TVWSD 2024 Audit Report FINAL

TETON VILLAGE WATER AND SEWER DISTRICT FINANCIAL REPORT JUNE 30, 2024

23

CONTENTS U

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Page U

INDEPENDENT AUDITOR’S REPORT

U

1-2

FINANCIAL STATEMENTS Statement of Net Position - Modified Cash Basis

3

Statement of Revenues and Expenses and Changes in Net Position Modified Cash Basis

4

Statements of Cash Flows

5

NOTES TO FINANCIAL STATEMENTS

6-17

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

18-19

SCHEDULE OF FINDINGS

20

SCHEDULE OF PRIOR YEAR FINDINGS

21

24

INDEPENDENT AUDITOR’S REPORT Management and the Board of Directors Teton Village Water and Sewer District Teton Village, WY 83025 Report on the Audit of the Financial Statements Opinions We have audited the accompanying modified cash basis financial statement of the business type activities, of the Teton Village Water and Sewer District (the District), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective modified cash basis financial position of the business type activities, of the Teton Village Water and Sewer District as of June 30, 2024, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with the modified cash basis of accounting described in Note 1.

Basis for Opinions 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Teton Village Water and Sewer District and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter—Basis of Accounting and Restatement We draw attention to Note 1 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.

We further draw attention to Note 12 which describes the restatement related to the District’s beginning net position as a result of the changes in basis of presentation from the 2023 audited financial statement to the 2024 audited financial statement.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the modified cash basis of accounting described in Note 1. This includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statement in the circumstances. Management is also responsible for 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 for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

1

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • • • • •

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit 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 Teton Village Water and Sewer District’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Teton Village Water and Sewer District’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Other Matters Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Teton Village Water and Sewer District’s basic financial statements. Management elected not to prepare the management discussion and analysis portion of the financial statements.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 16, 2024 on our consideration of the Teton Village Water and Sewer District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 effectiveness of the District’s 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 Teton Village Water and Sewer District’s internal control over financial reporting and compliance.

Mountain States CPAs and Consultants, LLC Mountain States CPAs and Consultants, LLC Lander, Wyoming December 16, 2024

2

Financial Statements

TETON VILLAGE WATER AND SEWER DISTRICT

STATEMENT OF NET POSITION - MODIFIED CASH BASIS JUNE 30, 2024

ASSETS Current assets Cash and cash equivalents Investments p Total current assets

$

Non-current assets Capital assets Land Construction in progress Depreciable capital assets Less: accumulated depreciation Total capital assets

453,659 6,522,838 24,860,194 (12,097,486) 19,739,205

TOTAL ASSETS

25,515,460

LIABILITIES Current Liabilities Current portion of long term debt Total current liabilities

197,916

Non-current liabilities Long term debt Less: current portion of long term debt Total long term debt

3,260,503 (197,916) 3,062,587

TOTAL LIABILITIES

3,260,503

NET POSITION Net investment in capital assets Unrestricted TOTAL NET POSITION

817,837 4,958,418 5,776,255

16,478,702 5,776,255 $

See Independent Auditor's Report and Notes to Financial Statements 3

25,515,460

TETON VILLAGE WATER AND SEWER DISTRICT

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN NET POSITION MODIFIED CASH BASIS YEAR ENDED JUNE 30, 2024

REVENUES Water and sewer services

$

OPERATING EXPENSES Salaries and wages including payroll taxes Benefits Pension Office and administration Training Repairs and maintenance Improvements and project costs Equipment and supplies Utilities Operations expense Travel Audit and bookkeeping Legal Capital outlay Insurance Debt payments Depreciation Total Expenditures

1,754,607

956,208 206,440 137,070 55,207 6,309 274,650 12,625 92,522 130,565 66,148 2,718 11,486 1,190 148,048 24,350 204 664,487 2,790,227

NON OPERATING REVENUES (EXPENSES) Interest expense Tax revenues Grants Rental Interest Total Non Operating Revenues (Expenses)

