1.Were any of the government's enterprise funds "profitable" during the year? If so, what has the government done with the "earnings"? Has it transferred them to the general fund?

2.Does the government have revenue bonds outstanding that are related to business-type activities? If so, for what activities?

RUSK COUNTY, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014 Prepared by: County Auditor Rusk County, Texas Comprehensive Annual Financial Report For the Year Ended December 31, 2014 TABLE OF CONTENTS INTRODUCTORY SECTION Exhibit Letter of Transmittal GFOA Certificate of Achievement Organizational Chart List of Elected and Appointed Officials Page 1-3 4 5 6 FINANCIAL SECTION Independent Auditor's Report 7-9 Management's Discussion and Analysis 10-20 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet-Governmental Funds Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual-General Fund and Major Special Revenue Funds Statement of Net Position-Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Position-Proprietary Funds Statement of Cash Flows-Proprietary Funds Statement of Fiduciary Net Position-Fiduciary Funds 1 2 23 24 3 26 3-A 27 4 28 4-A 29 5 6 30-31 32 7 8 9 33 34 35 Notes to the Financial Statements 36-55 Combining and Individual Fund Financial Statements and Schedules: Fund Descriptions Combining Balance Sheet-Nonmajor Governmental Funds i 57-59 A-1 60 Combining and Individual Fund Financial Statements and Schedules (continued): Exhibit Page Combining Statement of Revenues, Expenditures, and Changes in Fund Balances-Nonmajor Governmental Funds A-2 61 Combining Balance Sheet-Nonmajor Special Revenue Funds B-1 62 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances-Nonmajor Special Revenue Funds B-2 63 Schedules of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual: General Fund Road and Bridge Fund Law Library Fund Rusk County Officials' Fund Human Services Fund Airport Fund Juvenile Services Fund Water Supply Grant Fund Debt Service Fund C-1 C-2 C-3 C-4 C-5 C-6 C-7 C-8 C-9 64-66 67 68 69 70 71 72 73 74 Agency Funds: Combining Statement of Assets & Liabilities Combining Statement of Changes in Assets & Liabilities D-1 D-2 75 76-79 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source Schedule by Function and Activity Schedule of Changes by Function and Activity E-1 E-2 E-3 80 81-82 83-84 Table Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 86 87-88 89 90-91 92 93-96 97 98 99 100 101 102 103 104 105 106 107 STATISTICAL SECTION Net Position by Component Changes in Net Position Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Property Taxpayers Property Tax Levies and Collections Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Demographic and Economic Statistics Principal Employers Full-time Equivalent County Governmental Employees by Function Operating Indicators by Function Capital Asset Statistics by Function ii STATE AND FEDERAL FINANCIAL ASSISTANCE SECTION Exhibit Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Page 108-109 Independent Auditor's Report on Compliance for Each Major Program and on Internal Control over Compliance Required by The State of Texas Single Audit Circular 110-111 Schedule of Expenditures of Federal Awards and Notes F-1 112-113 Schedule of Expenditures of State Awards and Notes F-2 114-115 Schedule of Findings and Questioned Costs F-3 116 Summary Schedule of Prior Year Findings F-4 117 Corrective Action Plan F-5 118 iii This page is left blank intentionally. RUSK COUNTY COURTHOUSE 115 N. MAIN ST. SUITE 103 HENDERSON, TEXAS 75652 903-657-0307 COUNTY AUDITOR: Ronald Moody June 17, 2015 Honorable County Judge Joel Hale Honorable County Commissioners, Taxpayers and Citizens of Rusk County Henderson, Texas Conforming to statutory requirements of the duties of the County Auditor, submitted herewith is the Comprehensive Annual Financial Report (CAFR) for Rusk County for the year ended December 31, 2014. The report was prepared by the County Auditor's Office. This report consists of management's representations concerning the finances of the County. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the County has established a comprehensive internal control framework that is designed both to protect the County's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the County's financial statements in conformity with generally accepted accounting principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). Because the cost of internal controls should not outweigh their benefits, the County's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Texas State law requires the County's financial statements be audited by a licensed independent certified public accountant. The Commissioners' Court selected Richard P. Loughlin, CPA to perform the audit for the current fiscal year. The auditors have issued an unqualified opinion on Rusk County's financial statements for the year ended December 31, 2014, and their report may be found on pages 7-9 in the Financial Section of this report. In addition to meeting the requirement set forth by statute, the audit was also designed to meet the requirements of the standards set forth in the Government Accountability Office's Government Auditing Standards. The auditor's report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards is on pages 107-108 of this report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of MD&A. This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The County's MD&A can be found on pages 10-20 immediately following the independent auditor's report. Profile of the Government Rusk County, Texas, created in 1843, is located in the northeast part of the State. The County occupies a land area of 932 square miles and serves a population of 53,923. The County is empowered to levy a property tax on both real and personal property located within its boundaries. The financial statements present information on the financial position and operations of County government as a single comprehensive reporting entity. The various agencies, departments and accounts of the County that 1 constitute the County reporting entity are included in this report in a accordance with criteria established by the GASB. The reporting entity consists of all the funds of the primary government (Rusk County). The County operates under the policy and legislative authority of the Commissioners' Court, consisting of a County Judge, elected at-large and four (4) County Commissioners, each elected from a designated precinct. The Commissioners' Court's primary function is the administration of