FOR THE YEAR ENDED JUNE 30, 2014

MANAGEMENT’S DISCUSSION AND ANALYSIS

MANAGEMENT’S DISCUSSION AND ANALYSISTOWN OF TRUCKEE, CALIFORNIA

JUNE 30, 2014

Fiduciary funds are used to clear funds for the benefit of out-of-town clients. As of June 30, 2014, Citywide's assets exceeded liabilities (net balance) by $180.6 million. Net position, as mentioned earlier, can serve as a useful indicator of a city's financial position over time.

The town can use unlimited net position of the solid waste, parking, buildings and safety and transit funds to finance their ongoing operations. Of the Town's state funds, all but the capital projects fund ended the year with a positive fund balance. Of the total fund balance, $7.4 million or 16% is unallocated, which is available for spending at the town's discretion.

The city's parking, solid waste, construction and safety and transportation funds ended the year with a positive, unrestricted net position. State statutes limit the amount of general debt to 15% of the city's total assessed valuation, which was $5,236.5 million in fiscal year 2014.

MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2014

BASIC FINANCIAL STATEMENTS

STATEMENT OF NET POSITION

TOWN OF TRUCKEE, CALIFORNIA

STATEMENT OF ACTIVITIES

TOWN OF TRUCKEE, CALIFORNIA STATEMENT OF ACTIVITIES

GOVERNMENTAL FUNDSBALANCE SHEET

GOVERNMENTAL ACTIVITIES

TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION - RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES

GOVERNMENTAL FUNDS AND CHANGES IN FUND BALANCES

GOVERNMENT FUNDS AND CHANGES IN THE FUND BALANCE SHEET AND CHANGES IN THE FUND STATEMENTS STATEMENT OF REVENUES, EXPENDITURES. GOVERNMENT-WIDE ACTIVITIES STATEMENT - GOVERNMENT ACTIVITIES AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE.

GOVERNMENT-WIDE STATEMENT OF ACTIVITIES - GOVERNMENTAL ACTIVITIESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

PROPRIETARY FUNDS STATEMENT OF NET POSITION

PROPRIETARY FUNDS AND CHANGES IN NET POSITION

PROPERTY FUNDS AND CHANGES IN NET POST AND CHANGES IN NET POST STATEMENT OF INCOME, EXPENDITURE,.

PROPRIETARY FUNDS STATEMENT OF CASH FLOWS

Cash and Cash Equivalents - Net cash at year-end provided by (used for) non-capital financing activities.

FIDUCIARY FUNDS

STATEMENT OF NET POSITION JUNE 30, 2014

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONTOWN OF TRUCKEE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTSTOWN OF TRUCKEE, CALIFORNIA

FINANCIAL REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity

NOTES TO THE BASIC FINANCIAL STATEMENTS

FINANCIAL REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

On the basis of the occurrence of the business event, income from real estate taxes is recognized in the fiscal year for which the taxes are calculated. Income from grants, rights and donations is recognized in the financial year in which all eligibility conditions are met. The main operating income of corporate funds is the cost to customers for sales and services.

For purposes of the accompanying statement of cash flows, the business and fiduciary funds consider all highly liquid investments with a maturity of three months or less when purchased, and their equity in the Town's investment pool, to be cash equivalents. Each fund's share in this pool is shown in the accompanying financial statements as cash and investments. Investments are reported in the accompanying balance sheet at fair value determined annually using selected bases.

In the statements for the entire country, receivables consist of all revenues generated at the end of the year and not yet received. In the financial statements of the fund, material receivables in state funds include pre-calculated revenues such as taxes, donations, interest and other similar interstate revenues, as they are usually measurable and available. Non-exchange transactions that are recoverable but not available are deferred in the financial statements of the fund in accordance with the modified accrual of business events, but are not deferred in the financial statements for the entire country in accordance with the principle of accrual of business events.

Any remaining balances outstanding between the government activities and the business-type activities are reported in the government-wide financial statements as "internal balances". Advances between funds, as reported in the fund financial statements, are offset by a non-disposable fund balance account in appropriate state funds to indicate that they are not available for appropriation and are not available financial resources. Transfers between government and property funds are accounted for as part of the reconciliation with the government-wide presentation. The town's inventory balance includes supplies used in the road maintenance, snow removal and fleet divisions of the public works department.

The town and HSTT jointly built an animal shelter and shared the cost of the construction. The town advanced funds to the HSTT for a portion of their share of the building costs. The accounting treatment of capital assets depends on whether the assets are used in government fund operations or own fund operations and whether they are reported in the government-wide or fund financial statements.

