IRMO CHAPIN RECREATION COMMISSION COLUMBIA, SOUTH CAROLINA

AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

YEAR ENDED JUNE 30,2016 WITH INDEPENDENT AUDITORS REPORT

IRMO CHAPIN RECREATION COMMISSION COLUMBIA, SOUTH CAROLINA

AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

YEAR ENDED JUNE 30,2016

CONTENTS

Independent Auditors Report ..... .......... ............. .... ..... .. ........... ..... .. ..... ..... ...... ...... ............... ... ... Management's Discussion and Analysis................................................................................... Financial Section- Basic Financial Statements Statement of Net Position.......................................................................................................... Statement of Activities .. ... ........ ...... ... .. ...... ..... ...... .. ..... ..... ...... .. ............ ... ... ...... ..... ... ................. Balance Sheet- Governmental Funds....................................................................................... Reconciliation of the Balance Sheet - Governmental Funds to the Government Wide Statement of Net Position ......................................................................... Statement of Revenues, Expenditures, and Changes in Fund BalanceGovernmental Funds................................................................................................................ Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance- Governmental Funds to the Government Wide Statement of Net Position............. Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund .................. ...................... ................................. Statement of Revenues, Expenditures, and Changes in Fund Balance- Budget and Actual Special Revenue Fund ........ ...... ..... ... .. .... .. .... .. ..... ............. ..... ...... .... ..... .. ... ... .................. ..... .... Notes to the Financial Statements..............................................................................................

I 3

10 II 12 13 14 16 17 18 19

Required Supplementary Information

Schedule of Proportionate Share of the South Carolina Retirement Systems Net Pension Liabilities................................................................................... ..... Schedule of South Carolina Retirement Systems Contributions.............................................. Schedule of Funding Progress for Retiree Health Plan............................................................

37 38 39

Independent Auditors Report on Internal Control

Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...........................................

40

THE BRITTINGHAM GROUP, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS 501 STATE STREET POST OFFICE BOX 5949 WEST COLUMBIA, SOUTH CAROLINA 29171 PHONE: (803) 739-3090 FAX: (803) 791-0834

INDEPENDENT AUDITORS REPORT

The Honorable Chairman and Members of The Irmo Chapin Recreation Commission 5605 Bush River Road Columbia, South Carolina 29212 Report on the Financial Statements We have audited the accompanying fmancial statements of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Irmo Chapin Recreation Commission (the "Commission") as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents.

Management's Responsibility for tlze 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; tiris includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements timt are free from material uris statement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance witi1 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by ti1e Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fmancial statements are free from material nrisstatement.

An audit involves perfomling procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in ti1e circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.

1

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.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Commission, as of June 30, 2016, and the respective changes in financial position, and the respective budgetary comparison for the General Fund and the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Otlzer Matters Required Supplementwy Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the Schedule of Proportionate Share of the South Carolina Retirement Systems Net Pension Liabilities, the Schedule of South Carolina Retirement System Contributions, and the Schedule of Funding Progress for Retiree Health Plan on pages 3-9, 37, 38 and 39 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. Other Reporting Required by Govemment Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 24, 2016, on our consideration of the Commission's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over fmancial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards m considering the Commission's internal control over financial reporting and compliance.

'f4 ~ &.rt.*er.j> t-J--P West Columbia, South Carolina October 24,2016 2

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 The Irmo Chapin Recreation Commission's (the "Commission") discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the Commission's fmancial activity, (c) identify changes in the Commission's fmancial position (its ability to address the next and subsequent year challenges), (d) identify any material deviations from the fmancial plan (the approved budget), and (e) identify individual fund issues or concerns. Since the Management's Discussion and Analysis (MD&A) is designed to focus on the fiscal years activities, resulting changes and currently known facts, we encourage readers to consider the information presented here in conjunction with the Commission's financial statements and the notes to the financial statements.

FINANCIAL IDGHLIGHTS

The assets and deferred outflows of the Commission exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $13,038,785. The Commission's total net position increased by $1,207,372. As of the close of the most recent fiscal year, the Commission's governmental funds reported combined ending fund balances of $6,588,417 a decrease of $3,170,812 in comparison with the prior year. At the end of the fiscal year, unassigned fund balance for the general fund was $1,596,571 or 34.8% of total general fund expenditures (excluding interfund transfers).

OVERVIEW OF THE FINANCIAL STATEMENTS Government-wide Financial Statements

The govemment-wide financial statements are designed to provide readers with a broad overview of the Commission's finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the Commission's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Commission is improving or deteriorating. The Statement ofActivities is focused on both the gross and net cost of various functions which are supported by the Commission's general tax and other revenues. This is intended to summarize and simplify the user's analysis of costs of various government services 3

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 (CONTINUED)

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Commission, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Commission are governmental funds. Governmental Funds

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide fmancial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term fmancing requirements. Because the focus of governmental funds is narrower than that of the government-wide fmancial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Commission adopts an annual appropriated budget for its general and special revenue funds. Budgetary comparison statements have been provided for these funds to demonstrate compliance with the budget. Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information

In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementmy information that contains statements such as the budget and actual comparison for the governmental funds. Required supplementary information can be found after the notes to the fmancial statements.

4

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 (CONTINUED) Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the Commission, assets and deferred outflows exceeded liabilities and deferred inflows by $13,038,785 at the close of the most recent fiscal year. The Commission's increase in net position after for this fiscal year amounts to $1 ,207 ,3 72. The largest portion of the Commission's net position is its investment in capital assets (e.g., land and land improvements, buildings and building improvements, furniture, equipment, vehicles, construction in progress, and public domain infrastructure), less any related debt used to acquire those assets that is still outstanding. The Commission uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Commission's investment in its capital assets is reported net of related debt, it should still be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the Commission's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of net position may be used to meet the Commission's ongoing obligations to citizens, creditors, and customers within the respective governmental activities. At fiscal year end the Commission is able to report positive balances in net investment in capital assets and restricted net position. However, the unrestricted net position has a deficit balance of $5,451,633. Of this amount, $5,674,563 is the net pension liability. The remaining portion was a surplus of $222,929 is primarily a result of an increase in operating grants and contributions. The government-wide financial statements include not only the Irmo Chapin Recreation Commission itself (known as the primary government), but also a legally separate foundation !mown as the Saluda Shoals Foundation for which the Commission is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself.

