COUNTY OF DEL NORTE,
CALIFORNIA
FINANCIAL STATEMENTS
TOGETHER WITH
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED
COUNTY OF DEL NORTE
Annual Financial Report
For the Year Ended June 30, 2013
Table of Contents
Page
INTRODUCTORY SECTION
County Officials.. . . i
FINANCIAL SECTION
Independent Auditor’s Report. . . 1-4
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position. . . 5
Statement of Activities. . . 6
Fund Financial Statements:
Governmental Funds:
Balance Sheet. . . 7
Reconciliation of the Governmental Funds Balance Sheet to the
Government-Wide Statement of Net Position - Governmental Activities. . . 8
Statement of Revenues, Expenditures, and Changes in Fund Balances.. . . 9
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Government-Wide Statement
of Activities - Governmental Activities. . . 10
Proprietary Funds:
Statement of Net Position.. . . 11
Statement of Revenues, Expenses, and Changes in Net Position. . . 12
Statement of Cash Flows. . . 13-14
Fiduciary Funds:
Statement of Fiduciary Net Position. . . 15
Statement of Changes in Fiduciary Net Position. . . 16
Notes to Basic Financial Statements. . . 17-50
Required Supplementary Information (Unaudited):
Schedule of Funding Progress - Pension. . . 51
Schedule of Funding Progress - Other Postemployment Benefits (OPEB). . . 51-52
Budgetary Comparison Schedule - General Fund. . . 53
Budgetary Comparison Schedule - Road. . . 54
Budgetary Comparison Schedule - Administration Grants. . . 55
Budgetary Comparison Schedule - Housing Rehabilitation. . . 56
Budgetary Comparison Schedule - Mental Health/Substance Abuse. . . 57
Budgetary Comparison Schedule - Mental Health Services Act. . . 58
Budgetary Comparison Schedule - Welfare Assistance. . . 59
Budgetary Comparison Schedule - Welfare Administration.. . . 60
Budgetary Comparison Schedule - 2011 Public Safety Realignment. . . 61
Budgetary Comparison Schedule - Stimson Mitigation. . . 62
COUNTY OF DEL NORTE
Annual Financial Report
For the Year Ended June 30, 2013
Table of Contents
Page
FINANCIAL SECTION (CONTINUED)
Combining Nonmajor Fund Statements:
Nonmajor Governmental Funds:
Combining Balance Sheet.. . . 64
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances. . . 65
Special Revenue Funds:
Combining Balance Sheet. . . 66-68
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances. . . 69-71
Capital Projects Funds:
Combining Balance Sheet. . . 72
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances. . . 73
Debt Service Funds:
Combining Balance Sheet. . . 74
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances. . . 75
Nonmajor Enterprise Funds:
Combining Statement of Net Position. . . 76
Combining Statement of Revenues, Expenses, and Changes in Net Position. . . 77
Combining Statement of Cash Flows. . . 78
Internal Service Funds:
Combining Statement of Net Position. . . 79
Combining Statement of Revenues, Expenses, and Changes in Net Position. . . 80
Combining Statement of Cash Flows. . . 81
Fiduciary Funds:
Trust Funds:
Combining Statement of Fiduciary Net Position - Investment Trust Funds. . . 82
Combining Statement of Changes in Fiduciary Net Position - Investment Trust Funds. . . . 83
Agency Funds:
Combining Statement of Assets and Liabilities - Agency Funds.. . . 84
Combining Statement of Changes in Assets and Liabilities - Agency Funds. . . 85
INTRODUCTORY SECTION
COUNTY OF DEL NORTE
County Officials
For the Year Ended June 30, 2013
BOARD OF SUPERVISORS
Roger Gitlin. . . District 1
Martha McClure . . . District 2
Michael Sullivan. . . District 3
Gerry Hemmingsen. . . District 4
David Finigan.. . . District 5
COUNTY OFFICERS
Administrative Officer. . . Jay Sarina
Agricultural Commissioner .. . . Ken Smith
Assessor. . . Louise Wilson
Auditor/Controller. . . Clinton Schaad
Building Maintenance & Parks. . . Ed Fulton
Chief Probation Officer. . . Thomas Crowell
Child Support Services. . . Debbie Mayhue
Clerk/Recorder.. . . Alissia Northrup
Community Development Director. . . Heidi Kunstal
County Counsel. . . Gretchen Stuhr
District Attorney . . . Vacant
Health and Social Services Director. . . Gary Blatnick
Information Technology Director. . . Dan McCorkle
Sheriff/Coroner. . . Dean Wilson
Treasurer/Tax Collector . . . Dawn Langston
FINANCIAL SECTION
•
Independent Auditor’s Report
•
Basic Financial Statements
•
Required Supplementary Information
To the Board of Supervisors and Grand Jury
County of Del Norte, California
Basis for Qualified Opinion on Governmental Funds
The County has not recorded the salaries payable liability in the fund financial statements. Accounting principles
generally accepted in the United States of America require that obligations for salaries payable be recorded. If
the financial statements were corrected for this departure from accounting principles generally accepted in the
United States of America, the General fund liabilities would be increased by $286,884, the Mental Health
Services Act fund liabilities would be increased by $21,822, the Welfare Administration fund liabilities would
be increased by $116,918 and the aggregate remaining Other Governmental Funds liabilities would be increased
by $120,743.
Qualified Opinion
In our opinion, except for the effects of the matter described in the “Basis for Qualified Opinion on Governmental
Funds” paragraph, the financial statements referred to above present fairly, in all material respects, the financial
position of the General fund, the Mental Health Services Act fund, the Welfare Administration fund and the
aggregate remaining Other Governmental Funds of the County as of June 30, 2013, and the changes in financial
position thereof for the year the ended in accordance with accounting principles generally accepted in the United
States of America.
