TVWSD Audit FYE6.30.2023

TETON VILLAGE WATER AND SEWER DISTRICT Financial Statements and Supplementary Information For the Years Ended June 30, 2023 and 2022

TETON VILLAGE WATER AND SEWER DISTRICT Financial Statements June 30, 2023 and 2022

Table of Contents

Independent auditor’s report ............................................................................................................................ 1 Statements of net position ................................................................................................................................... 4 Statements of revenues and expenses and changes in net position ............................................................................................................................ 6 Statements of cash flows ..................................................................................................................................... 7 Notes to the financial statements ..................................................................................................................... 9 Required supplementary information Schedule of the proportionate share of the net pension liability (unaudited) ................................................................................................................................. 23 Schedule of changes in net pension liability (unaudited) ......................................................... 24 Schedule of contributions (unaudited) ............................................................................................ 25 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 ............................................................................. 26

Independent Auditor’s Report December 19, 2023 Board of Directors Teton Village Water and Sewer District Teton Village, WY 83025

Opinions We have audited the accompanying financial statements of the business-type activities of Teton Village Water and Sewer District as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Teton Village Water and Sewer 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 financial position of the business-type activities of the Teton Village Water and Sewer District , as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and 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.

In preparing the financial statements, management is required to evaluate whether 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 twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

PO BOX 5, Jackson, WY 83001 | thompsonpalmer.com | O: 307.733.5160 F: 307.739.141 | 275 E Broadway

Auditor’s Responsibilities 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 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.

In performing an audit in accordance with generally accepted 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.

Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the basic financial statements.

Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United State of America require that the schedule of the proportionate share of the net pension liability, and the schedule of contributions, and the statement of revenues, expenditures, and changes in fund balances – budget and actual – on pages 22-24 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 considered it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Change in Accounting Principle As described in Note III-D to the financial statements, in 2023 the District adopted new accounting guidance, GASB statement No. 87, Leases. Our opinion is not modified with respect to this matter.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2023, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of the report is solely 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 District’s internal control over financial reporting and compliance.

Thompson Palmer & Associates, PC Certified Public Accountants

TETON VILLAGE WATER AND SEWER DISTRICT Statements of Net Position June 30, 2023 and 2022

2023 ASSETS Current assets Cash and cash equivalents Investments Interest receivable Accounts receivable - mill levy Accounts receivable Lease receivable - current Supplies inventory Prepaid items Total current assets Non-current assets Capital assets Water supply and storage Water distribution system Wastewater treatment plant and interceptor sewers Sewer collection system Land Machinery and equipment Construction in progess Less: accumulated depreciation Total capital assets

$

2,556,786 5,189,148 61,151 26,128 122,744 13,548 2,010 23,155 7,994,670

2022

$

6,707,496 354,431 34,278 132,444 8,568 2,010 16,232 7,255,459

3,948,316 2,585,709 15,171,917 2,250,726 453,659 913,376 641,355 (11,392,849) 14,572,210

3,874,673 2,575,245 15,171,917 2,250,726 453,659 875,881 521,853 (10,723,845) 15,000,110

Other non-current assets Lease receivable - non-current Loan origination fees, net Deposits Total other non-current assets

135,271 15,758 2,065 153,094

98,549 12,808 2,065 113,422

Total assets

22,719,974

22,368,991

266,884

223,321

DEFERRED OUTFLOW OF RESOURCES Deferred outflows related to pensions

The accompany notes are an integral part of these financial statements 4

TETON VILLAGE WATER AND SEWER DISTRICT Statements of Net Position (continued) June 30, 2023 and 2022

2023

2022

LIABILITIES Current Liabilities Vouchers payable Compensated absences payable Accrued interest payable Accrued wages and taxes Current portion of long term debt Total current liabilities

29,848 32,443 11,809 33,350 197,059 304,509

75,789 37,769 14,486 30,081 369,990 528,115

Non-current liabilities Notes payable Less: current maturities Net pension liability Total non-current liabilities