5

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 (CONTINUED)

Irmo Chapin Recreation Commission Net Position The following schedule is a summary of the Statement ofNet Position as of June 30, 2016 and 2015:

Statement of Net Position June 30, 2016 Current and other assets Other non-current assets Capital assets, net Total assets

$

3,197,606 5,135,328 37,245,091 45,578,025

2015 $

3,067,729 9,096,968 31,054,003 43,218,700

Deferred outflows of resources Total assets and deferred outflows of resources

519,811 46,097,836

492,091 43,710,791

Current liabilities Non-current liabilities Total liabilities

3,146,444 29,901,549 33,047,993

3,752,994 27,653,662 31,406,656

Deferred inflows of resources Total liabilities and deferred inflows of resources

11,058 33,059,051

472,722 31,879,378

Net position: Net investment in capital assets Restricted Unrestricted

17,520,020 970,399 (5,451,634)

16,815,500 980,471 (5,964,558)

Total net position

$

13,038,785

$ 11,831,413

6

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 (CONTINUED)

The changes in net position displayed below shows the governmental activities dnring the fiscal year. The increase in net position resulted primarily from the addition of capital assets and a rise in revenue in several areas with no resultant increase in expenditures. Program revenue: Charges for services Grants and contributions

$

4,349,193 994,427

$

3,910,322 540,784

General revenue: Property taxes Accomodation taxes Unrestricted investment income Other Total revenue

6,286,617 17,500 24,247 65,793 11,737,777

6,137,643 12,500 34,985 10,586 10,646,820

Expenses: Administration After school programs Chapin area programs Irma area programs Saluda Shoals programs Senior services programs Sports tourism Therapeutic recreation programs Interest on long-term debt Total expenses

2,818,915 1,076,106 1,737,570 1,608,552 2,011,976 298,393 78,266 105,334 795,293 I 0,530,405

2,712,788 930,821 1,737,563 1,484,280 1,682,760 286,604 48,993 83,728 801,495 9,769,032

Increase in net position

$

1,207,372

$

877,788

Financial Analysis of Irmo Chapin Recreation Commission Funds

As noted earlier, the Commission uses fund accounting to ensure and demonstrate compliance with finance-related requirements. As of June 30, 2016, the Commission's governmental funds reported combined fund balances of $6,588,417, representing a net decrease of$3,170,813 from the prior fiscal year. The primary factor for this increase is the acquisition of capital assets.

7

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 (CONTINUED)

General and Special Revenue Funds Budgetary Highlights

A budget to actual statement is provided for the general and major special revenue funds. Columns for both the original budget adopted for fiscal year 2016 as well as the amended budget are presented. No amendments were made to the original budget in the current fiscal year. In the general fund, revenues were over the budget by $34,150 and expenditures were $149,354 below budget. In the special revenue funds, revenues were under the budget by $199,468, and expenditures were $164,520 under budget.

Capital Asset and Debt Administration Capital Assets

At June 30, 2016 the Commission's investment in capital assets was $37,245,091 (net of accumulated depreciation). Tlris investment in capital assets includes land and land improvements, buildiogs and building improvements, furniture, equipment, velricles, construction io progress, and public domain infrastructure. The net iovestment from the prior fiscal year was $31,054,003. Major capital asset activity during the fiscal year iocluded the fol!owiog: • Purchase of additional equipment and maclrinery in the various areas. • Completion of Seven Oaks Park Expansion and Renovation Projects. • Continuing Development Saluda Shoals Park East Additional information regardiog the Commission's capital assets can be found in Note 4 of the notes to the financial statements. Long-term Debt

At the end of the fiscal year, ICRC had General Obligation Bond Debt outstanding of$23,890,000. The Commission's long-term debt increased by $3,100,000 duriog the fiscal year due to the issuance of a new 2016 bond. The Commission's had principal payments in the current year in the amount of$1,565,000. The state limits the amount of general obligation debt the Commission can issue to 8 percent of the assessed value of all taxable property within the Commission's boundaries, unless additional debt is approved by referendum. Currently, the Commission had no outstanding debt that did not meet the referendum criteria.

8

IRMO CHAPIN RECREATION COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2016 (CONTINUED) Long-term Debt (Continued)

Additional information regarding the Commission's long-term debt can be found in Note 5 of the notes to the fmancial statements.

Economic Factors and Fiscal Year 2016 Budgets and Rates

•

At June 30, 2016 the unemployment rate for Lexington County was 4.4%, one of the lowest rates in South Carolina. Tllis compares favorably with the state's rate of5.2%. The national rate was also 4.9% at June 30,2016.

•

Property values remain stable in Lexington County and projected growth in tax revenue was realized.

•

Inflationary trends in the area compare favorably to national indices.

•

Population growth patterns in the district are stable in the Irma area but show continued growth in the Chapin area.

Since the Commission relies on both property taxes and user fees in its governmental activities, these indices and population growth patterns were factored into the Commission's consideration and adoption of the budget for fiscal year 2016. Requests for Information

The Commission's fmancial statements are designed to present users (citizens, taxpayers, customers, investors and creditors) with a general overview of the Commission's finances and to demonstrate the Commission's accountability. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Executive Director.

9

IRMO CHAPIN RECREATION COMMISSION STATEMENT OF NET POSITION JUNE 30,2016 Governmental Activities Assets Current assets: Cash and equivalents Assets held by others Receivables: Property taxes Grants Other Prepaid expenses Total current assets Noncurrent assets Cash, restricted for capital projects Cash, restricted for debt service Non Depreciable capital assets Depreciable capital assets, net Total noncurrent assets Total assets

$

Deferred outflows of resources Pension plan Total deferred outflows of resources Total assets and deferred outflows of resources Liabilities Current liabilities: Accounts payable Accrued liabilities Unearned revenue Compensated absences, current Bonds payable, current Total current liabilities Noncurrent liabilities Other post employment benefits payable Net pension liablity Compensated absences, noncurrent Bonds payable, noncurrent Total noncurrent liabilities Total liabilities Deferred inflows of resources Pension plan Total deferred inflows of resources Total liabilities and deferred inflows of resources Net position (deficit) Net investment in capital assets Restricted for: Debt service Capital projects Unrestricted - net pension liability Unrestricted- other Total net position See accompanying notes.

2,479,828

Component Unit

$

664,046 237,476

244,738 453,845 2,553 16,642 3,197,606

973,794

4,164,929 970,399 5,393,531 31,851,560 42,380,419 45,578,025

973,794

519,811 519,811 46,097,836

973,794

72,272

856,434 331,658 347,821 155,531 1,455,000 3,146,444

2,198

1,010,481 6,183,316 272,752 22,435,000 29,901,549 33,047,993

2,198

11,058 11,058 33,059,051

2,198

698 1,500

13,355,091

$

970,399 4,164,929 (5,674,563) 222,929 13,038,785

$

971,596 971,596

10

IRMO CHAPIN RECREATION COMMISSION STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016

Net (Expenses) Revenues and Changes in Net Position

Program Revenues

Functions/Programs

Primary Government: Governmental activities Administration After school programs Chapin area programs Irma area programs Saluda Shoals programs Senior services programs Sports tourism Therapeutic recreation programs Interest on long-term debt Total governmental activities

Expenses

$

2,818,915 1,076,106 1,737,570 1,608,552 2,011,976 298,393 78,266 105,334 795,293 10,530,405

Operating Grants

Capital

Charges for

and

Services

Contributions

Grants and Contributions

$

185,539 1,336,449 681,036 451,101 1,390,483 28,414 217,112 59,059

$

557,119

$

100,000

Governmental Activities

$

37,344 35,286 221,638 43,040

4,349,193

(1,976,257) 260,343 (1,019,190) (1,122,165) (621,493) (48,341) 138,846 (3,235) (795,293) (5, 186, 785)

Component Unit

$

894,427

100,000

181,199

187,085

167,407

173,293

181,199

187,085

167,407

173,293

Component Unit:

Saluda Shoals Foundation Total component unit

General revenues: Property taxes and earnings

6,286,617 17,500 24,247 65,793 6,394,157 1,207,372 11,831,413

Accomodations tax Unrestricted investment earnings Other

Total general revenues Change in net position Net position, at beginning of year Net position, end of year See accompanying nates.

