^ 5 o 1

TOWN OF POLLOCK

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED DECEMBER 31, 2010

Uncler provisions of state law, this report is a public document, A copy of the report has been submitted to the entity and other appropriate public officiais. The report is available forpublic inspection at the Baton Rouge office of the LegislativeAuditor and, where appropnate. at the office of the parish clerk of court.

Release Date

TABLE OF CONTENTS

PAGE

Independent Auditors' Report I - 2

Required Supplemental Information (Part I) Management's Discussion And Analysis 3-6

Govemment-Wide Financial Statements Statement OfNet Assets 7 Statementof Activities 8

Fund Financial Statements Govemmental Funds

Balance Sheet 9 Reconciliation of Fund Balances on tlie Balance Sheet for Govemmental

Funds to Net Assets of Govemmental Activities on the Statement of NetAssets 10

Statement of Revenues, Expenditures and Changes in Fund Balance 11 Reconciliation ofthe Statement of Revenues, Expenditures, and Changes in

Fund Balance of Govemmental Funds to the Statement ofActivities 12 Proprietary Funds

Statement of Net Assets 13 Statement of Revenues, Expenditures and Changes in Fund Net Assets 14 Statement of Cash Flows 15-16

Notes To Financial Statements 17-30

Required Supplemental Information (Part Tl) Statementof Revenues, Expenditures and Changes in Fund

Balances (Budget and Actual) General Fund 31-32

Other Supplemental Infonnation Schedule oFPer Diem Paid to Board Members 33

Independent Auditors' Report On Compliance And On Intemal Control Over Financial Reporting Based On An Audit Of Financial Statements Performed In Accordance With Government Audit ing Standards 34-35

Schedule OfFindings And Questioned Cost 36 Management's Corrective Action Plan 37 Summary ofPrior Year Findings And Questioned Cost 38-39

-I-

RozffiR, HARRINGTON & MCKAY CERTIFIED PUBLIC ACCOUNTANTS 1407 PETERMAN DiUVE • ALEXANDRIA, LOUISIANA 71301

MAILING ADDRESS J O H N S . ROZIER, IV, CPA POST O F H C E B O X 12178

MARKS.MCKAY, CPA AlMXANDRJA.LOUIStANA 71315-2178 LEEW. WILUS, CPA

RHONDA L. RACHAL, CPA TEl£PHOt4E (318) 442-1608 STEVEN E. KIMBALL, CPA TELECOPIER (318) 487-2027

GEORQETTE VEBCHEH, CPA M. DALE HARRINGTON, CPA

RETIRED-2005

June 26,2011

The Honorable Mayor and Members ofthe Board of Aldermen Town of Pollock, Louisiana

We have audited the accompanying financial statements ofthe govemmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Town of Pollock, as ofand for the year ended December 31, 2010, which collectively comprise the Tovm's basic financial statements as listed in the table of contents. These basic financial statements are the responsibility of tlie Town of Pollock's management. Our responsibility is to express an opinion on these basic financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in tlie United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards., issued by tlie Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial siatements are firee of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statemenls. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, and each major fund ofthe Town of Pollock, as of December 31,2010, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The management's discussion and analysis and budgetary comparison infonnation listed in the accompanying table of contents are not a required part of die financial statements but are supplementary information required by the Govemmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquires of management regarding

•Members-Antortcan Inst t tato ot Cortlftod Public Aceeuntants • Socloty of Loulstanni CPAs

-I-

Town of Pollack December 3 1 , 2 0 i O Page 2

tlie methods of measurement and presentation of the required supplemental information. However, we did not audit the infonnation and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Pollock's basic financial statements. The Schedule of Per Diem Paid to Board Members is presented for purposes of additional analysis and is not a required part of the basic financia] statements. The Schedule of Per Diem Paid to Board Members has been subjected to tlie auditing procedures applied in the audit of tlie basic financied statements and, in our opinion, is fairiy stated in all material respected in relation to the basic financial statements taken as a whole.

In accordance with Governnnni Auditing Standards^ we have also issued a report dated June 26, 2011, on our consideration of Pollock's intemal control over financial reporting and our tests of iis compliance vWth certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit perfonned in accordance with Government Auditing Standards and should be read in conjunction wntli this report in considering the results ofour audit.

" ^ ^ / A - i f ^ r / M Rozier, Harrington & McBCay, Certified Public Accountants

-2-

Town o f Pol lock Management's Discussion A n d Analysis December 3 1 , 2010

This section ofthe Town of Pollock's annual financial report presents our discussion and analysis of the Tovm's financial performance during the fiscal yearended December 31, 2010.

OVERVTEW OF FINANCIAL STATFMF.NTS The basic financial statements include govemment-wide financial statements and fund financial statements. These two types of financial statements present the Town's financial position and results of operations fi'om differing perspectives which are described as follows:

GOVERNMENT-WIDE FINANCIAL STATEMENTS

The govemment-wide financial statements report information about the Town as a whole using accounting methods similar to those used by private-sector companies. These report all revenues and expenses regardless of when cash is received or paid. Furthermore, the govemment-wide statements include all ofthe Town's assets (including infirastructure acquired after January 1, 2004) and all of the Town's liabilities (including long-term debt).

The govermnent-wide financial statements are divided into two categories, which are described as foUows:

• Governmental Activities — Expenses incurred in connection with providing basic services including public safety, sanitation and general administration are reported as govemmental activities. The govemmental activities are financed by taxes, license and permit fees, intergovemmental sources, and utility franchise arrangements.

• Business-Type Activities - Expenses associated with providing utility services and operating tlie municipal airport are recovered tiirough fees paid by the customers that utilize tiiese services. These activities are operated in a manner similar to commercial enterprises. Accordingly, activities associated with these services are reported as business type activities.

FUND FINANCIALSTATEMENTS

Fund financial statements provide detailed information regarding the Town's most significant activities and are not intended to provide infonnation for tlie Town as a whole. Funds are accounting devices that are used to account for specific sources offimds. The Town has two types of funds that are described as follows:

• Governmental Funds - These funds are used to account for essentially the same fiinctions that are reported as govemmental activities in the govemment-wide financial statements. However, unlike govemment-wide financial statements, the govemmental fimds use a modified accrual basis of accounfing that provides a short-term view of the Town's finances. Assets reported by govemmental fiinds are limited to amounts that are available for current needs. In addifion, liabilities are limited to amounts tliat are expected to be paid firom currently available assets.

-3-

Town o f Pol lock Management's Discussion A n d Analysis December 3 1 , 2010

• Proprietary Fund - These fimds are used to account for activities that fiinction in a manner similar to commercial enterprises. Proprietary fimd financial statements typically provide a more detail presentation of the informafion reported in tlie business-type activifies portion ofthe government-wide financial statements.

FINANCIAL ANAT.VSTS OF THE TOWN AS A WHOTE

NETASSETS

A condensed version ofthe govemment-wide Statement ofNet Assets is presented as follows:

Assets: Current and Other Assets Intemal Balances Capital Assets Total Assets

Liabilities: Current and Other Liabilities Long-term Liabilities Total Liabilities

Net Assets: Invested in Capital Assets (Net) Restricled Unrestricted Totai Net Assets

December 31,20I( Govern­mental

Activities

$ 250.044 (90,387) 493,721 653,378

10,124

10,124

493,721

149,533 % 643,254

Business-Type

Activities

$ 1,441,476 90,387

10,996,874 12,528,737

202.204 3.419.690 3,621,894

7,512,230 1,049.268

345,345 $ 8,906,843

1

Total

S 1,691,520

11,490,595 13,182,115

212.328 3,419.690 3,632,018

8,005,951 1.049.268

494,878 S 9,550,097

December 31,2009

$ 1,378,285

11,275,759 12.654.044

331.742 3,113.651 3.445.393

8.004,709 1.051,462

152.480 S 9,208,651

As the presentation appearing above demonstrates, the largest portion of the Tovm's net assets (83.8%) are invested in capital assets. Net assets invested in capital assets consist of land, buildings, equipment, and any infrastructure acquired afier December 31, 2003 less any debt used to acquire the assets that remains outstanding. The Town uses these capital assets to provide services to its cifizens; consequently, tiiese amounts ai"e not available for future spending.

