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Town of Portsmouth

2013 Financial Statements

April 25, 2014

Presented byJames Wilkinson

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Introduction

Presentation will review the Town’s 2013 Audit Results

Feel free to ask questions at any time

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Town General Fund

Total Fund Balance increased by $706,365

Budgeted change was zero

Unassigned Fund Balance = $5,098,694

Unassigned Fund Balance represents roughly 10% of Operating Budget

Current level is on low-end, but within Town’s fund balance policy target of 8-15% of budgeted expenditures

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Fund Balance: last 14 years

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Results of Operations

Revenues were above budget by $408,798

Property taxes $407,605 above what was anticipated

Tax collection percentages:

• 96.99% collection of current year assessment (93% PY, Budgeted at 96% in current year)

• 100.6% collection of current and prior assessments outstanding when compared to current assessment

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Tax Collections: Percent of current levy

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Results of Operations (continued)

Expenditures were $77,421 above appropriated amounts

Net transfers to other funds under budget by $457,077

Significant unfavorable results in these areas:

• General government

• Public Safety (due to change in reporting of details)

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Net Bonded Debt per capita

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School Department

Unrestricted fund ended year with fund balance of $3,980,737, with $3,922,963 committed for educational purposes

Fund balance is accumulation of all prior year balances, less current year deficit of $328,869

School grant/restricted funds recognized $1,110,330 in activity

Revenues were $22,516 below anticipated amounts

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School Department (continued)

Expenditures were $1,278,899 below appropriations

Transfer to other funds of $1,500,000 – Capital Project Fund

Current year decrease in fund balance of $328,869 recognized

School Lunch Fund recognized net loss of $28,064

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Wind Turbine

Revenues amounted to just $55,120 (down from $324,197 in prior year due to mechanical failure)

Operating expenses were $71,358 (no depreciation recognized due to lack of operation)

Interest expense was $28,344 for the fiscal year

Advances from general fund of $237,355 utilized to fund operations (fund owes general fund and school fund total of $492,297 at year-end)

$199,714 of revenue bond principal retired during year

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Transfer Station

Revenues amounted to $554,501, down from prior year revenue of $582,454

Expenses were $513,140, down from prior year amount of $522,237

Operating income of $41,361

Fund has net assets of $138,716 – with $59,138 of that invested in capital assets used in operations and $42,216 reserved for recycling

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Town Pension Plan

Funded status has varied: 80.1% funded as of 1/1/2000 60.6% funded as of 7/1/2010 61.5% funded as of 7/1/2011 52.7% funded as of 7/1/2012

(significant decrease in expected rate of return on investments reflected – 6.75%, prior rate used was 8%)

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Town Pension Plan (continued)

Funded status has varied (continued): 52.1% funded as of 7/1/2013

• $3.75 million unfunded actuarial accrued liability at 7/1/2013

All actuarially required contributions have been made

Continue taking steps to manage cost of future benefits

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Other Post-Employment Benefits Town plan ended year with accumulated balance

of $402,179 available for benefits Based on latest actuarial data available, combined

unfunded liability is in excess of $17.4 million Combined actuarially determined contribution was

approximately $1,841, 000 while actual contributions aggregated $1,284,000 (69.7% of required contribution)

While full funding of benefits is highly recommended, it is not currently required by law or accounting standards

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Observations and Recommendations

A-133 Single Audit is in progress and all observations, findings and related recommendations will be presented at completion.

Delays in audit process due to personnel turnover. Significant efforts required to close Town accounting records and prepare annual financial statements.

We received complete cooperation from management and staff while conducting the audit.

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Questions?

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Thank You.