(28,267) 1,474,011 719,724 49,943 288,153 2,503,564

Change in Net Position

1,467,944

NET POSITION - JULY 1 - as restated NET POSITION - JUNE 30

20,787,013 $

See Independent Auditor's Report and Notes to Financial Statements 4

22,254,957

TETON VILLAGE WATER AND SEWER DISTRICT

STATEMENT OF CASH FLOWS - MODIFIED CASH BASIS FOR THE YEAR ENDED JUNE 30, 2024 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash received from other governments Cash paid for goods and services Cash paid to employees for services Interest received Net cash provided by (used in) operating actives

$

1,754,607 2,193,735 (804,346) (1,299,718) 288,153 2,132,431

CASH FLOWS FROM INVESTING ACTIVITIES Cash provided from sale of certificates of deposits Acquisition and construction of capital assets Net cash provided by (used in) investing activities

209,055 (5,831,483) (5,622,428)

CASH FLOWS FROM FINANCING ACTIVITIES Rent received Principal paid on long term debt Loan proceeds received Interest paid on long term debt Net cash provided by (used in) capital and related financing activities

49,943 (193,440) 1,922,812 (28,267) 1,751,048

Net (decrease) in cash and cash equivalents

(1,738,949)

Cash and cash equivalents - beginning of year

2,556,786

Cash and cash equivalents - end of year

$

RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Change in Net Position Adjustments to reconcile operating (loss) to net cash provided by operating activities: Depreciation Net cash provided by operating activities

NON-CASH ITEMS

817,837

1,467,944 664,487 $

2,132,431

NONE

See Independent Auditor's Report and Notes to Financial Statements 5

Notes to the Financial Statements

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 -

Nature of Business and Significant Accounting Policies General Information Teton Village Water and Sewer District is a public utility district which operates a water and sewage treatment facility within Teton Village. The District was created in 1969 for the necessity and convenience for the residents of Teton Village located in Teton Village, Wyoming. The District is governed by a five member board.

The criteria used to determine the reporting entity are consistent with Section 2100 “Defining the Reporting Entity” of the Codification of Governmental Accounting and Financial Reporting Standards published by Governmental Accounting Standards Board (GASB).

The accounting policies of the District conform to generally accepted accounting principles as applicable to governments.

The District operates under, and is bound by, Wyoming statutes covering governance, trustee authority, policies and procedures, open meetings/records, fiscal policies, as well as the bylaws adopted by the Trustees. The District is managed and controlled by a Board of five Trustees who serve without compensation.

The District has no component units included within the reporting entity.

Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. The District’s financial statements are prepared on the basis of modified cash basis. This method recognizes assets, liabilities, net position/fund equity, revenues, and expenditures/expenses when they result from cash transactions with a provision for depreciation and long term debt associated with the fixed assets. This basis is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Conformity with GAAP would require recognition of income when earned and expenses when incurred in the accompanying financial statements.

As a result of the use of this modified cash basis of accounting, certain assets and their related revenues (such as accounts receivable and revenue for billed or provided services not yet collected) and certain liabilities and their related expenses (such as accounts payable and expenses for goods or services received but not yet paid, and accrued expenses and liabilities other than long term debt) are not recorded in these financial statements.

Proprietary Fund The accompanying financial statements have been prepared using the modified cash basis of accounting. This basis is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.

Enterprise funds distinguish operating revenues and expenses from non operating items.

Operating revenues and expenses generally result from providing services in connection with the enterprise fund’s principal ongoing operation. The principal operating revenues for the District are charged to customers for providing water and sewer services.

Operating expenses include cost of services, administrative expenses and depreciation.

All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses.

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TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 -

Nature of Business and Significant Accounting Policies (cont.)

Statement of Cash Flows For purposes of the statement of cash flows, the District considers all highly liquid assets (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents.

Net Position The Teton Village Water and Sewer District applies restricted, then unrestricted resources when an expense is incurred for purposes that satisfy the related definition and criteria for the related net position classification. Under the reporting for proprietary funds only restricted and unrestricted net position is presented on the financial statements.

