LINCOLN COUNTY, OREGON ANNUAL FINANCIAL REPORT AND INDEPENDENT AUDITOR’S REPORT YEAR ENDED JUNE 30, 2024 LINCOLN COUNTY, OREGON List of Elected and Appointed Officials June 30, 2024 BOARD OF COMMISSIONERS Title Name Commissioner, Chair Kaety Jacobson Commissioner Claire Hall Commissioner Casey Miller All individuals receive mail at the address listed below: 225 West Olive Street Newport, OR 97365 Administrative Staff Kristin Yuille, County Counsel Tim Johnson, County Administrator Independent Auditor’s Report A - 1 - A - 3 Management’s Discussion and Analysis B - 1 - B - 6 Basic Financial Statements: Government - Wide Financial Statements: Statement of Net Position 1 Statement of Activities 2 Fund Financial Statements: Balance Sheet – Governmental Funds 3 Reconciliation of Governmental Funds Balance Sheet to Statement of Net Position 4 Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental Funds 5 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities 6 Statement of Net Position – Proprietary Funds 7 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 8 Statement of Cash Flows – Proprietary Funds 9 Statement of Fiduciary Net Position – Fiduciary Fund 10 Statement of Changes in Fiduciary Net Position – Fiduciary Fund 1 1 Notes to Basic Financial Statements 1 2 - 50 Required Supplementary Information: S chedule s of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: General Fund 5 1 Public Works Fund 5 2 Mental Health Fund 5 3 Public Health Fund 5 4 American Rescue Plan Act Fund 5 5 Schedule of the County’s Proportionate Share of the Net Pension Asset / (Liability) and Schedule of the County’s Contributions for Oregon Public Employees Retirement System 5 6 Schedule of the County’s Proportionate Share of the Net OPEB Asset / (Liability) and Schedule of the County’s Contributions – Retirement Health Insurance Account 5 7 Schedule of Changes in the County’s Total OPEB Liability and Related Ratios 5 8 Other Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Capital Projects Fund 5 9 Combining and Individual Fund Financial Schedules: Nonmajor Governmental Funds: Combining Balance Sheet – Nonmajor Governmental Funds 60 Combining S chedule of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds 6 1 Nonmajor Special Revenue Funds Combining Balance Sheet 6 2 - 6 6 | TABLE OF CONTENTS Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 67-71 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: Economic Development Fund 72 Property Management Fund 73 County Commons Fund 74 Law Library Fund 75 Clerk Records Fund 76 Transportation Service District 77 Lincoln Community Health Center Fund 78 Siletz Area Enhanced Law Enforcement District 79 Animal Services District 80 Title III / Safety Net Fund 81 Corner Preservation Fund 82 Community Justice Fund 83 Radio Communications Systems Fund 84 Extension Service District 85 Agate Beach Disposal Site Closure Fund 86 DUII Fund 87 Homeless Planning Fund 88 Developmental Disabilities Fund 89 Nonmajor Capital Projects Fund Combining Balance Sheet 90 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 91 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: County Commons Facilities Fund 92 Vehicle Replacement Fund 93 Community Enhancement Projects Fund 94 Nonmajor Enterprise Funds: Enterprise Fund Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Solid Waste Disposal District 95 Internal Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Self Insurance Fund 96 Independent Auditor’s Report Required by Oregon State Regulations 97-98 Additional Reports and Schedules Required by Uniform Guidance: Independent Auditor’s 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 99-100 Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance 101-103 Schedule of Expenditures of Federal Awards 104-105 Notes to Schedule of Expenditures of Federal Awards 106 Schedule of Findings and Questioned Costs 107-111 | INDEPENDENT AUDITOR’S REPORT A-1 Independent Auditor's Report Board of Commissioners Lincoln County Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Lincoln County (“County”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the County's basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the County, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the County and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matters As described in Note 1 to the financial statements, the 2023 financial statements have been restated to correct misstatements. Our opinions are not modified with respect to 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 in 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, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the County's ability to continue as a going concern for 12 months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. A-2 Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. 