City Council Council Workshop

~ Agenda ~ Tuesday, September 6, 2016 I. II. III. IV. V.

6:00 PM

Call to Order Roll Call Minutes Approval 1. City Council - Council Workshop - Aug 16, 2016 5:30 PM Workshop Business 1. 2015 Audit and Financial Annual Reports Adjournment

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205 S Webster Ave Omro, WI 54963 http://www.omro-wi.com/ Barbara J Van Clake (920) 685-7000

Council Chambers

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City Council

205 S Webster Ave Omro, WI 54963

Council Workshop

~ Minutes ~ Tuesday, August 16, 2016

http://www.omro-wi.com/ Barbara J Van Clake (920) 685-7000

5:30 PM

Call to Order

Council Chambers

Mayor Wright called the workshop meeting to order at 5:30 PM in the council chambers at Omro City Hall.

Attendee Name Rod Brusius Jason A. Reeves Steve Jungwirth Larry R Wright Kari A. Vonderloh Larry E Wright James C Braasch David J Casper Mark Van Pelt Barbara J Van Clake Linda K Kutchenriter

Organization City of Omro City of Omro City of Omro City of Omro City of Omro City of Omro City of Omro City of Omro City of Omro City of Omro City of Omro

Title Alderman District 1 Alderman District 1 Alderman District 2 Alderman District 3 Alderman District 2 Alderman District 3 Councilman Project Manager Public Works Director Clerk /Deputy Treasurer City Administrator

Status Present Present Present Present Present Late Present Present Present Present Present

Arrived

6:02 PM

Inflow and Infiltration StudyMark Van Pelt, Public Works Director, presented David Casper to the council Results and Discussion members. The City of Omro had hired Badger Laboratories to complete an infiltration and inflow study. David Casper of Badger Laboratories presented the 2016 Sanitary Sewer Flow Metering Project Report on the infiltration and inflow within our wastewater treatment collection system. Adjournment adjourn the meeting at 7:01 PM

The meeting was closed at 7:01 PM Rod Brusius motioned and Jason A. Reeves seconded to adjourn the meeting at 7:01 PM as presented. RESULT: APPROVED [UNANIMOUS] MOVER: Rod Brusius, Alderman District 1 SECONDER: Jason A. Reeves, Alderman District 1 AYES: Brusius, Reeves, Jungwirth, Vonderloh, Wright, Braasch Motion carried by [Unanimous] vote.

Respectfully Submitted by,

Barbara Van Clake, WCPC, MMC Clerk /Deputy Treasurer

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Minutes Acceptance: Minutes of Aug 16, 2016 5:30 PM (Minutes Approval)

Roll Call

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

CITY OF OMRO Omro, Wisconsin COMMUNICATION TO THOSE CHARGED WITH GOVERNANCE AND MANAGEMENT As of and for the Year Ended December 31, 2015

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CITY OF OMRO

Page No. Required Communication of Internal Control Related Matters Identified in the Audit to Those Charged with Governance Internal Control Environment Internal Control Over Financial Reporting

1 2–3 3

Other Communications to Those Charged with Governance Two Way Communication Regarding Your Audit Communication of Other Control Deficiencies, Recommendations, and Informational Points to Management that are not Material Weaknesses or Significant Deficiencies Required Communications by the Auditor to Those Charged with Governance

4–5

6–8 9 – 12

Management Representations

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

TABLE OF CONTENTS

Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

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REQUIRED COMMUNICATION OF INTERNAL CONTROL RELATED MATTERS IDENTIFIED IN THE AUDIT TO THOSE CHARGED WITH GOVERNANCE

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To the City Council and Management City of Omro Omro, Wisconsin

In planning and performing our audit of the financial statements of the City of Omro as of and for the year ended December 31, 2015 and for the Omro Water and Sewer Utility as of December 31, 2015 and for the year then ended, in accordance with auditing standards generally accepted in the United States of America, we considered its internal control over financial reporting (internal control) as a basis for designing our auditing 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 its internal control. Accordingly, we do not express an opinion on the effectiveness of its internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be material weaknesses. 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 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. We consider the following deficiencies in the city’s internal control to be material weaknesses: > >

Internal Control Environment Internal Control Over Financial Reporting

This communication is intended solely for the information and use of management, the city council, and others within the organization and is not intended to be, and should not be, used by anyone other than these specified parties.

Madison, Wisconsin August 17, 2016

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

Baker Tilly Virchow Krause, LLP Ten Terrace Ct, PO Box 7398 Madison, WI 53707-7398 tel 608 249 6622 fax 608 249 8532 bakertilly.com

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Auditing standards require that we perform procedures to obtain an understanding of your government and its internal control environment as part of the annual audit. This includes an analysis of significant transaction cycles and an analysis of the year-end financial reporting process and preparation of your financial statements.

A properly designed system of internal control includes adequate staffing as well as policies and procedures to properly segregate duties. This includes systems that are designed to limit the access or control of any one individual to your government’s assets or accounting records, and to achieve a higher likelihood that errors or irregularities in your accounting processes would be discovered by your staff in a timely manner. At this time, due to staffing and financial limitations, the proper internal controls are not in place to achieve adequate segregation of duties. As a result, errors, irregularities or fraud could occur as part of the financial reporting process that may not be discovered by someone in your organization. Therefore, we are reporting a material weakness related to the internal control environment. There are also certain controls that are not currently in place related to significant transaction cycles. As a result, there is a risk that erroneous or unauthorized transactions or misstatements could occur without the knowledge of management or the governing body. Our recommendations for strengthening controls are listed below. CONTROLS OVER ACCOUNTS PAYABLE 1. There should be a review and approval of all invoices. CONTROLS OVER PAYROLL 1. Persons preparing the payroll are not independent of other personnel duties or restricted from access to the payroll account. 2. There is authorization for new employees and changes to employee rates and data in the payroll system, however, no one other than the employee who enters the rates is reviewing the data. 3. There should be a reconciliation performed to verify that the total of the direct deposits plus the payroll checks posted against the bank account equals the payroll register total. 4. There should be a review and approval of the year end payroll accrual by someone independent of the preparer. CONTROLS OVER TAXES 1. There should be review and approval of the journal entries to record taxes receivable and tax settlements by someone separate from the preparer. 2. Bank reconciliations should be performed by someone independent of the tax collection process. CONTROLS OVER FINANCIAL REPORTING 1. Account reconciliations should be performed by someone independent of the processing of transactions in the account. 2. There should be appropriate review and approval of all journal entries by someone independent of the preparer.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

INTERNAL CONTROL ENVIRONMENT

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INTERNAL CONTROL ENVIRONMENT (cont.) CONTROLS OVER UTILITY BILLING AND RECEIPTING There should be segregation between receipting and receivables function.

CONTROLS OVER INFORMATION TECHNOLOGY 1. Administrative rights for financial applications should be limited to reduce the risk that unauthorized changes are made to the system. 2. All criteria noted in the city’s password policy should be implemented. 3. Backups should be tested frequently to ensure they could be utilized, if needed. Since the controls listed above or other compensating controls are not currently in place, errors or irregularities could occur as part of the accounting processes that might not be discovered by management or the governing body. Therefore, the absence of these controls is considered to be a material weakness. We recommend that a designated employee review the segregation of duties, risks, and these potential controls and determine whether additional controls should be implemented. This determination should take into consideration a cost / benefit analysis.

INTERNAL CONTROL OVER FINANCIAL REPORTING Properly designed systems of internal control provide your organization with the ability to process and record accurate monthly and year-end transactions and annual financial reports. Our audit includes a review and evaluation of the internal controls relating to financial reporting. Common attributes of a properly designed system of internal control for financial reporting are as follows: >

There is adequate staffing to prepare financial reports throughout the year and at year-end.

>

Material misstatements are identified and corrected during the normal course of duties.

>

Complete and accurate financial statements, including footnotes, are prepared.

>

Financial reports are independently reviewed for completeness and accuracy.

Our evaluation of the internal controls over financial reporting has identified control deficiencies that are considered to be a material weakness surrounding the preparation of financial statements and footnotes, adjusting journal entries identified by the auditors, and an independent review of financial reports. Management has not prepared financial statements that are in conformity with generally accepted accounting principles. In addition, material misstatements in the general ledger were identified during the financial audit. This level of internal control over financial reporting can be a difficult task for governments that operate with only enough staff to process monthly transactions and reports, and often rely on their auditors to prepare certain year-end audit entries and financial statement.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

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OTHER COMMUNICATIONS TO THOSE CHARGED WITH GOVERNANCE

Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

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TWO WAY COMMUNICATION REGARDING YOUR AUDIT

As this past audit is concluded, we use what we have learned to begin the planning process for next year’s audit. It is important that you understand the following points about the scope and timing of our next audit: a. We address the significant risks of material misstatement, whether due to fraud or error, through our detailed audit procedures. b. We will obtain an understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures. We will obtain a sufficient understanding by performing risk assessment procedures to evaluate the design of controls relevant to an audit of financial statements and to determine whether they have been implemented. We will use such knowledge to: 

Identify types of potential misstatements.

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Consider factors that affect the risks of material misstatement.

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Design tests of controls, when applicable, and substantive procedures.

We will not express an opinion on the effectiveness of internal control over financial reporting or compliance with laws, regulations, and provisions of contracts or grant programs. c.

The concept of materiality recognizes that some matters, either individually or in the aggregate, are important for fair presentation of financial statements in conformity with generally accepted accounting principles while other matters are not important. In performing the audit, we are concerned with matters that, either individually or in the aggregate, could be material to the financial statements. Our responsibility is to plan and perform the audit to obtain reasonable assurance that material misstatements, whether caused by errors or fraud, are detected.

We are very interested in your views regarding certain matters. Those matters are listed here: a. We typically will communicate with your top level of management unless you tell us otherwise. b. We understand that the city council has the responsibility to oversee the strategic direction of your organization, as well as the overall accountability of the entity. Management has the responsibility for achieving the objectives of the entity. c.

We need to know your views about your organization’s objectives and strategies, and the related business risks that may result in material misstatements.

d. Which matters do you consider warrant particular attention during the audit, and are there any areas where you request additional procedures to be undertaken? e. Have you had any significant communications with regulators or grantor agencies? f.

Are there other matters that you believe are relevant to the audit of the financial statements?

Also, is there anything that we need to know about the attitudes, awareness, and actions of the city concerning: a. The city’s internal control and its importance in the entity, including how those charged with governance oversee the effectiveness of internal control? b. The detection or the possibility of fraud? Page 4 Packet Pg. 10

Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

As part of our audit of your financial statements, we are providing communications to you throughout the audit process. Auditing requirements provide for two-way communication and are important in assisting the auditor and you with more information relevant to the audit.

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TWO WAY COMMUNICATION REGARDING YOUR AUDIT (cont.)

With regard to the timing of our audit, here is some general information. If necessary, we may do preliminary audit work during the months of October-December, and sometimes early January. Our final fieldwork is scheduled during the spring to best coincide with your readiness and report deadlines. After fieldwork, we wrap up our audit procedures at our office and may issue drafts of our report for your review. Final copies of our report and other communications are issued after approval by your staff. This is typically 6-12 weeks after final fieldwork, but may vary depending on a number of factors. Keep in mind that while this communication may assist us with planning the scope and timing of the audit, it does not change the auditor’s sole responsibility to determine the overall audit strategy and the audit plan, including the nature, timing, and extent of procedures necessary to obtain sufficient appropriate audit evidence. We realize that you may have questions on what this all means, or wish to provide other feedback. We welcome the opportunity to hear from you.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

We also need to know if you have taken actions in response to developments in financial reporting, laws, accounting standards, governance practices, or other related matters, or in response to previous communications with us.

Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

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COMMUNICATION OF OTHER CONTROL DEFICIENCIES, RECOMMENDATIONS AND INFORMATIONAL POINTS TO MANAGEMENT THAT ARE NOT MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES

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PRIOR YEAR POINT

As a condition of receiving funds from the Wisconsin Clean Water Fund Loan Program (CWL), the sewer utility is required to establish and fund an equipment replacement account for specifically identifiable assets purchased with the bonds. Annual transfers are to be made into the fund until it is fully funded and withdrawals are permitted within certain guidelines. As of the end of 2014, the sewer utility was underfunded for this account. The utility has adequate cash reserves to fund the account therefore we recommend management make the required transfers into this account. We also recommend the utility review the equipment associated with this account and update the listing with its 2015 sewer rate reviews. Status (12/31/15) The account was fully funded at the end of 2015. This point is considered resolved.

INFORMATIONAL POINTS REVISIONS TO ACTUARIAL STANDARDS IMPACT IMPLICIT OPEB LIABILITIES Current guidance for the accounting and financial reporting of other postemployment benefits (OPEBs) by governmental employers is outlined in GASB No. 45. The most common OPEB is retiree healthcare. This standard applies to both explicit benefits – those where the employer pays for all or a portion of the premiums – as well as implicit benefits. An implicit OPEB occurs when retirees are allowed to remain on the employer’s health care plan at their own cost but pay the same blended premium as current employees. While the employer is not paying a portion of the retiree premium they may be paying a higher premium for their active employees than they otherwise would if age adjusted premiums were calculated for each group. This results in an implicit rate subsidy. When GASB 45 was drafted it allowed community rated plans, such as the State of Wisconsin ETF Plan (the “Plan”), to use unadjusted premiums to the extent allowed by actuarial standards. As such, employers participating in the Plan and not providing explicit retiree benefits have not been required to calculate or record an implicit OPEB liability. However, revisions to Actuarial Standard of Practice (ASOP) No. 6 now provide very limited circumstances in which the use of unadjusted premiums by actuaries will be considered appropriate. In fact, the Plan has indicated that unadjusted premiums will not be able to be used under the new rules. The revisions to ASOP No. 6 are effective for actuarial studies with a measurement date on or after March 31, 2015. This will impact financial reporting periods after December 31, 2015. As a participant in the Plan, which has not calculated or recorded an OPEB liability in the past, you will now need to evaluate the implicit rate subsidy under GASB 45 for your December 31, 2016 financial statements. We are available to assist management with this evaluation.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

FUNDING FOR THE EQUIPMENT REPLACEMENT FUND

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INFORMATIONAL POINTS (cont.)

