HomeMy WebLinkAbout20064_Simpson Gas_LTLT 2014 Audit Report-Final_20141231
THE LAND TRUST FOR THE
LITTLE TENNESSEE, INC. INDEPENDENT AUDITOR’S REPORT
AND FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014
CORLISS & SOLOMON, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
The Land Trust for the Little Tennessee, Inc.
Table of Contents
Year Ended December 31, 2014
Independent Auditor’s Report ................................................................................................................. 1 - 2
Financial Statements
Statement of Financial Position ............................................................................................................. 3
Statement of Activities ............................................................................................................................ 4
Statement of Functional Expenses .......................................................................................................... 5
Statement of Cash Flows ........................................................................................................................ 6
Notes to Financial Statements ............................................................................................................... 7 - 16
CORLISS & SOLOMON, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
242 Charlotte Street Phone 828-236-0206
Suite 1 Fax 828-236-0209
Asheville, NC 28801 www.candspllc.com
(1)
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
The Land Trust for the Little Tennessee, Inc.
Franklin, North Carolina
We have audited the accompanying financial statements of The Land Trust for the Little Tennessee, Inc., which
comprise the statement of financial position as of December 31, 2014, and the related statements of activities,
functional expenses and cash flows for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America. Those standards
required 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 entity’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 entity’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 that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of The Land Trust for the Little Tennessee, Inc. as of December 31, 2014, and the changes in its net
assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
The Land Trust for the Little Tennessee, Inc. Independent Auditor’s Report (Continued)
(2)
Report on Summarized Comparative Information
We have previously audited the 2013 financial statements of The Land Trust for the Little Tennessee, Inc., and
our report dated May 23, 2014, expressed an unmodified opinion on those audited financial statements. In our
opinion, the summarized comparative information presented herein as of and for the year ended December 31,
2013, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Corliss & Solomon, PLLC
Asheville, North Carolina
May 27, 2015
2014 2013
Current Assets
Cash and Cash Equivalents 1,140,338$ 786,698$
Grant and Contract Receivables 42,056 105,741
Note and Interest Receivable 509,610 500,000
Pledges Receivable 16,312 10,874
Prepaid Expenses 84,369 8,885
Other Current Assets 10,932 38,346
Total Current Assets 1,803,617 1,450,544
Long-Term Assets
Cash and Certificates Held for Land Protection 1,236,297 515,429
Certificates of Deposit - 74,059
Note Receivable-Long Term - 500,000
Furniture and Equipment, Net 12,468 12,077
Stewardship Funds with Community Foundation 821,043 716,164
Rickman Store Property 254,539 254,539
Land Assets Subject to Life Estate, Net 171,086 168,486
Conservation Lands 3,139,174 2,752,497
Total Long-Term Assets 5,634,607 4,993,251
Total Assets 7,438,224 6,443,795
Current Liabilities
Accounts Payable 8,241 11,793
Accrued Salaries and Payroll Tax Liabilities 9,775 13,754
Deferred Revenue 127,209 -
Fiscal Agent Funds Held 15,462 23,411
Total Current Liabilities 160,687 48,958
Net Assets
Unrestricted
Undesignated 1,178,442 1,691,914
Invested in Conservation Lands 3,564,799 3,175,522
Board Designated 1,460,879 680,024
Total Unrestricted 6,204,120 5,547,460
Temporarily Restricted 618,878 393,588
Permanently Restricted 454,539 453,789
Total Net Assets 7,277,537 6,394,837
Total Liabilities and Net Assets 7,438,224$ 6,443,795$
The Land Trust for the Little Tennessee, Inc.
Statement of Financial Position
As of December 31, 2014
(With summarized comparative totals as of December 31, 2013)
Assets
Liabilities and Net Assets
The accompanying notes are an integral part of these financial statements.