An additional portion ofthe net assets (11%) represent resources that are subject to restrictions that are imposed by agreements with the Town's bondholders or requirements imposed by various revenue sources. The remaining unrestricted net assets (5.2%) may be used to meet the Town's ongoing obligations to citizens and creditors.

-4-

Town o f Pol lock Management's Discussion A n d Analysis December 3 1 , 2010

CHANGES IN NETASSETS

A condensed version of the govemment-wide Statement of Changes in Net Assets is presented as foUows:

Revenues: Program Revenue:

Charges for Services Operating Grants and

Contributions Capital Grants and

Contributions General Revenue;

Properly Taxes Sales Taxes Franchise Taxes Licenses and Permits Proceeds from the Sale of

Timber Other

Total Revenue

Program Exnenses: General Govemment PubHc Safety - Police Department Public Works - Roads and Bridges Sanitation UtiUty System Airport Total Expenses

Excess (Deficiency) Before Transfers and Special Items

Transfers

Change in Net Assets Net Assels BeginninR

Net Assets Ending

Forthe Year Ended December 31,2010 Govern­mental

Activities

S 223.503

12.895

140,000

13,081 54,806 20,381 39,528

53,225 10.359

567.778

255.582 224.613

14.400 21.662

— 516,257

5i,521

121,623

173.144 470,110

S 643,254

Business-Type

Activities

$ 1,445.840

—

64,687

— —

101,725 20,784

1,633.036

— — — —

1,322,958 20,153

1,343,111

289,925

(121,623)

168,302 8,738,541

8.906.843

Total

$ 1,669.343

12,895

204.687

13,081 54.806 20,381 39,528

154.950 31.143

2.200,814

255,582 224.613

14,400 21,662

1.322,958 20.153

1,859.368

341.446

—.-

341,446 9,208,651

S 9,550,097

For the Year Ended December 31,2009

$ 1,248.044

—

15.108

13,027 50,174 18,337 33.833

46.609 1,425,132

202.087 187,415

1.099 17.863

1,162,917 16,901

1,588,282

(163,150)

«...

(163.150) 9,371,801

S 9,208,651

Governmental activifies increased the Town's net assets by $173,144. Business-type acfivifies increased the Town's net assets by $168,302.

-5-

Town o f Po l lock Management's Discussion A n d Analysis December 3 1 , 2010

FINANCIAI. ANAT YSIS OF THE TOWN^S FIINDS The Town's govemmental fimds reported a combined fund balance of $643,254, which represents an increase of $173,144 in comparison to the previous balance. Differences between fiind balances and net assets reported for governmental activifies are attributable to including capital assets in the determination of net assets.

The Town's general fimd, which is available for spending at the Town's discrefion, reported a deficit fimd balance of $1,127, which represents a decrease $3,528 in comparison to the previous balance.

Amounts reported for business-type acfivities in the Tovwi's individual fiinds are idenfical to the business-type activities reported in the govemment-wide presentation.

GENERA!. FUND BUDGET HIGHUGHTS The Town's general fund is required to adopt a budget and the budget is amended as necessary. For the current year, amendments were necessary to utilize revenue that was not anticipated when the original budget was prepared. In tlie current year the Town's Revenues exceeded budgeted amounts by $45,702. The Town's expenses exceeded budgeted expenses by $2,190. Budget variances are within the acceptable range.

CAPITAL ASSET ADMINISTRATION

Capital asset activity for the year ended December 31, 2010 was limited to police car video cameras, computers, software and light bar mountings replacing die air conditioner in the business office, park improvements placed in service that were in process at the end ofthe prior year. Wen* sewer plant construction, purchase of Ford F-150, and construcfion of a New Ground Storage Tank was begun and is still in process as of December 31,2010.

DEBT ADMINISTRATION

In January 2010 the Town gave its final approval for the construction of a $530,000 ground storage tank. This new tank will replace an old outdated tank. The town has been given approval to borrow the $530,000 needed to complete this project. As of December 31, 2010 the balance borrowed of this amount was $371,000. Principal payments for the year totaled $157,406, which represented 4.5% of the balance outstanding at the beginning ofthe year.

FACTORS EXPECTED TO EFFECT FIJTURE OPERATIONS

In January 2010 the Town gave its final approval for the construction of a $530,000 ground storage tank. This new tank will replace an old outdated tank. The town was given approval lo borrow the $530,000 needed to complete this project. As of December 31, 2010 $371,000 of this amount was borrowed and construction in process on the ground storage tank totaled $493,997.

-6-

Town o f Pol lock

STATEIViENT OF NET ASSETS

December 3 1 , 2010

ASSETS Cash and cash equivalents Receivables (net) Restricted cash Internal balances Capital assets

Non depreciable capital assets Donated Property Depreciable capital assets.

Total nsscts

net

Govemmental Activities

$ 218,562 31,482

-(90,387)

148,864 140,000 204.857

653,378

Business-Type Activities

$ 571,513 $ 139,635 730,328 90,387

514,597 -

10,482,277

12,528,737

Tolal

790,075 171,117 730,328

-

663,461 140,000

10,687,134

13,182,115

LIABILITIES Accounts and other payables Deposits due otliers Payable from restricted assets

Accrued interest payable Long-term liabilities-portion due within one year

Long-term liabilities - due in more than one year

Total liabilities

10,124 -

_

--

10,124

90,825 36,705

9,720 64,954

3,419,690

3,621,894

100,949 36,705

9,720 64,954

3.419,690

3.632,018

NETASSETS Invested in capital assets, netof related debt Restricted for:

Debt service Airport operations

Unrestricted

493.721

149,533

7,512,230 8,005,951

720,608 328.660 345,345

720,608 328,660 494,878

Total net assets (deficit) 643,254 $ 8,906,843 $ 9,550,097

The accompanyliig notes are an integral part of tho financial stntcmcnts.

-7-

IS

I i .0

I

I

•ft

I IM IS

2 I

rt j3

12

<

C "1

il u

•I §'^ 2 a fi K S B

O o

t2 " 3 .a

U

z m

'».- ' w

m i n CM

o o T f

• *

*-*'

( S yD vo

^ r J

0\ 1-1 nn 0 \

^-'

M

i n

m o

•*-.* M

m w-i rs

cs •^ «+ t—"

R s o O

•—• rM

as i n o o

0 ^ m

o

-:r

' OO

m vo

fvl" .—"

M

V l

r-\ oo ' n

'*-! i n M

&

ro

vo -4-I N P«i

r ) ra •^ -+

r M vn vn ^ . 1

<N

1 ^ "n r^i vn •—• •n

o\ m vo tn ^ « ! , vo oo eo t—• >M ' V

vo l - H • *

r vn

t -t n i n

r-(N

CN n vo "O cs 00 vo 00 oo ^ -

v. •—<

•* r VJ7

vo 1—"

•* r-vo >—•

vo

r--on V.O • ^

sa

r^ V.O • +

o t s

6fl

w

•^ o

i n m c?. — r l o (N (N m "-*

„ M r - l 1—1

m -* m

"1 m CN w-i oo

6 9

u • < u c fi

u

^ OT ^*

•J3 =>

•c o

<

a U

e :^

•a a 01

P-1

u .5 i

JD

•B O

H

S F i-o

n E

T Q .

• 3 o (-

r-f vo — oo m oo o oo <M C\ o_ oo m w-i o_ m" •*" o " oC vo" 1—' "n ts m oo

vo —

\ ^ — oo

-4- o

cv'

0\ rn O fS

fs" -—'

>—< VO — oo -* m eo o oo (N oo Ol o oo m m <n vo HT" - * o " c " tn ^ •—• "n o4 fn vO rs

^n oo oo

P4 ^ o -^ rn "rj. oc oc vo m —4 rs.

o o

m t oo vo o cv eo

m o n m m

^ 2 ~ - •—I

m o r-~ r-- H - ^

T f i n rs m • *

so

9 m cv vo vo

. w

B

> as S3

u a u O

O, M cSj

5 E •= S y E 4>

g < M [ i :

ir-

U l a

in u V a o

O 3 C

g s .s .J-

.S S Oil H. W) in

- §5 ! H U 2 2

on

' 5 oo

u

ff J ,

Town of Pollock Balance Sheet Governmental Funds - December 31, 2010

Assets

Cash and Cash Equivalenls

Receivables (net)

Total assets

General

Fund

$ 67,902

31.482

S 99,384

General

Capital

Projccls

$ 150,660

$ 150,660

OUicr

Govemmenlal

Funds

$

$

Total

Govemmenlal

Funds

$ 218,562

31,482

$ 250.044

Liabilities and Tund Balance

Liahilities

Accounts payable Inlerfund payables Advances from olher funds

Total liabilities

Fund Balance

Unreserved - Reported In

General Fund

Capilal Projects Funds

Total Fund Balances

$ 10,124 S

90,387

100,511

(U127)

150.660

(1.127) 150.660

$ 10,124

90.387

100,511

(U127)

150,660

149.533

Total Liabilities and Fund

Balance % 99,384 $ 150,660 $ S 250.044

The accompanying notes are an Integral part of the financial statements.