Net Position consists of restricted and unrestricted amounts. The District records restrictions to indicate that a portion of the net position is segregated for a specific future use and does not represent current available expendable financial sources. The District has no restrictions on funds under formal or legal obligations as of June 30, 2024.

Net position is a function of assets minus liabilities equals net position under the modified cash basis financial statements. The caption "Invested in capital assets, net of related debt," consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets.

The District maintained emergency reserves at $1,137,057. The purpose of maintaining emergency reserves is due to the fact that the District is largely reliant on tax revenues and assessments in a county that is largely reliant property tax revenues.

These reserves are meant to enable the District to continue the level of services to property owners of Teton Village.

The District has not elected to adopt a minimum net position policy as of June 30, 2024.

Budget and Budgetary Accounting The amounts reported as the original budgeted amounts in the budgetary statement reflect the amounts when the original appropriations were adopted. The amounts reported as the final budgeted amounts in the budgetary statement reflect the amounts after approved budget amendments during fiscal year 2023-2024.

The District follows these procedures in establishing the budgetary data reflected for the General Fund in the financial statements: •

The Board, in conjunction with internal management, prepares and approves the District's budget prior to May 1 for the fiscal year commencing July 1.

•

The budget is then submitted to the County Commissioners and Wyoming Department of Audit. The operating budget includes proposed expenditures and means of financing them for the upcoming year, along with estimates for the current year and actual data for the preceding year.

•

The budget is submitted in summary form with more detailed line item budgets included for administrative control.

•

Public hearings are advertised and conducted to obtain taxpayer comments.

•

The Board can, after adequate public notice and a public hearing, amend the original budget.

•

Appropriations lapse at the end of each fiscal year.

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TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 -

Nature of Business and Significant Accounting Policies (cont.)

Revenue Recognition Amounts reported as revenues include 1) charges to customers for water and sewer services or other applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.

Capital Assets Land, buildings and equipment are carried at cost. Capital assets are defined by the government as equipment with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Major renewals and betterments are capitalized. Maintenance, repairs and minor renewals are expended as incurred. When properties are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts.

All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated fixed assets are recorded at their fair market values as of the date placed in service.

Depreciation Method and Useful Lives Property, plant, and equipment are depreciated using the straight-line method over the following estimated useful lives:

Water supply and storage Water distribution system Sewer collection system Wastewater treatment plant and interceptor sewers Other assets

Years 5 - 50 years 7 - 50 years 20 - 50 years 5 - 50 years 5 - 50 years

Net Position Net position is a function of assets plus deferred outflows of resources minus liabilities minus deferred inflows of resources equals net position. The caption "Invested in capital assets, net of related debt," consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets.

The District applies restricted and then unrestricted resources when an expense is incurred for purposes that satisfy the related definition and criteria for the related net position classification shown above for fund financial statements.

Use of Estimates The preparation of financial statements in conformity with a basis of accounting other than accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect certain reported amounts and related disclosures. Actual results could differ from those estimates.

Compensated Absences Employees accrue compensatory paid time off over the course of their employment on a graduated scale based on years of service that range from 55.2 annually for the first year to 147.6 for the 20th year of employment. A maximum of 100 hours may be carried over to the following year and all compensatory paid time off is paid out upon termination. As of June 30, 2024 the district had $32,723 in accrued compensatory paid time off that is not shown on the Statement of Net Position as it is presented on the modified cash basis of accounting.

8

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 -

Nature of Business and Significant Accounting Policies (cont.)

Income Taxes The District is a political subdivision of the State of Wyoming and, as such, is exempt from federal income taxes.

New and Upcoming Accounting Pronouncements The following are Statements of the Governmental Accounting Standards Board (GASB) that are or will be applicable to the Organization in the upcoming future. As of June 30, 2024, the Organization was aware of the following new standards issued by GASB: •

GASB Statement No. 96, Subscription-Based Information Technology Arrangements, effective for fiscal year beginning after June 15, 2022.