the affairs of the County, which includes the adopting of the County budget. The County Judge and the Commissioners all serve four year terms. The County provides the full range of County services contemplated by statute or charter. This includes general administration, judicial, legal, elections, financial administration, public facilities, public safety, environmental protection, conservation, public transportation, health and welfare care, and recreation. The County Judge is by statute the Budget Officer of the County and is responsible for presenting a prepared County budget to the Commissioners' Court for approval. The Commissioners' Court invites any interested citizen to appear for a budget hearing concerning the County's budget prior to adoption. Before determining the final budget, the Commissioners' Court may increase or decrease the amounts as proposed in the budget. Expenditure amounts finally budgeted may not exceed the estimated revenues and available fund balance. A tax rate is then set which will generate the estimated ad valorem tax revenues in the budget. When the budget has been adopted by the Commissioners' Court, the County Auditor is responsible for monitoring the expenditures of the various departments of the County to prevent expenditures from exceeding budget appropriations and for keeping the members of the Commissioners' Court advised of the condition of the various funds and accounts. Funds are budgeted on an annual basis with no carryovers into the next year. If a fund(s) has or shows a balance at the end of the year, the balance is included in making computation of funds available for the next year's budget. Budget to actual comparisons are provided in this report for each individual fund for which an appropriated annual budget has been adopted. For the General Fund and the Road and Bridge Fund (the County's two (2) major funds), this comparison is on pages 30-31 as part of the Basic Financial Statements. For other governmental funds, this comparison is presented in the Combining and Individual Fund Financial Statements and Schedules section of this report, starting on page 68. The Capital Projects Fund, the Permanent Funds, the Internal Service Fund, and the Fiduciary Funds (Agency Funds) are not budgeted. Local Economy The economy of the County is fairly well diversified with timber, oil and gas, mining, two (2) power plants, light industry, agriculture, medical (hospital, several nursing homes, and a drug rehabilitation center), two (2) state prisons, and an intermediate sanction facility. New industries in surrounding counties have created job opportunities for Rusk County residents. Six (6) of the school districts in the County have increased average daily attendance (ADA), and two (2) have had a decrease. The County has a civilian labor force of 24,468, which has decreased 9.14% from the prior year. 2 Long-term Financial Planning The Commissioners' Court continues to be very active in budgeting financial resources to rehabilitate all County maintained infrastructure over a number of years in the most economical way. Various capital outlays for road and bridge equipment have been made and are planned to ensure that the department stays updated to meet future repair needs. Tobacco funds received from the State are being accumulated to cover future health costs. The State of Texas has indicated to the County that if the County will fund right of way acquisition from US 79 to US 259, the State will move the Loop 571 project to a higher priority for funding purposes. Various costs associated with increased health care premiums for active and retired employees had a significant effect on the financial statements in 2014. The County continues to participate in the insurance program provided through the Texas Association of Counties. This insurance pool allows the County to limit increases in premiums at an amount less than the national average. Major Initiatives On January 12, 2015, the Friends of the Mt. Enterprise Library donated a new building to relocate the Mt. Enterprise branch library. On February 9, 2015, with help from the County, the library was open to the public. New flooring was installed in the District Attorney, Elections, County Clerk, and Tax Assessor-Collector offices. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Rusk County for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2013. This was the twenty-fourth (24th) consecutive year that the County has received this prestigious award. In order to be awarded a Certificate of Achievement, the County published an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated services of the entire staff of all County Departments. I would like to especially thank the entire staff of the County Auditor's office for their assistance and contribution to the preparation of this report. In closing, without the leadership and support of the Honorable J. Clay Gossett, 4th Judicial District of Texas Judge and the County Judge and Commissioners' Court, preparation of this report would not have been possible. Respectfully submitted, 3 4 5 County Welfare (1) (1) Juvenile Probation Director District Judge County Health (1) County Judge Indigent Health Care (1) (1) Five (5) Justices of the Peace (2) Denotes joint and overlapping responsibilities. (1) County Court-atLaw Judge Sanitation (1) County Attorney (1) Denotes elected officials. All others are appointed. Airport Authority Five (5) Constables Sheriff (1) (2) Extension Service Veterans Service Officer County Clerk (1) (2) County Court-atLaw Judge Highway Patrol Secretary (1) County Judge Depot (1) (2) (1) (2) Librarian Democratic And Republican Chairman Commissioners' Court County Judge and Four (4) County Commissioners COUNTY VOTERS (1) County Treasurer (1) Tax AssessorCollector (1) Democratic Chairman (1) District Clerk Voter Registration (1) County Clerk Emergency Information Management Technology (1) (2) Tax AssessorCollector RUSK COUNTY, TEXAS ORGANIZATIONAL CHART (1) (1) (2) District Judge Grand Jury Republican Chairman County Auditor (1) District Attorney Juvenile Probation Officer Northeast Texas Treatment Center Adult Probation Officer Rusk County, Texas List of Elected and Appointed Officials December 31, 2014 Elected Officials 4th Judicial District Judge County Judge County Commissioner, Precinct #1 County Commissioner, Precinct #2 County Commissioner, Precinct #3 County Commissioner, Precinct #4 County Court-at-Law Judge County Attorney County Clerk County Sheriff County Tax Assessor-Collector County Treasurer District Clerk Constable, Precinct #1 Constable, Precinct #2 Constable, Precinct #3 Constable, Precinct #4 Constable, Precinct #5 Justice of the Peace, Precinct #1 Justice of the Peace, Precinct #2 Justice of the Peace, Precinct #3 Justice of the Peace, Precinct #4 Justice of the Peace, Precinct #5 Honorable J. Clay Gossett Honorable Joel Hale Honorable W.D. Bill Hale Honorable Mike Pepper Honorable Freddy Swann Honorable Harold Howell Honorable Chad Dean Micheal Jimerson Joyce Lewis-Kugle Jeff Price Lanita Whitehead Andy Vinson Courtney Terry Sammy Nichols Elton Brock Tim Barton David Guy Jimmy Skinner Jerdy Wolverton Bonnie Miller Jackie Risinger Darlene Childress Joe Sorrells Appointed Officials County Auditor Chief, Adult Probation Officer Chief, Juvenile Probation Officer County Surveyor Ronald G. Moody Mark Hogberg Fay Terry Unfilled 6 Richard P Loughlin Certified Public Accountant ___________________________________________________________________________________________ Telephone: Fax: 903.657.0240 903.655.1324 116 S Marshall P O Box 1716 Henderson TX 75653 INDEPENDENT AUDITOR'S REPORT Rusk County Commissioners' Court Rusk County, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Rusk County, Texas, (\"County\") as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the County's basic financial statements as listed in the table of contents. We have also audited the internal service fund type of Rusk County, Texas, as of and for the year ended December 31, 2014, as displayed in the County's basic financial statements. We also have audited the financial statements of each of the County's nonmajor governmental and fiduciary funds presented as supplementary information in the accompanying combining and individual fund financial statements as of and for the year ended December 31, 2014, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. MEMBER AMERICAN INSTITUTE OF CERTIFED PUBLIC ACCOUNTANTS AND TEXAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS 7 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Rusk County, Texas, as of December 31, 2014, and the respective changes in financial position, and, where applicable, cash flows thereof, and the respective budgetary comparison schedules for the General Fund, and the Road and Bridge Fund (major special revenue funds) for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each nonmajor governmental and fiduciary fund of Rusk County, Texas, as of December 31, 2014, 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. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 10 through 20, 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 inquires, 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that comprise Rusk County, Texas', basic and combining and individual fund financial statements. The introductory section, the Budgetary Comparison for the General Fund, Road and Bridge Fund, Law Library Fund, Rusk County Officials' Fund, Human Services Fund, Airport Fund, Juvenile Services Fund, Water Supply Grant Fund, and the Debt Service Fund; the Capital Assets Used in the Operation of Governmental Funds schedules; the statistical section; Schedule of Expenditures of Federal Awards; and the Schedule of Expenditures of State Awards are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Budgetary Comparison for the General Fund, Road and Bridge Fund, Law Library Fund, Rusk County Officials' Fund, Human Services Fund, Airport Fund, Juvenile Services Fund, Water Supply Grant Fund, and the Debt Service Fund; the Capital Assets Used in the Operation of Governmental Funds schedules; the Schedule of Expenditures of Federal Awards; and the Schedule of Expenditures of State Awards 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 and combining and individual fund financial statements 8 and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Budgetary Comparison for the General Fund, Road and Bridge Fund, Law Library Fund, Rusk County Officials' Fund, Human Services Fund, Airport Fund, Juvenile Services Fund, Water Supply Grant Fund, and the Debt Service Fund; the Capital Assets Used in the Operation of Governmental Funds schedules; the Schedule of Expenditures of Federal Awards; and the Schedule of Expenditures of State Awards are fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 15, 2015, on our consideration of Rusk County, Texas, internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control over financial reporting and compliance. ______________________________ Richard P. Loughlin Certified Public Accountant Henderson, Texas June 15, 2015 9 This page is left blank intentionally. Management's Discussion and Analysis As management of Rusk County, Texas, (the \"County\") we offer readers of the County's financial statements this narrative overview and analysis of the financial activities of the County for the year ended December 31, 2014. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 1-3 of this report. Financial Highlights The assets of the County exceeded its liabilities and deferred inflows of resources at the close of the year by $35,864,650 (Net Position). Of this amount, $22,786,112 (Unrestricted Net Position) may be used to meet the County's ongoing obligations to citizens and creditors. The County's total net position increased by $1,676,203. The increase in net position is primarily attributable to revenues exceeding anticipated amounts and expenditures well within the County's budget. As of the close of the current year, the County's governmental funds reported combined ending fund balances of $24,054,699 an increase of $2,093,867 in comparison with the prior year. $13,949,592 of this amount is available for spending at the County's discretion (Unassigned Fund Balance). The principal reason for the increase in fund balance is attributable to greater than anticipated revenue from fees and maintaining all departmental expenditures well within budget. At the end of the current year, Unassigned Fund Balance for the General Fund was $13,949,592, or 94.65% of total General Fund expenditures. The County issued no new debt during the year. Overview of the Financial Statements This Discussion and Analysis is intended to serve as an introduction to the County's Basic Financial Statements. The County's Basic Financial Statements comprise three components: (1) Governmentwide Financial Statements; (2) Fund Financial Statements; and (3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the Basic Financial Statements themselves. Government-wide Financial Statements. The Government-wide Financial Statements are designed to provide readers with a broad