STATE ENVIRONMENTAL IMPROVEMENT AND ENERGY … · For the year ending June 30, 2016, the Authority...

STATE ENVIRONMENTAL IMPROVEMENT AND ENERGY RESOURCES AUTHORITY

COMMUNICATION OF AUDIT RELATED MATTERS

JUNE 30, 2016

.::WILLIAMS .::::KEEPERS LLC

CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

November 1, 2016

To the Members of the Board of the State Environmental Improvement and Energy Resources Authority

2005 West Broadway, Suite 100, Columbia, MO 65203 OFFICE (573) 442-6171 FAX (573) 777-7800

3220 West Edgewood, Suite E, Jefferson City, MO 65109 OFFICE (573) 635-6196 FAX (573) 644-7240

www.williamskeepers.com

We have audited the financial statements of the State Environmental Improvement and Energy Resources Authority (the Authority) for the year ended June 30, 2016, and have issued our reportthereon dated November 1, 2016. Professional standards require that we provide you with information about our responsibilities under U.S. generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. Professional standards also require that we communicate to you the following information related to our audit.

Our Responsibility under U.S. Generally Accepted Auditing Standards

As stated in our engagement letter dated March 22, 2016, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities.

Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As a part of our audit, we considered the internal control over financial reporting (internal control) of the Authority. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters.

Other Information in Documents Containing Audited Financial Statements

Our responsibility for the supplementary information accompanying the financial statements, as described by professional standards, is to evaluate the presentation of the supplementary information in relation to the financial statements as a whole and to rep01i on whether the supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole.

With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine the information complies with U.S. generally accepted accounting principles, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

American Institute of Certified Public Accountants J Missouri Society of Certified Public Accountants J Member, Allinial Global

Planned Scope and Timing of the Audit

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit involved judgment about the number of transactions examined and the areas tested.

Our audit included obtaining an understanding of the Authority and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of fu1iher audit procedures. Material misstatements may result from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or ( 4) violations of laws or governmental regulations that are attributable to the Authority or to acts by management or employees acting on behalf of the Authority.

We performed the audit according to the planned scope and timing previously communicated to you in our discussion about planning matters in August 2016.

Significant Audit Findings

Qualitative Aspects of Accounting Practices

Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we advised management about the appropriateness of accounting policies and their application. The significant accounting policies used by the Authority are described in Note 1 of the financial statements. Except as noted below, no new accounting policies were adopted, and the application of existing policies was not changed during 2016. We noted no transactions entered into by the Authority during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

For the year ending June 30, 2016, the Authority implemented Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application. The objective of this Statement is to improve financial reporting by clarifying the definition of fair value for financial reporting purposes, establishing general principles for measuring fair value, providing additional fair value application guidance, and enhancing disclosures about fair value measurements. As a result of implementing GASB 72, the Authority included additional disclosures regarding fair value measurements, the level of the fair value hierarchy in which investments fall, and the valuation techniques used to level such investments.

For the year ending June 30, 2018, the Authority will be required to implement Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This Statement establishes standards for recognizing and measuring liabilities, deferred outflows and inflows of resources, and expenses/expenditures. This Statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. In general, this Statement will require the Authority to record and report the net OPEB liability, along with deferred outflows of resources, deferred inflows of resources, and expenses/expenditures. It also requires significant changes to the footnote disclosures and required supplementary information.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most significant estimates are the Authority's estimate for the allowance for uncollectible receivables, net pension liability, and pension related deferred inflows and outflows ofresources. We

2

evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole.

The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were deposits and investments held at year end, fair value disclosures, pension plan information, and commitments and contingencies.

Difficulties Encountered in Performing the Audit

We encountered no difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements

Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. For the purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of the financial statements that, in our judgment, may not have been detected except through our auditing procedures. An audit adjustment may or may not indicate matters that could have a significant effect on the Authority's financial reporting process (that is, cause future financial statements to be materially misstated).

During the course of the audit, we assisted with the adjustments required to record activity related to the pension liability and deferred inflows and outflows related to pensions, as further discussed in Note 11 of the Notes to Financial Statements.

All adjustments we proposed have been accepted by management and have been reflected in the audited financial statements.

Disagreements with Management

For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations

We have requested certain representations from management that are included in the management representation letter issued in connection with our audit.

Management Consultations with Other Independent Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Authority's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

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Other Audit Findings or Issues

We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Authority's auditors. However, these discussions occurred in the nonnal course of our professional relationship and our responses were not a condition to our retention.

We thank Authority management and staff for their assistance during the course of our audit. We will be pleased to discuss these or any other matters deemed appropriate at your convenience. This information is intended solely for the use of the Board and management of the Authority and is not intended to be and should not be used by anyone other than these specified parties.

Sincerely,

Williams-Keepers LLC

4

REPORT OF


JUNE 30, 2016


For the Year Ended June 30, 2016

TABLE OF CONTENTS

Independent Auditors' Report

Management's Discussion and Analysis

Government-Wide Financial Statements:

Statement of Net Position

Statement of Activities

Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet

Reconciliation of the Governmental Funds Balance Sheet to the

Statement of Net Position

Statement of Revenues, Expenditures, and Changes in Fund Balances

Reconciliation of the Statement of Revenues, Expenditures and Changes

in Fund Balances to the Statement of Activities

Statement of Fiduciary Net Position - Agency Funds

Notes to Financial Statements

Required Supplementary Information:

Budgetary Comparison Schedules:

General Fund

Market Development Program

Missouri Brownfields Revolving Loan Fund

Pension Plan Information: Schedule of the Authority's Proportionate Share of the Net Pension Liability

Schedule of Authority Contributions

Notes to Required Supplementary Infonnation - Pension Plan

Supplementary Information:

Schedule of Investments Held

Schedule of Tax Exempt Revenue Bonds Issued and Outstanding

Schedule of Tax Exempt Revenue Bonds Issued But Matured

PAGE

1 - 2

3 - 7

8

9

10

11

12

13 14

15 - 28

29 - 30

31 - 32

33

34

34

34

35

36 - 37

38 - 40

.:5 WILLIAMS .::::KEEPERS LLC


I 2005 West Broadway, Suite 100, Columbia, MO 65203 OFFICE (573) 442-6171 FAX (573) 777-7800

3220 West Edgewood, Suite E, Jefferson City, MO 651 09 OFFICE (573) 635-6196 FAX (573) 644-7240


INDEPENDENT AUDITORS' REPORT

Members of the Board of the State Environmental Improvement and Energy Resources Authority

We have audited the accompanying financial statements of the governmental activities and each major fund for the State Environmental Improvement and Energy Resources Authority (the Authority) as of and for the year ended June 30, 2016, and related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the accompanying table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Authority's preparation and fair presentation of the financial statements 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 Authority's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

American Institute of Certified Public Accountants I Missouri Society of Certified Public Accountants I Member, Allinial Global

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the State Environmental Improvement and Energy Resources Authority as of June 30, 2016, and the respective changes in financial position for the year then ended, in accordance with U.S. generally accepted accounting principles.

Other Matters

Required Supplementary Information

U.S. generally accepted accounting principles require that the management's discussion and analysis, the pension plan schedules, and the budgetary comparison schedules as listed in the table of contents be presented to supplement the basic financial statements. Such information, 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 rep01iing for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with U.S. generally accepted auditing standards, 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 information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority's basic financial statements. The supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements.

Such infonnation is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Except as noted in the following paragraph, such 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 financial statements or to the financial statements themselves, and other additional procedures in accordance with U.S. generally accepted auditing standards. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.

The financial statements of State Environmental Improvement and Energy Resources Authority for the year ended June 30, 1992, were audited by other auditors whose report dated August 14, 1992, expressed an unqualified opinion on those financial statements. Their rep01i, as of the same date, on certain accompanying supplementary information which has also been included on pages 36-40 stated that, in their opinion, such information was fairly presented in all material respects in relation to the general purpose financial statements for the year ended June 30, 1992, taken as a whole.

November 1, 2016

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MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2016

The following Management's Discussion and Analysis (MD&A) of the State Environmental Improvement and Energy Resources Authority's (the "Authority") financial performance provides an overview of the Authority's financial activities for the fiscal year ended June 30, 2016. The information contained in the MD&A should be considered in conjunction with the information presented as part of the Authority's Basic Financial Statements. Following this MD&A are the basic financial statements of the Authority with the notes thereto which are essential to a full understanding of the data contained in the financial statements. The Authority's basic financial statements have the following 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 the readers with a broad overview of the Authority's finances in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the Authority's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. The Statement of Activities presents information showing how the Authority's net position changed during the 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 related cash flows. Thus, revenues and expenses are reported in the statement for some items that will result in cash flows in future fiscal periods. The government-wide financial statements present information about the Authority as a whole. All of the activities of the Authority are considered to be governmental activities.

Governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide statements, it is useful to compare the information presented for governmental activities in the government-wide financial statements. By doing so, the reader may better understand the long-term impact of the government's near term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.

Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Authority's programs.

The notes to the financial statements provide additional information that is essential for a full understanding of the information provided in the government-wide and fund financial statements.

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CONDENSED FINANCIAL INFORMATION

The following condensed financial information is presented from the Authority's government-wide financial statements:

Summary of Net Position as of June 30, 2016 and 2015

Current and other assets Capital assets, net

Total assets

Total deferred outflows of resources

Total liabilities

Total deferred inflows ofresources

Net assets Invested in capital assets Restricted for market development programs Restricted for Brownfields program Unrestricted

Total net position

4

2016

$ 4,125,304

4,125,304

118,603

584,554

10,596

356,599 511,821

2,780,337

$ 3,648,757

2015

$ 3,904,847 642

3,905,489

56,569

482,918

109,760

642 356,432 240,068

2,772,238

$ 3,369,380

Summary of Changes in Net Position from Operating Results for the Years Ended June 30, 2016 and 2015

2016 2015 Program revenues:

General operations $ 534,135 $ 350,065 Market development 640,639 1,060,507 Missouri Brownfields Revolving Loan Fund 568,596 246,128

General revenues: Investment income 15,634 15,307 Other 6,634

Total revenues 1,759,004 1,678,641

Expenses: Personnel services 510,001 427,080 Contractual services 775,171 998,989 Other operating costs 193,813 292,634 Depreciation 642 470

Total expenses 1,479,627 1,719,173 Increase (decrease) in net position 279,377 (40,532) Net position, beginning of year 3,369,380 3,409,912

Net position, end of year $ 3,648,757 $ 3,369,380

During fiscal 2016, net position increased by $279,377, from $3.37 million to $3.65 million. Total assets increased by $219,815 or 5.6% from the prior year, while total liabilities increased $101,636 or 21 %. This increase in net position is due primarily to an increase in outstanding Brownfield loans.