•

GASB Statement No. 101, Compensated Absences effective for fiscal year beginning after December 15, 2023.

•

GASB Statement No. 102, Certain Risk disclosures effective for fiscal year beginning after June 15, 2024.

•

GASB Statement No. 103, Certain Risk disclosures effective for fiscal year beginning after June 15, 2024.

In May 2020, the GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.

The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Earlier application is encouraged.

In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.

This Statement requires that liabilities for compensated absences be recognized for (1)leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave.

Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a government should consider relevant factors such as employment policies related to compensated absences and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefits should not be included in a liability for compensated absences.

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TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 Nature of Business and Significant Accounting Policies (cont.)

New and Upcoming Accounting Pronouncements (cont.)

This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences.

The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. Earlier application is encouraged.

In December of 2023 the GASB issued Statement No. 102, Certain Risk Disclosures.

This Statement defines a concentration as a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources. A constraint is a limitation imposed on a government by an external party or by formal action of the government’s highest level of decision-making authority. Concentrations and constraints may limit a government’s ability to acquire resources or control spending.

This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. If a government determines that those criteria for disclosure have been met for a concentration or constraint, it should disclose information in notes to financial statements in sufficient detail to enable users of financial statements to understand the nature of the circumstances disclosed and the government’s vulnerability to the risk of a substantial impact. The disclosure should include descriptions of the following: • • •

The concentration or constraint Each event associated with the concentration or constraint that could cause a substantial impact if the event had occurred or had begun to occur prior to the issuance of the financial statements Actions taken by the government prior to the issuance of the financial statements to mitigate the risk.

The requirements of this Statement are effective for fiscal years beginning after June 15, 2024, and all reporting periods thereafter. Earlier application is encouraged.

In April of 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues.

This Statement continues the requirement that the basic financial statements be preceded by management’s discussion and analysis (MD&A), which is presented as required supplementary information (RSI). MD&A provides an objective and easily readable analysis of the government’s financial activities based on currently known facts, decisions, or conditions and presents comparisons between the current year and the prior year. This Statement requires that the information presented in MD&A be limited to the related topics discussed in five sections: (1) Overview of the Financial Statements, (2) Financial Summary, (3) Detailed Analyses, (4) Significant Capital Asset and Long-Term Financing Activity, and (5) Currently Known Facts, Decisions, or Conditions. Furthermore, this Statement stresses that the detailed analyses should explain why balances and results of operations changed rather than simply presenting the amounts or percentages by which they changed. This Statement emphasizes that the analysis provided in MD&A should avoid unnecessary duplication by not repeating explanations that may be relevant to multiple sections and that “boilerplate” discussions should be avoided by presenting only the most relevant information, focused on the primary government. In addition, this 10

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 -

Nature of Business and Significant Accounting Policies (cont.)

New and Upcoming Accounting Pronouncements (cont.)

Statement continues the requirement that information included in MD&A distinguish between that of the primary government and its discretely presented component units.

This Statement describes unusual or infrequent items as transactions and other events that are either unusual in nature or infrequent in occurrence. Furthermore, governments are required to display the inflows and outflows related to each unusual or infrequent item separately as the last presented flow(s) of resources prior to the net change in resource flows in the government-wide, governmental fund, and proprietary fund statements of resource flows.

This Statement requires that the proprietary fund statement of revenues, expenses, and changes in fund net position continue to distinguish between operating and nonoperating revenues and expenses. Operating revenues and expenses are defined as revenues and expenses other than nonoperating revenues and expenses. Nonoperating revenues and expenses are defined as (1) subsidies received and provided, (2) contributions to permanent and term endowments, (3) revenues and expenses related to financing, (4) resources from the disposal of capital assets and inventory, and (5) investment income and expenses.