-9-

Town o f Pol lock Reconci l iat ion o f Fund Balances on the Balance Sheet for Governmental Funds to NetAssets o f Govemmental Act iv i t ies on the Statement o f Net Assets

Year Ended December 3 1 , 2010

Total Fund Balances - Govemmental Funds $ 149,533

Amounts reported for governmental aciivilies in the stalemenl ofnet assets arc

different because:

Capital assets used in govcmmenlxtl aciivilies arc not financial resources and

Uierefore arc not reported in die ftinds. 493.721

Nel Assets of Govemmental Activities $ 643.254

The accompanying notes are an integral part of the financiai statements.

-10-

Town of Pollock Statement of Revenues, Expenditures and Changes in Fund Balance Govemmental Funds - Year Ended December 31, 2010

Revenues:

Taxes:

Ad valorem

Sales

Frandiise ta.\-es

Licenses & permits:

Inlergovemmental

Fines and forfietures

Other

Tolal Revenues

Exncnditures:

Current

General govemmcnl

PubHc safely - police dcpartmenV

Streets

Sanitation

Capital expenditurcs

Total £.xpcDditurc5

Excess (Deficiency) «f

Revenues Over Expenditurcs

General

Fund

$ 13,081

54.806

20,381

39,528

13.835

210,765

21.045

373,441

245,629

197,235

14,400

21,662

23.440

502,366

General

Capital

Proiects

% ' -

-

-

-

-

-

1.112

1,112

-

--

-

Oilier

Govenunental

Funds

$

-

-

-

-

--

_

-

--

-

Total

Govemmenlal

$

—

—

Funds

13,081

54,806

20,381

39,528

13,835

210,765

22,157

374,553

245,629

197,235

14,400

21,662

23,440

502.366

(128,925) 1,112 (127,813)

Other Financine Source.s (TIses):

Proceeds from timber sales

OperaUng transfers in

Operaling transfers out

53,225 87,736

(15,564)

-50,563

(1,112)

53,225 138,299

(16,676)

Net Change in Fund Balances (3,528) 50,563 47.035

Fund Balance (Deficit) -

Beginning of Year 2,401 100,097 102,498

Fund Balance (Dcfiut) -

End of Year $ (1,127) $ 150.660 S 149.533

The accompanying notes are an Integral part ofthe financial statements.

-11-

Town o f Po l l ock Reconci l iat ion o f t h e Statement o f Revenues, Expenditures, and Changes i n Fund Balance o f Govemmental Funds to the Statement o fAc t i v i t i es

Year Ended Decemer 3 1 , 2010

Nel change in fund balances of Govenunental Funds $ 47,035

Amounts reported for govemmenlal ocUvilies in Uie statement of >

activities are dilferent becuu.%:

Donated Capital osset reported on Govenunenl Wide; not reported for Govemmental HO.IJDD

fund.

Govemmenliil fund-s rqiort capital oullnys as cxpendilures. Mowever, in the

stuleinent of acUvities Uie cost of tliosc assets is ollocated over

estimated useful Uves and reported as dcprcciaUon expense. This is the

amount by \viuch capital outlays exceeded depreciation in the current

period. (13,891)

Change in netassets of govemmental acUviUes $ 173,144

The accompanying notes are an Integral part of the financial statements.

-12-

Town o f Pol lock statement o f Ne t Assets Proprietary Funds - December 3 1 , 2010

ASSETS:

Current Assets:

Casli and co^ equivalents

Receivables (nel)

Total current assets

Reshicted Assets:

Cosh and cash equivalents

Debt service

Noncurrent Assels:

Interfund receivables Advances to oUier funds Non depreciable assels Depreciable assels (net)

Total assets

Busmess-Type AcUvities - Enlerprise Funds

Utility

System

Municipal

Airport

334,150 $

138.725

472,875

730,328

514,597

10.419.447

12,137.247

237.363 $

910

238.273

ToUil

571,513

139.635

711.148

730.328

90,387

-

62,830

90.387 514.597

10,482,277

391,490 12,528,737

LUBrLlTmS:

Current LiabDiUes:

Accounts and other payable

Inlerfund Payables

Deposits due oUiers

Total current liabiliUes

LiabiliUes Payable From Restricted As. els:

Accrued inieresl payable from restricted ossets

Current porUon of long-tenn debt

Noncurrent LiabiliUes:

Advances from olher funds

Long-tenn debt

Total liuhililics

90.825

36,705

127,530

9.720

64,954

3.419.690

3.621,894

90,825

36,705

127,530

9,720

64,954

3,419,690

3.621,894

NET ASSETS:

Tnvaslcd in capital assets, net of related debt

Restricled for.

Debt service

Airport operations

Unresuicted

Total net assets (dcricit)

7,449,400

720,608

345,345

62.830

328,660

7.512,230

720.608

328,660

345.345

S 8,515.353 $ 391,490 $ 8,906,843

Tho accompanying notes are an Integral part of the financial statements.

-13-

Town of Pollock statement o f Revenues, Expenses and Changes in Fund NetAssets Proprietary Funds - December 3 1 , 2010

Busmess-Type AcliviUes - Enteiprise Funds

Oueratinff Rcveimcs:

Chaises for services

OUier

Total OpuruHng Revenues

Oncratiny Expenses:

Depreciation

Insurance

Lcgul and professional

GUier

Payroll taxes and benefits

Repairs und maintenance

Salaries and wages

UUlities ond lelephonc

Total Operating Expenses

Operating Income (Loss)

Nonoiicrntinii Revenues (Exnenses):

Interest income

hiterest expense

Timber Sale

Contributed Capita t

Chiingc in Net A.ssefs Before

Contributions and Transfers

Sneciul llcins and Tninsfers:

OpcraUng Transfers hi (Out)

Change in net assets

Total net assets - beginning

Total net asscis - ending

UUlily

System

$ 1,409,964 $

34.576

1.444,540

391,106

52,470

43.028

9,107

77.492

226,079

237,847

133,386

1,170,515

Municipal

Airport

1,300 $

-

1.300

4,210

-10.678

4,696

-

-

-569

20,153

Total

1,411.264

34.576

1,445,840

395.316

52,470

53.706

13,803

77,492

226,079

237,847

133,955

1.190.668

274.025

204,408

(99,347)

105,061

8,410,292

(18.853)

85.517

(22.276)

63.241

.328,249

255,172

18,139

(152,443)

-64.68? ,

2,645

-101,725

-

20.784

(152.443)

101.725

64,687

28!>,925

(121,623-)

168,302

8.738.541

S 8,515.353 $ 391.490 $ 8^06,843

The accompanying notes are an integral part ofthe financiai statements.

-14-

Town o f P o l l o c k

s t a t e m e n t o f Cash F lows

Propr ie ta iy Funds - Year Ended December 3 1 , 2 0 1 0

Ca.sh flow from operating nctivltics:

Cash received from customers

Cash paymenls to suppliers of goods and services

Cash paymenls to employees for services

Net cosh provided (used) by operaUng ocUvities

Cash flows from non^capilnl financinir activiries:

Repayment of advance

Change in due to from oUicr funds

OpcraUng Uunsfers out

Ad valorem Uixcs

Business-Type Activities - Enlerprise Funds

Utility

System

$ 1,410.712 $

(572,484)

(237.847)

600,381

Municipal

Airport

1,630 $

(16.150)

(14,520)

Total

1,412.342

(588.634)

(237,847)

585,861

(99.347)

24,276

(22.276)

24,276

(121,623)

Net cash provided (used) by non-capital financing

ucliviUes

Cash floivs from cnnital and related financing

activities:

Capital Expenditures

Debt Proceeds

Conhibuted Capital

Principle paid on long-term debt

Interest paid on long-tcmi debt

Net cash provided (used) by capilol ond related financing

activiUes

Cash flows from mvcstini» activities:

Cash received from Timber Snic

Interest and oUier income

Nel cash provided (used) by investing acUviUcs

Net inerense (dccrcaiic) in aisli

Beginning cash balance

Ending cash balance

Less restricted cash and cash equivalents

Cash and cush equivalents

(99.347)

(484,043)

371,000

64,687

(157,406)

(150.643)

(356,405)

-

18,139

18,139

162,768

901,710

1,064.478

730.328

$ 334.150 $

2,000

-

-

-

-

-

-

101.725

2.645

104,370

91,850

145,513

237.363

-

237.363 J

(97,347)

(484.043)

371,000

64,687

(157,406)

(150,643)

(356,405)

101,725

20,784

122,509

254,618

1,047.223

1.301.841

730.328

571.513

The accompanying notes are an integral part of the financial statements.