1,531,131 (197,059) 1,224,514 2,558,586

1,903,017 (369,990) 662,912 2,195,939

Total liabilities

2,863,095

2,724,054

DEFERRED INFLOW OF RESOURCES Deferred inflows related to pensions Deferred inflows related to leases

17,233 148,819

454,309 107,117

166,052

561,426

13,109,901 6,847,810

12,484,112 6,822,719

Total deferred inflow of resources NET ASSETS Net investment in capital assets Unrestricted Total net position

$

19,957,711

The accompany notes are an integral part of these financial statements 5

$

19,306,831

TETON VILLAGE WATER AND SEWER DISTRICT Statements of Revenues and Expenses and Changes in Net Position For the Years Ended June 30, 2023 and 2022

2023 OPERATING REVENUES Water and sewer services

$

1,541,057

2022 $

1,750,385

OPERATING EXPENSES Amortization and depreciation Chemicals, materials and lab fees Disposal Employee Benefits Pension expense Engineering and training Gas, power and lights Insurance Office administration and supplies Payroll taxes Bookkeeping and auditing Repairs, maintenance and operating expenses Salaries Telephone Travel, mileage and vehicle Total operating expenses Operating (loss)

692,630 18,944 53,749 140,263 208,407 22,410 116,197 64,278 28,216 71,864 157,552 399,214 672,848 13,251 22,439 2,682,262 (1,141,205)

677,302 21,149 43,398 153,650 100,626 23,384 100,486 59,386 28,445 71,690 133,197 460,044 658,737 13,513 20,251 2,565,258 (814,873)

NON‐OPERATING REVENUES (EXPENSES) Investment earnings Interest expense Tax revenues Rental income Interest income - right of use lease Other income - right of use lease Miscellaneous income Proceeds from sale of assets Total non-operating revenues (expenses)

228,709 (41,777) 1,480,733 33,014 2,580 8,568 2,344 1,900 1,716,072

9,720 (54,664) 1,170,301 28,479 2,792 8,356 4,211 46,000 1,215,196

Income (loss) before contributions

574,867

400,323

Capital contribution - tap fees

76,013

186,455

Change in net position

650,880

586,778

19,306,831

18,720,052

Net position - beginning of year Net position - end of year

$

19,957,711

The accompany notes are an integral part of these financial statements 6

$

19,306,831

TETON VILLAGE WATER AND SEWER DISTRICT Statements of Cash Flows For the Years Ended June 30, 2023 and 2022

2023 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash paid for goods and services Cash paid to employees for services Net cash provided by operating activities

$

1,550,757 (791,560) (1,172,030) (412,834)

2022

$

1,763,080 (909,363) (1,141,266) (287,549)

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Tax revenues received Rent received Net cash provided by non-capital financing activities

1,472,584 44,162

1,178,771 43,838

1,516,746

1,222,609

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital contributions - tap fees Acquisition and construction of capital assets Principal paid on long term debt Loan proceeds recevied Interest paid on long term debt Net cash (used) by capital and related financing activities

76,013 (259,280) (419,956) 48,070 (44,453)

186,455 (944,350) (360,812) 48,070 (56,380)

(599,606)

(1,127,017)

The accompany notes are an integral part of these financial statements 7

TETON VILLAGE WATER AND SEWER DISTRICT Statements of Cash Flows (continued) For the Years Ended June 30, 2023 and 2022

2023

2022

CASH FLOWS FROM INVESTING ACTIVITIES Interest received Maturities of certificates of deposit Purchases of certificates of deposit Net cash provided (used) by investing activities

177,319 248,665 (5,081,000) (4,655,016)

6,102 1,746,702 1,752,804

Net (decrease) in cash and cash equivalents

(4,150,710)