(3)
Temporarily Permanently Total Total
Unrestricted Restricted Restricted 2014 2013
Support and Revenue
Grants and Contracts -$ 639,510$ -$ 639,510$ 490,957$
Contributions 412,083 803,011 750 1,215,844 579,336
Stewardship Contracts 24,952 - - 24,952 36,292
Program Income 77,702 - - 77,702 67,568
Land Contributions 82,069 - - 82,069 170,800
Investment Gains 16,426 14,480 - 30,906 82,972
Investment Income 15,974 - - 15,974 12,022
Interest Income 38,533 - - 38,533 3,758
Land Transaction Gains - - - - 30,199
Rental Income 10,950 - - 10,950 10,709
Event Income 2,287 - - 2,287 405
Merchandise Sales 158 - - 158 413
In-Kind Contributions 2,259 - - 2,259 -
Other Income 4,146 - - 4,146 8,627
Net Asset Released
from Restriction 1,231,711 (1,231,711) - - -
Total Support and Revenue 1,919,250 225,290 750 2,145,290 1,494,058
Expenses
Program Services 1,044,546 - - 1,044,546 740,692
Management and General 136,819 - - 136,819 150,086
Fundraising 81,225 - - 81,225 77,090
Total Expenses 1,262,590 - - 1,262,590 967,868
Change in Net Assets 656,660 225,290 750 882,700 526,190
Net Assets, Beginning of Year 5,547,460 393,588 453,789 6,394,837 5,868,647
Net Assets, End of Year 6,204,120$ 618,878$ 454,539$ 7,277,537$ 6,394,837$
The Land Trust for the Little Tennessee, Inc.
Statement of Activities
Year Ended December 31, 2014
(With summarized comparative totals for the prior year)
The accompanying notes are an integral part of these financial statements.
(4)
The Land Trust for the Little Tennessee, Inc.
Statement of Functional Expenses
Year Ended December 31, 2014
(With summarized comparative totals for the prior year)
Program
Management
& General
Fund
Raising
Total
2014
Total
2013
Salaries 337,563$ 63,832$ 51,324$ 452,719$ 421,331$
Payroll Taxes 25,079 7,228 4,186 36,493 33,506
Health and Dental Insurance 21,612 6,928 2,663 31,203 31,115
Retirement 17,911 3,825 2,491 24,227 22,072
Contract Labor 26,502 215 - 26,717 96,729
Subtotal Personnel 428,667 82,028 60,664 571,359 604,753
Advertising 3,658 249 - 3,907 450
Bank/Credit Card Fees - 6,582 1,601 8,183 7,567
Dues and Subscriptions 1,763 2,236 - 3,999 3,352
Easement Purchase Costs 82,535 - - 82,535 32,831
Equipment Rental/Maintenance 4,023 794 607 5,424 6,117
Event Expense - 2,287 3,354 5,641 951
Field Equipment 2,095 - - 2,095 708
Insurance 14,488 2,858 2,188 19,534 18,197
Interest Expense - - - - 2,657
Internet/E-mail 303 960 18 1,281 1,261
Land Transaction Costs 8,004 - - 8,004 63,645
Meetings 3,549 3,107 359 7,015 4,812
Miscellaneous Expense 918 250 - 1,168 4,665
Office Equipment/Software 3,874 2,512 1,574 7,960 8,010
Postage and Delivery 966 1,529 1,186 3,681 2,699
Professional Fees 247,784 21,399 2,404 271,587 107,116
Project Management Expense 29,457 - - 29,457 31,749
Property Tax 4,736 - - 4,736 -
Rent 14,018 2,765 2,117 18,900 17,694
Repairs and Maintenance 100 1,728 - 1,828 1,125
Staff Development 2,087 235 301 2,623 858
Supplies/Materials/Publications 13,369 1,877 1,844 17,090 18,652
Telephone 2,184 431 330 2,945 2,509
Travel 19,060 1,909 1,851 22,820 15,171
Utilities 3,886 516 394 4,796 3,423
Sub-Total Expenses 891,524 136,252 80,792 1,108,568 960,972
Below Book Value Land Sales 150,149 - - 150,149 -
Depreciation Expense 2,873 567 433 3,873 6,896
Total Expenses 1,044,546$ 136,819$ 81,225$ 1,262,590$ 967,868$
The accompanying notes are an integral part of these financial statements.