In fiscal year 2016, the Authority's total net pension liability increased by $159,317 from $376,439 to $535, 756, and deferred inflows and outflows changed overall by a net decrease of $37,130.

Revenues from general operations increased by $184,070 or 53% from $350,065 to $534,135. This increase was primarily due to increased bond issuances. The Market Development Program revenue decreased from the previous year as a result of fewer project expenditures, while the Brownfield Program saw an increase in project expenditures and related revenue. Brownfields also saw an increase in the amount of loans repaid.

Total revenues for the year increased $80,363 or 5%. As a percent of total revenues, general operations revenue increased from approximately 21 % of total revenues in fiscal year 2015 to 30% in fiscal year 2016. As a percent of total revenues, Market Development decreased from 63% last year to 36% this year. Brownfields revenues to total revenues increased from approximately 15% last year to approximately 32% this year.

Total expenses decreased by $239,546 or 14% over those of the prior year primarily due to decreased project activity in the Market Development program and a decrease in professional fees from the general fund.

5

FINANCIAL ANALYSIS OF FUNDS

Total fund balances for the governmental funds remained consistent with the prior year at $3 .56 million, with only a small increase of $6,385.

The Market Development Program revenues reflected a 40% decrease from the prior year, due to a decrease in projects expenditures and related activities.

The Brownfields Revolving Loan Program revenues increased 122% in fiscal year 2016, which included loan repayments in the amount of $73 ,317. Increased activity in the program, which operates primarily on a reimbursement basis, is primarily due to an increase in project clean-up expenditures. The Authority received a supplemental grant award of $500,000 for fiscal year 2016 from the U.S. Environmental Protection Agency.

CAPITAL ASSET AND DEBT ADMINISTRATION

The Authority maintains certain furnishings and office equipment for its corporate purposes. All capital assets were fully depreciated as ofJune 30, 2016, compared to capital assets of $642, net of accumulated depreciation at June 30, 2015.

The Authority has no long term debt but does issue tax-exempt bonds on behalf of public entities, political subdivisions of the State of Missouri and public and private companies to finance certain eligible projects. These bonds are considered to be non-recourse conduit debt obligations and, as such, are not included in the Authority's financial statements. As ofJune 30, 2016, approximately $1.22 billion of these bonds were outstanding.

BUDGET VARIATIONS

General Operations revenues for the Authority are influenced by the lack of demand for new-money State Revolving Fund (SRF) bonds, as the SRF program continues to make direct loans using available program equity. The low interest rate environment did, however, make refunding SRF bonds feasible which resulted in larger than anticipated issuance fee revenues. Market conditions also limited demand for Private Activity Bond (P AB) issuances. The Authority continues to expand its work in other areas, many of which are offered as fee for service activities to offset less predictable bond revenues. There was one SRF bond refunding issue during fiscal year 2016, which generated $133,158 in revenue; private activity bonds generated an additional $90,712 ofrevenue. Overall expenditures fell below budgeted expectations, with a 23% variance. The most significant expenditure in excess of budget was in miscellaneous and administrative expense, which included an unanticipated cusip fee expense of $2,030.

Revenues and expenditures for the Market Development Program were considerably lower than budgeted. Revenues and expenditures are budgeted based on the total project funds available plus a reasonable amount of unexpended funds carried over from previous awards; however, all project funds may not be awarded that year and those awarded may not be expended in that fiscal year.

Similarly, revenues and expenditures for the Brownfields Revolving Loan Program were also lower than budgeted. Revenues and expenditures are budgeted based on all available project funds being awarded. However, these are 5-year federal grants and all funds that are awarded may not be expended in that fiscal year.

6

ECONOMIC FACTORS AND SUBSEQUENT EVENTS

Historically, a substantial portion of the Authority's annual revenues are derived from fees related to bond issuances under the SRF Program and the P AB Program. Revenues earned under these bond issuance programs are subject to influences outside the control of the Authority. Annual participation is unpredictable and highly variable as was evidenced during the past several fiscal years.

The State Revolving Fund continues to undergo programmatic and regulatory changes. The program has sufficient equity to manage current cash needs. Until demand increases, SRF issuances will continue to be smaller in size, and be less frequent than in the past and, consequently, lower revenues are anticipated for future years. Given the amount of bonds previously refunded, it is unlikely that refunding of SRF bonds will be economically advantageous in the near term.

Public interest in wastewater infrastructure construction appears to remain at current levels, but recent applications appear to indicate that demand for drinking water projects is increasing. Future federal appropriations for the SRF program as a whole remain a concern.

7

ASSETS

Cash Investments


STATEMENT OF NET POSITION June 30, 2016

Accounts and grants receivable Brownfields advances and loans receivable Accrued interest Prepaid and other assets

Total assets

DEFERRED OUTFLOWS OF RESOURCES

Pension related

Total deferred outflows of resources

LIABILITIES

Accounts payable Accrued liabilities Net pension liability

Total liabilities

DEFERRED INFLOWS OF RESOURCES

Pension related

Total deferred inflows of resources

NET POSITION

Restricted for market development programs Restricted for Brownfields program Unrestricted

Total net position

The notes to the financial statements are an integral part of these statements. 8

$ 685,732

2,713,664

205,959

511,821

3,128

5,000

4,125,304

118,603

118,603

4,698

44,100 535,756

584,554

10,596

10,596

356,599

511,821

2,780,337

$ 3,648,757

Functions/Programs

General operations

Market Development

Missouri Brownfields

Revolving Loan Fund


STATEMENT OF ACTIVITIES For the Year Ended June 30, 2016

Program Revenues

Charges for Operating Grants

Expenses Services and Contributions

$ 537,803 $ 534,135 $ 596,127 640,639

345,697 568,596

Total governmental activities $ 1,479,627 $ 534, 135 =$====1,=20=9=,2=35=

General revenues:

Investment income

Total general revenues

Change in net position

Net position, beginning of year

Net position, end of year


Net Revenue (Expense) and

Changes in

Net Assets

$ (3,668) 44,512

222,899

263,743

15,634

15,634

279,377 3,369,380

$ 3,648,757

STATE ENVIRONMENTAL IMPROVEMENT ANI) ENERGY RESOURCES AUTHORITY

BALANCE SHEET GOVERNMENTAL FUNDS

June 30, 2016

Major Funds

Market Development

General Program

ASSETS Cash $ 242,464 $ 380,036 Investments 2,713,664 Accounts and grants receivable 87,819 6,516 Due from other funds 139,446 Accrued interest 3,128 Prepaid and other assets 5,000

Total assets $ 3,191,521 $ 386,552

LIABILITIES Accounts payable $ 2,567 $ 2,131 Accrued liabilities 44,100 Due to other funds 27,822

Total liabilities 46,667 29,953

FUND BALANCES Nonspendable: prepaids 5,000 Restricted for market development programs 356,599

Restricted for Brownfields program Committed to:

Brownfields Revolving Loan Fund cost share 269,261

Unassigned 2,870,593

Total fund balances 3, 144,854 356,599

Total liabilities and fund balances $ 3,191,521 $ 386,552


Missouri Brownfields Total Revolving Governmental Loan Fund Funds

$ 63,232 $ 685,732 2,713,664

111,624 205,959 139,446

3,128 5,000

$ 174,856 $ 3,752,929

$ $ 4,698 44,100

111,624 139,446

111,624 188,244

5,000 356,599

63,232 63,232

269,261 2,870,593

63,232 3,564,685

$ 174,856 $ 3,752,929


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION

June 30, 2016

Amounts reported for governmental activities in the statement of net position are different because:

Total fund balance - governmental funds

Long-term liabilities are not due and payable in the current period and, therefore, are not reported as liabilities in the governmental funds:

Net pension liability Deferred inflows of resources - pension liability Deferred outflows of resources - pension liability

Net pension liability activity

Other long term assets are not available to pay for current period expenditures and, therefore, are not recorded in the governmental funds:

(535,756) (10,596) 118,603

Brownfields advances and loans, net of repayments of $221,530

Net Position of Governmental Activities


$ 3,564,685

(427,749)

511,821

$ 3,648,757


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUN]) BALANCES GOVERNMENTAL FUNDS

For the Year Ended June 30, 2016

Major Funds Missouri

Market Brownfields Development Revolving

General Program Loan Fund

REVENUES General operations $ 579,135 $ $ Market development intergovernmental revenue 640,639 Brownfields grants 564,566 Brownfields loan repayments, including interest

payments of$3,860 73,317 Investment income 15,467 167

Total revenues 594,602 640,806 637,883

EXPENDITURES Personnel services 409,824 61,922 74,636 Contractual services 504,110 612,101 Operating expenditures 129,706 74,607

Total expenditures 539,530 640,639 686,737

Excess (deficiency) ofrevenues over expenditures 55,072 167 (48,854)

OTHER FINANCING SOURCES AND (USES) Transfers in 112,086 Transfers (out) (112,086)

Total other financing sources and (uses) (112,086) 112,086

Net change in fund balances (57,014) 167 63,232 Fund balances, beginning of year 3,201,868 356,432

Fund balances, end of year $ 3,144,854 $ 356,599 $ 63,232

The notes to the financial statements are an integral paii of these statements. 12

Total Governmental

Funds

$ 579, 135 640,639 564,566

73,317 15,634

1,873,291

546,382 1,116,211

204,313

1,866,906

6,385

112,086 (112,086)

6,385 3,558,300

$ 3,564,685


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES For the Year Ended June 30, 2016

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balance - total governmental funds

Governmental funds report capital outlay as expenditures. However,

in the statement of activities the cost of those assets is allocated

over their estimated useful lives and reported as depreciation expense

Some expenses reported in the statement of activities do not

require the use of current financial resources and, therefore, are

not repo1ied as expenditures in the governmental funds

Pension expense

Governmental funds report long-term loan advances as expenditures, which are not reported as expenses in the Statement of Activities

Brownfields advances and loans

Governmental funds report long-term loan repayments as revenues, which are not reported as revenues in the Statement of Activities

Brownfields loan repayments

Change in Net Position of Governmental Activities


$ 6,385

(642)

1,881

341,040

(69,287)

$ 279,377

ASSETS Cash

Total assets

LIABILITIES Funds held for others

Total liabilities


STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS

June 30, 2016

W eatherizationn Fund

$ 1,185,200

$ 1,185,200

$ 1,185,200

$ 1,185,200

$

$

$

$

Natural Resource Damages

Program Fund

6,846,829

6,844,676

6,846,829

6,844,676

The notes to financial statements are an integral part of these statements. 14

$

$

$

$

Total Agency Funds

8,032,029

8,029,876

8,032,029

8,029,876


NOTES TO FINANCIAL STATEMENTS

1. BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES

Background and purpose: The State Environmental Improvement and Energy Resources Authority (the "Authority"), created in 1972, is an independent, self-supporting, quasi-governmental agency, governed by a five member Board appointed by the Governor of the State of Missouri (the "State"). The Authority is administratively placed in the Missouri Department of Natural Resources. The State's accountability for the Authority does not extend beyond making the Board appointments.