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 GAAS and Government Auditing Standards will always detect a material misstatement when it exists. 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 if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards , we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • 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, evidence regarding the amounts and disclosures in the financial statements. • 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 County's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the County's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require, that the management's discussion and analysis and general fund and major special revenue funds budgetary comparison information, certain pension schedules, and certain other postemployment benefit schedules as listed in the table of contents 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. We have applied certain limited procedures to the management’s discussion and analysis, certain pension schedules, and certain other postemployment schedules 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 our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the management’s discussion and analysis, certain pension schedules, and other certain postemployment benefit schedules as listed in the table of contents because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. A-3 The general fund and major special revenue funds’ budgetary comparison information is the responsibility of management and is 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 in the United States of America. In our opinion, the general fund and major special revenue funds’ budgetary comparison information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The supplementary information as listed in the table of contents and the schedule of expenditures of federal awards is presented for the purpose of additional analysis, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 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 in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 9, 2025 on our consideration of the County's internal control over financial reporting and on our 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 our 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 County’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 the County’s internal control over financial reporting and compliance. Other Reporting Required by Oregon State Regulations In accordance with Oregon State Regulations , we have also issued our report dated October 9, 2025 on our consideration of the County’s compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters, including the provisions of Oregon Revised Statutes (ORS) as specified in Oregon Administrative Rules 162-010-0000 through 162-010-0330 of the Minimum Standards for Audits of Oregon Municipal Corporations The purpose of that report is to describe the scope of our testing necessary to address the required provisions of ORS, and not to provide an opinion on compliance with such provisions. Donald F. Ewalt, CPA KDP Certified Public Accountants, LLP Medford, Oregon October 9, 2025 | MANAGEMENT’S DISCUSSION AND ANALYSIS LINCOLN COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2024 B-1 As management of Lincoln County, Oregon, we offer readers of the County’s financial statements this narrative overview and analysis of the financial activities of the County for the fiscal year ended June 30, 2024. We encourage readers to consider the information presented here and the accompanying basic financial statements. FINANCIAL HIGHLIGHTS • The County's total net position increased by $15.9 million or 15.1%. • Revenues increased by $14.7 million or 16.5%. • Expenses increased by $9.2 million or 11.7%. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to Lincoln County's basic financial statements. The statements are comprised of three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. The government-wide financial statements are designed to provide readers with a broad overview of Lincoln County's finances in a manner similar to a private-sector business. The statement of net position presents information on all of Lincoln County's assets and liabilities, with the difference of the two reported as net position. Over time, increases and decreases in net position may serve as an indicator of whether the financial position of Lincoln County is improving or deteriorating. For example, the statement of activities presents information showing how the County's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation time). The government activities of Lincoln County include general government, community services, public safety, highways and streets, culture and recreation, health and welfare, and education. Fund financial statements 