Town of Bermuda Run Bermuda Run, North Carolina For the year ended June 30, 2022  Independent Auditor's Reports Basic Financial Statements Information Accompanyling the Basic Financial Statements  And    Town of Bermuda Run Table of Contents June 30, 2022  Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements:  1-3 4-13  Government-wide Financial Statements:  Exhibit1 1 Exhibit 2  Statement of Net Position Statement of Activities  14 15  Fund Financial Statements Exhibit3 3 Exhibit 4 Exhibit 5 Exhibit6  Balance Sheet- - Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures And Changes in Fund Balances of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances - General Fund and Annually Budgeted Statement of Fund Net Position - Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund Statement of Cash Flows - Proprietary Funds  16 17  tot the Statement of Activities  18  Special Revenue Fund  19 20 21 22 23-40  Exhibit7 Exhibit8 8 Exhibit9  Notes to the Financial Statements    Required Supplementary Information:  Schedule of the Proportionate Share of the Net Pension Asset- - Local Government Employees' Retirement System Schedule of Contributions - Local Government Employees'  41 42  Retirement System  Individual Funds Statements and Schedules:  Statement of Revenues, Expenditures, and Changes in Fund Balances- - Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual - Special Revenue Fund - Gated Security Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Capital Projects Fund - Blue Heron Trail Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Fund - American Rescue Plan Statement of Revenues, Expenditures, and Changes in Fund Balances- - Budget and Actual - General Capital Projects Fund-US1 158 Schedule of Revenues and Expenditures Budget and Actual - (Non-GAAP) Schedule of Revenues and Expenditures-Budget and Actual - (Non-GAAP)  Budget and Actual - General Fund  43-44 45 46 47 48 49-50 51  Sewer Fund  Sewer Capital Projects Fund-WWTP  Other Schedules:  Schedule of Changes in Ad Valorem Taxes Receivable  52 53  Analysis of Current Taxl Levy  Compliance Section:  Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performedi in Accordance  with Govemnment, Auditing Standards  54-55    EDDIECARRICK, CPA, PC  Certified Public Accountant INDEPENDENT AUDITOR'S REPORT  Tot the Honorable Mayor and Town Council Town of Bermuda Run Bermuda Run, North Carolina  Report on the Audit of the Financial Statements  Opinions  lhave audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the Town of Bermudal Run, North Carolina, as of and fort the year ended. June 30, 2022, and the related notes tot the financial statements, which collectively comprise the Town of Bermuda Run, North Carolina's basic financial statements as listed in the table of Inn my 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, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the Town of Bermuda Run, North Carolina, as of June 30, 2022, and the respective changes ini financial position, cash flows thereof and the respective budgetary comparison for the General Fund and major annually budgeted special revenue fund, for the year then ended in accordance with accounting principles generally Iconducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable 0 financial audits contained in Government. Auditing Standards, issued by the Comptroller General of the United States. My responsibilties under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am required to bei independent of the Town of Bermuda Run, North Carolina and to meet my other ethical responsibilities, in accordance with the relevant ethical requirements relating to my audit. I believe that the audit evidence have obtained is sufficient and appropriate to provide al basis for my audit opinions. As discussed in Note Vtot the financial statements, in January 2020, the World Health Organization has declared COVID-191 to constitute a" "Public Health Emergency of International Concern." Given the uncertainty oft the situation, the duration of any business disruption and related financial impact cannot be reasonably estimated at this time. My opinion is not modified with  contents.  accepted in the United States of America. Basis for Opinions  Emphasis of Matter  respect tot this matter.  Responsibilities of Management for the Financial Statements  Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted ini the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, Inp preparing the financial statements, management is required to evaluate whether there are conditions or events, considered int the aggregate, that raise substantial doubt about the Town of Bermuda Run, North Carolina's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material  whether due to fraud or error.  substantial doubt shortly thereafter.  Auditor's Responsibilities for the Audit of the Financial Statements  misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinions.  Member oft the American Institute of Cerlified Public/ Accountants  Eddie Carrick  1  151 Young Drive, Lexington, NC 27292 336-249-2545, Fax 336-249-4745    Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Govemnment Auditing Standards will always The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material ift there is a substantial likelihood that, individually or in the aggregate, they would influence thej judgment Inp performing an auditi in accordance with generally accepted auditing standards and Government Auditing Standards, ::  detect ar material misstatement when ite exists.  made by a reasonable user based on the financial statements.  Exercise professional judgment and maintain professional skepticism throughout the audit. evidence regarding the amounts and disclosures in the financial statements.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town Evaluate the appropriateness ofa accounting policies used and the reasonableness of significant accounting estimates Conclude whether, in my judgment, there are conditions or events, considered in' the aggregate, that raise substantial doubt about the Town of Bermuda Run, North Carolina's ability to continue as a going concern for a reasonable I am required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certaini internal control-related matters thatl identified during the audit. Accounting principles generally accepted in the United States of America require that the managements discussion and analysis and budgetary comparison information on pages 4-13 and 19 and the Local Government Employees' Retirement System's Schedules of the Proportionate Share of the Net Pension Asset (Liability) and Contributions, on pages 41 through 42, respectively, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to my inquiries, the basic financial statements, and other knowledge I obtained during my audit of the basic financial statements. Ido not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Bermuda Run, North Carolina's basic financial statements. The individual fund statements, budgetary schedules, other schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted ini the United States of America. In my opinion, thei individual fund statements, budgetary schedules, other schedules  ofE Bermuda Run, North Carolina's internal control. Accordingly, no such opinioni is expressed. made by management, as well as evaluate the overall presentation of the financial statements.  period oft time.  Required Supplementary Information  Supplementary Information  are fairly stated, in all material respects, in relation to the basic financial statements as a whole.  2    Other Information  Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and my auditor's report thereon. My opinions on the basic financial statements do not cover the other information, and Ido not express an opinion or any form of Inc connection with my audit of the basic financial statements, my responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, I conclude that an uncorrected In accordance with Government Auditing Standards, I have also issued my report dated September 12, 2022, on my consideration of the Town of Bermuda Run, North Carolina's internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town of Bermuda Run, North Carolina's internal control over, financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Town of Bermuda Run, North Carolina's internal control over financial  assurance thereon.  material misstatement oft the otheri information exists, are required to describe iti in my report.  Other Reporting Required by Government Auditing Standards  reporting and compliance. Eddie Carrick CPA, PC  achckf  Lexington, North Carolina September 12, 2022  3    OF  Bercte ARun NORTH CAROLINA 120 Kinderton Boulcvard, Suitc TOO Bermuda Run, NC: 27006 336.998.0906 Fax3 336.998.7209 townolbr.com  Management's Discussion and Analysis  As management of the Town of Bermuda Run, we offer the readers of the Town of Bermuda Run's financial statements this narrative overview and analysis of the financial activities of the Town of Bermuda Run for the fiscal year ended June 30, 2022. We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the Town's financial statements, which  follow this narrative. Financial highlights  The assets and deferred outflows of resources of the Town of Bermuda Run exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $12,086,417 (net position). The government's total net position increased by $128,338, primarily due to business-type activities and As of the close of the current fiscal year, the Town of Bermuda Run's governmental funds reported combined ending fund balances of $1,892,884 with a net decrease of $439,375 in fund balance. At the end oft the current fiscal year, unassigned fund balance for the general fund was $1,002,256, or The Town of Bermuda Run's total debt decreased by $64,646 due to an increase in accrued vacation of  aconservative approach to spending.  Approximately 47% of this total amount, or $890,627, is restricted or assigned. 33% oft total general fund expenditures fort thet fiscal year. $3,295, and a decrease in net pension liability of $67,941.  Overview oft thel Financial Statements  This discussion and analysis is intended to serve as introduction to the Town of Bermuda Run's basic financial statements. The Town's basic financial statements consist of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (see Figure 1). The basic financial statements present two different views of the Town through the use of government- wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the reader's understanding of the financial  condition of the Town of Bermuda Run.  4  A Vibrant Community of Vision    Management Discussion and Analysis Town of Bermuda Run Figure1  Required Components of Annual Financial Report  Management's Discussion and Analysis  Basic Financial Statements  Government-wide Financial Statements  Fund Financial Statements  Notes tot the Financial Statements Detail  Summary  Basic Financial Statements  The first two statements (Exhibits 1 and 2) in the basic financial statements are the Governmentwide Financial Statements. They provide both short and long-term information about the Town's financial status. The next statements (Exhibit 31 through 9) are Fund Financial Statements. These statements focus on the activities of the individual parts of the Town's government. These statements provide more detail than the government-wide statements. There are three parts to the Fund Financial Statements: 1) the governmental fund statements 2) the budgetary comparison statements and 3) the proprietary fund statements. The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the Town's individual funds. Budgetary information required  by the General Statutes also can bet found ini this part oft the statements.  