-15- Continued.

Town of Pollock s ta tement of Cash Flows (Continued) Proprietary Funds - Year Ended December 31, 2010

Business-Type Activities - Enterprise Funds

Rceoneilintinn of opcri\tiBg income (loss^

to n e t esxsXx

Operaling income (loss)

Adjustments lo reconcile operating income to net cash

provided by operaUng acUviUes:

Depreciotion

(Increase) dccrca.se in accounts receivable

fftecreuse) increase in accounts and oilier payables

(Decrease) increase in meter deposits

Net cash provided (used) by operating acUvities

UUIity

System

S 274.025

391,106

(33.917)

(30.923)

90

% 600,381

£

_

%

Municipal

Airport

(18.853) $

4.210

330

(207)

-

(14.520) %

Total

255,172

395,316

(33,587)

(31.130)

90

585,861

Sunnlcmental disclosures of ciishflow informiitioni During llie yeir ended December 31, 2010. the Airport Fund reduced the amount reported as an advance receivable Irom the general fund by $24,276 in e.\change lor services performed by Ihe Ihe Oeneral Fund Tlicrc were no furUier operating, finoncing, or invesUng acUvities during Uie year Uiat did not result in cash receipts or payments.

The accompanying notes are an integral part ofthe financial s ta tements .

-16-

TOWN OF POLLOCK, LOUISIANA Notes To Financia i Statements December 3 1 , 2010

NOTE 1 • SUMMARY OF SIGNTFICANT ACrOITNTINC POTJCTES

The Town of Pollock, Louisiana (the Town) was incorporated under the provisions of Louisiana Law. The Town is governed by its Mayor and a Board of AJdermen consisting of five members. Services provided to the citizens of Pollock include but are not limited to public safety (police and fire protection), streets, sanitation, water utility service, sewer utility service, and operation of a municipal airport.

The Town's accounting polices conform to generally accepted accounting principals for governmental units. The preparation of fmancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions tliat affect certain reported amounts and disclosiures. Accordingly, actual results could differ from those estimates. Some ofthe Town's more significant accounting polices are described as follows:

FINANCIAL REPORTING ENTITY

As the municipal governing authority, for reporting purposes, the Town is considered a separate financial reporting entity. The financial reporting entity consists of (a) the primary government (the Town), (b) organizations for which the primary govermnent is financially accountable, and (c) other organizations for which the nature and significance of tiieir relationsliip with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Govemmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determining which component units should be considered part ofthe Town of Pollock for financial reporting purposes. The basic criterion for including a potential component unit wthin the reporting entity is financial accountability. The GASB has set fortii criteria to be considered in determining financial accountability. These criteria include:

1. Appointing a voting majority of an organization's goveming body, and

a) The ability ofthe Town to impose its will on that organization and/or

b) The potential for the organization to provide specific financia! benefits to or impose specific financial burdens on the Town.

2. Organizations for which the Town does not appoint a voting majority but are fiscally dependent on the Town.

3. Organizations for which the reporting entity financial statements would be misleading if data oftiie organization is not included because ofthe nature or significance ofthe relationship.

Based upon application of these criteria, there were no potential component units and all of the Tovm's activities were included in tlie primary govemment reporting entity.

-17-

TOWN OF POLLOCK, LOUISIANA Notes To Financia i Statements December 3 1 , 2010

BASIC FINANCIAL STATEMENTS

The basic financial statements include both govemment-wide and ftmd financial statements. Both govemment-wide and fund financial statements categorize activities as eitlier govemmental activities or business-type activities, which are described as follows:

• Govemmental activities involve govemment services that are normally supported by taxes and intergovemmental revenues.

• Business-type activities rely on fees and charges for support and operate in a manner similar to private sector enterprises. Since proprietary funds operate in a manner similar to business enterprises, these funds follow certain pronouncements that are developed by the Financial Accounting Standards Board (FASB) for business enterprises. However, the Town only applies those FASB pronouncements that were issued on or before November 30,1989.

The govemment-wide and fiind financial statements present tlie Town's financial position and results of operations from differing perspectives which are described as follows:

GOVERNMENT-WIDE FINANCIAL STATEMENTS

The Statement ofNet Assets and the Statement ofActivities display information about the Town as a whole. The effect of most interfimd activity is eliminated fi-om these financial statements. Furthermore, govemment-wide fmancial statements exclude any fiduciary activities which are reported in the fund financial statements.

Program revenues reported in the Statement of Activities consist of amounts tliat are directly associated with a govemmental service or business-type activity. Program revenues include charges for services, fines, court cost, contributions associated with a particular function and most grants.

FUND FINANCIAL STATEMENTS

Funds are separate accounting entities that are designed to assist with demonstrating legal compliance and segregating transactions by activity. Separate financial statements are provided for governmental funds and business-type (enterprise) funds. In addition, separate financial statements are presented for any fiduciary activities. Major individual funds are reported as separate columns in the fund financial statements. The Town's major funds are described as follows:

MAJOR GOVERNMENTAL FUNDS

General Fund - The general fund is the primary operating fiind. It is used to account for all financial resources except those required to be accounted for in another fiind.

Canital Outlav - The capital outlay fund is a capital project fund used to account for construction projects conducted with funds provided by the State's capital outlay program.

MAJOR BUSINESS-TYPE FUNDS

Utility Svstem - The utility system fimd is used to account for the operation of the Town's water and sewer system, which is supported by user charges.

-18-

TOWN OF POLLOCK, LOUISIANA

Notes To Financial Siatements December 31, 2010

Municipal Airport - The Municipal Airport Fund is used to accoimt for the operation of the Town's airport, wliich is supported by revenue generated from the Airport and surrounding property.

Business-Type fiinds disfinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection witli the funds ongoing operations. Principal operating revenues are charges to customers for water and sewer service.

BASIS O F ACCOUNTING AND MEASUREMENT FOCUS

Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financiai stateinents. Basis of accounting relates to the timing ofthe measurements made, regardless of the measurement focus applied. The basis of accounting and measurement focus used for various financial statement presentations are described as follows:

Financial Statement PresentntJon Basis of Accounting Measurement Focus Govemment-Wide Financial Statements Accrual Basis Economic Resources Fund Financial Statements:

Govemmental Funds Modified Accrual Basis Current Financial Resources Proprietary Funds Accrual Basis Economic Resources Fiduciary Funds Accrual Bf is Economic Resources

Under the accrual basis of accounting and the economic resources measurement focus, revenues are recorded when earned and expenses are recorded when a liability is incurred.

Under the modified accmal basis of account and the currenl financial resources measure focus revenue Is recognized when it is considered measurable and available. Revenue is considered available if it is collected within 60 days of year end or if it is due under a cost reimbursement arrangement. In addition, expenses are generally recorded when a liability has been incurred; however, debt service, claims and judgments are recorded as expenses when payment is made. Furthennore, when the current financial resources measure focus is used, amounts recorded as assets exclude capital assets and the acquisition of capital assets is treated as an expenditure. In addition, long-term debts are excluded from amounts reported as liabilities. Proceeds from issuing long-term debt are reported as an other financing source and repayment of long-term debt is reported as an expenditure.

BUDGETARY CONTROL

The Mayor prepares an annual budget for the Town's general fund. This budget is submitted to the Board of Aldermen and an approved budget is adopted before the beginning of each fiscal year. Amended budgets are prepared prior to the conclusion of each fiscal year. The amended budgets are prepared and approved in the same manner as the original budget.