Cybersecurity is a growing challenge for many governments as threats and vulnerabilities constantly evolve. Information security is a significant issue for many organizations and is no longer considered to be strictly an Information Technology (IT) issue. The potential impacts of a security breach can be financial, operational, and reputational. Cyber risk should be a high priority and evaluated on a regular basis. Security breaches can come in a number of forms, which are continually evolving with advances in and increased use of technology. It is important for governments to assess what types of information they have that are vulnerable to cyber-attack. Items to consider include processing, collecting, and/or storing personal information about employees, taxpayers, and/or customers. Social security numbers, bank accounts, addresses, medical information, birth dates, and credit cards are all common examples of information existing in systems of governmental entities. In addition, general ledger data and other supporting files can be compromised. Several instances of ransomware have been reported in governmental entities like yours during the last year. Ransomware restricts access to your files and demands a ransom to the malware operator in order to release the restriction. It is important to take inventory of all the information that flows through your systems in order to properly secure your data. We recommend performing a cyber risk assessment to align the internal controls and processes with the organizational objectives, initiatives, resources, and risk appetites with regards to cyber risk. We have cybersecurity experts available to assist with this assessment. HIPAA RISK ASSESSMENT With data breaches on the rise, the US Department of Health and Human Services (HHS) Office of Civil Rights (OCR) has ramped up auditing and enforcement of Health Insurance Portability and Accountability Act (HIPAA) compliance in recent years. What they have found is that many organizations are not doing enough to protect Electronic Protected Health Information (ePHI). One of the most common findings identified by HHS OCR is the lack of a thorough and documented risk assessment. The HIPAA Security Rule requires that organizations in accordance with the Code of Federal Regulations 45 §164.308(a)(1)(ii)(A) “Conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information ...”. HHS OCR has indicated this risk assessment should be documented and performed at least annually. Breach notification to HHS OCR is required when ePHI is exposed. When HHS OCR investigates such breaches, the documentation for the organization’s latest risk assessment is often one of the first requests by HHS OCR for their review. We recommend you perform and document the required HIPAA risk assessment. We are available to assist you with this process.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

CYBER RISK ASSESSMENT

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INFORMATIONAL POINTS (cont.)

In recent years, our clients have told us that the roles of their board members have become increasingly demanding. Expectations and accountability are at all-time high and the knowledge required to be an effective board member is substantial. For these reasons, we have compiled a number of resources dedicated to educating state and local government board members. Go to our website www.bakertilly.com and click on the State and Local Government page. Included in the “insights” section at the bottom of the State and Local Government page are four quickhitting, informative videos: 1. 2. 3. 4.

Government financial statements 101 Understanding your government’s fraud risk Financial ratios and benchmarks Fund balance and other financial policies

Also included are links to other videos, case studies and news / events that you might find of interest. We encourage you to subscribe to our complimentary newsletter “Government Connection” to stay abreast of the latest issues impacting state and local governments. You can do so by clicking on the “subscribe” button and indicating "State and Local Government" as an area of interest on the subscription form. Also, if you or your board members have suggested topics to feature on our Board Governance webpage or Government Connection newsletter, we invite you to submit your ideas in person or online. INTERPRETING YOUR FINANCIAL STATEMENTS POST-GASB NO. 68 Now that your financial statements reflect the new pension requirements of GASB Statement No. 68, what has changed and how do you interpret this new information? In summary, GASB Statement No. 68 required governmental entities participating in the Wisconsin Retirement System (WRS) to report their proportionate share of the plan’s activity and net pension asset. As of the December 31, 2014 measurement date used for your 2015 financial statements, WRS reported total resources available to provide pension benefits of $92.1 billion. They also reported a total liability for pensions of $89.7 billion. This resulted in a net pension asset of $2.4 billion. Your government’s proportionate share of the asset is $224,728 and is reported as a restricted asset. There are also pension-related deferred outflows or inflows due to timing of contributions and smoothing of activity. Pension activity under GASB Statement No. 68 is reported in the government-wide financial statements and proprietary fund financial statements, similar to long-term debt. The implementation of this new standard does not affect how you fund or pay for your pension contributions to the WRS. The accounting and reporting of pensions has become more complex with the implementation of GASB Statement No. 68. We are available to answer any questions on how this new accounting standard affects your financial statements.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

NEW RESOURCES FOR STATE AND LOCAL GOVERNMENT BOARDS

REQUIRED COMMUNICATIONS BY THE AUDITOR TO THOSE CHARGED WITH GOVERNANCE

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To the City Council City of Omro Omro, Wisconsin

Thank you for using Baker Tilly Virchow Krause, LLP as your auditor. We have completed our audit of the financial statements of City of Omro for the year ended December 31, 2015 and have issued our report thereon dated August 17, 2016. This letter presents communications required by our professional standards. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA The objective of a financial statement audit is the expression of an opinion on the financial statements. We conducted the audit in accordance with auditing standards generally accepted in the United States of America. These standards require that we plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements prepared by management with your oversight are free of material misstatement, whether caused by error or fraud. Our audit included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit does not relieve management or the city council of their responsibilities. As part of the audit we obtained an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing and extent of further audit procedures. The audit was not designed to provide assurance on internal control or to identify deficiencies in internal control. OTHER INFORMATION IN DOCUMENTS CONTAINING AUDITED FINANCIAL STATEMENTS Our responsibility does not extend beyond the audited financial statements identified in this report. We do not have any obligation to and have not performed any procedures to corroborate other information contained in client prepared documents, such as official statements related to debt issues. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously communicated to you in our Communication to Those Charged with Governance and Management dated August 6, 2015 and also communicated during the our meeting with you on August 8, 2015. QUALITATIVE ASPECTS OF THE ENTITY’S SIGNIFICANT ACCOUNTING PRACTICES Financial Statement Disclosures The disclosures in the notes to the financial statements are neutral, consistent, and clear.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

Baker Tilly Virchow Krause, LLP Ten Terrace Ct, PO Box 7398 Madison, WI 53707-7398 tel 608 249 6622 fax 608 249 8532 bakertilly.com

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To the City Council City of Omro

QUALITATIVE ASPECTS OF THE ENTITY’S SIGNIFICANT ACCOUNTING PRACTICES (cont.)

Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City of Omro are described in Note I to the financial statements. As described in Note I to the financial statements, the City of Omro changed accounting policies related to financial reporting for pensions by adopting Statement of Governmental Accounting Standards (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequently to the Measurement Date – an Amendment of GASB Statement No. 68 in 2015. Accordingly, the accounting change has been retrospectively applied to prior periods presented as if the policy has always been used. We noted no transactions entered into by the City of Omro during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus. Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. We are not aware of any particularly sensitive accounting estimates utilized by management in its financial statement process. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing our audit. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatement identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. An uncorrected financial statement misstatement exists in the amount of $51,581 related to the reversal of a 2014 uncorrected misstatement for insurance reimbursements. This causes revenues and beginning net position of the governmental activities to be overstated in 2015. Management has determined that the effects are immaterial to the financial statements taken as a whole. The following is a summary of material financial statement misstatements (audit adjustments): Amount Adjust due to overlying districts Record proceeds for the fire truck loan Clear out fund balance for funds that closed Adjustments for GASB 68 Adjustments to accounts payable Adjustments to utility assets Record joint metering expense Adjust utility depreciation expense Clear out prior year interfund balances Adjustments to accounts receivable

$

791,842 329,000 159,665 35,583 482,070 67,440 38,778 31,986 230,886 165,500 Page 10 Packet Pg. 18

Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

Accounting Policies

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To the City Council City of Omro

In addition, we prepared GASB No. 34 conversion entries which are summarized in the “Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position” and the “Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities” in the financial statements. DISAGREEMENTS WITH MANAGEMENT For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the management representation letter. This letter follows this required communication. INDEPENDENCE We are not aware of any relationships between Baker Tilly Virchow Krause, LLP and the City of Omro that, in our professional judgment, may reasonably be thought to bear on our independence. Relating to our audit of the financial statements of the City of Omro for the year ended December 31, 2015, Baker Tilly Virchow Krause, LLP hereby confirms that we are, in our professional judgment, independent with respect to the city in accordance with the Code of Professional Conduct issued by the American Institute of Certified Public Accountants, and provided no services to the city other than audit services provided in connection with the audit of the current year’s financial statements and nonaudit services which in our judgment do not impair our independence.   

Financial statement preparation Adjusting journal entries Compiled regulatory reports

None of these nonaudit services constitute an audit under generally accepted auditing standards, including Government Auditing Standards. OTHER AUDIT FINDINGS OR ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City of Omro’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

CORRECTED AND UNCORRECTED MISSTATEMENTS (cont.)

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To the City Council City of Omro

We applied certain limited procedures to the required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquires of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the supplementary information, which accompanies the financial statements but is not RSI. With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. RESTRICTION ON USE This information is intended solely for the use of the governing body and management and is not intended to be, and should not be, used by anyone other than the specified parties. We welcome the opportunity to discuss the information included in this letter and any other matters. Thank you for allowing us to serve you.

Madison, Wisconsin, August 17, 2016

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Attachment: 2015 Communication to Mgmt Report (1990 : 2015 Audit and Financial Annual Reports)

OTHER MATTERS

MANAGEMENT REPRESENTATIONS

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Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

CITY OF OMRO Omro, Wisconsin FINANCIAL STATEMENTS Including Independent Auditors' Report As of and for the Year Ended December 31, 2015

Packet Pg. 28

4.1.b

CITY OF OMRO

Page(s) Independent Auditors' Report

i - iii

Basic Financial Statements Government-Wide Financial Statements Statement of Net Position Statement of Activities

1 2-3

Fund Financial Statements Balance Sheet - Governmental Funds

4

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position

5

Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds

6

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

7

Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Assets and Liabilities - Agency Fund Index to Notes to Financial Statements Notes to Financial Statements

8-9 10 11 - 12 13 14 15 - 53

Required Supplementary Information Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund

54 - 59

Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Special Revenue Fund - Marble Trust

60

Schedule of Proportionate Share of the Net Pension Asset - Wisconsin Retirement System

61

Schedule of Employer Contributions - Wisconsin Retirement System

61

Notes to Required Supplementary Information

62

Supplementary Information Combining Balance Sheet - Nonmajor Governmental Funds

63 - 66

Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds

67 - 70

Statement of Cash Flows Component Unit

71

Packet Pg. 29

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

TABLE OF CONTENTS As of and for the Year Ended December 31, 2015

4.1.b

INDEPENDENT AUDITORS' REPORT

To the City Council City of Omro Omro, Wisconsin Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Omro, Wisconsin, as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City of Omro's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City of Omro's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the City of Omro's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Page i

Packet Pg. 30

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

Baker Tilly Virchow Krause, LLP Ten Terrace Ct, PO Box 7398 Madison, WI 53707-7398 tel 608 249 6622 fax 608 249 8532 bakertilly.com

4.1.b

To the City Council City of Omro

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Omro, Wisconsin, as of December 31, 2015 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. Emphasis of Matter As discussed in Note I, the City of Omro adopted the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68, effective January 1, 2015. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted 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.

Page ii

Packet Pg. 31

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

Opinions

4.1.b

To the City Council City of Omro

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Omro's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole.