(5)
2014 2013
Cash Flows from Operating Activities
Change in Net Assets 882,700$ 526,190$
Adjustments to reconcile change in net assets to
net cash provided or used by operating activities:
Depreciation and Amortization 1,273 4,296
(Gain)/Loss on Land Transactions 150,149 (30,199)
(Gain)/Loss from Endowment Fund Investment (40,847) (91,097)
Funds Received for Endowment Fund (750) -
Stock Donations Received (122,377) (187,994)
(Increase)/Decrease in Operating Assets
Grant and Contract Receivables 63,685 14,249
Note and Interest Receivable 490,390 (1,000,000)
Pledges Receivable (5,438) 14,703
Prepaid Expenses (75,484) (8,885)
Other Assets 27,414 (15,026)
Increase/(Decrease) in Operating Liabilities
Accounts Payable (3,552) 6,501
Accrued Salaries and Payroll Tax Liabilities (3,979) 5,350
Deferred Revenue 127,209 -
Fiscal Agent Funds Held (7,949) 11,384
Net Cash Provided/(Used) by Operating Activities 1,482,444 (750,528)
Cash Flows from Investing Activities
Sale of Conservation Lands (536,826) 1,654,629
Stock Donations Liquidated 122,377 187,994
Liquidation of Certificates of Deposit 74,059 -
Increase in Cash and Certificates Held for Land Protection (720,868) (397,338)
Purchase of Equipment and Furniture, Net (4,264) (2,517)
Net Cash Provided/(Used) by Investing Activities (1,065,522) 1,442,768
Cash Flows from Financing Activities
Principal Payments on Notes Payable - (229,900)
Withdrawals from CFWNC Stewardship Funds 14,000 -
Transfers to CFWNC Stewardship Funds (77,282) (47,660)
Net Cash Provided/(Used) by Financing Activities (63,282) (277,560)
Net Change in Cash During Year 353,640 414,680
Cash and Equivalents, Beginning of Year 786,698 372,018
Cash and Equivalents, End of Year 1,140,338$ 786,698$
Supplemental Disclosure of Cash Flow Information
Cash Paid for Interest -$ 2,657$
The Land Trust for the Little Tennessee, Inc.
Statement of Cash Flows
Year Ended December 31, 2014
(With summarized comparative totals for the prior year)
The accompanying notes are an integral part of these financial statements.
(6)
(7)
The Land Trust for the Little Tennessee, Inc.
Notes to Financial Statements
Year Ended December 31, 2014
1. Description of the Organization and Summary of Significant Accounting Policies
Description of the Organization
The mission of The Land Trust for the Little Tennessee (LTLT) is to conserve the waters, forests, farms, and
heritage of the Upper Little Tennessee and Hiwassee River Valleys. Its supporting goals are as follows:
Cooperate with landowners, local governments, and others to achieve long-term protection of floodplain,
farms, forests, and culturally significant lands in the upper Little Tennessee and Hiwassee River Valleys.
Provide information, assistance, and encouragement to landowners about long-term conservation options
that support traditional and sustainable uses of the land and water.
Promote good stewardship of land and water through monitoring, education, demonstration, and habitat
restoration.
The central program areas of LTLT are summarized as follows:
Conserve -- LTLT helps to conserve the landscape of the upper Little Tennessee and Hiwassee River valleys
by protecting private lands from inappropriate development. It does this by working with private landowners
to place conservation easements on their property, by accepting gifts of land, and by purchasing at-risk
properties.
Restore -- LTLT promotes active stewardship of land and water, both for restoration and maintenance of
ecosystem integrity and for providing goods and services desired by landowners and society. LTLT works to
restore the landscape through technical advice and the demonstration of sustainable forestry and agriculture,
stream side reforestation, stream bank stabilization, invasive exotic plant control, and wetland restoration.
Connect -- LTLT connects people to the land, water and special places in our region. Through LTLT’s Citizen
Science program, trained volunteers track changes in ecosystem health via the monitoring of fish and bird
communities, and school groups are given the opportunities to study nature in the outdoors. With LTLT’s
Partners in Place initiative heritage sites are preserved, interpreted, and made available to the public where
appropriate. LTLT also offers various educational opportunities to the public in subjects related to
conservation and restoration.