Unmodified Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, and each major fund other than the
General fund, the Mental Health Services Act fund, and the Welfare Administration fund and other then the
aggregate remaining Other Governmental Funds information of the County, as of June 30, 2013, and the
respective changes in financial position and, where applicable, cash flows thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As described in Note 2A to the basic financial statements, errors were detected in prior year net position and fund
balance. The correction of these errors resulted in the restatement of beginning net position/fund balance for the
year ended June 30, 2013.
As described in Note 1R to the financial statements, in 2013, the County implemented Governmental Accounting
Standards Board (GASB) Statements No. 60, 61, 62, 63 and 66 and implemented GASB 65 in advance during
the fiscal year 2013. Among these new GASB Statements, GASB Statement No. 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position; and GASB Statement No.
65, Items Previously Reported as Assets and Liabilities, have significant impact over the County of Del Norte’s
financial statements. Our opinion is not modified with respect to these matters.
-2-To the Board of Supervisors and Grand Jury
County of Del Norte, California
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Schedule of Funding
Progress and 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. 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 knowledge 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.
Management has omitted the Management’s Discussion and Analysis that accounting principles generally
accepted in the United States of America require to be presented to supplement the basic financial statements.
Such missing 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. Our opinion on the basic
financial statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County’s basic financial statements. The introductory section and combining nonmajor fund
financial statements are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
The combining nonmajor fund financial statements are the responsibility of management and were derived from
and relate directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information directly to
the underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the combining nonmajor fund financial statements are
fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
-3-Basic Financial Statements
COUNTY OF DEL NORTE
Statement of Net Position
June 30, 2013
Governmental Business-Type
Activities Activities Total ASSETS
Cash and investments $ 17,692,660 $ 1,219,403 $ 18,912,063
Cash with fiscal agent 736,326 - 736,326
Receivables:
Accounts 1,357,330 826 1,358,156
Taxes and assessments 787,060 1,734,279 2,521,339
Intergovernmental 5,654,427 3,702 5,658,129
Prepaid costs 72,474 - 72,474
Prepaid insurance 601,152 - 601,152
Deposits receivable 200,000 - 200,000
Inventory 87,854 - 87,854
Restricted cash and investments 380,199 - 380,199
Loans receivable 8,420,121 - 8,420,121
Sublease receivable 2,927,832 - 2,927,832
Capital assets:
Non-depreciable 4,796,439 - 4,796,439
Depreciable, net 38,401,996 6,564,826 44,966,822
Total capital assets 43,198,435 6,564,826 49,763,261
Total Assets 82,115,870 9,523,036 91,638,906
LIABILITIES
Accounts payable 1,882,270 206,178 2,088,448
Accrued salaries and benefits 528,059 - 528,059
Accrued interest payable - 35,121 35,121
Deposits payable 343,962 - 343,962
Due to other governments 6,901,171 - 6,901,171
Long-term liabilities:
Due within one year 2,731,179 290,016 3,021,195
Due in more than one year 22,538,320 1,510,677 24,048,997
Total Liabilities 34,924,961 2,041,992 36,966,953
NET POSITION
Net investment in capital assets 37,913,264 6,162,753 44,076,017
Restricted for:
General government 100,990 - 100,990
Public protection 1,101,725 - 1,101,725
Public ways and facilities 13,233,893 - 13,233,893
Public assistance 4,448,665 - 4,448,665
Health and sanitation 4,806,987 4,806,987
Future claims 441,182 - 441,182
Unrestricted (14,855,797) 1,318,291 (13,537,506)
Total Net Position $ 47,190,909 $ 7,481,044 $ 54,671,953
The notes to the basic financial statements are an integral part of this statement.
-5-COUNTY OF DEL NORTE
Statement of Activities
For the Year Ended June 30, 2013
Program Revenues Changes in Net Position Operating Capital
Charges for Grants and Grants and Functions/Programs: Expenses Services Contributions Contributions Governmental activities:
General government $ 13,483,539 $ 1,367,377 $ 8,907,217 $ 40,867
Public protection 18,652,373 2,660,272 12,056,308
Public ways and facilities 5,175,304 79,324 2,428,038 102,229
Public assistance 25,450,589 134,018 14,446,275
Health and sanitation 4,602,211 179,297 5,171,253 Culture and recreation 440,910 87,736 - Education 2,977 - - Interest on long-term debt 392,341 - - Total Governmental Activities 68,200,244 4,508,024 43,009,091 143,096
Business-Type activities:
Water and sewer 353,534 221,313 - Flood control 8,444 7,302 140 Total Business-Type Activities 361,978 228,615 140
Total $ 68,562,222 $ 4,736,639 $ 43,009,231 $ 143,096
General revenues: Taxes:
Property taxes Sales and use taxes Transient occupancy taxes Property transfer taxes Timber yield taxes Franchise fees
Grants and contributions - unrestricted Tobacco settlement
Interest and investment earnings Miscellaneous
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning
Prior period adjustment
Net Position - Beginning, Restated Net Position - Ending
The notes to the basic financial statements are an integral part of this statement.
-6-Net (Expense) Revenue and Changes in Net Position
Governmental Business-Type
Activities Activities Total
(3,168,078) $ $ - $ (3,168,078) (3,935,793) - (3,935,793) (2,565,713) - (2,565,713) (10,870,296) - (10,870,296) 748,339 - 748,339 (353,174) - (353,174) (2,977) - (2,977) (392,341) - (392,341) (20,540,033) - (20,540,033) (132,221) (132,221) (1,002) (1,002) (133,223) (133,223) (20,540,033) (133,223) (20,673,256) 6,953,494 8,643 6,962,137 5,145,220 - 5,145,220 343,617 - 343,617 59,611 - 59,611 9,899 - 9,899 611,984 - 611,984 134,673 - 134,673 383,211 - 383,211 234,634 2,405 237,039 953,833 310 954,143 131,359 (131,359) -14,961,535 (120,001) 14,841,534 (5,578,498) (253,224) (5,831,722) 53,290,382 7,734,268 61,024,650 (520,975) - (520,975) 52,769,407 7,734,268 60,503,675 47,190,909 $ $ 7,481,044 $ 54,671,953
The notes to the basic financial statements are an integral part of this statement.