1,560,847

Cash and cash equivalents - beginning of year

6,707,494

5,146,647

Cash and cash equivalents - end of year

$

2,556,784

$

6,707,494

Reconciliation of Operating Income To Net Cash Provided by Operating Activities 2023 Operating (loss)

$

Adjustments to reconcile operating (loss) to net cash provided by operating activities: Depreciation Amortization Pension expense Change in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in prepaid items Increase (decrease) in accounts payable and accrued liabilities Total adjustments Net cash provided by operating activities

$

(1,141,205)

2022 $

(814,873)

689,080 3,550 80,963

675,610 1,692 (16,514)

9,700 (6,923)

12,694 (3,426)

(47,998) 728,372

(142,733) 527,323

(412,834)

The accompany notes are an integral part of these financial statements 8

$

(287,550)

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 I.

Summary of significant accounting policies A. Reporting entity The Teton Village Water and Sewer District is a public utility district which operates a water and sewage treatment facility at the Teton Village area of Teton County, Wyoming.

B. Measurement focus, basis of accounting and financial statement presentation The accompanying financial statements have been prepared using the accrual method of accounting in accordance with accounting principles of enterprise funds promulgated by the Governmental Accounting Standards Boards in its publication “Codification of Governmental Accounting and Financial Reporting” and the audit guide “Auditing of State and Local Governmental Units” prepared by the American Institute of Certified Public Accountants.

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.

C. Fixed assets and depreciation Depreciation is recorded using the straight-line method over the estimated useful life as follows:

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

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

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, and buildings and infrastructure with cost more than $25,000. 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.

D. Inventory Inventory consists of spare parts, meters, and supplies used in the connections and maintenance of the lines and plant. Inventory is valued at cost (FIFO basis) for financial statement presentation.

9

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 I.

Summary of significant accounting policies (continued) E. Accounts receivable The District recognizes bad debts at the time specific accounts become doubtful for collection; accordingly, accounts receivable are included in the accompanying balance sheet at face value with no provision for losses thereon. This form of presentation is preferable due to the nature of receivables and the immaterial amounts of doubtful collections involved.

F. 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.

Interest expense paid during 2023 and 2022 was $44,453 and $56,380 respectively.

G. Property taxes The District has a mill levy assessment through Teton County, Wyoming. All taxes attach as an enforceable lien on property as of May 11. Taxes are levied on or about August 1 and are payable in two installments on September 1 and March 1. All property taxes are collected by the County Treasurer and remitted to the District when received. Property tax revenue is recognized by the District when due from the county.

In 2022-2023, the District levied 3.5 mills for operating expenses and debt service. The total assessed valuation as of June 30, 2023 and 2022 was $168,893,791 and $122,620,409, respectively.

H. Income taxes No provision is made for income tax, since the District is a governmental subdivision of the State of Wyoming and is exempt from income tax.

I. Accounting estimates The preparation of financial statements require management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual amounts may differ from estimates.

J. Management discussion and analysis The omission of the Management Discussion and Analysis is a common practice among entities that are similar in size and operations to that of the District. Management does not feel that the omission has a material effect on the presentation of the financial statements as a whole.

10

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 I.

Summary of significant accounting policies (continued) K. Pension assets, liabilities & deferred outflows of resources For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Wyoming Retirement System (“WRS”) and additions to/deductions from WRS’s fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. In addition to assets, the statement of net position reports a separate section for deferred outflows of resources which represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. For the year ended June 30, 2023 and 2022 the deferred outflows and inflows of resources are related to pensions and leases.

L. Leases In June 2017, the GASB issued statement No.87, Leases , which improves accounting and financial reporting for leases by governments. The Statement increase the usefulness of governments' financial statements by requiring recognition of certain lease assets and deferred inflows for leases that were previously classified as operating leases. The District adopted this guidance for the period ended June 30, 2023 and it did not have a material impact on the District's financial statements.

II.