Corporate and Tax-Exempt Status
LTLT was incorporated in 1999 as a not-for-profit corporation under the laws of the state of North Carolina,
and has been recognized as tax-exempt pursuant to Section 501(c)(3) of the Internal Revenue Code.
Contributions to the organization qualify for the charitable contribution deduction under Section 170(b)(1)(a).
In addition, the organization is classified as a publicly supported organization under Section 509(a)(1).
Funding
The organization’s primary funding sources are contributions from the public and grants from foundations
and governmental agencies.
Basis of Accounting
The accompanying basic financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (U.S. GAAP).
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(8)
Cash and Cash Equivalents
For purposes of reporting on the statement of cash flows, the organization considers highly liquid investments
purchased with an initial maturity of three months or less to be cash equivalents. Certificates of deposit are
not considered cash equivalents.
Financial Statement Presentation
U.S. GAAP establishes standards for external financial reporting by not-for-profit organizations and requires
that resources be classified for accounting and reporting purposes into three net asset categories according to
externally imposed restrictions. Descriptions of the three net asset classes are as follows:
Unrestricted Net Assets - Net assets that are not subject to donor-imposed restrictions and that are
generally available for general operating expenses of the organization. This class also includes
net assets designated by the board of directors for particular purposes and the net assets
corresponding to conservation land assets.
Temporarily Restricted Net Assets - Net assets subject to donor-imposed restrictions as to the
purpose and/or time of use.
Permanently Restricted Net Assets - Net assets subject to donor-imposed restrictions that they be
maintained permanently by the organization.
Contributions
Contributions received are recorded as unrestricted, temporarily restricted or permanently restricted support
depending on the existence and/or nature of any donor restrictions. As restrictions expire, net assets are
reclassified to unrestricted net assets and are reported on the statement of activities as “Net Assets Released
from Restrictions.”
Contributions and Grants Receivable
Unconditional contributions and grants receivable that are expected to be collected within one year are
recorded at net realizable value. Those that are expected to be collected in future years are recorded at the
present value of their estimated future cash flows. Amortization of the discount is included in contributions or
grant revenue.
Investments
Investments are reported at current fair value on the statement of financial position. Realized and unrealized
investment gains and losses are reflected as income or expense on the statement of activities.
Endowments
With the enactment of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) in North
Carolina in 2009, LTLT elected to retain its policy which calls for the preservation of the original value of
permanently restricted contributions and grants. Consistent with current U.S. GAAP, the net asset values
associated with permanently restricted funds invested are not adjusted for gains or losses. Accumulated
investment income is temporarily restricted until appropriated for use. Appropriation occurs through the
decision to accept spendable income offered for distribution by the community foundation holding the
endowment. LTLT considers the following factors in making a determination to appropriate or accumulate
donor-restricted endowment funds: (1) the duration and preservation of the various funds, (2) the purposes of
the donor-restricted endowment funds, (3) general economic conditions, (4) the possible effect of inflation
and deflation, (5) the expected total return from income and the appreciation of investments, (6) other
resources of the Organization, and (7) the Organization’s investment policies.
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(9)
Property and Equipment
Purchases of lands or equipment of $500 or more are capitalized at original cost value. Depreciation is
provided over the estimated useful life of each class of depreciable asset and is computed using the straight-
line method.
Land and Land Stewardship Responsibilities
LTLT has land and land stewardship responsibilities that fall into three main categories:
Conservation Lands – LTLT maintains fee simple ownership of real property with conservation
value. These properties are either managed in an effort to protect the conservation value, or
transferred to owners (including governmental entities) that will manage the lands in a similar
fashion. LTLT records conservation lands acquired on a fee simple basis at cost if purchased; or at
fair market value at the time of acquisition if all or part of the land was received as a gift. Fair
market value is based on independent appraisal or management estimate when an appraisal is not
available.
Conservation Easements – LTLT has perpetual conservation stewardship responsibilities for these
properties. A conservation easement is a legal agreement between a landowner and a land trust that
permanently limits uses of a tract of land in order to protect its conservation value. LTLT has
responsibility for 43 conservation easements. The Organization’s accounting policy for
conservation easements, which is widely used by other land trust organizations, states that
easements will not be recognized as assets. Accordingly, easements received by donation are not
recognized in assets or in income and easements purchased are expensed.
