Denham Springs Economic Development District · 2020-05-09 · DENHAM SPRINGS ECONOMIC DEVELOPMENT...

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nffMHAM SPRINGS ECONOMIC nFVELOPMENT DISTRICT

REPORT ON AUBIT OF rOMPONENTTTNIT FINA'^'^TAT. STATEMENTS

JUNE 30,201Q

Under provisions of state law, this report is a public document. A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office ofthe Legislative Auditor and, where appropriate, at the office of the parish clerk of court.

Release Date jij/cl/i

CONTENTS

Independent Auditor's Report Page 1 - 2

Required Supplemental Information:

Management's Discussion and Analysis 3 - 9

Govemment-Wide Financial Statements:

Statement of Net Assets 10

Statement of Activities U

Fund Financial Statements:

Balance Sheet - Govemmental Funds 12

Reconciliation ofthe Govemmental Funds Balance Sheet to the Statement of Net Assets 13

Statement of Revenues, Expenditures, and Changes in Fund Balance - Govemmental Fimds 14

Reconciliation ofthe Statement of Revenues, Expenditures, and Changes in Fund Balances of Govemmental Funds to the Statement of Activities 15

Notes to the Financial Statements 16 -30

Independent Auditor's Report on Intemal Control Over Financial Reporting and on Compliance Based on an Audit ofthe Financial Statements Performed in Accordance with Govemment Auditing Standards 31 - 32

Schedule ofFindings and Responses 33

Summary Schedule of Prior Year Findings 34

Hannis T. Bourgeois, LLP Certified Public Accountants

2322 Tremont Drive • Baton Rouge, LA 70809

178 Del Orieans Avenue, Suite C • Denham Springs, LA 70725

Phone: 225.928.4770 • Fax: 225.926.0945 www.htbcpa.com

December 22,2010

INDEPENDENT AUDITOR'S REPORT

To the Board of Commissioners Denham Springs Economic Development District State of Louisiana

We have audited the accompanying financial statements ofthe govemmental activities and each major fund of the Denham Springs Economic Development District, State of Louisiana, *'the District" (a component unit of the City of Denham Springs), as of and for the year ended Jxme 30, 2010, which collectively comprise the District's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe District's management. Our responsibility is to express opinions on these fmancial statements based on our audit. The prior year simunarized comparative infonnation has been derived from the District's June 30, 2009 financial statements and, in our report dated December 28, 2009, we expressed imqualified opinions on the respective financial statements of the govermnental activities and each major fimd.

We conducted our audit in accordance with auditmg 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 ofthe United States. Those standards require that we plan and perforai the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position ofthe govemmental activities and each major fiind ofthe Denham Springs Economic Development District, State of Louisiana as of June 30, 2010, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America.

http://www.htbcpa.com

Denham Springs Economic Development District State of Louisiana

In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2010, on our consideration of the District's intemal control over financial reporting and on our tests of its compliance with certam 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 intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the intemal confrol over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Accoimting principles generally accepted m the United States of America require that the management's discussion and analysis on pages 3 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 Govemmental 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 procediures to the requfred supplementary information in accordance with auditing standards generdly accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the infonnation and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit ofthe basic financial statements. We do not express an opinion or provide any assurance on the infonnation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Respectfiilly submitted,

DENHAM SPRINGS ECONOMIC DEVELOPMENT DISTRICT

MANAGEMENT'S DISCUSSION AND ANALYSIS

JUNE 30,2010

Introduction

The Denham Sprmgs Economic Development District (the District) is pleased to present its Annual Fmancial Report developed in compliance with Govemmental Accounting Standards Board Statement No. 34, Basic Financial Statements - Management's Discussion and Analysis - For State and Local Governments (GASB 34), and related standards.

The District's discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the District's financial activity, (c) identify changes in the District's financial position, (d) identify any significant variations from the District's financial plan, and (e) identify individual fimd issues or concems.

Since Management's Discussion and Analysis (MD&A) is designed to focus on the current year's activities, resulting changes, and currentiy known facts, please read it in conjunction with the District's financial statements included in this report.

Financial Highlights

• At June 30, 2010, the District's liabilities exceeded its assets by $(3,832,229) (net deficit).

• For the year ended June 30, 2010, the District's total net assets (deficit) compared to prior fiscal year net asset (deficit) of ($3,623,092) decreased ($209,137) or 6%. This is mainly attributable to a decrease in sales tax collections resulting from the economic slowdown experienced locally.

• At June 30, 2010, the District's govemmental funds reported combined ending fiind balances of $3,801,367, a decrease of ($1,874,283) for die year. Of this amount, $302,677, is available for spending on Capital Projects begun and $3,498,639 is available to service outstanding debt.

• The District's total liabilities decreased ($2,220,032). Accounts payable decreased ($300,286) because of payment of accmed expenses, accmed interest decreased ($440,411) due to the conversions ofthe 2007 Series B and C and the 2008 Series bonds from taxable to non-taxable and reducing the fixed rate on the 2007 Series C bonds from 10.00% to 8.00% and total bonds payable decreased by ($1,479,335) which is net of amortization of issuance discounts of $10,665. The bonds are being paid from the dedicated portion of the sales tax revenues generated from the District. Additional collateral for these bonds is limited to the "Bass Pro Shops" development. The City of Denham Springs has no liability for these bonds.

Overview of the Annual Financial Report

The financial statement focus is on both the District as a whole and on the major individual'fimds. Both perspectives, govemment-wide and major fimds, allow the user to address relevant questions, broaden a basis for comparison, and enhance the Disfrict's accountability. The statements then proceed to provide an increasingly detailed look at specific fmancial activities.


MANAGEMENT'S DISCUSSION AND ANALYSIS rCONTESiUED^

JUOT,30,2010

The MD&A is intended to serve as an infroduction to the District's basic financial statements, which consists of three components: (1) govemment-wide financial statements, (2) fund financial statements, and (3) notes to the financial statements.

Govemment-Wide Financial Statements

The govemment-wide financial statements are designed to provide readers with a broad overview of the District's finances in a manner similar to a private-sector busmess.

The Statement of Net Assets presents information on the District's assets and liabilities using the accrual basis of accounting, in a maimer similar to the accounting used by private business enterprises. The difference between the assets and liabilities is reported as net assets. Over time, the increases or decreases in net assets and changes in the components of net assets may serve as a usefiil mdicator of whether the financial position ofthe District is improving or deteriorating.

The Statement of Activities presents information showing how the District's net assets changed during the most recent fiscal year, focusing on both the gross and net costs of various activities that are supported by the District's various revenues. This is intended to summarize and simplify the reader's analysis ofthe cost and/or subsidy of various govemmental services.

In both ofthe govemment-wide financial statements, the District's activities are of a single type:

Govemmental activities - All of the District's basic services are reported here, and will be financed primarily through revenues from sales taxes.

The govemment-wide financial statements include die Denham Springs Economic Development District (component unit of the City of Denham Springs, Parish of Livingston, Louisiana) and its blended component unit die Denham Springs Economic Development Corporation only and can be found on pages 10 and 11 of this report.

Fund Financial Statements

A fimd is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, use fund accounting to ensure and demonstrate compliance witii finance-related and legal requfrements. The District uses a single category of funds to account for financial transactions: govemmental fimds. Traditional users of goverrunental fmancial statements will find the fund financial statements presentation more, familiar.


MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTESTUED-)

JUNE 30,2010

Govemmental funds are used to account for all of the District's basic services. However, unlike the govemment-vwde financial statements, govemmental fund financial statements focus on how money flows into and out of those funds and the balances that are left at year-end that are available for spending. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The govermnental fund statements provide a detailed short-term view of the District's general govenunent operations and the basic services it provides. Govemmental fimd information helps to detemiine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs. The basic govemmental fund financial statements can be found on pages 12 through 15 of this report.

Because the focus of govemmental funds is narrower than that of the govemment-wide financial statements, there are differences in the information presented for govemmental funds and for govemmental activities in the govemment-wide financial statements. Review of these differences provides the reader of tiie financiai statements insight on the long-term impact of the District's more immediate decisions on the current use of financial resources. Both the govemmental fimd balance sheet and the govemmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between govemmental fimds and govemmental activities. The reconciliations can be found on pages 13 and 15 of this report.

Notes to the Financial Statements

The notes to the financial statements provide additional mformation that is essential to a full understanding of the data provided in the govemment-wide and fimd financial statements. The notes to the financial statements can be found on pages 16 through 30 of this report.

Govemment-Wide Financial Analysis

As noted earlier, net assets may serve over tune as a useful mdicator of a government's financial position. The following table provides a sunimary of the District's net assets (deficit) for the current year as compared to the prior year. For more detailed information, see the Statement of Net Assets on page 10 of this report.


MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED'̂

Assets: Current and Other Assets Restricted Assets Capital Assets

Total Assets

Liabilities: Current and Other Liabilities Long-Term Debt Outstanding

JUNE 30,2010

Condensed Statement of Net Assets June 30,2010 and 2009

Govemmental Activities 2010

$ 1,134.332 : 3,801,316

39.672.182

44,607,830

258.451 48,181.608

2009 S 882,010

5,987,057 40.167.932

47,036,999

999.148 49,660,943

$ Change $ 252,322

(2,185,741) (495,750)

(2,429,169)

(740,697) (1.479,335)

% Change 29%

(37%) (1%)

(74%) (3%)

Total Liabilities 48,440,059 50.660,091 (2.220,032)

Net Assets: Invested in Capital Assets, Net of Related Debt Unrestricted

Total Net Assets (Deficit)

(1.235.585) (2,596,644)

(1,378,012) (2.245,080)

142,427 (351.564)

$(3,832,229) $ (3,623,092) $ (209,137)

10% (16%)

At June 30,2009, the District has a govemment-wide net deficit.

Approximately 100% of the District's net assets represent resources that are subject to extemal restirictions on how they may be used. The District's Restricted Assets of $3,801,316 can only be used for capital outiay and debt service requirements.

At the end of the current fiscal year, the District was not able to report positive balances in its sole category of net assets, govemmental activities. The same held tme for the prior fiscal year. This was mainly caused by the legal expenses incurred defending the District's bond issuance and the interest expense and fees in the prior year on those bonds, while there was a reduction in sales tax revenues in tiie current year.

The District's activities decreased its total net assets by $209,137, the total decrease attributable to its govemmental activities.

In order to fiirther understand what makes up tiie changes in net assets, tiie following table provides a summary ofthe results of tiie Disfrict's activities for the current year as compared to the prior year. An analysis ofthe primary sources of tiiese changes follows tiie table. For more detailed mformation, see the Statement of Activities on page 11 of this report.

DENHAM SPIUNGS ECONOMIC DEVELOPMENT DISTRICT

MANAGEMENT'S DISCUSSION AND ANALYSIS fCONTINUED)

JUNE 30, 2010

Condensed Statement of Changes in Net Assets For the Years Ended June 30,2010 and 2009

Govemmental Activities

Revenues: Program Revenues:

Charges for Services Rent Miscellaneous

General Revenues: Interest Income Sales Taxes

Total Revenues

Expenses: General Govemment Interest and Fees on Debt Service Depreciation

Total Expenses

Change in Net Assets

Year

Net Assets (Deficit) - End of Year

2010

$ 60,346 12 9

8,427 2,525,298

2,594,092

192,966 1,538,038 1,072,225

2,803,229

(209,137)

(3,623,092)

$ (3,832,229)

2009

$ 62,413 12

109,566

44,593 2,983,899

3,200,483

182,069 3,156,232 1.057,813

4,396,114

(1,195,631)

(2,427,461)

$ (3.623,092)

$ Change

$ (2,067) -

(109,557)

(36,166) (458,601)

(606,391)

10,897 (1,618,194)

14,412

(1,592,885)

986,494

(1,195,631)

$ (209,137)

% Change

(3%) 0%

(100%)

(81%) (15%)

(19%)

6% (51%)

1%

(36%)

83%

(49%)

(6%)

Governmental Activities

The District's governmental net deficit mcreased by $209,137, compared to the prior year endmg net assets,a deficit of ($3,623,092).

Expenses have a net decrease of $1,592,885. This is attributable to $1,618,194 decrease in interest and fees on debt service resulting from converting sales tax mcrement revenue bonds to non-taxable variable rate, offset by mcrease in general govemment of ($10,897) mauily attributable to repairs and maintenance cost, and an increase in depreciation expense of ($14,412) resulting from completed constmction projects.

Program revenues decreased ($111,624). This is mainly attributable to a significant decrease in miscellaneous income of ($109,557) and a decrease of ($2,067) in charges for services.


MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

JUNE 30,2010

General revenues decreased ($494,767). This is attributable to sales tax decrease of ($458,601) and a decrease in interest income of ($36,166). The sales tax decrease is attributable to economic slowdown experienced locally and reduced interest income is attributable to drawdown of bond proceeds while constmction was being completed on the "Bass Pro Shops" project.

Fund Financial Analysis

As noted earlier, the District uses fimd accounting to ensure and demonstrate compliance with finance-related legal reqmrements.

Govemmental Funds

The focus ofthe District's govemmental fimds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District's financing requirements. In particular, unreserved fund balance may serve as a usefiil measure of the District's net resources available for spending at the end ofthe year. The basic govemmental fund financial statements can be found on pages 12 through 15 of this report.

At the end ofthe current year, the District's govemmental funds reported combined ending fund balances of $3,801,367. Of this amoimt, $302,677 is available for spending on Capital Projects m progress, $3,498,639 is available to service outstanding debt and $51 in the Special Revenue Fund.

Capital Assets and Debt Administration

Capital Assets

The District's investment in capital assets for its govemmental activities as of June 30, 2010 amoimts to $39,672,182. The total decrease in the District's investment in capital assets for the current fiscal year was ($495,750). This net decrease is attributable to the capitalized cost of $576,475 m drainage work along Bass Pro Boulevard, offset by depreciation expense of ($1,072,225).

The following table provides a summary ofthe District's capital assets at the end ofthe current year as compared to the prior year. For more detailed information, see Note 4 to the financial statements on page 26 of this report.

Capital Assets (Net of Depreciation)

June 30,2010 and 2009 Govemmental Activities 2010 2009

Land $ 7,303,750 $ 7,303,750 Otiier Capital Assets, Net of Depreciation 32,368,432 32,864.182

Total $39,672,182 $40,167,932


MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

JUNE 30,2010

Long-Term Debt

At June 30, 2010, tiie District had total long-term debt outstanding of $48,510,000. Of tiiis total, $635,000 is due within one year and $47,875,000 is due within greater than one year. The following table provides a summary ofthe District's outstanding debt at the end ofthe current year as compared to the prior year. For more detailed information, see Note 5 to the financial statements on pages 27-29 of this report.

Outstanding Debt June 30,2010 and 2009

Govemmental Activities 2010 2009

Sales Tax Increment Bonds $48,510.000 $50,000,000

Total $48,510,000 $50,000,000

These bonds were issued for the purchase of 24 acres within the 75 acre District and for the constmction ofthe "Bass Pro Shops" project and infrastmcture. The bonds will be paid from the dedicated portion of the sales tax revenues generated from the District. Additional collateral for these bonds is limited to the "Bass Pro Shops" development and the City of Denham Springs has no liability for these bonds.

Other Factors Affecting the District

The District's management approach is fiscally conservative; however, due to the nature ofthe fimds originally created as a result ofthe creation ofthe Bass Pro Sales Tax Incentive District the District issued bonds to finance the development ofthe properties and infrastmcture within the boundaries ofthe District, The District will meet future obligations to redeem bonds with the proceeds of sales taxes collected within the District which is pledged for tiie repayment ofthe bonds.

Contacting the District's Financial Management

This financial report is designed to provide the District's users with a general overview ofthe District's finances and show the District's accountability for the money it receives. Questions regarding this report or requests for additional mformation should be addressed to Denham Springs Economic Development District at Post Office Box 131, Denham Springs, Louisiana 70727-0131. The District's telephone number is (225) 665-8121.

GOVERNMENT-WIDE FINANCIAL STATEMENTS

Exhibit A-1


STATEMENT OF NET ASSETS

JUNE 30, 2010 (Witii Comparative Totals as of June 30, 2009)

Govemmental Activities ASSETS

Cash and Cash Equivalents Receivables Restricted Assets:

Cash and Cash Eqiuvalents Receivables

Deferred Bond Issuance Costs Capital Assets:

Land Otiier Capital Assets, Net of Depreciation

Total Assets

LIABILITIES

Accounts Payable Accmed Interest Non-Current Liabilities:

Due Within One Year Due in More Than One Year

Total LiabiUties

NET ASSETS

Investment in Capital Assets, Net of Related Debt

Unrestricted (Deficit)

Total Net Assets (Deficit)

Total Liabilities and Net Assets

2010

$ 51

16,111

3,310,585

490,731

1,118,170

7,303,750

32,368,432

$ 44,607,830

$ 16,111

242,340

635,000

47,546,608

2009

$ 1,382

3,608

5,365,850

621,207

877,020

7,303,750

32,864,182

$ 47,036,999

$ 316,397

682,751

265,000

49,395,943

48,440,059

(1,235,585) (2,596,644)

(3,832,229)

50,660.091

(1,378.012) (2,245,080)

(3,623,092)

$ 44,607,830 $ 47,036,999

The accompan5dng notes constitute an integral part of this statement, 10

Exhibit A-2


STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2010 (Witii Comparative Totals for tiie Year Ended June 30,2009)

Governmental Activities: Expenses:

General Govemment Interest and Fees on Debt Service Depreciation

Total Expenses

Governmental Activities 2010

192,966 $ 1,538,038 1,072,225

2,803,229

2009

182,069 3,156,232 1,057,813

4,396,114

Program Revenues: Charges for Services Rents Miscellaneous

Net Program Expense

General Revenues: Sales Taxes

Interest Income

Total General Revenues

Change in Net Assets

Net Assets (Deficit) - Beginning of Year

Net Assets (Deficit) - End of Year

60,346 12 9

(2,742,862)

2,525,298 8,427

2,533,725

(209,137)

(3.623.092)

$ (3,832,229) $

62,413 12

109,566

(4,224,123)

2,983,899 44,593

3,028,492

(1,195,631)

(2,427,461)

(3.623,092)

The accompanymg notes constitute an integral part of this statement. 11

FUND FINANCIAL STATEMENTS


BALANCE SHEET -GOVERNMENTAL FUNDS

JUNE 30, 2010 (Witii Comparative Totals as of June 30,2009)

General Fund

ASSETS

Cash and Cash Equivalents Receivables Restricted Assets:

Cash and Cash Equivalents Receivables:

Sales Taxes - Parish Sales Taxes - State Accrued Interest

Due from Other Funds

Total Assets

LIABILITIES

Accounts Payable Due to Other Funds

Total Liabilities

FUND BALANCES Fund Balance:

Reserved for: Capital Projects Debt Service Special Revenue Fund

Total Fund Balances

Total Liabilities and Fund Balances

Denham Springs Economic Capital Capital

Development Projects Projects Corporation Fund 2007 A Fund 2007 B

16,111

51

51

$ 51 $ 16,111

$ 16,162 $

$ 16,111 $

$ 16,162 $

$

156,622

36

$ 156,658

156,658

156,658

$ 156,658

The accompanying notes constitute an integral part of this statement. 12

146,019

Exhibit B-1

Capital Projects

Fund 2008

$ •

Debt Service Fund

$

Total Govemmental Funds

2010 2009

$ 51 $• 1,382 16,111 3,608

145,986 3.007.977 3,310,585 5,365,850

$

$

33

146.019

-

276,814 213,219

629

$ 3.498.639

$

276,814 213,219

698

$ 3,817,478

$ 16,111

$

$

389,501 230.555

1,151 27,565

6,019,612

316,397 27,565

16,111 343,962

3,498,639 302,677

3,498,639 51

1.202,523 4,473,088

39 146,019 3,498,639 3.801,367 5.675,650

$ 146,019 $ 3,498.639 $ 3,817,478 $ 6,019,612

Exhibit B-2


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS

JUNE 30,2010 (Witii Comparative Totals as of June 30,2009)

Fund Balances-Total Govemmental Funds

2010 2009

$ 3,801,367 $ 5,675,650

Amounts Reported for Govemmental Activities in the Statement of Net Assets are Different Because:

Capital Assets Used in Govemmental Activities are not Financial Resources and are not Reported in the Govemmental Funds

Govemmental Cost of Capital Assets Less Accumulated Depreciation

42,139,102 (2,466,920)

41,562,627 (1,394,695)

Deferred Bond Issuance Costs 1,118,170 877,020

Elimination of Interfimd Assets and Liabilities: Due from Other Funds Due to Other Funds

Long-Term Liabilities are not Due and Payable m the Current Period and Therefore are not Reported in the Governmental Funds:

27,565 (27,565)

Sales Tax Increment Revenue Bonds Discount on Bonds Payable Accrued Interest on Bonds Payable

Net Assets (Deficit) of Govemmental Activities

(48,510,000) 328,392

(242,340)

(50,000,000) 339,057

(682,751)

$ (3,832,229) $ (3,623,092)

The accompanying notes constitute an mtegral part of this statement. 13


STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCES •

GOVERNMENTAL FUNDS

FOR THE YEAR. ENDED JUNE 30,2010 (With Comparative Totals for the Year ifended June 30,2009)

General Fund

Revenues: Sales Taxes Inteiest Administrative Fees Rents Miscellaneous

Total Revenues Expenditures:

General Govemment Tax Collection Fees Accounting Fees Legal Fees Engineering Consulting Repairs & Maintenance Traffic Control Costs

Capital Outiay: Construction Costs:

Roads Engineering Fees:

Roads Debt Service:

Principal Interest / Fees Cost of Issuance

Total Expenditures Excess (Deficiency) of

Revenues over Expenditures Other Financing Sources (Uses):

Transfers In Transfers Out

Total Other Financing Sources (Uses)

Net Change in Fund Balances Fund Balances (Deficit) at Beginning of Year Fond Balances at End of Year

Denham Springs Economic

Development Corporation

Capital Projects

Fund 2007 A

$ $

60.346 12

60,358

40.991 19,355

504,251

72,224

Capital Projects

Fund 2007 B

1,031

1,031

3,555 22,267 23,260

191,270 636.821

(576,463)

576,475

576,475

12

39

S 51 $

_

27.565

27,565

27,565

(27,565)

240,352

(239,321)

(711,904)

(711,904)

(95U25)

1,107,883

5 156,658


Exhibit B-3

Capital Projects

Fund 2008

$ 337

Debt Service Fund

$ 2,525.298 7,059

9

Total Governmental Funds

2010

$ 2.525,298 $ 8,427

60,346 12 9

2009

2,983.899 44.593 62,413

12 109.566

337 2.532,366 2,594,092 3.200,483

83,538 83.538 40.991' 22,910 22.267 23,260

100.678 46,408 10,624 23,257 -

504.251

72,224

1,490.000 1,933^54

32,512

1,490.000 1.933,254

275,680

1.102

3.141,134 51.898 32,512 275.680 5,128 51,898 3.539,304 4,468,375 3,328.331

(51,561) (1.006,938) (1,874.283) (127,848)

75.375

75,375

23.814 122,205

$ 146,019

32,512 (23)

32,489

(974.449) 4,473.088

$ 3,498,639

711,927 (711,927)

(1,874,283) 5,675,650

$ 3.801,367

338,240 (338.240)

-

(127,848) 5.803.498

$ 5.675.650

Exhibit B-4


RECONCILL^TION OF THE STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVrnES

FOR THE YEAR ENDED JUNE 30.2010 (Witii Comparative Totals for tiie Year Ended June 30,2009)

2010 2009

Net Change in Fund Balances - Total Govermnental Funds

Amounts Reported for Governmental Activities in the Statement of Activities are Different Because:

$ (1,874,283) $ (127,848)

Govemmental Funds Report Capital Outlays as Expenditures. However, in the Statement of Activities, the Cost of Those Assets is Allocated Over Their Estimated Usefiil Lives and Reported as Depreciation Expense.

Capital Outlay 576,475 Depreciation Expense (1.072.225)

The issuance of long-term debt (e.g. bonds) provides current fmancial resources to govemmental funds, while the repayment ofthe principal of long-term debt consumes the current financial resources of govemmental fimds. Neither transaction, however, has any effect on net assets. Also, govermnental fiinds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.

Bond Principal Repayments on Sales Tax Increment Revenue Bonds 1,490,000 Cost of Issuance of Sales Tax Increment Revenue Bonds 275.680

(1.057.813)

5.128

Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the govemmental funds. Amortization of Cost of Issuance (34.530) Amortization of Discount Paid on Issuance of Sales Tax Increment Revenue Bonds (10,665)

Interest on long-term debt in the Statement of Activities differs fi-om the amount reported in the govemmental funds because interest is recognized as an expenditure in the fiinds when it is due. and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. 440,411 (15,098)

Change in Net Assets of Govemmental Activities $ (209,137) $ (1.195,631)



NOTES TO THE FINANCIAL STATEMENTS

JUNE 30,2010

Note 1 - Organization, Nature of Operations, and Summary of Significant Accounting Policies -

a. Organization and Nature of Operations

The Denham Sprmgs Economic Development District ("the District") was created by an ordinance of the City Council of the City of Denham Sprmgs on December 9, 2003, pursuant to the Louisiana Cooperative Economic Development Law. A board of five members is provided by law. Ilie District encompasses approximately 75 acres within the City of Denham Springs.

The purpose of the District is to secure Sales Tax Increment Revenue bonds which were issued to provide funds for the construction of infrastructure improvements and acqmring, constructing and equipping the Bass Pro retail outlet and restaurant and ancillary items within the District.