Stewardship, compliance, and accountability A. Budget compliance The District’s Board of Directors properly approved and adopted an operating budget for the years ended June 30, 2023 and 2022. The District operated within the budget as adopted during the fiscal years.

III. Detailed footnotes A. Cash and investments Cash and investments are carried at cost, which equals market value, and consist of federally insured money market accounts and certificates of deposit.

Wyoming State Statutes allow the District to invest in US, state and local government securities, and accounts of financial and savings institutions approved as depositories of public funds by the Wyoming State Treasurer. Stocks and bonds of private corporations, as well as repurchase and reverse repurchase agreements, are a prohibited investment means for the District.

11

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 III. Detailed footnotes A. Cash and investments Cash, cash equivalents, and investments as of June 30, 2023 consist of the following: Cash and cash equivalents Deposits with financial institutions Deposits with Wyoming Government Investment Fund Cash on hand Total cash and cash equivalents

$ 1,316,959 1,239,727 100 2,556,786

Investments Certificate of deposit through Bank of Jackson Hole Certificate of deposit through Wyoming Government Investment Fund Total investments Total cash, cash equivalents, and investments

108,148 5,081,000 5,189,148 $ 7,745,934

At year end the carrying amount and bank balances of the District’s depository balances and their collateralized status were as follows: Carrying Amount

Bank Balances Insured or collateralized by securities held by the district or its agent in the District's name

$

250,000

$

250,000

Collateralized with securities held by the pledging financial institution's trust department or agent but not in the District's name

855,390

812,202

Uninsured or uncollateralized

254,757

254,757

$ 1,360,147

$ 1,316,959

Total

12

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 III. Detailed footnotes (continued) B. Capital assets Beginning balance Business-type activities Capital assets not being depreciated: Land Construction in progress

$

453,659 521,853

Increases

$

119,502

Ending balance

(Decreases)

$

-

$

453,659 641,355

Total capital assets not depreciated

975,512

119,502

-

1,095,014

Capital assets being depreciated: Water supply and storage Water distribution system Sewer collection system Wastewater treatment plant Machinery and equipment

3,874,673 2,575,245 2,250,726 15,171,917 875,881

73,643 10,465 57,570

(20,075)

3,948,316 2,585,710 2,250,726 15,171,917 913,376

Total capital assets depreciated

24,748,442

141,678

(20,075)

24,870,045

Increases

(Decreases)

Beginning balance

Ending balance

Accumulated depreciation for: Water supply and storage Water distribution system Sewer collection system Wastewater treatment plant Machinery and equipment

1,466,905 1,019,866 969,657 6,841,314 426,104

96,612 71,398 40,180 442,375 38,514

(20,075)

1,563,517 1,091,264 1,009,837 7,283,689 444,543

Total accumulated depreciation

10,723,846

689,079

(20,075)

11,392,850

Total capital assets being depreciated, net

14,024,596

(547,401)

-

13,477,195

$ 15,000,108

$ (427,899)

-

$ 14,572,209

Total business-type activities capital assets, net

13

$

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 III. Detailed footnotes (continued) C. Long‐term debt Long-term debt activity is as follows: Beginning Balance $

1,903,017

Additions

Reductions

$

$

48,070

(419,956)

Ending Balance $ 1,531,131 Loan Balance

Note payable ‐ Wyoming Office of State Land and Investments 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.

$

30,801

Note payable ‐ Wyoming Office of State Land and Investments 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.

$ 1,113,378

Note payable ‐ Wyoming Office of State Land and Investments 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.

$

338,883

$

48,070

C. Long‐term debt Note payable ‐ Wyoming Office of State Loans and Investments 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. 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, 2023, $48,070 in draws had been taken. Funds not taken by March 30, 2024 plus a potential 90-day extension will revert back to the state. 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.