Basic Financial Statements
• Fund Financial Statements
COUNTY OF DEL NORTE
Balance Sheet
Governmental Funds
June 30, 2013
Mental Health/ General Adminstration Housing Substance
Fund Road Grants Rehabilitation Abuse ASSETS
Cash and investments $ 75,224 $ 5,671,892 $ - $ 155,436 $ 2,550,325 Cash with fiscal agent - - - - Receivables: Accounts 452,571 - - - 41,530 Taxes 477,905 - - - Intergovernmental 942,000 344,077 476,022 - 799,637 Prepaid costs 22,005 - - - Prepaid insurance 601,152 - - - Inventory 10,829 77,025 - - Due from other funds - - - - Restricted cash and investments 13,781 - - - Loans receivable 4,946 - - 8,415,175 Sublease receivable 2,927,832 - - - Total Assets $ 5,528,245 $ 6,092,994 $ 476,022 $ 8,570,611 $ 3,391,492 LIABILITIES Accounts payable $ 361,332 $ 175,862 $ 104,830 $ - $ 408,320 Deposits payable 198,611 - - - Due to other funds - - 418,012 - Due to other governments - - - 6,901,171 Total Liabilities 559,943 175,862 522,842 6,901,171 408,320
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 755,467 - 324,525 - 231,323 Total Deferred Inflows of Resources 755,467 - 324,525 - 231,323
FUND BALANCES Nonspendable 3,561,818 77,025 - - Restricted - 5,840,107 - 1,669,440 2,751,849 Committed - - - - Assigned - - - - Unassigned 651,017 - (371,345) - Total Fund Balances (Deficits) 4,212,835 5,917,132 (371,345) 1,669,440 2,751,849
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 5,528,245 $ 6,092,994 $ 476,022 $ 8,570,611 $ 3,391,492
The notes to the basic financial statements are an integral part of this statement.
-7-2011 Public Other Mental Health Welfare Welfare Safety Stimson Governmental
Services Act Assistance Administration Realignment Mitigation Funds Total
3,925,226 $ $ - $ 600 $ - $ 1,773,967 $ 2,793,020 $ 16,945,690 - - - - 736,326 736,326 439 - 44,358 - - 122,734 661,632 156,359 104,239 - - 48,557 787,060 498,768 - - 1,186,668 - 1,407,255 5,654,427 50,469 - - - - 72,474 - - - - - 601,152 - - - - - 87,854 - - - 3,574,572 - 3,574,572 365,762 - - - 656 380,199 - - - - - 8,420,121 - - - - - 2,927,832 4,424,433 $ $ 572,590 $ 149,197 $ 1,186,668 $ 5,348,539 $ 5,108,548 $ 40,849,339 26,342 $ $ 14,388 $ 70,279 $ 52,064 $ 37,214 $ 443,334 $ 1,693,965 - 27,079 - - 118,272 343,962 557,400 490,212 606,591 - 1,502,357 3,574,572 - - - - - 6,901,171 26,342 571,788 587,570 658,655 37,214 2,063,963 12,513,670 33,329 - - - - 776,940 2,121,584 33,329 - - - - 776,940 2,121,584 - - - - - 3,638,843 4,364,762 802 - 528,013 - 3,091,006 18,245,979 - - - 5,311,325 - 5,311,325 - - - - 36,285 36,285 - (438,373) - - (859,646) (1,018,347) 4,364,762 802 (438,373) 528,013 5,311,325 2,267,645 26,214,085 4,424,433 $ $ 572,590 $ 149,197 $ 1,186,668 $ 5,348,539 $ 5,108,548 $ 40,849,339
The notes to the basic financial statements are an integral part of this statement.
-7-COUNTY OF DEL NORTE
Reconciliation of the Governmental Funds Balance Sheet to the
Government-Wide Statement of Net Position - Governmental Activities
June 30, 2013
Total Fund Balance - Total Governmental Funds $ 26,214,085
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 in the governmental funds balance sheets. 43,198,435
Other long-term assets are not available to pay for current period expenditures and therefore,
are reported as unavailable revenues in the governmental funds 2,121,584
The County has not reported certain current liabilities in the governmental funds.
Accrued salaries and benefits (528,059)
Certain liabilities are not due and payable in the current period and therefore, are not reported in the governmental funds.
Loans (3,224,350)
Certificates of participation (5,065,000)
Capital leases (1,390)
Compensated absences (2,560,554)
Internal service funds are used by management to charge the cost of certain activities, such as insurance and equipment maintenance and operations, to individual funds. The assets and
liabilities of the internal service funds must be added to the statement of net position. (12,963,842) Net Position of Governmental Activities $ 47,190,909
The notes to the basic financial statements are an integral part of this statement.