Madison, Wisconsin August 17, 2016

Page iii

Packet Pg. 32

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

Supplementary Information

4.1.b

CITY OF OMRO STATEMENT OF NET POSITION As of December 31, 2015

ASSETS Cash and investments Receivables (net) Taxes Delinquent personal property taxes Interest Special assessments Loans Accounts Internal balances Due from primary government Due from other governments Due from other organizations Inventories and prepaid items Restricted assets Restricted cash and investments Net pension asset Capital Assets Land Construction in progress Other capital assets, net of depreciation Total Assets

$

3,562,183

$

1,664,793 200 6,323 3,306 445,049 165,600 8,052 244,115 4,600 -

DEFERRED OUTFLOWS OF RESOURCES Pension related amounts

1,806,884 24,804 337,845 (8,052) 9,316

Component Unit

Totals $

5,369,067

$

13,616

1,664,793 200 6,323 28,110 445,049 503,445 244,115 4,600 9,316

14,000 -

8,863 180,012

531,642 44,716

540,505 224,728

-

700,221 6,126,878 13,120,195

88,073 8,370 6,805,819 9,649,417

788,294 8,370 12,932,697 22,769,612

27,616

193,205

45,723

238,928

-

LIABILITIES Accounts payable Accrued liabilities Due to other governments Due to component unit Deposits Noncurrent Liabilities Due within one year Due in more than one year Total Liabilities

498,495 112,270 4,281 14,000 5,383

21,621 24,817 -

520,116 137,087 4,281 14,000 5,383

1,106 -

335,075 2,412,392 3,381,896

186,722 1,923,210 2,156,370

521,797 4,335,602 5,538,266

1,106

DEFERRED INFLOWS OF RESOURCES Unearned revenues

1,643,317

-

1,643,317

-

5,014,943

4,844,916

9,859,859

-

172,766 13,871 308,978 1,600,216 106,482 180,012 890,919

105,357 413,267 44,716 2,130,514

278,123 13,871 308,978 1,600,216 106,482 413,267 224,728 3,021,433

26,510

7,538,770

$ 15,826,957

NET POSITION Net investment in capital assets Restricted for Debt service Impact fees Loan programs Trust activities Cemetery Equipment replacement Pension Unrestricted TOTAL NET POSITION

$

8,288,187

$

$

26,510

See accompanying notes to financial statements. Page 1Pg. 33 Packet

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

Governmental Business Activities Type Activities

4.1.b

CITY OF OMRO

Program Revenues

Functions/Programs Primary Government Governmental Activities General government Public safety Public works Health and human services Leisure activities Conservation and development Interest and fiscal charges Total Governmental Activities

Expenses

$

Business-type Activities Water Utility Sewer Utility Total Business-type Activities Total Primary Government Component Unit Business Improvement District

Operating Grants and Contributions

Charges for Services

1,036,936 1,231,996 736,035 29,645 721,928 252,312 87,476 4,096,328

$

557,561 764,403 1,321,964

24,352 60,145 8,693 16,210 110,362 23,712 243,474

$

18,120 12,266 225,508 83,349 2,490 341,733

528,462 894,113 1,422,575

Capital Grants and Contributions

$

-

212,190 13,598 225,788 2,205 14,000 16,205

$

5,418,292

$

1,666,049

$

341,733

$

241,993

$

9,318

$

14,000

$

-

$

-

General Revenues Taxes Property taxes, levied for general purposes Property taxes, levied for debt service Other taxes Intergovernmental revenues not restricted to specific programs Investment income (loss) Miscellaneous Total General Revenues Transfers Total General Revenues and Transfers Change in net position NET POSITION - Beginning of Year (as restated) NET POSITION - END OF YEAR

See accompanying notes to financial statements. Page 2

Packet Pg. 34

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF ACTIVITIES For the Year Ended December 31, 2015

4.1.b

$

(994,464) $ (947,395) (488,236) (13,435) (528,217) (226,110) (87,476) (3,285,333) -

$

(26,894) 143,710 116,816

(3,285,333)

116,816

(994,464) $ (947,395) (488,236) (13,435) (528,217) (226,110) (87,476) (3,285,333)

-

(26,894) 143,710 116,816

-

(3,168,517)

-

-

-

-

4,682

1,558,095 43,869 27,039 839,481 12,381 314,039

3,970 -

1,558,095 43,869 27,039 839,481 16,351 314,039

-

2,794,904 76,112

3,970 (76,112)

2,798,874 -

-

2,871,016

(72,142)

2,798,874

-

(414,317)

44,674

8,702,504 $

-

8,288,187

(369,643)

7,494,096 $

7,538,770

4,682

16,196,600 $

15,826,957

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

Net (Expenses) Revenues and Changes in Net Position Primary Government Component Unit Business Governmental Business-type Improvement Activities Activities Totals District

21,828 $

26,510

See accompanying notes to financial statements. Page 3

Packet Pg. 35

4.1.b

CITY OF OMRO BALANCE SHEET GOVERNMENTAL FUNDS As of December 31, 2015

ASSETS Cash and investments Receivables Taxes Special assessments Delinquent personal property tax Accounts Interest Loans Restricted cash and investments Due from other funds Due from other governments Due from other organizations

$

1,762,870

Marble Trust

$

2015 Loan

832,273

$

-

$

967,040

Totals

$

3,562,183

1,329,356 3,306

-

-

335,437 -

1,664,793 3,306

200 165,600 6,323 12,681 24,782 4,600

-

219,333 -

445,049 8,863 -

200 165,600 6,323 445,049 8,863 12,681 244,115 4,600

$

3,309,718

$

832,273

$

219,333

$

1,756,389

$

6,117,713

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts Payable $ Accrued Liabilities Deposits Due to other governments Due to component unit Due to other funds Total Liabilities

497,239 64,413 4,043 4,281 14,000 4,629 588,605

$

-

$

-

$

1,256 1,340 2,596

$

498,495 64,413 5,383 4,281 14,000 4,629 591,201

TOTAL ASSETS

Deferred Inflows of Resources Unearned revenues Unavailable revenues Total Deferred Inflows of Resources Fund Balances Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

$

1,307,880 37,802

-

219,333

335,437 -

1,643,317 257,135

1,345,682

-

219,333

335,437

1,900,452

200 286,336 10,000 1,078,895 1,375,431

832,273 832,273

-

1,417,897 459 1,418,356

200 2,250,170 286,336 10,459 1,078,895 3,626,060

3,309,718

$

832,273

$

219,333

$

1,756,389

$

6,117,713

See accompanying notes to financial statements. Page 4

Packet Pg. 36

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

General

Nonmajor Governmental Funds

4.1.b

CITY OF OMRO

Total Fund Balances - Governmental Funds

$

3,626,060

Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds. Land Other capital assets Less: Accumulated depreciation

700,221 12,733,814 (6,606,936)

Some receivables that are not currently available are reported as unavailable revenues in the fund financial statements but are recognized as revenue when earned in the government-wide statements.

257,135

The net pension asset does not relate to current financial resources and is not reported in the governmental funds.

180,012

Deferred outflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds.

193,205

Some liabilities, including long-term debt, are not due and payable in the current period and therefore, are not reported in the funds. Bonds and notes payable Compensated absences Accrued interest Land contract payable NET POSITION OF GOVERNMENTAL ACTIVITIES

(2,584,483) (156,328) (47,857) (6,656) $

8,288,187

See accompanying notes to financial statements. Page 5

Packet Pg. 37

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION As of December 31, 2015

4.1.b

CITY OF OMRO

General REVENUES Taxes Intergovernmental Licenses and permits Fines, forfeitures and penalties Public charges for services Investment income (loss) Miscellaneous Total Revenues

$

EXPENDITURES Current General government Public safety Public works Health and human services Leisure activities Conservation and development Capital Outlay Debt Service Principal Interest and fiscal charges Total Expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Sale of city property Long-term debt issued Transfers in Transfer in - tax equivalent Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES - Beginning of Year

1,305,671 1,152,661 67,798

Marble Trust $

2015 Loan -

$

-

$

323,332 -

Totals $

24,751 (12,462) 26,701 362,322

1,629,003 1,152,661 67,798

36,999 140,150 25,688 288,310 3,017,277

3,711 3,711

-

987,580 859,133 629,075

-

-

5,668 -

993,248 859,133 629,075

11,024 460,655

-

-

29,505 9,644

40,529 470,299

241,490 48,839

-

329,000

11,352 57,338

252,842 435,177

4,855

-

-

405,000

409,855

345 3,242,996

-

329,000

72,011 590,518

72,356 4,162,514

36,999 164,901 16,937 315,011 3,383,310

(225,719)

3,711

(329,000)

(228,196)

(779,204)

1,685 9,096 64,781 (13,052)

(8,953)

329,000 -

74,468 (50,228)

1,685 329,000 83,564 64,781 (72,233)

62,510

(8,953)

329,000

24,240

406,797

(163,209)

(5,242)

-

(203,956)

(372,407)

1,538,640

FUND BALANCES - END $ OF YEAR

Nonmajor Governmental Funds

1,375,431

837,515

$

832,273

-

$

-

1,622,312

$

1,418,356

3,998,467

$

3,626,060

See accompanying notes to financial statements. Page 6

Packet Pg. 38

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Net change in fund balances - total governmental funds

$

(372,407)

Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of net position the cost of these assets is capitalized and they are depreciated over their estimated useful lives and reported as depreciation expense in the statement of activities. Capital outlay is reported as an expenditure in the fund financial statements but is capitalized in the government-wide financial statements Some items reported as capital outlay were not capitalized Depreciation is reported in the government-wide financial statements

435,177 (305,809) (455,498)

Receivables not currently available are reported as revenue when collected or currently available in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements.

225,241

Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Debt issued Principal repaid Land contract payment

(329,000) 405,000 4,855

Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences Accrued interest on debt Net pension asset Deferred outflows of resources related to pensions

(14,702) (19,676) (109,331) 121,833

CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES

$

(414,317)

See accompanying notes to financial statements. Page 7

Packet Pg. 39

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Business-type Activities - Enterprise Funds Water Utility Sewer Utility Totals ASSETS Current Assets Cash and investments Receivables Customers Other Due from other funds Inventories Restricted Assets Redemption account Total Current Assets Noncurrent Assets Restricted Assets Equipment replacement Depreciation account Net pension asset Capital Assets Property and equipment Construction in progress Less: Accumulated depreciation Other Assets Special assessments receivable Designated connection fee account Designated plant debt Total Noncurrent Assets Total Assets DEFERRED OUTFLOWS OF RESOURCES Pension related amounts

$

401,401

$

646,924

$

1,048,325

120,432 110 24,018 9,166

217,303 150

337,735 110 24,018 9,316

555,127

118,375 982,752

118,375 1,537,879

21,807

324,264 89,003 22,909

324,264 89,003 44,716

3,521,046 8,370 (1,182,540)

7,392,900 (2,837,514)

10,913,946 8,370 (4,020,054)

23,534 2,392,217

1,270 298,326 460,233 5,751,391

24,804 298,326 460,233 8,143,608

2,947,344

6,734,143

9,681,487

22,341

23,382

45,723

See accompanying notes to financial statements. Page 8

Packet Pg. 40

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF NET POSITION PROPRIETARY FUNDS As of December 31, 2015

Business-type Activities - Enterprise Funds Water Utility Sewer Utility Totals LIABILITIES Current Liabilities Accounts payable Accrued liabilities Due to other funds Current portion of compensated absences Liabilities Payable from Restricted Assets Current portion of revenue bonds Total Current Liabilities Noncurrent Liabilities Long-Term Debt Revenue bonds payable Compensated absences Total Noncurrent Liabilities Total Liabilities NET POSITION Net investment in capital assets Restricted for Debt service Equipment replacement Pension Unrestricted net position TOTAL NET POSITION

$

4,593 5,898 12,681 11,089

17,028 18,919 19,389 11,089

21,621 24,817 32,070 22,178

34,261

164,544 230,969

164,544 265,230

15,204 15,204

1,892,802 15,204 1,908,006

1,892,802 30,408 1,923,210

49,465

2,138,975

2,188,440

2,346,876

2,498,040

4,844,916

21,807 551,537

105,357 413,267 22,909 1,578,977

105,357 413,267 44,716 2,130,514

2,920,220

$

4,618,550

$

7,538,770

See accompanying notes to financial statements. Page 9

Packet Pg. 41

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

4.1.b

CITY OF OMRO

Business-type Activities - Enterprise Funds Water Utility Sewer Utility Totals OPERATING REVENUES

$

OPERATING EXPENSES Operation and maintenance Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Investment income Interest expense Total Nonoperating Revenues (Expenses) Income (Loss) Before Contributions and Transfers CONTRIBUTIONS AND TRANSFERS Capital contributions Transfers out Total Contributions and Transfers

$

1,422,575

989,092 279,786 1,268,878

(29,099)

182,796

153,697

1,579 1,579

2,391 (53,086) (50,695)

3,970 (53,086) (49,116)

(27,520)

132,101

104,581

14,000 (6,352) 7,648

3,015,295 $

$

507,388 203,929 711,317

(95,075)

NET POSITION - Beginning of Year (as restated)

894,113

481,704 75,857 557,561

2,205 (69,760) (67,555)

Change in Net Position

NET POSITION - END OF YEAR

528,462

2,920,220

$

16,205 (76,112) (59,907)

139,749

44,674

4,478,801

7,494,096

4,618,550

$

7,538,770

See accompanying notes to financial statements. Page 10

Packet Pg. 42

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Business-type Activities - Enterprise Funds Water Utility Sewer Utility Totals CASH FLOWS FROM OPERATING ACTIVITIES Received from customers Received from other funds Paid to suppliers for goods and services Paid to employees for services Net Cash Flows From Operating Activities

$

CASH FLOWS FROM INVESTING ACTIVITIES Investment income Net Cash Flows From Investing Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Paid to municipality for tax equivalent Debt service transfers to other funds Net Cash Flows From Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Debt retired Interest paid Acquisition and construction of capital assets Contributions received Special assessments received Net Cash Flows From Capital and Related Financing Activities Net Change in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS - Beginning of Year CASH AND CASH EQUIVALENTS - END OF YEAR

400,554 $ 179,142 (371,276) (101,182) 107,238

874,554 $ (435,936) (106,140) 332,478

1,579 1,579

2,391 2,391

3,970 3,970

(69,760) (69,760)

(6,352) (6,352)

(69,760) (6,352) (76,112)

(63,244) 2,205 6,708

(160,482) (54,102) (43,570) 14,000 1,321

(160,482) (54,102) (106,814) 16,205 8,029

(54,331)

(242,833)

(297,164)

(15,274)

85,684

70,410

1,851,441

2,268,116

416,675 $

401,401

$

1,937,125

$

1,275,108 179,142 (807,212) (207,322) 439,716

2,338,526

See accompanying notes to financial statements. Page 11

Packet Pg. 43

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2015

Business-type Activities - Enterprise Funds Water Utility Sewer Utility Totals RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Flows From Operating Activities Depreciation Depreciation charged to other funds Changes in assets and liabilities Customer accounts receivable Other accounts receivable Due from other funds Inventories Accounts payable Due to other funds Compensated absences Other liabilities Pension related deferrals and assets NET CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION - PROPRIETARY FUNDS Cash and investments Restricted cash and investments Designated connection fee account Designated plant debt CASH AND CASH EQUIVALENTS

$

(29,099) $

182,796

$

153,697

75,857 9,874

203,929 (9,874)

279,786 -

(2,844) 175 16,965 (1,253) (2,900) 36,481 3,108 1,325 (451)

(22,598) 3,039 (600) (27,064) 3,108 127 (385)

(25,442) 175 20,004 (1,253) (3,500) 9,417 6,216 1,452 (836)

$

107,238

$

332,478

$

439,716

$

401,401

$

646,924 531,642 298,326 460,233

$

1,048,325 531,642 298,326 460,233

$

1,937,125

$

2,338,526

$

401,401

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES None.