Due to the special independent status as "a body corporate and politic," the Authority is authorized to finance, acquire, construct and equip projects for the purpose ofreducing, preventing or controlling pollution and to provide for the development of energy resources of the State of Missouri. The usual method of financing is through the issuance of tax-exempt revenue bonds and notes. The Authority receives fees for services provided in the issuance process.

The Authority is also empowered to conduct environmental and energy research and development activities, develop alternative methods of financing environmental and energy projects, and assist Missouri communities, organizations, and businesses in obtaining low-cost funds and other financial assistance for projects related to the Authority's purposes.

The Authority has also been mandated by the General Assembly (RSMo 260.005 through 260.125) to implement a number of projects in cooperation with the Department of Natural Resources and the Department of Economic Development, including administering the Missouri Market Development Program which provides market development assistance through technical and financial support to businesses and organizations that develop marketable end-products from recycled materials. Funding for this program is provided through the Solid Waste Management Fund created by Senate Bill #530, passed in 1990 and subsequently amended.

The Authority, in cooperation with the Department of Natural Resources and other agencies, established and operates the State Revolving Fund (SRF), which provides financing to communities and districts for construction of clean water and drinking water projects.

The Authority is also a provider of technical research for the State of Missouri. Studies have been requested by the General Assembly and have been conducted on numerous energy and environmental issues, including energy usage and efficiency and solid and hazardous waste. Partnerships have also been created with entities, both public and private, to promote and educate Missouri's citizens on a variety of environmental and energy related topics.

The basic financial statements of the Authority include all of the funds relevant to the operations of the Authority. The financial statements presented herein do not include agencies which have been formed under applicable state laws or separate and distinct units of government apart from the Authority that have been determined not to be component units as defined by Governmental Accounting Standards Board Statement No. 61, "The Financial Reporting Entity: Omnibus" (GASB 61).

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Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. Financially accountable means the primary government is able to impose its will or the component unit may provide financial benefits or impose a burden on the primary government. In addition, component units can be other organizations for which the nature and significance of the relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading if excluded.

As required by generally accepted accounting principles, the Authority has evaluated the above criteria to determine whether any other entity meets the definition of a component unit and must be included in these financial statements. The Authority does not have any component units that meet the above criteria.

Basis of presentation: The government-wide financial statements (i.e., the statement of net position and the statement of activities) report the overall information on the Authority without displaying individual funds. These statements exclude information about fiduciary activities where the Authority holds assets in an agency capacity for others since these funds cannot be used to support the Authority's own programs. The effect of interfund activities has also been removed from these statements.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Investment income and other items not properly included among program revenues are reported instead as general revenues.

Separate fund financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

The Authority uses funds to report its financial position and results of its operations in the fund financial statements. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Funds are classified into three categories: governmental, proprietary and fiduciary.

The Authority reports the following major governmental funds:

General Fund - The general fund is the general operating fund of the Authority. It is used to account for all financial resources and activities of its basic operations except those required to be accounted for in another fund.

Market Development Program Fund (Special Revenue Fund) - The Market Development Program Fund is used to account for the proceeds of specific revenue sources that are restricted to expenditures for specific purposes. This fund specifically accounts for activities of the Missouri Market Development Program as described in Note 6.

Missouri Brownfields Revolving Loan Fund (Special Revenue Fund) - The Missouri Brownfields Revolving Loan Fund is used to administer grant awards and cooperative agreements to states, political subdivisions and tribes as described in Note 6.

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Additionally, the Authority reports the following fiduciary type agency funds:

Weatherization Program Fund - This agency fund is used to account for the flow of funds from AmerenUE, AmerenUE Gas, Laclede Gas, and Liberty Utilities to recipient weatherization agencies within each company's service area as further described in Note 7.

Natural Resources Damages Program Fund - This agency fund is used to account for the flow of settlement funds used to acquire, rehabilitate and/or preserve natural resources as further described in Note 7.

Basis of accounting: The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting.

The governmental fund and fiduciary fund financial statements are presented using the cunent financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. As such, the Authority recognizes revenue on application fees when received since the fees are nonrefundable and the earnings process is complete in a short period of time.

The Authority recognizes revenue on issuance fees at the time of issuance of the related bonds since, until actual issuance, the amount or the certainty of receiving the issuance fee is not determinable. The Authority considers revenues to be available if they are collected within 90 days of the end of the current fiscal period. Expenditures related to bond issuances are recognized when incuned as there is no reasonable method of allocating them to issuance revenues because of the above-mentioned uncertainties. Grant revenues are recognized when reimbursable grant expenditures are made.

The Authority's general spending prioritization policy is to consider restricted resources to have been used first, followed by committed, assigned, and unassigned amounts when expenditures have been incurred for which resources in more than one classification could be used.

Sometimes the Authority will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Authority's policy to consider restricted net position to have been depleted before unrestricted net position is applied.

Income taxes: The Authority is exempt from federal income taxes under Section 115 of the Internal Revenue Code.

Investments: Missouri Statutes and legal opinions authorize the Authority to invest in ce1iain types of investments including, but not limited to, certificates of deposit, U.S. Treasury and federal agency securities, and obligations of Missouri. The Authority reports investments at fair value in the financial statements, with changes in fair value rep01ied as an item of revenue or expense in the statement of revenues, expenditures, and changes in fund balances. Fair value is the amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Advances and loans receivable: Advances and loans receivable consist of advances and loans made to participants under the Brownfields Revolving Loan Fund Program. Management assesses the allowance for estimated uncollectible accounts on a loan by loan basis. All advances and loans are deemed fully collectible as of June 30, 2016.

Capital assets: Capital assets with a cost of more than $1,000 on an individual basis are capitalized and repmied at historical cost in the government-wide financial statements. Depreciation is calculated using the straight line method over the estimated useful life of the capital assets and rep01ied in the Statement of

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Activities. Equipment is depreciated over a period of five to ten years. Capital expenditures are recorded as expenditures in the governmental funds financial statements.

Deferred outflows/inflows of resources: In addition to assets, the statement of financial position will sometimes report a 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 future periods and so will not be recognized as an outflow of resources until then. The Authority has one item that qualifies for reporting in this category, which represents pension contributions and other related activity in connection with the defined benefit pension plan (see Note 11).

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources until that time. The Authority has one item that qualifies for reporting in this category, which represents investment earnings in connection with the defined benefit pension plan (see Note 11).

Fund balance: In the governmental fund financial statements, fund balance is displayed in five components as follows:

Nonspendable - This consists of amounts that are not in a spendable form or are legally or contractually required to be maintained intact.

Restricted - This consists of amounts that are constrained to specific purposes by their providers, through constitutional provisions, or by enabling legislation.

Committed - This consists of amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority (the Board of Directors). The Board of Directors can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken to remove or revise the limitation.

Assigned - This consists of amounts that are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or cmmnitted. The Board of Directors can assign fund balance; however, an additional formal action does not have to be taken for the removal of the assignment.

Unassigned - This consists of amounts that are available for any purpose and can only be reported in the General Fund.

The Authority did not have any assigned fund balance as of June 30, 2016.

In the government-wide financial statements, equity is displayed in three components as follows:

Net Investment in Capital Assets - This consists of capital assets, net of accumulated depreciation, less the outstanding balances of any bonds, notes, or other borrowings that are attributable to the acquisition, construction, or improvements of those assets.

Restricted - This consists of amounts that are legally restricted by outside paiiies or by law through constitutional provisions or enabling legislation.

Unrestricted - This consists of net amounts that do not meet the definition of "restricted" or "net investment in capital assets, net of related debt."

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Estimates: The preparation of financial statements in confonnity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Conduit debt obligations: Notes and bonded indebtedness issued by the Authority to pay for the costs of projects which provide for the conservation of air, land and water resources, and reduce the pollution thereof, and for proper methods of disposing of solid waste materials are not liabilities of the Authority or the State, but are the liability of the organization to which title of the project passes. Accordingly, such conduit debt obligations are not reported as liabilities in the accompanying balance sheet. As of June 30, 2016, the aggregate principal amount of such obligations payable totaled approximately $1.22 billion.

2. DEPOSITS AND INVESTMENTS

Deposits:

Custodial credit risk for deposits is the risk that in the event of a bank failure, the Authority's deposits may not be retumed. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the Authority will not be able to recover the value of investments or collateral securities that are in possession of the outside party. As ofJune 30, 2016, no investments were uninsured and unregistered, and all securities were held by the counterparty or by its trust department or agent in the Authority's name.

The Authority's cash balance consisted of cash deposits and certificates of deposit. The carrying amount of the Authority's deposits, including certificates of deposit, with financial institutions at June 30, 2016, was $2,595,020 and the bank balance was $2,604,480. As of June 30, 2016, the Authority's bank balance was exposed to custodial credit risk as follows:

Amount insured by the Federal Deposit Insurance Corporation (FDIC)

Amount collateralized with securities held by financial institutions pledged in the Authority's name

Total bank balance

$ 1,030,836

1,573,644

$ 2,604,480

As required by Missouri law, the deposito1y bank is to pledge securities in addition to FDIC coverage to equal the amount on deposit at all times. As of June 30, 2016, all deposits were fully collateralized.

Investment Policy:

Missouri Statutes and legal opinions authorize the Authority to invest in ce1iain types of investments including, but not limited to, certificates of deposit, U.S. Treasury and federal agency securities, and obligations of Missouri.

Investments were as follows as of June 30, 2016:

Certificates of deposit

U.S. government and agency securities U.S. treasmy note

Total investments

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Fair Value

$ 1,909,288

5,367 799,009

$ 2,713,664

Concentration of Credit Risk:

Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government's investment in a single issue. As of June 30, 2016, the Authority held no single issue exceeding 5% of the portfolio, excluding U.S. government securities.

Credit Risk:

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the Authority. As of June 30, 2016, all U.S. government and agency securities were guaranteed by the U.S. Government.

Interest Rate Risk:

Interest rate risk is the risk that changes in interest rate will adversely affect the fair value of an investment. Duration is a measure of a debt instrument's exposure to a change in interest rates and the related sensitivity of market price to parallel shifts in the yield curve. It uses the present value of cash flows as a percentage of the instruments' full price. The Authority's interest rate risk is mitigated through the duration of investments outlined in its investment policy.

