Finance & Accounting Update

DISTRICT'S CAFR IS COMPLETE

The District’s Comprehensive Annual Financial Report (CAFR) for the fiscal year that ended June 30, 2020 was completed and filed with the State of Nevada, Department of Taxation on February 15, 2021. The report includes the independent auditor’s report which provided an “unmodified” opinion, as well as the Auditor's Report on Internal Controls that identified two finding of material weaknesses.

District management will be working with the Boardappointed Audit Committee to address the auditor’s findings as well as continue to implement recommendations to improve the District’s financial reporting, with an emphasis on enhancing transparency and understanding of the District’s financial position. • The District’s General Fund reported an ending fund balance, as of June 30, 2020, of $4.63 million, representing an increase of $0.86 million over the prior year. Of this amount, a total $3.11 million represents the unassigned fund balance.

• The District’s Community Services Special Revenue Fund ended the year with a fund balance of $15.28 million, reflecting an increase of $1.95 million from the prior year; the Beach Special Revenue Fund ended the year with a fund balance of $2.59 million, reflecting an increase of $0.78 million from the prior year. The entire fund balance within the District’s Community Services and Beach Special

Revenue funds are either restricted or assigned for future use to support the District’s recreational programs and facility improvements.

• As of June 30, 2020 the District had total bond debt outstanding of $5.22 million including Utility Revenue

Bonds outstanding of $4.08 million and Recreation Bonds outstanding totaling $1.14 million. The District retired $0.89 million in bond principal during the fiscal year.

In February, management also provided the Board of Trustees with a Mid-Year Budget Update which included financial results through December 31, 2020 – the first six months of the current fiscal year. Overall, despite the ongoing impacts from reduced access to selected venues and programming, the District financial results reflect favorable variances relative to the approved budget.

The following are selected highlights from the CAFR for the year ended June 30, 2020:

• The District’s net position as of June 30, 2020 was $158.37 million and reflects an increase in net position of $5.41 million over the prior year. Of this amount, a total of $36.63 million (unrestricted net position) is available to meet the District’s future obligations, including future planned capital projects.

• The net position of the District’s governmental activities increased by $4.02 million (to $79.67 million) and the net position of the District’s business-type activities increased by $1.39 million (to $78.70 million).

District Revenues & Expenditures Through December 31, 2020:

• District revenues totaling $22,354,923 were recorded through the second quarter of FY 2020/2021. Total revenues collected represent 41.1% of the total revenues of $54,382,650 included in the District’s approved budget for FY 2020/2021. Total sources for through the second quarter are reported as falling $3.17 million under the yearto-date budget through December 31, 2020; however, this variance includes $1,516,393 in sources of funds that represent planned use of fund balance for selected capital projects.

• The District’s approved budget for FY 2020/2021 includes expenditure appropriations totaling $51,393,708 across all funds, including operations, capital and debt. Overall,

District expenditures recorded through the second quarter ending December 31, 2020, total $21,197,289 which represents 41.2% of the approved fiscal year budget.

Expenditures through the second quarter are $7.9 million under the year-to-date expenditure budget through

December 31, 2020 and is largely attributable to timing of capital project expenditures within the District’s Utility and Community Services capital project funds.

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• Overall, financial results through the second quarter of FY 2020/2021 reflect revenues exceeding expenditures by $1,157,634, which represents a favorable variance relative to the year-to-date budget through the first six months of the fiscal year which assumed expenditures exceeding revenues by $3,602,055.

A specific area of emphasis for the Board of Trustees has been ensuring that fund balances within the District’s Utility and Community Services Funds are identified and committed to specific long-term capital projects that have been identified as Board priorities supporting the Community Services, and Beach Master Plans. These include the completion of the Tennis Center Renovation Project, reconstruction of the Burnt Cedar Pool, and replacement of the Effluent Export Pipeline. Projects identified by the Board as capital project priorities not yet included in the District’s five-year capital plan include renovation of the Incline Beach House and construction of a new dog park.

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