STATE OF MISSISSIPPI STEVEN A. PATTERSON State Auditor WILLIAM S. JONES, CPA Director, Department of Audit ED P. YARBOROUGH, CPA Director, Division of County Audits _part3 potx

JEFFERSON DAVIS COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 17 At June 30, 1995, assets held for participants employed by the county and reported in an Agency Fund totaled $114,598. The county believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. The county has no liability for losses under the plan, but the Board of Trustees of the Public Employees' Retirement System, as plan administrator, does have the duty of due care that would be required of an ordinary prudent investor. (6) Interfund Receivables and Payables. Individual fund interfund receivables and payables consisted of the following at September 30, 1995: Interfund Interfund Receivables Payables Due from/to Other Funds General Fund $ 0 39,277 Special Revenue Funds: County library 1,361 Reappraisal maintenance 1,683 District 1 road 5,436 District 2 road 5,436 District 3 road 5,436 District 4 road 5,436 District 5 road 5,435 Solid waste 3,567 Total 33,790 0 Debt Service Fund: Extended care facility I & S 605 0 Agency Funds: Junior college maintenance 1,985 Junior college enlargement 594 Junior college construction 1,411 Rural fire protection 892 Total 4,882 0 Total Due from/to Other Funds $ 39,277 39,277 JEFFERSON DAVIS COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 18 (7) Fixed Assets. Changes in General Fixed Assets: Balance Balance Oct. 1, 1994 Additions Deletions Sept. 30, 1995 Governmental Funds: Land $ 234,427 234,427 Buildings 2,128,498 2,128,498 Construction in progress 47,368 718,326 765,694 Mobile equipment 2,179,142 164,645 30,928 2,312,859 Other furniture and equipment 295,634 74,113 10,215 359,532 Total $ 4,885,069 957,084 41,143 5,801,010 (8) Claims and Judgments. Risk Financing. The county is exposed to risk of loss related to workers' compensation for injuries to its employees. On October 1, 1990, the county decided to stop carrying workers' compensation insurance because of its prohibitive cost and joined the Mississippi Public Entity Workers' Compensation Trust, a public entity risk pool, to cover its exposure to risk of loss. The pool was formed on January 1, 1990, by the Mississippi Association of Supervisors, Inc., pursuant to Section 71-3-75, Miss. Code Ann. (1972), to provide workers' compensation insurance for the benefit of participating counties and various other political subdivisions in the State of Mississippi. The county pays premiums to the pool for its workers' compensation insurance coverage and the participation agreement provides that the pool will be self-sustaining through member premiums. The retention for the pool is $350,000 for each accident and completely covers all statutory limits set by the Workers' Compensation Commission. Risk of loss is remote for claims exceeding the pool's retention liability. However, the pool also has catastrophic reinsurance coverage of $1,000,000 per accident, provided by Employers Reinsurance Corporation, effective from January 1, 1995 to January 1, 1996. The pool may make an overall supplemental assessment or declare a refund depending on the loss experience of all the entities it insures. (9) Long-term Debt. The following individual liabilities are reported on the combined balance sheet at September 30, 1995: Final Amount Interest Maturity Description and Purpose Outstanding Rates Date General Long-term Debt Account Group: General Obligation Bonds: Extended care facility $ 20,000 5.5 to 6.1 6-96 JEFFERSON DAVIS COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 19 Annual requirements to amortize outstanding long-term debt reported in the General Long-term Debt Account Group are as follows: Year Ending September 30 Bonds 1996 $ 21,220 Total 21,220 Less: Amounts representing interest 1,220 Total at Present Value $ 20,000 Legal Debt Margin - The amount of general obligation bonded debt that can be incurred by the county is limited by state statute. Total outstanding general obligation bonded debt during a year can be no greater than 15% of assessed value of the taxable property within the county, according to the then last completed assessment for taxation. However, the limitation is increased to 20% whenever a county issues bonds to repair or replace washed out or collapsed bridges on the public roads of the county. As of September 30, 1995, the amount of outstanding general obligation bonded debt was equal to .04% of the latest property assessments. The following changes occurred in liabilities reported at year end: Balance Balance Styling Oct. 1, 1994 Additions Reductions Sept. 30, 1995 General obligation bonds $ 40,000 0 20,000 20,000 (10) Contingencies. Federal Grants - The county has received federal grants for specific purposes that are subject to audit by the grantor agencies. Entitlements to these resources are generally conditional upon compliance with the terms and conditions of grant agreements and applicable federal regulations, including the expenditure of resources for allowable