overview of the County's finances, in a manner similar to private-sector business. The Statement of Net Position presents information on all of the County's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The Statement of Activities presents information showing how the County's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and 10 expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensatory time). Both of the Government-wide Financial Statements are designed to distinguish functions of the County that are principally supported by taxes, intergovernmental revenues, fees, and fines (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government, judicial, legal, elections, financial administration, public facilities, public safety, public transportation, health and welfare, culture and recreation, and conservation. Rusk County has no business-type activities. The Government-wide Financial Statements contain financial information only for the County. Rusk County has no component units as defined by generally accepted accounting principles (GAAP). The Government-wide Financial Statements can be found on pages 23-24 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. All of the funds of the County can be divided into three categories: Governmental Funds, Proprietary Funds, and Fiduciary Funds. Governmental Funds. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government-wide Financial Statements. However, unlike the Government-wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the County's near-term financing requirements. Because the focus of governmental funds is narrower than that of the Government-wide Financial Statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the Government-wide Financial Statements. By doing so, readers may better understand the long-term impact of the County's near-term financing decisions. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains eleven (11) individual governmental funds. Each of the funds is described on pages 57-59 of this report. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund and the Road and Bridge Fund, each of which are considered to be major funds. Data from the other nine (9) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of Combining Statements elsewhere in this report. The County adopts annual appropriated budgets for the General Fund and the Road and Bridge Fund, its two (2) major funds. A Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual is presented at the functional level of detail for each of these funds on pages 30-31 of this report. In addition, a Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual is presented for the General Fund and the Road and 11 Bridge Fund at the activity or departmental level to demonstrate legal compliance with the budget on pages 64-66, and page 67, respectively. The County also adopts annual appropriated budgets for seven (7) of its nine (9) nonmajor governmental funds (Law Library Fund, Rusk County Officials' Fund, Human Services Fund, Juvenile Services Fund, Debt Service, Airport Fund, and Water Supply Grant Fund). A Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual is presented for each of these funds to demonstrate compliance with their budgets on pages 68-74 of this report. The basic Governmental Fund Financial Statements can be found on pages 26-31 of this report. Proprietary Funds. The County maintains an Internal Service Fund, which is an accounting device used to accumulate and allocate costs internally among the County's various functions. The County uses the Internal Service Fund to account for its health insurance activities (the collection of payments by the County and its employees for health insurance and the payment of premiums to the County's health insurance provider). This service benefits the governmental functions of the County, and therefore has been included within governmental activities in the Government-wide Financial Statements. Proprietary Funds provide the same type of information as the Government-wide Financial Statements, only in more detail. The basic Proprietary Fund Financial Statements can be found on pages 32-34 of this report. Fiduciary Funds. Fiduciary Funds are used to account for resources held for the benefit of parties outside the County. Fiduciary Funds are not reflected in the Government-wide Financial Statements because the resources of those funds are not available to support the County's programs. The accounting used for Fiduciary Funds is much like that used for Proprietary Funds. The County's basic Fiduciary Fund Financial Statement can be found on page 35 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements. The Notes to the Financial Statements can be found on pages 36-55 of this report. Other Information. In addition to the Basic Financial Statements and accompanying Notes, this report also presents Combining and Individual Fund Financial Statements and Schedules. These statements and schedules provide greater detail in connection with Governmental Funds, Fiduciary Funds, and Capital Assets Used in the Operation of Governmental Funds. The Combining and Individual Fund Financial Statements and Schedules may be found on pages 60-84 of this report. Single Audit. The County expended in excess of $500,000 in state financial assistance during the year ended December 31, 2014. As a result, a single audit in accordance with the State of Texas Single Audit Circular was required. The Compliance and State and Federal Financial Assistance section of this report begins on page 108. Government-wide Financial Analysis. Net Position. As noted earlier, Net Position may serve over time as a useful indicator of the County's financial position. In the case of the County, assets exceeded liabilities and deferred inflows of resources by $35,864,650 at the close of the most recent fiscal year. 12 A large portion of the County's Net Position (33.78%) reflects its investment in capital assets (e.g., Land, Buildings, Machinery and Equipment, and Infrastructure), less the related outstanding debt to acquire those assets. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Rusk County, Texas Net Position of Governmental Activities (Table 1) 2013 2014 Current and Other Assets Capital Assets Total Assets $ Long-Term Liabilities Outstanding Other Liabilities Total Liabilities $ Total Deferred Inflows of Resouces 45,334,672 22,932,963 68,267,635 $ $ $ 12,708,286 612,321 13,320,607 $ 13,499,214 686,091 14,185,305 $ 19,082,378 $ 19,102,008 $ 12,116,832 961,706 22,786,112 35,864,650 $ 12,114,324 923,225 21,150,898 34,188,447 $ Net Position: Net Investment in Capital Assets Restricted Unrestricted Total Net Position $ $ $ 43,566,642 23,909,118 67,475,760 At the end of the current fiscal year, the County is able to report positive balances in all three (3) categories of Net Position. The same situation held true for the prior fiscal year. Changes in Net Position. Net Position for the County increased $1,676,203 from the prior year, which is consistent with the prior year's increase. The economy in this part of the country is not as impacted by the overall slowdown as other parts of the country. However, the County generally maintained overall spending levels with that of the prior year as revenues increased slightly. The most significant County revenue source is Ad Valorem Taxes, which represented 78.32% of total revenue in the most recently completed fiscal year. Fees and fines charged and collected by County Officials generated another 14.72% of revenue. Grants received from the State and Federal government constituted 4.02% of revenue. The balance of the County's revenue (2.94%) came from other taxes, oil and gas royalties, interest, and other miscellaneous revenues. 13 Rusk County, Texas Changes in Net Position of Governmental Activities (Table 2) Revenues: Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions General Revenues: Property Taxes Other Total Revenues $ $ Expenses: General Government Judicial Legal Elections Financial Administration Public Facilities Public Safety Public Transportation Health and Welfare Culture and Recreation Conservation Interest on Long-Term Debt Total Expenses $ $ Increase in Net Position Net Position - Beginning Net Position - Ending $ $ 14 2014 2013 3,799,512 $ 609,584 427,699 3,960,896 617,321 504,290 20,209,323 757,658 25,803,776 $ 19,696,484 710,476 25,489,467 2,391,322 $ 2,431,208 602,142 249,122 1,814,390 761,845 6,885,164 6,681,505 551,406 1,106,036 174,833 478,600 24,127,573 $ 2,500,971 2,308,514 597,931 188,382 1,748,139 863,205 6,582,485 6,604,989 701,967 1,029,227 166,649 486,853 23,779,312 1,676,203 $ 34,188,447 35,864,650 $ 1,710,155 32,478,292 34,188,447 Rusk County, Texas Governmental Activities Expenses and Program Revenues 2014 (Chart 1) 15 Rusk County, Texas Governmental Activities Revenues by Source 2014 (Chart 2) Rusk County, Texas Governmental Activities Expenses by Function 2014 (Chart 3) 16 Financial Analysis of the County's Funds. As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the County's Governmental Funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County's financing requirements. In particular, Unreserved Fund Balance may serve as a useful measure of the County's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the County's Governmental Funds reported combined ending Fund Balances of $24,054,699, an increase of $2,093,867 in comparison with the prior year. 57.99% of this ($13,949,592) constitutes Unassigned Fund Balance, which is available for spending at the County's discretion. The remainder of Fund Balance is nonspendable or restricted to indicate that it is 1) not in spendable form ($213,430), or 2) restricted for particular purposes ($9,891,677). The General Fund is the chief operating fund of the County. At the end of the current fiscal year, Unassigned Fund Balance of the General Fund was $13,949,592, while total Fund Balance was $14,054,385. As a measure of the General Fund's liquidity, it may be useful to compare Fund Balance to total fund expenditures. Unassigned Fund Balance represents 94.65% of total General Fund expenditures, while total Fund Balance represents 95.37% of that same amount. The Fund Balance of the County's General Fund increased by $1,130,490 during the current fiscal year. Key factors in this increase are: Revenue realized approximated final budgeted amounts. Less expenditures than budgeted, in general, in all County departments. The Road and Bridge Fund has a total Fund Balance of $2,804,491, all of which is Restricted Fund Balance (for County roads and bridges) and nonspendable. The net increase in Fund Balance during the year was $658,048. Generally, the net increase resulted from: Maintaining expenditures well below budget in all four precincts. Revenue increased $543,643 over the prior year. Proprietary Funds. The County's Proprietary Funds provide the same type of information as the Government-wide Financial Statements, only in more detail. The County's only Proprietary Fund is the Insurance Internal Service Fund. Unrestricted Net Position at the end of the current year amounted to $587,520. The County provides employees and retirees' health and life insurance through traditional insurance. General Fund Budgetary Highlights. Differences between the original budget and the final amended budget were a net increase in appropriations of $148,344. Significant among the increases were: $10,111 in increases allocated to Capital Outlay/Sheriff. $10,000 net increase in expenditures for the library complex $83,138 as a result of adding a new department in the General Fund for Health and Welfare/Public Health. $40,717 in net increases allocated to Nondepartmental. 17 The increases were funded by greater than anticipated revenues from fees and maintaining other expenditures well below budgeted amounts. As a result of the favorable budget variances in both revenues and expenditures, it was unnecessary to draw upon existing Fund Balance, as was originally anticipated. Differences between the final amended budget and actual General Fund expenditures were a net positive variance of $2,432,571. Significant among the net positive variances were: $186,000 in positive budget variances in Nondepartmental, due to less than anticipated costs for postage, accounting fees, and software and computer equipment. $633,000 in positive budget variances in Judicial/All Courts, due to less than anticipated costs for capital murder trials. $92,000 in positive budget variances in General Government/County Clerk due to less than expected records archive expenditures and office supplies. $76,000 in positive budget variances in Judicial/District Clerk due to a savings in personnel costs and contracted services. $97,000 in positive budget variances in Legal/District Attorney due to less than anticipated special trial expenditures. $59,000 in positive budget variances in Financial Administration/Tax Assessor-Collector due to less than anticipated expenditures for contracted services and personnel. $98,000 in positive budget variances in Public Safety/Jail due to savings in insurance, medical fees, and utilities. $104,000 in positive budget variances in Public Safety/Sheriff due mostly to savings in fuel costs, insurance, litigation, and deputy training. $109,000 in positive budget variances in Health and Welfare/Ambulance and Sanitation due to less than anticipated expenditures in contracted services. $731,000 in positive budget variances in Capital Outlay due to less than anticipated major renovations and other capital improvements. The balance of the positive variance resulted from a general cost savings in all departments within the County. Governmental Activities Capital Asset and Debt Administration. Governmental Activities Capital Assets. The County's investment in Governmental Activities Capital Assets as of December 31, 2014, amounts to $22,932,963, net of accumulated depreciation. This investment in Governmental Activities Capital Assets includes Land, Buildings, Machinery and Equipment, and Infrastructure (e.g., roads and bridges). Major Capital Asset events during the current fiscal year included the following: Purchase of additional rolling stock for several of the County's departments, including five (5) for the Sheriff's Department. Approximately $607,031 of equipment purchased for the County's Road & Bridge Department. 18 Rusk County, Texas Capital Assets Used in Governmental Activities (Net of Depreciation) (Table 3) 2014 Land Buildings Machinery and Equipment Infrastructure Total Capital Assets $ $ 1,032,025 17,298,955 2,980,517 1,621,466 22,932,963 2013 $ $ 1,032,025 17,985,836 3,155,793 1,735,466 23,909,120 Additional information on the County's Capital Assets can be found in Note IV (C) on pages 46-47 of this report. Long-Term Debt. At the end of the current fiscal year, the County had total debt of $12,708,286. Rusk County, Texas Outstanding Long-Term Debt (Table 4) 2014 Certificates of Obligation: Principal Amount of Debt Premium on Issuance of Debt OPEB Liability Compensated Absences Total Long-Term Debt $ $ 10,700,000 116,131 1,777,754 114,401 12,708,286 2013 $ $ 11,665,000 129,794 1,609,745 94,675 13,499,214 The Texas State Constitution limits the amount of general obligation bonded debt the County may issue to 25% of the assessed value of the real property in the County. The current debt limit for the County is $1,107,121,000. The County presently has $10,700,000 in general obligation bonded debt. Additional information on the County's long-term debt can be found in Note IV (H) on pages 53-54 of this report. Economic Factors and Next Year's Budgets and Rates. The unemployment rate for the County as of the end of the fiscal year was 4.9%, compared with a rate of 6.1% a year ago. The County's assessed valuation of property for the 2014 property tax year (2015 fiscal year) has increased approximately $34,499,000 (.77%) to approximately $4,428,480,000. The County's property tax rate decreased slightly from $0.46735 per $100 of assessed valuation to $0.462784 per $100 assessed valuation for the 2015 budget year (2014 property tax year). All of these factors were considered in preparing the County's budget for the 2015 fiscal year. 19 During the current fiscal year, Unassigned Fund Balance in the General Fund increased to $13,949,592. That amount represents approximately eleven months of General Fund operations, and the County believes that to be a reasonable reserve. As a result, the County utilized $9,899,616 of fund balance to avoid fee increases when preparing the 2015 budget. Requests for Information. This report is designed to provide a general overview of the County's finances for all those with an interest in the County's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Ronald G. Moody County Auditor Rusk County Courthouse 115 N. Main Street Suite 103 Henderson, TX 75652 (903) 657-0306 rmoody@co.rusk.tx.us 20 This page is left blank intentionally. BASIC FINANCIAL STATEMENTS 21 This page is left blank intentionally. GOVERNMENT-WIDE FINANCIAL STATEMENTS 22 This page is left blank intentionally. Page 23 Exhibit #1 Rusk County, Texas Statement of Net Position December 31, 2014 Governmental Activities Assets Cash Investments Receivables (net of allowances for uncollectibles): Property Taxes Due from Other Governments Accounts Prepaids Capital Assets (not being depreciated) Land Capital Assets (net of accumulated depreciation): Buildings Machinery & Equipment Infrastructure Total Assets Liabilities Accounts Payable and Accrued Expenses Due to Other Governments Noncurrent Liabilities: Due Within One Year Due in More than One Year $ 9,899,643 19,965,626 15,270,512 32,243 19,669 146,979 1,032,025 17,298,955 2,980,517 1,621,466 $ 68,267,635 $ 503,471 108,850 1,014,177 11,694,109 Total Liabilities $ 13,320,607 Deferred Inflows of Resources Unearned Revenue Unearned Deferred Revenue $ Total Deferred Inflows of Resources $ 19,082,378 Net Position Net Investment in Capital Assets Restricted for: Debt Service Perpetual Care: Expendable Nonexpendable County Independent School Districts: Expendable Nonexpendable Unrestricted Total Net Position The notes to the financial statements are an integral part of this statement. 5,030,465 14,051,913 $ 12,116,832 894,578 677 15,000 51,451 22,786,112 $ 35,864,650 Page 24 Exhibit #2 Rusk County, Texas Statement of Activities For the Year Ended December 31, 2014 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Expenses Functions/Programs: General Government Judicial Legal Elections Financial Administration Public Facilities Public Safety Public Transportation Health and Welfare Culture and Recreation Conservation Interest on Long-Term Debt Net (Expense)/Revenue $ Net (Expense)/ Revenue and Changes in Net Position Governmental Activities 2,391,322 2,431,208 602,142 249,122 1,814,390 761,845 6,885,164 6,681,505 551,406 1,106,036 174,833 478,600 $ 660,014 840,343 45,287 44,852 1,642,443 6,150 121,028 271,467 136,772 31,156 - $ 23,166 712 98,526 350,047 67,728 69,405 - $ 11,250 193,608 222,841 - $ (1,696,892) (1,590,153) (458,329) (204,270) (171,947) (562,087) (6,414,089) (6,119,469) (345,229) (1,074,880) (174,833) (478,600) $ 24,127,573 $ 3,799,512 $ 609,584 $ 427,699 $ (19,290,778) General Revenues: Property Taxes Other Taxes Interest Earned Gain on Sale of Capital Assets Miscellaneous $ 20,209,323 15,384 259,515 51,770 430,989 Total General Revenues $ 20,966,981 Change in Net Position $ Net Position - Beginning Net Position - Ending The notes to the financial statements are an integral part of this statement. 1,676,203 34,188,447 $ 35,864,650 FUND FINANCIAL STATEMENTS 25 This page is left blank intentionally. Page 26 Exhibit #3 Rusk County, Texas Balance Sheet Governmental Funds December 31, 2014 Road & Bridge Fund General Fund Assets Cash Investments Receivables (net of allowances for uncollectibles): Property Taxes Due from Other Governments Accounts Prepaids $ 5,808,610 11,601,699 $ 10,094,225 19,962 6,226 104,793 1,923,902 2,224,471 Other Governmental Funds Total Governmental Funds $ $ 3,977,962 864 42,186 1,198,325 12,281 12,579 - 15,270,512 32,243 19,669 146,979 8,941,486 $ 44,746,386 $ 27,635,515 $ Liabilities Accounts Payable Due to Other Governments $ 174,918 108,850 $ 92,613 $ - 57,110 $ - 324,641 108,850 $ 283,768 $ 92,613 $ 57,110 $ 433,491 $ 3,231,567 $ 10,065,795 1,305,480 $ 3,966,801 417,181 76,237 1,195,135 $ 4,954,228 76,237 15,227,731 5,272,281 1,688,553 $ 20,258,196 Deferred Inflows of Resources Unavailable Revenue - Advance Tax Collections Unavailable Revenue - Other Unavailable Revenue - Tax Revenue Total Deferred Inflows of Resources Fund Balances Nonspendable Restricted Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 13,297,362 $ $ 104,793 $ 13,949,592 $ 9,594,625 19,682,358 Total Assets Total Liabilities 8,169,385 1,862,113 5,856,188 $ 42,186 $ 2,762,305 - 66,451 $ 213,430 7,129,372 9,891,677 13,949,592 $ 14,054,385 $ 2,804,491 $ 7,195,823 $ 24,054,699 $ 27,635,515 $ 8,169,385 $ 8,941,486 $ 44,746,386 The notes to the financial statements are an integral part of this statement. Page 27 Exhibit #3-A Rusk County, Texas Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Position December 31, 2014 Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because: Total Fund Balances-Total Governmental Funds (Page 26) $ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 24,054,699 22,932,963 The Internal Service Fund is used to charge the costs of health insurance to individual funds. The assets and liabilities of the Internal Service Fund are included in governmental activities in the Statement of Net Position. 587,520 Net Delinquent Property Taxes Receivable is a "long-term asset" and not available to pay for current period expenditures and therefore is deferred in the funds. 1,175,818 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. (See Note II.A.) Net Position of Governmental Activites (page 23) The notes to the financial statements are an integral part of this statement. (12,886,350) $ 35,864,650 Page 28 Exhibit #4 Rusk County, Texas Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2014 Road & Bridge Fund General Fund Revenues: Ad Valorem Taxes Other Taxes Intergovernmental Fees Fines and Forfeitures Miscellaneous Total Revenues Expenditures: Current: General Government Judicial Legal Elections Financial Administration Public Facilities Public Safety Public Transportation Health and Welfare Culture and Recreation Conservation Nondepartmental Capital Outlay Debt Service: Principal Interest Other Governmental Funds Total Governmental Funds $ 13,191,466 15,384 198,599 1,723,407 455,318 373,699 $ 5,155,251 220,121 950,750 228,292 92,854 $ 1,752,208 532,357 448,634 9,574 353,712 $ 20,098,925 15,384 951,077 3,122,791 693,184 820,265 $ 15,957,873 $ 6,647,268 $ 3,096,485 $ 25,701,626 $ 1,335,120 2,278,571 542,820 245,758 1,778,856 526,572 5,422,478 422,658 1,053,569 170,305 766,886 193,790 $ 5,329,219 645,001 $ 52,616 92,924 45,227 193,608 470,434 463,683 111,420 8,981 $ 1,387,736 2,371,495 588,047 245,758 1,778,856 720,180 5,892,912 5,792,902 534,078 1,053,569 170,305 766,886 847,772 - - 965,000 492,263 965,000 492,263 Total Expenditures $ 14,737,383 $ 5,974,220 $ 2,896,156 $ 23,607,759 Excess (Deficiency) of Revenues over Expenditures $ 1,220,490 $ 673,048 $ 200,329 $ 2,093,867 Other Financing Sources (Uses): Transfers in Transfers out $ 15,000 $ (105,000) - $ (15,000) 105,000 - $ Total Other Financing Sources (Uses) $ (90,000) $ (15,000) $ 105,000 $ - Net Change in Fund Balances $ 658,048 305,329 $ 2,093,867 Fund Balances - Beginning Fund Balances - Ending 1,130,490 $ 12,923,895 $ 14,054,385 The notes to the financial statements are an integral part of this statement. $ 2,146,443 $ 2,804,491 6,890,494 $ 7,195,823 120,000 (120,000) 21,960,832 $ 24,054,699 Page 29 Exhibit #4-A Rusk County, Texas Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds To the Statement of Activities For the Year Ended December 31, 2014 Amounts Reported for Governmental Activities in the Statement of Activities are Different Because: Net Change in Fund Balances-Total Governmental Funds (Page 28) $ 2,093,867 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. (See Note II.B.) (961,314) The repayment of long-term debt (e.g. certificates of obligation and capital leases) consumes current financial resources of governmental funds, but the transaction has no effect on net position. 965,000 Delinquent property tax collections provide current financial resources to the funds but has no effect on net position. (1,386,753) Delinquent property taxes receivable, which do not provide current financial resources, are not reported as revenue in the funds. 1,497,149 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 governmental funds. (See Note II.B.) (188,910) The Internal Service Fund is used to charge the costs of health insurance to individual funds. The net revenue (expense) of the activity of the Internal Service Fund is reported with governmental activities. (342,836) Changes in Net Position of Governmental Activities (Page 24) The notes to the financial statements are an integral part of this statement. $ 1,676,203 Page 30 Exhibit #5 1 of 2 Rusk County, Texas Statement of Revenues, Expenditures, and Changes in Fund BalancesBudget (GAAP Basis) and Actual-General Fund and Major Special Revenue Funds For the Year Ended December 31, 2014 General Fund Budgeted Amounts Final Original Actual Variance with Final Budget Positive/ (Negative) Revenues: Ad Valorem Taxes Other Taxes Intergovernmental Fees Fines and Forfeitures Miscellaneous $ 13,459,024 11,000 83,500 1,535,672 550,000 322,400 $ 13,459,024 11,000 99,750 1,535,672 550,000 332,511 $ 13,191,467 15,384 198,599 1,723,407 455,318 373,699 $ (267,557) 4,384 98,849 187,735 (94,682) 41,188 Total Revenues $ 15,961,596 $ 15,987,958 $ 15,957,874 $ (30,084) Expenditures: Current: General Government Judicial Legal Elections Financial Administration Public Facilities Public Safety Health and Welfare Culture and Recreation Conservation Nondepartmental Capital Outlay $ 1,394,761 3,071,035 636,891 241,375 1,845,072 558,196 5,634,421 538,280 1,091,353 169,127 912,400 928,700 $ 1,400,904 3,071,995 639,991 250,375 1,848,072 546,796 5,644,069 621,418 1,106,153 162,257 953,117 924,808 $ 1,335,121 2,278,571 542,820 