14

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 III. Detailed footnotes (continued) C. Long‐term debt Annual requirements to amortize the loans as of June 30, 2023 are:

2024 2025 2026 2027 2028 2029-2030

$

Total

Principal 197,059 201,985 206,903 201,380 206,415 517,389

$ 1,531,131

$

$

Interest 37,077 32,150 27,100 21,928 16,893 40,829 175,977

$

Total 234,136 234,135 234,003 223,308 223,308 558,218

$ 1,707,108

D. Lease Receivable Right of use 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).

Per GASB 87 statement, the amount of $148,819 has been included in the Statement of Net Position as a lease receivable calculated by taking the present value of future lease payments for 25 years starting July 1, 2008 and ending June 30, 2033 at a discount rate of 2.5%. The lease receivable was remeasured as of June 30, 2023 when the lease was renewed and the monthly payments increased from $929 to $1,400.

The remeasurement increased the lease receivable and related deferred inflows by $50,270. Rental income is reclassified as interest income and other income-right of use lease.

15

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 III. Detailed footnotes (continued) D. Lease Receivable Right of use lease receivable Annual debt service requirements to maturity for the lease liability is as follows: Year

Principal

Interest

2024 2025 2026 2027 2028 2029-2033 Thereafter

$

13,548 13,573 13,916 14,268 14,629 78,885 -

$

3,252 3,227 2,884 2,532 2,171 5,115 -

Total

$

148,819

$

19,181

IV. Other information A. Pension plans The District participates in the Wyoming Retirement System (WRS), a statewide cost-sharing multipleemployer public employee retirement system administered by the State of Wyoming Retirement System Board. All full-time employees of the District are eligible to participate. The WRS provides retirement, disability and death benefits according to predetermined formulas. Benefits are established by Title 9, Chapter 3 of the Wyoming Statutes.

WRS members are required to contribute 9.25% of their annual covered salary and the District is required to contribute 9.37% of the annual covered payroll. Legislation enacted in 1979 allows the employer to pay any or all of the employees’ contribution in addition to the matching contribution. The District paid 60.22% of the required employee’s contribution for the year ended June 30, 2023.

Contribution rates are established by Title 9, Chapter 3 of the Wyoming Statutes. The District’s contributions to the WRS for the year ended June 30, 2023, were $127,444 and employee contributions were $45,544 which equals the required contribution for the year.

GASB Statement No. 68 Accounting and Financial Reporting for Pensions has been adopted by the District.

This statement relates to accounting and financial reporting issues only, it does not address the District's approach to funding its pension obligations, which is set by state statutes.

16

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 IV. Other information (continued) A. Pension plans Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2023, the District reported a liability of $1,224,514 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2022 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2022 and rolled-forward using generally accepted actuarial procedures. The District’s proportion of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plans relative to the projected contributions of all participating governmental entities, actuarially determined. The schedule below shows the District’s proportionate share of the net pension liability at June 30, 2023, the proportionate portion at the measurement date of December 31, 2022, and the change in the proportion from its proportion measured as of December 31, 2021.

Pension liability at June 30, 2023 Proportion at December 31, 2022 Increase (decrease) from December 31, 2021

$ 1,224,514 0.0448078% 0.0013302%

For the year ended June 30, 2023 the District recognized pension expense of $208,407, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows or Inflows of Resources Deferred Outflows Net difference between projected and actual earnings on pension plan investments

$

105,407

Change in share of deferred outflows and assumptions

39,004

Change in proportionate share

58,850

Contributions subsequent to the measurement date Total deferred outflows Deferred Inflows Net difference between projected and actual earnings on pension plan investments

$

63,623 266,884

$

-

Net difference between expected and actual experience on pension liability

(7,762)

Change in proportionate share Total deferred inflows

(9,472) (17,234)

$ 17

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 IV. Other information (continued) A. Pension plans Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions The $63,623 reported as deferred outflows of resources related to pensions results from District contributions prior to the fiscal year end, but subsequent to the measurement date of December 31, 2021. These contributions will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30, 2024 2025 2026 2027

