IVGID GM’s corner: Our finances are in great position
November 12, 2014
At an upcoming meeting, the Board of Trustees will be reviewing IVGID's Comprehensive Annual Financial Report (CAFR) for the Fiscal Year ended June 30, 2014.
While most everyone is familiar with the District's Budget document, which authorizes the spending of money, the CAFR describes what was actually spent and the status of assets and liabilities at the end of the fiscal year.
All of the documents included in the CAFR comply with accounting requirements promulgated by the Government Accounting Standards Board (GASB) and are reviewed by an outside auditing firm.
The District's auditor, Kafoury, Armstrong & Company, issued an unqualified opinion on the CAFR. An unqualified (clean) opinion, which is the best audit report that can be issued, states that the financial statements are fairly presented in conformity with generally, accepted accounting principles.
IVGID’s financial condition continues to be the envy of public agencies across Nevada with our ever-increasing net position, readily available cash, low debt ratio and no unfunded pension and medical liabilities.
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The auditor also prepared a "Report on Compliance and Internal Control" in relation to the audit of the basic financial statements. The auditors reported no material weaknesses in our controls.
What does the CAFR demonstrate regarding the overall financial condition of the District?
Frankly, IVGID's financial condition continues to be the envy of public agencies across Nevada with our ever-increasing net position, readily available cash, low debt ratio and no unfunded pension and medical liabilities.
KEY POINTS OVER THE PAST FIVE YEARS
Our cash position has remained stable while our net investment in capital assets has increased by over 25 percent from $80.2 million to $101.2 million.
Our annual expenses have increased cumulatively by less than 5 percent, or on average, less than one percent per year.
Our utility revenues have increased by 30 percent to ensure adequate cash flow to not only fund annual operations but to also fund future capital improvement needs.
Our user fee revenues have been relatively stable despite recessionary pressures and less than favorable weather conditions during most of the period.
Our governmental revenues (property tax and combined taxes) are no longer subject to property tax litigation refunds and have shown a steady increase over the entire period.
Our bonded indebtedness has dropped from $2,374 to $1,536 per capita.
Our recreation fee cost to the property owners has remained flat over the entire period.
Our unrestricted cash of $20.2 million is nearly 50 percent greater than our total outstanding indebtedness of $14.0 million.
Since 2008, our outstanding indebtedness has dropped from $27.2 million to $14.0 million.
Our outstanding indebtedness is only 2 percent of our statutory debt capacity.
Our ratio of debt service to total expenditures remains at 10 percent.
The vast majority of our non-utility debt will be retired by 2018.
POST EMPLOYMENT BENEFITS
One of the biggest obligations on most government balance sheets these days is unfunded liabilities for post employment benefit obligations for health insurance and retirement benefits.
A recent study pegged the unfunded liability for members of the Nevada Public Employee Retirement System at approximately $18,000 per capita and $48.5 billion statewide.
In terms of retiree health care, the City of Reno and Washoe County each have over $200 million in unfunded liabilities noted on their balance sheets.
Unlike most local government agencies in Nevada, IVGID does not participate in the Public Employee Retirement System, or pay toward retiree health insurance.
Therefore, our post employment unfunded liabilities are zero!
As the new kid on the block, I can tell you that I feel very fortunate to be working for a District with an outstanding track record of financial performance.
I can also tell you that the citizens of our community can be very proud of the financial condition of the District.
Kudos to the current and previous Board of Trustees and staff for developing such a secure and sustainable financial model.
Despite this track record of exceptional financial performance, we refuse to rest on our laurels and we will continue to endeavor to provide quality service to all of our customers at the lowest cost possible.
In addition, we will continue to excel in financial and capital planning in the most transparent, inclusive manner possible.
During the upcoming budget process, we are going to be reviewing the way we present the budget and the manner in which we allocate revenue among our different expenditures.
We will be doing this to try and make our budget easier to understand while continuing to ensure this tradition of outstanding financial performance.
We remain poised to continue to invest in our community assets and meet our responsibilities to maintain them as well as deliver quality services.
Type the following link into your web browser — tinyurl.com/m6g2zsu — to view the District's CAFR.
"GM's Corner" is a twice-monthly column from Incline Village General Improvement Distinct General Manager Steve Pinkerton, who will discuss issues and offer updates regarding various district matters.
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