In addition to the subtotals currently required in a proprietary fund statement of revenues, expenses, and changes in fund net position, this Statement requires that a subtotal for operating income (loss) and noncapital subsidies be presented before reporting other nonoperating revenues and expenses. Subsidies are defined as (1) resources received from another party or fund (a) for which the proprietary fund does not provide goods and services to the other party or fund and (b) that directly or indirectly keep the proprietary fund’s current or future fees and charges lower than they would be otherwise, (2) resources provided to another party or fund (a) for which the other party or fund does not provide goods and services to the proprietary fund and (b) that are recoverable through the proprietary fund’s current or future pricing policies, and (3) all other transfers.

This Statement requires governments to present each major component unit separately in the reporting entity’s statement of net position and statement of activities if it does not reduce the readability of the statements. If the readability of those statements would be reduced, combining statements of major component units should be presented after the fund financial statements.

This Statement requires governments to present budgetary comparison information using a single method of communication—RSI. Governments also are required to present (1) variances between original and final budget amounts and (2) variances between final budget and actual amounts. An explanation of significant variances is required to be presented in notes to RSI. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter. Earlier application is encouraged.

The Organization is evaluating the impact that the above GASB statements will have on its financial reporting.

NOTE 2 -

Deposits and Investments Custodial Credit Risk of Bank Deposits Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits (cash and money market funds) totaled $817,837 and the bank balance was $1,373,875 as of June 30, 2024. Of the bank deposit balance, $250,000 was covered by federal depository insurance, and the remainder was collateralized up to an additional $1,123,875 by a financial institution where the District holds most of its deposits.

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TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 2 -

Deposits and Investments (cont.)

Statutes authorize the District to invest in various instruments of the federal government and its agencies, savings certificates of savings and loan associations, bank certificates of deposit and investment pools that purchase allowable investments. The District has elected to invest cash in excess of immediate needs in the Wyoming Government Investment Fund (WGIF).

Custodial Credit Risk of Investments Custodial credit risk is the risk that in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The District will minimize the custodial credit risk by limiting investments to the types of securities allowed by state law and by prequalifying the financial institutions, broker/dealers intermediaries, and advisors with which the District would do business.

Investments The District's certificates of deposit are summarized in the table below. certificates of deposit listed below are not rated.

Certificates of Deposit WGIF - CD's BOJH - CD's Wells Fargo - CD Total Certificates

Fair Value $ 3,047,000 235,000 261,000 $ 3,543,000

Less than 1 Month $ 711,000 0 0 $ 711,000

Maturity in Months 6-12 $ 1,185,000 235,000 261,000 $ 1,681,000

Maturity in Months 12-24 $ 1,151,000 0 0 $ 1,151,000

Rates 5.15% - 5.81% 2% - 4.91% 4.76%

The

Rating None None None

The Wyoming Government Investment Fund is an external investment pool administered by the Wyoming State Treasurer. This pool invests in various investments. The District has chosen to utilize two funds for the Wyoming Government Investment fund. The District has $1,415,418 invested in one of the pools that invests in highlight liquid deposits that provide liquidity while maximizing returns and the other pool invests primarily in certificates of deposits in various financial institutions in amounts below the Federal Deposit Insurance Corporation limit of $250,000 as shown in the table above.

The District has invested funds with an external investment pool, mostly in Certificates of Deposit which are specifically excluded from Government Accounting Standards Board Statement (GASS) No. 72, Fair Value Measurement and Application. Unrealized gains and losses on investments are not included in the statement of revenues, expenditures, and changes in net position for the District (as a proprietary fund) given that the financial statements are presented on the modified cash basis of accounting.

Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity its fair value is to changes in market interest rates.

Concentration of Credit Risk The Board places no limit on the amount the District may invest in any one issuer. The District minimizes the concentration of the credit risk by diversification so that the impact of potential losses from any one type of deposit and or security or issuer will be minimized. The District had a concentration of its deposits in one financial institution that is used for its primary operating account and also holds a Certificate of Deposit with the institution.

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TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 2 -

Deposits and Investments (cont.)

Deposits and Investments are summarized in the table below as of June 30, 2024.