$ (57,744) 12,459 36,741 113,951

$ 28,430 10,574 -

$

36,946 17,073 3,792 1,039

$

-

$

(3,319) (3,319) (1,124) -

$

(3,158) (3,158) (3,156) -

$ 105,407

$ 39,004

$

58,850

$

-

$

(7,762)

$

(9,472)

Actuarial Assumptions The total pension liability in the January 1, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return

2.25 percent 2.50 to 6.50 percent, including inflation 6.80 percent

Mortality rates were based on the PUB-2010 General Healthy Mortality table, amount weighted, fully generational, projected with the MP-2020 ultimate scale.

The assumed rate of investment return was adopted by the plan’s trustees after considering input from the plan’s investment consultant(s) and actuary(s). Additional information about the assumed rate of investment return is included in the WRS actuarial valuation report as of January 1, 2022. In addition, a five year experience study was completed as of December 31, 2020 and this study provides a detailed analysis regarding recommendations on the long term rates for inflation and the real rate of return. The assumed rate of investment return of 6.80% (real return net of inflation of 4.55%) falls within a reasonable range of the long-term expected rate of return.

The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which expected future real rates of return (expected arithmetic returns, net of pension plan investment expense and inflation) are developed for each major asset class. These real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

18

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 IV. Other information (continued) A. Pension plans Actuarial Assumptions For each major asset class that is included in the pension plan’s target allocation for the fiscal year 2022, these best estimates are summarized in the following table: Long-Term Target Allocation Asset Class Cash Fixed income Equity Marketable alternatives Private markets Gold Totals

Expected Real Rate of Return

0.50% 20.00% 51.50% 16.00% 10.50% 1.50%

0.32% 4.05% 9.00% 6.02% 7.67% 0.72%

100.00%

7.23%

The figures in the above table were supplied by Meketa Investment Group, the investment consulting firm to the Wyoming Retirement System.

WRS’s success in achieving the 6.80% assumed investment return objective is evaluated on an ongoing basis over reasonably long periods of time (5 to 7 years).

Discount rate Projected benefit payments are required to be discounted to their actuarial present values using a single discount rate that reflects 1) a long-term expected rate of return on pension plan investments (to the extent that the plan’s fiduciary net position is projected to be sufficient to pay benefits using a 100 year analysis) and 2) tax-exempt municipal bond rate based on an index of 20 year general obligation bonds with an average AA credit rating (which is published by the Federal Reserve) as of the measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met).

The expected rate of return on pension plan investments is 6.80%, the municipal bond rate is 4.05%.

19

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 IV. Other information (continued) A. Pension plans Sensitivity of the District’s proportionate share of the net pension liability to changes in the discount rate Sensitivity of the proportionate share of the net pension liability to changes in the discount rate.

The following presents the District’s proportionate share of the net pension liability calculated using the discount rate of 6.80 percent, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage-point lower (5.80 percent) or one percentage-point higher (7.80 percent) than the current rate.

Using 5.80% Discount $ 1,808,168

Net pension liability

Using 6.80% Discount $ 1,224,514

Using 7.80% Discount $ 740,824

Pension Plan Fiduciary Net Position The Wyoming Retirement System has detailed information about the Public Employees Pension Plan including audited financial statements and information about the fiduciary net position. The report is available on their website at http://retirement.state.wy.us.

The plan currently has 30,226 retirees and beneficiaries, 35,416 inactive non-retired members and 34,533 active members for a total of 100,175.

B. Subsequent events Management has evaluated subsequent events through December 19, 2023 the date on which the financial statements were available to be issued.

The District is a participant in the Wyoming Retirement System which has been contracted to provide pension benefits for all District employees. The Board feels GASB 68 - Accounting and Financial Reporting for Pensions has forced the District to record a pension liability for which it has no contractual obligation.