The general fimd budget presents revenue and expenditures on a basis which is consistent with generally accepted accounting principles. No annual budget is required for the Tovm's Utility Fund.

-19-

TOWN OF POLLOCK, LOUISIANA Notes To Financia i Statements December 3 1 , 2010

CASH AND CASH EQUIVALENTS

Amounts reported as cash and cash equivalents (restricted and unrestricted) include all cash on hand, cash in bank accounts, certificates of deposit and highly liquid investments. Credit risk associated with bank deposits is limited by requiring fiscal agent banks to pledge securities as required by Stale Law. Furthermore, hiterest rate risk associated witli certificates of deposits is typically mitigated by purchasing instruments that matiure in one year or less.

INTERNAL ACTIVITY:

Interfund transactions are reported as operating transfers when the recipient fund is not expected to provide repayment. Transacfions tliat are expected to result in repayment are reported as interftind receivables and payables. Any interfund receivables and payables that are not expected to be repaid with one year are classified as advances.

In preparing the govemment-wide fmancial statements, internal acfivity is eliminated to present net amounts for governmental acfivities and business-type activities.

RESTRICTED ASSETS:

Restricted assets represent resources that must be expended in a specific manner. Restrictions of this nature are imposed by various contractual obligations including grant agreements and bond covenants. Whenever restricted assets can be used to satisfy an obligation, the restricted assets are typically consumed before utilizing any unrestricted resources.

CAPITAL ASSETS

Capital assets, which include property, equipment and infrastructure acquired after December 31, 2003, are reported as assets in the applicable governmental or business-type columns in the govemmenl-wide financial statements and in the fund financial statements for proprietary funds. Assets reported in the fund financial statements for governmental funds exclude capital assets. Instead, the governmental funds report the acquisition of capital assets as expenditures rather than asset acquisitions.

All capital assets are valued at historical cost or esfimated historical cost if actual historical cost is not available. Donated assets are valued at their fair market value when received by the Town, Capital assets are depreciated using the straight-line method and estimated useful lives ranging from 3 to 40 years. Useful lives are selected depending on the expected durability ofthe particular asset.

COMPENSATED ABSENCES

The Town does not accumulate unpaid vacation, sick pay, and other employee benefit amounts because employees are not allowed to carry over significant amounts.

NOTE 2 - CASH ANT) CASH EOTJTVALENTS

Deposits are staled at cost, which approxunates market. Under state law, deposits must be secured by federal deposit insurance or the pledge of securities owned by die fiscal agent bank. The market value oftiie pledged securities plus the federal deposit insurance must at all times equal tiie amount on deposit

-20-

TOWN OF POLLOCK, LOUISIANA

Notes To Financial Statements December 31, 2010

with the fiscal agent. These securities are held in the name ofthe pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties.

At December 31, 2010, tiie Town had $1,520,403 in deposits (collected bank balance). Tiiese deposits are secured from risk by $250,000 of federal deposit insurance on demand deposits; $250,000 of federal deposit insurance on the Interest Bearing Accounts for a total of $500,000 and $1,255,894 of pledged securities held by the custodial bank in the name ofthe fiscal agent bank.

NOTF^-RFrFTVABLES Receivables at December 31 , 2010 consisted oftiie following:

Governmental Business-Type

Activities Activities

Accounts Receivable

Charges for Services

Franchise Taxes

Ad Valorem Taxes

Otiier

Total Accounts Receivable

Due From Other Govemments

Sales Taxes

LCLE Grant

Total Due From Other Govemments

Receivables, net

NOTE 4 - L O N G - T E R M D E B T

$ —- $

5,203

6,788

11.991

6,596

12,895

19,491

$ 31,482 $

131,979

7,656

139.635

—

139,635

Long-term debt outstanding at year end is described as follows:

Governmental Business-Type Activities Activities TOTAL

Utility Revenue Bonds

Total Obligations Due Within One Year

Due in More Than One Year $

3,484,644

3,484,644 —- 64,954

-™ $3,419,690

3,484,644

3.484,644 64,954

$3,419,690

- 2 1 -

TOWN OF POLLOCK, LOUISIANA

Notes To Financial Statements December 3 1 , 2010

Long-term debt activity for the year ended December 31,2010, is presented as follows:

Business-TvDc Activities General Obligation Bonds Utility Revenue Bonds

Total Long-term Debts

Beginning Balance

$ 3,271,050

$ 3,271,050

Additions

$ 371,000

$ 371,000

G E N E R A L O B L I G A T I O N AND UTILITY R E V E N U E BONDS

Reductions

$ — 157,406

$ 157,406

Ending Balance

J

3.484,644

$ 3,484,644

At December 31,2010 the following Bond Issues were outstanding:

$2,525,000 Utility Revenue Bonds, dated May 12, 1999, with proceeds to be collected in installments for the purpose of funding construction costs. Due in monthly installments of $l!,994 including interest of 4.75% beginning May 12, 2001, final installment due May 12,2039.

$930,000 Utility Revenue Bonds, dated November 11, 2004, with proceeds to be collected in installments for the purpose of funding construction costs. Due in monthly installments of $4,222 including interest of 4.5% beginning December?, 2005, final installment due December 15,2044.

$371,000 Utility Revenue Bonds, dated January 22, 2010, with proceeds to be collected in installments for the purpose of funding construction costs. Due in varying semi-annual installments with the first installment of interest only and the second interest and principal; totaling between $26,000 and $27,500 per year, including interest of 2.95% beginning May 1, 2010, final installment due November 30,2030. Total

Outs tanding Balance Utility General

Revenue Obligation

2,235,060

878,584

371,000

$3,484,644

-22-

TOWN OF POLLOCK, LOUISIANA

No tes To F i n a n c i a i S t a t e m e n t s December 31 , 2010

A schedule of maturities of general obligation and utility revenue bonds is presented as follow:

2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2044 Total

NOTE 5 - CAPITAL ASSETS

A summary of capital transactions for the

Governmental Activities Non Depreciable Capital Assets

Land Donated Property Construction in Process

Total

Depreciable Capital Assets Buildings and Improvements Vehicles Fumiture, Fixtures and Equipment

Utility Revenue

$ 64,954 67.349 69,860 73,491 76.249

433,462 537,177 665,117 701,683 621,044 174,258

$ 3,484,644

Interest

$ 156,793 154,513 151.495 148.347 145,038 670,448 562,999 429,427 271,270

96,582 15,399

$2,802,311

year ended December 31, 2010 follows:

Beginning Balance Ad

$ 148,864 S —

14,108 162,973

248,652 110,853 60,509

ditions Disposals

— s 140,000 —

14.108 140,000 14,108

14,108 — — • —

23,440 —

Ending Balance

$ 148,864 140,000

— 288,864

252,760 110.853 83,949

Accumulated Depreciation Total

Tolal Govemmental Activities

(215,374) (37,331) 204.640 217

$ 367,612 $ 140,217

— —

$ 14,108

(252.705) 204,857

$ 493,721

-23-

TOWN OF POLLOCK, LOUISIANA Notes To Financiai Statements December 31, 2010

Busincss-TvDC Activities Non Depreciable Capital Assets

Land and Right of Ways Utility Construction in Process

Total

Depreciable Capital Assets Water Distribution System Wastewater System Airport Improvements Prison Utility System Accumulated Depreciation

Total

Total Business-Type Activities

Beginning Balance

$ 20,600 48,666 69,266

2,266.123 1.905.194

181.360 10.671,616 (4,185,412) 10,838,881

$ 10,908,147

Additions Disposals

$ .._ $ 445,331 — 445.331 —

14,497 ~ 24,214 —•

(395,315) (356,604)

$ 88,727 $

Ending Balance

$ 20.600 493,997 514,597

2,280,620 1,929,408

181,360 10.671.616 (4,580,727) 10,482.277

$ 10,996,874

Depreciation expense charged to various functions presented on the statement of activities is •resented as follows: presented as follows:

Governmental Business-Type Activities Activities Tolal

General Govemment $ 9,953 $ — $ 9,953 Public Safety 27,378 — 27,378 Utility System — 391,106 391,106 Municipal Airport --- 4,210 4,210

Total Depreciation Expense $ 37,331 $ 395,316 $ 432,647

NOTE 6 - AD VALOREM TAXES

The Town bills and collects its own property taxes using the assessed values determined by the Tax Assessor of Grant Parish. For the year ended December 31, 2010, the Town levied 7.52 mills for general corporate purposes.