5    Management Discussion and Analysis Town of Bermuda Run Government-Wide Financial Statements  The government-wide financial statements are designed to provide the reader with al broad overview of the Town's finances, similar in format to ai financial statement of a private-sector business. The government- wide: statements provide short and long-term information about the Town's financial status as a whole. The two government-wide statements report the Town's net position and how they have changed. Net position is the difference between the Town's total assets and deferred outflows of resources and total liabilities and deferred inflows of resources. Measuring net position is one way to gauge the Town's The government-wide statements are divided into three categories: 1) governmental activities 2) business- type activities and 3) component units. The governmental activities include most of the Town's basic services such as safety and security, transportation and administration. Property tax and state shared revenues finance these activities. The business-type activities are those that the Town charges customers to provide. These include sewer services offered by the Town. The final category is component unit. Although legally separate from the Town, the Tourism Development. Authority is important to the Town. The  financial condition.  Town exercises control over the Authority by appointing its members. The government-wide financial statements are on Exhibits 1 and 2 oft this report.  Fund Financial Statements  The fund financial statements (see Figure 1) provide a more detailed look at the Town's most significant activities. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town of Bermuda Run, like all other governmental entities in North Carolina, uses fund accounting to ensure and reflect compliance (or non-compliance) with finance-related legal requirements, such as General Statutes or the Town's budget ordinance. All of the funds of the Town of Bermudal Run can be divided into two categories: governmental funds and proprietary Governmental Funds Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the Town's basic services are accounted fori in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will. be available for spending in the next year. Government funds are reported using an accounting method called modified accrual accounting which provides a short term spending focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him determine if there are more or less financial resources available to finance the Town's programs. The relationship between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is described in a  funds.  reconciliation that is part of thet fund financial statements.  6    Management Discussion and Analysis Town of Bermuda Run  The Town of Bermuda Run adopts an annual budget for the General Fund and Special Revenue Fund, as required by the General Statutes. The budget is a legally adopted document that incorporates input from the citizens of the Town, the management of the Town, and the decisions oft the board about which services top provide and how to pay for them. It also authorizes the Town to obtain funds from identified sources to finance the current period activities. The budgetary statement provided for the General Fund and Special Revenue Fund demonstrates how well the Town complied with thel budget ordinance and whether or not the Town succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented in the same format, language and classifications as the legal budget document. The statement shows four columns: 1) the original budget as adopted by the board 2) the final budget as amended by the board 3) the actual resources, charges to appropriations, and ending balances ini the General Fund and Special Revenue Fund, and 4) the differences or variance between the final budget and actual resources and charges. To account fort the difference between the budgetary basis of accounting and the modified accrual basis, ar reconciliation showing the differences ini the reported activities is shown at the end oft the budgetary statement. Proprietary funds - The Town of Bermuda Run has one type of proprietary fund. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town uses an enterprise fund to account fori its sewer activity. This fund is the same as the functions shown in the business-type activities in the Statement of Net Position and Statement of Notes to the Financial Statements - The notes provide additional information that is essential to the full understanding of data provided in the government-wide and fund financial statements. The notes to the Other Information - In addition to the basic financial statements and accompanying notes, this report includes certain supplemental information detailing the information provided in the basic financial statements and is presented to allow the reader to gain an in-depth understanding of the financial information Interdependence with Other Entities - The Town depends on financial resources flowing from, or associated with, both the Federal Government and the State of North Carolina. Because of this dependency, the Town is subject to changes in specific flows of intergovernmental revenues based on modifications to Federal and State laws and Federal and State appropriations. Itis also subject to changes in investment earnings and asset values associated with U.S. Treasury Securities because of actions by  Activities.  financial statements begin on page 23 of this report.  presented.  foreign government and other holders ofp publicly held U.S. Treasury Securities.  7    Management Discussion and Analysis Town of Bermuda Run Government-Wide Financial Statements  Town of Bermuda Run's Net Position (Figure2) Governemental, Activities Business-Type Activities  Total 2022 2021  2022  2021  2022  2021  Current and other assets Capital assets Deferred outflows ofr resources Total assets and deferred outflows of resources Long-term liabilities Other liabilities Deferred inflows ofr resources Total liabilities and deferred inflows ofr resources Net position: Net investment in capital assets Restricted for: Stabilization by State Statute Streets Unrestricted Total net position  $2,635,040 $. 2,401,151 $ 2,367,837 $ 2,206,466 $ 5,002,877 $ 4,607,617 5,894,186 5,604,832 1,977,625 1,862,363 7,871,811 7,467,195 8,591,277 8,063,714 4,345,461 $4,068,829 12,936,738 12,132,543  62,051  57,731  62,051  57,731  48,882 298,550 498,710 846,142  113,528 53,380 4,820 171,728  48,882 302,730 498,710 850,322  113,528 56,117 4,820 174,465  4,180 4,180  2,737 2,737  5,894,186 5,604,832 1,977,625 1,862,363 7,871,811 7,467,195  555,256 328,965 3,330,385 3,235,350  555,256 1,006,430 328,965  1,006,430 249,102  249,102  966,728 1,031,621 2,363,657 2,203,729  $7,745,135 $ 7,891,985 $4,341,282 $ 4,066,093 $ 12,086,417 $ 11,958,078  As noted earlier, net position may serve over time as one useful indicator of a government's financial condition. The assets and deferred outflows of resources of the Town exceeded liabilities and deferred inflows by $12,086,417 as of June 30, 2022. The Town's net position increased by $128,338 for the fiscal year ended June 30, 2022. However, the largest portion (66%) reflects the Town's net investment in capital assets (road improvements, equipment, machinery, utility plant) less any related debt still outstanding that was issued to acquire those items. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town's net investment in capital assets is reported net of the outstanding debt, the resources needed to repay that debt must be provided by other sources, since capital assets cannot be used to liquidate these liabilities. An additional portion of the Town's net position, $884,221, represents resources that are subject to external restrictions  on! howt they may be used. The remaining balance of $3,330,3851 ist unrestricted.  8    Management Discussion and Analysis Town of Bermuda Run government net position:  Several particular aspects of the Town's financial operations positively influenced the total unrestricted  Continued diligence in the collection of property taxes by maintaining at tax collection percentage of  99.39%, which is above state average. Timely maintenance of Town assets tor maximize lives.  Town of Bermuda Run's Changes in Net Position (Figure 3)  Governmental Activities 2022 2021  Business-type Activities 2022 2021  Total 2022 2021  Revenues Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Other taxes Other Totalr revenues Expenses: General government Safety Gate operations Transportation Interest onl long-term debt Sewer Total expenses Transfers Increase inr netp position Net position, July1 Netp position, June 30  571,768 $ 568,581 $ 609,975 $ 525,341 $ 1,181,743 $ 1,093,922  575,525  61,969  575,525 963,020 429,253 549,944  61,969 882,278 465,766 538,186  963,020 882,278 429,253 465,766 549,944 537,336 2,061,684 1,049,225 87,022 684,550 576,021 403,106 812,003  850  3,089,510 2,515,930 609,975 526,191 3,699,485 3,042,121  2,061,684 1,049,225 87,022 684,550 403,106 334,786 128,338 128,338  79,553  79,553 576,021 812,003 358,022 167,297 167,297  334,786 358,022  3,236,362 2,516,802 334,786 358,022 3,571,148 2,874,824  Increase in net position beforet transfers  (146,851) (146,851)  (872) 275,189 168,169 (872) 275,189 168,169  7,891,985 7,892,858 4,066,093 3,897,924 11,958,078 11,790,782 $7,745,135 $ 7,891,985 $ 4,341,282 $4 4,066,093 $1 12,086,417 $11,958,078  9    Management Discussion and Analysis Town of Bermuda Run  Governmental activities. Governmental activities decreased the Town's net position by $146,851, thereby accounting for 100% of the total decrease in net position oft the Town. The decrease ini net position was the result of capital project expenditures as well as continued effort to control costs and manage expenditures. Management believes healthy investment in the Town will result in additional revenues, adding to the Town's net position by investing in capital assets which were largely funded by capital contribution revenues. Tax revenue remained steady in the current year. Town management acknowledges that 2022 was a successful year and plans on improving upon these approaches as a long-term strategy to realize  continued fiscal health.  Key elements of this decrease are as follows: Taxi revenues remained steady  Town council has adopted a conservative approach to general fund spending  Capital project and special projects expenditures  Business-type activities: Business-type activities increased the Town's net position by $275,189, accounting for 100% of the total growth int the government's net position. Key elements oft this increase are  as follows:  Sewer charges increased Conservative approach to spending Financial Analysis oft the Town's Funds related legal requirements.  As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance- Governmental Funds: The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the Town's financing requirements. Specifically, unreserved fund balance can be a useful measure of a government's The General Fund is the chief operating fund of the Town. At the end of the current fiscal year, the Town of Bermuda Run's fund balance available in the General Fund was $1,002,256, while total fund balance reached $1,886,477. The Town currently has an available fund balance of 33% of general fund At. June 30, 2022, the governmental funds of the Town reported a combined fund balance of $1,892,884 with a net decrease in fund balance of $439,375. Included in this change in fund balance are decreases in the General Fund of$1,038,107, a decrease in Special Revenue Fund-Gate of $95,810, a decrease in the General Fund Capital Project-Blue Heron of $115,586, an increase in Special Revenue Fund-ARPA of  net resources available for spending at the end of the fiscal year.  expenditures, while total fund balance represents 61% of the same amount.  $317,and an increase in the General Fund Capital Project-US1580 of$809,811.  10    Management Discussion and Analysis Town of Bermuda Run  General Fund Budgetary Highlights: During the fiscal year, the Town revised the budget on several occasions. Generally, budget amendments falli into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as Federal and State grants; and 3) increases in appropriations that become necessary to maintain services. The Town amended the budget in order to account for the road maintenance expenditures as well as other Proprietary Funds: The Town's proprietary funds provide the same type of information found in the government-wide statements but in more detail. Unrestricted net position in the Sewer Fund at the end of the fiscal year amounted to $2,363,657. The total change in net position was $275,189. Other factors concerning the finances oft this fund have already been addressed ini the discussion of the Town's business-  special projects and capital projects.  