20

TETON VILLAGE WATER SEWER DISTRICT Notes to the Financial Statements June 30, 2023 and 2022 IV. Other information (continued) C. Risk management and litigation The District is exposed to various risks of losses related to torts, theft, damage or destruction of assets, errors and omissions, injuries to employees and natural disasters.

The District’s attorney estimates that the amount of actual or potential claims against the District as of June 30, 2023 will be covered by liability insurance coverage or workers compensation coverage and will not materially affect the financial condition of the District.

Liability insurance and employee health insurance are provided by commercial carriers. Workers compensation coverage is provided through the State of Wyoming Workers Safety and Compensation Division.

There were no significant reductions in insurance from the previous year and there were no settlements in excess of insurance coverage in each of the past three years.

D. Commitments and contingencies At June 30, 2023 the District had remaining commitments for uncompleted construction contracts for the 2022 Wastewater Treatment Plant Project totaling $10,630,000.

D. Rounding convention A rounding convention to the nearest whole dollar has been applied throughout this report; therefore, the precision displayed in any monetary amount is plus or minus $2. Without the overhead costs of manually balancing each column, the sum of the displayed amounts in a column may not equal the total displayed.

21

TETON VILLAGE WATER AND SEWER DISTRICT REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) JUNE 30, 2023

22

TETON VILLAGE WATER AND SEWER DISTRICT Schedule of the Proportionate Share of the Net Pension Liability (Unaudited) For the Years Ended December 31,

Public Employee Pension Plan

2014

2015

2016

2017

2018

2019

2020

2021

2022

0.029461%

0.033484%

0.034861%

0.039234%

0.040212%

0.042130%

0.044225%

0.043478%

0.044808%

Proportionate share of the net pension liability

519,893

779,965

842,774

894,276

1,224,560

990,012

961,162

662,912

1,224,514

Covered employee payroll

492,080

583,990

621,546

696,944

700,227

732,300

787,406

791,261

809,019

Proportionate share of the net pension liability as a percentage of its covered-employee payroll

103.23%

133.56%

135.59%

128.31%

174.88%

135.19%

122.07%

83.78%

151.36%

Plan fiduciary net position as a percentage of the the total pension liability

79.08%

73.40%

73.42%

76.35%

69.17%

76.83%

79.24%

86.03%

75.47%

Proportion of the net pension liability

23

TETON VILLAGE WATER AND SEWER DISTRICT Schedule of Changes in Net Pension Liability (Unaudited) For the Years Ended December 31,

Total Pension Liability

2014 213,059,299 614,848,444 (418,274,815) (17,821,799)

2015 $

217,488,957 638,943,600 (66,191,620) (450,589,769) (19,365,045)

2016 $

219,893,113 664,368,366 (43,790,701) (483,482,106) (18,127,974)

2017 $

201,824,345 641,429,003 (56,701,091) 290,801,601 (516,837,260) (18,654,997)

2018 $

195,575,014 658,459,157 (49,213,548) (547,913,244) (18,114,423)

2019 $

194,455,298 676,902,286 (7,044,256) (579,179,480) (21,308,205)

2020 $

198,288,436 699,015,173 55,560,847 (606,335,323) (19,412,613)

2021 $

214,075,814 709,100,401 2,186,282 173,419,980 (632,776,958) (19,019,015)

2022

Service cost Interest on pension liability Difference-expected and actual experience Assumption changes Benefit payments Refunds

$

$

210,661,646 724,623,380 (24,730,118) (660,862,406) (24,875,791)

Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a)

391,811,129 8,045,046,973 $ 8,436,858,102

320,286,123 8,436,858,102 $ 8,757,144,225

338,860,698 8,757,144,225 $ 9,096,004,923

541,861,601 9,096,004,923 $ 9,637,866,524

238,792,956 9,637,866,524 $ 9,876,659,480

263,825,643 9,876,659,480 $ 10,140,485,123

327,116,520 10,140,485,123 $ 10,467,601,643

446,986,504 10,467,601,643 $ 10,914,588,147

224,816,711 10,914,588,147 $ 11,139,404,858

Employer contributions Employee contributions Pension plan net investment income (loss) Benefit payments Refunds Pension plan administrative expense Other