Deposits Cash in banks Investments Wells Fargo - CD Bank of Jackson Hole - CD Wyoming Government Investment Fund (WGIF) - CD's Wyoming Government Investment Fund (WGIF) Total Cash and Investments NOTE 3 -

$

817,837 261,000 235,000 3,047,000 1,415,418

$

5,776,255

Property Taxes The District's property taxes are levied at the County level on October 1st of each year.

The County Assessor is responsible for the assessment of all taxable real property within Teton County. The County Treasurer computes the annual tax for each parcel of real property and prepares tax books used as the basis for issuing tax bills to all taxpayers in the County. Property taxes are collected by the County Treasurer, who remits to each unit its respective share of the collections. Provided the payments are timely, the tax can be paid in two equal installments on November 10 and May 10, or the tax may be paid in full on December 31. Taxes collected are distributed after the end of each month. This is the largest single revenue source for the District.

NOTE 4 -

Lease Receivable The District entered into an agreement to lease office space to the Teton Village Association Improvement and Service District on July 1, 2008. The terms of the lease were fifteen (15) years commencing on July 1, 2008 and terminating on June 30, 2023.

The District renewed for one (1) additional five (5) year term effective July 1, 2023 and terminating on June 30, 2028. The District has the right to renew for one (1) additional five (5) year term providing they are not in default under the terms of the lease.

The annual rent is sixteen thousand eight hundred dollars ($16,800) per year, payable in twelve (12) equal monthly installments of one thousand four hundred dollars ($1,400).

As the District has elected the modified cash basis presentation, GASB 87, Leases, has not been applied which would include the recognition of a right of use asset and liability.

The table below presents the incoming cash flows associated with the lease over the remaining lease term.

2025 2026 2027 2028 2029

$

16,800 16,800 16,800 16,800 0

Total

$

67,200

The District also rents three apartments to employees as part of a condition of their employment. Rents range from $550 to $235 a month. As the lease expires upon the termination of employment an estimate of the lease terms cannot be determined.

13

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 5 -

Capital Assets The table below summarizes the fixed asset activity for the District as of June 30, 2024.

Land Construction in process Total non depreciable fixed assets

Ending Balance June 30, 2023 $ 453,659 641,355 1,095,014

$

Additions

0 5,881,483 5,881,483

$

Disposals

0 0 0

$

0 0 0

Ending Balance June 30, 2024 $ 453,659 6,522,838 6,976,497

Transfers

Water and supply storage Water distribution WW Treatment and interceptor Sewer collection system Other fixed assets

3,948,316 2,585,710 15,171,917 2,250,726 903,526

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

3,948,316 2,585,710 15,171,917 2,250,726 903,526

Total depreciable fixed assets

24,860,195

0

0

0

24,860,195

Accumulated depreciation: Water supply storage Water distribution WW Treatment and interceptor Sewer collection system Other fixed assets

(1,563,517) (1,091,264) (7,283,689) (1,009,837) (484,693)

(96,428) (71,056) (418,407) (40,082) (38,514)

0 0 0 0 0

0 0 0 0 0

(1,659,945) (1,162,320) (7,702,096) (1,049,919) (523,207)

Total Accumulated Depreciation

(11,433,000)

(664,487)

0

0

(12,097,487)

GRAND TOTAL net of depreciation

NOTE 6 -

$

14,522,209

$

5,216,996

$

0

$

0

$

19,739,205

Notes Payable On October 7, 2021, the District signed a promissory note in the amount of $2,900,000, with the Wyoming Office of State Loans and Investments with funds provided by the U.S. Environmental Protection Agency, Clean Water Act, CFDA #66.458, for the purpose of funding the WWTP Improvements 2022 Project. The funds for this loan are both state and federal monies. On October 6, 2022, the note was increased to $4,200,000. The District plans to draw on the loan as needed during the project. As of the June 30, 2024, $1,970,882 in draws had been taken. Loan payments are required to begin no later than one year after substantial completion or initial operations of the project whichever comes first. The repayment schedule is 20 annual payments. The interest rate on the loan is 1.75%. It is secured by the District with the pledge and assignment of revenues from the District’s mill levy assessments, user fees and connection fees. None of the funds that have been drawn thus far are considered federal dollars for the year ended June 30, 2024. As a result of no federal dollars being used on the project a Uniform Guidance single audit has not been required. The rate for this note was changed in February of 2024 to .50%.