See accompanying notes to financial statements. Page 12

Packet Pg. 44

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

4.1.b

CITY OF OMRO

Agency Fund ASSETS Cash and investments Taxes receivable

$

1,570,401 1,327,619

$

2,898,020

LIABILITIES Due to other taxing units

$

2,898,020

TOTAL LIABILITIES

$

2,898,020

TOTAL ASSETS

See accompanying notes to financial statements. Page 13

Packet Pg. 45

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF ASSETS AND LIABILITIES AGENCY FUND As of December 31, 2015

4.1.b

CITY OF OMRO

NOTE I

Page Summary of Significant Accounting Policies A. Reporting Entity B. Government-Wide and Fund Financial Statements C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position or Equity 1. Deposits and Investments 2. Receivables 3. Inventories and Prepaid Items 4. Restricted Assets 5. Capital Assets 6. Other Assets 7. Deferred Outflows of Resources 8. Compensated Absences 9. Long-Term Obligations 10. Deferred Inflows of Resources 11. Equity Classifications 12. Basis for Existing Rates

15 15 16

II

Stewardship, Compliance, and Accountability A. Excess Expenditures and Other Financing Uses Over Appropriations B. Limitations on the City's Tax Levy

28 28 28

III

Detailed Notes on All Funds A. Deposits and Investments B. Receivables C. Restricted Assets D. Capital Assets E. Interfund Receivables/Payables and Transfers F. Long-Term Obligations G. Net Position/Fund Balances H. Restatement of Net Position I. Component Unit

28 28 31 32 34 37 38 43 45 45

IV

Other Information A. Employees' Retirement System B. Risk Management C. Commitments and Contingencies D. Joint Ventures E. Effect of New Accounting Standards on Current-Period Financial Statements

46 46 52 52 53 53

19 21 21 22 23 24 24 25 25 25 25 25 26 27

Page 14

Packet Pg. 46

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

INDEX TO NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Omro, Wisconsin conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The accepted standardsetting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (GASB). A. REPORTING ENTITY This report includes all of the funds of the city. The reporting entity for the city consists of the primary government and its component unit. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading. The primary government is financially accountable if (1) it appoints a voting majority of the organization's governing body and it is able to impose its will on that organization, (2) it appoints a voting majority of the organization's governing body and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government, (3) the organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. Certain legally separate, tax exempt organizations should also be reported as a component unit if all of the following criteria are met: (1) the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents; (2) the primary government or its component units, is entitled to, or has the ability to access, a majority of the economic resources received or held by the separate organization; and (3) the economic resources received or held by an individual organization that the primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to the primary government. Component units are reported using one of two methods, discrete presentation or blending, Generally, component units should be discretely presented in a separate column in the financial statements. A component unit should be reported as part of the primary government using the blending method if it meets any one of the following criteria: (1) the primary government and the component unit have substantively the same governing body and a financial benefit or burden relationship exists, (2) the primary government and the component unit have substantively the same governing body and management of the primary government has operational responsibility for the component unit, (3) the component unit serves or benefits, exclusively or almost exclusively, the primary government rather than its citizens, or (4) the total debt of the component unit will be paid entirely or almost entirely from resources of the primary government.

Page 15

Packet Pg. 47

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) A. REPORTING ENTITY (cont.) Discretely Presented Component Units Community Development Authority The government-wide financial statements include the Community Development Authority ("CDA") as a component unit. The CDA is a legally separate organization. The board of the CDA is appointed by the mayor. Wisconsin Statutes provide for circumstances whereby the city can impose its will on the CDA, and also create a potential financial benefit to or burden on the city. The Community Development Authority is part of the reporting entity of the City of Omro. However, the CDA had no financial transactions during 2015 which are material to these financial statements. Also, the CDA does not own any assets nor is it liable for any debt. Therefore, no financial statements are presented in this report. The CDA does not issue separate financial statements. Business Improvement District The government-wide financial statements include the Business Improvement District ("BID") as a component unit. The BID is a legally separate organization. The board of the BID is appointed by the mayor. Wisconsin Statutes provide for circumstances whereby the city can impose its will on the BID, and also create a potential financial benefit to or burden on the city. See Note III.I. As a component unit, the BID's financial statements have been presented as a discrete column in the financial statements. The information presented is for the fiscal year ended December 31, 2015. The BID does not issue separate financial statements. B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS In June 2012, the GASB issued statement No. 68 - Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27. This statement establishes standards for measuring and recognizing assets, liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures related to pensions. In November 2013, the GASB issued statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. This statement addresses an issue regarding application of the transition provisions of Statement No. 68. These standards were implemented January 1, 2015. Government-Wide Financial Statements The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

Page 16

Packet Pg. 48

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Government-Wide Financial Statements (cont.) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The city does not allocate indirect expenses to functions in the statement of activities. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. Fund Financial Statements Financial statements of the city are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position/fund balance, revenues, and expenditures/expenses. Funds are organized as major funds or nonmajor funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the city or meets the following criteria: a. Total assets/deferred outflows of resources, liabilities/deferred inflows of resources, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type, and b. The same element of the individual governmental or enterprise fund that met the 10% test is at least 5% of the corresponding total for all governmental and enterprise funds combined. c. In addition, any other governmental or enterprise fund that the city believes is particularly important to financial statement users may be reported as a major fund. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The city reports the following major governmental funds: General Fund - accounts for the city's primary operating activities. It is used to account for and report all financial resources except those accounted for and reported in another fund. Marble Trust Special Revenue Fund - accounts for monies received from private donations to finance maintenance and improvements to the parks and swimming pool. Page 17

Packet Pg. 49

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) The city reports the following major governmental funds: (cont.) 2015 Loan Debt Service Fund - accounts for resources accumulated and payments made for principal and interest on the 2015 loan. The city reports the following major enterprise funds: Water Utility - accounts for operations of the water system. Sewer Utility - accounts for operations of the sewer system. The city reports the following nonmajor governmental funds: Special Revenue Funds - used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes (other than debt service or capital projects). Cemetery Hinz Trust Historical Society Trust Park Impact Fees

Carter Memorial CDBG Grant Library Impact Fees Police K-9

Debt Service Funds - used to account for and report financial resources that are restricted, committed, or assigned to expenditure for the payment of general long-term debt principal, interest, and related costs. 2005 State Trust Fund Loans 2009 IDB Loan 2012 General Obligation Notes

2007 General Obligation Notes 2010 General Obligation Notes

Capital Projects Funds - used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. General Capital Projects

City Garage

Page 18

Packet Pg. 50

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) The city reports the following nonmajor governmental and enterprise funds: (cont.) Permanent Funds - used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs, that is, for the benefit of the government or its citizenry. Condon Memorial Pomerening Memorial King Trust

Dunn Memorial Schoenbechler Memorial

In addition, the city reports the following fund type: Agency Fund - used to account for and report assets held by the city in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. Tax Collection C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION Government-Wide Financial Statements The government-wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Special assessments are recorded as revenue when earned. Unbilled receivables are recorded as revenues when services are provided. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the city's water and sewer and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Page 19

Packet Pg. 51

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the city considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for certain insurance recoveries received after the 60 day period, which are also considered available to pay for the related liabilities. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences, and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are recorded in the year levied as receivables and deferred inflows. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. Intergovernmental aids and grants are recognized as revenues in the period the city is entitled the resources and the amounts are available. Amounts owed to the city which are not available are recorded as receivables and unavailable revenues. Amounts received before eligibility requirements (excluding time requirements) are met are recorded as liabilities. Amounts received in advance of meeting time requirements are recorded as deferred inflows. Special assessments are recorded as revenues when they become measurable and available as current assets. Annual installments due in future years are reflected as receivables and unavailable revenues. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, special assessments and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. Proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. Agency funds follow the accrual basis of accounting, and do not have a measurement focus. The proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water and sewer utilities are charges to customers for sales and services. Special assessments are recorded as receivables and contribution revenue when levied. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

Page 20

Packet Pg. 52

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) All Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY 1. Deposits and Investments For purposes of the statement of cash flows, the city considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. Investment of city funds is restricted by Wisconsin state statutes. Available investments are limited to: a.

Time deposits in any credit union, bank, savings bank or trust company maturing in three years or less.

b.

Bonds or securities of any county, city, drainage district, technical college district, village, town, or school district of the state. Also, bonds issued by a local exposition district, a local professional baseball park district, a local professional football stadium district, a local cultural arts district, the University of Wisconsin Hospitals and Clinics Authority, or the Wisconsin Aerospace Authority.

c.

Bonds or securities issued or guaranteed by the federal government.

d.

The local government investment pool.

e.

Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency.

f.

Securities of an open-end management investment company or investment trust, subject to various conditions and investment options.

g.

Repurchase agreements with public depositories, with certain conditions.

Investment of most trust funds including cemetery perpetual care funds, is regulated by Chapter 881 of the Wisconsin Statutes. Investment of library trust funds is regulated by Chapter 112. Those sections give broad authority to use such funds to acquire various kinds of investments including stocks, bonds and debentures. The city has adopted an investment policy. That policy follows the state statute for allowable investments. The city's investment policy addresses custodial credit risk. Collateralization is required on two types of investments: certificates of deposit that exceed the state and FDIC insurance limits and repurchase agreements. The collateralization level is 102% of the market value of principal and accrued interest. Page 21

Packet Pg. 53

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (cont.) 1. Deposits and Investments (cont.) Collateral is limited to securities of the U.S. Treasury and its agencies. Collateral is always kept by an independent third party and evidenced by safekeeping receipts. The city is in compliance with this policy as all certificates of deposit held were fully insured or collateralized. The city's investment policy also addressees concentration of credit risk. With the exception of U.S. securities and authorized Local Government Investment Pools, no more than fifty percent (50%) of the city's total investment portfolio shall be invested in a single security type or with a single financial institution. The city is in compliance with this policy. Interest rate risk is also addressed by the city's investment policy. The city will diversify its investments according to type, maturity and institution. The portfolio will contain both short-term and long-term investments. No more than fifty percent (50%) of total investments should extend beyond five years and never extend beyond ten years. The city is in compliance with this policy. Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on quoted market prices. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled investments of municipal accounting funds is allocated based on average balances. The difference between the bank statement balance and carrying value is due to outstanding checks and/or deposits in transit. The Wisconsin Local Government Investment Pool (LGIP) is part of the State Investment Fund (SIF), and is managed by the State of Wisconsin Investment Board. The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice. At December 31, 2015, the fair value of the city 's share of the LGIP's assets was substantially equal to the amount as reported in these statements. See Note III. A. for further information. 2. Receivables Property taxes are levied in December on the assessed value as of the prior January 1. In addition to property taxes for the city, taxes are collected for and remitted to the state and county governments as well as the local school district and technical college district. Taxes for all state and local governmental units billed in the current year for the succeeding year are reflected as receivables and due to other taxing units on the accompanying statement of assets and liabilities - agency fund.

Page 22

Packet Pg. 54

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (cont.) 2. Receivables (cont.) Property tax calendar - 2015 tax roll: Lien date and levy date Tax bills mailed Payment in full, or First installment due Second installment due Personal property taxes in full Tax sale - 2015 delinquent real estate taxes

December 2015 December 2015 January 31, 2016 January 31, 2016 July 31, 2016 January 31, 2016 October 2018

Accounts receivable have been shown net of an allowance for uncollectible accounts. Delinquent real estate taxes as of July 31 are paid in full by the county, which assumes the collection thereof. No provision for uncollectible accounts receivable has been made for the water and sewer utilities because they have the right by law to place substantially all delinquent bills on the tax roll, and other delinquent bills are generally not significant. During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as "due to and from other funds." Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds." Interfund receivables and payables between funds within governmental activities are eliminated in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as internal balances. The city has received federal and state grant funds for economic development and housing rehabilitation loan programs to various businesses and individuals. The city records a loan receivable when the loan has been made and funds have been disbursed. The amount recorded as economic development and housing rehabilitation loans receivable has not been reduced by an allowance for uncollectible accounts. It is the city's policy to record revenue when the initial loan is made from the federal and state grant funds. The net amount of the loan receivable balance is included in restricted fund balance. Interest received from loan repayments is recognized as revenue when received in cash. Any unspent loan repayments at year end are presented as restricted fund balance in the fund financial statements. 3. Inventories and Prepaid Items Governmental fund inventory items are charged to expenditure accounts when purchased. Year-end inventory was not significant. Proprietary fund inventories are generally used for construction and/or for operation and maintenance work. They are not for resale. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Page 23

Packet Pg. 55

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (cont.) 4. Restricted Assets Mandatory segregations of assets are presented as restricted assets. Such segregations are required by bond agreements and other external parties. Current liabilities payable from these restricted assets are so classified. The excess of restricted assets over current liabilities payable from restricted assets will be used first for retirement of related long-term debt. The remainder, if generated from earnings, is shown as restricted net position. 5. Capital Assets Government-Wide Statements Capital assets, which include property, plant and equipment, are reported in the government-wide financial statements. Capital assets are defined by the government as assets with an initial cost of more than $500 for general capital assets and $5,000 for infrastructure assets, and an estimated useful life in excess of 2 years. All capital assets are valued at historical cost, or estimated historical cost if actual amounts are unavailable. Donated capital assets are recorded at their estimated fair value at the date of donation. Additions to and replacements of capital assets of business-type activities are recorded at original cost, which includes material, labor, overhead, and an allowance for the cost of funds used during construction when significant. For tax-exempt debt, the amount of interest capitalized equals the interest expense incurred during construction netted against any interest revenue from temporary investment of borrowed fund proceeds. No interest was capitalized during the current year. The cost of renewals and betterments relating to retirement units is added to plant accounts. The cost of property replaced, retired or otherwise disposed of, is deducted from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. Depreciation of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation reflected in the statement of net position. Depreciation is provided over the assets' estimated useful lives using the straight-line method. The range of estimated useful lives by type of asset is as follows: Buildings Machinery and Equipment Utility System Infrastructure Seawall

30 3-20 15-107 15-50 20

Years Years Years Years Years

Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same way as in the government-wide statements. Page 24

Packet Pg. 56

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (cont.) 6. Other Assets The sewer utility reports cash and investments that have been designated for specific purposes but are not restricted as other assets. 7. Deferred Outflows of Resources A deferred outflow of resources represents a consumption of net position/fund balance that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future time. 8. Compensated Absences Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, and are payable with expendable resources. 9. Long-Term Obligations All long-term obligations to be repaid from governmental and business-type resources are reported as liabilities in the government-wide statements. The long-term obligations consist primarily of notes and bonds payable and accrued compensated absences. Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face value of debts (plus any premiums) are reported as other financing sources and payments of principal and interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the government-wide statements. For the government-wide statements and proprietary fund statements, bond premiums and discounts are amortized over the life of the issue using the effective interest method. The balance at year end is shown as an increase or decrease in the liability section of the statement of net position. 10. Deferred Inflows of Resources A deferred inflow of resources represents an acquisition of net position/fund balance that applies to a future period and therefore will not be recognized as an inflow of resources (revenue) until that future time.

Page 25

Packet Pg. 57

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (cont.) 11. Equity Classifications Government-Wide Statements Equity is classified as net position and displayed in three components: a. Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances (excluding unspent debt proceeds) of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position - Consists of net position with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. c. Unrestricted net position - All other net positions that do not meet the definitions of "restricted" or "net investment in capital assets." When both restricted and unrestricted resources are available for use, it is the city's policy to use restricted resources first, then unrestricted resources as they are needed. Fund Statements Governmental fund balances are displayed as follows: a. Nonspendable - Includes fund balance amounts that cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained intact. b. Restricted - Consists of fund balances with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation. c. Committed - Includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority. Fund balance amounts are committed through a formal action (resolution) of the city. This formal action must occur prior to the end of the reporting period, but the amount of the commitment, which will be subject to the constraints, may be determined in the subsequent period. Any changes to the constraints imposed require the same formal action of the city that originally created the commitment.

Page 26

Packet Pg. 58

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (cont.) 11. Equity Classifications (cont.) Fund Statements (cont.) d. Assigned - Includes spendable fund balance amounts that are intended to be used for specific purposes that do not meet the criteria to be classified as restricted or committed. The Council may take official action to assign amounts. Assignments may take place after the end of the reporting period. e. Unassigned - Includes residual positive fund balance within the general fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those purposes. Proprietary fund equity is classified the same as in the government-wide statements. The Council formally established a stabilization fund and capital expenditures reserve fund beginning with the fiscal year 2009 budget. The stabilization and capital expenditure reserve funds are classified as unassigned fund balance within the general fund as they currently do not meet the GASB No. 54 definition for presenting this as restricted or committed. Additions to the stabilization and capital expenditures reserve funds are required when the remaining general fund balance reaches a maximum of 30% of total general fund annual revenues. The entire balance of the stabilization fund was used during 2015 for remediation. The balance at year end for the capital expenditures reserve was $154,279. The City has a formal minimum fund balance policy. That policy is to maintain its unassigned general fund balance (excluding the stabilization and capital expenditure reserve accounts) at a minimum of 25% of total general fund annual revenues. The balance at year end was $1,078,895 or 30%. See Note III. G. for further information. 12. Basis for Existing Rates Water Utility Current water rates were approved by the Public Service Commission of Wisconsin on November 28, 2012 and were effective January 1, 2013. Sewer Utility Current sewer rates were approved by the city council on December 17, 2013 and placed into effect on January 1, 2014. Page 27

Packet Pg. 59

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE II - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. EXCESS EXPENDITURES AND OTHER FINANCING USES OVER APPROPRIATIONS

Fund

Budgeted Expenditures and Other Financing Uses

Park impact fee $ CDBG grant 2015 Loan City garage King Trust Historical Society Trust Schoenbechler trust 2010 General Obligation Notes Cemetery Carter Memorial

206,800 24,732 -

Actual Expenditures and Other Financing Uses

Excess Expenditures and Other Financing Uses Over Budget

$

$

7,511 634 329,000 41,132 5,668 6,670 1,908 300,133 29,505 2,651

7,511 634 329,000 41,132 5,668 6,670 1,908 93,333 4,773 2,651

The city controls expenditures at the function level. Some individual functions experienced expenditures which exceeded appropriations. The detail of those items can be found in the city's year-end budget to actual report. B. LIMITATIONS ON THE CITY'S TAX LEVY Wisconsin law limits the city's future tax levies. Generally the city is limited to its prior tax levy dollar amount (excluding TIF Districts), increased by the greater of the percentage change in the city's equalized value due to new construction or zero percent. Changes in debt service from one year to the next are generally exempt from this limit with certain exceptions. The city is required to reduce its allowable levy by the estimated amount of fee revenue it collects for certain services, if those services were funded in 2013 by the property tax levy. Levies can be increased above the allowable limits if the amount is approved by referendum.

NOTE III - DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS The city maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the statement of net position and balance sheet as cash and investments.

Page 28

Packet Pg. 60

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A. DEPOSITS AND INVESTMENTS (cont.) The city's deposits and investments at year end were comprised of the following: Bank and Investment Balances

Carrying Value Deposits Mutual funds - other than bonds Mutual funds Annuity LGIP Stocks

$

Petty cash Total Deposits and Investments

4,519,951 508,758 298,150 215,931 1,711,414 222,773

$

2,996 $

7,479,973

$

5,369,067 540,505

Associated Risks

4,692,307 508,758 298,150 216,075 1,598,625 222,773 -

$

Custodial credit N/A Credit, interest rate Credit, interest rate Credit Custodial credit, concentration of credit N/A

7,536,688

Reconciliation to financial statements Per statement of net position Unrestricted cash and investments Restricted cash and investments Per statement of assets and liabilities Agency Fund Total Deposits and Investments

1,570,401 $

7,479,973

Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for time and savings accounts (including NOW accounts) and $250,000 for demand deposit accounts (interest-bearing and noninterest-bearing). In addition, if deposits are held in an institution outside of the state in which the government is located, insured amounts are further limited to a total of $250,000 for the combined amount of all deposit accounts. Bank accounts are also insured by the State Deposit Guarantee Fund in the amount of $400,000. However, due to the nature of this fund, recovery of material principal losses may not be significant to individual municipalities. This coverage has been considered in computing custodial credit risk. The city maintains collateral agreements with its banks. At December 31, 2015, the banks had pledged various government securities in the amount of $1,053,693 to secure the city's deposits.

Page 29

Packet Pg. 61

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A. DEPOSITS AND INVESTMENTS (cont.) Custodial Credit Risk Deposits Custodial credit risk is the risk that in the event of a financial institution failure, the city's deposits may not be returned to the city. As of December 31, 2015, $731,744 of the city's total bank balances were exposed to custodial credit risk as follows: Uninsured and uncollateralized

$

731,744

Investments For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the city will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The city does not have any investments exposed to custodial credit risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. As of December 31, 2015, the city's investments were rated as follows:

Investment Type Mutual funds Annuity

Composite Ratings A, B, BBB AA

The city also held investments in the following external pool which is not rated: Wisconsin Local Government Investment Pool Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer.

Page 30

Packet Pg. 62

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A. DEPOSITS AND INVESTMENTS (cont.) Concentration of Credit Risk (cont.) At December 31, 2015, the investment portfolio was concentrated as follows: Issuer ExxonMobil

Percentage of Portfolio

Investment Type Stock

6%

Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment. As of December 31, 2015, the city's investments were as follows: Maturity (In Years) Investment Type Annuity Mutual fund - bonds Totals

Fair Value

Less than 1

1-4

Over 4

$

216,075 298,150

$

86,756

$

-

$

216,075 211,394

$

514,225

$

86,756

$

-

$

427,469

See Note I.D.1. for further information on deposit and investment policies. B. RECEIVABLES Receivables not expected to be collected within one year relate to delinquent personal property taxes in the general fund, fire truck loans receivable in the 2015 loan fund, and CDBG and other development loans in the nonmajor funds as follows:

General Fund Amounts not expected to be collected within one year

$

200

2015 Loan $

177,360

Nonmajor and Other Funds $

445,049

Page 31

Packet Pg. 63

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) B. RECEIVABLES (cont.) Governmental funds report unavailable or unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Property taxes levied for the subsequent year are not earned and cannot be used to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of unavailable revenue and unearned revenue reported in the governmental funds were as follows: Unearned Property taxes receivable for subsequent year Stern's Park grant Interest on investments Other miscellaneous Fire truck loan receivable Total Unearned/Unavailable Revenue for Governmental Funds

Unavailable

$ 1,643,317 -

$

24,284 6,323 7,195 219,333

$ 1,643,317

$

257,135

For economic development loans, the city is limited by the Wisconsin Department of Administration to the amount of program income from economic development loans that it may retain to be loaned to other businesses and/or the amount of time for which funds may be held without use. Program income includes the principal and interest received from economic development loans repayments. At December 31, 2015, the city has not exceeded the maximum amount of program income that it may retain or the amount of time for which funds may be held without use. When it does, a liability to the state will be recorded. C. RESTRICTED ASSETS The following represent the balances of the restricted assets: Long-Term Debt Accounts Redemption

-

Used to segregate resources accumulated for debt service payments over the next twelve months.

Depreciation

-

Used to report resources set aside to fund plant renewals and replacement or make up potential future deficiencies in the redemption account.

Equipment Replacement Account The sewer utility established an equipment replacement account to be used for significant mechanical equipment replacement as required by the Wisconsin Department of Natural Resources. Page 32

Packet Pg. 64

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) C. RESTRICTED ASSETS (cont.) Impact Fee Account The city has received impact fees which must be spent in accordance with the local ordinance and state statutes. Any unspent funds must be refunded to the current property owner. Net Pension Asset Restricted assets have been reported in connection with the net pension asset balance since this balance must be used to fund employee benefits. Following is a list of restricted assets at December 31, 2015: Restricted Assets Bond redemption account Bond depreciation account Equipment replacement account Library impact fees Net pension asset - governmental activities Net pension asset - business-type activities Total

$

118,375 89,003 324,264 8,863 180,012 44,716

$

765,233

Page 33

Packet Pg. 65

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2015, was as follows: Beginning Balance Governmental Activities Capital assets not being depreciated Land

$

Capital assets being depreciated Buildings Machinery and equipment Infrastructure Seawall Total Capital Assets Being Depreciated

700,221

Additions $

Ending Balance

Deletions -

$

-

$

700,221

5,698,810 2,981,326 3,457,733 509,650

51,422 77,946

4,169 38,904

5,698,810 3,028,579 3,457,733 548,692

12,647,519

129,368

43,073

12,733,814

Total Capital Assets

13,347,740

129,368

43,073

13,434,035

Less: Accumulated depreciation for Buildings Machinery and equipment Infrastructure Seawall Total Accumulated Depreciation

(2,631,139) (2,063,662) (1,345,284) (154,426) (6,194,511)

(170,675) (174,011) (83,377) (27,435) (455,498)

4,169 38,904 43,073

(2,801,814) (2,233,504) (1,428,661) (142,957) (6,606,936)

6,453,008

(326,130)

-

7,153,229

$ (326,130) $

-

Net Capital Assets Being Depreciated Total Governmental Activities Capital Assets, Net of Accumulated Depreciation

$

6,126,878

$

6,827,099

$

44,735 35,668 187,860 186,902 333

$

455,498

Depreciation expense was charged to functions as follows: Governmental Activities General government Public safety Public works, which includes the depreciation of infrastructure Leisure activities Conservation and development Total Governmental Activities Depreciation Expense

Page 34

Packet Pg. 66

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS (cont.) Business-type Activities Beginning Balance Water Capital assets not being depreciated Land and land rights Construction in progress Total Capital Assets Not Being Depreciated

$

Capital assets being depreciated Source of supply Pumping Treatment Transmission and distribution General Total Capital Assets Being Depreciated Total Capital Assets Less: Accumulated depreciation for All asset categories Net Capital Assets Being Depreciated Net Water Capital Assets

$

1,457 -

Additions $

8,370

Ending Balance

Deletions $

-

$

1,457 8,370

1,457

8,370

-

9,827

73,523 78,184 57,866 3,180,052 84,210

54,874 -

9,120 -

73,523 78,184 57,866 3,225,806 84,210

3,473,835

54,874

9,120

3,519,589

3,475,292

63,244

9,120

3,529,416

(1,105,929)

(85,731)

9,120

(1,182,540)

2,367,906

(30,857)

-

(22,487) $

-

2,369,363

$

2,337,049 $

2,346,876

Page 35

Packet Pg. 67

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS (cont.) Business-type Activities (cont.) Beginning Balance Sewer Capital assets not being depreciated Land and land rights

$

Capital assets being depreciated Collecting system Collecting system pumping Treatment and disposal General Total Capital Assets Being Depreciated Total Capital Assets Less: Accumulated depreciation for All asset categories Net Capital Assets Being Depreciated Net Sewer Capital Assets Business-type Capital Assets, Net of Accumulated Depreciation

86,616

Additions $

Ending Balance

Deletions -

$

-

$

86,616

2,351,110 181,253 4,593,445 143,081

43,570 -

6,175 -

2,388,505 181,253 4,593,445 143,081

7,268,889

43,570

6,175

7,306,284

7,355,505

43,570

6,175

7,392,900

(2,649,634)

(194,055)

6,175

(2,837,514)

4,619,255

(150,485)

-

4,468,770

$

4,705,871

$

(150,485) $

-

$

4,555,386

$

7,075,234

$

(172,972) $

-

$

6,902,262

$

75,857 203,929

$

279,786

Depreciation expense was charged to functions as follows: Business-type Activities Water Sewer Total Business-type Activities Depreciation Expense

Depreciation expense may be different from business-type activity capital asset additions because of joint metering, salvage, cost of removal, internal allocations, or costs associated with the disposal of assets.