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. Lincoln County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. LINCOLN COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2024 B-2 Because the focus of governmental funds is narrower than that of government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the County's near-term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balance provide a reconciliation to facilitate this comparison between the governmental funds and governmental activities. The County maintains 27 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and change in fund balances for the General, Public Works, Mental Health, Public Health, American Rescue Plan, and Capital Projects funds. These funds are considered to be major funds. Data from the nonmajor governmental funds is combined into a single, aggregated presentation. Individual fund information for each of the nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. Lincoln County adopts an annual appropriation budget for all governmental funds. Budgetary comparison statements are provided to demonstrate budgetary compliance. Proprietary funds Proprietary funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent is that the costs of providing the services be financed primarily through user fees. The County maintains two types of proprietary funds - enterprise funds and internal services funds. The County's only enterprise fund, the Solid Waste District Fund, is a blended component unit, business-type fund that derives its primary revenue from charges to customers of the solid waste haulers in the County. Internal service funds are proprietary funds that are used as an accounting tool to accumulate and allocate costs internally among a government's various functions. The Self Insurance Fund is an internal service fund that Lincoln County uses to self-manage its insurance programs such as workers' compensation, and unemployment insurance. Since the Self Insurance Fund primarily benefits governmental functions, it has been included in governmental activities in the government-wide financial statements. Fiduciary funds Fiduciary (or agency) funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not included in the government wide financial statements because the resources are not available to support the operations of Lincoln County. The County is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the County's fiduciary assets and liabilities are reported in a separate Statement of Fiduciary Net Position. An example is the Property Tax funds, which the Lincoln County Treasurer collects for many different entities within Lincoln County and then distributes these funds in accordance with tax rates certified by the County Assessor. Notes to the basic financial statements. The notes to the basic financial statements provide additional information that is essential to a full understanding of the information provided in the government-wide and fund financial statements. LINCOLN COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2024 B-3 Other supplementary information. The combining statements for the nonmajor governmental funds and budgetary comparison schedules for both the nonmajor and the internal service proprietary fund are presented immediately following the notes to the basic financial statements. A statistical section containing selected financial, economic, and demographic information is presented immediately following the combining statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS Changes in Net Position. As noted earlier, any changes in net position may serve over time as a useful indicator of a government's financial position. The County's combined net position was $121.1 million at June 30, 2024, which, after restatement, increased $15.9 million or 15.1% between fiscal years 2023 and 2024. An increase in cash and investments due to COVID funding contributed to the increase in net position. This was offset by increases in current liabilities and net pension liabilities. Current and other assets increased by $10.0 million or 10.3%. Capital assets increased $3.7 million, or 7.9%. Overall, total assets and deferred outflows or resources increased by $14.7 million or 9.9%. Other liabilities decreased from last year by $3.3 million or 14.5%. Other liabilities consist mainly of accounts payable, accrued payroll payable, and unearned revenue. The decrease is mostly due to the decrease in unearned revenue. The decrease in unearned revenue is due to COVID funding for which the qualifying expenditures had been made during the year. Long-term liabilities increased $2.2 million or 11.6% due primarily to the issuance of new subscription leases ($1.0 million) and an increase in the Net Pension Liability ($3.2 million) during the year. These liabilities increases were offset