Because ofthe required cooperation firom each ofthe following govemmental entities,

City of Denham Springs Livingston Parish School Board

Livmgston Parish Council Livingston Parish Sheriff

Livingston Parish Gravity Drainage District #1 State of Louisiana

the District created the Denham Springs Economic Development Corporation on February 14, 2004. The Corporation's Board is composed of five members reconunended by the City of Denham Springs, two members recommended by the Livingston Parish School Board, one member recommended by the Livingston Parish Council, and one member recommended by the Livuigston Parish Sheriff for a total of mne members. The corporation is a private nonprofit corporation created pursuant to the Louisiana Nonprofit Corporation Law (Chapter 2 of Titie 12 of the Louisiana Revised Statutes) and has been assigned the responsibilities to oversee, supervise and approve the construction of infrastructure improvements and acquiring, constructing, and equipping the Bass Pro retail outlet and restaurant and ancillary items. There was no financial activity within this corporation prior to March of 2007.

b. Reporting Entity

The City of Denham Springs is the financial reporting entity for the City of Denham Springs, Louisiana. The City of Denham Springs appouits the District's goveming body and can impose its will on the District. Accordingly, the District has- been determined to be a component unit ofthe City of Denham Springs.

16


NOTES TO THE FINANCIAL STATEMENTS fCONTINUED^

JUNE 30,2010

The accompanykig financial statements present uafonnation only on the activities and funds maintained by the District and do not present infomiation on the City of Denham Springs, the general govemment services provided by that governmental unit, or the other govemmental units that comprise the financial reporting entity for the City of Denham Springs, Louisiana.

Blended Component Unit Blended component imits, although legally separate entities, are, in substance, part of the government's operations. The Denham Springs Economic Development Corporation was created to serve only the Denham Springs Economic Development District and is govemed by a board approved by the District. Management has determined that the Corporation is to be reported as a blended component unit as a special revenue govemmental fimd within these financial statements.

Discretely Presented Component Unit The District has no discretely presented component units.

c. Basis of Statement Presentation

The accompanying financial statements have been prepared m conformity with generally accepted accounting principles (GAAP) of the United States of America as applicable to govemmental units. The Govemmental Accounting Standards Board (GASB) is tiie accepted standard setting body for establishing govenmiental accounting and financial reportmg principles.

This financial report has been prepared in conformity with GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, issued in June 1999.

d. Fund Accounting

The District uses fund accounting to maintain its financial records and the results of its operations. Fund accoimting is designed to demonstrate legal compliance and to aid management by segregating transactions relatmg to certain govemmental functions or activities.

A fimd is defined as a separate accounting entity with a self-balancing set of accounts. Funds of tiie District are classified as govemmental fimds. Govemmental fimds account for the District's general activities, includmg the collection and disbursement of specific or legally restricted monies, tiie acquisition or constmction of general fixed assets, and the servicing of general long-term debt. The govemmental fimds presented in the financial statements are described as follows and are all considered major govemmental fimds:

17


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED^

JUNE 30,2010

Govemmental Fund Types

General Fund

The General Fund is the general operatmg fimd ofthe District and accounts for all financial resources, except those required to be accounted for m other fiinds.

Special Revenue Fund

The Denham Springs Economic Development Corporation is reported as a special revenue fimd of tiie District and accounts for all financial activities ofthe corporation.

Capital Projects Funds

The capital projects fimds account for financial resources to be used for the acquisition or construction of major capital faciUties.

Debt Service Fund

The Debt Service Fund is used to account for accumulation of resources for the payment of general long-term debt principal, uiterest, and related costs.

e. Measurement Focus/Basis of Accounting

Basic Financial Statements - Government-Wide Financial Statements (GWFS)

The Statement of Net Assets and the Statement of Activities display information about the reportuig govemment as a whole. These statements mclude all the financial activities ofthe Disbict.

The GWFS were prepared using the economic resources measurement focus and the accmal basis of accounting. Revenues, expenses, gains, losses, assets and liabilities resultuig from exchange or exchange-like transactions are recognized when the exchange occurs (regardless of when cash is received or disbursed). Revenues, expenses, gains, losses, assets and tiabilities resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions.

18 .



JUNE 30,2010

The statement of activities demonstrates the degree to which tiie direct expenses of a given fimction or segment are offset by program revenues. Direct expenses are those that are clearly identifiable witii a specific fimction or segment. Program revenues include 1) charges to customers or appUcants who purchase, use, or dkectiy benefit from goods, services, or privileges provided by a given fimction or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular fimction or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

The District does not allocate nidirect expenses,

Basic Financial Statements - Governmental Funds

The accountmg and financial reporting treatment applied to a fimd are determined by its measurement focus. Govemmental Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only ciurent assets and cunent liabilities generally are included on the balance sheet. Operating statements of Govemmental Funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.

Fimd financial statements report detailed information about tiie District. The focus of govemmental fimd financial statements is on major fimds rather than reporting funds by type. The General Fund, the Denham Springs Economic Development Corporation, the 2007 Series A Bond Capital Projects Fund, the 2007 Series B Bond Capital Projects Fund, the 2008 Series Bond Capital Projects Fund and the Debt Service Fund are all considered major fiinds ofthe District

The modified accrual basis of accounting is used by Govemmental Funds. Under tiie modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). Measurable means the amoimt of the transaction can be determined and available means collectible within the current period or soon enough thereafter (generally 60 days) to be used to pay liabilities of the cunent period. Expenditures are recorded when the related fimd liability is incurred. The Govemmental Funds use the following practices in recordmg revenues and expenditures:

Revenues

Sales tax revenues are recorded as revenues when the underlying transaction occurs and meets the availability criteria.

19



JUNE 30.2010

Interest income is composed of interest from interest-bearing demand deposits, and from invested fimds. Interest eamed on cash equivalents, and investments is recorded when the income is both measurable and available.

Intergovemmental revenues are recorded when the income is both measurable and available.

Graat revenues are recorded when the District or Corporation is entitied to reimbursement of expenditures under the terms ofthe grant or agreement.

Charges for services axe recorded as revenue when the fees are collected because they are usually paid at the time the service is rendered.

Other revenues are recorded as revenue when the money is received because they are generally not measurable until actually received.

Expenditures

Principal and interest on general long-term obligations are recognized when due. All other expenditures are generally recognized under the modified accmal basis of accounting when the related fimd liabihty is uicurred.