Page 36

Packet Pg. 68

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) E. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS Interfund Receivables/Payables The following is a schedule of interfund receivables and payables including any overdrafts on pooled cash and investment accounts: Receivable Fund General Fund Water Utility Water Utility

Payable Fund Water General Fund Sewer Utility

Amount $

Total - Fund Financial Statements

36,699

Less: Fund eliminations

(19,389) (9,258)

Less: Government-wide eliminations Total Internal Balances - Government-Wide Statement of Net Position Receivable Fund Governmental Activities Business-type Activities

12,681 4,629 19,389

$

Payable Fund Business-type Activities Governmental Activities

Total Government-Wide Financial Statements

8,052 Amount

$

12,681 (4,629)

$

8,052

All amounts are due within one year. The principal purpose of these interfunds is to reimburse the utility funds for amounts placed on the tax roll. All remaining balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.

Page 37

Packet Pg. 69

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) E. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS (cont.) Transfers The following is a schedule of interfund transfers: Fund Transferred To

Fund Transferred From

General Fund

Water Utility

General Fund Nonmajor Funds Nonmajor Funds Nonmajor Funds Nonmajor Funds Nonmajor Funds

Nonmajor Funds Nonmajor Funds General Fund Water Utility Sewer Utility Marble Trust

Amount $

Principal Purpose

64,781 9,096 41,132 13,052 4,979 6,352 8,953

Total - Fund Financial Statements

148,345

Less: Fund eliminations

(72,233)

Total Transfers - Government-Wide Statement of Activities

$

Payment in lieu of taxes Impact fees and scholarship funds Fund closeout Fund closeout Payment of debt service Payment of debt service Funding of capital projects

76,112

Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. F. LONG-TERM OBLIGATIONS Long-term obligations activity for the year ended December 31, 2015, was as follows: Beginning Balance Governmental Activities Bonds and Notes Payable General obligation debt Land contract payable Sub-totals

$

Other Liabilities Vested compensated absences Total Governmental Activities Long-Term Liabilities

2,660,483 11,511 2,671,994

Increases $

141,626

$

2,813,620

329,000 329,000

Decreases $

73,714

$

402,714

Ending Balance

405,000 4,855 409,855

$

59,012

$

468,867

2,584,483 6,656 2,591,139

Amounts Due Within One Year $

156,328

$

2,747,467

260,959 6,656 267,615

67,460

$

335,075

Page 38

Packet Pg. 70

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGATIONS (cont.) Beginning Balance Business-type Activities Bonds and Notes Payable Clean water fund loan

$

2,217,828

Other Liabilities Vested compensated absences

Increases

$

35,059

Total Business-type Activities Long-Term Liabilities

$

2,252,887

Decreases

-

$

160,482

39,261

$

39,261

$

21,734

$

Amounts Due Within One Year

Ending Balance

182,216

2,057,346

$

52,586

$

164,544

22,178

2,109,932

$

186,722

In accordance with Wisconsin Statutes, total general obligation indebtedness of the city may not exceed 5% of the equalized value of taxable property within the city's jurisdiction. The debt limit as of December 31, 2015, was $8,916,975. Total general obligation debt outstanding at year end was $2,584,483. General Obligation Debt All general obligation notes and bonds payable are backed by the full faith and credit of the city. Notes and bonds in the governmental funds will be retired by future property tax levies or tax increments accumulated by the debt service fund. Governmental Activities General Obligation Debt State trust fund loan Promissory note General obligation promissory notes General obligation promissory notes Promissory note

Date of Issue

Final Maturity

Interest Rates

Original Indebtedness

Balance December 31, 2015

1/26/2005 8/18/2009

3/15/2024 11/1/2019

5.25% 2.40*

$

$

11/3/2010

11/1/2016

0.80-2.0

1,085,000

65,000

4/26/2012 3/25/2015

5/1/2029 4/1/2020

0.80-3.6 2.10

1,705,000 329,000

1,550,000 329,000

632,983 250,000

Total Governmental Activities - General Obligation Debt

$

449,983 190,500

2,584,483

*Variable interest rate - see Other Debt Information section of this footnote for details.

Page 39

Packet Pg. 71

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGATIONS (cont.) General Obligation Debt (cont.) Debt service requirements to maturity are as follows: Governmental Activities General Obligation Debt Principal Interest

Years 2016 2017 2018 2019 2020 2021-2025 2026-2029 Totals

$

260,959 207,451 210,805 411,687 226,598 806,983 460,000

$

77,325 69,193 63,955 58,320 48,813 153,294 32,287

$

2,584,483

$

503,187

Revenue Debt Business-type activities revenue bonds are payable only from revenues derived from the operation of the sewer utility. The sewer utility has pledged future sewer revenues, net of specified operating expenses, to repay revenue bonds issued in 2006. Proceeds from the bonds provided financing for the sewer utility improvements. The bonds are payable solely from revenues and are payable through sewer charges for services. Annual principal and interest payments on the bonds are expected to require 53% of net revenues. The total principal and interest remaining to be paid on the bonds is $2,356,738. Principal and interest paid for the current year and total customer net revenues were $214,584 and $403,116, respectively.

Page 40

Packet Pg. 72

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGATIONS (cont.) Revenue Debt (cont.) Revenue debt payable at December 31, 2015, consists of the following: Business-type Activities Revenue Debt

Date of Issue

Final Maturity

Interest Rates

Original Indebtedness

Balance December 31, 2015

6/14/2006

5/1/2026

2.531%

$

$

Sewer Utility Clean water fund loan

3,354,326

2,057,346

(1)

(1) - During 2006 the utility was authorized to issue $3,510,030 of sewer system Clean Water Fund revenue bonds. The original amount reported above has been issued as of December 31, 2015. The repayment schedule is for the amount issued. Debt service requirements to maturity are as follows: Business-type Activities Revenue Debt Principal Interest

Years 2016 2017 2018 2019 2020 2021-2025 2026 Totals

$

164,544 168,709 172,979 177,357 181,846 980,642 211,269

$

49,989 45,772 41,448 37,014 32,469 90,026 2,674

$

2,057,346

$

299,392

Land Contract Payable Land Contract Payable at December 31, 2015 consists of the following: Governmental Activities Land Contract Payable 2012 Land contract

Date of Issue

Final Maturity

12/15/2012 12/15/2016

Interest Rates

Original Indebtedness

Balance December 31, 2015

3.00%

$

$

26,000

6,656 Page 41

Packet Pg. 73

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGATIONS (cont.) Land Contract Payable (cont.) Debt service requirements to maturity are as follows: Governmental Activities Land Contract Payable Principal Interest

Years $

2016

6,656

$

200

Other Debt Information Estimated payments of vested compensated absences are not included in the debt service requirement schedules. The compensated absences liability, other post employment benefits obligation, and net pension obligation attributable to governmental activities will be liquidated primarily by the general fund. The 2009 promissory notes has variable interest rates. The interest rates on the notes are adjusted each year based on the interest rate earned by Winnebago County in its investment pool during the preceding calendar year plus .25%. General Obligation Notes Called On May 1, 2015, the city called the 2015 and 2016 principal payments of the 2010 general obligation promissory notes in the amounts of $145,000 and $95,000, respectively. Savings on interest payments for 2015 and 2016 total $6,600. Available funds from the city's 2010 GO note fund were used to call this debt. A statutory mortgage lien upon the city's system and any additions, improvements and extensions thereto is created by Section 66.0621 of the Wisconsin Statutes as provided for in the ordinances creating the revenue bond issue. The city's system and the earnings of the system remain subject to the lien until payment in full of the principal and interest on the bonds. Bond Covenant Disclosures Insurance The city is exposed to various risks of loss related to torts, theft of, damage to, or destruction of assets, errors and omissions, workers compensation, and health care of its employees. These risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded coverage in any of the last three years. There were no significant reductions in coverage compared to the prior year.

Page 42

Packet Pg. 74

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGATIONS (cont.) Debt Coverage - Sewer Utility Under terms of the resolutions providing for the issue of revenue bonds, revenues less operating expenses excluding depreciation (defined net earnings) must exceed 1.10 times the highest annual debt service of the bonds. The coverage only includes revenue debt and does not include general obligation or other debt. The coverage requirement was met in 2015 as follows: Operating revenues Investment income Connection fees Less: Operation and maintenance expenses Net Defined Earnings Minimum Required Earnings per Resolution: Highest annual debt service Subtotal Coverage factor Minimum Required Earnings

$

894,113 2,391 14,000 (507,388)

$

403,116

$

214,533 214,533 1.10

$

235,986

Actual Debt Coverage

1.88

G. NET POSITION/FUND BALANCES Net position reported on the government wide statement of net position at December 31, 2015, includes the following: Governmental Activities Net Investment in Capital Assets Land Other capital assets, net of accumulated depreciation Less: Long-term debt outstanding Plus: Noncapital debt proceeds Total Net Investment in Capital Assets

$

700,221 6,126,878 (2,591,139) 778,983

$

5,014,943

Page 43

Packet Pg. 75

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) G. NET POSITION/FUND BALANCES (cont.) Governmental Funds Governmental fund balances reported on the fund financial statements at December 31, 2015, include the following: General Fund

Nonmajor Funds

Marble Trust

Totals

Fund Balances Nonspendable: Delinquent personal property taxes

$

200

Restricted for: Trust activities Cemetery Loan programs Impact fees Debt service Police K-9 activities Committed to: 2015 budget carryovers Assigned to: 2016 fund balance applied Capital projects Unassigned: Total Fund Balances

$

$

-

$

-

$

200

-

832,273 -

738,904 106,482 308,978 13,871 220,623 29,039

1,571,177 106,482 308,978 13,871 220,623 29,039

286,336

-

-

286,336

10,000 -

-

459

10,000 459

1,078,895

-

-

1,078,895

1,375,431

$

832,273

$

1,418,356

$

3,626,060

Business-type Activities Net Investment in Capital Assets Land Construction in progress Other capital assets, net of accumulated depreciation Less: Long-term debt outstanding Total Net Investment in Capital Assets

$

88,073 8,370 6,805,819 (2,057,346)

$

4,844,916

Page 44

Packet Pg. 76

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) H. RESTATEMENT OF NET POSITION Net position has been restated as a result of the implementation of GASB Statement No. 68 - Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27 and implementation of GASB Statement No. 71 - Pension Transition for Contributions Made Subsequent to the Measurement Date. These statements require the net pension asset and related deferred outflows and deferred inflows, if any, to be reported in the financial statements. The details of this restatement are as follows:

Net Position - December 31, 2014 (as reported)

Governmental Business-type Activities Activities

Water Utility

Sewer Utility

$

7,404,493

$ 2,971,598

$ 4,432,895

289,343

71,874

35,051

36,823

71,372

17,729

8,646

9,083

7,494,096

$ 3,015,295

$ 4,478,801

Add: Net pension asset Add: Deferred outflows related to pensions Net Position - December 31, 2014 (as Restated)

$

8,341,789

8,702,504

$

$

I. COMPONENT UNIT BUSINESS IMPROVEMENT DISTRICT This report contains the Business Improvement District (BID), which is included as a component unit. In addition to the basic financial statements and the preceding notes to financial statements which apply, the following additional disclosures are considered necessary for a fair presentation. a. Basis of Accounting/Measurement Focus The BID follows the full accrual basis of accounting and the flow of economic resources measurement focus. b. Deposits and Investments At year end, the carrying amount of the BID's deposits was $13,616 and is part of the city's commingled cash. See Note III. A.

Page 45

Packet Pg. 77

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION A. EMPLOYEES' RETIREMENT SYSTEM Summary of Significant Accounting Policies Pension. For purposes of measuring the net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Wisconsin Retirement System (WRS) and additions to/deductions from WRS’ 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. General Information About the Pension Plan Plan description. The WRS is a cost-sharing multiple-employer defined benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, and expected to work at least 1200 hours a year and expected to be employed for at least one year from employee’s date of hire are eligible to participate in the WRS. Vesting. For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 and on or after April 24, 1998, and prior to July 1, 2011, are immediately vested. Participants who initially became WRS eligible on or after July 1, 2011, must have five years of creditable service to be vested. Benefits provided. Employees who retire at or after age 65 (54 for protective occupation employees, 62 for elected officials and State executive participants) are entitled to receive an unreduced retirement benefit. The factors influencing the benefit are: (1) final average earnings, (2) years of creditable service, and (3) a formula factor. Final average earnings is the average of the participant's three highest years' earnings. Creditable service is the creditable current and prior service expressed in years or decimal equivalents of partial years for which a participant receives earnings and makes contributions as required. The formula factor is a standard percentage based on employment category. Employees may retire at age 55 (50 for protective occupation employees) and receive reduced benefits. Employees terminating covered employment before becoming eligible for a retirement benefit may withdraw their contributions and forfeit all rights to any subsequent benefits. The WRS also provides death and disability benefits for employees.