The District borrowed $168,792 at 2.5% interest for the wastewater treatment plant expansion. The loan is payable in 20 annual installments of $10,828, including interest until paid. The loan is secured by all property tax levies to property within the District and Matures in 2026. The current outstanding balance of the note as of June 30, 2024 is $20,747. In February 2024 the interest rate for this note was decreased to 1.5% by the originating entity.

The District borrowed $738,820 at 2.5% interest for improvements to the drinking water system. The loan is payable in 20 annual installments of $47,393, including interest until paid. The loan is secured by all property tax levies to property within the District. This loan matures in 3030. The current outstanding balance of the note as of June 30, 2024 is $305,895. In February 2024 the interest rate for this note was also changed to 1.5%.

The District borrowed $2,742,366 at 2.5% interest for an expansion of the wastewater treatment plant. The loan is payable in 20 annual installments of $175,915, including interest until paid. The loan is secured by all property tax levies to property within the District and matures in 2029. The current outstanding balance of the note as of June 30, 2024 is $962,979. I In February 2024 the interest rate for this note was also changed to 1.5% 14

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 6 -

Notes Payable (cont.)

Below is a summary of the required principal and interest payments for the notes payable described on the prior page for the next five years and thereafter. The table also includes the rate adjustment that was made in February of 2024.

2025 2026 2027 2028 2029 Thereafter

Principal $ 353,687 388,576 386,240 394,473 402,886 1,136,725 $3,062,587

NOTE 7 -

$

$

Interest 79,218 58,194 53,218 48,293 60,716 286,573 586,212

$

$

Total 432,905 446,770 439,458 442,766 463,602 1,423,298 3,648,799

Contingencies A.

Grants The District, from time to time, may receive financial assistance in the form of grants. The expenditure of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and could be subject to audit by the granting agencies. Any disallowed claims resulting from such audits could become a liability of the general fund or other applicable funds. However, in the opinion of management, any such disallowed claims will not have a material adverse effect on the overall financial position of the District at June 30, 2024.

B.

Litigation The District is contingently liable in respect to lawsuits and claims in the ordinary course of its operations. In the opinion of District personnel, the settlement of such contingencies may affect the financial position of the District at June 30, 2024. Should any claims prove to be a detriment to the District, they will be recorded as expenditure in the period in which a liability is realized.

C.

Property and Liability Risk Management Real and personal property owned by the District is subject to loss from natural disasters and actions of others. In addition, the District has the potential to be named as the responsible party in liability claims. The District purchases commercial insurance packages to offset such losses, should they occur.

NOTE 8 -

Defined Benefit Pension Plan Under the modified cash basis presentation Government Accounting Standards Board (GASB) statement No. 68, accounting for pensions is not applied. Under a full accrual presentation the unfunded pension liability would be presented as well as any corresponding deferred inflows and outflows. The disclosure below is for informational purposes only.

Substantially all District employees are eligible to participate in the System. Participants who retire at age 60 with four years of credited service are entitled to a retirement benefit according to predetermined formulas and are allowed to select one of five optional methods for receiving benefits. Early retirement is allowed provided the employee has completed four years of service and attained the age of 50, but will result in a reduction of benefits based on the length of time remaining to normal retirement age. The System also provides death and disability benefits. Benefits are established by State Statutes.

The System issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by writing to Wyoming Retirement System, 6101 Yellowstone Road, Suite 500, Cheyenne, Wyoming 82002 or by calling (307) 777-7691.

15

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 8 -

Defined Benefit Pension Plan (cont.)

The System also provides disability retirement to any employee who becomes permanently incapacitated, mentally or physically, and who cannot continue in the performance of his duties. Benefits are established by State Statutes.