$

127,929,930 137,144,565 318,184,952 (418,274,815) (17,821,799) (5,182,863) 5,539,339

$

144,622,373 153,529,134 (67,155,642) (450,589,769) (19,365,045) (5,097,818) (312,704)

$

151,488,715 152,422,538 454,712,993 (483,482,106) (18,127,974) (5,993,529) (312,336)

$

148,746,669 149,752,251 923,878,089 (516,837,260) (18,654,997) (6,551,109) (312,336)

$

147,632,510 151,130,515 (252,571,153) (547,913,244) (18,114,423) (7,033,951) (287,669)

$

157,385,096 157,610,787 1,251,518,669 (579,179,480) (21,308,205) (6,527,091) (309,531)

$

165,984,825 165,086,190 805,893,355 (606,335,323) (19,412,613) (7,238,487) (294,892)

$

170,676,891 169,867,368 1,414,900,342 (632,776,958) (19,019,015) (7,725,813) (298,065)

$

178,277,910 177,131,721 (644,372,637) (660,862,406) (24,875,791) (8,030,528) (544,320)

Net change in plan fiduciary net position

$

147,519,309

$ (244,369,471)

$

250,708,301

$

680,021,307

$ (527,157,415)

$

959,190,245

$

503,683,055

$

1,095,624,750

$

(983,276,051)

Plan fiduciary net position - beginning

6,524,646,566

6,672,165,875

6,427,796,404

6,678,504,705

7,358,526,012

6,831,368,597

7,790,558,842

8,294,241,897

9,389,866,647

Plan fiduciary net position - ending (b)

6,672,165,875

6,427,796,404

6,678,504,705

7,358,526,012

6,831,368,597

7,790,558,842

8,294,241,897

9,389,866,647

8,406,590,596

Net pension liability - ending (a) - (b)

$ 1,764,692,227

$ 2,329,347,821

$ 2,417,500,218

$ 2,279,340,512

$ 3,045,290,883

0.0294608%

0.0334843%

0.0348614%

0.0392340%

0.0402116%

0.0421300%

0.0442247%

0.0434776%

0.0448078%

519,893

779,965

842,774

894,276

1,224,560

990,012

961,162

662,912

1,224,514

Plan Fiduciary Net Position

Proportion of liability Proportionate share of liability

24

$

2,349,926,281

$

2,173,359,746

$

1,524,721,500

$

2,732,814,262

TETON VILLAGE WATER AND SEWER DISTRICT Schedule of Contributions (Unaudited) For the Years Ended June 30,

2015 Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered employee payroll

2016

2017

2018

2019

74,215

$ 105,915

$ 107,222

$ 115,894

$ 121,766

(74,215)

(105,915)

(107,222)

(115,894)

(121,766)

-

-

-

-

-

$ 467,643

$ 637,272

$ 645,138

$ 697,316

15.87%

16.62%

16.62%

16.62%

$

25

2020 $

2021

2022 $

2023

-

$ 147,134

-

(147,134)

(117,140)

(127,444)

-

-

-

-

$ 712,499

$ 768,740

$ 811,998

17.09%

17.62%

18.12%

$

117,140

649,335

18.04%

$

$

127,444

684,446

18.62%

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 Independent Auditor’s Report December 19, 2023 Board of Directors Teton Village Water and Sewer District Teton Village, WY 83025 We have audited, 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, the financial statements of the business-type activities of Teton Village Water and Sewer District as of and for the year ended June 30, 2023, 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 19, 2023.

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.

26

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 no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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.

Thompson Palmer & Associates, PC Certified Public Accountants

27