Page 46

Packet Pg. 78

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) Post-retirement adjustments. The Employee Trust Funds Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance with s. 40.27, Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system’s consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the “floor”) set at retirement. The Core and Variable annuity adjustments granted during recent years are as follows: Year

Core Fund Adjustment

Variable Fund Adjustment

2005

2.6%

7%

2006

0.8

3

2007

3.0

10

2008

6.6

0

2009

(2.1)

(42)

2010

(1.3)

22

2011

(1.2)

11

2012

(7.0)

(7)

2013

(9.6)

9

2014

4.7

25

Page 47

Packet Pg. 79

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) Contributions. Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for General category employees and Executives and Elected Officials. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. During the reporting period, the WRS recognized $89,101 in contributions from the city. Contribution rates as of December 31, 2015 are: Employee Category

Employee

Employer

General

6.8%

6.8%

Executives & Elected Officials

7.7%

7.7%

Protective with Social Security

6.8%

9.5%

Protective without Social Security

6.8%

13.1%

Pension Assets, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At December 31, 2015, the city reported an asset of $224,728 for its proportionate share of the net pension asset. The net pension asset was measured as of December 31, 2014, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2013 rolled forward to December 31, 2014. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The city’s proportion of the net pension asset was based on the city’s share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2014, the city’s proportion was 0.00914913%, which was a decrease of 0.00001300% from its proportion measured as of December 31, 2013. For the year ended December 31, 2015, the city recognized pension expense of $75,763.

Page 48

Packet Pg. 80

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) At December 31, 2015, the city reported deferred outflows of resources related to pensions from the following sources: Deferred Outflows of Resources Differences between expected and actual experience

$

Net differences between projected and actual earnings on pension plan investments

32,579 108,824

Changes in proportion and differences between employer contributions and proportionate share of contributions

179 97,346

Employer contributions subsequent to the measurement date $

Totals

238,928

$97,346 reported as deferred outflows related to pension resulting from the WRS Employer’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension asset in the year ended December 31, 2016. Other amounts reported as deferred outflows of resources related to pension will be recognized in pension expense as follows: Year Ended December 31: 2016

Deferred Outflows of Resources $

34,675

2017

34,675

2018

34,675

2019

34,675

2020

2,882

Page 49

Packet Pg. 81

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) Actuarial assumptions. The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date:

December 31, 2013

Measurement Date of Net Pension Liability (Asset)

December 31, 2014

Actuarial Cost Method:

Entry Age

Asset Valuation Method:

Fair Market Value

Long-Term Expected Rate of Return:

7.2%

Discount Rate:

7.2%

Salary Increases: Inflation

3.2%

Seniority/Merit

0.2% - 5.8%

Mortality:

Wisconsin 2012 Mortality Table

Post-retirement Adjustments*:

2.1%

* No post-retirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience and other factors. 2.1% is the assumed annual adjustment based on the investment return assumption and the post-retirement discount rate. Actuarial assumptions are based upon an experience study conducted in 2012 using experience from 2009 – 2011. The total pension liability for December 31, 2014 is based upon a roll-forward of the liability calculated from the December 31, 2013 actuarial valuation.

Page 50

Packet Pg. 82

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) Long-term expected return on plan assets. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges 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. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class

Long-Term Real Rate of Return

Target Allocation

US Equities

5.3%

21%

International Equities

5.7

23

Fixed Income

1.7

36

Inflation Sensitive Assets

2.3

20

Real Estate

4.2

7

Private Equity/Debt

6.9

7

Multi-Asset

3.9

6

Cash

0.9

-20

Single discount rate. A single discount rate of 7.20% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.20% and a long term bond rate of 3.56%. Because of the unique structure of WRS, the 7.20% expected rate of return implies that a dividend of approximately 2.1% will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Page 51

Packet Pg. 83

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) Sensitivity of the city’s proportionate share of the net pension asset to changes in the discount rate. The following presents the city’s proportionate share of the net pension asset calculated using the discount rate of 7.20 percent, as well as what the city’s proportionate share of the net pension asset would be if it were calculated using a discount rate that is 1-percentage-point lower (6.20 percent) or 1percentage-point higher (8.20 percent) than the current rate:

City’s proportionate share of the net pension asset (liability)

1% Decrease to Discount Rate (6.20%)

Current Discount Rate (7.20%)

1% Increase to Discount Rate (8.20%)

$(633,995)

$224,728

$902,912

Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position is available in separately issued financial statements available at http://legis.wisconsin.gov/lab/ and reference report number 15-11. At December 31, 2015, the city reported a payable to the pension plan which represents contractually required contributions outstanding as of the end of the year. B. RISK MANAGEMENT The city is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; workers compensation; and health care of its employees. All of these risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded the commercial coverage in any of the past three years. There were no significant reductions in coverage compared to the prior year. C. COMMITMENTS AND CONTINGENCIES Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. The liability and expenditure for claims and judgments are only reported in governmental funds if it has matured. Claims and judgments are recorded in the government-wide statements and proprietary funds as expenses when the related liabilities are incurred. From time to time, the city is party to various pending claims and legal proceedings. Although the outcome of such matters cannot be forecasted with certainty, it is the opinion of management and the city attorney that the likelihood is remote that any such claims or proceedings will have a material adverse effect on the city's financial position or results of operations. The city has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial. Page 52

Packet Pg. 84

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

NOTE IV - OTHER INFORMATION (cont.) D. JOINT VENTURES The City of Omro and the Towns of Omro and Rushford jointly operate the fire department, which is called the Omro Joint Fire Department (fire department) and provides fire protection to the municipalities indicated above. The governing body is made up of citizens from each community. Local representatives are appointed by the mayor. The governing body has authority to adopt its own budget and control the financial affairs of the fire department. The city is obligated by the joint venture agreement to remit an amount annually to the fire department. The city made a payment to the fire department of $45,601 in 2015. Financial information of the fire department as of December 31, 2015 is available directly from the fire department's office. The city does not have an equity interest in the Omro Joint Fire District. E. EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS The Governmental Accounting Standards Board (GASB) has approved the following: 

Statement No. 72, Fair Value Measurement and Application



Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68



Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans



Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions



Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Government



Statement No. 77, Tax Abatement Disclosures



Statement No. 78, Pensions Provided Through Certain Multiple-Employer Defined Benefit Pension Plans

When they become effective, application of these standards may restate portions of these financial statements.

Page 53

Packet Pg. 85

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2015

REQUIRED SUPPLEMENTARY INFORMATION

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

Packet Pg. 86

4.1.b

CITY OF OMRO

Budgeted Amounts Original

Final

Variance with Final Budget

Actual

REVENUES TAXES General property taxes Mobile home taxes Sales tax Taxes from county housing authority Interest and penalties on taxes Total Taxes INTERGOVERNMENTAL Shared taxes from state Fire insurance tax State aid - exempt computers State aid - law enforcement State aid - road allotment State aid - recycling County aid - library County aid - economic development Total Intergovernmental LICENSES AND PERMITS Liquor and malt beverage licenses Operators' license Cigarette licenses Cable television franchise fees Bicycle licenses Dog and cat licenses Building permits Other licenses Total Licenses and Permits FINES, FORFEITURES AND PENALTIES Court penalties and costs Parking violations Judgments and damages Total Fines, Forfeitures and Penalties

$

1,278,738 14,500 40

$

1,278,738 14,500 40

$

1,278,632 12,861 40

$

(106) (1,639) -

12,700 210 1,306,188

12,700 210 1,306,188

13,968 170 1,305,671

1,268 (40) (517)

821,211 7,000 5,173 1,280 204,816 12,000 79,019

821,211 7,000 5,173 1,280 204,816 12,000 79,019

821,643 7,213 6,481 1,440 213,563 11,945 79,019

432 213 1,308 160 8,747 (55) -

3,553 1,134,052

3,553 1,134,052

11,357 1,152,661

4,600 1,350 400 24,740 70 7,000 20,320 8,150 66,630

4,600 1,350 400 24,740 70 7,000 20,320 8,150 66,630

4,310 1,225 500 25,242 45 6,623 22,378 7,475 67,798

(290) (125) 100 502 (25) (377) 2,058 (675) 1,168

45,000 1,800 -

45,000 1,800 -

35,546 1,370 83

(9,454) (430) 83

46,800

46,800

36,999

(9,801)

7,804 18,609

See independent auditors' report and accompanying notes to required supplementary information. Page 54

Packet Pg. 87

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Budgeted Amounts Original PUBLIC CHARGES FOR SERVICES Clerk fees Treasurer fees License publication fees Police department fees Public works fees Snow and ice removal Weed control fees Recycling Swimming pools Solid waste disposal Parks Library fees Conservation and development Zoning Park rental fees Total Public Charges for Services

$

3,500 1,500 350 800 2,000 200 1,500 4,000 86,010 1,300 1,425 2,000 20,509 1,200 3,000

Final

$

3,500 1,500 350 800 2,000 200 1,500 4,000 86,010 1,300 1,425 2,000 20,509 1,200 3,000

Variance with Final Budget

Actual

$

3,744 899 430 851 2,992 260 1,300 3,129 88,338 2,312 8,439 1,523 21,312 1,100 3,521

$

244 (601) 80 51 992 60 (200) (871) 2,328 1,012 7,014 (477) 803 (100) 521

129,294

129,294

140,150

10,856

INVESTMENT INCOME Investment income

32,000

32,000

25,688

(6,312)

MISCELLANEOUS REVENUES Rent of city property Donations Other miscellaneous Insurance dividends Total Miscellaneous Revenues

1,650 100 300 10,000 12,050

1,650 100 300 10,000 12,050

2,923 181 277,334 7,872 288,310

1,273 81 277,034 (2,128) 276,260

2,727,014

2,727,014

3,017,277

Total Revenues

290,263

See independent auditors' report and accompanying notes to required supplementary information. Page 55

Packet Pg. 88

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Budgeted Amounts Original

Final

Variance with Final Budget

Actual

EXPENDITURES GENERAL GOVERNMENT Municipal court Council Codification of ordinances Land use planning City hall Property and liability insurance Other insurance Special legal counsel Personnel - special service awards Data processing Internal accounting Assessment of taxes Independent audit Other Elections Legal counsel Mayor Clerk/treasurer Total General Government PUBLIC SAFETY Police department Fire service Ambulance service Building inspection Emergency government Crossing Guard Total Public Safety

$

33,697 31,016 5,400 920 52,108 32,000 29,300 500

$

33,697 31,016 5,400 920 52,108 32,000 29,300 500

$

31,747 35,990 6,841 9,032 46,619 32,470 31,797 -

$

1,950 (4,974) (1,441) (8,112) 5,489 (470) (2,497) 500

3,870 15,000 58,366 11,600 25,000 31,670 7,618 31,780 6,956 179,436 556,237

3,870 15,000 58,366 11,600 25,000 31,670 7,618 31,780 6,956 179,436 556,237

3,674 13,165 67,401 12,256 23,951 432,057 5,487 47,866 6,881 180,346 987,580

196 1,835 (9,035) (656) 1,049 (400,387) 2,131 (16,086) 75 (910) (431,343)

746,818 55,060 4,765 18,250 500 825,393

746,818 55,060 4,765 18,250 500 825,393

746,661 52,814 4,753 52,493 2,412 859,133

157 2,246 12 (34,243) 500 (2,412) (33,740)

See independent auditors' report and accompanying notes to required supplementary information. Page 56

Packet Pg. 89

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Budgeted Amounts Original PUBLIC WORKS Machinery and equipment Garages and sheds Bridges and culverts Public works administration Solid waste management Buildings and grounds operations Sewer operating expense Curb and gutter Tree and brush control Street lights Storm sewers Street taxes Other public areas Solid waste disposal Recycling Roadway maintenance Street cleaning Snow and ice control Sidewalks Traffic control Total Public Works HEALTH AND HUMAN SERVICES Animal control Senior transportation Total Health and Human Services LEISURE ACTIVITIES Library Parks administration Celebration and entertainment Waterways Swimming pool Other summer recreation Community center Recreation facilities Skating rink Total Leisure Activities

$

36,000 21,900 1,000 276,426 116,000 7,000 1,100 1,000 4,200 54,000 1,500 60 1,000 6,800 135,000 800 12,000 2,500 5,300 683,586

Final

$

36,000 21,900 1,000 276,426 116,000 7,000 1,100 1,000 4,200 54,000 1,500 60 1,000 6,800 33,089 135,000 800 12,000 2,500 5,300 716,675

Variance with Final Budget

Actual

$

46,654 31,448 414 49,713 118,157 6,742 750 1,518 23,378 56,512 5,352 42 937 10,408 242,840 4,043 19,819 3,570 6,778 629,075

$

(10,654) (9,548) 586 226,713 (2,157) 258 350 (518) (19,178) (2,512) (3,852) 18 63 (3,608) 33,089 (107,840) (3,243) (7,819) (1,070) (1,478) 87,600

400 10,000

400 10,000

140 10,884

260 (884)