$

13,038,785

4,526 5,301 9,827 183,120 788,476

$

971,596

11

IRMO CHAPIN RECREATION COMMISSION BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 20I6

Assets Cnsh and cush equivalents Receivables: Property taxes Grants Other Due from other funds Prepaid expenditures Total assets

$

699,992

$

$

$

970,399

Total

Projects

$

4,164,929

$

7,615,155 244,738 453,845 9,428 2,419,882 16,642 10,759,690

82,805

161,933 100,355 1,761,117 16,642 2,740,039

I,779,835

Capital

Debt Service

Special Revenue

General

250,000

103,490 2,553 654,209

6,875 4,556

$

2,540,087

$

$

44,592 124,642 1,775,933 285,672 2,230,839

$

1,060,079

$

4,419,485

$

$

724,401

$

Liabilities

Accounts payable

$

Accrued liabilities Due to other funds Unearned revenue

Total liabilities

87,441 207,016 633,308 69,023 996,788

10,641 735,042

856,434 331,658 2,419,882 354,695 3,962,669

Deferred inflows of resources

Unavailable revenue- property taxes Totnl deferred inflows of resources Fund balances Nonspendable Restricted

208,604 208,604

16,642 4,665,956 1,905,819 6,588,417

16,642

Unassigned

309,248 309,248

1,596,571 1,613,213

Total fund balances Total liabilities. deferred inflows of resources, and fund balances

78,566 78,566

130,038 130,038

$

2,740,039

$

2,540,087

$

981,513

3,684,443

981,513

3,684,443

1,060,079

$

4,419,485

$

10,759,690

See accompanying notes.

12

IRMO CHAPIN RECREATION COMMISSION RECONCILIATION OF THE BALANCE SHEET- GOVERNMENTAL FUNDS TO THE GOVERNMENT WIDE STATEMENT OF NET POSITION JUNE30,2016

Total fund balances -governmental funds

$

6,588,417

Amounts reported for governmental activities in the statement of net position are different because: Delinquent taxes receivable will be collected after year-end, but are not available soon enough to pay for current periods expenditrues and, therefore, are reported as deferred revenue in the funds. Capital assets used in governmental activities are not financial resources, and are not reported in the funds. Deferred inflows and outflows are not financial resources and are not reported in the funds.

208,604 37,245,091 508,753

Long-term liabilities (including the current portion) are not due and payable in the current period, and are not reported in the funds: Other post-employment benefits Net pension liability Compensated absences Bonds payable Net position of governmental activities

(1,010,481) (6,183,316) (428,283) (23,890,000) $ 13,03 8, 785

See accompanying notes.

13

IRMO CHAPIN RECREATION COMMISSION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016

General

Special Revenue

Debt Service

Capital Projects

Total

Revenues

General revenues: Property tnxes

Accomodations tax Investment income Employee health insurance contributions Program revenues: Administration Grants and contributions Other After school programs

$3,966,666 17,500 4,938 185,539

$

$2,342,564 4,612

112,525 65,793

Charges for services Grants and contributions

$ 14,682

544,594 41,693

$6,309,230 17,500 24,232 185,539

657,119 107,486

1,336,446 1,842

1,336,446 1,842

157,354

523,682 37,344

681,036 37,344

148,100

303,001 35,286

451,101 35,286

1,390,483

1,390,483

Chapin area programs

Charges for services Grants and contributions Irma area programs Charges for services Grants and contributions Saluda Shoals programs

Charges for services Grants and contributions Senior Services programs Charges for services Grants and contributions Sports tourism Charges for services Therapeutic recreation programs Charges for services Grants and contributions Total revenues

28,414 221,638

28,414 221,638

59,059 43,040 5,010,566

-CONTINUED-

217,112

217,112

3,845,196

59,059 43,040 11,803,907

2,347,176

600,969

14

IRMO CHAPIN RECREATION COMMISSION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 20I6 (CONTINUED)

General

Special Revenue

Debt

Capital

Service

Projects

Total

Expenditures Current

Administration Personnel Operating After school programs Personnel Operating Chapin area programs Personnel Operating Inno area programs Personnel Operating Saluda Shoals programs Personnel Operating Senior services programs Personnel Operating Sports tourism Personnel Operating Therapeutic recreation programs Personnel Operating Debt service Principal Interest Capital outlay Total expenditures

776,751 289,325 716,493 343,634

892,625 183,481

892,625 183,481

449,610

776,751 738,935

257,300

716,493 600,934

959,600 733,795

959,600 733,795 195,295 94,080

195,295 94,080

18,369 59,897

18,369 59,897

76,967 21,541

76,967 21,541 1,565,000 795,293 381,353 5,477,529

Excess (deficit) of revenues over (under) expenditures

(466,963)

Other Financing Sources Bond proceeds Transfers from other funds Transfers to other funds Total other financing sources (uses)

325,467 (50,000) 275,467

Net change in fund balance Fund balance, beginning of year Fund balance, end of year

2,027,217 554,873

2,027,217 554,873

(191,496) 1,804,709 $ 1,613,213

9,541 3,564,218

280,978

2,360,293

(13,117)

(275,467) (275,467) 5,511 303,737 $ 309,248

6,672,680 6,672,680

1,565,000 795,293 7,063,574 18,074,720

(6,071,711)

(6,270,813)

3,100,000

3,100,000 325,467 (325,467) 3,100,000

3,100,000 (13,117) 994,630 $ 981,513

(2,971,711) 6,656,154 $ 3,684,443

(3,170,813) 9,759,230 $ 6,588,417

15 See accompanying notes.

IRMO CHAPIN RECREATION COMMISSION RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE- GOVERNMENTAL FUNDS TO THE GOVERNMENT WIDE STATEMENT OF NET POSITION JUNE 30,2016

Amounts reported for governmental activities in the statement of activities are different due to the following: Net change in fund balance -total governmental funds

$ (3,170,813)

Governmental funds report capital outlay expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets: Capital asset purchases Depreciation expenses

$ 7,063,574 (872,486)

6,191,088

Repayment of debt principal is an expenditure in the governmental funds while the repayment reduces long-term liabilities in the statement of net assets.

1,565,000

Issuance of debt increasing long-term liabilities in the statement of net assets.

(3,100,000)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Compensated absences Other post-employment benefits obligation Net pension obligation

(33,638) (I 80,218)

(300,514)

(86,658)

Some property taxes will not be collected for several months after the

Commission 1s fiscal year-end. They are not considered navailable" revenue in governmental funds. Net amounts not meeting current year availability criteria are not recognized in governmental funds in the current year.

Change in net position of governmental activities

22,611

$

1,207,372

See accompanying notes.