type activities.  Capital Asset and Debt Administration  Capital Assets. The Town's investment in capital assets for its governmental and business-type activities as of June 30, 2022, totals $7,871,811 (net of accumulated depreciation). These assets include buildings,  roads, machinery and equipment, and construction in progress.  Major capital asset transactions during the year included the following additions:  Construction inj progress - Blue Heron Trail $577,930  Road improvements $45,203 Sidewalks $30,886  Town of Bermuda Run's Capital Assets (net of depreciation) (Figure 4)  Govemmental Activities 2022 2021 577,930 $ 1,703,010 4,620,439 3,101,626 357,000 392,700 297,082 381,640 41,733 25,856  Business-type Activities 2022 2021  Total 2022 2021 577,930 $ 828,646 4,620,439 3,101,626 357,000 392,700 297,082 381,640 41,733  Construction inj progress Roadi improvements Buildings Other improvements Equipment andi furnishings Planta and distribution  25,856  1,977,626 1,862,363 1,977,626 1,862,363  $5,894,186 $ 5,604,832 $ 1,977,625 $ 1,862,363 $7,871,811 $6,592,831  Additional information on the Town's capital assets can be found in the Note III.A.4 of the Basic Financial  Statements.  11    Management Discussion and Analysis Town of Bermuda Run  Long-term Debt. As of June 30, 2022, the Town's long-term debt was made up oft thei following:  Town of Bermuda Run's Long-term Debt (Figure 5)  Governmental Activities 2022 2021 40,334 $ 108,275 $ 8,548 5,253 48,882 $ 113,528 $  Business-type Activities 2022 2021 $ $  Total 2022 2021 40,334 $ 108,275 8,548 5,253 $ 48,882 $ 113,528  Pension related debt (LGERS) Compensated absences  Town of Bermuda Run's Outstanding Debt  The Town of Bermuda Run's total debt decreased by $64,646 due to an increase in accrued vacation of North Carolina general statutes limit the amount of general obligation debt that a unit of government can issue to 8 percent of the total assessed value of property located within that government's boundaries. The Additional information regarding the Town's long-term debt can bei found ini Note II.B.6 of this report. The following key economic indicators reflect the growth and prosperity of the Town.  $3,295, and a decrease in net pension liability of $67,941.  legal debt margin for the Towni is $51,747,253.  Economic Factors and Next Year's Budgets and Rates  The complete build out of Kinderton Village Residential Community with a new 73 unit single family Afully operational 50 bed tower in for the Davie Medical Center - Bermuda Run Campus, as well as a  section  fully operational joint replacement unit  The expansion of services for Bermuda' Village Premier Retirement Community Increased commercial and retail growth in the Town and surrounding areas events. This facility produces over 18,000 room nights for the region  Increased destination driven economic impact from Truist Sports Park for tournaments and special The completion and opening of the new R.I.S.E. 123,000 square foot indoor sports and events facility adjacent to Truist Sports Park. The facility is forecast to produce 20,000 room nights for the region. Continued increased use of WinMock at Kinderton for corporate events, weddings, and regional programs. WinMock produces between 8,000 and 10,000 room nights for the region. Work toward the recruitment ofa a 130 room boutiquelupscale hotel adjacent to WinMock at Kinderton The completion of a 224 unit market rate apartment community, Comet-Bermuda Run, within the Kinderton Commercial Core area. This apartment communityi is fully leased and has a waiting list. Two new access streets to the Kinderton Commercial Core area adding additional opportunities for  mixed-use development  12    Management Discussion and Analysis Town of Bermuda Run  Economic Factors and Next Year's Budgets and Rates (Continued)  The completed availability of sewer for a 125 acre undeveloped mixed-use zoned area called' "Hillsdale  at Bermudal Run" thati is ready for development. Budget Highlights for the Fiscal Year Ending June 30, 2023  Governmental Activities Property tax revenues are expected to increase slightly in conjunction with new construction in the commercial areas, as well as renewed. residential family home construction in the residential zoned areas. The Town has budgeted monies to enhance quality of life by interconnecting residential and retail areas with multi-use paths. Other revenues and expenses are expected to remain The Town has chosen not to appropriate fund balance in the fiscal year 2023 budget. Management believes that increased revenues and continued restrictions on spending will maintain the Town's financial position. As the Town considers future revenue sources, it has determined that a $0.01 increase in the property tax rate will result in additional revenues of approximately $64,290 at current values and collection rate. Though management believes current growth will generate enough revenue to support Town operations, a careful analysis of property tax revenue willl be considered in future years' budgets. Business-type Activities: Revenues for the 2022-2023 year are expected to increase slightly due to projected volume increase in sales tax distribution from the State of North Carolina. However, this will be tempered with a change from per capita to ad valorem method of sales tax distribution by the Davie County  consistent with the 2021-2022 fiscal year.  Commissioners. Requests for Information  This report is designed to provide an overview of the Town's finances for those with an interest in this area. Questions concerning any of the information found int this report or requests fora additional information should be directed to the Town Manager, Town of Bermuda Run, 120 Kinderton Blvd, Suite 100, Bermuda Run, NC  27006.  13    Exhibit 1  Town of Bermuda Run, North Carolina Statement of Net Position June 30, 2022  Component Unit Town of Bermuda Run Tourism Development Authority  Primary Government Business-type Activities  Governmental Activities  Total  ASSETS Current assets: Cash andi investments Property taxes receivable (net) Due (to) from other funds Accounts receivable (net) Restricted cash Total current assets Non-current assets: Capital assets (Note 4): Construction inp progress Other capital assets, net of depreciation Total Capital assets Total assets DEFERRED OUTFLOWS OF RESOURCES Pension deferrals Total deferred inflows ofr resources LIABILITIES Current liabilities: Accounts payable Long-term liabilities: Net pension liability Accrued vacation Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred revenue ARPA Pension deferrals Total deferredi inflows ofr resources NET POSITION Neti investment in capital assets Restricted for: Stabilization by State Statute Streets Tourism Development Unrestricted Total net position  $ 1,167,623 $ 2,405,814 $ 3,573,437 $  11,923 37,978 656,868 760,648 2,635,040 577,930 5,316,256 5,894,186 8,529,226 62,051 62,051  11,923 656,868 760,648 5,002,876 778,562 7,093,248 7,871,811 12,874,687 62,051 62,051  (37,978) 2,367,837 200,632 1,776,992 1,977,625 4,345,461  7,004 194,159 201,163  201,163  298,550 40,334 8,548 347,432 431,683 67,027 498,710 5,894,186 555,256 328,965 966,728  4,180  302,730 40,334 8,548 351,612 431,683 67,027 498,710 7,871,811 555,256 328,965 3,330,385  4,180  1,977,625  7,004 194,159 201,163  2,363,657  $ 7,745,135 $ 4,341,282 $ 12,086,417 $  The accompanying notes are an integral part of the financial statements  14        Exhibit3  Town of Bermuda Run, North Carolina Governmental Funds Balance Sheet June 30, 2022 Major Special Capital Revenue Project Gate Blue Heron 121,676 $  NonMajor Capital Project Governmental US158  Total Funds 1,167,623 760,648 37,978 11,923 656,868 2,635,040 $ 298,550 298,550 431,683 11,923 443,606 555,256 328,965 (115,586) 121,676 1,002,573 1,892,884  Special Revenue ARPA $ 317 $ 431,683  General $1,045,631 328,965 360,734 11,923 194,523 $1,941,776 43,375 $ 43,375 11,923 11,923 555,256 328,965 1,002,256 1,886,477 $1,941,776  ASSETS Cash andi investments Restricted cash Due (to)f from otherf funds Property taxes receivable (net) Accounts receivable (net) LIABILITIES Accounts payable  (322,756) 462,345 139,588 $ 255,174 $ 255,174  121,676  432,000 $  $  DEFERRED INFLOWS OF RESOURCES Deferred revenue ARPA Property taxes receivable Total deferredi inflows ofr resources Fund! balances: Restricted for: Stabilization by state statute Streets Capital project Assigned for gate operations Unassigned Total Fund Balances Totall liabilities, deferred inflows of resources and fundb balances Amounts reported for governmental activities int the statement ofr net position (Exhibit 1) are different because: Capital assets usedi ing governmental activities arer not financial resources and therefore are not reportedi int thet funds. ofr resources on the Statement of Net Position Liabilities for earned revenues considered deferred inflows ofr resourcesi inf funds statements. Pension related deferrals Accrued vacation Net position oft the governmental activities  431,683 431,683  (115,586)  121,676 121,676 (115,586) 121,676  317 317  139,588 $ 317 $  5,894,186 (40,334) 62,051 11,923 (67,027) (,548) $ 7,745,135  Net pension liability  Contributions tot the pension plani int the currentf fiscaly year are deferred outflows  Somel liabilities, including bonds payable, are not due and payablei int the current period anda aret therefore not reported int the net position oft the governmental: activities:  The accompanying notes are ani integral part oft thet financial statements  16    Exhibit4 4  Town of Bermuda Run, North Carolina Governmental Funds For the. Year Ended June 30, 2022  Statement of Revenues, Expenditures and Changes in Fund Balance  Major Special Capital Revenue Project Gate Blue Heron $  NonMajor Capital Project US158 $  Total Governmental Funds $ 966,609 429,253 216,109 779,604 5,767 571,768 123,989 3,093,099 809,811 3,902,910 1,994,420 87,022 667,577 783,455 3,532,475 809,811 4,342,285 (439,375) 2,332,259 1,892,884  Special Revenue ARPA $  General 966,609 $ 429,253 216,109 317,260 5,450 123,989 2,058,670  Revenues: Ad Valorem taxes Other taxes and licenses Unrestricted intergovernmental revenues Restricted intergovernmental revenues Investment earnings Gate fees Otherr revenues Other financing sources: Proceeds from long-term debt Transfers in Capital contributions Appropriated fundb balance Expenditures: General government Safety Gate operations Transportation Debt service Other Financing Uses: Transfers out Total Expenditures and Other Uses Excess ofr revenues and other sources over (under) expenditures and other uses Fund Balances Beginning ofyear, July1 1 End ofy year, June 30  462,345 462,345  317 317  571,768 571,768  809,811 809,811  Total revenues ando other sources 2,058,670  571,768  462,345 577,931  317  1,416,489 87,022 783,455 2,286,966 809,811 3,096,777 (1,038,107) 2,924,584 $1,886,477  667,577 667,577  577,931  667,577-  577,931  (95,810) (115,586) 217,485  317  809,811 (809,811)  121,676 $(115,586) $ 317  The accompanying notes are ani integral part oft the financial statements  17    Exhibit5 5  Town of Bermuda Run, North Carolina Governmental Funds For the' Year Ended June 30, 2022  Statement of Revenues, Expenditures and Changes in Fund Balance  Amounts reported for governmental. activities int the: statement ofa activities are different because:  Net changes inf fund balances total governmental funds  $ (439,375)  Governmental funds report capital outlays as expenditures. However, int the Statement ofA Activities, the cost oft those assets is allocated over their estimated useful lives and reported as depreciation expense. Thisi ist the amount by which capital outlays exceeded depreciation for the current period.  