10,400

10,400

11,024

(624)

175,144 64,670 650 171,298 1,500 30,600 1,500 800 446,162

175,144 64,670 650 171,298 1,500 30,600 1,500 800 446,162

150,407 106,368 5,774 4,146 162,432 1,500 27,787 1,500 741 460,655

24,737 (41,698) (5,774) (3,496) 8,866 2,813 59 (14,493)

See independent auditors' report and accompanying notes to required supplementary information. Page 57

Packet Pg. 90

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Budgeted Amounts Original CONSERVATION AND DEVELOPMENT Weed control Recycling Urban development Marketing manager Industrial development Economic development - tourism Total Conservation and Development CAPITAL OUTLAY General administration Elections Law enforcement Highway buildings Other culture and recreation Sidewalks Library Parks Total Capital Outlay DEBT SERVICE Principal Interest and fiscal charges Total Debt Service Total Expenditures Excess (deficiency) of revenues over (under) expenditures

$

575 97,040 2,300 109,307 4,000 6,950

Final

$

575 97,040 2,300 109,307 4,000 6,950

Variance with Final Budget

Actual

$

66 109,442 3,325 105,825 12,435 10,397

$

509 (12,402) (1,025) 3,482 (8,435) (3,447)

220,172

220,172

241,490

(21,318)

2,000 57,864 1,000 1,000 20,000 81,864

2,000 12,792 57,864 1,000 1,000 20,000 57,731 72,275 224,662

1,615 9,122 33,221 638 523 3,235 485 48,839

385 3,670 24,643 362 477 16,765 57,731 71,790 175,823

5,200 5,200

5,200 5,200

4,855 345 5,200

345 (345) -

2,829,014

3,004,901

3,242,996

(238,095)

(102,000)

(277,887)

(225,719)

52,168

See independent auditors' report and accompanying notes to required supplementary information. Page 58

Packet Pg. 91

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Budgeted Amounts Original OTHER FINANCING SOURCES (USES) Sale of city property Transfers in Transfer in - tax equivalent Transfers out Total Other Financing Sources (Uses)

$

36,000 66,000 -

$

102,000

Net Change in Fund Balance

-

FUND BALANCE - Beginning of Year FUND BALANCE - END OF YEAR

Final

1,538,640 $

1,538,640

36,000 66,000 -

$

1,685 $ 9,096 64,781 (13,052)

(34,315) 9,096 (1,219) (13,052)

102,000

62,510

(39,490)

(175,887)

(163,209)

12,678

1,538,640 $

Variance with Final Budget

Actual

1,362,753

1,538,640 $

1,375,431

$

12,678

See independent auditors' report and accompanying notes to required supplementary information. Page 59

Packet Pg. 92

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Budgeted Amounts Original REVENUES Investment income

$

EXPENDITURES Excess of revenues over expenditures OTHER FINANCING USES Transfers out Net Change in Fund Balance FUND BALANCE - Beginning of Year FUND BALANCE - END OF YEAR

$

Final

13,800

$

Variance with Final Budget

Actual

13,800

$

3,711

$

(10,089)

-

-

-

13,800

13,800

3,711

(10,089)

(13,800)

(13,800)

(8,953)

4,847

(5,242)

(5,242)

-

-

837,515

837,515

837,515

$

837,515

-

837,515 $

832,273

$

(5,242)

See independent auditors' report and accompanying notes to required supplementary information. Page 60

Packet Pg. 93

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

DETAILED SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - SPECIAL REVENUE FUND - MARBLE TRUST For the Year Ended December 31, 2015

4.1.b

CITY OF OMRO

Fiscal Year Ending

Proportion of the Net Pension Asset

12/31/15

0.00914913%

Proportionate Share of the Net Pension Asset $

224,728

Covered Payroll $

Proportionate Share of the Net Pension Asset as a Percentage of Covered Payroll

Plan Fiduciary Net Position as a Percentage of the Total Pension Asset

20.29%

102.74%

1,107,813

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION ASSET WISCONSIN RETIREMENT SYSTEM For the Year Ended December 31, 2015

SCHEDULE OF EMPLOYER CONTRIBUTIONS - WISCONSIN RETIREMENT SYSTEM For the Year Ended December 31, 2015

Fiscal Year Ending 12/31/15

Contractually Required Contributions

Contributions in Relation to the Contractually Required Contributions

$

$

97,346

97,346

Contribution Deficiency (Excess) $

Covered Payroll -

$

1,115,171

Contributions as a Percentage of Covered Payroll 8.73%

See independent auditors' report and accompanying notes to the required supplementary information. Page 61

Packet Pg. 94

4.1.b

CITY OF OMRO

BUDGETARY INFORMATION Budgetary information is derived from the annual operating budget and is presented using the same basis of accounting for each fund as described in Note I. C. The budgeted amounts presented include any amendments made. The city may authorize transfers of budgeted amounts within departments. Transfers between departments and changes to the overall budget must be approved by a two-thirds action. Appropriations lapse at year end unless specifically carried over. Carryovers to the following year were $286,336. Budgets are adopted at the department level of expenditure. WISCONSIN RETIREMENT SYSTEM The amounts determined for each fiscal year were determined as of the calendar year-end that occurred within the fiscal year. The city is required to present the last ten fiscal years of data; however accounting standards allow the presentation of as many years as are available until ten fiscal years are presented. Changes in benefit terms. There were no changes of benefit terms for any participating employer in the Wisconsin Retirement System. Changes in Assumptions. There were no changes in assumptions.

See independent auditors' report. Page 62

Packet Pg. 95

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended December 31, 2015

SUPPLEMENTARY INFORMATION

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

Packet Pg. 96

4.1.b

CITY OF OMRO

Special Revenue Funds Carter Memorial

Cemetery ASSETS Cash and investments Receivables Taxes Loans Restricted cash and investments TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable Deposits Total Liabilities

$

$

36,380

$

CDBG Grant

21,759

$

45,899

Historical Society Trust

$

191,589

-

-

-

263,079

-

-

-

-

-

-

$

106,482

$

36,380

$

21,759

$

308,978

$

191,589

$

-

$

1,340 1,340

$

-

$

-

$

1,256 1,256

Deferred Inflows of Resources Unearned revenues Total Deferred Inflows of Resources Fund Balances Restricted Assigned Total Fund Balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

106,482

Hinz Trust

$

-

-

-

-

-

-

-

-

-

-

106,482 106,482

35,040 35,040

21,759 21,759

308,978 308,978

190,333 190,333

106,482

$

36,380

$

21,759

$

308,978

$

191,589

Page 63

Packet Pg. 97

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS As of December 31, 2015

Special Revenue Funds Library Impact Fee

$

2,421

Park Impact Fee

$

2,587

Debt Service Funds 2005 State Trust Fund Loan

Police K-9

$

29,039

$

2007 General Obligation Notes

4,032

$

-

2010 General Obligation Notes

2009 IDB Loan

$

12,539

$

2,411

-

-

-

45,018 -

23,346 -

181,970

66,300 -

8,863

-

-

-

-

-

-

$

11,284

$

2,587

$

29,039

$

49,050

$

23,346

$

194,509

$

68,711

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

-

-

45,018

23,346

-

66,300

-

-

-

45,018

23,346

-

66,300

11,284 11,284

2,587 2,587

29,039 29,039

4,032 4,032

-

194,509 194,509

2,411 2,411

11,284

$

2,587

$

29,039

$

49,050

$

23,346

$

194,509

$

68,711

Page 64

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Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

4.1.b

CITY OF OMRO

ASSETS Cash and investments Receivables Taxes Loans Restricted cash and investments TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable Deposits Total Liabilities

Debt Service Fund

Capital Project Fund

2012 General Obligation Notes

General Capital Projects

$

$

Condon Memorial

459

$

Dunn Memorial

3,346

$

Pomerening Memorial

14,756

$

11,120

138,673 -

62,100 -

-

-

-

-

-

-

-

-

$

158,344

$

62,559

$

3,346

$

14,756

$

11,120

$

-

$

-

$

-

$

-

$

-

Deferred Inflows of Resources Unearned revenues Total Deferred Inflows of Resources Fund Balances Restricted Assigned Total Fund Balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

19,671

Permanent Funds

$

138,673

62,100

-

-

-

138,673

62,100

-

-

-

19,671 19,671

459 459

3,346 3,346

14,756 14,756

11,120 11,120

158,344

$

62,559

$

3,346

$

14,756

$

11,120

Page 65

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Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS As of December 31, 2015

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

Permanent Funds Schoenbechler Memorial

$

101,731

Total Nonmajor Governmental Funds

King Trust

$

360,819

$

967,040

-

-

335,437 445,049

-

-

8,863

$

101,731

$

360,819

$

1,756,389

$

-

$

-

$

1,256 1,340 2,596

$

-

-

335,437

-

-

335,437

101,731 101,731

360,819 360,819

1,417,897 459 1,418,356

101,731

$

360,819

$

1,756,389

Page 66

Packet Pg. 100

4.1.b

CITY OF OMRO

Special Revenue Funds Carter Memorial

Cemetery REVENUES Taxes Public charges for services Investment income Miscellaneous Total Revenues

$

EXPENDITURES Current General government Health and human services Leisure activities Conservation and development Capital Outlay Debt Service Principal Interest and fiscal charges Total Expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses)

$

FUND BALANCES (DEFICIT) - Beginning of Year $

183 20,036 20,219

$

CDBG Grant

64 64

$

33 33

29,505 -

2,651 -

-

634 -

29,505

2,651

-

634

(10,580)

17,568

64

-

-

(10,580)

17,568

64

117,062

17,472

21,695

-

Net Change in Fund Balances

FUND BALANCES - END OF YEAR

16,210 1,463 1,252 18,925

Hinz Trust

106,482

$

35,040

$

21,759

(601)

(601) 309,579 $

308,978

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2015

Page 67

Packet Pg. 101

Special Revenue Funds Historical Society Trust $

Library Impact Fee

- $ (30,249) 1,800 (28,449)

Park Impact Fee $

4,340 80 4,420

2005 State Trust Fund Loan

Police K-9 $

14 3,613 3,627

$

2007 General Obligation Notes

43,869 43,869

$

-

2009 IDB Loan $

4,556 4,556

6,670 -

-

-

-

-

-

-

6,670

-

-

-

30,000 25,199 55,199

-

2,007 2,007

4,210

4,420

3,627

(11,330)

-

2,549

(35,119)

-

$

4,201 9 4,210

Debt Service Funds

-

(7,511) (7,511)

-

11,331 11,331

13,052 13,052

-

(35,119)

4,210

(3,091)

3,627

1

13,052

2,549

225,452

7,074

5,678

25,412

4,031

190,333

$

11,284

$

2,587

$

29,039

$

4,032

(13,052) $

-

191,960 $

194,509

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

Page 68

Packet Pg. 102

4.1.b

CITY OF OMRO

Debt Service Funds

REVENUES Taxes Public charges for services Investment income Miscellaneous Total Revenues

2010 General Obligation Notes

2012 General Obligation Notes

$

$

EXPENDITURES Current General government Health and human services Leisure activities Conservation and development Capital Outlay Debt Service Principal Interest and fiscal charges Total Expenditures Excess (deficiency) of revenues over expenditures

57,290 83 57,373

FUND BALANCES (DEFICIT) - Beginning of Year $

$

102,500 1 102,501

City Garage $

-

-

10,718 57,338

-

295,000 5,133 300,133

80,000 39,672 119,672

68,056

-

52

34,445

-

41,132 41,132

8,953 8,953

(41,132) (41,132)

(242,760)

41,184

43,398

(41,132)

245,171

(21,513)

(42,939)

41,132

-

Net Change in Fund Balances

119,673 51 119,724

General Capital Projects

-

(242,760)

OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses)

FUND BALANCES - END OF YEAR

Capital Project Funds

2,411

$

19,671

$

459

$

-

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2015

Page 69

Packet Pg. 103

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

4.1.b

Permanent Funds Condon Memorial $

$

Dunn Memorial

17 17

$

Pomerening Memorial

94 94

$

107 107

Schoenbechler Memorial $

1,155 1,155

Total Nonmajor Governmental Funds

King Trust $

9,877 9,877

$

323,332 24,751 (12,462) 26,701 362,322

-

-

-

323 -

5,668 -

5,668 29,505 9,644 11,352 57,338

-

-

-

323

5,668

405,000 72,011 590,518

17

94

107

832

4,209

(228,196)

-

-

-

(1,585) (1,585)

-

74,468 (50,228) 24,240

17

94

107

(753)

4,209

(203,956)

3,329

14,662

11,013

3,346

$

14,756

$

11,120

102,484 $

101,731

356,610 $

360,819

1,622,312 $

1,418,356

Page 70

Packet Pg. 104

4.1.b

CITY OF OMRO

Business Improvement District CASH FLOWS FROM OPERATING ACTIVITIES Received from customers Paid to suppliers for goods and services Paid to employees for services Net Cash Flows From Operating Activities

$

14,000 (3,347) (5,000) 5,653

Net Change in Cash and Cash Equivalents

5,653

CASH AND CASH EQUIVALENTS - Beginning of Year

7,963

CASH AND CASH EQUIVALENTS - END OF YEAR RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income Changes in assets and liabilities Accounts payable NET CASH FLOWS FROM OPERATING ACTIVITIES

$

13,616

$

4,682 971

$

5,653

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES None.

Attachment: 2015 Financial Statements City of Omro (1990 : 2015 Audit and Financial Annual Reports)

STATEMENT OF CASH FLOWS COMPONENT UNIT For the Year Ended December 31, 2015

Page 71

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