1. City of Dry Ridge, Kentucky Audited Financial Statements June 30, 2018
Van Gorder, Walker & Co., Inc.
Monday, December 3, 2018
-Introduce self
-Thank Mayor , Amy Kenner and their staff for their help and cooperation through the audit process. Anything I needed they were quick to provide.

2. City of Dry Ridge, Kentucky Auditor’s Opinion
“In our opinion, the financial statements …present fairly, in all material respects, the respective financial position of the … City of Dry Ridge, Kentucky as of June 30, 2018,… in conformity with accounting principles generally accepted in the United States of America.”
-This is the part of the audit that we provide to you and what you pay us for.
-Unmodified opinion - highest level of assurance we can give.
-Financial statements are presented properly and free of material misstatement.

3. City of Dry Ridge, Kentucky Report on Internal Control and Compliance
There are no Material Weaknesses or Significant Deficiencies in internal control.
There are no reportable items of Non- Compliance with state laws, bond/loan agreements, or grant agreements.

4. City of Dry Ridge, Kentucky Auditor’s Correspondence to Those in Charge of Governance
At June 30, 2018, the City has booked, on its statement of net position, its proportionate share of the CERS unfunded pension liability of $3,314,388 and its share of the CERS unfunded Other-Post Employment Benefits for Health Insurance (OPEB) of $1,200,971; both of which are split between General Government and the Utility Fund.
$4.515M Total
We added, as a prior period adjustment the beginning balance of the OPEB balance of $708,720.
We had no management letter comments to add this year.
Letter in your packet.
The City Council are the responsible persons in charge of governance as related to financial matters of the City.
Gov Pension Liab is $2.919M ; W&S is $395K = $3.314M
Gov OPEB Liab is $1.058M; W&S is $143K = $1.201M

5. City of Dry Ridge, Kentucky Assets / Cash Comparison Governmental Funds As of June 30th
Cash increased 13.2% from 2017 to 2018 (Compared to a 24.5% increase in PY)
Rule of Thumb is to have 3 months of operating cash on hand.
-3 Months worth would be $816K (SEE RED ARROW) Months of Cash on Hand VERY STRONG CASH POSITION (up from 8 months last year).
-You have $2.1 M in unrestricted cash, and $35K in Restricted MARF cash.

6. City of Dry Ridge, Kentucky Assets / Cash Comparison Proprietary (Utility) Fund As of June 30th
Cash & CDs increased 67%, from 2017
Rule of Thumb is to have 3 months of operating cash on hand.
-3 Months worth would be $436K (SEE RED ARROW)
-You have approx. 4.2 months coverage (compared to 1.8 mo. In PY)

7. City of Dry Ridge, Kentucky Long-Term Liabilities Comparison Governmental Activities As of June 30th
-LTD of $534K notes and $67K in Compensated Absences Payable. $3.9M in Pension & OPEB Liability
Pension - $1.5M

8. City of Dry Ridge, Kentucky Long-Term Liabilities Comparison Utility Fund As of June 30th
Pension - $377K
$539K
$355K
-2018 balance includes $456K loan and $24K in Compensated Absences; $539K GASB 68 & 75 for portion of employees who work utility fund.

9. City of Dry Ridge, Kentucky Revenues vs
City of Dry Ridge, Kentucky Revenues vs. Expenditures All Governmental Funds For the Years Ended June 30th
This is all revenues and expenditures for all the Governmental funds.
Excess of Revenues over Expenditures for 2018 was $179.6K compared to $402K in 2017
NOTE: 2016 included about $770K in gov grants and expenditures (fire truck $700K and park $60K)

10. City of Dry Ridge, Kentucky Operating Revenues vs
City of Dry Ridge, Kentucky Operating Revenues vs. Operating Expenditures Utility Funds For the Years Ended June 30th
This is all revenues and expenditures for all the Utility Funds
OPERATING INCOME for 2018 was $413K vs. ($368K LOSS) in Significant improvement over previous year/
Made slight change to way AR was being managed at EoY (2017 Revenue may have been understated)
Effect of Water / Sewer Rate increase is evident.

11. City of Dry Ridge, Kentucky Expenditures by Dept
City of Dry Ridge, Kentucky Expenditures by Dept. – All Governmental Funds For the Year Ended June 30, 2018
CAPITAL OUTLAY: $333K Ghana Development WIP, $206K Ambulance, $69 at park.

12. City of Dry Ridge, Kentucky General Govt
City of Dry Ridge, Kentucky General Govt. Expenditures – Yearly Comparison For the Year Ended June 30, 2018
7.6%
Increase in general government expenditures-2018 (up 7.6%)

13. City of Dry Ridge, Kentucky Police Expenditures– Yearly Comparison For the Year Ended June 30,
-Police expenditures decreased 1.1% from 2017

14. City of Dry Ridge, Kentucky Fire Expenditures – Yearly Comparison For the Year Ended June 30,
-2018 Fire expenditures increased 6.8%

15. City of Dry Ridge, Kentucky Utility Fund Expenditures – Yearly Comparison For the Year Ended June 30,
(3.9%)
Decrease 3.9% from 2017

16. City of Dry Ridge, Kentucky Debt Service Expenditures Utility Fund – Yearly Comparison For the Year Ended June 30,
Paid off 1993 KIA Note in 2016 $45K Final Payment; replaced w Payments on $330K Heritage Bank debt .

17. Questions?
John R. Chamberlin, CPA, MBA Partner Van Gorder, Walker & Co., Inc Dixie Highway Erlanger, Kentucky (859)