16

IRMO CHAPIN RECREATION COMMISSION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGETTOACTUAL-GENERALFUND YEAR ENDED JUNE 30, 20I6

Vnriance with Final Budget

Budget

Originnl

Finnl

Actual

Ovcr/(Undcr)

Revenue Property taxes

$

Accomodntions tax Investment income Employee health insurance contributions Charges for services: Irma area programs Chapin area programs Thempcutic recreation programs Senior services programs Grants und contributions Other Total revenue

4,181,488 20,000 5,000

$

4,181,488 20,000 5,000

$

3,966,666 17,500 4,939

$

(214,822) (2,500) (61)

140,000

140,000

185,539

45,539

102,480 172,200 100,402 209,850 34,996 10,000 4,976,416

102,480 172,200 100,402 209,850 34,996 10,000 4,976,416

148,100 157,353 59,059 250,052 155,565 65,793 5,010,566

45,620 (14,847) (41,343) 40,202 120,569 55,793 34,150

1,781,366 832,099

1,781,366 832,099

2,027,217 554,873

245,851 (277,226)

886,918 324,079

886,918 324,079

776,751 289,325

(110,167) (34,754)

837,894 322,150

837,894 322,150

716,493 343,634

(121,401) 21,484

219,562 80,130

219,562 80,130

195,295 94,080

(24,267) 13,950

66,543 22,541 253,601 5,626,883

66,543 22,541 253,601 5,626,883

76,967 21,541 381,353 5,477,529

10,424 (1,000) 127,752 (149,354)

Expenditures Current

Administration Personnel Operating Chapin area programs Personnel

Operating lnno area progrnms

Personnel Operating Senior services programs Personnel Operating

Therapeutic recreation programs Personnel Operating

Capital outlay Total expenditures Excess (deficit) of revenue over (under) expenditures Other Financing Sources (Uses) Transfers from other funds Transfers to other funds Total other financing sources (uses) Net change in fund balance

$

(650,467)

(650,467)

(466,963)

183,504

(350,467) 100,000 (250,467)

(350,467) 100,000 (250,467)

(325,467) 50,000 (275,467)

25,000 50,000 75,000

(400,000)

(191,496)

(400,000)

$

Fund balance, beginning of year Fund balance, end of year

$

108,504

1,804,709 $

1,613,213

See accompanying notes.

17

IRMO CHAPIN RECREATION COMMISSION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE • BUDGET TO ACTUAL- SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2016

Variance with Finnl Budget

Budget Original Revenues Progrnm revenues: After school programs Charges for services Grants and contributions Chapin area programs Charges for services Grants and contributions

$

Actual

Finn I

1,288,407

$

1,288,407

$

1,336,446 1,842

Ovcr/(Undcr)

$

48,039 1,842

555,570 35,000

549,570 41,000

523,682 37,344

(25,888) (3,656)

321,890 53,000

321,890 53,000

303,001 35,286

(18,889) (17,714)

1,324,000 38,000

1,324,000 138,000

1,390,483

66,483 (138,000)

328,797 3,944,664

328,797 4,044,664

217,112 3,845,196

(111,685) (199,468)

784,806 153,221

784,806 153,221

892,625 183,481

107,819 30,260

411,484

411,484

449,610

38,126

242,097

242,097

257,300

15,203

1,089,252 755,485

1,214,252 755,485

959,600 733,795

(254,652) (21,690)

77,222 80,630

77,222 80,630

3,594,197

3,719,197

18,369 59,897 9,541 3,564,218

(58,853) (20, 733) 9,541 (164,520)

Excess (deficit) of revenue over (under) expenditures

350,467

325,467

280,978

(34,948)

Other Financing Sources (Uses) Transfers from other funds Transfers to other funds Total other financing sources (uses)

325,467 325,467

(50,000) 325,467 275,467

(50,000)

350,467 350,467

Irma area programs

Charges for services Grants and contributions Saluda Shoals progmms Charges for services Grants and contributions Sports tourism

Charges for services Total revenues Expenditures Current After school program

Personnel Operating

Chapin area programs Operating Irma area programs Operating Saluda Shoals programs Personnel Operating Sports tourism Personnel Operating

Capital Outlay Total expenditures

Net chnngc in fund balance

$

5,511

$

Fund balance. beginning of year Fund balance, end of year

See accompanying notes.

(50,000) $

15.052

303,737 $

309,248

18

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2016 1. Summary of Significant Accounting Principles

The fmancial statements of the Irma Chapin Recreation Commission have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Government Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant principles used in the preparation of the Commission's financial statements. General The Irma Chapin Recreation Commission was created in 1970 pursuant to legislation providing quality parks and recreation programs to Lexington County residents of School District Five of Lexington and Richland Counties. In 1980, the Commission was charged with the responsibility of providing comprehensive aging programs for the residents of tlris geographical area. The Commission is an oversight board with complete authority over budget and policy. The Lexington County Council has tl1e authority to approve the property tax levy for the general operating budget and/or bonded debt; however, state statute establishes a mininlum tax levy. The Governor appoints the Commissioners for a term of five years. Reporting Entity The Irma Chapin Recreation Commission financial statements include all funds of the entity and includes the Saluda Shoals Foundation (the "Foundation") as a discretely presented component unit in a separate column in the combined fmancial statements to emphasize that it is legally separate from the government. The Foundation is a non-profit organization formed to encourage, solicit, receive and administer gifts, devises, and donations for the advancement of the Irma Chapin Recreation Commission. It is exempt from income taxes under 501(c)(3) of the Internal Revenue Code. The board of directors is appointed by tl1e Irma Chapin Recreation Commission and can be removed for cause. Complete fmancial statements oftlris component unit may be obtained at Saluda Shoals Foundation, 5605 Bush River Road, Columbia, SC 29212. Measurement Focus. Basis of Accounting and Financial Statement Presentation The government-wide fmancial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the time of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and sinrilar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

19

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

1. Summary of Significant Accounting Principles (continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include: 1) charges to customers for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Fund Accounting The Government uses the following Governmental funds:

General Fund- to account for all financial resources except those required to be accounted for in another fund. All property taxes, intergovernmental revenues and miscellaneous revenues are recorded in this fund. Operational expenditures for the Commission are paid through the general fund. Special Revenue Fund - to account for revenues earmarked or legally restricted for specific purposes or programs other than for major capital projects or fiduciary funds. Debt Service Fund- to account for the accumulation of resources for payments of long-term debt. Capital Projects Fund- to account for resources used for the acquisition or construction of major capital assets. Budget The Commission adopts an annual budget for the revenues and expenditures of the general fund and the special revenue fund. These budgets are prepared on the GAAP basis of accounting, consistent with financial statement presentation. Unexpended appropriations lapse at fiscal year-end. Budget amounts reflected in the accompanying financial statements represent the adopted budget and any revisions approved by the Commission during the fiscal year. A formal budget has not been adopted for the Saluda Shoals Foundation.