Ad valorem taxes are assessed on a calendar year basis and are due on or before December 31 in the year the tax is levied. Revenues from ad valorem taxes are recognized as revenue in the year billed. There were no material amounts of uncollectible ad valorem taxes at December 31,2010.

-24-

TOWN OF POLLOCK, LOUISIANA

Notes To F inanc ia i Statements December 3 1 , 2010

NOTE 7 - RTSK MANAGEMENT The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks of loss are covered by participation in a public entity risk pool that operates as a common insurance program and by acquiring commercial insurance coverage. Claims resulting fi'om these risks have historically not exceeded insurance coverage.

NOTE S - PENSION PLAN

The Town of Pollock's employees are covered by the State Retirement System for municipal employees with the exception of one police officer who is covered by the Municipal Police Employees Retirement System of Louisiana,

In January 2010 the Town joined the State Retirement System for is municipal employees. This system is a cost-sharing, multiple-employer defined benefit pension plan administered by a separate board of trustees. Pertinent information relative to tiie plan follows:

Plan Description. Tlie System is composed of two distinct plans, Plan A and Plan B, witii separate assets and benefit provisions. All employees ofthe municipality are members of Plan B.

All permanent employees working at least 35 hours per week who are not covered by another pension plan and are paid wholly or in part from municipal fimds and all elected municipal officials are eligible to participate in the System. Under Plan B, employees who retire at or after age 60 witii at least 10 years of creditable service at or after age 55 with at least 30 years of creditable service are entitled to a retirement benefit, payable montiily for life, equal to 2 percent of their final average monthly salary in excess of $100 for each year of creditable service. FurUiermore, employees with at least 10 years of creditable service, but less than 30 years, may take early retirement benefits commencing at or after age 60, witii the basic benefit reduced 3 percent for each year retirement precedes age 62, unless he has at least 30 years of creditable service. In any case, monthly retirement benefits paid under Plan B cannot exceed 100 percent of final average salary. Final average salary is the employee's average salary over the 36 consecutive or joined montiis that produce the highest average. Employees who terminate witii at least the amount of creditable service stated above, and do not witiidraw their employee contributions, may reture at tiie ages specified above and receive the benefit accmed to tiieir date of termination. The System also provides death and disability benefits. Benefits are established or amended by state statue.

The System issues an annual publicly available financial report that includes financial statements and required supplementary information for tiie System. That report may be obtained by writing to the Municipal Employees Retirement System of Louisiana, 7937 Office Park Boulevard, Baton Rouge, Louisiana 70809, or by calling (225) 925-4810.

Fimding Policy. Under Plan B, members are required by state statue to contribute 5.0 pereent of tiieir annual covered salary and the Town of Pollock is requured to contribute at an actuarially detemiined

-25-

TOWN OF POLLOCK, LOUISIANA Notes To Financia l Statements December 3 1 , 2010

rate. Contributions to the System also include one-fourth of one percent (except Orleans and East Baton Rouge parishes) oftiie taxes shown to be collectible by tiie tax rolls of each parish. These tax dollars are divided between Plan A and Plan B based proportionately on the salaries of the active members of each plan. The contribution requirements of plan members and the Town of Pollock are established and may be amended by state statue. As provided by Louisiana Revised Statue 11:103, the employer contributions are determined by actuarial valuation and are subject to change each year based on the results oftiie valuation for tiie prior fiscal year.

One police officer ofthe Tovm of Pollock is enrolled in the Municipal Police Employees Retirement System of Louisiana. This system is a cost-sharing, multiple-employer defined benefit pension plan administered by separate board of trustees. Pertinent information relative to this plan is presented as follows:

Plan Description. All fiill-thne police department employees engaged in law enforcement are eligible to participate in tiie System. Employees who retire at or after age 50 with at least 20 years of creditable service or at or after age 55 with at least 12 years of creditable service are entitled to a retirement benefit, payable monthly for life, equal to 3 percent of their final-average salary for each year of creditable service. Final-average salary is tiie employee's average salary over the 36 consecutive or joined montiis that produce tiie highest average. Employees who terminate with at least the amoimt of creditable service stated above, and do no withdraw their employee contributions, may retire at tiie ages specified previously and receive tiie benefit accrued to tiieir date of termination. The System also provides death and (Usability benefits. Benefits are established or amended by state statute.

The System issues an annual publicly available financial report tiiat includes financial statements and required supplementary infonnation for the System. That report may be obtamed by writing to tiie Mumcipal Police Employees Retirement System of Louisiana, 8401 United Plaza Boulevard, Baton Rouge, Louisiana 70800-2250, or by callmg (225) 929-7411.

Fimding Policy. Plan members are required by state statute to contribute 7.5 percent of tiieir annual covered salary and the Town is required to contribute at an actuarially determined rate. The contribution requirements of plan members and the Town is established and may be amended by state statute. As provided by Louisiana Revised Statute 11:103, the employer contributions are detemiined by actuarial valuation and are subject to change each year based on the results of tiie valuation for tite prior fiscal year. The Town's contributions to tiie System for tiie years ending December 31,2010 were equal to the required contributions for the year.

NOTE 9 - TNTERGOVERNMENTAL ACREEMF.NT

The Town operates a mumcipal mrport on property tiiat was originally donated by the Federal Govemment. Since the property was provided by Federal sources, the Federal govemment retains a degree of oversight responsibility. In the course of exercising its oversight responsibility, the Federal Aviation Administration (FAA) determined tiiat certain monies generated by the Aiiport property were used to fund non-akport municipal expenditures in violation with its agreements.

-26-

TOWN OF POLLOCK, LOUISIANA

Notes To Financiai Statements December 3 1 , 2 0 1 0

In response to tiie findmgs described above, the Town has entered into a repayment agreement witii tiie FAA. The agreement, which was accepted by the FAA on November 11, 1987 requires tiie general fimd to repay a total of $350,899 to the Municipal Auport Enterprise Fund. Under tiie terms of tite repayment agreement, the general fimd is required to execute $2,000 installments on an annual basis. In addition, the general fund will receive credit for the following in-kind services provided on behalf of the Airport.

• Twenty-four percent (24%) oftiie Tovwi Clerk's salary. • An armual allowance of $600 for the Town Clerk's office expense. • Twenty-six percent (26%) oftiie Police Chiefs salary. • An annual allowance of $900 for the Police Chiefs vehicle expense.

The amount currently payable by tiie general fimd to the municipal airport enterprise fiind is presented as an advance in the accompanying financial statements. The amount presented in the accompanying financial statements was computed as follows:

Orieinal Balance-November 11,1987 $ 350,899 In-kind payments for the year ended:

December 31,1995 tiirouRh December 31,2009 (206,236) December31,2010 (22,276)

Cash pavments for vear 1995 tiu-oush 2010 (32.000)

Balance-December 31.2010 $ 90,387

NOTE 10 - RESTRICTED RESOURCES Restrictions on the Town's utility fimd imposed by various laws, regulations, contracts and grants are summarized as follows:

Bond covenants require the Town to establish bank accoimts wliich serve as debt service and depreciation reserves. Funds may be disbursed ftQm these accounts only under specific circumstances described by the bond covenants.

Assets, liabilities, and equity classified as restricted are summarized as follows:

Cash $ 730,328 Liabilities Payable from Restricted Assets 9,720 Total Restricted Retamed Eamings $ 720,608

-27-

TOWN OF POLLOCK, LOUISIANA Notes To Financia i Statements December 31 ,2010

The Town also operates a mimicipal airport on property tiiat was originally provided by Federal sources. Restrictions imposed by the donor require resotorces generated by the property to be used solely for operation ofthe Aiiport and maintenance ofthe property. Accordmgly, resources held by the Municipal Airport Fund in tiie amount of $328,660 have been classified as restricted,

NOTE n -CONTTNGENCTES

Portions of the Town's Utility Systems are located in the right of way of various state roads. In connection witii improvements to the State Highway System, it has been necessary for the town to relocate portions of its service lines. In order to assist with tiie -financial burdens of line relocation, the state has provided Utility Relocation Assistance Funds (URAF) to the town. The URAF program states that such assistance are not loans and the town is not currently required to repay or reimburse the state for this funding. The town may eventually be required to reimburse/repay these funds in order for tiie town to have access to state owned rights of ways in tiie fiiture. For tiic years ended December 31, 2002 and 2003, the town received $260,995 in URAF assistance. The amount of URAF assistance the town has received in years prior to 2002 cannot be presently be determined.