COUNTY OF DEL NORTE
Statement of Revenues, Expenditures,
And Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2013
Mental Health/ General Administration Housing Substance
Fund Road Grants Rehabilitation Abuse REVENUES
Taxes and assessments $ 9,524,588 $ - $ - $ - $ Licenses, permits, and franchises 870,024 3,638 - - Intergovernmental 3,021,355 2,420,688 7,372,140 21,091 2,055,354 Use of money and property 120,951 11,113 - 280 12,793 Fines and forfeitures 818,997 - - - 97,065 Charges for services 1,987,408 10,024 - - 33,455 Other revenues 269,937 37,596 28,150 15,848 154,915 Total Revenues 16,613,260 2,483,059 7,400,290 37,219 2,353,582 EXPENDITURES Current: General government 4,522,528 - 7,204,476 - Public protection 13,693,825 - - - Public ways and facilities - 2,017,967 - - Public assistance 166,477 - - 198,692 3,680,449 Health and sanitation 335,656 - - - Culture and recreation 418,191 - - - Debt service:
Principal 167,469 - - - Interest and other charges 106,091 - - - Capital outlay 102,747 514,900 - - 9,086 Total Expenditures 19,512,984 2,532,867 7,204,476 198,692 3,689,535
Excess of Revenues Over
(Under) Expenditures (2,899,724) (49,808) 195,814 (161,473) (1,335,953)
OTHER FINANCING SOURCES (USES)
Transfers in 4,873,576 38,209 54,313 - 2,751,984 Transfers out (1,597,492) (409,691) (27,418) (23) (471,519) Total Other Financing Sources (Uses) 3,276,084 (371,482) 26,895 (23) 2,280,465
Net Change in Fund Balances 376,360 (421,290) 222,709 (161,496) 944,512
Fund Balances (Deficits) - Beginning 4,355,337 6,321,356 (594,054) 1,830,936 1,807,337
Prior period adjustment (520,975) - - - -Fund Balances (Deficits) - Beginning, Restated 3,834,362 6,321,356 (594,054) 1,830,936 1,807,337
Change in inventory on purchases method 2,113 17,066 - - -Fund Balances (Deficits) - Ending $ 4,212,835 $ 5,917,132 $ (371,345) $ 1,669,440 $ 2,751,849
The notes to the basic financial statements are an integral part of this statement.
-9-2011 Public Other Mental Health Welfare Welfare Safety Stimson Governmental
Services Act Assistance Administration Realignment Mitigation Funds Total
-$ $ 1,482,579 $ 988,386 $ - $ - $ 464,721 $ 12,460,274 - - - - - 873,662 3,050,146 5,396,778 6,612,332 8,952,304 - 4,952,277 43,854,465 7,159 - - - 43,448 38,546 234,290 - - - - 221,843 1,137,905 5,754 - 26,496 - - 1,062,510 3,125,647 13,827 21,647 69,870 - - 750,878 1,362,668 3,076,886 6,901,004 7,697,084 8,952,304 43,448 7,490,775 63,048,911 - - - - 516,451 12,243,455 - - 89,034 - 3,137,862 16,920,721 - - - - 66,274 2,084,241 9,750,345 9,580,695 - - 1,163,765 24,540,423 1,577,368 - - - - 2,248,656 4,161,680 - - - - - 418,191 - - - - 206,678 374,147 - - - - 286,250 392,341 13,899 - 63,609 - 138,674 138,232 981,147 1,591,267 9,750,345 9,644,304 89,034 138,674 7,764,168 62,116,346 1,485,619 (2,849,341) (1,947,220) 8,863,270 (95,226) (273,393) 932,565 153,982 3,669,612 2,104,259 - - 2,156,052 15,801,987 (517,169) (698,926) (1,022,500) (8,886,630) (43,448) (1,740,607) (15,415,423) (363,187) 2,970,686 1,081,759 (8,886,630) (43,448) 415,445 386,564 1,122,432 121,345 (865,461) (23,360) (138,674) 142,052 1,319,129 3,242,330 (120,543) 427,088 551,373 5,449,999 2,125,593 25,396,752 - - - - - (520,975) 3,242,330 (120,543) 427,088 551,373 5,449,999 2,125,593 24,875,777 - - - - - 19,179 4,364,762 $ $ 802 $ (438,373) $ 528,013 $ 5,311,325 $ 2,267,645 $ 26,214,085
The notes to the basic financial statements are an integral part of this statement.
-9-COUNTY OF DEL NORTE
Reconciliation of the Statement of Revenues, Expenditures,
And Changes in Fund Balances of Governmental Funds to the
Government-Wide Statement of Activities - Governmental Activities
For the Year Ended June 30, 2013
Net Change in Fund Balances - Total Governmental Funds $ 1,319,129
Amounts reported for governmental activities in the Statement of Activities are different because: 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.
Expenditures for capital outlay 981,147
Depreciation expense (3,817,839)
Governmental funds only report the disposal of assets to the extent proceeds are received from the sale. In the statement of activities, a gain or loss is reported for each diposal. This is the net cost
of the capital assets disposed. (73,306)
Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.
Principal retirements 374,147
Some revenues reported in the statement of activities will not be collected for several months after the County's year end and do not provide current financial resources and therefore are not reported as revenues in the governmental funds.
Change in unavailable revenue (485,562)
Some expenses reported in the statement of activities were for certain liabilities that were not accrued and therefore are not reported as expenditures in the governmental funds.
Change in accrued salaries and benefits (73,833)
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 governmental funds.
Change in compensated absences payable (259,148)
Measurement focus adjustment for inventory reported using the purchases method in the governmental
funds and reported using the consumption method in the Statement of Activities. 19,179 Internal service funds are used by management to charge the cost of certain activities, such as insurance
and equipment maintenance and operations, to individual funds. The net revenue (expense) of certain
internal service funds is reported with governmental activities. (3,562,412)
Change in Net Position of Governmental Activities $ (5,578,498)
The notes to the basic financial statements are an integral part of this statement.