20

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED1. Summary of Significant Accounting Principles (continued) Cash and Cash Equivalents The Commission's cash and cash equivalents are considered to be cash on hand and demand deposits. Assets Held in Trust by Others Assets held in trust by others are measured at fair value in the statement of financial position. Earnings on the assets are recognized by earnings classifications as a change in unrestricted net position. Changes in fair value are included in the statement of activities as gains and losses in the unrestricted net position. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, culverts, and similar items), are reported in the government-wide financial statements. Capital assets are defined by the Commission as assets with an initial, individual cost of$5,000 or more and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Property, plant, and equipment of the Commission is depreciated using the straight line method over the following estimated useful lives: Assets Buildings & Improvements Furniture & Office Equipment Land Improvements Machinery & Park Equipment Public Domain Infrastructure Vehicles

Years 10 to 50 5 to 20 10 to 25 10 to 20 15 to 40 8

Inventory Inventory consists of unused pipe and small parts needed for repairs or improvements. Inventory is valued at cost, on a first-in, first-out basis.

21

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

1. Summary of Significant Accounting Principles (continued) Deferred Outflows and Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense) until then. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. Fund Balance The fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes as follows: Nonspendable: The nonspendable fund balance classification includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example, inventories and prepaid amounts. It also includes the long term amount of loans and notes receivable, as well as property acquired for resale. Resh·icted: The restricted fund balance classification includes amounts that are restricted externally by creditors, grantors, contributors, or laws or regulations of other governments or restricted by law through constitutional provisions or enabling legislation. Committed: The committed fund balance classification includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Commission's highest level of decision-making authority. Those co=itted amounts cannot be used for any other purpose unless the Commission removes or changes the specified use by taldng the same type of action it employed to previously commit those amounts. Committed fund balance also incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. The Commission recognizes committed fund balances that have been approved for specific purposes by the Commission before the fiscal year end.

22

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

1. Summary of Significant Accounting Principles (continued) Assigned: The assigned fund classification includes amounts that are constrained by the Commission's intent to be used for specific purposes but are not restricted or committed. The authority for making an assignment is not required to be the commission's highest level of decision-making authority and as such, the nature of the action necessary to remove or modify an assignment does not require the Commission's highest level of authority. Assigned fund balance amounts in the Commission's financial statements represent amounts approved by the Commission to be transferred and spent after year end. Unassigned: The unassigned fund balance classification includes amounts that have not been assigned to other funds and has not been restricted, committed, or assigned for specific purposes within the general fund. At June 30,2016, the general fund had nonspendable funds of$16,642 related to prepaid items. The debt service fund had fund balance of $981,513 restricted for payment of bond obligations. The capital projects fund had fund balance of $3,684,443 restricted for the acquisition and construction of capital assets. Based on the Commission's policies regarding fund balance classifications as noted above, the Commission considers amounts that are restricted, committed, or assigned to be spent when the corresponding expenditure that has been designated by the commission or donors has been made. After these fund balances have been deleted, unassigned fund balance will be considered to have been spent. Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to malce estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

23

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED1. Summary of Significant Accounting Principles (continued)

Property Taxes The County of Lexington bills and collects the property taxes for the Commission. Property taxes are levied on real and personal properties owned on the preceding December 31 of each fiscal year ended June 30. Liens attach to the property at the time taxes are levied. These taxes are due without penalty through January 15. Taxpayers incur penalties of 3 percent on collections from January 15 to February 1, and 10% through March 16 and 15% thereafter. Current year real and personal taxes go into execution on March 17. The levy and collection data for motor vehicle property taxes is the last day of the month in which the motor vehicle license expires. Property tax revenues are recognized when due or past due and collected within the current period or soon enough thereafter (defined as sixty days) to pay liabilities of the current period. An allowance is provided for an estimated amount of taxes billed which may ultimately prove to be uncollectible. Deferred revenue (property taxes) represents that portion of delinquent property taxes which is deemed not available to pay current expenditures.

Compensated Absences It is the Commission's policy to permit ICRC employees to accumulate earned but unused vacation and sick pay benefits. The maximum accumulation of vacation days is 45 days. There is no liability for unpaid sick leave since the Commission does not have a policy to pay any amounts when employees separate from service with the Commission. All vacation pay up to the maximum allowed, is accrued when incurred in the government-wide 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.

24

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED2. Cash and Cash Equivalents Statutes authorize the Commission to invest in obligations of the United States and its agencies, general obligations of the State of South Carolina and its subdivisions, savings and loan associations to the extent of federal insurance, certificates of deposit collaterally secured, repurchase agreements secured by the foregoing obligations, and the State Treasurer's Investment Pool.

The Commission considers cash on hand, on deposit, certificates of deposits and money market funds as cash and cash equivalents. Custodial credit risk of deposits: Custodial credit risk is the risk that in the event of a banlc failure, the Commission's deposits may not be returned to it. The Commission has a policy to reduce its exposure to this risk by requiring deposits in excess of Federal Deposit Insurance Coverage (FDIC) limits to be collateralized in accordance with state law. As of June 30, 2016, the Commission's and the Foundation's cash and cash equivalent bank balance totaled $7,642,865 and $666,923, respectively. Of these balances, the $1,250,000 was insured by the FDIC and the remainder was collateralized by obligations of the United States of America and its agencies (as required by state law). Custodial credit risk of investments: Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Commission will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Commission has a policy to reduce its exposure to this risk by requiring deposits in excess of FDIC limits to be collateralized in accordance with state law as noted above. 3. Assets Held by Others During the year, the Foundation established two accounts with the Central Carolina Community Foundation (CCCF) governed by Agency Fund Agreements naming the Foundation as the beneficiary of the funds. The agreements provide CCCF with the ability to direct the investment transactions for the accounts. The funds are restricted for specific purposes. The balances at June 30, 2016 are as follows: Saluda Shoals Nature's Theater Fund Saluda Shoals Foundation Fund

Fair Value $ 212,694 24,782 $ 237,476

25

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED4. Capital Assets

Capital asset activity for the year ended June 30, 2016 is as follows:

Go\Crnmental Activities Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated

Beginning Balance Jul~ 1, 2015

$

Depreciable capital assets: Furniture and office equipment Buildings and improvements Land improvements Machinery and park equipment Public domain infrastructure Vehicles Total depreciable capital assets Total capital assets Less, accumulated depreciation for: Furniture and office equipment Buildings and improvements Land improvements Machinery and park equipment Public domain infrastructure Vehicles Total accumulated depreciation Total depreciable capital assets, net Governmental activities, capital assets, net

Depreciation expense: Administration Chapin area programs Irmo area programs Saluda Shoals programs

5,393,531 6,368,619

$

Decreases

$

$

6,672,679

5,393,531 13,041,298

11,762,150

6,672,679

18,434,829

1,354,553 20,853,999 5,373,666 1,660,045 1,560,433 886,817 31,689,513 43,451,663

14,828 14,061

390,895 7,063,574

1,369,381 20,868,060 5,373,666 1,808,161 1,774,323 886,817 32,080,408 50,515,237

971,900 6,001,253 2,986,069 1,100,553 597,355 740,530 12,397,660 19,291,853

77,398 445,829 151,399 105,710 63,220 28,930 872,486 (481,591)

1,049,298 6,447,082 3,137,468 1,206,263 660,575 769,460 13,270,146 18,810,262

$ 31,054,003

$

Increases

Ending Balance June 30,2016

$

148,116 213,890

$

6,191,088

$

$ 37,245,091

236,466 161,985 237,460 236,575 872,486

26

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

5. Long Term Debt A summary oflong-term debt activity for the year ended June 30, 2016 is as follows: July 1, 2015

Governmental activities: General obligation bonds Net pension obligation

$

Net OPEB obligation

Compensated absences Total governmental activities

$

Increases

Decreases

22,355,000 5,607,275 830,263 394,644

$ 3,100,000 576,041 180,218 146,519

$ (1,565,000)

29,187,182

$ 4,002,778

$ (1,677,880)

June 30, 2016 $

(112,880) $

One Year

23,890,000 6,183,316 1,010,481 428,283

$ 1,455,000

31,512,080

$ 1,610,531

155,531

The Commission issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the Commission. General obligation bonds outstanding at June 30, 2016, are as follows: General Obligation Bond Issue Date 2005 2007 2013 2016

Interest Rates to Maturity 4.50% - 5.00% 3.97% 2.00% - 4.00% 2.00% - 4.00%

Year of Maturity 2018 2020 2032 2025

Original Issue Amount $ 6,270,000 3,300,000 18,000,000 3,100,000

Balance June 30, 2016 $ 1,600,000 2,350,000 17,010,000 2,930,000 $ 23,890,000

The debt service requirements to maturity for the bonds payable are as follows: Year Ending June 30, 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032

Interest $ 795,451 735,493 672,137 614,390 553,806 2,063,731 946,431 51,406 $6,432,845

Principal $ 1,455,000 1,540,000 1,620,000 1,700,000 1,310,000 7,110,000 7,510,000 1,645,000 $ 23,890,000

Total $ 2,250,451 2,275,493 2,292,137 2,314,390 1,863,806 9,173,731 8,456,431 1,696,406 $ 30,322,845

27

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED6. Employee Retirement System and Net Pension Liability Substantially all employees of the Commission are covered by a retirement plan through the South Carolina Retirement System (SCRS), a cost-sharing multiple-employer defined benefit pension plan administered by the Retirement Benefits Division of the South Carolina Public Employee Benefit Authority (PEBA), a public employee retirement system. The PEBA has the authority to establish and amend benefits and funding policy. Generally, all full-time or parttime equivalent State employees in a permanent position are required to participate in and contribute to the SCRS as a condition of employment unless exempted by law as provided in Section 9-1-480 of the South Carolina Code of Laws, as amended, or are eligible and elect to participate in the State Optional Retirement Program (ORP). The SCRS plan provides life-time monthly retirement annuity benefits to eligible members as well as disability, survivor options, annual benefit adjustments, death benefits, and incidental death benefits to eligible employees and retired members. The Retirement Division (Division) maintains five independent defmed benefit plans and issues its own publicly available Comprehensive Annual Financial Report (CAFR) which includes financial statements and required supplementary information. The CAFR is available online at www.retirement.sc.gov, or a copy may be obtained by writing to the South Carolina Public Employee Benefit Authority, P.O. Box 11960, Columbia, South Carolina 29211-1960. Under the SCRS, Class II members are eligible for a full service retirement annuity upon reaching age 65 or completion of 28 years of credited service regardless of age. Employees who first became members of the System after June 30, 2012 are considered Class III members and are eligible for a full service retirement annuity upon reaching age 65 or upon meeting the rule of the 90 requirement (i.e., the members age plus the years of service add up to a total of at least 90). The benefit formula for full benefits effective since July 1, 1989 for the SCRS is 1.82 percent of an employee's average final compensation (AFC) multiplied by the number of years of credited service. For Class II members, AFC is the average annual earnable compensation during 12 consecutive quarters and includes an amount for up to 45 days termination pay at retirement for unused annual leave. For Class III members, AFC is the average annual earnable compensation during 20 consecutive quarters and termination pay for unused annual leave at retirement is not included. Early retirement options with reduced benefits are available as early as age 55 for Class II members and age 60 for Class III members. Class II members are vested for a defened annuity after five years of earned service. Class III members are vested for a defened annuity after eight years of earned service. Members qualify for a survivor's benefit upon completion of 15 years of credited service (five years effective January 1, 2002).

28

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

6. Employee Retirement System and Net Pension Liability (continued) Disability annuity benefits are available to Class II members if they have permanent incapacity to perform regular duties of the member's job and they have at least 5 years of earned service (tl:tis requirement does not apply if tl1e disability is a result of a job related injury). Class III members can apply for disability annuity benefits provided they have a permanent incapacity to perform the regular duties oftl1e member's job and they have a mininmm of eight years of credited service. Members of SCRS have to be approved for disability benefits from the Social Security Administration in order to be eligible for SCRS disability retirement benefits.

An incidental death benefit equal to an employee's annual rate of compensation is payable upon fue deafu of an active employee with a mininlum of one year of credited service or to a working retired contributing member. There is no service requirement for death resulting from actual performance of duties for an active member. For eligible retired members, a lump-sum payment is made to the retiree's beneficiary of up to $6,000 based on years of service at retirement. The Commission's contributions for fue years ended JlU1e 30, 2016, 2015 and 2014 are as follows: Employee Year Ended

Contribution

June30,

Rate

Employer Contribution Rate Incidental

Covered

Employer Contributions Incidental

Base

Death

Total

Payroll

Base

Death

Total

2016

8.16%

10.91%

0.15%

11.06%

$ 3,289,746

$ 358,911

$ 4,935

$ 363,846

2015

8.00%

10.75%

0.15%

10.90%

3,056,961

328,623

4,585

333,208

2014

7.50%

10.45%

0.15%

10.60%

3,014,727

315,039

4,522

319,561

As an alternative to membership in fue SCRS, newly hired employees of the FlU1d may elect to participate in fue State Optional Retirement Program (ORP), a defined contribution retirement plan. The Commission did not have any employees participating in fue ORP during fue 2016, 2015 or 2014 fiscal years. Article X, Section 16, of the Soutl1 Carolina Constitution requires tlmt all State-operated retirement systems be funded on a solU1d actuarial basis. Title 9 of the South Carolina Code of Laws of 1976, as amended, prescribes requirements relating to membership, benefit, and employee/employer contributions for each retirement system. Employee and employer contribution rates to SCRS are actuarially detem:tined.

29

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED6. Employee Retirement System and Net Pension Liability (continued) As a result of the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions (Statement), the Commission reported $6,183,316 for its proportionate share of the net pension liabilities of the SCRS at June 30, 2016. The net pension liability of the SCRS defined benefit pension plan was determined based on the July 1, 2014 actuarial valuations, using membership data as of July 1, 2014, projected forward to June 30, 2015, and financial information of the pension trust funds as of June 30, 2015, using generally accepted actuarial procedures. The Commission's portion of the net pension liability was based on the Commission's share of contributions to the pension plan relative to the contributions of all participating entities. At June 30, 2015, the Commission's SCRS proportion was 0.0326%, which was the same as its portion of the net pension liability measured as of June 30,2014. At June 30, 2016 the state reported deferred outflows of resources and deferred inflows of resources to pensions from the following sources: Deferred Outflows ofResources: Diffurences between expected and actual experience Contributions made to SCRS from measurement date to June 30, 2016 Total defurred outflows of resources

$

155,965 363,846 519,811

$

11,058

$

Defurred Inllows ofResources: Net diffurences between projected and actual earnings on pension plan investments

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expenses as follows:

Year ended June 30, 2017 2018 2019 2020

Deferred Outfiows 390,319 $ 26,472 11,262 91,758 $ 519,811

Deferred Inflows $ (1,492) (1,492) (1,492) (6,582) $ (11,058)

$

$

Net 388,827 24,980 9,770 85,176 508,753

30

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

6. Employee Retirement System and Net Pension Liability (continued) The total pension liabilities in the July 1, 2014 actuarial valuation was determined using the following actuarial assumptions applied to all periods included in the measurement: Entry Age Actuarial Cost Method Actuarial Assumptions: 7.50% Investment Rate or Return Projected Salary Increases 3.5% to 12.5% In:flationRate 2.75% Benefit Adjustments Lesser ofl% or $500 South Carolina state statute requires that an actuarial experience study be completed at least once in each five-year period. The last experience study was performed on data through June 30, 2010, and the next experience study is scheduled to be conducted after the June 30,2015 annual valuation is complete. The post-retiree mortality assumption is dependent upon the member's job category and gender. This assumption includes base rates which are automatically adjusted for future improvement in mortality using published Scale AA projected from the year 2000. Former Job Class Educators and Judges

General Employees and Members of the General Assembly Public Safety, Firefighters and Members of the South Carolina National Guard

Males RP-2000 Males (with White

Females RP-2000 Females (with White

Collar Adjustment) Multiplied Collar Adjustment) Multiplied by 110% by95% RP-2000 Males multiplied by RP-2000 Females multiplied by 100% 90% RP-2000 Males (with Blue

RP-2000 Females (with Blue

Collar adjustment) multiplied by 115%

Collar adjustment) multiplied by 115%

The long-term expected rate of return on pension plan investments for actuarial purposes is based upon the 30 year capital market outlook at the end of the third quarter 2012. The actuarial longterm expected rates of return represent best estimates of arithmetic real rates of return for each major asset class and were developed in coordination with the investment consultant for the Retirement System Investment Commission (RSIC) using a building block approach, reflecting observable inflation and interest rate information available in the fixed income markets as well as Consensus Economic forecasts. The actuarial long-term assumptions for other asset classes are based on historical results, current market characteristics and professional judgement. 31

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

6. Employee Retirement System and Net Pension Liability (continued) The RSIC has exclusive authority to invest and manage the retirement trust funds' assets. As co-fiduciary of the Systems, statutory provision and governance policies allow the RSIC to operate in a manner consistent with a long-term investment time horizon. The expected real rates of investment return, along with the expected inflation rate, form the basis for the target asset allocation adopted annually by the RSIC. For actuarial purposes, the long-term expected rate of return is calculated by weighting the expected future real rates of return by the target allocation percentage and then adding the actuarial expected inflation which is summarized in the table below. For actuarial purposes, the 7.50 percent assumed annual investment rate of return used in the calculated of the total pension liability includes a 4. 75 percent real rate of return and a 2.75 percent inflation component. 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 Short Term Cash Short Duration

Domestic Fixed Income

Target Asset Allocation 5.0% 2.0% 3.0% 7.0% 6.0%

Global Fixed Income

9.0%

Global Public Equity Global Tactical Asset Allocation Alternatives Hedge Funds (Low Beta) Private Debt Private Equity Real Estate (Broad Market) Commodities

Total Expected Real Return Inflation for Actuarial Purposes Total Expected Nominal Return

!.90% 2.00%

0.04% 0.06%

2.70% 3.80%

0.19% 0.23%

2.80% 5.!0% 7.!0% 4.90%

0.08% 0.31% 2.20% 0.49%

4.30% 9.90% 9.90% 6.00% 5.90%

0.34% 0.69% 0.89% 0.30% 0.18% 6.00% 2.75%

13.0%

Core Fixed Income High Yield

Global Fixed Income Emerging Markets Debt

Long-Term Expected Expected Portfolio Arithmetic Real Real Rate of Rate of Return Return

3.0% 6.0%

31.0% 10.0% 32.0% 8.0% 7.0% 9.0% 5.0% 3.0%

100.0%

8.75%

32

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

6. Employee Retirement System and Net Pension Liability (continued) The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from all SCRS participating employers will be made at contractually required rates, actuarially determined. Based on those assumptions, the plans' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods ofprojected benefit payments to determine the total pension liability. The following table represents the Fund's proportionate share of the net SCRS pension liabilities calculated using the discount rate of 7.50 percent, as well as what the Fund's respective net pension liabilities would be if it were calculated using a discount rate of 1.00 percent lower (6.50 percent) or 1.00 percent higher (8.50 percent) than the current rate. Current Rate

1%

Decrease Plan SCRS

$

6.50% 7,795,395

$

7.50% 6,183,316

1%

Increase $

8.50% 4,832,189

7. Other Post-Employment Benefit (OPEB) Obligations Plan Description The Commission's defined benefit postemployment healthcare plan (the Plan), provides medical and dental insurance to eligible retirees under the Medicare age of 65. As of July 1, 1992, all active and retired employees with health insurance contribute an approved amount to offset the cost of medical coverage. Any employee hired on or prior to July 23, 2003 is grandfathered after 5 years of service while any employee hired after July 23, 2003 will be grandfathered after 10 years of service. When employees are grandfathered in to the Plan, they pay 50% of the employer cost plus the co-pay. The cost for an employee decreases by 2% for each additional year of service. Upon reaching 30 years of service, the employee will only pay the co-pay. Retirees have the option of continuing their dependent coverage while being employed by the Commission. No new members can be enrolled upon retirement. For dependent coverage, the retiree is responsible for the total cost. The Plan is approved each year by the commissioners; the contribution requirements of the Commission and plan members are established and amended by the Commission. These contributions are neither guaranteed nor mandatory. The Commission has retained the right to unilaterally modify its payments toward retiree health care benefits. As of July 1, 2015, the measurement date for fiscal years 2013-2016, there were 74 covered participants; 62 of which are active participants and the remaining 12 members are retirees receiving benefits. 33

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

7. Other Post-Employment Benefit (OPEB) Obligations (continued) Funding Policy The Commission has elected not to fund the Plan at this time and will utilize a pay-as-you-go policy. For current retirees the Commission makes a percentage of the healthcare contributions based on the parameter explained above in the Plan Description. For the year ended June 30, 2016, the Commission contributed $35,006 for retiree healthcare coverage and the retirees contributed $19,925. The Commission's annual OPEB cost (expense) is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The current ARC rate is based on an actuarial valuation that is prepared in accordance within certain parameters. The current rate is 6.79 percent of annual covered payroll. Annual OPEB Cost and Net OPEB Obligation For the year ending June 30, 2016, the Commission's annual OPEB cost was $215,224, as determined by an actuarial valuation performed on July 1, 2015. The Commission's end of year net OPEB obligation is determined as follows:

Annual OPEB cost: Normal cost Amortization of unfunded achtarial accrued liability

$

215,224

Annual required contribution (ARC)

35,006

Contributions made during the year Current year increase in OPEB obligation

180,218

Net OPEB obligation, beginning of year Net OPEB obligation, end of year

175,606 39,618

830,263 $

1,010,481

34

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED7. Other Post-Employment Benefit (OPEB) Obligations (continued)

The Commission's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and the net OPEB annual (obligation) asset were as follows:

Fiscal Year Ended 2016 2015 2014

Annual OPEB Cost $ 215,224 186,649 184,714

Percentage of Annual OPEB Cost Contributed 16.26% 10.71% 5.60%

Current Year Increase $ 180,218 166,651 174,366

NetOPEB Obligation $ I ,010,481 830,263 663,612

Funded Status and Funding Progress As of July 1, 2015, the most recent actuarial valuation date, the funded status of the plan was as follows:

Actuarial accrued liability (AAL) Actuarial value of plan assets Unfunded actuarial accrued liability (UAAL) Funded ratio (actuarial value of plan assets/AAL) Covered payroll (annual payroll of active employees coverd by the plan) UAAL as a percentage of covered payroll

$2,117,995

$2,117,995 0.00%

$2,890,372 65.00%

Actuarial valuations of OPEB plans involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. These actuarially determined amounts are subject to continual revisions as actual results are compared to past expectations and new estimates are made about the future. The schedule of funding progress presented immediately following the financial statements as required supplementary information presents multi-year trend information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 35

IRMO CHAPIN RECREATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS -CONTINUED-

7. Other Post-Employment Benefit (OPEB) Obligations (continued) Actuarial Methods and Assumptions Projections of benefits for fmancial reporting purposes are based on the substantive Plan (the Plan as understood by the employer and Plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and Plan members to that point. The actuarial calculations of the OPEB plan reflect a long-term perspective. Consistent with this perspective, actuarial valuations, after the initial year, will use actuarial methods and assumptions that include techniques that are designed to reduce the effects of short-tern volatility in actuarial accrued liabilities and the actuarial value of assets. The most recent actuarial valuation was determined usmg the following methods and assumptions: Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment return Medical cost trend rate: Pre-Medicare trend rate Post-Medicare trend rate Ultimate trend rate Year of ultimate trend rate Inflation rate

July I, 2015 Projected unit credit Level dollar 24 years Market value

4.00% (net of administrative expenses) 7.50%- 5.00% 5.50%- 5.00% 5.00% 2020 2.75%

The actuarial assumptions included an initial annual healthcare cost trend rate of 10%. The trend rate will decrease incrementally until it reaches 5% after nine years. The dental cost trend rate was assumed to be 5.0% per annum. The remaining amortization period at June 30, 2016, was 24 years.

8. Subsequent Events The Commission has considered subsequent events through October 24, 2016, the date of issuance, in preparing the financial statements and notes.

36

REQUIRED SUPPLEMENTARY INFORMATION

IRMO CHAPIN RECREATION COMMISSION SCHEDULE OF PROPORTIONATE SHARE OF THE SOUTH CAROLINA RETIREMENT SYSTEMS NET PENSION LIABILITIES LAST TEN FISCAL YEARS*

SOUTH CAROLINA RETIREMENT SYSTEM

2016 0.0326%

District's proportion of the net pension liability

2015

2014

0.0326%

0.0326%

District's proportionate share of the net pension liability

$

6,183,316

$ 5,607,275

$ 5,841,537

District's covered-employee payroll

$

3,289,746

$ 3,056,961

$ 3,014,727

District's proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total liability

187.96%

183.43%

193.77%

56.99%

59.92%

56.39%

* -The amounts presented for each fiscal year were determined as of July 1 of two years prior, using membersh' data as of the day, projected forward to June 30 of the previous year. Additionally, the Fund implemented GAS during fiscal year 2015. As such, only the last three years of information is available

37

IRMO CHAPIN RECREATION COMMISSION SCHEDULE OF SOUTH CAROLINA RETIREMENT SYSTEMS CONTRIBUTIONS LAST TEN FISCAL YEARS

SOUTH CAROLINA RETIREMENT SYSTEM

Contractually required contributions

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

$ 363,846

$ 328,623

$ 315,039

$ 300,003

$ 265,580

$ 256,536

$ 251,048

$ 244,303

$ 228,258

$ 207,809

Contributions in relation to the contractually required contribution

(363,846)

(315,039)

(328,623)

-

Contribution deficiency/(excess)

$

$

$

State covered-employee payroll

$3,289,746

$3,056,961

$3,014,727

Contributions as a percentage of covered-employee payroll

I 1.06%

10.75%

10.45%

(265,580)

(300,003)

(256,536)

(251,048)

(228,258)

(244,303)

-

$

$

$

$

$

$

$2,869,747

$2,828,426

$2,774,822

$2,715,641

$2,642,522

$2,518,230

10.45%

9.39%

9.25%

9.24%

9.25%

9.06%

(207,809) =

$ $2,581,472 8.05%

38

IRMO CHAPIN RECREATION COMMISSION SCHEDULE OF FUNDING PROGRESS FOR RETIREE HEALTH PLAN YEAR ENDED JUNE 30, 2016

Actuarial Value of Assets {a)

Actuarial Valuation Date July I, 2016 July I, 2012 July I, 2009

$ $ $

Unfunded Actuarial Accrued Liability (b-a)

Actuarial Accrued Liability (b) $ $ $

2,117,995 1,151,104 1,413,353

$ $ $

2,117,995 1,151,104 1,413,353

Funded Ratio (a I b) 0.00% 0.00% 0.00%

Covered Payroll (c) $ $ $

2,890,372 2,611,283 2,715,641

UAALasa Percentage of covered Payroll {{b- a}/c) 73.28% 44.00% 52.00%

39

THE BRITTINGHAM GROUP, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS 501 STATE STREET POST OFFICE BOX 5949 WEST COLUMBIA. SOUTH CAROLINA 29171 PHONE: (803) 739-3090 FAX: (803) 791-083'1

INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Chairman and Members of The Irmo Chapin Recreation Commission 5605 Bnsh River Road Columbia, South Carolina 29212 We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the govemmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund infom1ation of the Inno Chapin Recreation Commission (the "Commission"), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated October 24,2016. Internal Control over Financial Reporting In planning and perfom1ing our audit of the financial statements, we considered the Commission's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circtm1stances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission's intemal control. Accordingly, we do not express an opinion on the effectiveness of the Commission's intemal control. A deficiency in i11ternal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in intemal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with govemance. Our consideration of intemal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in intemal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material wealmesses. However, material weaknesses may exist that have not been identified.

40

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Commission's financial statements are free from material misstatement, we perfom1ed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that me required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

1J...L ~~ 0~ U--P West Columbia, South Carolina October 24, 2016

41