purposes. Any disallowance resulting from a grantor audit may become a liability of the county. Urban Renewal Revenue Notes - Jefferson Davis County issued 5 million dollars in urban renewal revenue notes on December 30, 1992. The notes are disclosed in Note 11 as "No Commitment Debt" obligations and are designed as "qualified tax exempt" obligations under Section 265 of the Internal Revenue Code of 1986, as amended. The county may become contingently liable to the note holders if the tax exempt status of the notes is forfeited because the project purpose for which the notes were issued can not be implemented. The nature and amount of the contingency can not be determined at this time. Litigation - The county is party to legal proceedings, many of which occur in the normal course of governmental operations. It is not possible at the present time to estimate ultimate outcome or liability, if any, of the county with respect to the various proceedings. However, the county's legal counsel believes that ultimate liability resulting from these lawsuits will not have a material adverse effect on the financial condition of the county. JEFFERSON DAVIS COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 20 General Obligation Debt Contingencies - The county is contingently liable for certain obligations which are repaid by governmental entities. The principal amount of such debt outstanding at year end consists of the following: Balance Styling September 30, 1995 General obligation hospital notes $ 62,224 (11) No Commitment Debt (Not Included in Financial Statements). No commitment debt is repaid only by the entities for whom the debt was issued and includes debt that either bears the county's name or for which a moral responsibility may exist that is not an enforceable promise to pay. No commitment debt explicitly states the absence of obligation by the county other than possibly an agreement to assist creditors in exercising their rights in the event of default. Because a default may adversely affect the county's own ability to borrow, the principal amount of such debt outstanding at year end is disclosed as follows: Balance Styling September 30, 1995 Jefferson Davis County urban renewal revenue notes $ 5,000,000* * The county issued urban renewal revenue notes, dated December 30, 1992, for 5 million dollars plus a premium of $50,000 at the rate of 4.375% interest pursuant to Sections 43-35-1 to 43-35-37, Miss. Code Ann. (1972), to provide funds to pay the costs of road and bridge construction, reconstruction, repair and improvement and construction of a multi-purpose county building (collectively, the "Project"). The notes will mature on December 30, 1995, with semiannual interest payments beginning on June 30, 1993. The net proceeds (gross less cost of issuance and premium received by the county) were invested on December 30, 1992, in certificates of deposit ("CDs") at an out-of-state bank at 4.375% interest and will also mature on December 30, 1995, three years later. The CDs and interest earnings thereon stand as sole security for payment of principal and interest on the notes and the investment principal and interest earnings are deemed adequate to pay all note principal and interest expense throughout the entire three year period. The county may exercise an option to pay off all or part of the notes at certain semiannual interest payment dates during the three year period by issuing general obligation notes which would be retired by the avails of a debt service levy. See Note 10 for further disclosure concerning the county's potential contingent liability. (12) Related Organizations. The county Board of Supervisors is responsible for appointing a voting majority of the members of the board of the Prentiss/Jefferson Davis County Airport, but the county's accountability for this organization does not extend beyond making the appointments. During the year, the county appropriated $5,000 to this organization. JEFFERSON DAVIS COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 21 (13) Joint Ventures. The county participates in the following joint venture: Jefferson Davis County is a participant with Marion County in a joint venture, authorized by Section 39-3-9, Miss. Code Ann. (1972), to operate the South Mississippi Regional Library. The joint venture was created to provide library service for Marion and Jefferson Davis Counties and is governed by a five member board. The two counties rotate board appointments so that each county has a majority of board members in alternate years. Complete financial statements for the South Mississippi Regional Library can be obtained from the Marion County branch of the library in Columbia, Mississippi. (14) Jointly Governed Organizations. The county participates in the following jointly governed organizations: Pearl River Valley Opportunity, Inc. operates in a district composed of Covington, Forrest, Jefferson Davis, Jones, Lamar, Marion, Pearl River and Perry Counties. Each county Board of Supervisors appoints one of the 24 board members and two board members are appointed from the private sector in each