by pay down of debt of $2.2 million. The County's net investment in capital assets increased by $4.7 million or 12.5% with modest capital project activity in 2024. An increase in capital assets of $3.7 million and a decrease in related debt of $1.0 million contributed to the increase in the County’s net investment in capital assets. The County’s increase in restricted net position due to an increase in grants and contributions restricted for specific programs which increased $4.7 million. Governmental Business Type Governmental Business Type Activities Activities Activities Activities 2024 2023 Current and other assets 106,445,523 $ 1,365,332 $ 96,311,435 $ 1,456,237 $ 107,810,855 $ 97,767,672 $ Capital assets, net 51,039,037 6,566 47,309,474 10,944 51,045,603 47,320,418 Total assets 157,484,560 1,371,898 143,620,909 1,467,181 158,856,458 145,088,090 Deferred outflows of resources 4,648,959 - 3,678,988 - 4,648,959 3,678,988 Total assets and deferred outflows 162,133,519 1,371,898 147,299,897 1,467,181 163,505,417 148,767,078 Long-term liabilities 20,783,510 - 18,623,130 - 20,783,510 18,623,130 Other liabilities 19,695,773 33,491 23,037,713 29,519 19,729,264 23,067,232 Total liabilities 40,479,283 33,491 41,660,843 29,519 40,512,774 41,690,362 Deferred inflows of resources 1,860,540 - 3,647,223 - 1,860,540 3,647,223 Total liabilities and deferred inflows 42,339,823 33,491 45,308,066 29,519 42,373,314 45,337,585 Net investment in capital assets 42,943,895 6,566 38,168,762 10,944 42,950,461 38,179,706 Restricted 47,711,063 - 33,779,571 - 47,711,063 33,779,571 Unrestricted 29,138,738 1,331,841 30,043,498 1,426,718 30,470,579 31,470,216 Total net position 119,793,696 $ 1,338,407 $ 101,991,831 $ 1,437,662 $ 121,132,103 $ 103,429,493 $ June 30, 2024 June 30, 2023 Total LINCOLN COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2024 B-4 Governmental Activities. Revenues for the County's governmental activities increased by $14.7 million or 16.5% while total expenses increased by $8.9 million or 11.4%. The increase in revenue is due primarily to COVID funding and the related expenses, operating grants increasing $5.1 million or 15.5% and property taxes increasing $1.8 million or 6.8%. As stated above, overall expenses increased this year. Specifically, general government expenses increased $1.3 million or 6.4%, public safety expenses increased $3.9 million or 17.3% and health and welfare expenses increased $4.1 million or 20.0%. These increases were driven by personnel costs and increases for technology costs, principally in the security realm. Business-type Activities. The County maintains an Enterprise Fund, the Solid Waste District, as a business type activity. The fund derives its revenue principally from charges for services and an operating grant. Net Position decreased by $99 thousand. Governmental Business Type Governmental Business Type Activities Activities Activities Activities 2024 2023 Revenues Program revenues: Fines, fees, and charges for services 23,508,102 $ 461,585 $ $19,269,853 $729,662 23,969,687 $ $19,999,515 Operating grants/contributions 38,111,421 31,000 32,999,911 31,000 38,142,421 33,030,911 Capital grants/contributions 121,926 546,956 - 121,926 546,956 General revenues: Property taxes 28,446,427 - 26,635,480 - 28,446,427 26,635,480 Transient room taxes 4,903,787 - 5,413,054 - 4,903,787 5,413,054 Other taxes 2,846,281 - 690,825 - 2,846,281 690,825 Miscellaneous 1,356,720 47,607 212,772 17,960 1,404,327 230,732 Investment income (loss) 3,874,119 64,421 2,520,852 32,235 3,938,540 2,553,087 Total revenues 103,168,783 604,613 88,289,703 810,857 103,773,396 89,100,560 Expenses General government 20,853,057 - 19,599,361 - 20,853,057 19,599,361 Public safety 26,091,757 - 22,237,989 - 26,091,757 22,237,989 Community services 6,329,528 - 7,490,531 - 6,329,528 7,490,531 Culture and recreation 598,434 - 339,665 - 598,434 339,665 Health and welfare 24,452,672 - 20,375,498 - 24,452,672 20,375,498 Education 437,308 - 381,721 - 437,308 381,721 Highway and streets 8,211,133 - 7,654,843 - 8,211,133 7,654,843 Interest on long-term debt 198,732 - 147,870 - 198,732 147,870 Solid waste - 703,868 - 479,354 703,868 479,354 Total expenses 87,172,621 703,868 78,227,478 479,354 87,876,489 78,706,832 Change in net position 15,996,162 (99,255) 10,062,225 331,503 15,896,907 10,393,728 Beginning net position 101,991,831 1,437,662 89,276,058 978,314 103,429,493 90,254,372 Restatement 1,805,703 - 2,653,548 127,845 1,805,703 2,781,393 Ending net position 119,793,696 $ 1,338,407 $ 101,991,831 $ 1,437,662 $ 121,132,103 $ 103,429,493 $ June 30, 2024 June 30, 2023 Total LINCOLN COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2024 B-5 FINANCIAL ANALYSIS OF THE COUNTY'S FUNDS At the end of the fiscal year, the County's governmental funds reported a combined fund balance of $82.1 million, an