Foreign Currency Risk:

In accordance with its investment policy, the Authority held no foreign investments or currency as of June 30, 2016.

3. BROWNFIELDS ADVANCES AND LOANS RECEIVABLE

As of June 30, 2016, there were no scheduled loans receivable repayments. Advances of $511,821 on one project in progress have not yet been converted into a loan receivable as of June 30, 2016. Monthly principal and interest payments were required to be paid for this project beginning on November 1, 2015. For the year ended June 30, 2016, $29,048 was paid on the principal balance of this project. An additional $40,239 of principal was paid on an existing loan, which was paid in full as of June 30, 2016.

4. CAPITAL ASSETS

A summary of changes in capital assets for the year ended June 30, 2016 is as follows:

Balance, Balance, June 30, 2015 Additions Disposals June 30, 2016

Office furniture and equipment $ 114,843 $ $ $ 114,843 Leasehold improvements 4,271 4,271

119,114 119,114 Less: Accumulated depreciation (118,472) (642) (119,114)

Equipment and leasehold improvements, net $ 642 $ (642) $ $

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5. FAIR VALUE MEASUREMENTS

For assets and liabilities required to be reported at fair value, U.S. generally accepted accounting principles prescribes a framework for measuring fair value and financial statement disclosures about fair value measurements. A fair value hierarchy has been established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The fair value hierarchy as prescribed by U.S. generally accepted accounting principles is as follows:

Level 1 Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that the Authority has the ability to access.

Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

Level 3 Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Authority's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The Authority's assets and liabilities measured at fair value on a recun-ing basis as of June 30, 2016, aggregated by the level in the fair value hierarchy within which those measurements fall, are as follows:

Description Total Level 1 Level2 Measured at fair value:

Certificates of deposit $ 1,909,288 $ $ 1,909,288 $ U.S. government and agency securities 5,367 5,367 U.S. treasury note 799,009 799,009

$ 2,713,664 $ $ 2,713,664 $

6. PROGRAMS

The Authority conducts a variety of programs which include the following:

State Revolving Fund Program

Level 3

The Missouri State Revolving Fund (SRF) Program was initiated cooperatively by the Authority and the Missouri Department of Natural Resources (DNR) in November, 1987. The SRF Program was developed pursuant to Title VI of the Clean Water Act and was formally approved in 1990 by the Missouri Clean Water Commission and the U.S. Environmental Protection Agency (EPA). Amendments to the federal Safe Drinking Water Act in 1996 authorized a drinking water revolving loan program. Missouri developed its program and corresponding regulations around the Clean Water program. The new program was approved by the Missouri Safe Drinking Water Commission and the EPA.

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The SRF Program is primarily a low-interest loan program; however, federal appropriations have also provided for subgrants beginning in 2009 with the American Recovery and Reinvestment Act. The program provides funding to communities for water and wastewater infrastructure at subsidized interest rates. Currently, interest rates are approximately 30% of tax-exempt municipal rates. Loans are amortized a maximum of_20 years. The monies in the fund can be reloaned or revolve in perpetuity for the benefit of other communities.

The SRF Program is funded through a combination of federal capitalization grants (83.33%) and State matching funds (16.67%). Historically, the State match for the Clean Water program was funded through the sale of general obligation Water Pollution Control Bonds, while the match for the Drinking Water program came from appropriated general revenue. Currently, state match for both programs is provided primarily through the sale of match bonds issued by the Authority.

Missouri Market Development Program

Pursuant to Senate Bill #530, Section 260.335, in March 1992, the Authority entered into an interagency agreement with the DNR and the Missouri Department of Economic Development to promote markets for recycled materials and to provide financial assistance for businesses which use recycled materials in making new products. The statute provides $800,000 from solid waste tipping fees for the program annually; however, appropriations can vary from year to year. Solid waste tipping fees are a per ton fee levied on solid waste disposed at landfills and transported out of state for disposal through transfer stations.

The Authority's Market Development Program Fund is reimbursed by DNR for Authority program expenses. The Market Development Program Fund reimburses the Authority for staff time and overhead expenses incurred on behalf of the program. Such amounts totaled $45,000 for the fiscal year 2016 and are included in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds in the Market Development Program Fund as both market development revenue and operating expenditures and in the . General Fund as general operations revenues.

Missouri Brownfields Revolving Loan Fund

The Brownfields Revolving Loan Program is an EPA initiative under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, 42 U.S.C. Section 9601) as amended by the Small Business Relief and Brownfields Revitalization Act. Under the program, funds are made available through grant awards and cooperative agreements to states, political subdivisions and tribes. These grant funds are to provide for the establishment, administration/management and funding of a revolving loan and sub grant program to clean up contaminated properties known as brownfields. The EPA defines brownfields as real property for which the expansion, redevelopment or re-use may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.

The State of Missouri's program is a cooperative effmi between the EPA, the Authority and the DNR. An initial grant of $1,000,000 was awarded by the EPA in late 2005, with supplemental awards in 2011, 2013, 2014 and 2016 providing an additional $2,500,000 in federal funds. The Authority is providing the required matching funds for these awards. A second grant of $1, 160,000 was awarded through the American Recovery and Reinvestment Act in 2010.

The 2005 program is funded through a combination of federal grants (83 .33%) and Authority matching funds (16.67%), whereas the 2010 program is fully federally funded. The program enables pmiicipants to borrow cleanup funds for relatively short periods of time atlow interest rates. In limited, exceptional circumstances, sub-grant funds may be available to eligible entities. Loan repayments will be made available to loan to additional applicants.

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7. AGENCY FUNDS

Weatherization Program

On July 16, 2002, AmerenUE entered into a Stipulation and Agreement to resolve the issues pending in Case Number EC-2002-1 before the Missouri Public Service Commission. As part of such agreement, Ameren VE agreed to create a weatherization fund for its low-income electric utility customers. The Weatherization Fund was to be initially funded with $2,000,000 on September 1, 2002 and additional contributions of $500,000 made each year for the following four years. A collaborative committee was established to develop plans by which the fund would be utilized.

The collaborative committee, consisting of staff of the Public Service Commission, Office of Public Counsel, Ameren VE and the DNR/Division of Energy, determined the funds would be deposited into an account established by the Authority and disbursed to weatherization agencies within the Ameren VE service area. Subsequently, the Authority, the DNR, the Public Service Commission and AmerenUE entered into a Cooperation and Funding Agreement outlining the responsibilities of the DNR/Division of Energy, the Authority and Ameren VE relating to program administration.

The Cooperation and Funding Agreement required Ameren VE to make an initial contribution to the fund of $2,000,000 and an additional $500,000 plus interest, as determined by AmerenUE, on or before June 30, 2003, June 30, 2004, June 30, 2005 and June 30, 2006. The Authority was required to deposit all payments of the fund into an interest bearing and collateralized account and to disburse funds to the appropriate weatherization agency upon the receipt of a complete and signed disbursement request from the Division of Energy. The funds are to be distributed to the fourteen weatherization agencies in AmerenUE's service tetritory according to a formula established by the collaborative committee and are to be spent in a manner consistent with the Federal Weatherization Assistance Program as administered by the Division on Energy, which is now located in the Depaiiment of Economic Development.

Pursuant to a process similar to that described above, in 2007, Cooperation and Funding agreements were entered into with regard to four new weatherization funding programs. AmerenUE will provide $1,200,000 per year for weatherization activities for the benefit of its electric customers. Laclede Gas will provide $950,000 per year for weatherization activities for the benefit of natural gas space-heating customers. Ameren UE will provide $263,000 per year for weatherization activities for the benefit of its natural gas space-heating customers. Atmos Energy Corporation, now Liberty Utilities, provided $100,000 for the initial year and $105,000 in successive years for weatherization activities for the benefit of its gas space-heating residential customers.

All weatherization funds are administered in the same manner as described above. Weatherization monies are held in one bank account with each entity's monies accounted for separately. Interest earned is divided on a pro rata basis between each fund based upon its balance at the end of the month. Expenses are divided equally between the funds.

Funds held by the Authority at June 30, 2016, under the terms of the agreement totaled $1,185,200.

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Natural Resource Damage Assessment and Restoration Program

The mission of the DNR's Natural Resource Damage Assessment and Restoration (NRD) Program is to restore natural resources damaged as a result of oil spills or hazardous substance releases into the environment. In partnership with affected federal trustee agencies, the NRD Program conducts damage assessments which are the first step toward resource restoration and used to provide the basis for determining restoration needs that address the public's loss and use of natural resources.

Once the damages are assessed, the NRD Program negotiates legal settlements or takes other legal actions against the responsible parties for the spill or release. Funds collected from these settlements are then used to restore or replace the damaged resources at no expense to the taxpayer.

DNR and certain federal agencies act as Joint Trustees of funds collected from polluters. The funds may be used to purchase property, restore and maintain habitat and protect the resource into the future with a conservation easement; or acquire other land which may be restored, maintained and protected to replace what was lost or damaged. The Joint Trustees solicit participants who will acquire, restore, maintain and protect the land parcels and the natural resources involved with NRD funds. The Trustees determine project priorities and direct the release of funds. The Authority assists the State Trustee by providing paying agent services.

Under a general NRD Memorandum of Understanding and specific Project Work Plans between the State Trustee and the Authority, certain NRD project funds are being held by the Authority which acts as a paying agent. Under the Project Work Plans, the Authority is required to deposit all NRD project funds into a collateralized account and to disburse amounts upon the receipt of a signed Authorization to Pay from the State Trustee. All project funds held by the Authority are accounted for separately by Project Work Plan or Resolution and interest earned is tracked on a pro rata basis between each based upon its balance at the end of the month.

Funds held by the Authority at June 30, 2016, under the terms of the agreement totaled $6,846,829.

8. COMMITMENTS

The Missouri Market Development Program Financial Assistance Awards are Board-approved and may be drawn upon throughout the agreement term. As of June 30, 2016, $550,832 had been approved but not yet distributed.

9. RISK MANAGEMENT

The Authority is exposed to various risks of loss related to to1is; thefts of, damage to, or destruction of assets; errors and omissions; and workers' compensation claims. The Authority carries commercial insurance for property and theft of assets and workers' compensation. The Authority is self-insured for all other risks of loss.

The Authority had no material unpaid claims, liabilities, or settlements related to any loss in any of the past three years. There were no substantive changes made in the types and amounts of the Authority's insurance coverage during fiscal 2016.

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10. INTERGOVERNMENTAL REVENUE

The Authority receives significant financial assistance from numerous federal, state, and local governmental agencies in the form of grants. Federal grants and assistance awards made on the basis of entitlement periods are recorded as intergovernmental receivables and revenues when entitlement occurs. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements or the individual fund-types included herein or on the overall financial position of the Authority as of June 30, 2016.

11. EMPLOYEES' RETIREMENT BENEFITS -DEFINED BENEFIT PENSION PLAN

(a) General Information about the Pension Plan

Plan description. Benefit eligible employees of the Authority are provided with pensions through the Missouri State Employees' Retirement System (MOSERS), a cost-sharing multiple-employer defined benefit pension plan. Chapter 104.320 of the Revised Statutes of Missouri grants the authority to establish a defined benefit plan for eligible state and other related agency employees. MOSERS issues an annual Comprehensive Annual Financial Report (CAFR), a publicly available financial report that can be obtained at www.mosers.org.

Benefits provided. MO SERS provides retirement, disability, and life insurance benefits to eligible employees. The base retirement benefits are calculated by multiplying the employee's final average pay by a specific factor multiplied by the years of creditable service. The factor is based on the specific plan in which the employee participates, which is based on the employee's hire date. Information on the three plans administered by MOSERS (MSEP, MSEP 200, and MSEP 2011 retirement plans) and how eligibility and the benefit amount is determined for each plan may be found in the Notes to the Finai1cial Statements ofMOSERS' CAFR starting on page 30.

Contributions. Per Chapter 104.436 of the Revised Statutes of Missouri, contribution requirements of the active employees and the participating employers are established and may be amended by the MOSERS Board. Employees in the MSEP 2011 Plan are required to contribute 4.0 percent of their annual pay. The Authority's required contribution rate for the year ended June 30, 2016 was 16.97 percent of annual payroll, 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, with an additional amount to finance any unfunded accrued liability. The contribution rate for the MO SERS plan year ended June 30, 2015 was 16.97 percent, which is the year of measurement for the net pension liability. Contributions to the pension plan from the Authority were $54,810 for the year ended June 30, 2016.

(b) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2016, the Authority reported a liability of $535,756 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date.

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The Authority's proportion of the net pension liability was based on the Authority's actual share of contributions to the pension plan relative to the actual contributions of all participating employers for MOSERS plan year ended June 30, 2015. At June 30, 2015, the Authority's proportion was 0.0200 percent, an increase from its proportion measured using 0.0160 percent as of the June 30, 2014, measurement date.

There were no changes to the benefit tenns during the MO SERS plan year ended June 30, 2015, that affected the measurement of total pension liability.

For the year ended June 30, 2016, the Authority recognized proportionate pension expense of $52,449. At June 30, 2016, the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows of Deferred Inflows Resources of Resources

Differences between expected and actual experience $ 1,001 $ (3,466) Changes of assumptions (7,130) Net difference between projected and actual earnings on pension

plan investments 41,137 Changes in proportion and differences between Board

contributions and proportionate share of contributions 16,213 Authority contributions subsequent to the measurement date

ofJune 30, 2015 60,252

Total $ 118,603 $ (10,596)

The $118,603 reported as deferred outflows ofresources and the $10,596 reported as deferred inflows ofresources related to pensions will be recognized as net pension expense (reduction) in the Authority's fiscal year following MOSERS' fiscal year as follows:

Plan year ending June 30:

2016

2017

2018

2019

Net

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$

$

65,849

5,534

4,833

31,791

108,007

Actuarial assumptions. The total pension liability in the June 30, 2015 actuarial valuation, which is also the measurement date, 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, approximate

0% for FY 2016 and 3.0% annually, average, including inflation thereafter

8.0 percent per year, compounded annually, net after investment expenses and including inflation

Mortality rates were based on the RP-2000 combined healthy mortality table projected to 2016 with Scale AA. The pre-retirement mortality rates used were 100% of the post-retirement mortality rates for males and 80% of the post-retirement rates for females, as appropriate, with adjustments for mortality improvements based on Scale AA.

The change in assumptions recorded as deferred inflows of resources was related to a change in wage assumptions. For the June 30, 2015, valuation, wage inflation is assumed to be 0% in the first year and 3% thereafter. This is a one-time change based on the payfreeze enacted for fiscal year ending June 30, 2016. Previously, salary increases were assumed to be 3.0% to 5.9% annually on average, including inflation.

The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2007 to June 30, 2011. As a result of the 2011 actuarial experience study, the MOSERS Board made various demographic assumption changes to more closely reflect actual experience. The most significant change was lowering the assumed annual investment rate of return from 8.5 percent to 8 percent.

The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which best-estimate rates of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. The ranges 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. Best estimates of geometric real rates of return for each major asset class included in the MOSERS target asset allocation as of June 3 0, 2015 are summarized in the following table.

Beta Balanced

Illiquids* * Total

Asset Class Policy

Allocation

80.0%

20.0%

100.0%

Long-term Expected Real

Rate of Return* 5.7%

7.3%

* Represent best estimates of geometric rates of return for each major asset class included. **Illiquid portfolio upper limit of 27.5% of capital, no new commitments past 23%.

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Weighted Average LongTerm Expected

Real Rate of Return 4.6%

1.5%

6.1%

Discount rate. The discount rate used to measure the total pension liability was 8.0 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from employers will be made at required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the Authority's proportionate share of the net pension liability to changes in the discount rate. The following presents the Authority's proportionate share of the net pension liability calculated using the discount rate of 8.0 percent, as well as what the Authority's prop01iionate share of the net pension liability would be if calculated using a discount rate that is I-percentage-point lower (7.0 percent) or I-percentage-point higher (9.0) than the current rate:

Authority's proportionate share of the net pension liability

1% Decrease (7.0%)

$ 769,289

Current Discount Rate (8.0%)

$ 535,756

1% Increase (9.0%)

$ 358,221

Pension plan.fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in the separately issued MOSERS financial report.

(c) Payables to the Pension Plan

The Authority had no payables to MOSERS as of June 30, 2016.

12. DEFERRED COMPENSATION PLAN

The Authority sponsors a deferred compensation plan for all eligible employees. Authority contributions to the deferred compensation plan are made monthly. Employees are eligible to paiiicipate in the plan upon their hire date and are immediately I 00% vested in all matching contributions. The Authority matches I 00% of employee contributions to the defeITed compensation plan up to a maximum of $3 5 per month. The matching contributions totaled $2,520 for the yeai· ended June 30, 2016.

13. POST-EMPLOYMENT RETIREE HEALTHCARE

The Authority paiiicipates in a cost-sharing multiple-employer defined benefit postemployment health care plan administered by the Missouri Consolidated Health Care Plan (MCHCP). The plan provides medical benefits to retirees of participating governmental entities. Retirees who had medical insurance coverage for six months immediately prior to termination or state-sponsored medical coverage since the effective date of the last enrollment period (or since first eligible), before they are eligible to retire, may continue coverage into retirement. MCHCP issues a publicly available financial report that includes financial statements and required supplementary information for the postemployment health care plan. The rep01i may be obtained by writing to the MCHCP, 832 Weathered Rock Court, P.O. Box I04355, Jefferson City, MO 65I 10-4355 or by calling (800) 487-0771.

Plai1 funding requests are actuarially determined, approved by the MCHCP Board of Trustees, and subject to appropriation by the Missouri General Assembly. The Authority contributed $I3,936, $13,555, and $12,028, in fiscal years 20 I6, 2015, and 2014, respectively, in accordance with the state's funding policy toward the annual required contribution for post-employment retiree healthcare.

28


GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES

BUDGET TO ACTUAL For the Year Ended June 30, 2016

Budget Actual

REVENUES

General operations $ 427,500 $ 579,135

Investment income 13,000 15,467

Miscellaneous income 200

Total revenues 440,700 594,602

EXPENDITURES

Personnel services:

Per diem 500 25 Office salaries 350,000 283,341

Payroll taxes and fringe benefits 145,000 118,189 Travel-Staff 12,000 8, 167 Travel-Board 800 102

Total personnel services 508,300 409,824

Operating expenditures:

SRF legal fees 5,000 3,819

Legal fees - general 10,000 8,439

Legal fees - projects 12,000 12,423

Accounting fees 15,000 7,369

Audit fees 18,000 18,613 Miscellaneous professional fees 50,000 13,671 Equipment maintenance 500 Telephone 2,500 3,185 Office supplies and printing 5,500 4,007

Postage 1,200 787

29

Variance

Positive/

(Negative)

$ 151,635

2,467

(200)

153,902

475

66,659 26,811

3,833

698

98,476

1, 181

1,561

(423)

7,631

(613)

36,329 500

(685)

1,493

413


GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES


(Continued)

Budget Actual

Operating expenditures (continued): Membership dues 4,000 3,805 Conference registration fees 2,000 1,585 Publications and subscriptions 200 Training 3,000 1,663 Board meetings 300 465 Miscellaneous and administrative 300 2,158 Workers' compensation contingency A,500 Advertising/legal notices 2,500 3,540 Office maintenance 200 Rent 32,000 30,000 Insurance 700 557 Equipment expense 800 Computer equipment 8,000 3,789 NRD direct costs 10,000 9,831

Total operating expenditures 188,200 129,706

Total expenditures 696,500 539,530

Excess (deficiency) of revenues over expenditures (255,800) 55,072

OTHER FINANCING SOURCES (USES) Transfers (out) (295,830) (112,086)

Total other financing (uses) (295,830) (112,086)

Net change in fund balance $ (551,630) $ (57,014)

30

Variance Positive/

(Negative)

195 415 200

1,337 (165)

(1,858) 4,500

(1,040) 200

2,000 143 800

4,211

169

58,494

156,970

310,872

183,744

183,744

$ 494,616


MARKET DEVELOPMENT PROGRAM SCHEDULE OF REVENUES AND EXPENDITURES


REVENUES

Market development intergovernmental revenue Investment income

Total revenues

EXPENDITURES

Personnel services: Administrative:

Payroll and related expenses

Travel

Total personnel services

Contractual services: Business assistance:

Encumbered direct financial assistance Current year direct financial assistance Business initiatives

Total contractual services

Operating expenditures:

Administrative: Training Legal fees

Conference/registration Accounting fees Membership fees

Direct costs

$

31

Budget

1,600,677

1,600,677

80,000 1,000

81,000

382,958 935,719

100,000

1,418,677

400 3,800 3,500

3,000 1,500

800

$

Actual

640,639

167

640,806

61,168

754

61,922

271,600 224,641

7,869

504,110

542 2,825 1,692

1,312

1,680

$

Variance

Positive/ (Negative)

(960,038)

167

(959,871)

18,832 246

19,078

111,358

711,078 92,131

914,567

400 3,258

675 1,308

188 (880)


MARKET DEVELOPMENT PROGRAM SCHEDULE OF REVENUES AND EXPENDITURES


(Continued)

Budget Actual

Operating expenditures (continued):

EIERA costs 45,000 45,000

Business assistance: Legal fees 40,000 20,069

Publications/exhibits/meetings 500 Travel expense 2,500 1,487


Total expenditures 1,600,677 640,639

Excess of revenues over expenditures 167

Net change in fund balance $ $ 167

32

Variance

Positive/ (Negative)

19,931

500 1,013

26,393

960,038

167

$ 167


MISSOURI BROWNFIELDS REVOLVING LOAN FUND SCHEDULE OF REVENUES AND EXPENDITURES


Variance Final Positive/

Budget Actual (Negative)

REVENUES Brownfields grants $ 1,478,873 $ 564,566 $ (914,307) Loan repayments 98,591 73,317 25,274

Total revenues 1,577,464 637,883 (889,033)

EXPENDITURES

Personnel services: Office salaries 284,732 48,802 235,930 Payroll taxes and fringe benefits 87,618 23,087 64,531 Travel 20,859 2,747 18, 112

Total personnel services 393,209 74,636 318,573

Contractual services:

Loans and subgrants 1,341,264 583,231 758,033

Contracts 137,721 28,870 108,851

Total contractual services 1,478,985 612,101 866,884

Operating expenditures: Administrative:

Supplies 1,100 1,100


Total expenditures 1,873,294 686,737 1,186,557

Deficiency of revenues over expenditures (295,830) (48,854) 246,976

OTHER FINANCING SOURCES (USES) Transfers in 295,830 112,086 (183,744)

Total other financing sources (uses) 295,830 112,086 (183,744)

Net change in fund balance $ $ 63,232 $ 63,232

33


REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN

SCHEDULE OF THE AUTHORITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

Authority's proportion of the net pension liability Authority's proportionate share of the net pension liability

Authority's covered-employee payroll Authority's proportionate share of the net pension liability as

percentage of its covered-employee payroll

Plan fiduciary net position as a percentage of the total pension

liability

$

$

June 30, 2016* 0.0200%

535,756 322,981

165.88%

72.62%

*Based on a measurement date and actuarial valuation as of the end of the preceding fiscal year.

Note: This schedule will ultimately contain 10 years of data.

SCHEDULE OF AUTHORITY CONTRIBUTIONS

Required contribution Contributions in relation to the required contribution Authority's covered employee payroll

Contributions as a percentage of covered-employee payroll

June 30, 2016* $ 54,810

$ 54,810 $ 322,981

16.97%

*Based on a measurement date and actuarial valuation as of the end of the preceding fiscal year.

Note: This schedule will ultimately contain 10 years of data.

June 30, 2015* 0.0160%

$ 376,439

$ 318,450

118.21%

79.49%

June 30, 2015* $ 52,107 $ 52,107 $ 318,450

16.36%

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN

Changes of Benefit Terms or Assumptions

Changes of benefit terms. There were no changes to benefit terms in the plan for the year ended June 30, 2015.

Changes of assumptions. There were no changes to assumptions in valuation reports for the year ended June 3 0, 2015, other than the assumption that there would be no pay increases for fiscal year ending June 3 0, 2016, only.

34


SCHEDULE OF INVESTMENTS HELD June 30, 2016

Maturity

Description Date

GENERAL FUND

CERTIFICATES OF DEPOSIT:

Certificate of deposit 10/12/16

Certificate of deposit 10/19/16 Certificate of deposit 10/27/16 Ce1tificate of deposit 2/11/17

Certificate of deposit 5/16/17

Total certificates of deposit

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION:

GNMA 5/15/22

GNMA 5/15/22

GNMA 6/14/22

Total Government National Mortgage Association

US TREASURY NOTE 8/15/17

Total investments - General fund

35

Interest/

Yield Rate

0.50%

0.60%

0.55%

0.65%

0.65%

8.00%

7.00%

7.50%

0.88%

Fair Value

$ 210,000

248,733

150,555

1,000,000

300,000

1,909,288

1,885

3,190

314

5,389

798,987

$ 2,713,664


SCHEDULE OF TAX EXEMPT REVENUE BONDS ISSUED AND OUTSTANDING June 30, 2016

Balance

Original Issue Outstanding

Issued and Outstanding Series Closing Date Amount June 30, 2016

Ameren UE 1998A 09/04/98 $ 60,000,000 $ 60,000,000

Ameren UE 1998B 09/04/98 50,000,000 50,000,000

Ameren UE 1998C 09/04/98 50,000,000 50,000,000

Associated Electric Cooperative, Refunding 2008 03/12/08 71,550,000 71,550,000

Henry County Water 2014A 10/30/14 7,515,000 6,435,000

Kansas City Power & Light 1992 09/15/92 31,000,000 31,000,000

Kansas City Power & Light 2008 05/22/08 23,400,000 23,400,000 Missouri-American Water Company 2006A 04127106 57,480,000 57,480,000 Raytown Water Company 2013 02/13113 1,015,000 855,000

SRF, Multiple Participant 1994B 12/01/94 43,230,000 110,000

SRF, Branson 1995A 05102195 17,450,000 100,000

SRF, Cape Girardeau 1995D 06/29195 11,462,661 259,535

SRF, Multiple Participant 1995E 10/14/95 26,410,000 90,000

SRF, Multiple Participant 1996B 04125/96 4,545,000 50,000

SRF, Multiple Participant 1996D 06112196 14,185,000 230,000


SRF, Kansas City 1997B 04/24/97 22,235,000 50,000

SRF, Multiple Participant 1997D 06/05197 24,060,000 210,000


SRF, Multiple Participant 1997F 06101/98 2,500,000 305,000

SRF, Multiple Participant 1998A 04/01/98 16,480,000 180,000


SRF, Multiple Participant 1999A 06/02199 47,970,000 8,320,000


SRF, Multiple Participant 2000A 04/12/00 52,640,000 1,545,000

SRF, Multiple Pmiicipant 2000B 11121/00 41,485,000 1,780,000

SRF, Multiple Participant 2001A 04/18/01 13,930,000 365,000

SRF, Multiple Participant 2001B 06/2/6/01 122,060,000 7,525,000

SRF, Multiple Participant 2001C 05/08/02 112,280,000 23,340,000

SRF, Multiple Participant 2002A 05108102 29,545,000 1,380,000

SRF, Multiple Participant 2002B 10/25/02 103,065,000 5,670,000

SRF, Little Blue Valley Sewer District 2003A 01/30/03 88,915,000 8,120,000

SRF, Multiple Participant 2003B 04/01/03 39,940,000 2,390,000

36


SCHEDULE OF TAX EXEMPT REVENUE BONDS ISSUED AND OUTSTANDING June 30, 2016

(continued)

Balance Original Issue Outstanding

Issued and Outstanding Series Closing Date Amount June 30, 2016


SRF, Multiple Participant 2004A 03123104 77,625,000 28,800,000

SRF, Multiple Participant 2004B 05/12/04 179, 780,000 36,460,000


SRF, Multiple Participant 2005A 05/06105 53,060,000 4,835,000 SRF, Multiple Participant 2005C 11/30/05 85,210,000 18,960,000 SRF, Multiple Participant 2006A 04127106 87,505,000 22,935,000 SRF, Multiple Participant 2006B 11/03/06 22,105,000 3,180,000 SRF, Multiple Participant 2007A 04120107 57,430,000 38,990,000 SRF, Multiple Participant 2007B 11/15/07 56,720,000 8,700,000 SRF, Multiple Participant 2008A 10/30/08 69,435,000 16,930,000 SRF, Multiple Participant Refunding 2010A 02/17/10 205,420,000 154,745,000 SRF, Multiple Participant 2010B 11/17/10 65,920,000 28,755,000 SRF, Multiple Participant Refunding 2011A 11/30/11 106,830,000 92,880,000 SRF, Multiple Participant Refunding 2013A 11/26/13 101,535,000 95,120,000 SRF, Multiple Participant 2015A 02/05/15 29,935,000 27,380,000 SRF, Multiple Participant, Refunding 2015B 12/22/15 136,105,000 136,105,000 Tri-County Water Authority 2010 06/01/10 10,525,000 6,210,000 Tri-County Water Authority 2015 07/08/15 30,070,000 30,070,000 Union Electric 1992 12/03/92 47,500,000 47,500,000 Union Electric 1993A 10/13/93 44,000,000 5,000

$ 2,818,232,661 $ 1,221,664,535

37


SCHEDULE OF TAX EXEMPT REVENUE BONDS ISSUED BUT MATURED June 30, 2016

Original Issue

Issued but Refunded Closing Date Amount

Alpha Portland Industries, Inc. 04129175 $ 1,900,000

Alpha Portland Industries, Inc. 04/29/80 1,450,000

American Cyanamid Company 04/12/94 3,450,000

American Cyanamid Company 09117/80 3,450,000



AmerenUE 03109100 63,500,000

Ameren UE 03/09/00 63,000,000

AmerenUE 03109/00 60,000,000

Armco Corporation 12/17/75 13,350,000

Amoco Division Standard Oil 02116177 5,400,000

Associated Electric Cooperative, Inc. 01/25/80 95,000,000

Associated Electric Cooperative, Inc. (D) 03119/81 36,000,000


Associated Electric Cooperative, Inc. (A) 01/21/82 50,000,000

Associated Electric Cooperative, Inc. (J) 05/04/82 73,000,000

Associated Electric Cooperative, Inc. (N) 05/18/82 9,700,000

Associated Electric Cooperative, Inc. (Y) 12/16/82 55,900,000





Bayer Corporation 05127197 1,600,000

Chrysler Corporation 10/30/85 16,000,000

Chrysler Corporation 06/01/93 16,000,000

Community Development Notes, 1983 10/27/93 18,000,000



Empire District Electric Company 12/20/78 8,000,000

Empire District Electric Company 12/08/93 8,000,000

Energy Efficiency Master 02107102 4,910,000

Energy Efficiency Master 10/08/04 13,760,000

Energy Efficiency Master 01/25/06 14,775,000

Grant Anticipation Notes, 1982 12/16/82 24,500,000

Grant Anticipation Notes, 1983 11117/83 44,100,000




Great Lakes Carbon 09/14/77 7,000,000

Great Lakes Container Corporation 07/24/80 800,000

Gulf & Western Industries, Inc. (Lone Star) 08/01/78 11,000,000

Henry County Water 05/01/96 13,000,000

Henry County Water 08/01/04 465,000

38


SCHEDULE OF TAX EXEMPT REVENUE BONDS ISSUED BUT MATURED June 30, 2016 (continued)

Original Issue

Issued but Refunded Closing Date Amount

Henry County Water 08/01/04 11,815,000 Kansas City Power & Light Company 07119178 31,000,000

Kansas City Power & Light Company 10/26/77 20,000,000

Kansas City Power & Light, Series 1993 10113/93 12,366,000

Lone Star Industries, Inc. 07/17/84 8,300,000

Lone Star Industries, Inc. 08/29/84 800,000

Metropolitan Sewer District, Series 1991 01/10/91 68,000,000

Metropolitan Sewer District, Series 1992A 01/14/92 85,000,000

Metropolitan Sewer District, Series 1993 12/09/93 50,000,000

Middlefork Water Company, Series 1992 05128192 2,000,000

Middlefork Water Company 05/24/01 1,620,000

Missouri-American Water Company 03118/93 5,000,000

Missouri-American Water Company 07101196 6,000,000

Missouri-American Water Company 11124/98 19,000,000



Missouri-American Water Company 04/24/02 15,000,000

Missouri Cities Water 02/12/91 4,500,000

Mobay Chemical Corporation 04/18/75 7,500,000 Mobay Chemical Corporation 09111175 3,500,000

Mobay Chemical Corporation 03115178 11,000,000

Mobay Chemical Corporation 05110178 825,000

Mobay Chemical Corporation 04/18/79 11,000,000

Mobay Chemical Corporation 12/05/85 1,600,000

Monsanto Company 08/03/78 2,370,000


Monsanto Company 09106179 2,900,000


Monsanto Company 06/09193 14,520,000


Monsanto Company 11110/88 7,950,000

Monsanto Company 06109193 14,520,000

Noranda Aluminum, Inc. 04/27176 10,500,000

Noranda Aluminum, Inc. 10/29/82 45,000,000

Raytown Water Company 04/23/92 3,000,000

Raytown Water Company 07130199 2,670,000

Raytown Water Company 09/26/08 970,000

Reynolds Metal Company 12/31/85 750,000 River Cement Company 05/29/80 5,700,000 SRF, Multiple Participant 1992A 06116192 48,295,000 SRF, Kansas City 06129195 30,000,000 SRF, Kansas City 04/26/95 24,000,000 SRF, Kansas City 04/24/97 5,730,000 SRF, Kansas City 04/25/95 18,000,000 SRF, Springfield 10/25/90 32,650,000

39


SCHEDULE OF TAX EXEMPT REVENUE BONDS ISSUED BUT MATURED

Issued but Refunded

SRF, Lees Summit

SRF, Multiple Participant, Refunding

SRF, Multiple Participant




SRF - MSD Notes

Standard Oil Company (Amoco Division)

St. Joseph Light & Power Company




St. Joseph Mineral Corporation

St. Louis County Water


St. Louis County Water St. Louis County Water St. Louis County Water



Tri-County Water Company

Tri-County Water Company

Union Electric Company (1995 A&B)

Union Electric Company







Union Electric Company (Series A & B, 1984)

Union Electric Company (Series C, 1984)

Union Electric

UtiliCorp United, Inc. Wentzville, City of

June 30, 2016

(continued)

40

Original Issue

Closing Date Amount

01/06/91 9,695,000

06/26/97 15,785,000

01/14/91 13,550,000

09/08/93 22,425,000

08/18/94 12,215,000

06129195 30,000,000

06/08/00 72,545,000

07/22/80 8,300,000

12/30/80 5,300,000

02/24/83 5,600,000

07/21/89 5,600,000

06/14/95 5,600,000

12/20/73 7,000,000

02/12/91 25,000,000

02/26/92 25,000,000

03/25/93 15,000,000

06120195 12,000,000 11/01/96 20,000,000

03/01/98 25,000,000 03/24/99 40,000,000 04/30/92 8,365,000

09/01/99 14,760,000

02/26/92 126,500,000

04/25/74 16,500,000

06/11/75 22,000,000

05/30/90 60,000,000

11/01/77 27,085,000

08/20/80 60,000,000

10/08/81 45,000,000

12/15/82 20,000,000

06/21184 160,000,000

11/14/84 47,500,000

12/17/91 42,585,000

05/26193 5,000,000

05/08/81 6,350,000

$ 3,111,271,000


MARKETDEVELOPMENTPROGRAMFINANCIAL ASSISTANCE A WARDS

From Inception Through June 30, 2016

.:: WILLIAMS .::::KEEPERS LLC


2005 West Broadway, Suite 100, Columbia, MO 65203 OFFICE (573) 442-6171 FAX (573) 777-7800

3220 West Edgewood, Suite E, Jefferson City, MO 651 09 OFFICE (573) 635-6196 FAX (573) 644-7240


INDEPENDENT AUDITORS' REPORT

Members of the Board of the State Environmental Improvement and Energy Resources Authority

We have audited, in accordai1ce with U.S. generally accepted auditing standards, the financial statements of the State Environmental Improvement and Energy Resources Authority (the Authority) for the year ended June 30, 2016, and have issued our report thereon dated November 1, 2016. We have also audited the accompanying Schedule of Missouri Market Development Program - Financial Assistance Awards of the Authority (the Schedule) from inception through June 30, 2016.

Management's Responsibility for the Schedule

Management is responsible for the preparation and fair presentation of this schedule in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedule that is free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on this schedule based on our audit. We conducted our audit of the Schedule in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedule of is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Authority's preparation and fair presentation of the Schedule 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 Authority's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Schedule.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

American Institute of Certified Public Accountants I Missouri Society of Certified Public Accountants I Member, Allinial Global

Other Matter

As described in Note 2, the accompanying schedule is prepared on the cash basis of accounting, which is a comprehensive basis of accounting other than U.S. generally accepted accounting principles.

Opinion

In our opinion, the Schedule of Missouri Market Development Program - Financial Assistance Awards referred to above presents fairly, in all material respects, such program awards of the State Enviromnental Improvement and Energy Resources Authority from inception through June 30, 2016, in conformity with the cash basis of accounting as described in Note 2.

November 1, 2016

2

STATE ENVIRONMENTAL IMPROVEMENT AN]) ENERGY RESOURCES AUTHORITY

SCHEDULE OF MISSOURI MARKET DEVELOPMENT PROGRAM FINANCIAL ASSISTANCE A WARDS

(CASH BASIS) FROM INCEPTION THROUGH JUNE 30, 2016

Project

FY '92 Projects City of Maryville Memphis City Sanitation Galamet, Inc. Recycled Plastics Corp. Spectrum Technologists The Surplus Exchange Ultra-Technologies Cooperative Workshops, Inc. Boonslick Industries Jamegy, Inc. Recycled Plastic Resins, Inc. Missouri Enterprise Versa-Tag, Inc. Gateway to Gardening Louisiana-Pacific Corp. Williams & Jelks Print-Pak, Inc.

FY '93 Projects Sanders Enterprises, Inc. Reclaim, Inc. Midway Plastics, Inc. Sikeston Recycling USA Recycling, Inc. P.K. Insulation Manufacturing Co., Inc. Environmental Recycling, Inc.

FY '94 Projects Bryant Plastics, Inc. Come Play Products Company Environmental Defense Fund Bridging the Gap Tri-Smith Plastic Recyclers, Inc. ALB Enterprises, Inc.

$

Amount

43,000 8,500

50,000 50,000 16,990 35,000 17,000 49,750 15,000 25,000 50,000 49,433

8,280 40,200 92,000 50,000 85,500

75,000 75,000 25,000 75,000 75,000 75,000 63,000

75,000 75,000 15,000 10,000 50,000 35,000

Amounts Paid/Lapsed

$

in Prior Years

43,000 8,500

50,000 50,000 16,990 35,000 17,000 49,750 15,000 25,000 50,000 49,433

8,280 40,200 92,000 50,000 85,500

75,000 75,000 25,000 75,000 75,000 75,000 63,000

75,000 75,000 15,000 10,000 50,000 35,000

Amounts Paid/Lapsed

in Fiscal Year2016

$

See Accompanying Notes to Schedule of Missouri Market Development Program.

3

Unexpired Balance June 30,

2016

$

AND ENERGY RESOURCES AUTHORITY



(continued)

Project

FY '95 Projects Miller Manufacturing and Lumber Ozark Mountain Resins Paint Solutions Recovery and Recycling Coon Manufacturing Pnu-Light Tool Recycled Plastic Resins NEMO Recycling B and B Pallet Supply The Pallet Connection

FY '96 Projects RSS Recycling M & H Pallet Company C & C Pallet Company Sunset Turf Nurseries, Inc. Osage Ag Concerns American Disposal Services of Missouri P.K. Insulation Manufacturing Company

FY '97 Projects City of St. Peters For The Children, Inc. Ozark Rivers Environmental Strategic Materials, Inc. Plastec, Inc. S & S Wood Products Coon Manufacturing Bryant Plastics

$

Amount

50,000 50,000 45,000 50,000 75,000 75,000 63,000 75,000 45,000 35,000

37,500 75,000 75,000 75,000 75,000 75,000 50,000

97,768 150,000 150,000 75,000 75,000 75,000 75,000 33,430

Amounts Paid/Lapsed

$

in Prior Years

50,000 50,000 45,000 50,000 75,000 75,000 63,000 75,000 45,000 35,000

37,500 75,000 75,000 75,000 75,000 75,000 50,000

97,768 150,000 150,000

75,000 75,000 75,000 75,000 33,430

Amounts Paid/Lapsed

in Fiscal Year 2016

$

See Accompanying Notes to Schedule of Missouri Market Development Program. 4


2016

$




(continued)

FY '98 Projects PR Recycling Dura Board, Inc.