Capital outlay Construction inp progress Depreciation  76,089 577,930 (364,666)  289,353 (3,588)  Revenues int the statement ofa activities that dor not provide current financial resources arer not reported as revenues int the funds. Change inu unavailable revenue for tax revenues Changesi inj pension expense Changes inr net pension assets Changes in deferred outflows Changes inr net pension! liability Changes in deferred inflows  4,320 67,941 (62,207)  10,054  Thei issuance ofl long-t -term debt provides currentf financial resources to governmental funds, while the repayment oft the principal ofl long-term debt consumes the current financial resources ofg governmental funds. Neither transaction has any effect onr net position. This amount ist ther net effect oft these differences int the treatment ofl long-term debt Some oft the expenses reportedi int the statement ofa activities dor not require the use of current financial resources and, therefore, are not reported as  and relatedi items.  expenditures in governmental funds. Compensated absences  (3,295) $ (146,851)  Total changes ini net position of governmental activities  The accompanying notes are ani integral part oft thef financial statements  18    0    Exhibit7  Town of Bermuda Run, North Carolina Proprietary Funds Statement of Fund Net Position June 30, 2022  Assets Current assets: Cash andi investments Accounts receivable (net) Total current assets Noncurrent assets: Capital assets: Construction inj progress Other capital assets, net of depreciation Total non-current assets Total assets Liabilities Current liabilities: Current maturities on long-term debt Accounts payable Due to other funds Total current! liabilities Long-term liabilities: Duei inr more than one year Totall liabilities Net Position Neti investmenti in capital assets Unrestricted  $2,405,814 2,405,814  200,632 1,776,992 1,977,625 4,383,439  4,180 37,978 42,158  42,158  1,977,625 2,363,657 $4,341,282  Total net position of business-type activities  The accompanying notes are ani integral part of the financial statements  20    Exhibit 8  Town of Bermuda Run, North Carolina Proprietary Funds For the Year Ended June 30, 2022  Statement of Revenues, Expenses and Changes in Fund Net Position  Operating revenues: Sewer charges Tap fees Operating expenses: Administration Sewer operations Depreciation  $  607,425 2,550 609,975 53,116 196,299 85,371 334,786 275,189  Operatingi income Nonoperating revenue (expense): Interest income Other income  Total nonoperating revenue (expense) Income before operating transfers Operating transfers in (out)  275,189  Change in net position business type activities  275,189 4,066,093 $ 4,341,282  Total net position July 1 Total net position June 30  The accompanying notes are ani integral part of thef financial statements  21    Exhibit 9  Town of Bermuda Run, North Carolina Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2022  Cash flows from operating activities: Cash received from customers Cash payment to suppliers of goods ands services Cash payment to employees and benefits Net Cash Provided By Operating Activities Cash flows from noncapital financial activities: Transfer from General Fund Increasei ini interfund payable  609,975 (247,972) 362,003  12,000 12,000  Net Cash Provided by! Noncapital Financing Activities Cash from capital and related financing activities:  Interest paid Payments on long-term debt Purchase of capital assets  (200,633) (200,633)  Net Cash Used by Capital and Related Financing Activities Cash flows fromi investing activities: Interest oni investments Net Cash Provided byl Investing Activities Net Increase (Decrease) In Cash Cash- Beginning of Year, July1 Cash- End of Year, June 30  173,370 2,232,443 2 2,405,814  Adjustments to Reconcile Net Operating Income to Net Cash Provided by Operating Activities: Changes in current assets and liabilities: (Increase) decrease in accounts receivable Increase (decrease) in accounts payable Net Cash Provided (Used) By Operating Activities  Net operating income Depreciation  275,189 85,371 1,443 362,003 $  Interest paid  The accompanyingi notes are ani integral part of the financial statements  22    Town of Bermuda Run, North Carolina NOTES TO FINANCIAL STATEMENTS As ofort for the Year Ended. June 30, 2022  Description of the unit  The Town of Bermuda Run is located in Davie County, whichi is ini the Piedmont area of North Carolina. The Town has ap population of approximately 3,128 and covers approximately two thirds of one square mile. The The accounting policies oft the Town of Bermuda Run and its discretely presented component unit conform to generally accepted accounting principles as applicable to governments. The following is a summary of  Town provides sewer services toi its residents. IS Summary of Significant Accounting Policies the more significant accounting policies: A. Reporting entity  The Town of Bermuda Run is a municipal corporation governed by an elected mayor and council. As required by generally accepted accounting principles, these financial statements present the Town and its component unit, a legally separate entity for which the Town is financially accountable. The discretely presented component unit presented below is reported in a separate column in the Town's financial  statements in order to emphasize thati iti is legally separate fort the Town. Town of Bermuda Run Tourism Development Authority  The Town of Bermuda Run Tourism Development Authority was established December 1, 2010 for the purpose of collecting a 3% occupancy tax to be used for the promotion of tourism in Bermuda Run. The members of the Tourism Development. Authority's governing board are appointed by the Town. The Tourism Development Authority, which has a June 30 year-end, is presented as if it were a special revenue fund. Information concerning the Tourism Development Authority can be obtained by contacting the Finance  Officer, Town of Bermuda Run, Bermuda Run, NC.  B.E Basis of presentation  Government-wide Statements: The statement of net position and the statement of activities display the information about the government and its component unit. These statements include the activities of the overall government. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the Town. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non- exchange transactions. Business-type activities are financed in whole or part by fees charged to external The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the Town and for each function of the Town's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees and charges paid by the recipients of goods and services offered by the programs and (b) grants and contributions that are restricted to meeting the operational and capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.  parties.  23    Notes to the Financial Statements (continued)  B. Basis ofpresentation (continued)  Fund Financial Statements: The fund financial statements provide information about the Town's funds. Separate statements for each fund category - governmental and proprietary - are presented. The Town has no fiduciary funds to report. The emphasis off fund financial statements is on major governmenta and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially the equal values. Non-operating revenues, such as subsidies and  are aggregated and reported as non-major funds.  investment earnings, result from non-exchange transactions or ancillary activities.  The Town reports thet following major governmental funds:  General Fund  The General Fund is the general operating fund oft the Town. Itis used to account for all financial resources except those required to be accounted for in other funds. The primary revenue sources are ad valorem taxes and state-shared revenues. The primary expenditures are for streets and general government  services.  Special Revenue Funds  The Special Revenue Funds account for specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specific purposes. The Town maintains two Special Revenue Funds, the Gated Security Fund and the American Rescue Plan Act (ARPA).  Capital Project- - Blue Heron Fund  This fund is used to account for the construction oft the Blue Heron trail. The Town reports the following major enterprise funds:  Sewer Fund  The Town maintains an Enterprise Fund, the Sewer Fund, to account for its sewer services. This fund is financed and operated in the same manner as a private business enterprise. A Capital Project Fund has been consolidated into the Sewer Fund for financial reporting purposes. The budgetary comparison for the Itis the intent of the governing body that costs (expenses, including depreciation) of providing these services to the public on a continuing basis be financed or recovered primarily through user charges. Therefore, periodic accounting is necessary for determination of neti income and rate control.  Sewer Capital Project Fund has been included ini the supplemental information.  24    Notes to the Financial Statements (continued)  C. Measurement Focus and Basis of Accounting usingt the modified basis of accounting.  Ina accordance with North Carolina General Statutes, all funds of the Town are maintained during the year Government-wide and Proprietary Fund Financial Statements: The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses recorded at the time liabilities are incurred regardless of when the related cash flows take place. Non-exchange transactions, in which the Town gives (or receives) value without directly receiving (or giving) equal value in exchange, including property taxes, grants, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principai ongoing operations. The principal operating revenues of the Town enterprise fund are charges to customers for sales and services. The Town also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the sewer system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this Governmental Fund Financial Statements: Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long- term debt and acquisitions under capital leases are reported as othert financial sources. The Town considers all revenues available if they are collected within 90 days after year end, except for property taxes. Ad valorem taxes receivable are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable for property other than motor vehicles are materially past due and are not considered to be an available resource to finance the operations of the current year. Also, as of September 1, 2013, State law altered the procedures for the assessment and collection of property taxes on registered motor vehicles in North Carolina. Effective with this change in the law, the State of North Carolina is responsible for billing and collecting the property taxes on registered motor vehicles on behalf of all municipalities and special tax districts. Property taxes are due when vehicles are registered. The billed taxes are applicable to the fiscal yeari in which they are received. Uncollected taxes that were billed in periods prior to September 1, 2013 and for limited registration plates are shown as a receivable in these financial statements and are offset by deferred inflows of resources.  requirements have been satisfied.  as program revenues. Likewise, general revenues include allt taxes.  definition are reported as non-operating revenues and expenses.  