95,956)
Covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A 444,839 418,330
Proportionate share of the
net pension liability(asset)
as a percentage of its
covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A 48.563% -22.938%
Plan fiduciary net position
as a percentage of the
total pension liability N/A N/A N/A N/A N/A N/A N/A N/A 91.974% 103.590°/o
*GASB Statement No. 68 requires ten years of information to be presented in this table. However,until a full 10-
year trend is compiled, the District will present information for those years for which information is available.
39
Black Butte Ranch Service District
Schedule of Employer Contributions
Oregon Public Employee Retirement System Defined Benefit Pension Plan
Last 10 Fiscal Years*
Schedule of Employer's Contributions
Oregon Public Employee Retirement System
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 $ 50,644 $ 46,358
Contributions in relation to
the coptractually
required contribution N/A N/A N/A N/A N/A N/A N/A N/A 50,644 48,147
Contribution deficiency
(excess) N/A N/A N/A N/A N/A N/A N/A N/A - 1,789
Covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A 418,330 432,058
Contributions as a
percentage of covered-
employee payroll N/A N/A N/A N/A N/A N/A N/A N/A 12.11% 11.14%
*GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10-
year trend is compiled, the District will present information for those years for which information is available.
40
Other Supplementary Information
June 30, 2015
Black Butte Ranch Service District
www. debaill� .com
Blacic Butte Ranch 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 Local Option Levy $ 322,821 $ (7,987) $ (1,159) $ 308,520 $ 5,155
2014-2015 616,236 (15,355) (2,207) 588,830 9,844
2013-2014 Local Option Levy 6,139 351 (99) 4,348 2,043
2013-2014 ll,718 442 (189) 8,071 3,900
2012-2013 Local Option Levy 2,757 364 (9) 1,995 1,117
2012-2013 5,264 463 (18) 3,578 2,131
2011-2012 Local Option Levy 1,560 398 (10) 1,530 418
2011-2012 2,979 508 (19) 2,670 798
2010-2011 Local Option Levy 510 165 (5) 552 118
2010-2011 971 214 (9) 953 223
2009-2010 Local Option Levy 111 27 (5) 73 60
2009-2010 287 53 (14) 174 152
2008-2009 Local Option Levy 60 10 (2) 23 45
zoos-zoo9 is9 2� �4� ss i2�
Prior 215 1 (2) 19 195
Totals $ 971,787 $ (20,319) $ (3,751) 921,391 $ 26,326
Land Sale Revenue 963
Adjustments for Accruals
June 30, 2014 (3,789)
June 30, 2015 2,749
Modified accrual basis tax revenue $ 921,314
41
Additional Reports
June 30, 2015
Black Butte Ranch Service District
www. debaill� .com
������
EideBailly
CPAs 8�I�USINESS ADVISC)RS
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
Governinent Auditing Standards
Deschutes County Commissioners and Managing Board
Black Butte Ranch 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 statement of Black Butte Ranch
Service District(the District),which comprise the statement of financial position as of June 30, 2015, and
the related statement of activities for the year then ended, and the related notes to the 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 that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements,but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly,we
do not express an opinion on the effectiveness of the District's interna] control.
A deficiency in inteNnal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, ar a combination of deficiencies, in internal control that is]ess
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 42
877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.3447150 I F 208.344.7435 I 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.
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 result 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
43
Black Butte Ranch Service District
Audit Comi�nents and Disclosures Required by State Regulators
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
reparts. 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.
44
������
EideBailly
CPAs 8�BUSINESS ADVISC�RS
Independent Auditor's Report Required by Oregon State Regulations
To Deschutes County Commissioners
Black Butte Ranch Service District
Bend, Oregon
We have audited the basic financial statements of Black Butte Ranch Service District(the District) as of
and for the year ended June 30, 2015, and have issued our report thereon dated November 10, 20]5. 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 ]62-010-0000 through 162-10-0320, 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
162-010-01]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 Accountability for Independently Elected Officials Not Applicable
162-010-0150 Schedule of Property Tax Transactions or Acreage Assessments None noted
162-010-0190 Other Financial or Statisrical Informarion 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 Not Applicable
162-010-0280 Programs Funded from Outside Sources 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 Not Applicable
www.�ad�b�l�ly.com 45
877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.3447150 I F 208.344.7435 I 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 defzciency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performin�their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness,yet important enough to merit attention by those charged with
governance.
Our consideration of internal control 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.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. 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 entity's internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
�
�
For Eide Bailly LLP
Boise Idaho
November 10, 2015
46