Other Financing Sources (Uses)

Other financing sources (uses) include the proceeds from the sale of Sales Tax Increment Revenue Bonds and the discount thereon, and transfers between fimds that are not expected to be repaid. Proceeds from the sale of the bonds are recorded when received and transfers are recorded when the transfer is made.

f. Budgetary PoUcy and Accounting

The District is not required to adopt an annual operating budget as aU income and expense are provided for by the bond indenture.

g. Cash and Cash Equivalents

Cash includes petty cash, demand deposits, and interest-bearing demand deposits. Cash equivalents include amounts in time deposits and those investments with original maturities of three months or less. Under state law, the District may deposit fimds in demand deposits, mterest-bearing demand deposits, or time deposits witii state banks organized under Louisiana law or any other state ofthe United States, or under the laws of the United States. Cash and cash equivalents are presented at cost m the District's balance sheet.

20


NOTES TO THE FINANCIAL STATEMENTS rCQNTINUED)

JUNE 30,2010

h. Investments

Investments are limited by Louisiana Revised Statute (R.S.) 33:2955 and the District's investment policy. If the original maturities of time deposits exceed three months, they are classified as mvestments; however, if the origmal maturities are three months or less, they are classified as cash equivalents.

GASB Statement 31 requires the District to report its investments at fair value in the balance sheet except for mvestments in non-participating interest-earning contracts, such as non-negotiable certificates of deposit with redemption terms that do not consider market rates. This type of investment is reported using a cost-based measure, provided that the fau* value of the contract is not significantiy affected by the impafrment of the credit standuig ofthe issuer or other factors.

i. Receivables and Payables

All trade and receivables are shown net of an allowance for uncollectibles, if any.

j . Capital Assets and Depreciation

Capital assets include any land, buildings, major infrastmcture improvements and equipment owned by the District. All capital assets are valued at historical cost, except for donated assets, which are valued at estimated fau: market value at the date of donation. At June 30, 2010, the District had no donated assets.

It is the District's policy to capitalize purchases of moveable property costing at least $1,000 and purchases of real property and major infrastmcture improvements costing at least $5,000.

Depreciation is calculated using the straight line method of depreciation over the following estimated usefiil lives upon completion of constmction:

Assets Years

Buildings 40 Infrastmcture Improvements 10 - 30

21


NOTES TO THE FINANCLU. STATEMENTS fCONTINUED)

JUNE 30, 2010

k. Transfers and Interfiind Loans

Transfers are advances between fimds that are not expected to be repaid. In those cases where repayment is expected, the advances are accounted for through the various "due from" and "due to" accounts m the fimd financial statements. The "due from" and "due to" accounts are eliminated in the govemment-wide fmancial statements.

L Reservations and Designations of Fund Balances

Reserved fimd balances represent tiiose portions of the fimd balance that are eitiier not available for expenditure or legally segregated for a specific future use.

m. Long-Term Obligations

In the govemment-wide financial statements, long-term debt and other long-term obligations are reported as liabilities m the applicable govemmental activities statement of net assets.

In the fiind financial statements, governmental fund types recognize the face amount of debt issued as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

n. Use of Estunates

The preparation of financial statements in conformity v̂ dth generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, acmal results may differ fi^m those estimates.

o. Cooperative Endeavor Agreement

A cooperative endeavor agreement dated December 15, 2006 was entered into by the Denham Springs Economic Development District (the "District"), Denham Springs Economic Development Corporation (the "Corporation"), City of Deaiham Springs, State of Louisiana (the "City"), Law Enforcement District of the Parish of Livingston, State of Louisiana (the "Law Enforcement District"), Livingston Parish School Board, both m its capacity as a Participating Tax Recipient Entity (tiie "School Board") and its capacity as tiie Tax Collector for Sales and Use Taxes in the District (the "Tax Collector"), Parish of Livingston, State of Louisiana (the "Parish"), Special Sales Tax District No. 1 ofthe Parish

22


NOTES TO THE FINANCIAL STATEMENTS fCONTINUEDI

JUNE 30,2010

of Livingston, State of Louisiana (the "School District"), Gravity Drainage District No. 1 ofthe Parish of Livingston, State of Louisiana (the "Gravity Dminage District") and The State of Louisiana (tiie "State"), actuig by and through the Louisiana Department of Revenue (the "Department").

Pursuant to this Cooperative Endeavor Agreement, the Participating Tax Recipient Entities and the State have pledged and dedicated and will irrevocably pledge and dedicate an amount of Aimual Pledged Local Increment and Aimual Pledged State Increment to pay the annual principal of̂ premium, if any, and interest on the Bonds. The District used a portion of the proceeds of the Bonds to purchase the Bass Pro Site, which then has been leased by the District to the Corporation. The District shall deposit a portion of the proceeds of tiie Bonds to the Project Fund held by the Paying Agent/Trustee to pay Project Costs. The Corporation will contract for and monitor construction, of the Project and sublease the Bass Pro Site and Facilities to Bass Pro Denham Springs Development Company, LLC. The Corporation will mortgage its leasehold interest in the Bass Pro Site and Facilities in favor ofthe Paying Agent/Trustee for the benefit of bondholders.

In consideration of the mutual covenants contained, the parties covenant and agree to pledge and dedicate pursuant to the agreement their agreed upon percentages of the sales tax collected within the District as follows:

Entity

City of Denham Springs Livingston Parish

Law Enforcement District Livingston Parish

School Board - General Fund Livingston Parish

School Board -1"** Sales Tax Livingston Parish School Board

District #1 Livingston Parish Council Livingston Parish Gravity

Drainage District #1 State of Louisiana

Sales and Use Tax Percent

1.50%

.50%

1.00%

1.00%

.50% 1.00%

.50% 4.00%

Percent of Sales Tax Pledged to District

71.42857%

71.42857%

100.00000%

0.00000%

100.00000% 71.42857%

71.42857% 50.00000%

10.00%

23


NOTES TO THE FINANCIAL STATEMENTS fCONTINUED^

JUNE 30,2010

in addition, while each ofthe local entities pledge their sales tax revenues until the bonds are paid in full, the State of Louisiana pledged their participation for not more than 20 years from date of closing on the bonds and not to exceed $1,500,000 per year. The bonds issued March 20, 2007 and May 27,2008, each have a maturity schedule of 30 years. No participating local tax recipient entity shall be reqmred to pledge or pay more than the aimual pledged local mcrement attributable to it during any year of the term of the agreement. The term of this agreement shall be effective upon execution by aU parties hereto and shall terminate upon the earlier of (i) payment in fiill by the District of all principal, mterest, premium, if any, and other reqmrements of the bonds or (ii) the final maturity date of the Bonds, which date shall not be extended beyond that final maturity date initially set forth in the Indenture without the prior written consent of all Participating Tax Recipient Entities.