county. Each county provides a modest amount of financial support when matching funds are required for federal grants. The Southeast Mississippi Air Ambulance District operates in a district composed of Forrest, Lamar, Covington, Jefferson Davis, Marion, Pearl River, Perry and Greene Counties. Each of the counties appoints one member of the board of directors and the Governor appoints one member. The county provides no financial support for the district. Pearl River Community College operates in a district composed of the Counties of Hancock, Pearl River, Lamar, Marion, Jefferson Davis and Forrest. Jefferson Davis County appoints two of the 16 members. The county appropriated approximately $177,650 for maintenance and support of the college in fiscal year 1995. Southern Mississippi Planning and Development District operates in a district composed of the following counties: Jefferson Davis, Covington, Jones, Wayne, Marion, Lamar, Forrest, Perry, Greene, Pearl River, Stone, George, Hancock, Harrison and Jackson. The governing body is a 27 member board of directors, one appointed by the Board of Supervisors of each member county, one from each of six participating cities, and six are appointed at large by minority members. The counties contribute only a small part of the entity's total revenues. Pine Belt Mental Health Care Resources operates in a district composed of the Counties of Forrest, Lamar, Jones, Perry, Wayne, Greene, Covington, Jefferson Davis and Marion. The board is comprised of one appointee from each county Board of Supervisors and there is minimal financial responsibility. (15) Defined Benefit Pension Plan. Plan Description. Jefferson Davis County, Mississippi, contributes to the Public Employees' Retirement System of Mississippi (PERS), a cost-sharing, multiple-employer, defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. Benefit provisions are established by state law and may be amended only by the State of Mississippi Legislature. PERS issues a publicly available financial report that includes financial statements and required supplementary information. That information may be obtained by writing to Public Employees Retirement System, PERS Building, 429 Mississippi Street, Jackson, MS 39201-1005 or by calling 1-800-444-PERS. JEFFERSON DAVIS COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 22 Funding Policy. PERS members are required to contribute 7.25% of their annual covered salary and the county is required to contribute at an actuarially determined rate. The current rate is 9.75% of annual covered payroll. The contribution requirements of PERS members are established and may be amended only by the State of Mississippi Legislature. The county's contributions to PERS for the years ending September 30, 1995, 1994 and 1993 were $106,832, $104,228 and $99,504, respectively, equal to the required contributions for each year. 23 JEFFERSON DAVIS COUNTY SUPPLEMENTAL INFORMATION 24 JEFFERSON DAVIS COUNTY (This page left blank intentionally) 25 JEFFERSON DAVIS COUNTY Schedule 1 Schedule of Federal Financial Assistance For the Year Ended September 30, 1995 Catalog of Federal Federal Grantor/ Domestic Program Pass-through Grantor/ Assistance Pass-through or Award Federal Federal Program Title Number Grantor's Number Amount Revenue Expenditures U. S. Department of Housing and Urban Development/Passed-through the Department of Economic and Community Development - State of Mississippi Community development block grant 14.219 2-1139-395-PF-1 $ 500,000 $ 452,632 452,632 Community development block grant 14.219 3-395-PF-94 73,735 71,670 71,670 Community development block grant 14.219 4-395-EM-01 155,458 18,527 18,527 Total U. S. Department of Economic and Community Development 542,829 542,829 U. S. Department of Transportation - Federal Highway Administration/Passed-through the Mississippi Department of Transportation Bridge inspection program 20.205 N/A 2,240 2,240 2,240 Total Federal Financial Assistance $ 545,069 545,069 26 JEFFERSON DAVIS COUNTY Schedule 2 Reconciliation of Operating Costs of Solid Waste For the Year Ended September 30, 1995 Operating Expenditures, Cash Basis: Salaries $ 98,390 Expendable commodities: Gasoline and petroleum products 7,871 Maintenance 4,658 Contractual services 64,114 Solid Waste Cash Basis Operating Expenditures: 175,033 Full Cost Expenses: Indirect administrative costs 1,994 Depreciation on equipment 30,662 Other accrued expenses 5,290 Solid Waste Full Cost Operating Expenses $ 212,979 . plan members and beneficiaries. Benefit provisions are established by state law and may be amended only by the State of Mississippi Legislature. PERS issues a publicly available financial report. Each county provides a modest amount of financial support when matching funds are required for federal grants. The Southeast Mississippi Air Ambulance District operates in a district composed. intentionally) 25 JEFFERSON DAVIS COUNTY Schedule 1 Schedule of Federal Financial Assistance For the Year Ended September 30, 1995 Catalog of Federal Federal Grantor/ Domestic Program Pass-through Grantor/ Assistance