-10-COUNTY OF DEL NORTE
Statement of Net Position
Proprietary Funds
June 30, 2013
Business-Type Activities Governmental Enterprise Funds Activities
Other Internal Enterprise Service CSA #1 Funds Totals Funds ASSETS
Current Assets:
Cash and investments $ 857,732 $ 361,671 $ 1,219,403 $ 746,970
Receivables:
Accounts 826 3,702 4,528 695,698
Assessments 1,734,279 - 1,734,279 Deposits - - - 200,000 Total Current Assets 2,592,837 365,373 2,958,210 1,642,668
Noncurrent Assets: Capital assets:
Depreciable, net 6,558,143 6,683 6,564,826 Total Noncurrent Assets 6,558,143 6,683 6,564,826
Total Assets 9,150,980 372,056 9,523,036 1,642,668
LIABILITIES Current Liabilities:
Accounts payable 205,861 317 206,178 188,305
Accrued interest payable 35,121 - 35,121 Loans payable 286,441 3,575 290,016 Total Current Liabilities 527,423 3,892 531,315 188,305
Noncurrent Liabilities:
Loans payable 1,432,179 78,498 1,510,677
Net OPEB obligation - - - 14,418,205 Total Noncurrent Liabilities 1,432,179 78,498 1,510,677 14,418,205
Total Liabilities 1,959,602 82,390 2,041,992 14,606,510
NET POSITION
Net investment in capital assets 6,238,143 (75,390) 6,162,753 Restricted for:
Future claims - - - 441,182
Unrestricted 953,235 365,056 1,318,291 (13,405,024)
Total Net Position $ 7,191,378 $ 289,666 7,481,044 $ (12,963,842)
The notes to the basic financial statements are an integral part of this statement.
-11-COUNTY OF DEL NORTE
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2013
Business-Type Activities Governmental Enterprise Funds Activities
Other Internal Enterprise Service CSA #1 Funds Totals Funds OPERATING REVENUES
Charges for services $ 221,313 $ 7,302 $ 228,615 $ 7,401,774
Other revenues 310 - 310 Total Operating Revenues 221,623 7,302 228,925 7,401,774
OPERATING EXPENSES
Services and supplies 125,540 1,826 127,366 6,070,534
Claims/premium expense - - - 4,638,791
Depreciation 147,750 4,525 152,275
Total Operating Expenses 273,290 6,351 279,641 10,709,325
Operating Income (Loss) (51,667) 951 (50,716) (3,307,551)
NON-OPERATING REVENUES (EXPENSES)
Taxes and assessments - 8,643 8,643 Intergovernmental - 140 140 Interest income 1,697 708 2,405 344 Interest expense (80,244) (2,093) (82,337) Total Non-Operating Revenues (Expenses) (78,547) 7,398 (71,149) 344
Income (Loss) Before Transfers (130,214) 8,349 (121,865) (3,307,207)
Transfers in - - -
Transfers out (125,975) (5,384) (131,359) (255,205)
Change in Net Position (256,189) 2,965 (253,224) (3,562,412)
Total Net Position - Beginning 7,447,567 286,701 7,734,268 (9,401,430)
Total Net Position - Ending $ 7,191,378 $ 289,666 $ 7,481,044 $ (12,963,842)
The notes to the basic financial statements are an integral part of this statement.
-12-COUNTY OF DEL NORTE
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2013
Business-Type Activities Governmental Enterprise Funds Activities
Other Internal Enterprise Service CSA #1 Funds Totals Funds CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 221,623 $ 3,600 $ 225,223 $ 7,941,384
Payments to suppliers 27,199 (1,826) 25,373 (5,617,974) Net Cash Provided (Used) by Operating Activities 248,822 1,774 250,596 2,323,410
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Taxes and assessments received 279,060 8,643 287,703 Intergovernmental revenues received - 2,601 2,601 Transfers to other funds (125,975) (5,384) (131,359) (255,205) Interfund loans repaid - - - (1,928,350) Net Cash Provided (Used) by Noncapital
Financing Activities 153,085 5,860 158,945 (2,183,555)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets (200,402) - (200,402) Principal paid on debt (274,673) (3,488) (278,161) Interest paid on debt (85,105) (2,093) (87,198) Net Cash Provided (Used) by Capital
and Related Financing Activities (560,180) (5,581) (565,761)
-CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 1,697 708 2,405 344 Net Cash Provided (Used) by Investing Activities 1,697 708 2,405 344
Net Increase (Decrease) in Cash and Cash
Equivalents (156,576) 2,761 (153,815) 140,199
Balances - Beginning 1,014,308 358,910 1,373,218 606,771
Balances - Ending $ 857,732 $ 361,671 $ 1,219,403 $ 746,970
The notes to the basic financial statements are an integral part of this statement.
COUNTY OF DEL NORTE
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2013
Business-Type Activities Governmental Enterprise Funds Activities
Other Internal Enterprise Service CSA #1 Funds Totals Funds RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss) $ (51,667) $ 951 $ (50,716) $ (3,307,551) Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 147,750 4,525 152,275 Decrease (increase) in:
Accounts receivable - (3,702) (3,702) 539,610 Increase (decrease) in:
Accounts payable 152,739 - 152,739 182,605 Net OPEB obligation - - - 4,908,746 Net Cash Provided (Used) by Operating Activities $ 248,822 $ 1,774 $ 250,596 $ 2,323,410
The notes to the basic financial statements are an integral part of this statement.
COUNTY OF DEL NORTE
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2013
Investment
Trust Funds Agency ASSETS
Cash and investments $ 9,346,042 $ 306,145
Taxes and assessments receivable - 2,811,095
Due from other funds - 1,997,161
Total Assets 9,346,042 5,114,401
LIABILITIES
Due to other funds - 1,997,161
Agency obligations - 3,117,240
Total Liabilities - 5,114,401
NET POSITION
Net position held in trust for investment pool participants $ 9,346,042 $
-The notes to the basic financial statements are an integral part of this statement.
-15-COUNTY OF DEL NORTE
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2013
Investment Trust Funds ADDITIONS
Contributions to investment pool $ 7,427,343
Total Additions 7,427,343
DEDUCTIONS
Distributions from investment pool 4,384,574
Total Deductions 4,384,574
Change in Net Position 3,042,769
Net Position - Beginning 6,303,273
Net Position - Ending $ 9,346,042
The notes to the basic financial statements are an integral part of this statement.
-16-Basic Financial Statements
• Notes to Basic Financial Statements
COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of County of Del Norte (County) have been prepared in conformity with
generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental
Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental
accounting and financial reporting principles. The more significant of the County’s accounting policies are
described below.
A. Reporting Entity
The County operates under an Administrator-Board of Supervisors form of government and provides various
services on a countywide basis including public safety, highways & streets, sanitation, health and social
services, culture-recreation, public improvements, planning and zoning, and general administrative services.
Generally accepted accounting principles require government financial statements to include the primary
government and its component units. Component units of a governmental entity are legally separate entities
for which the primary government is considered to be financially accountable and for which the nature and
significance of their relationship with the primary government are such that exclusion would cause the
combined financial statements to be misleading. The primary government is considered to be financially
accountable if it appoints a majority of an organization’s governing body and is able to impose its will on
that organization or there is a potential for the organization to provide specific financial benefits to or impose
specific financial burdens on the primary government.
Reporting for component units on the County’s financial statements can be blended or discretely presented.
Blended component units are, although legally separate entities, in substance part of the County’s operations
and, therefore, data from these units are combined with data of the primary government. Discretely presented
component units, on the other hand, would be reported in a separate column in the government-wide financial
statements to emphasize it is legally separate from the government.
For financial reporting purposes, the County’s basic financial statements include all financial activities that
are controlled by or are dependent upon actions taken by the County’s Board. The financial statements of
the individual component units may be obtained by writing to the County of Del Norte, Auditor-Controller’s
Office, 981 H Street, Suite 140, Crescent City, CA 95531.
Blended Component Units
Flood Control - The Flood Control District was established to provide for flood control in the County. The
County Board of Supervisors is the governing body of this fund and approves all payments. As an integral
part of the County, the District is reported as a nonmajor special revenue fund in the County’s financial
statements.
Flood Control Subzone 4-A - The Flood Control Subzone 4-A District was established to provide for flood
control in County Subzone 4-A. The County Board of Supervisors is the governing body of this fund and
approves all payments. As an integral part of the County, the District is reported as a nonmajor special
revenue fund in the County’s financial statements.
-17-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. Reporting Entity (Continued)
Blended Component Units (Continued)
Flood Control Subzone 4-C - The Flood Control Subzone 4-C District was established to provide for flood
control in County Subzone 4-C. The County Board of Supervisors is the governing body of this fund and
approves all payments. As an integral part of the County, the District is reported as a nonmajor special
revenue fund in the County’s financial statements.
CSA #1 - The CSA #1 District was established to provide County services to residents. The County Board
of Supervisors is the governing body of this fund and approves all payments. As an integral part of the
County, the County Service Area is reported as a major enterprise fund in the County’s financial statements.
Flood Control W-1 - The Flood Control W-1 District was established to provide for flood control in County
Subzone 4-C. The County Board of Supervisors is the governing body of this fund and approves all
payments. As an integral part of the County, the District is reported as a nonmajor enterprise fund in the
County’s financial statements.
Discretely Presented Component Units
There are no component units of the County which meet the criteria for discrete presentation.
Related Organizations
Del Norte Solid Waste Management Authority is a jointly governed organization. However, it has not met
the criteria stated above and its financial information is not combined with that of the County. The financial
statements of the Authority may be obtained by writing to the Del Norte Solid Waste Management Authority,
1700 State Street, Crescent City, CA 95531.
Joint Agencies
The County is a participant in Trindel Insurance Fund (Trindel) the purpose of which is to provide for the
creation and operation of a common risk sharing and insurance purchasing pool to be used to meet the
obligations of the member counties to provide Worker’s Compensation benefits for their employees and to
provide public liability and property damage insurance for its members. Trindel is governed by a Joint
Powers Agreement between the member counties pursuant to Article 1 (commencing with Section 6500),
Chapter 5 of Division 7, Title 1 of the Government Code of California. Complete audited financial
statements can be obtained from their office at P.O. Box 2069, Weaverville, CA 96093. The County is not
financially accountable for this organization and therefore it is not a component unit under Statement Nos.
14, 39 and 61 of the Governmental Accounting Standards Board.
-18-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. Reporting Entity (Continued)
Joint Agencies (Continued)
The County is a member of the California State Association of Counties Excess Insurance Authority (CSAC).
CSAC is a joint powers authority organized for the purpose of developing and funding excess insurance
programs for member counties. CSAC operates public entity risk pools for workers’ compensation,
comprehensive liability, property, and medical malpractice, and the pool purchases excess insurance and
services for members. CSAC is under the control and direction of a board of directors consisting of
representatives of the fifty member counties. Complete audited financial statements can be obtained from
CSAC’s office at 75 Iron Point Circle, Suite 200, Folsom, California 95630. The County is not financially
accountable for this organization and therefore it is not a component unit under Statement Nos. 14, 39 and
61 of the Governmental Accounting Standards Board.
B. Basis of Presentation
Government-Wide Financial Statements
The statement of net position and statement of activities display information on all of the nonfiduciary
activities of the County and its blended component units. These statements include the financial activities
of the overall government, except fiduciary activities. Eliminations have been made to minimize the double
counting of internal activities. These statements distinguish between the governmental and business-type
activities of the County. Governmental activities, which are normally supported by taxes and
inter-governmental revenues, are reported separately from business-type activities, which rely to a significant
extent on fees charged to external parties.
The statement of activities presents a comparison between direct expenses and program revenues for each
different identifiable activity of the County’s business-type activities and each function of the County’s
governmental activities. Direct expenses are those that are specifically associated with a program or function
and; therefore, are clearly identifiable to a particular function. Certain indirect costs, which cannot be
identified and broken down, are included in the program expense reported for individual functions and
activities. Program revenues include (1) charges paid by the recipients of goods and services offered by the
program, (2) operating grants and contributions, and (3) capital grants and contributions. Taxes and other
items not properly included among program revenues are presented instead as general revenues.
Fund Financial Statements
The fund financial statements provide information about the County’s funds, including fiduciary funds and
blended component units. Funds are organized into three major categories: governmental, proprietary, and
fiduciary. The emphasis is placed on major funds within the governmental and proprietary categories; each
is displayed in a separate column. All remaining governmental and enterprise funds are separately
aggregated and reported as nonmajor funds.
-19-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Presentation (Continued)
Fund Financial Statements (Continued)
The County reports the following major governmental funds:
•
The General fund is used to account for all revenues and expenditures necessary to carry out basic
governmental activities of the County that are not accounted for through other funds. For the County,
the General Fund includes such activities as general government, public protection, public
assistance, education, public ways and facilities and culture and recreation services.
•
The Road fund is a special revenue fund used to account for revenues and expenditures for streets
and road expansion and maintenance. Funding comes primarily from state highway users taxes and
state and federal highway improvement grants.
•
The Administration Grants fund is a special revenue fund used to account for revenues and
expenditures for community development grant programs. Funding comes primarily from federal
and state grant revenues.
•
The Housing Rehabilitation fund is a special revenue fund used to account for revenues and
expenditures for housing rehabilitation grant programs. Funding comes primarily from federal and
state grant revenues.
•
The Mental Health/Substance Abuse fund is a special revenue fund used to account for revenues and
expenditures associated with providing mental health and substance abuse care services to County
residents. Funding comes primarily from federal and state grant revenues and transfers from other
funds.
•
The Mental Health Services Act Fund is a special revenue fund used to account for revenues and
expenditures associated with providing mental health services to County residents. Funding comes
primarily from Proposition 63 and state and federal grants.
•
The Welfare Assistance fund is a special revenue fund used to account for revenues and expenditures
for welfare activities. Funding comes primarily from federal and state grants and transfers from
other funds.
•
The Welfare Administration fund is a special revenue fund used to account for revenues and
expenditures for administering welfare programs. Funding comes primarily from federal and state
grants and transfers from other funds.
•
The 2011 Public Safety Realignment fund is a special revenue fund used to account for revenues and
expenditures related to 2011 realignment funding. Funding comes primarily from state realignment
revenues.
•
The Stimson Mitigation fund is a special revenue fund used to account for revenues and expenditures
for mitigation activities. Funding comes primarily from interest earned on mitigation fees collected.
-20-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Presentation (Continued)
Fund Financial Statements (Continued)
The County reports the following major proprietary funds:
•
The CSA #1 fund is an enterprise fund used to account for district operations, debt and bond
redemption activity.
The County reports the following additional fund types:
•
Internal Service Funds account for the County’s self insurance programs which provide services to
other departments on a cost reimbursement basis.
•
The Investment Trust Funds account for the assets of legally separate entities that deposit cash with
the County Treasurer. The assets of these funds are held in trust for other agencies and are part of
the County’s external pool. The external investment pool is made up of three separate funds;
Independent Districts, School Districts, and Court Trust. The County is obligated to disburse monies
from these funds on demand.
•
Agency Funds account for the receipt and disbursement of various taxes, deposits, deductions, and
property collected by the County, acting in the capacity of an agent for distribution to other
governmental units or other organizations. The agency funds maintained by the County include two
separate components.
Accrued Trust Funds - Accounts for property tax receipts awaiting apportionment to other local
government agencies and investment earnings awaiting apportionment to other local government
agencies.
County Departmental Agency Funds - Accounts for all assets under the control of County
departments which are held in a fiduciary capacity.
C. Basis of Accounting and Measurement Focus
The government-wide and proprietary fund 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 at the time liabilities are incurred, regardless of when the related cash flows take place.
Nonexchange transactions, in which the County gives (or receives) value without directly receiving (or
giving) equal value in exchange, include property and sales tax, grants, entitlements, and donations. Under
the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied.
Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants,
entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been
satisfied.
-21-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Basis of Accounting and Measurement Focus (Continued)
Governmental funds are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Under this method, revenues are recognized when measurable and available.
Property and sales tax, interest, certain state and federal grants, and charges for services are considered
susceptible to accrual and are accrued when their receipt occurs within ninety days after the end of the
current fiscal year. Expenditures are generally recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures as well as expenditures related to claims and judgments are
recorded only when payment is due. General capital assets acquisitions are reported as expenditures in the
various functions of the governmental funds. Proceeds of governmental long-term debt and acquisitions
under capital leases are reported as other financing sources.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with
a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise and
internal service funds are charges to customers for sales and services. Operating expenses for enterprise and
internal service funds include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues
and expenses.
Fiduciary funds include trust funds and agency funds. All trust funds are reported using the economic
resources measurement focus and the accrual basis of accounting. Agency funds are reported using the
accrual basis of accounting to recognize receivables and payables.
D. Non-Current Governmental Assets/Liabilities
Non-current governmental assets and liabilities, such as capital assets and long-term liabilities, are reported
in the governmental activities column in the government-wide statement of net position.
E. Cash, Cash Equivalents and Investments
The County sponsors an investment pool that is managed by the County Treasurer. The Treasurer invests
on behalf of most funds of the County and external participants in accordance with the California State
Government Code and the County’s investment policy.
Investment transactions are recorded on the trade date. Investments are reported at fair value which is
determined using selected bases annually. The fair value represents the amount the County could reasonably
expect to receive for an investment in a current sale between a willing buyer and seller. Short term
investments are reported at cost, which approximates fair value. Securities traded on a national or
international exchange are valued at the last reported sales price at current exchange rates. Corporate notes
are valued by the safekeeping institution and by the County brokerage firm. Cash deposits are reported at
carrying amount which reasonably estimates fair value. Managed funds not listed on an established market
are reported at the estimated fair value as determined by the respective fund managers based on quoted sales
prices of the underlying securities.