NOTE 12 - ECONOMIC DEVELOPMENT ACTTVITrES

In order to enhance the local economy and provide employment opportunities for the citizens of Pollock, tiie Tovm has devoted substantial attention and resources to the development of a federal prison facility. The Town's activities associated with tiiis project are summarized as follows:

PMSQN SITE

In order to make the Town's property available for a prison site it was necessary to negotiate a release fi-om deed a restriction that encumbered tiie property. As consideration for the release ofthe deed restriction, tiie FAA required compensation for Town's Municipal Airport. Tlie Town agreed to provide compensation by transferring fimds from tiie Utility System to the Municipal Airport. Under the terms of this arrangement, fimds are required to be transferred in annual installments of $19,800. Furthermore, the annual transfers must be completed for a period often consecutive years beginning March 31,20QQ. During 2009, the Town paid its final payment on this obligation.

Based on the present value ofthe compensation payable to Municipal Airport, the cost ofthe Utility System's investment in the prison site was determined to be $154,764. Upon release of tiie deed restriction, the prison she was donated to the Bureau of Prisons.

UTILITY SERVICE COMMITMENT

The Town has entered into an agreement to provide water and sewer service for the tederal prison facility. In order to fiilfill this commitment, the Town constructed a new water system and sewer system. Fimding for a portion of new utiHty infrastructure was provided by a tap fee in tiie amount of $1,000,000 tiiat was collected from the Bureau of Prisons during 1999. Funding for the remaining improvements was provided by a capital outlay project and by issuing revenue bonds. In September 2003, the Town negotiated a second Prison site witii the Bureau of Prisons which calls for a payment of a tap fee of $ 3,023,750 and increased montiily utility fees. This new tap fee has covered tiie costs

-28-

TOWN OF POLLOCK, LOUISIANA

Notes To FinancialStatements December 31, 2010

of needed expansion of the water and sewer systems to accommodate the new facility. This $3,023,750 tap fee was received and recorded as revenue in 2004.

Revenue eamed from providing services to the Bureau of Prisons will be used to operate the Utility System and service debt incurred in connection with construction of the system. Furthermore, income from the Utility System will provide a source of fimds for compensatmg the Municipal Airport for land that was included in the prison site.

NOTE \7. - INTERNAL ACTIVITY

Forthe year ended December 31, 2010, intemal activity is summarized as follows:

Internal Internal Balances Transrers

Advances $ 114,663 $ — Due From (To) Other Funds — — Operating Transfers 138,299

Total 114.663 138,299 Intemal Eliminations 24,276 16,676

Net Total $ 90,387 $ 121,623

Further detmls regarding intemal activity are provided as follows:

ADVANCES

As discussed previously, the Municipal Airport Fund is entitled to collect certain advances from other funds. The nature of these advances and the current balances are described in the following manner:

Tiie Municipal Aiqjort Fund has provided advances to the General Fund. As discussed in Note 9, the original balance of $350,899 is being eliminated tiirough o formal repayment plan $90.387

Total Advances $ 90,387

DUE FROM (To) OTHER FUNDS

No interfimd balances of a short-term nature were reported at December 31,2010.

-29-

TOWN OF POLLOCK. LOUISIANA Notes To Financia i Statements December 3 1 , 2010

OPERATING TRANSFERS

Details related to interfimd transfers are presented as follows:

As discussed in Note 9, the intergovemmental agreement with tiic FAA allows certain resources to be transferred from the Municipal Airport Fund to the General Fund. $ 22.276

The Utility Fund has incurred certain expenses on behalf of the General Fund without expectation of reimbursement. 100,459

The General Capital Projects Fund transferred resources to the Utility Fund in the current year. (1,112)

Total Operatina Transfers In (Out) S 121,623

NOTE 14 - DONATED PROPERTY

On August 30,2010 James and Claudia Balfour donated a property located at 3911 Hwy 8, Pollock, Louisiana to tiie Town. The property includes a building and approximately four acres of land. The appraised value of this property if $140,000. As of December 31, 2010 this property was not placed in service and is not being depreciated in tiie current year.

NOTE 15 - GRANT REVENUES

During 2010 the Tovm received grant revenues from various sources. The Tovm received $12,985 of Grant proceeds from tiie Louisiana Commission on Law Enforcement project Criminal Justice Teclmology Upgrades. The money was used to purchase equipment for the police department.

Also, in 2010 tiie Town began construction of a ground storage tank. The Tovm was authorized to borrow $530,000 to construct this tank. These borrowings were structured in two bond issues, administered by the Louisiana Department of Healtii and Hospitals Drinking Water Revolving Loan Fund. The First Loan is the Water Revenue Bond Series 2010 A. Tins loan was stmctured to be forgiven as proceeds were received. In 2010 the Town received $64,687 on this series and reported this forgiven loan as contributed capital in the accompanying financial statements. The second loan is Water Revenue Series 2010 B. This is reported as Bonds Payable in the amount of $371,000 in the accompanying financial statements.

The police grant and ground storage tank projects were fiinded by the American Recovery and Reinvestment Act (ARRA Funds). In 2010 tiie Town incurred $445,331 ofFederal Expenditures on tills project. In 2009 the Town reported ARRA Expenditures of $48,666 in the financial statements. A recap ofFederal Grant Fund expenditures in 2009 and 2010 are as follows:

Ground Storage Police Tank Total

2009 S — S 48,666 $ 48,666 2010 .12,985 445,331 458,316

Totals 2009 & 2010 £ 12,985 % 493,997 $506.982

-30-

Town of Pollock General Fund

Statement of Rc^'cnucs, Expenditures and Changes in Fund Balances

Budget (Casli Basis) and Actual (Cash Basis) - Year Ended Dcccniher 31,2010

Budget Amounts Original Final

Actual Amounts

Variance witli

Final Budget

Positive (Negative)

Revenues:

Taxes:

Ad valorem

Sales

Frandiise la.\es

Licenses & permits:

Intergovemmental

Fines and forfietures

Otiier

Total revenues

General Guvcrnment:

Current

General govemment

Public safety- police department Sanitation

Streets Capilal e.\pcndilurK

Total expenditures

Excess (Deficiency) of

Revenues Over Expenditurcs

Other Financing Sources (Uses):

Operating transfers in Operating transfer out

$ 7,700 $

55,000

24,000

37,500

-

206,000

37,000

367,200

196,110

220,850 22,780

--

439,740

(72,540)

65,000

-

9,700 $

55,000

24,000

37.500

-

206,000

71.500

403,700

238,110

204,850

22,780

--

465,740

(62,040)

65,000

(50,000)

13,081 $

54,806

20,381

39,528

13,835

210,765

74,270

426,666

245,629

197,235

21.662

14,400 23,440

502,366

(75,700)

87.736

(15,564)

3,381

(194)

(3,619)

2,028

13,835

4,765

2,770

22,966

(7,519)

7,615

1,118

(14.400) (23,440)

(36.626)

(13,660)

22,736

34,436

Net Change in Fund Balances (7,540) (47.040) (3,528) 43,512

Fund Balance (Deficit) -

Beginning of Year 2,401 2,401 2,401

Fund Balance (Deficit) -

End OfYear $ (5,139) $ (44.639) $ (1.127) % 43.512

-31-

Town of Pollock General Fund Notes to Schedule of Revenues, Expenditures and Changes In Fund Balances Budget (Cash Basis) and Actual (Cash Basis) - Year Ended Decemlier 31,2010

The Town of Pollock adopts its operating budget for the general fiind on the cash basis of accounting, which differs from generally accepted accounting principals (GAAP). A reconcilation ofthe change in fimd balance determined using the cash basis of accounting and the change in fund balance based on GAAP is provided as follows:

Change in Fund Balance - GAAP Basis

Non Cash Operating Transfers In

Cash Payment to Airport Fund

Accounts Receivable Current

Prior

Interfund Receivables Current Prior

Accounts Payable Current Prior

Interfund Payables Current Prior

$ 47,035

(22,276)

(2,000)

(31,482)

24.460 (7.022)

10.124 (7.853) 2,271

Change in Net Assets - Cash Basis $ 18,008

-32-

Town of Pollock Schedule of P e r Diem Paid to Board Members

For the y e a r ended December 3 1 , 2010

Jerome Scott, Mayor Faye Mayeaux Winnie Nichols Charles Butterfield, Jr. Sharon Zeh R, Wilkins, Sr.