increase of $10.6 million from the previous year. • The County's General Fund balance increased $921 thousand from last year, increases in permits and fees and charges for services contributed to this increase in fund balance. • The Public Works Fund balance increased by $594 thousand. This is due to an increase in grant funding from other governments. • The Mental Health Fund showed a fund balance increase of $3.7 million. This reflected a status quo year with no major new programs. • The Public Health Fund showed a fund balance increase of $536 thousand. This reflected a significant increase in grant funding. • The American Rescue Plan Act Fund showed a fund balance increase of $364 thousand. This reflected investment income on cash and investments. • The Capital Projects fund showed a fund balance increase of $7.1 million. This reflected transfers from the County Commons Facilities Fund. GENERAL FUND BUDGETARY HIGHLIGHTS Minor changes were made during the fiscal year to adjust the County's originally adopted General Fund budget. The public safety budget increased by $434 thousand, general government increased by $16 thousand, community service increased by $47 thousand and the contingency was reduced by $186 thousand. These increases were driven by new operating grant related expenditures and COVID pandemic expenditures. The County anticipates that much, if not all, of the COVID expenditures will be reimbursed by Federal aid programs. CAPITAL ASSET AND DEBT ADMINISTRATION The County’s investment in capital assets for its governmental activities on June 30, 2024, was $51.0 million (net of accumulated depreciation/amortization), an increase of $3.7 million over last year. This investment in capital assets includes buildings, and equipment. The County’s business ‐ type activities have a nominal investment in capital assets of $6 thousand (net of accumulated depreciation) at June 30, 2024. Governmental Business Type Governmental Business Type Activities Activities Activities Activities 2024 2023 Land 4,352,728 $ - $ 2,490,912 $ - $ 4,352,728 $ 2,490,912 $ Construction in progress 2,121,995 - 1,770,648 - 2,121,995 1,770,648 Infrastructure 21,279,228 - 20,335,011 - 21,279,228 20,335,011 Buildings 11,005,628 - 11,296,895 - 11,005,628 11,296,895 Improvements 4,192,231 - 4,569,095 - 4,192,231 4,569,095 Equipment 5,181,361 6,566 4,960,264 10,944 5,187,927 4,971,208 Right-of-use assets 1,758,961 - 1,787,290 - 1,758,961 1,787,290 Software 1,146,905 - 99,359 - 1,146,905 99,359 Total 51,039,037 $ 6,566 $ 47,309,474 $ 10,944 $ 51,045,603 $ 47,320,418 $ June 30, 2024 June 30, 2023 Total LINCOLN COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2024 B-6 Additional information on the County's capital asset activity may be found in the Capital Assets section (Note 6) of the notes to the financial statements. Long-term Debt. On June 30, 2024, the County had total direct borrowing debt of $5.2 million. The County’s total general obligation debt decreased by $2.0 million. The County made principal payments of $444 thousand on one of its direct borrowings. Additionally, the County paid in full it’s prior year issued direct borrowings of $1.6 million. Additional information on the County's long ‐ term debt activity may be found in the Noncurrent Liabilities section (Note 8) of the notes to the financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET The fiscal year 2023-2024 budget continues to reflect the ongoing impacts of the COVID-19 pandemic, which first affected operations in fiscal year 2019-2020. Adjustments in operational patterns, the transition to remote work for staff, and continued COVID-19 mitigation measures are expected to persist throughout the fiscal year. Although federal aid programs are anticipated to offset some of these costs, uncertainties remain regarding the timing of disbursements, the allowability of certain expenses, and the overall duration of pandemic-related challenges. As a result, the County has adopted a conservative budgeting approach aimed at balancing the need to maintain critical services and functions while minimizing the use of reserves. However, this cautious strategy may limit the County’s ability to achieve the same level of reserve improvements seen in recent years until pandemic-related pressures begin to ease. Additionally, increased costs for Materials and Services are starting to emerge as a concerning trend, further straining the conservative budgeting framework. Rising prices in these areas could place additional pressure on the County’s financial position if such increases persist or accelerate in the coming months. While the County is not currently anticipating a significant depletion of reserves, these cost escalations highlight the importance of careful monitoring and potential adjustments to ensure fiscal stability. The dual challenge of managing pandemic-related uncertainties and addressing inflationary pressures underscores the need for ongoing fiscal prudence and adaptability in the County’s financial planning process. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of Lincoln County's financial condition. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to the Finance Director, Lincoln County, 210 SW 2nd St., Newport, OR 97365. Governmental Business Type Governmental Business Type Activities Activities Activities Activities 2024 2023 Direct borrowing 5,181,149 $ - $ 7,225,553 $ - $ 5,181,149 $ 7,225,553 $ Total 5,181,149 $ - $ 7,225,553 $ - $ 5,181,149 $ 7,225,553 $ June 30, 2024 June 30, 2023 Total | BASIC FINANCIAL STATEMENTS | GOVERNMENT-WIDE FINANCIAL STATEMENTS LINCOLN COUNTY STATEMENT OF NET POSITION JUNE 30, 2024 Governmental Business-type Activities Activities Total ASSETS AND DEFERRED OUTFLOWS OF RESOURCES: ASSETS: Cash and investments 95,653,886 $ 1,325,614 $ 96,979,500 $ Receivables, net 10,718,601 39,718 10,758,319 Net other post-employment benefit asset (RHIA) 73,036 - 73,036 Capital assets not being depreciated 6,474,723 - 6,474,723 Capital assets being depreciated/amortized, net 44,564,314 6,566 44,570,880 TOTAL ASSETS 157,484,560 1,371,898 158,856,458 DEFERRED OUTFLOWS OF RESOURCES: Deferred amounts related to OPERS 4,129,716 - 4,129,716 Deferred amounts related to RHIA 19,296 - 19,296 Deferred amounts related to OPEB (medical subsidy) 499,947 - 499,947 TOTAL DEFERRED OUTFLOWS OF RESOURCES 4,648,959 - 4,648,959 TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 162,133,519 1,371,898 163,505,417 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES: LIABILITIES: Accounts payable 2,977,120 19,358 2,996,478 Accrued payroll and related expenses 2,956,503 2,348 2,958,851 Accrued interest payable 27,644 - 27,644 Unearned revenue 11,234,216 - 11,234,216 Accrued compensated absences 2,500,290 11,785 2,512,075 Net pension liability (OPERS) (due in more than one year) 11,102,200 - 11,102,200 Other post employment benefit obligation (medical subsidy) Due within one year 179,750 - 179,750 Due in more than one year 1,406,418 - 1,406,418 Leases and subscriptions payable: Due within one year 538,572 - 538,572 Due in more than one year 2,349,176 - 2,349,176 Long-term debt, net of unamortized premium/discount: Due within one year 455,272 - 455,272 Due in more than one year 4,752,122 - 4,752,122 TOTAL LIABILITIES 40,479,283 33,491 40,512,774 DEFERRED INFLOWS OF RESOURCES: Deferred amounts related to OPERS 1,372,460 - 1,372,460 Deferred amounts related to RHIA 6,467 - 6,467 Deferred amounts related to OPEB (medical subsidy) 55,718 - 55,718 Deferred amounts related to leases 425,895 - 425,895 TOTAL DEFERRED INFLOWS OF RESOURCES 1,860,540 - 1,860,540 TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 42,339,823 33,491 42,373,314 NET POSITION: Net investment in capital assets 42,943,895 6,566 42,950,461 Restricted 47,638,027 - 47,638,027 Restricted for RHIA 73,036 - 73,036 Unrestricted 29,138,738 1,331,841 30,470,579 TOTAL NET POSITION 119,793,696 $ 1,338,407 $ 121,132,103 $ See accompanying notes to basic financial statements 1 LINCOLN COUNTY STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2024 Fines, Fees, and Operating Capital Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental activities: General government 20,853,057 $ 4,489,883 $ 8,300,535 $ - $ (8,062,639) $ - $ (8,062,639) $ Public safety 26,091,757 2,034,953 2,503,062 86,045 (21,467,697) - (21,467,697) Community services 6,329,528 1,261,310 2,933,148 - (2,135,070) - (2,135,070) Culture and recreation 598,434 7,959 30,725 - (559,750) - (559,750) Health and welfare 24,452,672 14,428,642 16,694,615 - 6,670,585 - 6,670,585 Education 437,308 - 7,410 35,881 (394,017) - (394,017) Highway and streets 8,211,133 1,285,355 7,641,926 - 716,148 - 716,148 Interest on long-term debt 198,732 - - - (198,732) - (198,732) Total government activities 87,172,621 23,508,102 38,111,421 121,926 (25,431,172) - (25,431,172) Business-type activities: Solid waste 703,868 461,585 31,000 - - (211,283) (211,283) Total primary government 87,876,489 $ 23,969,687 $ 38,142,421 $ 121,926 $ (25,431,172) (211,283) (25,642,455) General revenues: Property taxes 28,446,427 - 28,446,427 Transient room taxes 4,903,787 - 4,903,787 Other taxes 2,846,281 - 2,846,281 Miscellaneous 1,356,720 47,607 1,404,327 Investment income (loss) 3,874,119 64,421 3,938,540 Total general revenues 41,427,334 112,028 41,539,362 CHANGE IN NET POSITION 15,996,162 (99,255) 15,896,907 BEGINNING NET POSITION - BEGINNING OF YEAR, AS RESTATED 103,797,534 1,437,662 105,235,196 ENDING NET POSITION - END OF YEAR 119,793,696 $ 1,338,407 $ 121,132,103 $ Changes in Net Position Net (Expense) Revenue and Program Revenues See accompanying notes to basic financial statements 2 | FUND FINANCIAL STATEMENTS