TOWN OF Beech mountain, NORTH CAROLINA Misty d Watson, CPA, pa

Highlights: The assets of the Town exceeded its liabilities at June 30, 2018 by $24,359,807, an increase of $1,125,543 from the prior year. The increase is primarily due to Town management closely monitoring expenditures. The property tax collection rate for the current fiscal year is 97.55%, a slight decrease from fiscal year 2017. The latest published data from fiscal year 2017 states for a town the size of Beech Mountain, the average collection rate is 98.51%. The average tax collection across the State was 99.19%. Unassigned fund balance for the General Fund is $3,296,690, which is 55% of General Fund expenditures. The average fund balance available for similar units from 2017 published data was 118% and 45% across the State. The Water and Sewer Fund had an increase in net position of $4,379, leaving the net position at June 30, 2018 at $10,215,649. The Sanitation Fund had an increase of $1,286, leaving the net position at June 30, 2018 at $649,835. The Town’s principal for installment notes and revenues bonds decreased in total by $570,000 in the current year. No new debt was issued in the current fiscal year. The Town added new capital assets being depreciated during the year totaling $871,407 in the General Fund and $1,743,618 in the Water & Sewer Fund. Included in the new capital assets are vehicles and equipment, a skid steer, motorgrader, backoe, paving and completed construction of the Spruce Hollow to Parkway Waterline. The Town also continues completion of the water treatment plant.

Results of 2018 Audit: The independent auditor’s report can be found on pages 1-2 of the financial statements. Our responsibility under Auditing Standards Generally Accepted in the United States of America (GAAS): We considered the internal control structure for the purpose of expressing an opinion on the Town’s basic financial statements and not for providing assurance on the internal control structure. Our audit was performed in accordance with GAAS and Government Auditing Standards. Our objective is to provide reasonable assurance - not absolute - assurance that the basic financial statements are free of material misstatement. The basic financial statements are the responsibility of Town’s management. Report on the 2018 basic financial statements – Unmodified (clean) opinion; presented fairly in accordance with accounting principles generally accepted in the United States of America. All adjustments were approved and posted by management. Such adjustments include GASB 68 - accounting for LGERS, GASB 73 – accounting for LEO special separation allowance, depreciation, and long- term debt principal payments.

Results of 2018 audit: Relationship with management – We received full cooperation from the Town’s management and staff. There were no disagreements with management on accounting issues or financial reporting matters. There were no significant issues discussed with management related to business conditions, plans or strategies that may have affected the risk of material misstatement of the financial statements. No major issues were discussed with management prior to our retention to perform the audit.