Total

$

$

9.000 3,000 3,000 3.000 3,000 3,000

24,000

-33-

ROZIER, HARREVGTON & MCKAY CERTIFIED PUBLIC ACCOUNTANTS 1407 PETERRUN DRIVE • ALEXANDRIA, LOUISIANA 71301

M A I L I N G ADDRESS

J O H N S . ROZIER, IV, CPA POSTOMCE BOX 12178

M A R K S . MCKAY. CPA ALEXANDRIA, LOUISIANA 71315-2178

L E E W. WILLIS, CPA

RHOHDA I . RACHAL, CPA TELEPHONE (318) 442-1608

S T E V E N S . K IMBALL , CPA TELECOPIER (318) 4B7-2027

aEOROETTE VEMCHEK, C P A M. DALE HARRINGTON, CPA

RETIRED-2005

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLUNCE AND OTHER MATTERS BASED ON AN AUDIT

OF FINANCUL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

June 26.2011 The Honorable Mayor and

Members ofthe Board of Aldermen Town of Pollock, Louisiana

We have audited the financial statements ofthe govemmental activities, the business-type activities, and each major fimd ofthe Town of Pollock, Louisiana, as ofand for the year ended December 31, 2010, which collectively comprise the Town of Pollock's basic financial statements and have issued our report thereon dated June 26, 2011. We conducted our audit in accordance with auditing standards generally accepted in the Uruted States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Town of Pollock's intemal control over financial reporting as a basis for designing om- auditing procedures for the purpose of expressing our opinions on the financial statements, but not for tiie purpose of expressing an opinion on tiie effectiveness of the Town of Pollock, Louisiana's intemal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe Town's internal control over fmancial reporting.

A deficiency in internal conbxjl exists when tiie design or operation of a control does not allow management or employees, in tiie normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility tiiat a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.

-Members-Amarlean Instttuto of Cortmod Public Accounfaints • Socloty of Louisiana, CPAs

-34-

Town OfPollocii December 3 1 , 2010 Page 2

Our consideration of intemal control over financial reporting was forthe limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in intemal control over financial reporting that miglit be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies ui mtemal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified certam deficiencies in intemal control over financid reporting, described in the accompanying schedule of findings and questioned costs that we consider to be significant deficiencies m uitemal control over financial reporting, 2010-1. A significant deficiency is a deficiency, or a combination of deficiencies, in mtemal control that is less severe than a material weakness, yet important enough to merit attention by those charged with govemance.

Compliance and Other Matters As part of obtaming reasonable assurance about whether the Town of Pollock, Louisiana's financial statements are fi-ee of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance witii those provisions was not an objective ofour audit, and accordingly, we do not express such an opmion. The residts of our tests disclosed no instances of noncompliance or other matters tiiat are required to be reported under Govemment Auditing Standards.

The Town's response to tiie findings identified in our audit is described in tiie accompanying schedule of findings and questioned costs. We did not audit the Town's response and, accordingly, we express no opinion on it.

This report is intended solely for the infomiation and use of management. Town Council, others witiiin the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Rozier, Harrington & McKay, Certified Public Accountants

Alexandria, Louisiana June 26,2011

-35-

TOWN OF POLLOCK Sci^eduie o fF ind ings a n d Questioned Cost For t i te Year Ended December 3 1 , 2010

PART T - SUMMARY OF ATimTOR'S RESULTS:

• The Independent Auditor's Report on the primary govemment financial statements for tiie Town of Pollock as of December 31, 2010 and for the year then ended expressed an unqualified opinion.

• The report on intemal control included significant deficiencies reported as 2010-1 appearing below.

• The results of the audit disclosed no instances of noncompliance that are considered to be material to the financial statements ofthe Tovm of Pollock.

PART TT - FINDTNfiS RFT.ATTNG TO THF. FINANCTAL STATEMENTS WHICH ARF. REOUTRED TO BE REPORTED TN ACCORDANCE WTTH OENERALT.Y ACCEPTED GOVERNMENTAL AUDTTTNfi STANDARDS:

2010-1: TRAFFIC FINES

During our test of traffic fines, it was noted that the police were not always writing tickets in numerical sequence.

PART m - FINDINGS AND OUESTTONED COSTS FOR FEDERAL AWARDS WHICH SHALL TNCLTTDE AIIDIT FINDINGS AS DEFINED RY OMR CTRCUT.AR A-133: • N/A

-36-

Town Of Pollock Management 's Corrective Action Plan December 3 1 , 2010

SECTION I INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL STATEMENTS.

2010-1: TRAFFIC FINES

During our test of traffic fines, it was noted that the police were not always writing tickets in numerical sequence.

2010-1: RESPONSE The town is in the process of reviewing our policy and procedures related to traffic fines and will make any policy changes deemed necessary.

SECTION II INTERNAL CONTROL AND COMPLL^NCE MATERIAL TO FEDERAL AWARDS

A single audit was not required. Response - N/A

SECTION m MANAGEMENT LETTER

N/A- No Management Letter issued. L

Response-N/A

-37-

Town o f Pol lock Summary o fPr io r Year Findings and Questioned Costs December 31, 2010

SECTION I I N T E R N A L C O N T R O L AND C O M P L I A N C E M A T E R L \ L T O T H E FINANCIAL

S T A T E M E N T S .

2009-1: BANK ACCOUNT ADMINISTRATION

Certain bank accounts have been established for limited and specific purposes. These accounts typically have minimal activity; however, the accounts were not reconciled to the general ledger in a timely manner. In addition, interest eamed on certificates of deposits was not always recorded on tlie general ledger. In the fiiture, all accounts should be reconciled periodically and all interest eamed should be recorded. These policies should be applied to all bank accounts regardless of transaction volume or size.

2009-2: THEFT OF MONIES FROM THE POLICE STATION

APPROXIMATEt,Y $1,000 WAS STOLEN FROM THE POLICE EVIDENCE Rooivt. Tins tuiATTER HAS BEEM TUIWED OVER

TO THE GRANT SHERIFF'S OFFICE FOR INVESTIGATION.

2009-3: TRAFFIC FINES

During our test of traffic fines, it was noted that the police were not always writing tickets in numerical sequence.

2009-4: EMPLOYEE THEFT

In 2009 a theft of revenue from trai^c fines was discovered. We reviewed the ticket revenues from January I, 2009 through May 23, 2009 and discovered a total of $2,195 of monies that had been stolen. This matter and associated theft work papers were tumed over to the Grant Sheriffs Office. Per conferences with the sheriffs office, the investigation is complete.

2009-1: lUiSOLVED

The Town Clerk has begun receiving information from the bank and periodically reconciling tlie statements.

2 0 0 9 - 2 : RESOLVED

THIS MATTER WAS BEEN TURNED OVER TO TIIE GRANT

SHERIFF'S DEPARTMENT FOR INVESTIGATION AND

PROSECtrriON. NEW PROCEDURES HAVE ALSO BEEN

IMPLEMENTED TO ENHANCE THE CONTROL OF TIIE

EVIDENCE ROOM.

2Q09-3: UNRESOLVED

THE TOWN IS IN THE PROCESS OF REVIEWING OUR POLICY

AND PROCEDURES REUTED TO TRAFFIC FINES AND WILL

MAKE ANY POLICY CHANGES DEEMED NECESSARY.

2 0 0 9 - 4 : RESOLVED

RESOLVED. OUR ESTABLISHED PROCEDURES WORKED

PROPERLY IN DETECTING THE THEFT. THIS MATTER AND ALL

SUPPORTINO DOCUMENTATION HAVE BEEN TURNED OVER TO THE GRANT SHERIFF'S OFFICE FOR INVESTIGATION AND

PROSECUTION. THE TERMINATED EMPLOYEE PLED GUILTY

AND ARRANGED RESTrrUTION.

-38-

Town Of Pol lock Summary o f Pr ior Year Findings and Questioned Costs December 3 1 , 2010

SECTION II INTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS

A single audit was not required. Response - N/A

SECTION III MANAGEMENT LETTER

N/A- No Management Letter issued. Response - N/A

-39-