25    Notes to the Financial. Statements (continued)  C.A Measurement. Focus and Basis of Accounting (continued)  Sales taxes and certain intergovernmental revenues, such as the beer and wine tax, collected and held by the State at year-end on behalf of the Town are recognized as revenue. Sales taxes are considered shared revenue fort the Town because the taxi is levied by Davie County and then remitted to and distributed by the State. Most intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. All taxes, including those dedicated for specific purposes are reported as general revenues rather than program revenues. Under the terms of grant agreements, the Town funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, therei is both restricted and unrestricted net position available to finance the program. Itis the Town's policy to first apply cost-reimbursement grant resources to such programs; followed by categorical block grants, and then  general revenues. D. Budgetary data  The Town's budgets are adopted as required by the North Carolina General Statutes. An annual budget is adopted for the General Fund, the Gated Security Special Revenue Fund and the Enterprise Fund. All annual appropriations lapse at the fiscal-year end. Project ordinances are adopted for the Blue Heron Capital Project Fund, the US 158 Capital project fund, and the Enterprise Sewer Capital Project fund. The enterprise fund projects are consolidated with their respective operating fund for reporting purposes. All budgets are prepared using the modified accrual basis of accounting. Expenditures may not legally exceed appropriations at the departmental level for all annually budgeted funds and at the project level fori the multi- year funds. The Town does not have a current policy which allows for departmental transfers without  council approval.  E. Assets, Liabilities, Deferred Outlows/Inflows of Resources, and Fund Equity:  1. Deposits and Investments  All deposits of the Town and the Tourism Development Authority are made in board-designated official depositories and are secured as required by State law (G.S. 159-31). The Town and the Tourism Development Authority may designate, as an official depository, any bank or savings association whose principal office is located in North Carolina. Also, the Town and the Tourism Development Authority may establish time deposit accounts such as NOW and SuperNOW accounts, money market accounts, and State law [G.S. 159-30(c)] authorizes the Town and the Tourism Development Authority to invest in obligations oft the United States or obligations fully guaranteed both as to principal and interest by the United States, obligations of the State of North Carolina, bonds and notes of any North Carolina local government or public authority, obligations of certain non-guaranteed federal agencies, certain high quality issues of commercial paper and bankers' acceptances, and the North Carolina Capital Management Trust (NCCMT). The Town's and the Tourism Development Authority investments are reported at fair value. Non- participating interest earning contracts are accounted for at cost. The NCCMT Government Portfolio, a SEC-registered (2a-7) money market mutual fund, is measured at fair value. Because the NCCMT Government Portfolio has a weighted average maturity of less than 90 days, it is presented as an investment with a maturity ofl less than 61 months. The Town does not have at formal investment or credit risk  certificates of deposit.  policy.  26    Notes to the Financial Statements (continued)  2. Cash and Cash Equivalents  The Town pools money from several funds to facilitate disbursements and investment and to maximize investment income. Therefore, all cash and investments are essentially demand deposits and are considered cash and cash equivalents. The Tourism Development Authority considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash  and cash equivalents. 3. Restricted. Assets  Powell Bill funds are classified as restricted cash because it can be expended only for the purposes of maintaining, repairing, constructing, reconstructing or widening of local streets per G.S. 136-41.1 through  136-41.4.  Town of Bermuda Run Restricted Cash Governmental Activities General Fund Special Revenue Fund Total Restricted Cash  Streets $328,965 ARPA  431,683 $760,648  4. Ad Valorem Taxes Receivable  Ina accordance with State law (G.S. 105-347 and G.S. 159-13(a)), the Town levies ad valorem taxes on July 1, the beginning of the fiscal year. The taxes are due on September 1; however, interest does not accrue until the following January 6. These taxes are based on the assessed values as of January 1, 2021. As allowed by State law, the Town has established a schedule of discounts that apply to taxes which are paid prior to the due date. In the Town's General Fund, ad valorem tax revenues are reported net of such  discounts.  5. Allowances for Doubtful Accounts  Allr receivables that historically experience uncollectible accounts are shown net of an allowance for doubtful accounts. This account is estimated by analyzing the percentage of receivables that were written offi in prior  years. 6. Capital Assets  Capital assets are defined by the government as assets with an initial, individual cost of more than $2,500 and an estimated useful life of more than two years. Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets are recorded at their estimated fair value at the date of donation. General infrastructure assets acquired prior to July 1, 2003, consist of the road network and improvements that were acquired or that received substantial improvements subsequent to July 1, 1980, and are reported at estimated historical cost using deflated replacement cost. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not  capitalized.  27    Notes to the Financial Statements (continued)  6. Capital Assets (continued)  Capital assets are depreciated usingt the straight-line method over the following estimated useful lives:  Asset Class Road improvements Furniture and office equipment Infrastructure  Useful Life- Yrs 25 10-15 15-40  7: Deferred Outflows/Inflows of Resources  Ina addition to assets, the statement of financial position will sometimes report as separate section for deferred outflows of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to a future period and SO will not be recognized as an expense or expenditure until then. The Town has one that meet this criterion, contributions made to the pension plan in the 2022 fiscal year. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial element, Deferred Inflows of Resources, represents an acquisition of net position that applies to a future period and SO will not be recognized as revenue until then. The Town has two items that meets the criterion for this category -deferrals of pension expense that result from the implementation of GASB Statement 68 and  deferred revenue associated with ARPA funds. 8. Long-Term Obligations  Int the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statements of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method that approximates the effective interest method. Bonds payable are reported net oft the applicable bond premium or discount. Bond issuance cost, except for prepaid insurance costs, are expensed in the reporting period in which they are incurred. Prepaid insurance costs are expensed over Inf fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are ported as other financing uses. Issuance costs, whether or not withheld The vacation policy of the Town provides for the accumulation of up to thirty days earned vacation leave with such leave being fully vested when earned. For the Town's government-wide funds, an expense and liability for compensated absences and the salary-related payments are recorded as the leave is earned. The Town has not recognized a current liability due toi thei immaterial nature of this liability. The Town's sick leave policy provides for an unlimited accumulation ofe earned sick leave. Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be used in the determination ofl length of service for retirement benefit purposes. Since the Town does not have any obligation for the accumulation ofs sick leave untili it is actually taken, no accrual for sick leave has been made.  the life of the debt.  from the actual net proceeds received, are reported as debt service expenditures.  9. Compensated. Absences  28    Notes to the Financial Statements (continued)  10. Reimbursements for Pandemic-Related, Expenditures  InF FY 2020/21, the American Rescue Plan Act (ARPA) established the Coronavirus State and Local Fiscal Recovery Funds to support urgent COVID-19 response efforts and replace lost revenue for eligible state, local, territorial, and tribal governments. The Town was allocated $863,351 of fiscal recovery funds to be paid in two equal installments. The first installment of $431,676 was received in July 2021. The second nstallment willl be received inr mid-2022. The Town management and the Board of Commissioners have not elected to use $431,676 of the ARPA funds as of June 30, 2022. The ARPA funds will be transferred to the  appropriate funds once thei intended use oft the funds is determined.  11. Net Position/ Fund Balances  Net Position  Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets, net of related debt; restricted and unrestricted. Restricted net position represent constraints on resources that are either externally imposed by creditors, grantors, contributors, or laws or In the governmental fund financial statements, fund balance is composed off five classifications designed to  regulations of other governments or imposed by law through state statute.  Fund Balances  disclose the hierarchy of constraints placed on howi fund balance can be spent. The governmental fund types classify fund balances as follows:  Nonspendable Fund Balance - This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required tol be maintained intact. Restricted Fund Balance = This classification includes amounts that are restricted to specific purposes  externally imposed by creditors ori imposed by law.  Restricted for Stabilization by State statute - portion of fund balance that is restricted by State Restricted for Streets Powell Bill portion off fund balance that is restricted by revenue source for street construction and maintenance expenditures. This amount represents the balance of the total Restricted for Capital Project portion of fund balance that is restricted for the construction of the Committed Fund Balance -portion of fund balance that can only be used for specific purposes imposed by majority vote by quorum of Town of Bermuda Run's governing body (highest level of decision-making authority). The governing body can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains inj place until a similar action  Statute (G.S. 159-8(a)).  unexpended Powell Bill funds. Blue Heron trail.  ist taken (the adoption of another ordinance) to remove or revise thel limitation.  29    Notes to the Financial Statements (continued)  11. Net Position/ Fund Balances (continued)  Assigned fund balance - portion of fund balance that Town of Bermuda Run intends to use for specific  purposes.  Gate Operations - portion of fund balance that intended to be used for the security gate Unassigned fund balance = the portion of fund balance that has not been restricted, committed, or assigned The Town of Bermuda Run has ar revenue spending policy that provides guidance for programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: bond proceeds, federal funds, State funds, local non-town funds, town funds. For purposes of fund balance classification expenditures are to be spent from restricted fund balance first, followed by in-order by committed fund balance, assigned fund balance and lastly unassigned fund balance. The Finance Officer has the authority  operations.  tos specific purposes or other funds.  to deviate from this policy ifiti is int the best interest of the Town. 12. Defined Benefit Cost-Sharing Plans  For purposes of measuring the net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Local Governmental Employees' Retirement System (LGERS) and additions to/deductions from LGERS' fiduciary net position have been determined on the same basis as they are reported by LGERS. For this purpose, plan member contributions are recognized in the period in which the contributions are due. The Town of Bermuda Run's employer contributions are recognized when due and the Town of Bermuda Run has al legal requirement to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of LGERS. Investments are reported at fair value.  I.S Stewardship, Compliance, and Accountability:  A. Material Violations of Finance-Related Legal and Contractual Provisions: None  B. Excess of Expenditures over Appropriations: None III. Detail Notes on All Funds and Account Groups:  A. Assets: 1. Deposits  All the deposits of the Town and the Tourism Development Authority are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits that exceed the federal depository insurance coverage level are collateralized with securities held by the Town's or the Tourism Development Authority's agents in these units' names. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer's agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the Town and the Tourism Development Authority, these deposits are considered to be held by the Town's and the Tourism Development Authority's agents in their names. The amount of the pledged collateral is based on an  30    Notes to the Financial Statements (continued)  1. Deposits (continued)  approval averaging method for non-interest bearing deposits and the actual current balance for interest- bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the Town, the Tourism Development Authority, or the escrow agent. Because of the inability to measure the exact amounts of collateral pledged for the Town and the Tourism Development Authority under the Pooling Method, the potential exists to undercolaterzation, and this risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The Town has no formal policy regarding custodial credit risk for deposits, but relies on the State Treasurer to enforce standards of minimum capitalization for all pooling method financial institutions and to monitor them for compliance. The Town complies with provisions of GS 159-31 when designating official depositories and verifying that deposits are properly secured. The Tourism Development. Authority has noi formal policy regarding custodial At June 30, 2022, the Town's deposits had a carrying amount of $4,016,577 and a bank balance of $4,288,584. The bank balances of the Town were covered by $250,000 of federal depository insurance. The remaining balance of deposits is collateralized under thel Pooling Method as enumerated above. At. June 30, 2022, the TDA's deposits had a carrying amount of $194,159 and al bank balance of $194,159. The bank balances of the TDA were covered by $250,000 of federal depository insurance. Any excess  credit risk for deposits.  balance of deposits is collateralized under the Pooling Method as enumerated above.  2. Investments  At. June 30, 2022, the Town had $317,509 invested with the North Carolina Capital Management Trust Cash Portfolio which carried a credit rating of AAAm by Standard and Poor's. The Town has no policy regarding  credit risk.  3. Receivable Allowances for Doubtful Accounts  The amounts presented in the Balance Sheet and the Statement of Net Position for the year ending June  30, 2022 are net of the following allowances for doubtful accounts:  Fund None  June 30, .2022 -0-  31    Notes to the Financial Statements (continued)  4. Capital Assets Primary Government  Capital asset activity for the Primary Government for the year ended. June 30, 2022:  Beginning Balances  Ending  Increases (Decreases) Balances  Governmental activities: Capital assets not being depreciated: Construction inj progress Capital assets being depreciated: Roadi improvements Building Otheri improvements Equipment andf furnishings Total capital assets being depreciated: Less, accumulated depreciation for: Roadi improvements Building Otheri improvements Equipment Total accumulated depreciation  $1,703,010 $ 577,930 $ (1,703,010) $ 577,930  5,078,564 1,748,213 892,500 1,144,795 622,291 7,738,150 1,779,099 1,976,939 499,800 800,220 559,370 3,836,329  6,826,778 892,500 1,175,681 622,291 9,517,250 2,206,339 535,500 878,599 580,558 4,200,995 $5 5,894,186  30,886  229,399 35,700 78,379 21,188 364,666  Governmental activity capital assets, net $5,604,832 $1 1,414,433 $ Depreciation expense was charged to functions of the primary government as follows:  General government Gate operations Transportation  $74,023 16,973 273,671 $364,666  Construction commitments  The government has active construction projects as of June 30, 2022. At year-end, the government's  commitments with contractors are as follows:  Remaining  Project  Spent-to-date Commitment $ 577,931 $ 3,239,815 200,632 $ 778,563 $4,824,733  General Capital Project -Blue Heron Trail Sewer Capital Project WWTP  1,584,918  32    Notes to the Financial Statements (continued)  4. Capital Assets  Primary Government (continued)  Beginning Balances  Ending  Increases Decreases Balances  Business-type activities: Sewer fund: Capital assets notl being depreciated: Sewer construction Capital assets being depreciated: Plant and distribution Total capital assets being depreciated: Less, accumulated depreciation for: Plant and distribution Total accumulated depreciation Business-type activity capital assets, net  $ 3,313,403 3,313,403 1,451,038 1,451,038  $200,632 $  200,632 3,313,403 3,313,403 1,536,409 1,536,409 $1,977,625  85,371 85,371  $1,862,363 $ 115,261 $  B. Liabilities:  1. Pension Plan Obligations:  a. Local Governmental Employees' Retirement System  Plan Description. The Town is a participating employer in the statewide Local Governmental Employees' Retirement System (LGERS), a cost-sharing muliple-employer defined benefit pension plan administered by the State of North Carolina. LGERS membership is comprised of general employees and local law enforcement officers (LEOs) of participating local governmental entities. Article 3 of G.S. Chapter 128 assigns the authority to. establish and amend benefit provisions to the North Carolina General Assembly. Management of the plan is vested in the LGERS Board of Trustees, which consists of 13 members nine appointed by the Governor, one appointed by the State Senate, one appointed by the State House of Representatives, and the State Treasurer and State Superintendent, who serve as ex-officio members. The Local Governmental Employees' Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes financial statements and required supplementary information for LGERS. That report may! be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, by calling (919) 981-5454, Benefits Provided. LGERS provides retirement and survivor benefits. Retirement benefits are determined as 1.85% of the member's average final compensation times the member's years of creditable service. A member's average final compensation is calculated as the average of a member's four highest consecutive years of compensation. Plan members are eligible to retire with full retirement benefits at age 65 with five years of creditable service, at age 60 with 25 years of creditable service, or at any age with 30 years of creditable service. Plan members are eligible to retire with partial retirement benefits at age 50 with 20 years of creditable service or at age 60 with five years of creditable service (age 551 for firefighters).  oratw www.osc.nc.gov.  33    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  Survivor benefits are available to eligible beneficiaries of members who die while in active service or within 180 days of their last day of service and who have either completed 20 years of creditable service regardless of age (15) years of creditable service for firefighters and rescue squad members who are killed in the line of duty) or have completed five years of service and have reached age 60. Eligible beneficiaries may elect to receive ar monthly Survivor's Alternate Benefit for life or a return of the member's contributions. The plan does not provide for automatic post-retirement benefit increases. Increases are contingent upon LGERS plan members who are LEOS are eligible to retire with full retirement benefits at age 55 with five years of creditable service as an officer, or at any age with 30 years of creditable service. LEO plan members are eligible to retire with partial retirement benefits at age 50 with 15 years of creditable service as an officer. Survivor benefits are available to eligible beneficiaries ofl LEO members who die while in active service or within 180 days of their last day of service and who also have either completed 20 years of creditable service regardless of age, or have completed 15 years of service as a LEO and have reached age 50, or have completed five years of creditable service as a LEO and have reached age 55, or have completed 15 years of creditable service as a LEO if killed in the line of duty. Eligible beneficiaries may elect to receive a monthly Survivor's Alternate Benefit forl life or a return of ther member's contributions. Contributions. Contribution provisions are established by General Statute 128-30 and may be amended only by the North Carolina General Assembly. Town employees are required to contribute 6% of their compensation. Employer contributions are actuarially determined and set annually by the LGERS Board of Trustees. The Town's contractually required contribution rate for the year ended June 30, 2022, was 11.35% for general employees actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year. Contributions to the pension plan from the Town were $23,8791 for the year ended. June 30, 2022. Refunds of Contributions - Town employees who have terminated service as a contributing member of LGERS, may file an application for a refund of their contributions. By state law, refunds to members with at least five years of service include 4% interest. State law requires a 60 day waiting period after service termination before the refund may be paid. The acceptance of a refund payment cancels the individual's Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of At June 30, 2022, the Town reported a liability of $40,334 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2021. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2020. The total pension liability was then rolled forward to the measurement date of June 30, 2021 utilizing update procedures incorporating the actuarial assumptions. The Town's proportion of the net pension liability was based on a projection of the Town's long-term share of future payroll covered by the pension plan, relative to the projected future payroll covered by the pension plan of all participating LGERS employers, actuarially determined. At June 30, 2022, the Town's proportion was 0.00263% (measured as of June 30, 2021), which was ani increase of0.0004% from its proportion as of June 30, 2021 (measured as of June 30, 2020).  actuarial gains of the plan.  right to employer contributions or any other benefit provided by LGERS.  Resources Related to Pensions  34    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  For the year ended June 30, 2022, the Town recognized pension expense of $13,825. At June 30, 2022, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions  from the following sources:  Deferred Outflows Deferred Inflows  of Resources 9  of Resources  Differences between expected and actual experience Net difference between projected and actual earnings on Changes in proportion and differences between Town contributions and proportionate share of contributions Town contributions subsequent to the measurement date  12,832 $ 25,340  Changes of assumptions pension plani investments  57,625 9,402 67,027  23,879 62,051 $  Total  $  $23,879 reported as deferred outflows of resources related to pensions resulting from Town contributions subsequent to the measurement date will ber recognized as a decrease oft the net pension asset in the year ended June 30, 2023. Other amounts reported as deferred inflows ofr resources related to pensions will be  recognized in pension expense as follows:  Year ended June 30: 2023 2024 2025 2026 2027 Thereafter  $  (184) (4,536) (6,500) (17,633)  Actuarial Assumptions. The total pension liability in the December 31, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:  Inflation Salary increases Investment rate of return  2.5 percent productivity factor including inflation  3.25 percent to 8.25 percent, including inflation and 6.50 percent, net ofp pension plani investment expense,  35    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  The plan actuary currently uses mortality rates based ont the RP-2014 Total Data Set for Healthy Annuitants Mortality Table that vary by age, gender, employee group (ie. general, law enforcement officer) and health status (.e. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions of the U.S. population. The healthy mortality rates also contain a The actuarial assumptions used in the December 31, 2020 valuation were based on the results of an Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not The projected long-term investment returns and inflation assumptions are developed through review of current and historical capital markets data, sell-side investment research, consultant whitepapers, and historical performance of investment strategies. Fixed income return projections reflect current yields across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated forr multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis of the equity risk premium and the fixed income return projections. Other asset categories and strategies' return projections reflect the foregoing and historical data analysis. These projections are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class as of June 30, 2020 are  provision to reflect future mortality improvements.  actuarial experience study for the period. January 1, 2015 through December 31, 2019.  included in the measurement.  summarized in the following table:  Long-Term Expected Real Rate of Return  Asset Class Fixed! Income Global Equity Reall Estate Alternatives Credit Inflation Protection Total  Target Allocation  29.0% 42.0% 8.0% 8.0% 7.0% 6.0% 100%  1.4% 5.3% 4.3% 8.9% 6.0% 4.0%  The information above is based on 30 year expectations developed with the consulting actuary for the 2020 asset, liability, and investment policy study for the North Carolina Retirement Systems, including LGERS. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized figures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term inflation Discount rate. The discount rate used to measure the total pension liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made att the current contribution rate and that contributions from employers will be made at statutorily required  assumption of 2.50%. All rates of return andi inflation are annualized.  36    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued) projected benefit payments to determine the total pension liability.  rates, actuarially determined. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of Sensitivity of the Town's proportionate share of the net pension asset to changes in the discount rate. The following presents the Town's proportionate share of the net pension asset calculated using the discount rate of6.50 percent, as well as what the Town's proportionate share of the net pension asset or net pension liability would bei ifi it were calculated using a discount rate thati is one percentage point lower (5.50 percent)  orone percentage point higher (7.50 percent) than the current rate:  1% Decrease (5.50%) $  Discount Rate (6.50%)  1% Increase (7.50%) (55,324)  Town's proportionate share of ther net pension liability (asset)  156,572 $  40,334 $  Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in the separately issued Comprehensive Annual Financial Report (CAFR) for the State of North  Carolina.  b. Law Enforcement Officers Special Separation. Allowance The Town contracts all security and has no eligible law enforcement employees.  G.S Supplemental Retirement Income Plan 401K plan for eligible employees  Plan Description. The Town contributes to the Supplemental Retirement Income Plan (Plan), a defined contribution pension plan administered by the Department of State Treasurer and al Board of Trustees. The Plan provides retirement benefits to employees employed by the Town. Article 5 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Supplemental Retirement Income Plan for employees is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes the pension trust fund financial statements for the Internal Revenue Code Section 401(K) plan that includes the Supplemental Retirement Income Plan for employees. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, orby calling (919)981-5454. Funding Policy. Article 12E of G.S. Chapter 143 requires the Town to contribute each month an amount equal to five percent ofe each employee's salary, and all amounts contributed are vested immediately. Also, The Town made contributions of $13,335 fort the reporting year. No amounts were forfeited. The Town has not established policies concerning post-employment benefits as of June 30, 2022.  the employees may make voluntary contributions tot the plan.  d. Other Post-employment Benefits  37    Notes to the Financial Statements (continued)  2. Deferred Outflows and Inflows of Resources Deferred outflows of resources are comprised of the following:  Source  Amount $ 12,832 25,340  Differences between expected and actual experience Neto difference between projected and actual earnings on Changes inj proportion and differences between employer contributions and proportionate share of contributions Town contributions subsequent toi the measurement date  Changes in assumptions pension plan investments  23,879 62,051  Total  $  Deferred inflows of resources at year-end are comprised of thet following:  Statement of Net General Fund  Position Balance Sheet $ $ 11,923 431,683 431,683  Taxes Receivable, less penalties (General Fund) Deferred revenue. ARPA Differences between expected and actual experience Changes in assumptions  Changes inj proportion and differences between employer contributions and proportionate share of contributions  67,027 498,710 $  Total 3. Risk Management  $  443,606  The Town is exposed to various risks of loss related to torts; theft or damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Town participates in three self- funded risk financing pools administered by the North Carolina League of Municipalities. Through these pools, the Town obtains general liability and auto liability coverage of $3 million per occurrence, property coverage up to $20 million per building per occurrence, workers' compensation coverage up to the statutory limits, and employee health coverage up to a $1 million lifetime limit. The pools are reinsured through commercial companies for single occurrence claims against general liability and auto liability in excess of $500,000, upi to $500,000 for property, and $250,000 up to $5 million for workers' compensation. The pools are reinsured for annual employee health claims in excess of $150,000. The property liability pool has an aggregate limit of $1,000,000 for the aggregate losses in a single year. After the property pool has paid out $1,000,000, then the pool will be liable for a $10,000 per claim maintenance deductible on future property The Town has a public officials bond of $50,000 on the Finance Officer and $10,000 on the Tax Collector.  losses for that year. The remainder of each claim willl bel borne by the re-insurer.  The Town currently has noi flood insurance coverage.  38    Notes to the Financial Statements (continued)  4. Long-Term Obligations: a. Changes in Long-term Liabilities Governmental activities: Installment Note Net Pension Liability (LGERS) Accrued Vacation  Balance 2021 $ $ $ $ $ 108,275 67,941 40,334 5,253 3,295 8,548  Balance Current Portion  Increases Decreases June 30, 2022 of Balance  $ 113,528 $ 3,295 $ 67,941 $ 48,882 $  Compensated absences for governmental activities have typically been liquidated in the General Fund. At. June 30, 2022, the Town of Bermuda Run had bonds authorized but un-issued of $-0- and al legal debt  margino of$51,747,253. C.I Interfund Balances and Activity  Balances due to/from other funds at. June 30; 2022, consist of thei following:  Due to/from other funds: To From General Fund Capital Project From Sewer Fund To From Sewer Fund Capital Project  General Fund Sewer Fund  $ 360,734 $ 322,756 $ 37,978 $ 200,632 $ 200,632  Thei interfund balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, The General Fund has advanced the General Fund Capital Project Fund proceeds needed for various expenditures. The General Fund anticipates a repayment arrangement after the project is completed. The General Fund has advanced the Sewer Fund proceeds needed for storm water management expenditures.  and (3) payments between funds are made.  The General Fund anticipates a repayment arrangement in the next fiscal year.  D. Net Investment in Capital Assets  Governmental Business-type $ 5,894,186 $ 1,977,625 5 5,894,186 $ 1,977,625  Capital Assets less: long-term debt add: unexpended debt proceeds Net investment in capital assets  39    Notes to the Financial Statements (continued)  E.F Fund Balance  The following schedule provides management and citizens with information on the portion of General fund  balance that is available for appropriation:  Total fund balance General Fund Less: Stabilization by State Statute Streets Powell Bill Remaining Fund Balance  $ 1,886,477 555,256 328,965 $ 1,002,256  The outstanding encumbrances are amounts needed to pay any commitments related to purchase orders  and contracts that remain unperformed at year-end.  Encumbrances  General Fund $0  Non-Major Funds  IV. Summary Disclosure of Significant Contingencies Federal and State Assisted Programs  The Town has received proceeds from several federal and State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant moneys to the grantor agencies. Management believes that any required refunds will be immaterial. No provision has been made in the accompanying  financial statements for the refund of grant moneys, V.S Significant Effects of Subsequent. Events  Subsequent events occurring after the statement of financial position date have been evaluated through September 12, 2022, whichi is the date the financial statements were available to be issued. InJ January 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a "Public Health Emergency of international Concern", which continues to spread throughout the world and has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The coronavirus outbreak and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity oft this situation precludes any prediction as to the ultimate material adverse impact of the coronavirus outbreak. The outbreak presents uncertainty and risk with respect to the Authority  andi its ability to carry outi its activities which could impact its financial results.  40    00    4    Town of Bermuda Run, North Carolina For the Year Ended June 30, 2022  General Fund  Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30, 2021)  Variance Favorable (Unfavorable)  Actual- - Year Ended June 30, 2021 $ 875,192 1,975 124 877,291 465,766 465,766 197,992 11,740 209,732 61,969 193,790 255,759 8,560 25,253 100,000 125,253 1,942,362  Budget  Actual $ 952,456 13,602 552 966,609 429,253 429,253 203,695 12,414 216,109 79,863 33,000 204,397 317,260 5,450 23,989 100,000 123,989 2,058,670  Revenues: Ad Valorem taxes (net ofr refunds) Current levies Prior levies Penalties andi interest Other taxes and licenses: Local option sales tax Unrestricted intergovernmental revenues: Utilities franchise tax Cable franchise Beer and wine tax Restricted intergovernmental revenues: Powell Bill allocation Davie Community Foundation ABC revenues Investment earnings Other revenues: Other income  $ 967,050  $  (441) 9,583  419,670  220,200  (4,091)  326,600 5,030  (9,340) 420  Reimbursement: for administrative charges  123,950 2,062,500 1,254,851 3,317,351  39 (3,830) (1,254,851) (1,258,681)  Total Revenues Other financing sources: Appropriated fund balance Total revenues and other financing sources  2,058,670  1,942,362  43    Town of Bermuda Run, North Carolina  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (continued)  Variance Favorable (Unfavorable) June 30, 2021  Actual-Year Ended  Budget  Actual  Expenditures: General Government Governing Body Administration: Salaries and Employee Benefits Operating Expenses Professional Services Tax collection fees Town Hall expenses Capital outlay Election costs Community Services: Planning andz zoning Ground/ Igeneral maintenance Leaf removal Waster removal Townp projects Posto office Davie Community Foundation expenses Capital outlay Other Total General Government Safety- Community police program Transportation: Street Department: Engineering Repairs streets Other Streetii lights StreetF ROW maintenance Capital outlay