-22-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Cash, Cash Equivalents and Investments (Continued)
Participant’s equity in the investment pool is determined by the dollar amount of participant deposits,
adjusted for withdrawals and distributed investment income. Investment income is determined on an
amortized cost basis. Amortized premiums and accreted discounts, accrued interest, and realized gains and
losses, net of expenses, are apportioned to pool participants every quarter. This method differs from the fair
value method used to value investments in these financial statements, as unrealized gains or losses are not
apportioned to pool participants. During the fiscal year ended June 30, 2013, the County Treasurer has not
entered into any legally binding guarantees to support the value of participant equity in the investment pool.
Income from pooled investments is allocated to the individual funds or external participants based on the
fund or participant’s average daily cash balance at quarter end in relation to the total pool investments.
Interest income earned in agency funds where there are no interest earnings requirements are assigned to the
General Fund per County Policy. Income from non-pooled investments is recorded based on the specific
investments held by the fund. The interest income is recorded in the fund that earned the interest.
For purposes of the accompanying statement of cash flows, the County considers all highly liquid
investments with a maturity of three months or less when purchased including cash with fiscal agents and
restricted cash, and their equity in the County Treasurer’s investment pool, to be cash equivalents.
F. Restricted Cash and Investments
Restricted assets in the governmental funds represent cash and investments held in the General fund for
inmate welfare ($13,781), the Welfare Assistance fund for the Supplemental Nutrition Assistance Program
($365,762), and the Boy’s Camp fund for camp activities ($656).
G. Receivables
Receivables for governmental activities consist mainly of accounts, taxes, and intergovernmental.
Receivables in business-type activities consist mainly of user fees and assessments. Management believes
its receivables are fully collectible and, accordingly, no allowance for doubtful accounts is required.
H. Other Assets
Inventory
Inventories are stated at cost for governmental funds. Inventory recorded by governmental funds includes
materials and supplies for roads and printing supplies. Governmental fund inventories are recorded as
expenditures at the time the inventory is consumed rather than when purchased.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both government-wide and fund financial statements. The cost of prepaid items is recorded as
expenditures/expenses when consumed rather than when purchased.
-23-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I.
Loans Receivable
The General fund has a loan receivable of $4,946 due from Del Norte First Five. For the purpose of the
governmental fund financial statements, special revenue fund expenditures relating to long-term loans
receivable arising from mortgage subsidy programs are charged to operations upon funding and the loans
receivable are recorded. The Housing Rehabilitation fund has a loan receivable of $8,415,175. The balance
of the loans receivable includes loans that may be forgiven if certain terms and conditions of the loans are
met. The Housing Rehabilitation fund has recorded pass-through loans which will be remitted to the U.S.
Department of Housing and Urban Development as loan collections are received. At June 30, 2013, the
balance of the pass-through loans was $6,901,171 and was recorded as Due to Other Governments.
J. Sublease Receivable
The General Fund has recorded a sublease receivable from Del Norte Solid Waste Management Authority
in the amount of $2,916,462. The sublease receivable is structured to provide for the retirement of the
California Infrastructure and Economic Development Bank loan obtained by the County to finance the
construction, acquisition and installation of the Del Norte Solid Waste transfer station. Repayments will be
made by Del Norte Solid Waste Management Authority in annual installments of $78,475 to $183,454, with
an interest rate of 3.32%. The sublease receivable and loan payable will both be fully retired by August 1,
2033.
K. Capital Assets
Capital assets, including public domain (infrastructure such as roads, bridges, sidewalks, sewer and similar
items) are defined by the County as assets with a cost of more than $5,000 for equipment, $10,000 for
structures and improvements, and $10,000 for infrastructure and all land regardless of cost and an estimated
useful life of more than one year. Capital assets are recorded at historical or estimated historical cost if
actual historical cost is unavailable. Contributed capital assets are recorded at their estimated fair market
value at the date of donation.
Capital assets used in operations are depreciated or amortized using the straight-line method over the assets
estimated useful life in the government-wide financial statements. The range of estimated useful lives by type
of asset is as follows:
Depreciable Asset Estimated Lives Equipment 2-25 years Structures and improvements 5-50 years Infrastructure 20-65 years
Maintenance and repairs are charged to operations when incurred. Betterments and major improvements
which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or
retirement of capital assets, the cost and related accumulated depreciation are removed from the respective
accounts and any resulting gain or loss is included in the results of operations.
-24-COUNTY OF DEL NORTE
Notes to Basic Financial Statements
For the Year Ended June 30, 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
L. Property Tax
The State of California’s (State) Constitution Article XIIIA provides that the combined maximum property
tax rate on any given property may not exceed 1 percent of its assessed value unless an additional amount
for general obligation debt has been approved by voters. Assessed value is calculated at 100 percent of
market value, as defined by Article XIIIA, and may be increased by no more than 2 percent per fiscal year
unless the property is sold or transferred. The State Legislature has determined the method of distribution
of receipts from a 1 percent tax levy among the County, cities, school districts, and other districts.
The County of Del Norte is responsible for assessing, collecting, and distributing property taxes in
accordance with State law. Property taxes are levied on both secured (real property) and unsecured (personal
property other than land and buildings) property. Supplemental property taxes are assessed upon transfer
of ownership in property or completion of new construction.
The County levies, bills, and collects taxes as follows:
Secured Unsecured Valuation/lien dates January 1 January 1
Due Dates November 1 (1 installment)st July 1 February 1 (2 installment)nd
Delinquent dates December 10 (1 installment)st August 31 April 10 (2 installment)nd
The County of Del Norte apportions secured property tax revenue in accordance with the alternate methods
of distribution, the “Teeter Plan”, as prescribed by Sections 4701 through 4717 of the California Revenue
and Taxation code. Under the Teeter Plan, the County allocates to local taxing agencies 100 percent of the
secured property taxes billed (secured, supplemental, and debt service) to the taxing agencies within the
County. In return the County retains penalties and interest collected on delinquent secured taxes in the Tax
Loss Recovery Fund (TLRF). The primary purpose of TLRF is to cover losses that may occur as a result of