Property Held Subject to Life Estate – Conservation property received by donation with the donor
retaining the right to live on the property for the remainder of his or her lifetime. The property is
recorded at actuarial, present value of the appraisal and amortized annually to planned giving
contributions.
Fair Value Measurements
LTLT follows FASB ASC 820-10 “Fair Value Measurements.” This standard establishes a single definition
of fair value and a framework for measuring fair value in U.S. GAAP. The new standard also expands
disclosures about fair value measurements. Fair Value is defined as “the price that would be received to sell
an asset in an orderly transaction between market participants at the measurement date. That is, fair value is
based on an exit price, which may differ from the price paid to acquire the asset. If there is a principal market
for the asset, fair value represents the price in that market.” Items carried at fair value on a recurring basis by
the LTLT consist of funds held with a community foundation and life estate assets.
Income Taxes/Uncertain Tax Positions
LTLT is exempt from federal income taxes under 501(c)(3) of the Internal Revenue Code. Under the Code,
income from certain activities not related to the organization’s tax-exempt purpose may be subject to taxation
as unrelated business income. The organization had less than $1,000 of income from unrelated business
activities in the 2014 fiscal year and was, therefore, not required to file Federal Form 990-T (Exempt
Organization Business Income Tax Return). The organization believes that it has appropriate support for all
tax positions taken, and as such, does not have any uncertain tax positions that are material to the financial
statements. The organization’s Forms 990 for 2011, 2012 and 2013 are subject to examination by the IRS,
generally for three years after being filed.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the period. Actual results could differ
from those estimates.
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(10)
Functional Allocation of Expenses
The costs of providing the various programs and activities have been summarized on a functional basis in the
statement of activities. Accordingly, certain costs have been allocated among the programs and supporting
services benefited based on management estimate.
2. Cash and Cash Equivalents
Cash and cash equivalents consist of funds held in the following accounts:
As of December 31:2014 2013
Macon Bank Checking 3,677$ 9,596$
Macon Bank Money Market 547,519 600,328
EverBank Money Market 150,113 -
PNC Money Market 170,889 139,042
UCB Bank Checking 245,673 -
Undeposited Funds 22,467 37,732
Total Cash and Equivalents 1,140,338$ 786,698$ 3. Concentration of Credit Risk
LTLT spreads its cash among five banks to minimize exposure above the $250,000 federally insured limit.
Additionally, the organization has expanded security of its funds with Macon Bank where its deposits are
secured by $400,000 of collateral through a pledge with the Federal Home Loan Bank of Atlanta.
Management believes the organization is not exposed to any significant credit risk on its cash balances.
4. Cash and Certificates Held for Land Protection
Cash and certificates held for land protection consists of the following balances:
As of December 31:2014 2013
Nantahala Bank Money Market (Land Protection) 250,241$ 249,673$
Macon Bank Money Market (Land Protection) 574,740 26,134
PNC Money Market (Land Protection) 58,400 100,059
TD Bank Money Market (Land Protection) 250,224 -
UCB Bank Checking (CE Legal Defense) - 45,620
UCB Bank Checking 2 (CE Legal Defense) 5,500 6,291
UCB CD (12-month) (CE Legal Defense) 97,192 87,652
Total Cash & Certificates Held for Land Protection 1,236,297$ 515,429$
5. Grant and Contract Receivables
Grant and contract receivables consist of the following balances:
As of December 31:2014 2013
Conservation Trust for NC 26,480$ 40,983$
Stewardship Contracts 2,916 2,380
Southwestern RC&D 1,367 498
US Fish & Wildlife 7,514 1,854
Z. Smith Reynolds - 45,000
GA Land Conservation Center - 6,850
NC Dept of Environment & Natural Resources - 5,809
Other Receivables 3,779 2,367
Total Grant & Contract Receivables 42,056$ 105,741$
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(11)
6. Pledges Receivable
Pledges receivable balances were $16,312 and $10,874 as of December 31, 2014 and 2013, respectively.
Management believes that the pledges are fully collectible within one year.
7. Note and Interest Receivable
The note receivable consists of the $500,000 remaining balance of an original $1,000,000 secured note, and
$9,610 of accrued interest. The note is from one individual in connection with the sale of the Yellow Creek
Property in the prior year. LTLT provided seller financing for the sale. Terms call for the balance to be paid in
2015 in two payments of $250,000, with interest at 4.5 and 5.0 percent.
8. Furniture and Equipment
Year-end balances in furniture and equipment and consist of the following:
As of December 31:2014 2013
Office Equipment 30,726$ 39,272$
Leasehold Improvements 3,250 3,305
Accumulated Depreciation (21,508) (30,500)
Furniture and Equipment, Net 12,468$ 12,077$
9. Conservation Lands
Conservation lands held under fee simple title are listed below:
As of December 31:2014 2013
Tessentee I (60 acres) 176,036$ 176,036$
Tessentee II (3.9 acres) 33,670 33,670
Gibson Bottoms I (36 acres) 301,403 301,403
Robbins (0.5 acre) 12,970 12,970
Wiggins Creek (1 acre) 3,800 3,800
Queens Branch I (16 acres) 74,800 74,800
Coggins Bend I (15 acres) 283,063 283,063
Gibson Bottoms II (28 acres) 262,470 262,470
Hall Branch (14 acres) 306,600 306,600
Tessentee III (5.6 acres) 210,021 210,021
Potts Branch I Lots O-W (3.15 acres) 19,539 19,539
Potts Branch II Lot N & Lakey Creek Confluence (6) 250,587 250,587
Potts Branch III Lots I-L (2.63 acres) 71,867 71,867
Welch Farm (57.18 acres) 158,780 158,780
Coggins Bend II (5 acres) 55,750 55,750
Duvall (39.69 acres) - 442,414
West House (5.45 acres) 88,727 88,727
Sugar Cove (30.7 acres) 90,057 -
Upper Rickman Creek (173.6 acres) 542,931 -
Grant Fields (159.9 acres) 174,133 -
Potts Branch Lots A & M (0.93 acres) 21,970 -
Total Conservation Lands 3,139,174$ 2,752,497$
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(12)
10. Line of Credit
LTLT has a $395,000 line of credit with Macon Bank. The credit line is available for general business
purposes and provides short-term financing flexibility, including ready financing for land transactions when
other funding sources are not yet available. The organization had no outstanding balance as of December 31,
2014. The credit line is secured by one property held by the organization - Gibson Bottoms I (See Subsequent
Events - Note 23).
11. Temporarily Restricted Net Assets
Temporarily restricted net assets are held for the following purposes:
As of December 31:2014 2013
Preserve Cherokee Historical Sites (CPF) 345,486$ 169,403$
Conservation Easement Stewardship and Legal Defense 132,780 97,780
Stream Restoration Projects (Duke Energy) 60,000 40,000
RiverCane-Welch-Farm (RTCAR) 9,051 -
RiverCane Project (RTCAR) - 7,653
Bird Monitoring (RTCAR) 820 1,972
Little Tennessee Habitat Restoration (USF&WS) 17,876 27,724
Conserve Little Tennessee Tributaries (TNC) 19,009 -
Cowee Mound Interpretive Kiosk (Duke Energy) 1,546 1,546
Southern Blue Ridge Forests (TWS, Merck) 9,698 16,409
Time Restricted 2014 (Individual Contributors) - 23,311
Cowee Project (Individual Contributors) 3,600 -
Kids in Creek (Individual Contributors) 1,488 -
Connectivity Study (SWC) 2,000 -
Accumulated Gains on Permanent Stewardship Fund 14,480 -
Other Restricted Purposes 1,044 7,790
Total Temporarily Restricted Net Assets 618,878$ 393,588$
12. Permanently Restricted Net Assets
Permanently restricted net assets are held for the following purposes:
As of December 31:2014 2013
General Stewardship (Individual Contributors) 93,039$ 92,289$
Tilly Creek Stewardship (The Conservation Fund) 7,500 7,500
Bryson City Property (Bryson City) 144,000 144,000
Sylva Property (Sylva Township) 35,000 35,000
General Stewardship (Open Space Conservancy)175,000 175,000
Total Permanently Restricted Net Assets 454,539$ 453,789$
13. Board Designated Funds
Funds designated by the board of directors for specified purposes are shown below:
As of December 31:2014 2013
Land Protection 1,133,605$ 375,866$
Conservation Easement Stewardship 227,082 214,715
Conservation Easement Legal Defense 100,192 89,443
Total Board Designated Net Assets 1,460,879$ 680,024$
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(13)
14. LTLT Stewardship Funds
The organization has maintained the LTLT Stewardship Fund at the Community Foundation of Western
North Carolina (CFWNC) since 2000. The purpose of the fund is to support the stewardship program,
extraordinary land opportunities or other financial imperatives of the organization. LTLT may, through a vote
of its Board of Directors, obtain additional distributions from the Stewardship Fund for uses consistent with
the fund purpose and donor restrictions. This fund has traditionally contained board designated, temporarily
restricted and permanently restricted funds. In 2014 LTLT established the LTLT Permanently Restricted Stewardship Fund at the CFWNC as a traditional
endowment to place the organization’s permanently restricted net assets related to stewardship. The purpose
of the fund is to generate income to fund costs associated with perpetual management of LTLT’s conservation
easements. As stated in the fund agreement with the CFWNC, “The principal of the Fund (as defined in
NCGS 36E, Uniform Prudent Management of Institutional Funds Act), including amounts accrued through
investment returns, shall remain intact and shall not be distributed for any reason.” LTLT is entitled to receive an annual distribution from each fund in amounts determined by the CFWNC
based on the Foundation spending policy applicable to each fund.
The following is a summary of the LTLT Stewardship Fund activity since inception, by net asset
classification:
Board
Designated Restricted
Stewardship
Fund Total
Fund Activity in Prior Years:
Funds Transferred by Organization 150,663$ 501,449$ 652,112$
Prior Net Accumulated Investment Losses 64,052 - 64,052
Asset Balance as of December 31, 2013 214,715 501,449 716,164
Fund Activity in 2014:
Interfund Transfer at CFWNC - (278,789) (278,789)
Restricted Contributions - 77,282 77,282
Investment Gains 14,816 - 14,816
Investment Income 10,350 - 10,350
CFWNC Community Support Fees (3,839) - (3,839)
Distributions to LTLT (8,960) - (8,960)
Asset Balance as of December 31, 2014 227,082$ 299,942$ 527,024$
The following is a summary of the LTLT Permanently Restricted Stewardship Fund activity since inception
in 2014, by net asset classification:
Temporarily
Restricted
Permanently
Restricted
Permanently
Restricted
Stewardship
Fund Total
Fund Activity in 2014:
Interfund Transfer at CFWNC -$ 278,789$ 278,789$
Restricted Contributions - 750 750
Investment Gains 16,089 - 16,089
Investment Income 5,625 - 5,625
CFWNC Community Support Fees (2,194) - (2,194)
Distributions to LTLT (5,040) - (5,040)
Asset Balance as of December 31, 2014 14,480$ 279,539$ 294,019$
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(14)
When making its initial $278,789 transfer of funds to its new Permanently Restricted Stewardship Fund in
2014, LTLT elected to retain a permanently restricted grant of $175,000 pending the outcome of discussions
with the grantor about release of restrictions. LTLT continues to hold these funds in a separate account.
15. Fair Value Measurements
Fair values of assets measured on a recurring basis at December 31, 2014 are as follows:
Quoted Prices
In Active Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
As of December 31:Fair Value (Level 1) (Level 2) (Level 3)
Funds with Community Foundation 821,043$ -$ 821,043$ -$
Land Assets Subject to Life Estate
Rights of Grantor 171,086 - - 171,086
Totals 992,129$ -$ 821,043$ 171,086$
Fair Value Measurements at Reporting Date Using
Financial assets valued using Level 1 inputs are based on unadjusted quoted market prices within active
markets.
Financial assets valued using Level 2 inputs are based primarily on quoted prices for similar assets in active
or inactive markets.
Financial assets valued using Level 3 inputs are based on unobservable inputs usually involving management
estimates.
Fair values for Land Assets Subject to Life Estate (Level 3) are determined by (a) independent appraisal of
the market values of the lands before consideration of the life estate and by (b) the present value of the
remainder interest considering the life estate. Inputs include appraisal values, data from published life
expectancy tables and a 3% discount rate. There have been no changes in valuation techniques and related
inputs.
Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Land Assets
Subject to Life
Estate Rights
of Grantor
January 1, 2010 197,608$
Receipt of Land Assets Subject to Life Estate Rights of Grantor -
Unamoritized Discount as of January 1, 2014 (29,122)
Current Year Amortization of Discount 2,600
Transfers In and/or Out of Level 3 -
December 31, 2014 171,086$
Unobservable Inputs (Level 3)
Fair Value Measurements Using Significant
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(15)
16. Land Asset Subject to Life Estate
In 2010, LTLT received a donation with the donor retaining the right to live on the property for the remainder
of his or her lifetime. The property is recorded at actuarial, present value of the appraisal and amortized
annually to planned giving contributions. The year-end asset values are as follows:
As of December 31:2014 2013
Land Assets Subject to Life Estate 197,608$ 197,608$
Discount on Life Estate Property (26,522) (29,122)
Land Assets Subject to Life Estate, Net 171,086$ 168,486$
17. Rickman Store
In August 2007 LTLT acquired the T.M. Rickman Store, a part of the 370 acre Cowee-West’s Mill National
Historic District. This asset is classified separately from the Conservation Lands since it consists of a
functioning, historic building operated by a group of volunteers, the Friends of the Rickman Store.
18. Fiscal Agent Funds
During 2010, LTLT entered into a memorandum of understanding with the Friends of the Rickman Store to
serve as their fiscal agent for operations for the store and related activities. As of December 31, 2014 LTLT
held $15,462 on the Friends’ behalf. LTLT also serves as fiscal sponsor for occasional grants received on
behalf of the Friends.
19. Retirement Plan
LTLT maintains a 403(b) defined contribution retirement plan for its employees. The organization has
contributed six percent of salary annually for each eligible employee. The amounts contributed to the plan by
the organization for the years ended December 31, 2014 and 2013 were $24,227, and $22,072, respectively.
20. Lease Obligations
LTLT rents office space under a 36-month lease which began April 1, 2012 and ends March 31, 2015 with
rent at $1,300 per month and a rent increase of $1,200 each year. There is an option to renew the lease for one
additional year. Total office rent expense for the audit year was $16,500. In June 2012, LTLT also assumed a
4 year operating lease for office equipment with monthly payments of $239. Remaining lease obligations by
year are as follows:
Years Ending December 31:
2015 7,068$
2016 478
Total 7,546$ 21. Significant Estimates
As described in Note 1, the preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that can have an effect on the financial
statements as a whole. The Land Trust records conservation lands at estimated fair market value if received as
a gift. Fair market value is based on independent appraisal. If an independent appraisal is not available, fair
market value is estimated by management based on all available information. Due to the significance of the
conservation land balances in relation to the financial statements taken as a whole, these values represent
significant estimates.
22. Summarized Comparative Data
The financial statements include certain prior-year summarized comparative information. Such information
does not include sufficient detail to constitute a presentation in conformity with U.S. generally accepted
accounting principles. Accordingly, such information should be read in conjunction with the organization's
financial statements for the year ended December 31, 2013, from which the summarized information was
The Land Trust for the Little Tennessee Notes to Financial Statements (continued)
(16)
derived. In addition, certain reclassifications have been made to prior year information to facilitate
comparison to the current year.
23. Subsequent Events
On February 23, 2015, LTLT renewed its line of credit as an unsecured note with a maximum of $200,000
(Reference Note 10).
On March 25, 2015, LTLT closed on the purchase of the former gas station property next to its office building
site. The purchase price was $100,000. The property has been entered into the Brownfields environmental
cleanup program.
On May 7, 2015, LTLT closed on the purchase of the office building it has been renting. The purchase price
was $184,700.
Subsequent events have been evaluated through May 27, 2015, which is the date the financial statements were
available to be issued.