Note 2 - Cash, Cash Equivalents and Investments -

For reportmg purposes, cash and cash equivalents include cash held m trust and a demand deposit account. Under state law the District may deposit funds within a fiscal s^eut bank organized under the laws of the State of Louisiana, any other state in the union, or under the laws of the United States. Further, the District may invest in time deposits or certificates of deposit of state banks organized under Louisiana law and national banks having principal offices in Louisiana.

As confirmed by the fiscal agents, the District had cash totaling $3,310,636 with a carrying amount of $3,310,636. Cash and cash equivalents are stated at cost, which approximates market. These deposits must be secured under state law by federal deposit insurance or the pledge of securities owned by the bank. The market value of the pledged securities plus the federal deposit nisurance must at all times equal the amount on deposit with the bank. The following is a summary of cash and cash equivalents at June 30, 2010:

24


NOTES TO THE FINANCIAL STATEMENTS fCONTTNUED)

Deposits in Bank Accounts per Balance Sheet

Bank Balances (Category 3 Only): a. Uninsured and UncoUateralized b. Uninsured and Collateralized

vrith Securities Held by the Pledgmg Institution

c. Uninsured and Collateralized with Securities Held by the Pledging Institution's Tmst Department or Agent, but not m the Entities Name

Total Category 3 Bank Balances

JUNE 30,2010

Deposits m Bank Accounts Cash

$ 3,310.636

Total Bank Balances (Regardless of Category) $ 3,310,636

Custodial Credit Risk - Deposits. In the case of deposits, this is the risk that m the event of a bank failure, the District's deposits may not be returned to it. As of June 30, 2010, none ofthe District's bank balance of $3,310,636 was exposed to custodial credit risk.

Note 3 - Interfund Receivables and Payables -

The Corporation approves all constmction contract payments and the funds are transferred to the Corporation from the Constmction Funds of the District. Therefore, the accounts payable of the Corporation for incomplete constmction is to be reimbursed by the District's Capital Projects Funds. As a result, the manner m which cash is spent and received creates short-term interfimd loans. There were no interfimd receivables, payables or loans at year end.

25


NOTES TO THE FINANCL^L STATEMENTS fCONTINUED^

JUNE 30,2010

Note 4 - Changes in General Fixed Assets -

A summary of changes in general fixed assets follows:

Balance June 30.2009 Additions Deletions

Total Capital Assets being Depreciated 34,258,877

Less Accumulated Deprecation for: Buildmgs 900.805 Roads 352,025 Utilities 141.865

Total Accumulated Depreciation _ 1.394.695

Total Capital Assets being Depreciated, Net .32.864.182

Total Govemmental Activities Capital Assets, Net $ 40,167,932

576,475

655,131 313,920 103.174

1.072,225

f495.750)

$ (495,750) $

Balance June 30.2010

Governmental Activities:

Capital Assets not being Depreciated:

Land Construction in Progress

Total Capital Assets not being Depreciated

Capital Assets Being Depreciated: Buildings Roads Utilities

$ 7,303,750

7,303,750

26,205,237 5,990,156 2.063.484

$ - $ -

576,475

$ '7,303.750

7,303,750

26,205,237 6,566,631 2.063.484

34,835,352

1,555,936 665,945 245.039

2.466.920

32,368,432

$39,672,182

Depreciation expense was charged to govemmental activities as follows:

Economic Development $ 1,072,225

26


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

JUNE 30,2010

Note 5 - Changes in General Long-Term Debt -

The following is a summary ofthe changes in general long-term debt ofthe District for the year ended June 30,2010:

Due Balance Balance Within

June 30.2009 Additions Reductions June 30.2010 One Year Govemmental Activities:

2007 Series A $5,060,000 $ - $ - $ 5,060,000 $ -2007 Series B 31,180,000 - (1,330,000) 29,850,000 515.000 2007 Series C 5,300,000 - - 5,300,000 2008 Series 8,460,000 - (160,000) 8,300,000 120,000 Adjust for Deferred Amount: For Issuance Discounts (339.057) - 10.665 (328,392) -

Long-Tenn Liabilities $49,660,943 $ - $(1,479,335) $48,181,608 $635,000

At June 30, 2010, long-term debt consists ofthe following Sales Tax Increment Revenue Bonds dated March 1,2007 for tiie 2007 Series and May 27, 2008 for tiie 2008 Series.

On July 16, 2009, the 2007 Series B Bonds and tiie 2008 Series Bonds were converted from taxable variable rate sales tax increment revenue bonds to non-taxable variable rate sales tax increment revenue bonds. In addition, the 2007 Series C Bonds were converted from taxable fixed rate subordinate sales tax increment bonds to non-taxable fixed rate subordinate sales tax increment bonds. The conversion was done in an effort to reduce future interest payments.

Series 2007A Tax-Exempt Variable Rate Sales Tax Increment Revenue Bonds - Variable Interest Rate Interest Only until July 1, 2034 with Final Maturity January 1, 2037 $ 5,060,000

Series 2007B Taxable Variable Rate Sales Tax Increment Revenue Bonds - Converted to Non-Taxable Variable Rate Sales Tax Increment Revenue BondsonJuly 16, 2009; Final Maturity January 1, 2034 29,850,000

(CONTINUED)

27



JUNE 30, 2010

Series 2007C Taxable Fixed Rate Subordinate Sales Tax Increment Revenue Bonds - Interest Rate 10.00%; Converted to Non-Taxable Fixed Rate Subordinate Sales Tax Increment Revenue Bonds - Interest Rate 8.00% on July 16,2009; Interest Only Paid Each Year; Single Bond Maturity January 1,2037 5,300,000

Series 2008 Taxable Variable Rate Sales Tax Increment Revenue Revenue Bonds - Converted to Non-Taxable Variable Rate Sales Tax Increment Revenue Bonds on July 16,2009; Final Maturity January 1, 2037 8.300.000

$48,510,000

These bonds were issued for the purchase of 24 acres within the 75 acre District and for the constmction ofthe "Bass Pro Shops" project and infrastmcture. The bonds will be paid from the dedicated portion of the sale tax revenues generated from the District. Additional collateral for these bonds is linuted to the "Bass Pro Shop" development and the City of Denham Springs has no liability for these bonds.

The aimual requirements to amortize the bonds outstanding using estimated cunent interest rates of 0.27% for tiie Series 2007A, 0.27% for the Series 2007B, and 0.27% for tiie Series 2008 are shown in the following schedule. Other fees related to the Series 2007A, Series 2007B, and Series 2008 bonds that are not included in the following schedule consist of an estimated 1.00% for letter of credit fees and an estimated 0.25% for remarketing fees for all bonds.