245,758 1,778,856 526,572 5,422,478 422,658 1,053,569 170,305 766,886 193,790 $ 65,783 793,424 97,171 4,617 69,216 20,224 221,591 198,760 52,584 (8,048) 186,231 731,018 Total Expenditures $ 17,021,611 $ 17,169,955 $ 14,737,384 $ 2,432,571 Excess (Deficiency) of Revenues over Expenditures $ (1,060,015) $ (1,181,997) $ 1,220,490 $ 2,402,487 Other Financing Sources (Uses): Transfers in Transfers out $ 15,000 $ (105,000) 15,000 $ (105,000) 15,000 $ (105,000) - Total Other Financing Sources (Uses) $ (90,000) $ (90,000) $ (90,000) $ - Net Change in Fund Balances $ (1,150,015) $ (1,271,997) $ 1,130,490 Fund Balances - Beginning Fund Balances - Ending $ 2,402,487 12,923,895 12,923,895 12,923,895 - $ 11,773,880 $ 11,651,898 $ 14,054,385 $ 2,402,487 The notes to the financial statements are an integral part of this statement. Page 31 Exhibit #5 2 of 2 Rusk County, Texas Statement of Revenues, Expenditures, and Changes in Fund BalancesBudget (GAAP Basis) and Actual-General Fund and Major Special Revenue Funds For the Year Ended December 31, 2014 Major Special Revenue Funds Road & Bridge Fund Budgeted Amounts Final Original Actual Variance with Final Budget Positive/ (Negative) Revenues: Ad Valorem Taxes Intergovernmental Fees Fines and Forfeitures Miscellaneous $ 5,168,790 890,000 300,000 35,800 $ 5,168,790 220,121 890,000 300,000 78,800 $ 5,155,252 220,121 950,750 228,292 92,853 $ (13,538) 60,750 (71,708) 14,053 Total Revenues $ 6,394,590 $ 6,657,711 $ 6,647,268 $ (10,443) Expenditures: Current: Public Transportation Capital Outlay $ 5,730,987 640,430 $ 6,180,154 1,765,172 $ 5,329,219 645,001 $ Total Expenditures $ 6,371,417 $ 7,945,326 $ 5,974,220 $ 1,971,106 Excess (Deficiency) of Revenues over Expenditures $ $ (1,287,615) $ Other Financing Sources (Uses): Transfers out $ (15,000) $ (15,000) $ (15,000) $ - Total Other Financing Sources (Uses) $ (15,000) $ (15,000) $ (15,000) $ - Net Change in Fund Balances $ Fund Balances - Beginning Fund Balances - Ending 23,173 8,173 $ (1,302,615) $ 2,146,443 $ 2,154,616 The notes to the financial statements are an integral part of this statement. $ 673,048 850,935 1,120,171 $ 1,960,663 658,048 $ 1,960,663 2,146,443 2,146,443 - 843,828 $ 2,804,491 $ 1,960,663 Page 32 Exhibit #6 Rusk County, Texas Statement of Net Position Proprietary Funds December 31, 2014 Governmental Activities Internal Service Fund Assets Current Assets: Cash Investments $ 305,018 283,268 $ 588,286 Total Assets $ 588,286 Liabilities Current Liabilities: Accounts Payable $ 766 $ 766 Total Liabilities $ 766 Net Position Unrestricted $ 587,520 Total Net Position $ 587,520 Total Current Assets Total Current Liabilities The notes to the financial statements are an integral part of this statement. Page 33 Exhibit #7 Rusk County, Texas Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the Year Ended December 31, 2014 Governmental Activities Internal Service Fund Operating Revenues: Charges for Services Total Operating Revenues Operating Expenses: Benefits, Insurance & Administrative Cost Total Operating Expenses $ 2,871,962 $ 2,871,962 $ 3,221,389 $ 3,221,389 Operating Income (Loss) $ Nonoperating Revenues (Expenses) Interest Income $ 6,591 $ 6,591 Total Nonoperating Revenues (Expenses) Change in Net Position $ Total Net Position - Beginning Total Net Position - Ending The notes to the financial statements are an integral part of this statement. (349,427) (342,836) 930,356 $ 587,520 Page 34 Exhibit #8 Rusk County, Texas Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2014 Governmental Activities Internal Service Fund Cash Flows from Operating Activities: Receipts from Interfund Services Provided Payments to Suppliers and Providers $ 2,871,962 (3,222,018) Net Cash Provided (Used) by Operating Activities $ (350,056) Cash Flows from Investing Activities: Interest Income $ 6,591 Net Cash Provided (Used) by Investing Activities $ 6,591 Net Increase (Decrease) in Cash and Cash Equivalents $ Cash and Cash Equivalents, January 1 Cash and Cash Equivalents, December 31 (See below) (343,465) 931,751 $ 588,286 $ (349,427) $ (629) $ (629) Net Cash Provided (Used) by Operating Activities $ (350,056) Exhibit #6 - Page 32: Cash Investments $ 305,018 283,268 $ 588,286 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Increase/(Decrease) in Payables Total Adjustments Total Cash and Cash Equivalents - Exhibit #6 The notes to the financial statements are an integral part of this statement. Page 35 Exhibit #9 Rusk County, Texas Statement of Net Position Fiduciary Funds December 31, 2014 Agency Funds Assets Cash Investments $ 7,480,651 1,654,025 Total Assets $ 9,134,676 $ 4,855,548 931,227 249,106 3,098,795 $ 9,134,676 Liabilities Due to Other Governments Court Ordered Deposits Inmate Trust Funds Court Ordered Trust Funds Total Liabilities The accompanying notes are an integral part of this statement. RUSK COUNTY, TEXAS Notes to the Financial Statements December 31, 2014 I. Summary of Significant Accounting Policies The financial statements of Rusk County, Texas have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. 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 government's accounting policies are described below. A. Reporting Entity In evaluating how to define the County for financial reporting purposes, management has considered all potential component units for which the County may be financially accountable and, as such, should be included within the County's financial statements. The County is financially accountable if it appoints a voting majority of the organization's governing board and (1) it is able to impose its will on the organization, or (2) there is a potential for the organization to provide specific financial burden on the County. Additionally, the County is required to consider other organizations for which the nature and significance of their relationship with the County are such that exclusion would cause the County's financial statements to be misleading or incomplete. Based upon the application of the above criteria, the County has no component units. B. Government-wide and Fund Financial Statements The Government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the County. Governmental activities, which normally are supported by taxes, intergovernmental, fee, and fine revenues, are to be reported separately from business-type activities, which rely, to a significant extent on fees and charges for support. Rusk County has no business-type activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers, citizens, or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function