1. Draper & McGinley, P.A Certified Public Accountants Draper & McGinley, P.A Certified Public Accountants Presented by: Michele R. Mills, CPA Partner Fiscal Year 2015 Audit

2. Scope of Services Financial Statement Audit

3. Responsibilities: The financial statements are the responsibility of management Our responsibility is to: Plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement Express an opinion on the financial statements based on our audit

4. The audit was performed in accordance with Generally Accepted Auditing Standards and Government Auditing Standards

5. Auditors’ Opinion The City of Brunswick, Maryland received an Unmodified opinion on the financial statements.

6.  Overview provided by management of the financial highlights of the City  Our responsibility is to review the MD&A to ensure 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 Management’s Discussion & Analysis (MD&A) See page 3 - 9 of the audit report

7. Governmental Accounting Standards Board requires: Two sets of Financial Statements  Government – wide (pg. 10 - 11)  Fund – level (pg. 12 - 18) GASB Reporting Model

8. Financial Highlights

9. New for FY 2015 City implemented GASB 68; “Accounting and Financial Reporting for Pensions”  Required restatement of opening net position.  Required the City to record its proportionate share of the net pension liability as a participating governmental unit in the State’s retirement system.  The City’s proportionate share as of 06/30/15 was $970,619. See page 10 of the audit report

10. Required government-wide financial statements: Statement of Net Position Statement of Activities Government – Wide Statements

11. Statement of Net Position:  Presents the financial condition of the governmental and business-type activities of the City Government – Wide Statements

12. Statement of Net Position Total Assets $42,530,635 (Government-Wide) See page 10 of the audit report 0.3% decrease from FY 2014

13. Statement of Net Position Total Liabilities $5,292,252 (Government-Wide) See page 10 of the audit report 19% increase from FY 2014

14. Overall, the City’s debt decreased 5% from FY 2014.  No new borrowings in FY 2015.  Principal Payments of $197,639  $91,630 - Governmental activities  $106,009 - Business-type activities See page 31 of the audit report

15. Deferred Inflows/Outflows of Resources Deferred outflows of resources – a consumption of net assets by the government that is applicable to a future reporting period (attributable to pension)  Governmental activities - $117,082  Business-type activities - $34,973 Deferred inflows of resources – an acquisition of net assets by the government that is applicable to a future reporting period (attributable to pension and unearned revenue)  Governmental activities - $114,996  Business-type activities - $12,192,333 See page 10 of the audit report

16. Deferred Inflows/Outflows of Resources Assets + Deferred Outflows – Liabilities – Deferred Inflows = Net Position Governmental Activities: Net position - $9,743,368 Business-type Activities: Net position - $15,339,741

17. Statement of Net Position Total Net Position $25,083,109 (Government-Wide) See page 10 of the audit report

18. Statement of Activities:  Presents a comparison between direct expenses and program revenues for each program or function of the City’s governmental and business-type activities Government – Wide Statements

19. Statement of Activities Governmental Activities Total Expenses $3,958,638 Charges for Services $412,020 Operating Grants and Contributions $346,458 Capital Grants and Contributions $ - General Revenues $3,833,907 See page 11 of the audit report ExpensesProgram Revenues

20. Statement of Activities Business- type Activities Total Expenses $3,222,623 Charges for Services $2,716,512 Operating Grants and Contributions $42,000 General Revenues $113,263 See page 11 of the audit report Expenses Revenues

21. Statement of Activities Change in Net Position $282,899 (Government-Wide) As compared to $132,894 for FY 2014 Governmental Activities $633,747 Business-Type Activities $(350,848) See page 11 of the audit report

22. Balance Sheet Total Assets $ 6,098,830 Total Liabilities 2,016,845 Total deferred inflows of resources 33,188 Fund Balances Assigned $1,835,897 Unassigned 2,212,900 Total Fund Balances $4,048,797 Governmental Funds Governmental Funds include: General and Capital Projects See page 12 of the audit report

23. Statement of Revenues, Expenditures and Changes in Fund Balances Total Revenues $4,592,385 Total Expenditures 3,858,704 Excess of Revenues over Expenditures $ 733,681 Governmental Funds Governmental Funds include: General and Capital Projects See page 13 of the audit report

24. Statement of Revenues, Expenditures and Changes in Fund Balances Excess of Revenues and Other Financing Sources Over Expenditures and Other Uses $733,681 Adjustments for the Statement of Activities Capital outlay 206,780 Depreciation expense (403,691) Compensated absences (8,399) Debt service expenditures 91,630 Net pension adjustment 13,746 Change in Net Position of Governmental Activities $633,747 Governmental Funds Governmental Funds include: General and Capital Projects See page 13 of the audit report

25. Reconciliation of Fund Balance to Net Position of Governmental Activities See page 14 of the audit report

26. See page 13 of the audit report Totals: FY2015 $4,592,385 FY2014 $4,332,530

27. See page 13 of the audit report Totals: FY2015 $3,858,704 FY2014 $4,047,423

28. See page 16 of the audit report 7.8% increase 4.5% increase Statement of Operations – Water (Proprietary Fund -Enterprise)

29. See page 16 of the audit report Less than 1% decrease 8.6% increase Statement of Operations – Sewer (Proprietary Fund - Enterprise)

30. Operating expenses include depreciation expense as follows: Water Fund - $545,005 Sewer Fund - $945,248 See page 16 of the audit report

31. BUDGET TO ACTUAL – GENERAL FUND BUDGET (Original) BUDGET (Final) ACTUALVARIANCE REVENUES$4,046,200 $4,384,200 $4,549,710 $165,510 EXPENDITURES $3,695,200 $3,889,500 $3,657,879 231,621 TOTAL OTHER FINANCING SOURCES (USES) ($351,000) ($494,700) $ - NET CHANGE IN FUND BALANCE $ - $ - $397,131 See page 37 & 39 of the audit report

32. QUESTIONS?