(CONTINUED)

28


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

JUNE 30,2010

Year Ending June 30,

2011 2012 2013 2014 2015

2016-2020 2021-2025 2026-2030 2031-2035 2036-2037

2007 Series A Principal

$ ---------

5.060.000

5.060,000 Less: Unamortized Discount

Total

(37,950)

$5,022,050

Year Ending June 30,

2011 2012 2013 2014 2015

2016-2020 2021-2025 2026-2030 2031-2035 2036-2037

Interest

$ 13,615 13,649 13,611 I3,6U 13.611 68,132 68.094 68,094 66,133 9.971

348,521

-

$ 348.521

2007 Series B Principal

$ 515.000 145.000 180,000 250,000 350,000

3,500,000 7,555,000 9,710,000 7.645,000

-

29.850.000

(224.496)

$29,625,504

2008 Series Principal

$ 120,000 130.000 140,000 150.000 160.000 950.000

1,305,000 1,760,000 2,395,000 1.190,000

8.300,000 Less: Unamortized Discount

Total

(65.946)

$8,234,054

Interest

$ 22,156 21.895 21,480 21,099 20.690 96.486 81,714 61,623 34.387 3,846

385.376

-

$ 385.376

Interest

$ 79.028 78.348 77,711 77,151 76,350

359.943 287.813 161,775 37.433 -

1,235.552

-

$ 1.235,552

2007 Series C Principal

S --------

5,300.000

5,300.000

-

$ 5,300,000

Interest

$ 424,000 424,000 424.000 424,000 424,000

2,120,000 2,120,000 2,120,000 2.120,000

848.000

11.448,000

-

$11,448,000

Total Governmental Activities Prbcipal

$ 635,000 275.000 320,000 400,000 510,000

4,450,000 8,860,000

11,470,000 10,040.000 11,550,000

48.510,000

(328,392)

$48,181,608

Interest

$ 538,799 537,892 536,802 535,861 534,651

2.644.561 2,557,621 2,411,492 2,257.953

861,817

13,417,449

-

$ 13,417,449

Total

$ 1,173,799 812,892 856,802

'935,861 1,044,651 7,094.561

11.417,621 13,881.492 12,297,953 12,411,817

61,927,449

(328,392)

$61,599,057

29


NOTES TO THE FINANCL^L STATEMENTS (CONTINUED)

JUNE 30,2010

Note 6 - Lease and Sublease -

On March 20, 2007, the District entered uito a ground lease with the Denham Springs Economic Development Corporation, the 24 acres along with all fijture improvements thereon described as the Bass Pro Project. The Corporation is obligated to sublease the land to Bass Pro Denham Springs Development Company, LLC or an affiliate thereof for the purpose of the development, design, construction and operation of an approximately 150,000 square feet Bass Pro Shops retail outlet and approximately 10,000 square feet restaurant and boat service buildmg with related parkmg and infrastructure.

The term ofthe lease is for 30 years ending midnight March 20,2037 with the option of Bass Pro to renew the sublease for up to six consecutive five year terms at which time lease amounts vrill be negotiated.

As consideration for the lease and sublease the Corporation will sublease the prenuses to Bass Pro for the design and construction of said facilities and agrees to pay the Corporation $1.00 per month (payable annually in advance) and to pay or reunburse the Corporation for expenses and other costs identified as admiiustrative and/or operating expenses inclined as a result of the lease not to exceed $200,000 annually for the first two years of the term of this sublease and not to exceed $100,000 annually thereafter.

Upon payment of all outstanding bond principal and interest and operations of the Bass Pro Shops on a continuous basis without interruption for a period of 20 years from the date of this lease, Bass Pro may exercise its option to purchase said facilities. The purchase price will be equal to the then fair market value of the leased premises subject to any appUcable adjustments and/or Economic Benefit Credits as defined in the Cooperative Endeavor Agreement as accumulated over the years by Bass Pro. Fair value will be determined by an hidependent appraiser who is familiar with property similar to and in the same location as the leased premises. The Louisiana Department of Economic Development shall approve the application of all Economic Benefit Credits to be applied to the purchase price. Bass Pro will also receive benefit for any costs of the facilities funded by Bass Pro because the proceeds of the bonds are not sufficient for construction ofthe entire facility.

Note 7 - Compensation of Board Members -

All Board members of both the District and the Corporation serve without compensation.

30

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLL\NCE BASED ON AN AUDIT OF THE FINANCLVL STATEMENTS PERFORMED IN

ACCORDANCE WTTH GOVERNMENT AUDITING STANDARDS

Hannis T. Botirgeois, LLP Certified Public Accountants

2322 Tremont Drive • Baton Rouge, LA 70809 178 Del Orleans Avenue, Suite C • Denham Springs, b \ 70726

Phone: 225.928.4770 • Fax: 225.926.0945 www.htbcpa.com

December 22,2010

To the Board of Commissioners Denham Springs Economic Development District State of Louisiana

We have audited the financial statements of the govemmental activities and each major fimd of the Denham Springs Economic Development District, State of Louisiana, *4he District" (a component unit of the City of Denham Springs), as of and for the year ended June 30, 2010, which collectively comprise the District's basic financiai statements and have issued our report thereon dated December 22, 2010. 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 ofthe United States.

Internal Control Over Financial Reporting

In planning and performing oui" audit, we considered the District's intemal control over financial reporting as a basis for designing om* auditing procedures for the purpose of expressing our opmion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness ofthe District's intemal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe District's intemal control over financial reporting.

A deficiency in internal conti'ol exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned fimctions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in hiteraal control such that there is a reasonable possibility that a material misstatement ofthe entity's financiai statements will not be prevented, or detected and corrected on a timely basis.

31

http://www.htbcpa.com

Denham Springs Economic Development District State of Louisiana

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in intemal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in intemal control over fijiancial reporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance v«th which could have a direct and material effect on the determmation of financial statement amounts. However, providing an opmion on compliance with those provisions was not an objective of our audit, and accorduigly, we do not express such an opinion. The results of our tests disclosed no mstances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of management, City Council, others within the entity, and the Louisiana Legislative Auditor, and should not be used for any other purpose. Under Louisiana Revised Statue 24:513, this report is distributed by the Legislative Auditor as a public document.

Respectfully submitted.

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SCHEDULE OF FINDINGS AND RESPONSES

JUNE 30,2010

CURRENT YEAR FINDINGS:

Internal Control Finding

None

Compliance Finding

None

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SUMMARY SCHEDtJLE OF PRIOR YEAR FINDINGS

JUNE 30,2010

PRIOR YEAR FINDINGS:

None

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Denham Springs Economic Development District · 2020-05-09 · DENHAM SPRINGS ECONOMIC DEVELOPMENT...

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