Powell- street repairs Total Transportation Debts service: Principal Interest Total Expenditures Revenues over Expenditures Other Financing Sources (Uses) Transfer to general capital project Transfert tos sewer fund Excess ofr revenues and other sources over (under) expenditures ando other uses Fund Balance: Beginning of Year, July1 EndofYear, June 30  $ 11,400 $ 10,639 $  761 $ 11,250  276,120 98,255 43,300 18,898 36,073 4,635 477,280 49,557 46,076 41,520 281,604 427,413 798 21,850 59,752 928,570 1,416,489 87,022 87,008 400,507 103,835 93,806 22,211 76,089 783,455  247,491 106,756 39,409 41,460 19,950 455,066 48,885 46,600 43,335 207,396 85,828 5,379 26,181 492,721 959,037 79,553 9,000 410,920 113,822 96,342 29,116 122,044 752,127  520,357  43,077  1,026,783 1,558,540 93,000  98,213 142,051 5,978  856,000  72,545  2,507,540 809,811 (809,811)  2,286,966 (228,296) (809,811) (1,038,107) 2,924,584 1,886,477  220,574 (1,038,107)  1,790,717 151,645 (123,200) 28,445 2,896,139 2,924,584  (1,038,107)  44    Town of Bermuda Run, North Carolina Special Revenue Fund- Gated Security For the Year Ended June 30,2022  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30,2021)  Variance Favorable (Unfavorable)  Actual -Year Ended June 30,2021 $ 568,581 568,581  Budget  Actual $ 571,768  Operating revenues: Gate fees Insurance proceeds Fund balance appropriated Total revenue and otherf financing sources Operating expenditures: Administrative Gate operations expense Other Financing Sources (Uses) Transfer to other funds Total other financing sources (uses) Total expenditures and otherf financing uses Revenues over (under) expenditures Fund Balance: Beginning ofy year End of year  $ 566,017 123,692 689,709  571,768 $  5,751 123,692 129,443  571,768  568,581  50,000 617,577 667,577  50,000 509,048 559,048  689,709  22,132  689,709  667,577  22,132  559,048 9,534 207,952 $ 217,485  $  (95,810) $ (95,810)  217,485 $ 121,676  45    Town of Bermuda Run North Carolina General Capital Projects Fund- Bluel Heron Trail From inception and for the fiscal year ended June 30, 2022  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual  Actual Current Year  Variance Favorable (Unfavorable)  Project Authorization 2 2,954,395 $ 2,954,395  Prior Year  Totalt to Date  Revenues: NCDOT Funds Total revenues Expenditures: Construction CEI services NCDOT project oversight Administration Total expenditures Revenues over expenditures Other financing sources: Transfer from general fund Total other financing sources Net change inf fund balance Fund Balance: Beginning of year End ofy year  $ 462,345 $ 462,345 $ (2,492,050)  462,345 539,633 38,298 577,931 (115,586)  462,345 539,633 38,298 577,931 (115,586)  (2,492,050)  2,801,732 557,375 335,911 36,000 3,731,018 (776,623) 776,623 776,623  2,262,099 519,077 335,911 36,000 3,153,087 (661,037) 776,623 776,623  (115,586)  (115,586) $ 115,586  $( (115,586)  46    Town of Bermuda Run, North Carolina American Rescue Plan Fund Fort the Year Ended June 30, 2022  Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual  With Comparative Actual Amounts fort the Year Ended June 30, 2021)  Variance Favorable (Unfavorable)  2021 Actual $ 317 863,367 863,367 (863,684)  Budget  Actual $  REVENUES: ARPI Funds Interest income ARP Funds EXPENDITURES:  317 317 $  $  Transfers out General Fund Capital Project  863,367  Net changei in fund balance Fund balances- beginning of year Fund balances end of year  317  $  317  47    Town of Bermuda Run North Carolina General Capital Projects Fund-US1 158  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual  From inception and for the fiscal year ended June 30, 2022  Actual Current Year  Variance Favorable (Unfavorable)  Project Authorization  Prior Year  Totalto Date  Revenues:  Capital contributions: Hillsdale Group Total revenues Expenditures: Road construction Right of way Total expenditures Revenues over expenditures Other financing sources: Transfer from General Fund- Powell Bill Transfer from General Fund Total otherf financing sources Neto change in fund balance Fund Balance: Beginning of year End ofy year  770,000 $ 770,000 $  770,000 $ 770,000 1,640,411 62,600 1,703,011 (933,011) 123,200 809,811 933,011  770,000 1,640,411 62,600 1,703,011 (933,011) 123,200 809,811 933,011  770,000 1,640,411 62,600 1,703,011 (933,011) 123,200 123,200  809,811 809,811  $( (809,811) $ 809,811 $  $  (809,811) $  48    Town of Bermuda Run, North Carolina Sewer Fund Fort the Year Ended June 30, 2022  Schedule of Revenues and Expenditures Budget and Actual- (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30,2021)  Variance Favorable (Unfavorable) June 30, 2021  Actual- Year Ended 525,341 850 526,191  Budget  Actual 607,425 2,550 609,975 $ 79,125  Operating revenues: Sewer charges Tapf fees  530,850  Other financing sources: Transfer from general fund Appropriated fund balance Total revenue and other financing sources Operating expenditures: Administrative Licenses Charges from general fund Sewer operations: Plant operations Maintenance Engineering Repairs -plant Repairs lines Utilities Storm water management Capital outlay Other  530,850  609,975  79,125  526,191  3,116 50,000 53,116 63,123 53,912 11,707 15,684 37,782 14,092 196,299 249,415  1,010 50,000 51,010 53,000 31,121 29,174 32,837 58,898 16,165 221,195 272,205  51,200  (1,916)  479,650 530,850  283,351 281,435  Total operating expenditures Other budgetary appropriations: Principal paid on long-term debt Interest paid Total expenditures and budgetary appropriations Total revenue and other financing sources over (under) expenditures and budgetary appropriations  530,850  249,415  281,435  272,205  $  360,560 $ 360,560 $ 253,986  49    Town of Bermuda Run, North Carolina Sewer Fund (continued) Fort the Year Ended June 30,2 2022  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30, 2021)  2022. Actual  2021 Actual  Reconciliation of Modified Accrual Basis to Full Accrual Basis:  Total Revenues and Other Financing Sources Total Expenditures and Budgetary Appropriations Excess of Revenues Over (Under) Expenditures Capital outlay Depreciation  $ 609,975  $ 526,191  249,415 360,560  272,205 253,986  (85,371)  (85,817)  Change in net position  $ 275,189  $ 168,169  50    Town of Bermuda Run North Carolina Sewer Capital Project Fund - WWTP  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) From inception and for the fiscal year ended June 30,2022  Actual Current Year  Variance Favorable (Unfavorable)  Project Authorization  Prior Year  Totalt to Date $  Revenues: None Total revenues Expenditures: Construction Administration Total expenditures Revenues over expenditures Other financing sources: Transfer from Sewer Fund Total othert financing sources Revenues and other sources over (under) expenditures  1,552,653 232,897 1,785,550 (1,785,550) 1,785,550 1,785,550  200,632 - 200,632 (200,632)  200,632 200,632 (200,632)  1,352,021 232,897 1,584,918 (1,584,918) 1,785,550 1,785,550  (200,632) $ (200,632) $ 200,632  51    Town of Bermuda Run, North Carolina Schedule of Changes in Ad' Valorem Taxes Receivable For the Year ended June 30, 2022  Balance June 30, 2021 $  Collections and Credits $ 964,317 5,258 2,908 427 244 146 (291) (372) 55 (67) (42) 1,266 973,849  Balance June 30,2022 $  YearofLevy 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 2013-2014 2012-2013 2011-2012 2010-2011  Additions $ 970,261  5,944 2,152 709 794 287 346 680 387 124 303 197  7,410 3,617 1,221 531 492 389 15 179 236 155 1,266 15,511  $  $  970,261  $  Ad Valorem Taxes Receivable- Net Reconcilement with Revenues: Tax- Ad Valorem Adjustments  $ $ $  11,923 966,057 7,792 973,849  Total collections and credits  52    Town of Bermuda Run, North Carolina Analysis of Current Tax! Levy For the Year Ended. June 30, 2022  TotalLevy  Property excluding Registered Motor Vehicles $ 887,053 5,938  Registered Motor Vehicles $ 77,270  Property Valuation Rate $642,882,000 0.15 $ 964,323  Total Levy  Tax! Levy- Town Wide Discoveries Abatements and Releases Total for Year  3,958,667  5,938  $_646,840,667  970,261 5,944 $ 964,317  892,991 5,944 887,047 99.33%  77,270  Less, Uncollected' Tax at June 30, 2022 Current Year's1 Taxes Collected Percent Current Year Collected  $ 77,270  99.39%  100.00%  53    EDDIECARRICK, CPA, PC Certified Public Accountant  Report On Internal Control Over Financial Reporting And On Compliance and Other Matters Based On An Audit Of  Financial Statements Performed In Accordance With Government Auditing Standards  INDEPENDENT AUDITOR'S REPORT  Tot the Honorable Mayor and Members of the Town Council Town of Bermudal Run, North Carolina  Ihave audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government, Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information the Town of Bermuda Run, North Carolina, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprises the Town of Bermuda Run's basic financial statements, and have issued my report thereon dated  September 12, 2022.  Internal Control Over Financial Reporting  In planning and performing my audit of the financial statements, considered the Town of Bermuda Run's internal control over financial reporting (internal control) asal basis for designing audit procedures that are appropriate int the circumstances fort the purpose of expressing my opinions on the financial statements, but not fort the purpose of expressing an opinion on the effectiveness of the Town of Bermuda Run's internal control. Accordingly, I do not express an opinion on the Ad deficiency in internal control exists when the design or operation of a control does not allow management or employees, int the 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 deficiençies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A. significant deficiency is a deficiency or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. My consideration of the internal control was fort thel limited purpose described ini the first paragraph oft this section and was not designed to identify all deficiencies ini internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during my audit Ididi noti identify any deficiencies ini internal control that! C consider tol be material weaknesses. Ididi identify certain deficiencies in internal control, described in the following paragraph thatl consider to be significant deficiencies. Due to the limited number ofp personnel in the Town of Bermuda Run's office, there are inherent limitations to segregation of duties among Town of Bermuda Run's personnel. Presently, a single individual prepares checks, reconciles bank accounts, and maintains the general ledger. Alternative controls should be used to compensate for any lack of segregation of duties. The Town of Bermuda Run's governing board should provide some of these controls. Management is aware of the deficiency, but cost-benefit analysis indicates that hiring more personnel to mitigate this issue is not feasible. Management will request specific board members become more involved by providing additional oversight.  effectiveness of the Town's internal control.  Member oft theA American Institute of Certified PublicA Accountants  Eddie Carrick  54  151 Young! Drive, Lexingion, NC 27292 336-249-2545, Fax 336-249-4745    Compliance and Other Matters  As part of obtaining reasonable assurance about whether the Town of Bermuda Run's financial statements are free from material misstatement, performed tests of its compliance with certain provisions ofl 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 with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other  matters that are required to be reported under Government. Auditing Standards.  Town of Bermuda Run's Response to Findings  The Town of Bermuda Run's responses to the findings identified in my audit are described previously. The Town's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, I  express no opinion oni it. Purpose of this Report  The purpose of this report is solely to describe the scope of my testing ofi internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness oft the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.  Eddie Carrick, CPA,PC  ko.ct Lexington, North Carolina September 12, 2022  55