1. City of Dry Ridge, Kentucky Audited Financial Statements June 30, 2016
Van Gorder, Walker & Co., Inc.
Monday, February 13, 2017
-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, 2016,… 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
The City has booked, on its statement of net position, its proportionate share of the CERS unfunded pension liability. The liability, which the City is not responsible for re-paying, was $2,091,042 at June 30, 2016.
Multiple material adjustments were made to the financial statements
Large adjustments in the Utility Fund for depreciation, reclassification of fixed assets, pension expense, and reclassification on debt principal.
Small adjustment in the General Fund
We informed management of several small concerns and process improvements in the Management Comments letter.
Letter in your packet.
The City Council are the responsible persons in charge of governance as related to financial matters of the City.

5. City of Dry Ridge, Kentucky Assets / Cash Comparison Governmental Funds As of June 30th
Cash increased 55.1% from 2015 to 2016 (Compared to a 28% decrease in PY)
Rule of Thumb is to have 3 months of operating cash on hand.
-3 Months worth would be $483K (SEE RED ARROW) (used 2015 exp amount to calculate, 2016 had $1.2M in one time exp).
-You have $1.5M in unrestricted cash, and $40K in Restricted MARF cash.

6. City of Dry Ridge, Kentucky Assets / Cash Comparison Proprietary (Utility) Fund As of June 30th
Cash & CDs decreased 17%, $146K from 2014 to 2016 (decrease for 2014 $102K 10.5%; and 2013 $54K, 5%).
Rule of Thumb is to have 3 months of operating cash on hand.
-3 Months worth would be $464K (SEE RED ARROW)
-You have approx months coverage

7. City of Dry Ridge, Kentucky Long-Term Liabilities Comparison Governmental Activities As of June 30th
GASB 68 - $1,714,440
GASB 68 - $1,545,165
-2015 balance was only GASB includes $233K in loan payable, and $1.7M in GASB 68.
$233,469

8. City of Dry Ridge, Kentucky Long-Term Liabilities Comparison Utility Fund As of June 30th
GASB 68 $376,602
$554,094
-2015 balance was only $229K
-2016 balance includes $554K loan and $376K in GASB 68 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 2016 was $212K
Includes about $770K in gov grants for fire truck $700K and park $60K

10. City of Dry Ridge, Kentucky Revenues vs
City of Dry Ridge, Kentucky Revenues vs. Expenditures Utility Funds For the Years Ended June 30th
Concerning Trend
This is all revenues and expenditures for all the Utility Funds
Excess of Expenses over Revenues for 2016 was $280K. CONCERNING TREND
MAY WANT TO CONSIDER REVIEWING EXPENSE ALLOCATIONS TO UTILITY FUND (OVERWEIGHTED?), IF NOT OVERWEIGHTED, MAY WAY TO CONSIDER A RATE STUDY. REVENUES ARE DEFINITELY FLAT.

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, 2016
$700K Fire truck, $100K in other Vehicles, $60 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, 2016
12.4%
Increase in general government expenditures-2016 (up 12.4%)

13. City of Dry Ridge, Kentucky Police Expenditures– Yearly Comparison For the Year Ended June 30,
-Police expenditures increased 28.2% from 2015

14. City of Dry Ridge, Kentucky Fire Expenditures – Yearly Comparison For the Year Ended June 30,
-2016 Fire expenditures decreased 1.4%

15. City of Dry Ridge, Kentucky Utility Fund Expenditures – Yearly Comparison For the Year Ended June 30,
13.2%
Increase 13.2% from 2015

16. City of Dry Ridge, Kentucky Debt Service Expenditures Utility Fund – Yearly Comparison For the Year Ended June 30,
130.6%

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