Project

Second Chance Materials Dept. of Public Works, City of Springfield Dept. of Public Works, City of Lee's Summit Agricultural Waste Management, Inc. Missouri Enterprise Business Assistance Panel Products

FY '99 Projects Loganbill Shavings Advance Toner Canbrands International Lucent Recycling

FY '00 Projects CNC Recycling Green Farm Pilot NuRoad Systems UMR/Futuretek Central Paper B&B Organics Canbrands(2) Organic Res. Management Coolbrook Corp. Enviro Tech

$

Amount

60,000 60,000 60,000 60,000 28,710 30,000 67,325 60,000

50,000 49,384 23,959 40,875

42,450 48,750

170,000 159,000 50,000 37,500 50,000 50,000 50,000 50,000

Amounts Paid/Lapsed

$

in Prior Years

60,000 60,000 60,000 60,000 28,710 30,000 67,325 60,000

50,000 49,384 23,959 40,875

42,450 48,750

170,000 159,000 50,000 37,500 50,000 50,000 50,000 50,000

Amounts Paid/Lapsed

in Fiscal Year 2016

$



2016

$


SCHEDULE OF MISSOURI MARKET DEVELOPMENT PROGRAM FINANCIAL ASSISTANCE AWARDS


(continued)

Project

FY '01 Projects Coon Manufacturing EnviroPak Mountain Ridge Recycling Midwest Mulch Manufacturing Tico Manufacturing Tiro-Block Proctor and Gamble City of Columbia Reynolds County Sheltered Workshop

FY '02 Projects Apple Cabinets BioSpan Technologies Bryant Plastics DMR Plastics Loganbill Shavings & Mulch Magic Green Corp Missouri Hardwood Products PK Insulation Second Chance USA Recycling Waste Not Recycling Welch Products

FY '03 Projects

$

Amount

50,000 50,000 50,000 35,000 50,000 50,000 50,000 50,000 50,000

22,425 50,000 32,500 50,000 50,000 50,000 50,000 50,000 44,189 50,000 49,950 50,000

Amounts Paid/Lapsed

$

in Prior Years

50,000 50,000 50,000 35,000 50,000 50,000 50,000 50,000 50,000

22,425 50,000 32,500 50,000 50,000 50,000 50,000 50,000 44,189 50,000 49,950 50,000

Baden Car Parts, Inc. 50,000 50,000 Coon Manufacturing, Inc. 26,548 26,548 Forrest Keeling Nursery, Inc. 50,000 50,000 ORMI 25,000 25,000 SandVista 50,000 50,000 Sho-Me Pallets 50,000 50,000 The Smashed Chefs 25,867 25,867 TRI-Rinse, Inc. 37,384 37,384 Web Innovations & Tech. Services 50,000 50,000

Amounts Paid/Lapsed

in Fiscal Year 2016

$



2016

$




(continued)

FY '04 Projects BFC Composting Birdville USA LLC

Project

Encore Building Solutions, Inc. Flick Seed Company Hi-Tech Charities Horner Charcoal, Inc. Irresistible Community Builders Lamar Feed & Grain, Inc. Missouri Botanical Gardens Missouri REI Study Southland Flooring Supplies Windswept Worm Farm LLC Young's Innovations

FY '05 Projects Fiberlite Technology, Inc. Grisham Farm Products, Inc. J&J Industrial Supply, Inc. Missouri Bio-Fuels, LLC Missouri Organic Recycling Remains, Inc. Rustique, Inc. Ryan Enterprise, Inc.

$

Amount

50,000 50,000 50,000 50,000 50,000 50,000 50,000 44,253 21,000 38,109 50,000 50,000

3,633

50,000 46,275

50,000 45,656 50,000

50,000 50,000 50,000

Amounts Paid/Lapsed

$

in Prior Years

50,000 50,000 50,000 50,000 50,000 50,000 50,000 44,253 21,000 38,109 50,000 50,000

3,633

50,000 46,275 50,000 45,656 50,000 50,000 50,000 50,000

Amounts Paid/Lapsed

in Fiscal Year2016

$



2016

$

FY '06 Projects

ST A TE ENVIRONMENT AL IMPROVEMENT AND ENERGY RESOURCES AUTHORITY


Project


(continued)

Amounts Paid/Lapsed

in Prior Amount Years

Amounts Paid/Lapsed

in Fiscal Year 2016


2016

C.H.P. Environmental, Inc. DoCo, Inc.

$ 50,000 $ 50,000 $ $

EPC, Inc. International Mulch Company, Inc. Loganbill Enterprises, Inc. Missouri Botanical Gardens Nike IHM Recycling Concepts, Inc. Strategic Materials, Inc.

FY '07 Projects Bart Menning Tree Service LLC. Customix Corp Coon Mfg., Inc. DCAL Services, LLC Laclede Industries, Inc. Mtn. Vue Enterprises, LLC Plastic Lumber Co. of America, LLC RAMM Enterprises, Inc. Sunshine Recycling Wahlco/DW Tool, Inc.

FY '08 Projects Alternative Community Training, Inc.

Central Missouri Poultry Procedures Eco Recycling, Inc.

Eharas Service & Solutions, Inc.

***

Halphin Enterprises dba Windswept Worm Farm

Hansen's Tree Service & Environmental Wood

Loganbill Enterprises, Inc. Performance Roof Systems

50,000 34,800 40,000 50,000

5,400 50,000 50,000 50,000

50,000 23,317 22,877 39,000 49,287 50,000 50,000 50,000 42,000 50,000

50,000 23,332 50,000

50,000

35,000

50,000

35,000 50,000

50,000 34,800 40,000 50,000

5,400 50,000 50,000 50,000

50,000 23,317 22,877 39,000 49,287 50,000 50,000 50,000 42,000 50,000

50,000

23,332 50,000

50,000

35,000

50,000

35,000 50,000

***RAMM Enterprises, Inc. returned these funds to the Authority during fiscal year 2008.





(continued)

FY '09 Projects Asphalt Products, Inc.

Project

Cedar Ridge Innovations, LLC Double G Brands, Inc. Swift Construction Company, Inc. Thomason Brothers, Inc.

FY '10 Projects All Points Recycling, LLC BFC Composting

Braik Brothers Tree Care

Coon Mfg, Inc. Enginuity, LLC GT Management, LLC Hampton Alternative Energy Products, LLC Missouri Organic Recycling, Inc. Randolph County Sheltered Industries Sikeston Community Sheltered Workshop Stanfill Family dba Rustique Enterprises

FY '11 Projects 3 G Processing, LLC Bryant Plastics Customix Corp dba Aggieville EXT, Inc. Fick Supply Service, Inc. Foundation Workshop Nike IHM Thomason Brothers, Inc.

$

Amount

50,000 50,000 50,000 50,000 50,000

45,500 50,000

50,000 50,000 50,000 50,000 50,000 33,500 50,000 50,000 50,000

50,000 50,000 50,000 46,000 50,000 35,500

50,000 50,000

Amounts Paid/Lapsed

in Prior

Years

$ 50,000 50,000 50,000 50,000 50,000

45,500 50,000

50,000 50,000 50,000 50,000 50,000 33,500 50,000 50,000

6,799

50,000 50,000 50,000 46,000 50,000 35,500 50,000 50,000

Amounts Paid/Lapsed

in Fiscal Year 2016

$

See Accompanying Notes to Schedule of Missouri Market Development Program.

9


2016

$

43,201


SCHEDULE OF MISSOURI MARKET DEVELOPMENT PROGRAM FINANCIAL ASSISTANCE AW ARDS

Project

FY '12 Projects B&G Skid Removal Dairy Farmers of America, Inc. Enginuity Missouri Woodworking Specialties Prock Operations, Inc. Remains, Inc.

FY '13 Projects Ciona Technologies Foam Products Lake Area Industries Master Marble Missouri Organic Recycling Nature's Methane St. Joseph Plastic

FY '14 Projects Bluebird Composting, LLC EXT, Inc. Lake Area Industries Lake Area Industries


(continued)

Amounts Paid/Lapsed

in Prior Amount Years

$ 50,000 $ 50,000 39,818 39,818 50,000 50,000 39,371 39,371 50,000 50,000 36,250 36,250

250,000 250,000 45,750 45,750

*** 20,715 13,965 50,000 50,000 46,600 46,600

250,000 250,000 250,000 250,000

75,000 75,000 75,000 74,544 18,285 18,285 63,000 59,010

Loganbill Enterprises of Missouri, LLC 50,000 50,000 Madison County Wood Products 42,000 42,000

FY '15 Projects A venue of Life, Inc. 73,000 12,697 QRS, Inc. 250,000 250,000 DMR Plastics, Inc. I 00,000 100,000 St. Louis Composting, Inc. 220,000 220,000 Liquid Soap Products, Ltd. 250,000 Foam Products Corp. 44,447 19,440

Amounts Paid/Lapsed

in Fiscal Year 2016

$

6,750

-

456

60,303

250,000 21,600

***Lake Area Industries returned $6,750 of these funds to the Authority during fiscal year 2016.



2016

$

3,990

3,407

FY '15 Projects



Project


(continued)

Amount

Amounts Paid/Lapsed

in Prior Years

Amounts Paid/Lapsed

in Fiscal Year 2016


2016

BFC Composting Branch Creek, LLC

Bryant Plastics, Inc. Midwest Organics, Inc.

$ 69,750 $ $ 69,750 $ 100,000 61,875

250,000 Missouri Organic Recycling, Inc. 250,000

$ 12,242,467 $11,121,135

100,000 61,641 234

250,000 250,000

$ 570,500 $ 550,832



NOTES TO SCHEDULE OF MISSOURI MARKET DEVELOPMENT PROGRAM

1. BACKGROUND AND PURPOSE

The State Environmental Improvement and Energy Resources Authority (the "Authority"), created in 1972, is an independent, self-supporting, quasi-governmental agency, governed by a five member Board appointed by the Governor of the State of Missouri. The Authority is administratively placed in the Missouri Department of Natural Resources.

Due to the special independent status as "a body corporate and politic," the Authority is authorized to finance, acquire, construct and equip projects for the purpose ofreducing, preventing or controlling pollution and to provide for the development of energy resources of the State of Missouri (the "State"). The usual method of financing is through the issuance of tax-exempt revenue bonds and notes.

The Authority is also empowered to conduct environmental and energy research and development activities, develop alternative methods of financing environmental and energy projects, and assist Missouri communities, organizations, and businesses in obtaining low-cost funds and other financial assistance for projects related to the Authority's purposes.

The Authority has also been mandated by the General Assembly (RSMo 260.005 through 260.125) to implement a number of projects in cooperation with the Department of Natural Resources and the Department of Economic Development, including administering the Missouri Market Development Program which provides market development assistance through technical and financial support to businesses and organizations that develop marketable end-products from recycled materials.

Pursuant to Senate Bill #530, Section 260.335, in March 1992, the Authority entered into an interagency agreement with the Missouri Department of Natural Resources and the Missouri Department of Economic Development to promote markets for recycled materials and to provide financial assistance for businesses which use recycled materials in making new products. As required in that legislation, the program was provided annual funding of $1,000,000 upon appropriation by the Missouri Legislature. The funds come from the Solid Waste Management Fund. Pursuant to House Bill #1040, the funding available changed to $648,000 for fiscal 2005. For fiscal 2006 and beyond, Senate Bill #230 provides $800,000 from solid waste tipping fees for the program annually. Solid waste tipping fees are a per ton fee levied on solid waste disposed at landfills and transported out of state for disposal through transfer stations. Additional program assistance has been secured through contracts with the Missouri Council of Governments and Missouri Business Assistance Center. The Missouri Depaiiment of Economic Development has been and will continue to be used in an advisory capacity.

2. ACCOUNTING POLICIES

Method of Accounting: The accounts of the Authority are organized on the basis of funds and account groups. The Market Development Program is accounted for as a special revenue fund. Information shown in the accompanying Schedule of Missouri Market Development Program is presented on the cash basis.

Income Taxes: The Authority is exempt from federal income taxes under Section 115 of the Internal Revenue Code.

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