Contributions - The Plan statutorily requires 18.62% of the participant's salary to be contributed to the Plan. Contributions consist of 9.25% of the participant's salary as employee contributions and 9.37% as employer contributions. The amount of contributions designated as employee contributions represent the portion of total contributions that a participant retains ownership of and can elect to receive as a refund upon termination of employment. Employers can elect to cover all or a portion of the employee's contribution at their discretion. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

The District’s contributions to the Wyoming Retirement System for the year ended June 30, 2024 were $137,074.

Governmental accounting standards require the System to report its net pension liability, the total pension liability less the amount of the System's fiduciary net position. The total pension liability is based on actuarial valuations required to be performed at least every two years. As of December 31, 2023, the System's fiscal year-end, the System has reported a net pension liability of $2,270,181,250. The District's proportionate share of the net pension liability, which is based upon actual historical District contributions to the System, is approximately $990,861. This amount, which has been presented for informational purposes, is not a current liability and is expected to decrease over time with normal contribution rates.

NOTE 9 -

Commitments The District had commitments for various construction projects as of June 30, 2024 that are summarized in the table below: Remaining Commitment Project Contract amount Amount spent

WWTP Phase IV Expansion

$ 10,630,000

$

5,660,553

$

4,969,447

As of June 30, 2024, the District is holding retainage of $297,924 in relation to the project commitment noted in the table above.

NOTE 10 -

Related Party The District is located in Teton Village which has a number of other governmental Special Districts and regularly shares resources between the other Districts including staff, board members, office and shop space. The majority of these shared costs are done under board approved governed agreements. Below is a breakdown of related party transactions as of June 30, 2024.

The District was paid $58,452 for shared administrative costs including some wages on shared employees for the year ended June 30, 2024.

NOTE 11 -

Concentration The district had a concentration in revenues as the property taxes received through Teton County account for 34% of the District’s revenues for the year ended June 30, 2024.

The District also had a concentration in expenditures related to a construction project which totaled approximately 65% of the District’s expenses before the costs were capitalized for the year ended June 30, 2024.

16

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 12 -

Restatement The District’s beginning net position was restated from the June 30, 2023 audited financial statement due to the change in basis from the full accrual basis of accounting to the modified cash basis presentation. The table below is detail of the amounts required to be restated to the beginning net position for the modified cash basis presentation.

Net Position

Ending 2023 Net position $ 19,957,711

Beginning net position 2024 - As Restated $ 20,787,013

Restatement $ 829,302

Total restatement

$

829,302

Restatement for modified cash basis Reversal of receivables $ (210,023) (148,819) Reversal of lease receivable Reversal of inventory asset (2,010) Reversal of prepaids, management fees, and othe (40,978) Reversal of deferred outflows - pension (266,884) Reversal of accured interest payable 11,810 Reversal of accounts payable 32,417 Reversal of deferred inflows pension 17,233 Reversal of net pension liability 1,224,514 Reversal of leases liability 148,819 Reversal of accrued wages and benefits 63,223 Total restatement NOTE 13 -

$

829,302

Subsequent Events Management has evaluated subsequent events through the date December 16, 2024 the financial statements were available to be issued.

17

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS

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

Management and the Board of Directors Teton Village Water and Sewer District Teton Village, WY 83025 We have audited, in accordance with the 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the District, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and have issued our report thereon dated December 16, 2024.

Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control.

Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

18

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Mountain States CPAs and Consultants, LLC Mountain States CPAs and Consultants, LLC Lander, Wyoming December 16, 2024

19

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 TETON VILLAGE WATER AND SEWER DISTRICT SCHEDULE OF FINDINGS YEAR ENDED JUNE 30, 2024 None

20

TETON VILLAGE WATER AND SEWER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 TETON VILLAGE WATER AND SEWER DISTRICT SCHEDULE OF PRIOR YEAR FINDINGS YEAR ENDED JUNE 30, 2023 None

21