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2014

DETAILED NOTES A. Cash and Investments

The California Government Code requires California banks and savings and loan associations to provide security for a city's deposits by pledging government securities. California law also allows financial institutions to collateralize city deposits by pledging mortgage notes with a value of 150 percent of a city's total deposits. The City may waive collateral requirements for deposits fully insured up to $250,000 of federal deposit insurance.

At the end of the year, the book value of the city's cash deposits (including the amount in checking and money market accounts) and bank balance was $4,600,083. The difference between the bank balance and the book value represents outstanding checks and deposits in transit. 848,229 was covered by federal deposit insurance and was uninsured and collateralized (i.e., backed by securities held by the pledging financial institution at 110 percent of deposits, in accordance with the State of California Government Code, which is deemed in the name of the city).

DETAILED NOTES (CONTINUED) Investments

DETAILED NOTES (CONTINUED)

DETAILED NOTES (CONTINUED) Depreciation

Interfund operating receivables and payables are classified as owed by or owed to the General Fund. Amounts due from other funds include amounts due from other funds for loans to finance negative cash balances.

EMPLOYEES’ RETIREMENT PLAN (CONTINUED) Annual Pension Cost

EMPLOYEES’ RETIREMENT PLAN (CONTINUED)

EMPLOYEES’ RETIREMENT PLAN (CONTINUED) Actuarial Methods and Assumptions

RISK MANAGEMENT

OTHER INFORMATION A. Construction Commitments

PRIOR PERIOD ADJUSTMENTS

FIDUCIARY FUNDS A. Cash and Investments

FIDUCIARY FUNDS (CONTINUED)

FIDUCIARY FUNDS (CONTINUED) Credit Risk

FIDUCIARY FUNDS (CONTINUED) D. Capital Assets

This statement established an alternative treatment of issue costs for bond issues that were previously classified as an asset and amortized over the life of the bond.

REQUIRED SUPPLEMENTARY INFORMATION

GENERAL FUND

BUDGETARY COMPARISON SCHEDULETOWN OF TRUCKEE, CALIFORNIA

IMPACT FEES - MAJOR SPECIAL REVENUE FUNDBUDGETARY COMPARISON SCHEDULE

BUDGETARY COMPARISON SCHEDULE HOME GRANT - MAJOR SPECIAL REVENUE FUND

TOWN SPECIAL SERVICE AREAS - MAJOR SPECIAL REVENUE FUNDRequired Supplementary Information

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

BUDGETARY BASIS OF ACCOUNTING

EXCESS EXPENDITURES OVER APPROPRIATIONS

NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONTOWN OF TRUCKEE, CALIFORNIA

PERS SCHEDULE OF FUNDING PROGRESS

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2014

AND CHANGES IN FUND BALANCES

COMBINED STATEMENT OF INCOME, EXPENSES AND CHANGES IN ASSETS AND CHANGES IN ASSETS.

NONMAJOR CAPITAL PROJECTS FUNDSCOMBINING BALANCE SHEET

NONMAJOR CAPITAL PROJECTS FUNDS

NONMAJOR DEBT SERVICE FUNDSCOMBINING BALANCE SHEET

NONMAJOR DEBT SERVICE FUNDS

OTHER REPORTS

S Department of Transportation
REPORTING ENTITY
BASIS OF ACCOUNTING
RELATIONSHIP TO FINANCIAL STATEMENTS
CLAIMS
LOANS OUTSTANDING

The accompanying Federal Award Expenditure Plan represents the activity of all of the City of Truckee's federal financial aid programs. The reporting entity of the Town of Truckee is defined in Note 1 of the Town's Annual Financial Report. All federal awards received directly from federal agencies, as well as federal awards made through other government agencies, are included in the list.

When Federal awards were received from a pass-through entity, the Federal Award Expenditure Schedule, if available, shows the identification number assigned by the pass-through entity. The accompanying summary of federal award expenditures includes the City's federal grant activity and is presented in accordance with accounting principles generally accepted in the United States. The information in this schedule is presented on an accrual basis and in accordance with the requirements of OMB Circular A-133, Audit of States, Local Governments, and Nonprofit Organizations.

The amounts reported in the accompanying Schedule of Federal Award Expenditures agree, in all material respects, with the amounts reported within the City's underlying financial statements. Federal award revenue is primarily reported in the city's financial statements as intergovernmental revenue in governmental funds. The Town of Truckee has received federal grants for specific purposes that are subject to review and audit by the Federal Government's conduit entity.

SUMMARY OF AUDITOR'S RESULTS Financial Statements

FINANCIAL STATEMENT FINDINGS

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS