Blackhawk Technical College District Technical College District Financial Statements and Single...

Blackhawk Technical College District Janesville, Wisconsin

Financial Statements and Single Audit Years Ended June 30, 2015 and 2014

Blackhawk Technical College District Financial Statements and Single Audit Years Ended June 30, 2015 and 2014

Table of Contents INDEPENDENT AUDITOR’S REPORT ..................................................................................................... 1 MANAGEMENT’S DISCUSSION AND ANALYSIS ................................................................................... 4 BASIC FINANCIAL STATEMENTS Statements of Net Position .................................................................................................................. 11 Statements of Revenues, Expenses and Changes in Net Position ...................................................... 12 Statements of Cash Flows .................................................................................................................... 13

Statements of Fiduciary Net Position - Blackhawk Technical College Postemployment Benefits Trust ............................................................................................................ 15 Statements of Changes in Fiduciary Net Position - Blackhawk Technical College Postemployment Benefits Trust ............................................................................................................ 16

Notes to the Basic Financial Statements .............................................................................................. 17 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Funding Progress and Employer Contributions ............................................................ 48 Schedules of Employer’s Proportionate Share of the Net Pension Liability (Asset) and Employer Contributions ................................................................................................................ 49 Note to Required Supplementary Information .................................................................................... 50 SUPPLEMENTARY INFORMATION General Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Budgetary Basis) ....................................................................... 51 Special Revenue Fund - Operating - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) .......................... 52 Special Revenue Fund - Non-Aidable Funds - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) .......................... 53 Capital Projects Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) ....................................................... 54 Debt Service Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) ....................................................... 55 Enterprise Funds - Schedule of Revenues, Expenditures, and Changes in Net Position - Budget and Actual (Non-GAAP Budgetary Basis) ....................................................................... 56 Internal Service Funds - Schedule of Revenues, Expenses, and Changes in Net Position - Budget and Actual (Non-GAAP Budgetary Basis) ....................................................................... 57 Schedule to Reconcile the Non-GAAP Budgetary Combined Balance Sheet – All Fund Types to the Statement of Net Position - June 30, 2015 ............................................................. 58 Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Statement of Revenues, Expenses, and Changes in Net Position – Year Ended - June 30, 2015 .............................................................................................................................. 60 Schedule to Reconcile the Non-GAAP Budgetary Combined Balance Sheet - All Fund Types to the Statement of Net Position - June 30, 2014 ............................................... 63 Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Statement of Revenues, Expenses and Changes in Net Position – Year Ended - June 30, 2014 .............................................................................................................................. 65

Table of Contents (Continued) OTHER REPORTS Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters .................................................................................................... 67 Independent Auditor’s Report on Compliance for Each Major Federal and State Program and on Internal Control Over Compliance ..................................................................... 69 Schedule of Expenditures of Federal Awards .................................................................................... 72 Schedule of Expenditures of State Awards ........................................................................................ 74 Notes to the Schedules of Expenditures of Federal and State Awards ............................................. 77 Schedule of Findings and Questioned Costs ..................................................................................... 79 STATISTICAL SECTION (UNAUDITED) Financial Trends Net Position by Component ......................................................................................................... 82 Changes in Net Position............................................................................................................... 83 Revenue Capacity Equalized Value of Taxable Property ........................................................................................... 84 Direct and Overlapping Property Tax Rates ................................................................................ 85 Property Tax Levies and Collections ........................................................................................... 86 Principal Property Taxpayers ....................................................................................................... 87 Enrollment Statistics – Historical Comparisons ........................................................................... 88 Debt Capacity Ratio of Net Debt to Equalized Valuation and Debt Per Capita ................................................... 89 Direct and Overlapping Debt ........................................................................................................ 90 Legal Debt Margin Information ..................................................................................................... 94 Demographic and Economic Information Demographic and Economic Statistics ........................................................................................ 95 Principal Employers ..................................................................................................................... 96 Operating Information Full-Time Equivalent (FTE) District Employees by Employee Group .......................................... 97 Operational Expenditures per FTE Student ................................................................................. 98 Campus Statistics ........................................................................................................................ 99

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Independent Auditor’s Report District Board Blackhawk Technical College District Janesville, Wisconsin Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities and aggregate remaining fund information of Blackhawk Technical College District, (the “College”) as of and for the years ended June 30, 2015 and 2014, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements as listed in the 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 accounting principles generally accepted in the United States; 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 opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of 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 opinions.

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Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blackhawk Technical College District as of June 30, 2015 and 2014, and its changes in financial position and cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States. Change in Accounting Principle As discussed in Note 1 to the financial statements, in 2015 the College adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States require that the Management’s Discussion and Analysis, the schedules of funding progress and employer contributions, and the schedules of employer’s proportionate share of the net pension liability (asset) and employer contributions 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 reporting 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 auditing standards generally accepted in the United States, 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. Blackhawk Technical College District has not presented comparative Management’s Discussion and Analysis for the year ended June 30, 2014, that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be a part of, the 2015 financial statement. Supplementary Information Our audit was made for the purpose of forming opinions on the financial statements that collectively comprise the College’s basic financial statements. The 2015 budgetary comparison schedules listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedules of expenditures of federal and state awards are presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and State Single Audit Guidelines, issued by the Wisconsin Department of Administration and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

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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 basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States. In our opinion, the 2015 budgetary comparison schedules and the schedules of expenditures of federal and state awards are fairly stated in all material respects in relation to the basic financial statements as a whole. The “Statistical Section” listed in the accompanying table of contents, which is the responsibility of management, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated December 15, 2015, on our consideration of Blackhawk Technical College District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College’s internal control over financial reporting and compliance.

Wipfli LLP December 15, 2015 Eau Claire, Wisconsin

Management’s Discussion and Analysis

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MANAGEMENT’S DISCUSSION AND ANALYSIS Overview Blackhawk Technical College District (“BTC” or the “College”) Management’s Discussion and Analysis (MD&A) of its financial condition provides an overview of financial activity, identifies changes in financial positions, and assists the reader of these financial statements in focusing on noteworthy financial issues for the year ending June 30, 2015.

BTC is a public institution of higher education whose mission is to provide quality education, training and economic development services to Rock and Green counties. To accomplish this mission, it is critical that BTC maintain a healthy financial position for the long term. BTC’s goal is to accumulate sufficient net assets to ensure adequate reserves are available to accomplish this mission, whether it is to implement new programs or to expand existing programs. This annual financial report consists of a series of financial statements, prepared in accordance with generally accepted accounting principles (GAAP), as defined in the Governmental Accounting Standards Board Statement 34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments, and Statement 35, Basic Financial Statements-and Management’s Discussion and Analysis-for Public Colleges and Universities. Statement of Revenues, Expenses, and Changes in Net Position The Statement of Revenues, Expenses, and Changes in Net Position presents the revenues earned and expenses incurred during the year. Activities are reported as either operating or non-operating depending upon the nature of the activity. In general, a public college such as BTC will report an operating deficit or loss, as GAAP classifies state appropriations and property taxes as non-operating revenues. Revenues received from taxpayers in the form of tax levies and state aid appropriations are considered non-operating revenues and will reduce the operating deficit or loss or provide a net gain. The following summary shows a condensed version of the Statement of Revenues, Expenses, and Changes in Net Position:

Increase (Decrease) 2015 2014 Amount % Operating Revenue $13,587,827 $15,151,274 ($1,563,447) (10.3) Operating Expenses 38,018,725 37,480,950 537,775 1.4 Non-Operating Revenues (Expenses) net 24,068,948 22,698,451 1,370,497

6.0

Change in Net Position ($ 361,950) $ 368,775 ($730,725) (198.2) Net Position, Beginning $27,662,097 $27,293,322 368,775 1.35 Prior Period Adjustment – Change in Accounting Principle 5,345,848 0 5,345,848

0

Net Position, Ending $32,645,995 $27,662,097 $4,983,898

18.0

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Operating Revenues Operating revenues are the charges for services offered by the College. During 2015, the College generated $13,587,827 of operating revenue. This is a decrease of $1,563,447 or -10.3% from 2014. Significant changes between years are as follows:

Institutional revenue decreased by $1,217,664 or -65.2% over the prior year due to the one-time gain on sale of aeronautical training equipment and gift for building improvements last year.

Student tuition and fees decreased by $199,123 or -5.0% due to a decline in enrollment offset by a 3% increase in tuition rate and a greater percentage of financial aid applied to student tuition and fee charges.

State aids decreased by $81,698 or -5.1% primarily due to a reduction in state grant awards and student financial aid funding.

Operating Expenses Operating expenses are costs related to the programs offered by the College. During 2015, total operating expenses increased by $537,775 or 1.4% from the prior year. Major factors contributing to this increase are as follows:

Instructional expenses increased by $1,523,307 or 8.2%, due to an increase in equipment purchases offset by reductions in personnel and supply purchases.

Student aid expenses decreased by $391,293 or -14.6% due to a reduction in total student financial aid and the increase in aid applied to tuition and fee charges thereby reducing the amount available for disbursement to students.

General institutional expenses increased $629,064 or 12.6% due primarily to an increase in equipment purchases offset by reductions in printing costs, contractual services, and insurance expenses.

Physical plant expenses decreased $817,164 or 35.1% due to the reclassification of capital purchases offset by an increase in personnel, building lease, utilities, contract service, and supply expenses totaling $445,000.

Instructional resource expenses decreased by $802,968 or 27.1% due to the reduction in equipment and software purchases from prior year.

Depreciation expense increased by $680,198 or 40.1% due to an increase in capital assets placed in service.

Non-Operating Revenue and Expenses Non-operating revenues and expenses are revenue and expense items not directly related to providing instruction. Net non-operating revenues (expenses) increased $1,370,497 or 6.0%. Factors contributing to this net increase include: Property tax revenues decreased $8,307,800 or -40.0% due primarily to 2013 Wisconsin Act 145 –

Property Tax Relief Act which swapped $9,797,362 from property tax revenue to state aid revenue. This decline in property tax revenue is offset by a $1,361,900 increase in debt service tax revenue attributed to an increase in debt service obligations due in 2015.

State operating appropriations increased $9,868,243 or 332.6% due primarily to the Property Tax Relief Aid mentioned above.

Interest expense increased $238,492 or 27.2% due to the additional issuance of bonds.

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Statement of Net Position The Statement of Net Position includes all assets (items that the College owns and amounts owed to the College by others) and liabilities (amounts the College owes to others and what has been collected from others before the College has provided the services). This statement is prepared under the accrual basis of accounting, whereby revenues and assets are recognized when the service is provided, and expenses and liabilities are recognized when others have provided the service to us, regardless of when cash is exchanged. Below are highlights of the components of the Statement of Net Position: Increase (Decrease) 2015 2014 Amount % ASSETS Cash, cash equivalents and investments

$17,601,193 $12,950,362 $4,650,831 35.9

Receivables 5,246,192 7,314,627 (2,068,435) (28.3)Net capital assets 51,466,631 39,615,782 11,850,849 29.9 Other assets 6,053,068 3,194,834 2,858,234 89.5 Total Assets 80,351,248 63,075,605 17,275,643 27.4 DEFERRED OUTFLOWS OF RESOURCES

Total Deferred Outflows of Resources for Pension actuarial and contributions

$2,413,237

-

$2,413,237

n/a

LIABILITIES Current liabilities 9,416,860 8,132,926 1,283,934 15.8 Long-term liabilities 40,701,630 27,280,582 13,421,048 49.2 Total Liabilities 50,118,490 35,413,508 14,704,982 41.5 NET POSITION Net investment in capital assets 15,513,135 15,754,490 1,124,084 7.7 Restricted 3,527,712 342,676 3,185,036 929.5 Unrestricted 13,605,148 11,564,931 2,040,217 17.6 Total Net Position $32,645,995 $27,662,097 $4,983,898 18.0 Assets Total assets increased by $17,275,643, or 27.4%. Significant factors contributing to this increase are as follows: Cash, cash equivalents, and investments increased by $4,650,831 or 35.9%. This increase is the

result of: o planned borrowing for capital improvements which were not completed by the fiscal year

ended June 30, 2015; o the receipt of the property tax relief act payment in 2015 whereas in prior years a portion of

these taxes were collected in the summer payment, and tax collections were not yet received; and

o the premium received on bonds sold in 2015.

Net capital assets increased by $11,850,849 or 29.9% due to facility improvements, construction in progress, and capital equipment additions in excess of depreciation charges and asset disposals.

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Other assets increased $2,858,234 or 89.5% over the prior year due primarily to a change in accounting principle (GASB 68) which requires the reporting of net pension assets on the Statement of Net Position.

Receivables decreased $2,068,435 or -28.3% due to the property tax relief act state aid payment in FY15 versus property taxes receivable for the prior year. The reduction is offset by an increase in business and industry contract receivables and student accounts receivable.

Deferred Outflows of Resources Deferred outflows of resources increased by $2,413,237 due to a change in accounting principle

which requires the reporting of the College’s share of net pension assets in its financial statement. The deferred outflows is comprised of changes from the date of actuarial valuation December 31, 2014 to the College’s fiscal year end on June 30, 2015.

Liabilities Total liabilities increased by $14,704,982 or 41.5%, which is attributed to: Current liabilities increased by $1,283,934 or 21.0% due primarily to increase of $1,510,000 in current

debt obligations due offset by a reduction in employee wages and salaries payable ($122,751) due to timing of payroll.

Long-term liabilities increased by $13,421,048 or 49.2% due to the issuance of new debt for building improvements and movable equipment, offset by the retirement of existing debt, and an increase in premium received on bonds sold in 2015.

Net Position The changes in assets and liabilities as described above resulted in total net position being increased by $4,983,898 or 18.0%. Additional information regarding these changes is: Net investment in capital assets increased by $1,124,084 or 7.7%. The primary reason for this

increase is the addition of capital assets in excess of related debt.

Restricted net position increased by $3,185,036 or 929.5% due primarily to a change in accounting principle which requires the reporting of the College’s share of net pension assets in its financial statement. Net position, restricted for pensions increased by $2,921,424 due to this adjustment.

Unrestricted net position increased by $2,040,217 or 17.6% due to a change in accounting principle which requires the reporting of $2,413,237 in deferred outflows of resources related to WRS pension benefits.

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Statement of Cash Flows The Statement of Cash Flows presents information related to cash inflows and outflows, summarized by operating, financing, capital and investing activities. This statement is important in evaluating the College’s ability to meet financial obligations as they mature. The following schedule summarizes the major components of the Statement of Cash Flows: Increase (Decrease) 2015 2014 Amount % Net cash used for operating activities $(22,396,299) $(20,355,706) $580,441 (10.0)Net cash provided by non-capital financing activities 27,791,747 23,833,258 3,958,489 16.6Net cash used for capital and related financing activities (764,180) (489,433) (274,747) (56.1)Net cash flow provided by investing activities 2,033,976 1,026,924 1,007,052

98.1

Net increase (decrease) in cash and cash equivalents $6,665,244 $ 4,015,043 $2,650,201

66.0

Cash and cash equivalents increased by $6,665,244 in 2015 and by $4,015,043 in 2014. The

increase in cash is attributed to o The planned borrowing for capital improvements which were not completed by the fiscal year

ended June 30, 2015 increasing cash by $2,624,114; o the property tax relief act state aid payment received in 2015 of which a portion remained as

an outstanding receivable at the prior fiscal year-end; o $738,646 in premiums received on bonds sold in 2015 and not yet amortized; and o $2 million reduction in investments as of June 30, 2015.

Capital Asset and Debt Administration The College’s investment in capital assets includes land, land improvements, buildings and improvements, leasehold improvements, equipment, and construction in progress. On a GAAP basis, the College added $14,379,147 to capital assets during 2015, including the transfer of $13,969,286 from construction in progress to equipment, and retired net capital assets of $153,5251 in equipment and building improvements during the year. The College finances the bulk of its capital assets through the issuance of debt. In 2015, the College incurred new debt in the amount of $19,500,000 for capital assets and facility improvements and retired debt in the amount of $4,950,000 for a net increase of $14,550,000. The College continues to maintain a Moody’s Investors Service Aa2 rating, and continues to meet all of its debt service requirements. Wisconsin state statutes limit the amount of aggregate and bonded indebtedness that the College can incur. The amount of debt outstanding falls well below these thresholds. Financial Position The College has a variety of funding sources including property taxes, state aid, student fees, business and industry contract fees, investment income, federal and state grants and other sources to meet the expenses of the College. The State’s 2011-13 budget bill (2011 Wisconsin Act 32) reduced general state aid to the Wisconsin Technical College System by 30% and imposed an additional restriction on technical college levy authority. Districts remained subject to the 1.5 operational mill rate cap; however, Act 32 froze the operational levy at the greater of the dollar amount levied in 2010 or the mill rate levied in 2010.

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The State’s 2013-15 budget bill (2013 Wisconsin Act 20) permanently removed the 1.5 operational mill rate cap and set the operational levy amount at the 2010 level with an adjustment to increase the levy for net new construction within the College’s District. The District’s equalized property values increased by 0.78240% due to net new construction which resulted in $125,221 increase in local tax revenue for operations in 2015. OPEB In 2008 the College started funding its obligations under Governmental Accounting Standards Board (GASB) Statement No. 45 which requires the College to recognize the expense of other post-employment benefits when the benefit is earned rather than when it is paid. The College is amortizing prior service costs over a thirty year period. The issues of funding the obligation and the impact on general fund balance were a significant budgetary and financial reporting concern. The College issued $5,175,000 in bonds in September 2010, to partially fund the other post-employment benefit liability. Recognizing the long-term nature of these funds and the need for a return on investment of plan assets, the College appointed an Investment Advisor to manage the investment of the plan assets in accordance with the adopted Investment Policy. The latest actuarial study completed for June 30, 2015, reports an actuarial accrued liability of $4,471,917 with funding of $8,718,978 which results in a funding ratio of 195.0%. The College has funded the current service costs within the operational budget. The June 30, 2015 actuarial study reports asset valuations have grown from $6,880,656 on June 30, 2011 to $8,718,978 on June 30, 2015. Future contributions for current service costs will be substantially reduced or eliminated due to the strength of plan assets in relation to the actuarial accrued liability. Economic Factors The College’s District covers most of Rock and Green County. District unemployment rates continue to decline yet remain higher than the state average. The August 2015 unemployment rates for Janesville MSA and the City of Beloit are 4.4% and 5.8% respectively which are down 1.5% and 2.4% respectively from August 2014. The state unemployment rate is 3.9% for August 2015. The top three industries in Rock County include medical services, educational services and government. In Green County, the top industries are internet retail, health care, and discount retail sales. Both counties are striving to diversify the local economy through the attraction and expansion of industrial and commercial business and industry. Two radio-isotope manufacturers are constructing production facilities in Rock County within the next two years. Two major distribution warehouses have announced plans to locate facilities in Rock County within the next year. With an improving economy, local employers are citing challenges in attracting and retaining skilled-workers in their production operations. BTC continues to market educational training services to the traditional high school graduates as well as to the unemployed and under-employed adults in an effort to close this skilled workforce gap. Challenges Higher education in the United States continues to operate in a sea of change. State support for public institutions of higher education has declined significantly in recent years with no increase in funding anticipate in the near term. Wisconsin technical colleges were not spared as evidenced by the 30% reduction in state aid support in 2011. Simultaneous to this reduction, the technical college operational levy authority was frozen at the 2010 dollar amount despite a legislative cap at 1.50 mils. The 2013 state budget bill permanently removed the 1.50 operational mil rate cap and held this funding at the 2010 level with future adjustment limited to levy on net new construction in the District. For Blackhawk Technical College, this net new construction funding represents $115,983 in 2013 and $125,221 in 2014, or 0.43% and 0.47% increase in general fund revenue for 2013 and 2014 respectively.

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The Wisconsin Technical College System Board sets the tuition and material fee rates annually. The tuition rate increases for the last five years average 3.9% with a high of 5.5% for academic year 2012 and a low of 2.0% for academic year 2016. The 2% tuition rate increase is the lowest in more than a decade and comes at a time when the economy is beginning to rebound and student enrollment is declining across the state as jobs become more plentiful. The primary general fund revenue sources for Wisconsin Technical Colleges is state aid, property taxes, and tuition/fees. With state aid reduced by 30% ($1.5 million for BTC), property taxes essentially frozen at 2010 dollar levels, and tuition rate increase at an all-time low as enrollment declines, Wisconsin Technical Colleges will have no choice but to reduce services. Blackhawk Technical College has reduced more than $5 million in expenditures during the last four years and faces another round of reductions for fiscal year 2017 in order to bring expenditures in line with resource capacity. The College continues to collaborate with local business and industry to ensure educational programming and training services are relevant and effective in meeting the workforce needs of the community. Continued investments in facilities and equipment ensure that student learning is in sync with the technologies employed in the workplace. The College will continue to realign resources to best meet future employment needs of the District within our resource capacity. While financial resources will limit programming and delivery options, the College will continue striving to advance the local economy through workforce development and improve the lives of area citizens seeking to acquire valued, marketable workforce skills. Requests for Information This financial report is designed to provide a general overview of the College’s financial picture for those interested parties. Questions concerning any information contained in this report or for any additional information should be addressed to the Vice President of Finance and College Operations, 6004 S County Road G, PO Box 5009, Janesville, WI 53547-5009.

Basic Financial Statements

See accompanying notes to financial statements. 11

Blackhawk Technical College District

Statements of Net PositionJune 30, 2015 and 2014

2015 2014

ASSETSCurrent assets

Cash and cash equivalents 17,012,474$ 10,347,230$ Investments 588,719 2,603,132 Receivables:

Property taxes 3,532,033 6,046,575 Federal and state aid 1,116,079 1,117,469 Accounts and other, net reserve of $165,000 at 2015 and 2014 598,080 150,583

Prepaid expenses 151,779 214,969 Total current assets 22,999,164 20,479,958

Noncurrent assetsNet OPEB asset 2,964,029 2,979,865 Net pension asset 2,921,424 -

Total noncurrent assets 5,885,453 2,979,865

Capital assets 68,642,280 55,200,794 Less: accumulated depreciation 17,175,649 15,585,012

Total capital assets, net of depreciation 51,466,631 39,615,782

Total assets 80,351,248$ 63,075,605$

DEFERRED OUTFLOWS OF RESOURCES

Deferred outflows of resources - actuarial 1,879,048$ -$

Deferred outflows of resources - contributions 534,189 -

Total deferred outflows of resources 2,413,237 -

LIABILITIESCurrent liabilities

Accounts payable and accrued liabilities 1,142,866$ 1,510,003$ Other accrued liabilities 1,650,899 1,773,640 Accrued interest payable 265,987 182,961 Unearned revenue - other 214,999 26,799 Due to students and other groups 682,109 689,523 Current portion of long-term obligations 5,460,000 3,950,000

Total current liabilities 9,416,860 8,132,926

Long-term obligations, less current portionGeneral obligation debt payable 39,975,000 26,935,000 Unamortized premium on general obligation debt 726,630 345,582

Total long-term obligations, less current portion 40,701,630 27,280,582

Total liabilities 50,118,490 35,413,508

NET POSITIONNet investment in capital assets 15,513,135 15,754,490 Restricted for:

Debt service 553,401 278,829 Pensions 2,921,424 - Student financial assistance 52,887 63,847

Unrestricted 13,605,148 11,564,931

Total net position 32,645,995$ 27,662,097$



Statements of Revenues, Expenses and Changes in Net PositionFor the Years Ended June 30, 2015 and 2014

2015 2014

Operating revenuesStudent tuition and program fees, net of scholarship allowances

of $3,228,735 in 2015 and $3,077,160 in 2014 3,801,758$ 4,000,881$ State aids 1,525,993 1,607,691 Federal grants 6,825,882 6,822,481 Contract revenue 675,424 703,095 Auxiliary enterprise revenue 107,828 148,520 Miscellaneous - institutional revenue 650,942 1,868,606

Total operating revenues 13,587,827 15,151,274

Operating expensesInstruction 20,128,563 18,605,256 Instructional resources 2,165,723 2,968,691 Student services 3,810,176 4,053,329 General institutional 5,626,818 4,997,754 Physical plant 1,508,179 2,325,343 Student aid 2,297,505 2,688,798 Auxiliary services 103,271 143,487 Depreciation 2,378,490 1,698,292

Total operating expenses 38,018,725 37,480,950

Operating loss (24,430,898) (22,329,676)

Nonoperating revenues (expenses)Property taxes 12,441,582 20,749,382 State operating appropriations 12,835,623 2,967,380 Investment income 19,563 15,382 Loss on disposal of property and equipment (111,876) (156,241) Interest expense (1,115,944) (877,452)

Total nonoperating revenues 24,068,948 22,698,451

Increase (decrease) in net position (361,950) 368,775

Net position - beginning of year 27,662,097 27,293,322

Prior period adjustment to reclassify pension contributions 5,345,848 -

Net position - beginning of year, as restated 33,007,945 27,293,322

Net position - end of year 32,645,995$ 27,662,097$

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Statements of Cash FlowsFor the Years Ended June 30, 2015 and 2014

2015 2014Cash flows from operating activities

Tuition and fees received 3,544,813$ 4,138,197$ Federal and state grants received 8,401,643 8,446,644Contract revenues 632,580 701,604Payments to employees (23,864,018) (24,431,688)Payments for materials and services (11,868,713) (11,257,632)Auxiliary enterprise revenues 107,828 148,520Other receipts 649,568 1,898,649

Net cash used for operating activities (22,396,299) (20,355,706)

Cash flows from noncapital financing activitiesLocal government property taxes received 14,956,124 20,865,878State appropriations received 12,835,623 2,967,380

Net cash provided by noncapital financing activities 27,791,747 23,833,258

Cash flows from capital and related financing activitiesPurchases of capital assets (14,662,310) (10,518,477)Proceeds from issuance of capital debt 19,500,000 21,145,000Principal paid on capital debt (4,950,000) (10,595,000)Interest paid on capital debt (651,870) (520,956)

Net cash used for capital and related financing activities (764,180) (489,433)

Cash flows from investing activitiesPurchase of Investments (2,322) (1,007,792)Sale of Investments 2,016,735 2,019,334Investment income received 19,563 15,382

Net cash provided by investing activities 2,033,976 1,026,924

Net increase in cash and cash equivalents 6,665,244 4,015,043

Cash and cash equivalentsBeginning of year 10,347,230 6,332,187

End of year 17,012,474$ 10,347,230$

Non-cash capital and related financing activitiesLoss on disposal of capital assets 111,876$ 156,241$



Statements of Cash Flows (Continued)For the Years Ended June 30, 2015 and 2014

2015 2014Reconciliation of operating loss to net cash

used for operating activities:Operating loss (24,430,898)$ (22,329,676)$ Adjustment to reconcile operating loss to

net cash used for operating activities:Depreciation 2,378,490 1,698,292 Changes in assets and liabilities:

Receivables (446,107) 160,935 Prepaid expenditures 63,190 85,869 Accounts payable and accrued liabilities (46,042) 134,360 Other accrued liabilities (122,741) (81,482) Due to students and other groups (7,414) (66,724) Post-employment benefits 15,836 15,921 Net pension asset 1,855,750 Deferred outflows of reserves (1,844,563) Deferred revenue - other 188,200 26,799

Net cash used for operating activities (22,396,299)$ (20,355,706)$



Statements of Fiduciary Net Position -Blackhawk Technical College Post-Employment Benefits TrustJune 30, 2015 and 2014

2015 2014ASSETS

Current Assets Cash and cash equivalents 11,379$ 2,392$ Short-term investments 53,344 289,888 Total Current Assets 64,723 292,280

Long Term Assets Equity investments 8,654,255 8,479,494

Total Assets 8,718,978$ 8,771,774$

LIABILITIES

Current Liabilities -$ -$

Total Liabilities - -

NET POSITION

Held in trust for post-employment benefits 8,718,978 8,771,774

Total Net Position 8,718,978$ 8,771,774$



Statements of Changes in Fiduciary Net Position -Blackhawk Technical College Post-Employment Benefits TrustFor the Years Ended June 30, 2015 and 2014

2015 2014ADDITIONS

Contributions Blackhawk Technical College 129,742$ 129,742$

Investment income Interest 152 267 Dividends 212,438 250,624 Capital gains - realized 223,829 168,401 Capital gains - unrealized (212,601) 804,725

Total investment income 223,818 1,224,017

Total additions 353,560 1,353,759

DEDUCTIONS

Retiree benefits 366,437 369,597 Investment expense 3,359 3,064 Administrative expense 36,560 34,407

Total deductions 406,356 407,068

Change in Net Position (52,796) 946,691

NET POSITION HELD IN TRUST FOR POST-EMPLOYMENT BENEFITS

Beginning of year 8,771,774 7,825,083

End of year 8,718,978$ 8,771,774$

Blackhawk Technical College District Notes to the Basic Financial Statements

17

Note 1 – Summary of Significant Accounting Policies Introduction: Blackhawk Technical College District (the College) is organized under state legislation enacted in 1911 establishing vocational, technical, and adult education. The goals of the College are to train people for employment in a system flexible enough to permit adjustment to meet the needs of the community, with programs offered on a part-time, full-time, day and evening basis. The geographic area of the College is comprised of most of Rock County and the majority of Green County in south central Wisconsin. There are 52 municipalities with an estimated population of 186,747 and 13 public school districts within the College’s boundaries. The district contains 1,200 square miles and operates campuses located in the cities of Beloit, Janesville and Monroe as well as learning centers in the surrounding communities. The governing body of the College is the District Board, which consists of nine members. The members are appointed to staggered three-year terms by the County Board chairpersons for Rock and Green counties, who meet once a year to appoint members to the three open seats. The District Board membership includes two employers, two employees, three additional members, one school district administrator and one elected official who holds a state or local office. The District Board powers are established under the provisions of Chapter 38 of the Wisconsin Statutes and include:

Authority to borrow money and levy taxes; Budgetary authority; and Authority over other fiscal and general management of the College which includes, but is not

limited to, the authority to execute contracts, to exercise control over facilities and properties, to determine the outcome or disposition of matters affecting the recipients of the services being provided, and to approve the hiring or retention of key management personnel who implement Board policy and directives.

The College is approved to offer 49 associate degree and technical diploma programs. These include 19 associate degree, 6 two-year technical diploma, 10 one-year technical diploma, 4 less-than-one-year technical diploma, and 5 apprenticeship programs. In addition, the College offers various advanced technical programs, basic skills education, and adult continuing education.

The accounting policies of the College conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to public colleges and universities as well as those prescribed by the Wisconsin Technical College System (WTCS). The College reports are based on all applicable Governmental Accounting Standards Board (GASB) pronouncements.

The following is a summary of the more significant policies. Reporting Entity: The basic financial statements include all the accounts of all operations of the College’s reporting entity as governed by its Board. The College’s reporting entity is based upon the criteria set forth by the GASB Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, and includes all related organizations for which the College exercises financial accountability. The manifestations of financial accountability include the ability to appoint a voting majority of an organization’s governing board, the ability to significantly influence operations, and accountability for fiscal matters.


18

Note 1 – Summary of Significant Accounting Policies (continued) The College is affiliated with the Blackhawk Technical College Foundation, Inc. (Foundation), a not-for-profit corporation whose purpose is to solicit, hold, manage, invest and expend endowment funds and other gifts, grants, and bequests exclusively for the maintenance and benefit of the College. The Foundation is managed by a Director and an independent board of directors. The financial activities of the Foundation are not included in the College’s financial statements as the College does not have the ability to significantly influence operations or designate management and no significant interdependency exists.

New Accounting Pronouncement: Management adopted the provisions of the Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27. The statement establishes new requirements for the College to report a "net pension liability (asset)" for the unfunded (overfunded) portion of its pension plans and deferred outflows of resources and deferred inflows of resources related to pension plans. See the end of note 1 for the restatement of the beginning net position.

Basis of Accounting and Financial Statement Presentation: For financial statement reporting purposes, the College is considered a special-purpose government engaged only in business-type activities. Accordingly, the basic financial statements of the College have been prepared on the accrual basis of accounting, whereby all revenues are recorded when earned, and all expenses are recorded when incurred. This basis of accounting also requires the College to record depreciation expense related to capital assets to spread the cost of these assets to the estimated period benefiting from them. Operating revenues and expenses generally result from providing educational services or producing and delivering goods in connection with the College’s ongoing operations. Amounts reported as operating revenues include (1) student tuition and fees, (2) charges to customers for goods or services provided, (3) state and federal operating grants, and (4) contracts with business and industry or school districts. Operating expenses include all instructional and administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.


19

Note 1 – Summary of Significant Accounting Policies (continued) Budgets and Budgetary Accounting: The College’s internal records are maintained on a fund basis as required by the WTCS. The College follows the procedures listed below in adopting the annual budgets for all governmental fund types that are legally required.

1. Property taxes are levied by the various taxing municipalities. The College records as revenue its share of the local tax in the year levied.

2. Public hearings are conducted on the proposed budget prior to District Board approval. 3. Prior to July 1, the budget is legally enacted through approval by the District Board. 4. Budget amendments during the year are legally authorized. Budget transfers (between funds

and functional areas within funds) and changes in budgeted revenues and expenditures (appropriations) require approval by a vote of two-thirds of the entire membership of the District’s Board and require publishing a Class 1 public notice in the College’s official newspaper within ten days according to Wisconsin Statutes.

5. Management exercises control over budgeted expenditures by fund and function as presented in the accompanying basic financial statements. Expenditures may not exceed funds available or appropriated unless authorized by a resolution adopted by a vote of two-thirds of the District Board. Unused appropriations lapse at the end of each fiscal year.

6. Formal budgetary integration is employed as a planning device for all funds. The College adopts an annual operating budget that is prepared on a different basis from the basic financial statements, which are prepared in accordance with GAAP. The budget differs from GAAP by recognizing encumbrances as expenditures. Also, the budget does not incorporate changes related to GASB statements Nos. 33, 34, and 35.

Use of Estimates: In preparing basic financial statements in conformity with GAAP, the College is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents: Cash includes amounts in petty cash, demand deposits, and other short-term interest-bearing deposits. For purposes of the statement of cash flows, cash on hand, demand deposits with financial institutions, investments in the Local Government Investment Pool (LGIP), and other short-term investments with maturity dates of less than ninety days from when purchased are considered cash equivalents. Receivables and Credit Policies: Receivables are uncollateralized obligations which generally are due upon receipt. Accounts receivable are stated at the invoice amount. Account balances with invoices over thirty days old are considered delinquent. Payments of accounts receivable are applied to the specific invoices identified on the customers’ remittance advice or, if unspecified, to the earliest unpaid invoices. The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s best estimate of amounts that will not be collected. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific student accounts and the aging of accounts receivable. All accounts or portions thereof deemed to be uncollectible are written off to the allowance for doubtful accounts.


20

Note 1 – Summary of Significant Accounting Policies (continued) Prepaid Expenses: Prepaid balances are for payments made by the College for which benefits extend beyond June 30.

Inventories: The College does not maintain a significant amount of inventory and does not record inventory in its financial records. Capital Assets: Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value at the time of donation. The costs of maintenance and repairs are charged to operations as incurred. Equipment assets having a cost of $5,000 or more per unit and building or remodeling projects of $15,000 or more are capitalized. Depreciation on buildings and equipment is provided in amounts sufficient to relate the cost of the depreciable assets to operations on the straight-line basis over the estimated service lives, which range from three to fifteen years for equipment, 20 years for site improvements, and 50 years for remodeling, 50 years for buildings, and 65 years for infrastructures. Property Taxes and Taxes Receivable: The District Board, under Section 38.16 of the Wisconsin Statutes, may levy a tax not to exceed the prior year’s levy by the College’s valuation factor, which is equal to the percentage change in the College’s equalized value from the prior year due to net new construction for the purposes of operating and maintaining schools. The mill rate limitation is not applicable to taxes levied for the purposes of paying principal and interest on general obligation debt issued by the College that is used for capital improvements and equipment acquisitions.

The College communicates its property tax levy to city, village and town treasurers or clerks in October of the fiscal year for which the taxes are levied. The following dates are pertinent to the College’s tax calendar:

Levy date October 31, or within 10 days of receipt of

equalized valuation, whichever is later Tax bills are mailed Month of December Lien date January 1 Payments:

Taxes paid in one installment January 31 Taxes paid in two installments First installment due January 31 Second installment due

Delinquent taxes purchased by Counties

July 31 October 1

The College’s property tax is apportioned each fall, based on the equalized value as established by the Wisconsin Department of Revenue, to the municipalities located within the District. The College records its share of the property tax in the year it is levied.


21

Note 1 – Summary of Significant Accounting Policies (continued)

The combined tax rate for the fiscal years ended June 30, 2015 and 2014, are as follows:

In 2013 the Wisconsin Act 145 provided a ‘dollar for dollar’ reduction in the operational property tax levy and increase in state aid funding, effective for the year ending June 30, 2015. State property tax relief aid for the year ended June 30, 2015 was $9,797,362. Deferred Outflows/Inflows of Resources: In addition to assets, the statement of net 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 (expense) until that time. At this time, the College has only two items that qualify for reporting in this category. The deferred outflows of resources – actuarial represent the College’s proportionate share of collective deferred outflows of resources of the Wisconsin Retirement System. The deferred outflows of resources - contributions represent the College’s contributions to pension plans subsequent to the measurement date of the collective net pension liability (asset). In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents the acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. At this time, the College has no items that qualify for reporting in this category. Other Employee Benefit Amounts:

Compensated Absences - College employees are granted vacation in varying amounts in accordance with the provisions of union contracts and College policy. Vacation earned is forfeited if not taken within the allowable time period. The expense for vacation pay is recorded on the accrual basis. The value of vested vacation pay including payroll taxes and retirement costs was approximately $97,000 as of June 30, 2015 and 2014. Retirement Plan - The College has a retirement plan covering substantially all of its employees, which is funded through contributions to the Wisconsin Retirement System (WRS). For purposes of measuring the net pension liability (asset), deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the WRS and additions to/deductions from WRS’ fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 6 for further information on retirement plans.

Levy LevyMill Rate Amount Mill Rate Amount

Operating levy 0.56580 6,332,599$ 1.48479 16,004,740$ Debt service levy 0.54546 6,105,000 0.44003 4,743,100

Total property tax levy 12,437,599$ 20,747,840$

2015 2014


22

Note 1 – Summary of Significant Accounting Policies (continued) Post-Employment Health, Dental and Life Insurance - The College provides post-retirement health care, dental and life insurance benefits to certain teachers, support staff and administrators under contractual arrangements. Retirees must be 55 years old and have completed 12, 15, or 18 years of service to receive three, four, or five years of paid health insurance, respectively. Health care benefits are coordinated with Medicare after age 65. Dental coverage is available only to College Presidents. At June 30, 2015, 32 eligible retirees are receiving benefits. The College completed the third bi-annual actuarial study to estimate the costs and financial liabilities of this plan offered to its employees for the year ended June 30, 2015. The cost method used in estimating the liability was the Projected Unit Credit Cost Method. In order to determine the employer’s liability, the per capita claims were offset by the cost sharing features of the plan and the Medicare reimbursement. The attrition period used was from date of hire to date of full eligibility for benefits (55 with 12 years of service). The Annual Required Contribution (ARC) and the Actuarial Accrued Liability (AAL) are based upon Projected Unit Credit Accrued Liability as of June 30, 2015. The significant assumptions used in the computation include a 7.0% discount rate, a health insurance premium rate trend of 10% in year 1 and declining to 5% in year 11 and remaining at that level thereafter for those under age 65, and a health insurance premium rate of 5.0% for those over age 65. The College established a trust (Blackhawk Technical College Post-Employment Benefits Trust) for the purpose of funding the Other Post-Employment Benefits (OPEB) liability on November 21, 2007. The plan’s financial statements are prepared on the accrual basis of accounting. Plan contributions are recognized in the period in which the contributions are due and the College has committed to making contributions which total at least the amount of the ARC. Benefits are paid at the time premiums are due to the insurance carrier. Investments are reported at fair value.

On October 10, 2010, the College issued a taxable general obligation promissory note in the amount of $5,175,000 in order to substantially fund this liability. Based on the actuarial valuation and review as of June 30, 2015, the best estimate for the AAL of the College’s post-retirement health care plan, which is 194.97% funded and not included in the accompanying basic financial statements at June 30, 2015, is $4,471,917.


23

Note 1 – Summary of Significant Accounting Policies (continued) Other Employee Benefit Amounts (continued): As of June 30, 2015, actuarial valuation, members of the plan consisted of the following:

OPEB cost is calculated based upon the ARC which represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period of 30 years. The following schedule shows the computation of the net OPEB (asset) obligation:

Active:Fully eligible 79 Others 133

Retirees 52 Surviving spouses -

Total participants 264

2015 2014ARC 129,742$ 129,742$ Interest on OPEB obligation (208,591) (209,705) Adjustment to annual required contribution 224,427 225,626

Annual OPEB cost 145,578 145,663

Contributions made 129,742 129,742

Increase (decrease) in net OPEB obligation 15,836 15,921

Net OPEB (asset) obligation - Beginning of year (2,979,865) (2,995,786)

Net OPEB (asset) obligation - End of year (2,964,029)$ (2,979,865)$


24

Note 1 – Summary of Significant Accounting Policies (continued)

Other Employee Benefit Amounts (continued): The funded status of the plan at June 30 was as follows:

The College’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for fiscal year 2015 and the two preceding fiscal years are as follows:

Tuition and Fees: Tuition and fees are recorded, net of scholarships, as revenue in the period in which the related activity or instruction takes place. Tuition and fees attributable to summer school programs are prorated on the basis of student class days occurring before and after the fiscal year-end. State and Federal Revenues: The College receives funding from various federal and state contracts and grants. Some of these revenues are earned over fiscal periods different from the College and are subject to the Federal Single Audit Act and State Single Audit Guidelines. State general aids are recognized as revenue in the entitlement year. Federal and state aids for reimbursable programs are recognized as revenue in the year the related program expenditures are incurred. Aids received prior to meeting revenue recognition criteria are recorded as unearned revenues.

2015 2014AAL 4,471,917$ 5,831,611$ Actuarial value of plan assets 8,718,978 7,825,083

Unfunded (funded) actuarial accrued liability (UAAL) (4,247,061)$ (1,993,472)$

Funded ratio (actuarial value of plan assets/AAL) 195.0% 134.2%

Covered payroll (active plan members) 14,518,567$ 15,480,212$

Ratio of UAAL to covered payroll -29.3% -12.9%

Percentage of Net OPEBFiscal Year Annual OPEB Annual OPEB Obligation

Ended Cost Cost Contributed (Asset)6/30/2015 145,578$ 89.1% (2,964,029)$ 6/30/2014 145,663 89.1% (2,979,865) 6/30/2013 991,347 41.0% (2,995,786)


25

Note 1 – Summary of Significant Accounting Policies (continued) Scholarship Allowances and Student Aid: Financial aid to students is reported in the basic financial statements under the alternative method, as prescribed by the National Association of College and University Business Officers (NACUBO). Certain aid (loans, funds provided to students as awarded by third parties and Federal Direct Lending) is accounted for as third-party payments (credited to the student’s account as if the student made the payment). All other aid is reflected in the basic financial statements as operating expenses or scholarship allowances, which reduce revenues. The amount reported as operating expenses represents the portion of aid that was provided to the student in the form of cash. Scholarship allowances represent the portion of aid provided to the student in the form of reduced tuition. Under the alternative method, these amounts are computed on a total College basis by allocating the cash payments to students, excluding payments for services, on the ratio of all aid to the aid not considered to be third-party aid.

Net Position: Net position is classified according to restrictions or availability of assets for satisfaction of College obligations. Net investment in capital assets, represents the net value of capital assets (property, plant and equipment) less the debt incurred to acquire or construct the assets and the borrowed resources not yet expended, but restricted for capital purchases. Restricted net position for debt service can only be used to repay debt service costs (principal and interest) as they are levied for that specific purpose. Restricted net position for student financial assistance can only be used for student financial assistance activities. All remaining net position is unrestricted for legal purposes, but may be designated for specific purposes. Prior Period Adjustment: Net position as of July 1, 2014 has been restated as follows for the implementation of GASB Statement No. 68, as amended by GASB Statement No. 71.

Net position as previously reported at July 1, 2014 27,662,097$ Prior period adjustment:

Net pension asset (measurement date as ofDecember 31, 2013) 4,777,174

Deferred outflows:Contributions made during fiscal year 2014

(subsequent to the measurement date) 568,674

Total prior period adjustment 5,345,848

Net position as restated, July 1, 2014 33,007,945$


26

Note 2 - Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments are classified in the College’s Statements of Net Position and Statements of Cash flows as follows:

Cash, cash equivalents, and investments are classified as follows at June 30:

2015 2014Cash deposits:

Cash on hand 1,775$ 1,775$ Demand deposits 2,583,795 3,519,400

Total cash deposits 2,585,570 3,521,175

Cash equivalents:Wisconsin Local Government Investment Pool 14,426,904 6,826,055

Total cash and cash equivalents 17,012,474 10,347,230

Investments:Certificates of Deposit 587,882 2,602,295 Treasury securities 837 837

Total cash, cash equivalents, and investments 17,601,193$ 12,950,362$

2015 2014Restricted for:

Debt Service 1,546,018$ 807,372$ Capital Projects 7,544,217 4,920,103 Student Financial Assistance 655,444 657,284

9,745,679 6,384,759

Unrestricted 7,855,514 6,565,603

Total cash, cash equivalents, and investments 17,601,193$ 12,950,362$


27

Note 2 - Cash, Cash Equivalents, and Investments (continued)

Cash equivalents are shown on the College’s Statements of Net Position for the Blackhawk Technical College Post-Employment Benefits Trust as follows:

The College is authorized by Wisconsin Statute 66.0603 to invest in the following instruments:

Obligations of the U.S. Treasury and U.S. Agencies. Obligations of any Wisconsin county, city, drainage district, technical college district, village,

town, or school district. Time deposits in any bank, trust company, or savings and loan association that is authorized to

transact business in this state, if the time deposits mature in not more than three years. The state’s local government pooled investment fund. Any security maturing in seven years or less with either the highest or second rating category

of a nationally recognized rating agency. Repurchase agreements with public depositories, if the agreement is secured by federal bonds

or securities. Securities of open-end management investment companies or investment trusts, if the portfolio

is limited to obligations of the U.S. Treasury and U.S. Agencies. Bonds issued by a local exposition district. Bonds issued by a local professional baseball park district. Bonds issued by the University of Wisconsin Hospitals and Clinics Authority.

The Wisconsin Local Government Investment Pool (LGIP) has compiled fair value information for all securities in the pool and has provided a book value to fair value conversion factor. As of June 30, 2015 and 2014, the conversion factors were 100%.

The LGIP is part of the State Investment Fund (SIF), and is managed by the State of Wisconsin Investment Board (SWIB). The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day’s notice. Investments in the LGIP are covered by a surety bond issued by Financial Security Assurance, Inc. The bond insures against loss arising from principal defaults on substantially all types of securities acquired by the pool except U.S. Government and agency securities. The bond provides unlimited coverage on principal losses, reduced by any Federal Deposit Insurance Corporation (FDIC) and State of Wisconsin Guarantee Fund insurance. The College is exposed to market risk through its participation in the LGIP.

2015 2014Cash equivalents:

Cash on hand 100$ 100$ Wisconsin Local Government Investment Pool 53,344 289,888 US Bank Money Market 11,279 2,292

Total cash equivalents 64,723$ 292,280$


28

Note 2 - Cash, Cash Equivalents, and Investments (continued)

Custodial Credit Risk - Deposits: Custodial credit risk is the risk that, in the event of financial institution failure, the College will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of a third party. As of June 30, 2015 and 2014, the College’s carrying value of the deposits was $3,171,677 and $6,121,695, respectively, compared to bank balances of $3,238,108 and $6,833,875, respectively. No bank balances at June 30, 2015 or 2014, were uninsured and uncollateralized.

Credit Risk - Investments: Credit risk is the risk an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments as listed above. The College minimizes its credit risk by requiring security of the investment as the first priority and limiting investments to financial institutions and the LGIP. The College’s repurchase agreements are collateralized by U.S. Government securities which are uninsured and unregistered, held by the counterparty or its trust department, but not in the College’s name. As of June 30, 2015 and 2014, the College had $14,426,904 and $6,826,055, respectively, invested in the LGIP, which does not carry a credit quality rating.

Concentration of Credit Risk: Concentration of credit risk is the risk of loss attributed to the magnitude of an organization’s investment in a single issuer. Any investment which represents 5 percent or more of total investments is required to be disclosed. Exempt from this disclosure are investments issued or explicitly guaranteed by the U.S. government, investments in mutual funds, external investments pools, and other pooled investments. The College places no limit on the amount the College may invest in any one issuer.

Interest Rate Risk: Interest rate risk is the risk changes in interest rates will adversely affect the fair value of an investment. The College does not have a formal investment policy which limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Note 3 – Accounts and Other Receivables Accounts and other receivables consisted of the following on June 30:

2015 2014Student tuition and fees, net of allowance for

doubtful accounts 491,436$ 73,586$ Contracted services 78,787 49,105 Other 27,857 27,892

Total accounts and other receivables 598,080$ 150,583$


29

Note 4 – Capital Assets Following are the changes in the College’s capital assets for the year ended June 30, 2015:

Beginning EndingBalance Additions Deletions Balance

Capital assets not being depreciated:Land 462,500$ -$ -$ 462,500$ Construction in progress 8,751,991 13,553,726 13,969,286 8,336,431

Total capital assets not beingdepreciated 9,214,491 13,553,726 13,969,286 8,798,931

Capital assets being depreciated:Land improvements 1,531,112 116,850 - 1,647,962 Buildings and improvements 31,163,805 9,836,072 28,332 40,971,545 Leasehold improvements 1,774,566 - - 1,774,566 Equipment 11,516,820 4,841,785 909,329 15,449,276

Total capital assets beingdepreciated 45,986,303 14,794,707 937,661 59,843,349

Less accumulated depreciation:Land improvements 895,087 53,273 - 948,360 Buildings and improvements 9,457,505 720,331 - 10,177,836 Leasehold improvements 305,439 88,728 - 394,167 Equipment 4,926,981 1,516,158 787,853 5,655,286

Total accumulated depreciation 15,585,012 2,378,490 787,853 17,175,649

Net capital assets 39,615,782 25,969,943$ 14,119,094$ 51,466,631

Less general obligation debt (27,770,000) (42,835,000)

Add unspent general obligation debt 3,908,708 6,881,504

Net investment in capital assets 15,754,490$ 15,513,135$


30

Note 4 – Capital Assets (continued) Following are the changes in the College’s capital assets for the year ended June 30, 2014:

Beginning EndingBalance Additions Deletions Balance

Capital assets not being depreciated:Land 462,500$ -$ -$ 462,500$ Construction in progress 857,663 9,817,222 1,922,894 8,751,991

Total capital assets not beingdepreciated 1,320,163 9,817,222 1,922,894 9,214,491

Capital assets being depreciated:Land improvements 1,531,112 - - 1,531,112 Buildings and improvements 31,176,148 - 12,343 31,163,805 Leasehold improvements 1,774,566 - - 1,774,566 Equipment 10,211,135 3,500,453 2,194,768 11,516,820

Total capital assets beingdepreciated 44,692,961 3,500,453 2,207,111 45,986,303

Less accumulated depreciation:Land improvements 843,075 52,012 - 895,087 Buildings and improvements 8,831,442 626,063 - 9,457,505 Leasehold improvements 216,710 88,729 - 305,439 Equipment 6,046,362 931,489 2,050,870 4,926,981

Total accumulated depreciation 15,937,589 1,698,293 2,050,870 15,585,012

Net capital assets 30,075,535 11,619,382$ 2,079,135$ 39,615,782

Less general obligation debt (16,705,000) (27,770,000)

Add unspent general obligation debt 1,259,871 3,908,708

Net investment in capital assets 14,630,406$ 15,754,490$


31

Note 5 - Long-Term Obligations The following is a summary of long-term obligations for the years ended June 30, 2015 and 2014:

The College pledges full faith, credit, and resources of the College to pay all outstanding general obligation promissory notes. The College levies taxes annually to pay the amount of principal and interest due for the debt. The obligations of the College at June 30 are as follows:

Balance Balance Due Within07/01/14 Increases Decreases 06/30/15 One Year

General Obligation Debt 30,885,000$ 19,500,000$ 4,950,000$ 45,435,000$ 5,460,000$ Unamortized premium 345,582 502,069 121,021 726,630 -

31,230,582$ 20,002,069$ 5,071,021$ 46,161,630$ 5,460,000$

Balance Balance Due Within07/01/13 Increases Decreases 06/30/14 One Year

General Obligation Debt 20,335,000$ 21,145,000$ 10,595,000$ 30,885,000$ 3,950,000$ Unamortized premium 19,766 373,426 47,610 345,582 -

20,354,766$ 21,518,426$ 10,642,610$ 31,230,582$ 3,950,000$

2015 20142005 $1,500,000 general obligation promissory

note payable to BMO Harris Bank, N.A., Chicago,IL, interest at 3.00%-3.65%, payable semiannuallyin April and October; varying principal paymentsare due annually on April 1 until maturity onApril 1, 2015. Proceeds used for buildingimprovements, remodeling, and to acquireequipment. -$ 115,000$

2006 $2,000,000 general obligation promissorynote payable to UMB Bank, N.A., Kansas City,MO, interest at 4.00%-4.25%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2016. Proceeds used for building improvements, remodeling, and to acquire equipment. 100,000 200,000

Subtotal 100,000$ 315,000$


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Note 5 - Long-Term Obligations (continued)

2015 2014Subtotal - carried forward 100,000$ 315,000$

2007 $2,300,000 general obligation promissorynote payable to UMB Bank, N.A., Kansas City,MO, interest at 4.00%-4.10%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2017. Proceeds used for building improvements, remodeling, and to 430,000 630,000 acquire equipment.

2008 $2,500,000 general obligation promissorynote payable to Stifel Nicholas & Company, Inc.,Minneapolis, MN, interest at 3.80%-4.00%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2018. Proceeds used for building improvements, remodeling, and to acquire equipment. 610,000 795,000

2009 $2,500,000 general obligation promissorynote payable to BMO Harris Bank, N.A.,Milwaukee, WI, interest at 2.75%-3.75%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2019. Proceeds used for building improvements, remodeling, and to acquire equipment. 510,000 625,000

2010 $1,750,000 general obligation promissorynote payable to BMO Harris Bank, N.A.,Milwaukee, WI, interest at 1.75%-2.50%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2016. Proceeds used for building construction, remodeling, and equipment. 160,000 315,000

Subtotal 1,810,000$ 2,680,000$


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2015 2014Subtotal - carried forward 1,810,000$ 2,680,000$

2010 $5,175,000 taxable general obligation promissory note payable to BMO Harris Bank,N.A., Milwaukee, WI, interest at 1.30%-3.55%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2020. Proceeds used for OPEB pastservice liability. 2,600,000 3,115,000

2011 $3,300,000 general obligation promissorynote payable to BMO Harris Bank, N.A.,Milwaukee, WI, interest at 1.85%-2.80%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2021. Proceeds used for building construction, remodeling, and equipment. 2,000,000 2,550,000

2012 $4,100,000 general obligation promissorynote payable to UMB Bank, N.A.,Kansas City, MO, interest at 1.00%-2.00%, payable semiannually in April and October; varying principal payments are due annually on April 1 until maturity on April 1, 2022. Proceeds used for building construction, remodeling, and equipment. 2,600,000 3,100,000

2013 $5,240,000 general obligation promissorynote payable to Raymond James & Associates, Inc.,St. Petersburg, FL, interest at 2.00%-2.40%, payablesemiannually in April and October; varying principalpayments are due annually on April 1 until maturityon April 1, 2023. Proceeds used for building construction, remodeling, and equipment. 4,620,000 5,035,000

Subtotal 13,630,000$ 16,480,000$


34



2013 $6,405,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%-4.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 until maturity on April 1, 2019.Proceeds used for purpose of refunding certainobligations of the District. 3,905,000 4,905,000

2013 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.50%-3.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 commencing April 1, 2020, until maturity on April 1, 2023. Proceeds used for building construction, remodeling, and equipment. 1,500,000 1,500,000

2013 $1,500,000 general obligation promissorynote payable to Raymond James & Associates, Inc.,St. Petersburg, FL, interest at 2.00%-2.50%, payablesemiannually in April and October; varying principalpayments are due annually on April 1 commencingApril 1, 2020, until maturity on April 1, 2023.Proceeds used for building construction, remodeling,and equipment. 1,500,000 1,500,000

2013 $1,500,000 general obligation promissorynote payable to UMB Bank, N.A., Kansas City, MO,interest at 2.40%-2.60%, payable semiannually inApril and October; varying principal payments are due annually on April 1 commencing April 1, 2020, until maturity on April 1, 2023. Proceeds used forbuilding construction, remodeling, and equipment. 1,500,000 1,500,000

Subtotal 22,035,000$ 25,885,000$


35



2014 $5,000,000 general obligation promissorynote payable to Hutchinson, Shockey, Erley & Co.,Chicago, IL, interest at 1.50%-3.00%, payablesemiannually in April and October; varying principalpayments are due annually on April 1 until maturityon April 1, 2024. Proceeds used for buildingconstruction, remodeling, and equipment. 4,900,000 5,000,000

2014 $4,500,000 general obligation promissorynote payable to Hutchinson, Shockey, Erley & Co.,Chicago, IL, interest at 1.50%-3.00%, payablesemiannually in April and October; varying principalpayments are due annually on April 1 until maturityon April 1, 2024. Proceeds used for buildingconstruction, remodeling, and equipment. 4,100,000 -

2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%, payable semiannually in Apriland October; varying principal payments are due annually on April 1 until maturity on April 1, 2019.Proceeds used for building construction, remodeling,and equipment. 1,200,000 -

2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%, payable semiannually in Apriland October; varying principal payments are due annually on April 1 until maturity on April 1, 2021.Proceeds used for building construction, remodeling,and equipment. 1,400,000 -

Subtotal 33,635,000$ 30,885,000$


36



2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%-3.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 commencing April 1, 2020, until maturity on April 1, 2024. Proceeds used for building construction, remodeling, and equipment. 1,500,000 -

2014 $4,500,000 general obligation promissorynote payable to UMB Bank, N.A., Kansas City, MO,interest at 1.00%-2.25%, payable semiannually inApril and October; varying principal payments are dueannually on April 1 until maturity on April 1, 2024.Proceeds used for building construction, remodeling,and equipment. 4,300,000 -

2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 commencing April 1, 2016, until maturity on April 1, 2021. Proceeds used for building construction, remodeling, and equipment.and equipment. 1,500,000 -

2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 commencing April 1, 2016, until maturity on April 1, 2021. Proceeds used for building construction, remodeling, and equipment.and equipment. 1,500,000 -

Subtotal 42,435,000$ 30,885,000$


37



2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%-3.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 commencing April 1, 2017, until maturity on April 1, 2022. Proceeds used for building construction, remodeling, and equipment.and equipment. 1,500,000 -

2014 $1,500,000 general obligation promissorynote payable to Robert W. Baird Co., Milwaukee, WI,interest at 2.00%-3.00%, payable semiannually inApril and October; varying principal payments aredue annually on April 1 commencing April 1, 2021, until maturity on April 1, 2025. Proceeds used for building construction, remodeling, and equipment.and equipment. 1,500,000 -

Total outstanding long-term obligations 45,435,000$ 30,885,000$


38


Principal and interest are payable from irrevocable ad valorem taxes levied on all taxable property in the District. The annual requirements to amortize all outstanding general obligation debt, including interest, at June 30 are as follows:

Wisconsin Statutes 67.03(1) provides the aggregate amount of indebtedness of a district shall not exceed 5 percent of the value of the taxable property located in the district. The 5 percent limit at June 30, 2015 and 2014, was $584,176,990 and $562,257,061, respectively. The actual indebtedness of the College for 2015 and 2014 was $45,435,000 and $30,885,000, respectively. The indebtedness of the College, net of resources available for 2015 and 2014 was $44,615,612 and $30,606,171, respectively. In addition, the maximum bonded indebtedness of the College for purchasing and constructing buildings and equipment may not exceed 2 percent of the value of the taxable property within the District. The 2 percent limit at June 30, 2015 and 2014, was $233,670,796 and $224,902,824, respectively. The College had no bonded indebtedness for 2015 and 2014.

Note 6 - Retirement Plans

All eligible College employees participate in the WRS, a cost-sharing multiple-employer defined benefit Public Employee Retirement System (PERS). WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government and other public employees. Eligibility requirements are as follows:

Employees initially employed by a WRS employer prior to July 1, 2011 – Expected to be employed for at least one year and expected to work at least 600 hours a year (440 hours for teachers).

Employees initially employed by a WRS employer on or after July 1, 2011 – Expected to be

employed for at least one year and expected to work at least 1,200 hours a year (880 hours for teachers).

Year Principal Interest Total2016 5,460,000$ 1,063,946$ 6,523,946$ 2017 5,500,000 943,554 6,443,554 2018 5,715,000 817,649 6,532,649 2019 5,835,000 682,139 6,517,139 2020 5,785,000 558,794 6,343,794

2021-2025 17,140,000 994,333 18,134,333

45,435,000$ 5,060,415$ 50,495,415$


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Note 6 - Retirement Plans (continued) Employees who retire at or after age 65 are entitled to receive an unreduced retirement benefit. The factors influencing the benefit are (1) final average earnings, (2) years of creditable service, and (3) a formula factor. Final average earnings is the average of the employee’s three highest years’ earnings. Creditable service is the creditable current and prior service expressed in years or decimal equivalents of partial years for which a participant receives earnings and makes contributions as required. The formula factor is a standard percentage based on employment category. Employees may retire at age 55 and receive actuarially reduced benefits. Employees terminating covered employment before becoming eligible for a retirement benefit may withdraw their contributions and, by doing so, forfeit all rights to any subsequent benefit. For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 or beginning employment on or after April 24, 1998, up to and including June 30, 2011, are immediately vested. Participants initially beginning employment on or after July 1, 2011, are not eligible for a WRS retirement annuity or lump sum retirement benefit until they have five years of creditable service. If an employee were to leave prior to fulfilling the five year vesting requirement, that employee would remain eligible to take a separation benefit. The separation benefit would include the employee contributions (and investment returns) only. The WRS also provides death and disability benefits for employees. Eligibility and the amount of all benefits are determined under Chapter 40 of Wisconsin Statutes. The WRS issues an annual financial report which may be obtained by writing to the Department of Employee Trust Funds, P.O. Box 7931, Madison, WI 53707-7931.


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Note 6 - Retirement Plans (continued) Post-Retirement Adjustments: The Employee Trust Funds Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance with s. 40.27, Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system’s consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the “floor”) set at retirement. The Core and Variable annuity adjustments granted during recent years are as follows:

Year Core Fund Adjustment Variable Fund Adjustment 2005 2.6% 7% 2006 0.8 3 2007 3.0 10 2008 6.6 0 2009 (2.1) (42) 2010 (1.3) 22 2011 (1.2) 11 2012 (7.0) (7) 2013 (9.6) 9 2014 4.7 25

Contributions: Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for general category employees, including teachers, and Executives and Elected Officials. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. During the reporting period, the WRS recognized $1,124,175 in contributions from the employer Contribution rates as of June 30, 2015 are:

Employee Category Employee Employer General (including teachers) 6.8% 6.8% Executives & Elected Officials 7.7% 7.7% Protective with Social Security 6.8% 9.5% Protective without Social Security 6.8% 13.1%


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Note 6 - Retirement Plans (continued)

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015, the College reported a liability (asset) of ($2,921,424) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of December 31, 2014, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of December 31, 2013 rolled forward to December 31, 2014. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The College’s proportion of the net pension liability (asset) was based on the College’s share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2014, the College’s proportion was 0.119%, which was a decrease of 0.002% from its proportion measured as of December 31, 2013. For the year ended June 30, 2015, the College recognized pension expense of $1,155,737. At June 30, 2015, the College reported deferred outflows of resources related to pensions from the following sources:

Deferred Outflows of Resources

Differences between expected and actual experience

$423,516

Changes in assumptions

0

Net differences between projected and actual earnings on pension plan investments

1,414,695

Changes in proportion and differences between employer contributions and proportionate share of contributions

40,837

Employer contributions subsequent to the measurement date

534,189

Total $2,413,237


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Note 6 - Retirement Plans (continued) $534,189 reported as deferred outflows related to pension resulting from the WRS Employer’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized in pension expense as follows:

Year ended June 30: Deferred Outflow of Resources

Deferred Inflows of Resources

2016 $459,540 $0 2017 459,541 0 2018 459,540 0 2019 459,541 0 2020 40,886 0

Actuarial assumptions: The total pension liability in the December 31, 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Actuarial Valuation Date: December 31, 2013

Measurement Date of Net Pension Liability (Asset)

December 31, 2014

Actuarial Cost Method: Entry Age

Asset Valuation Method: Fair Market Value

Long-Term Expected Rate of Return: 7.2%

Discount Rate: 7.2% Salary Increases: Inflation Seniority/Merit

3.2% 0.2% - 5.8%

Mortality: Wisconsin 2012 Mortality Table Post-retirement Adjustments* 2.1%

* No post-retirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience and other factors. 2.1% is the assumed annual adjustment based on the investment return assumption and the post-retirement discount rate.

Actuarial assumptions are based upon an experience study conducted in 2012 using experience from 2009 – 2011. The total pension liability for December 31, 2014 is based upon a roll-forward of the liability calculated from the December 31, 2013 actuarial valuation.


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Long-term expected Return on Plan Assets: The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These 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. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Long-Term Real Rate of Return

Target Allocation

US Equities 5.3% 21% International Equities

5.7% 23%

Fixed Income 1.7% 36% Inflation Sensitive Assets

2.3% 20%

Real Estate 4.2% 7% Private Equity/Debt 6.9% 7% Multi-Asset 3.9% 6% Cash 0.9% -20%

Single Discount Rate: A single discount rate of 7.20% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.20% and a long term bond rate of 3.56%. Because of the unique structure of WRS, the 7.20% expected rate of return implies that a dividend of approximately 2.1% will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan members. 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.


44


Sensitivity of the College’s proportionate share of the net pension liability (asset) to changes in the discount rate: The following presents the College’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.20 percent, as well as what College’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.20 percent) or 1-percentage-point higher (8.20 percent) than the current rate:

1% Decrease to Discount Rate

(6.20%)

Current Discount Rate (7.20%)

1% Increase To Discount Rate

(8.20%) Proportionate share of the net pension liability (asset)

$8,241,840 ($2,921,424) ($11,737,719)

Pension plan fiduciary net position: Detailed information about the pension plan’s fiduciary net position is available in separately issued financial statements available at http://legis.wisconsin.gov/lab/ and reference report number 15-11. Payables to the pension plan: The College reported a payable to the pension plan for the outstanding amount of required contributions of $232,924 at June 30, 2015 and $254,310 at June 30, 2014.


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Note 7 - Expenses Classification

Expenses on the Statement of Revenues, Expenses and Changes in Net Position are classified by function. Alternatively, the expenses could also be shown by type of expense, as follows for the year ended June 30:

Note 8 - Commitments and Contingencies

The College receives regular program aids from the WTCS Board based on aidable expenditures. This amount is subject to adjustment based on a state audit of the full-time equivalent students and cost allocation reports of the College and other districts of the state. The audit for the year ended June 30, 2015, has not been completed. It is the belief of management of the College audit adjustments, if any, will not materially affect the College’s financial position. From time to time, the College becomes party to claims and legal proceedings. Although the outcome of such matters cannot be forecast with certainty, it is the opinion of management and appropriate legal counsel the likelihood is remote any such claims or proceedings will have a material adverse effect on the College’s financial position. As of June 30, 2015, the College had approximately $777,000 in project commitments related to projects-in-progress at year-end.

2015 2014Salaries and wages 17,589,699$ 17,994,438$ Employee benefits 6,205,624 6,371,689 Travel, memberships, and subscriptions 270,379 270,997 Supplies 3,638,614 2,932,857 Contract services 2,852,210 2,868,331 Rentals 573,507 476,914 Credit 161,814 180,145 Insurance 204,855 197,114 Utilities 869,384 796,006 Depreciation 2,378,490 1,698,292 Student aid 3,274,149 3,694,167

Total operating expenses 38,018,725$ 37,480,950$


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Note 9 – Operating Leases

The College’s operating leases are month-to-month and year-to-year for institutional facilities and office equipment. Total expense for all operating leases for the years ended June 30, 2015 and 2014, was approximately $568,288 and $469,100, respectively. Total future minimum lease payments under operating leases at June 30 are estimated as follows:

Note 10 - Insurance

Districts Mutual Insurance: In July 2004, all sixteen WTCS technical colleges created Districts Mutual Insurance Company (DMI). DMI is a fully assessable mutual company authorized under Wisconsin Statute Chapter 611 to provide property, casualty, and liability insurance and risk management services to its members. The scope of insurance protection provided by DMI is broad, covering property at $400,225,000 per occurrence; general liability, auto, and educators’ legal liability at $5,000,000 per occurrence; and workers’ compensation at the statutorily required limits. At this time, settled claims have not approached the coverage limits as identified above. The College’s exposure in its layer of insurance is limited to $5,000 to $100,000 per occurrence depending on the type of coverage, and DMI purchases reinsurance for losses in excess of its retained layer of coverage.

DMI operations are governed by a five-member board of directors. Member colleges do not exercise any control over the activities of DMI beyond election of the board of directors at the annual meeting. The board has the authority to adopt its own budget, set policy matters, and control the financial affairs of the Company. At the start of operations, each member college was assessed a charge for a capitalization component to establish reserves for the Company. For the years ended June 30, 2015 and 2014, the College paid premiums of approximately $169,600 and $155,100, respectively, to DMI. Future premiums will be based on relevant rating exposure bases as well as the historical loss experience by members. DMI’s ongoing operational expenses, other than loss adjustment expenses, are apportioned pro rata to each participant based on equity interest in the Company. The audited DMI financial statements can be obtained through Districts Mutual Insurance Co., 212 West Pinehurst Trail, Dakota Dunes, SD 57049.

Year Amount2016 495,217$ 2017 506,166 2018 517,572 2019 529,442 2020 396,353

2021-2024 988,231

3,432,981$


47

Note 10 – Insurance (continued) Supplemental Insurance: In July 1997, the WTCS technical colleges formed the WTCS Insurance Trust to jointly purchase commercial insurance to provide coverage for losses from theft of, damages to, or destruction of assets. The trust is organized under Wisconsin Statutes 66.0301 and is governed by a board of trustees consisting of one trustee from each member college. Member entities include all sixteen WTCS districts.

The WTCS Insurance Trust has purchased the following levels of coverage from DMI for its participating members:

Liability: $5,000,000 aggregate general; $1,000,000 auto per accident; $1,000,000 employee benefits; includes benefit for accidental death and dismemberment, repatriation, and medical expenses; $1,000 deductible for employee benefits.

Crime: $750,000 coverage for employee dishonesty, forgery, computer fraud and funds transfer fraud; $500,000 coverage for theft, robbery, burglary, disappearance and destruction of money and securities; $25,000 coverage for investigation expenses; $2,500 deductible for investigation, $15,000 deductible for employee dishonesty, forgery and fraud.

The Trust financial statements can be obtained through Lakeshore Technical College District, 1290 North Avenue, Cleveland, WI 53015.

Note 11 - Subsequent Events

On July 6, 2015, the College issued general obligation promissory notes in the amount of $1,500,000. The proceeds are to be used for costs related to building improvements. The interest rate is 3.0% with the first principal payment due April 1, 2021. On August 5, 2015, the College issued general obligation promissory notes in the amount of $1,500,000. The proceeds are to be used for costs related to building improvements. The interest rate varies from 2.0% to 3% with the first principal payment due April 1, 2020. On September 3, 2015, the College issued general obligation promissory notes in the amount of $4,300,000. The proceeds are to be used for costs related to building improvements, remodeling and the acquisition of equipment. The interest rate varies from 2.0% to 2.25% with the first principal payment due April 1, 2016. Subsequent events have been evaluated through December 15, 2015, which is the date the financial statements were available to be issued.

Required Supplementary Information

48

Blackhawk Technical College District Schedules of Funding Progress and Employer Contributions Year Ended June 30, 2015

Schedule of Employer Contributions June 30, 2015

Schedule of Funding Progress June 30, 2015

Actuarial UAAL as aAccrued Percentage

Actuarial Liability (AAL) Unfunded AAL ofActuarial Value of Projected (Funding Funded Covered CoveredValuation Assets Unit Excess) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)6/30/15 8,718,978$ 4,471,917$ (4,247,061)$ 195.0% 14,518,567$ -29.3%6/30/13 7,825,083 5,831,611 (1,993,472) 134.2% 15,480,212 -12.9%6/30/11 6,880,656 8,099,141 1,218,485 85.0% 15,522,784 7.8%

See Independent Auditor’s Report. See accompanying note to required supplementary information.

Annual NetYear Required Percentage OPEB

Ended Contribution of ARC (Asset)June 30 (ARC) Contributed Obligation

2015 129,742$ 100.0% (2,964,029)$ 2014 129,742 100.0% (2,979,865) 2013 954,759 42.6% (2,995,786) 2012 954,759 42.6% (3,580,670) 2011 1,244,309 448.6% (4,171,593) 2010 1,243,928 88.4% 167,895

49

Blackhawk Technical College District Schedules of Employer’s Proportionate Share of the Net Pension Liability (Asset) and Employer Contributions Year Ended June 30, 2015

Schedule of Employer’s Proportionate Share of the Net Pension Liability (Asset) Wisconsin Retirement System

Last 10 Fiscal Years*

2015 Proportion of the net pension liability (asset) 0.119% Proportionate share of the net pension liability (asset) ($2,921,424)Covered-employee payroll $16,059,648 Plan fiduciary net position as a percentage of the total pension liability (asset)

102.74%

*The amounts presented for each fiscal year were determined as of the calendar year-end that occurred within the fiscal year

Schedule of Employer Contributions

Wisconsin Retirement System Last 10 Fiscal Years*

Contractually required contributions $1,124,175 Contributions in relation to the contractually required contributions

$1,124,175

Contribution deficiency (excess) $0 Covered-employee payroll $16,059,648 Contributions as a percentage of covered-employee payroll 7%

*The amounts presented for each fiscal year were determined as of the calendar year-end that occurred within the fiscal year

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Note to Required Supplementary Information Note 1

The College is required to present the Schedules of Employer Contributions and Funding Progress information for the three most recent actuarial studies. Studies have been completed as of June 30, 2015, 2013, and 2011.

Note 2 Changes of benefit terms: There were no changes of benefit terms for any participating employer in WRS. Changes of assumptions: There were no changes in the assumptions.

Supplementary Financial Information

51


General Fund - Schedule of Revenues, Expenditures, and Changes in Fund BalanceBudget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015

Variance withActual on a Final Budget-Budgetary Favorable

Original Final Basis (Unfavorable)Revenues Local government 9,763,438$ 5,625,363$ 5,653,660$ 28,297$

Intergovernmental revenue: State aids 12,746,687 12,914,762 12,835,623 (79,139) Federal aids 12,000 12,000 18,053 6,053 Tuition and fees: Statutory program fees 6,536,088 6,536,088 6,234,905 (301,183) Material fees 428,719 428,719 360,238 (68,481) Other student fees 442,835 442,835 421,068 (21,767) Miscellaneous - institutional revenue 802,491 1,260,103 1,196,110 (63,993)

Total revenues 30,732,258 27,219,870 26,719,657 (500,213)

Expenditures Current: Instruction 16,198,737 16,177,831 15,998,938 178,893 Instructional resources 2,240,822 2,243,432 2,042,912 200,520 Student services 2,475,333 2,461,746 2,425,850 35,896 General institutional 4,883,381 4,565,154 4,432,707 132,447 Physical plant 2,761,985 2,693,363 2,676,690 16,673

Total expenditures 28,560,258 28,141,526 27,577,097 564,429

Revenues over (under) expenditures 2,172,000 (921,656) (857,440) 64,216

Other financing uses Operating transfers out (2,172,000) (10,000) (10,000) -

Total other financing uses (2,172,000) (10,000) (10,000) -

Revenues and other financing sources over (under) expenditures and other financing uses - (931,656) (867,440) 64,216

Fund balanceBeginning of year 10,321,225 10,321,225 10,321,225 -

End of year 10,321,225$ 9,389,569$ 9,453,785$ 64,216$

See Independent Auditor's Report.

Budget Amounts

52


Special Revenue Fund - Operating - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015


Original Final Basis (Unfavorable)Revenues Local government 683,048$ 682,922$ 682,922$ -$

Intergovernmental revenue: State aids 699,583 1,303,170 646,775 (656,395) Federal 1,311,894 1,390,281 1,121,022 (269,259) Tuition and fees: Material fees 30,000 1,500 663 (837) Other student fees - 28,500 13,619 (14,881) Miscellaneous - institutional revenue 10,000 42,211 458 (41,753)

Total revenues 2,734,525 3,448,584 2,465,459 (983,125)

Expenditures Current: Instruction 1,834,564 2,508,878 1,600,710 908,168 Instructional resources 6,248 51,396 51,396 - Student services 827,782 794,864 705,887 88,977 General institutional 65,931 65,931 52,791 Physical Plant - 27,515 - 27,515

Total expenditures 2,734,525 3,448,584 2,410,784 1,024,660

Revenues over (under) expenditures - - 54,675 41,535

Fund balanceBeginning of year 615,134 615,134 615,134 -

End of year 615,134$ 615,134$ 669,809$ 41,535$


Budget Amounts

53


Special Revenue Fund - Non-Aidable Funds - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015


Original Final Basis (Unfavorable)Revenues Intergovernmental revenue: State aids 974,000$ 974,000$ 874,482$ (99,518)$ Federal 13,470,000 13,470,000 11,290,475 (2,179,525) Miscellaneous - institutional revenue 163,000 171,321 141,150 (30,171)

Total revenues 14,607,000 14,615,321 12,306,107 (2,309,214)

Expenditures Current: Student services 14,512,000 14,512,000 12,219,389 2,292,611 General institutional 105,000 113,321 107,678 5,643


Revenues over (under) expenditures (10,000) (10,000) (20,960) (10,960)

Other financing sources Operating transfers in 10,000 10,000 10,000 -

Revenues and other financing sources over (under) expenditures and other financing uses - - (10,960) (10,960)


End of year 63,847$ 63,847$ 52,887$ (10,960)$


Budget Amounts

54


Capital Projects Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015


Original Final Basis (Unfavorable)Revenues Intergovernmental revenue: State aids 5,000$ 10,378$ 4,736$ (5,642)$ Federal - 79,353 78,998 (355) Miscellaneous - institutional revenue 10,000 10,126 6,695 (3,431)

Total revenues 15,000 99,857 90,429 (9,428)

Expenditures Capital outlay: Instruction 3,802,880 5,351,440 4,194,047 1,157,393 Instructional resources 1,872,311 1,989,753 1,935,159 54,594 Student services 144,600 190,965 190,964 1 General institutional 409,000 1,022,243 948,504 73,739 Physical plant 8,661,209 8,716,673 8,313,651 403,022


Revenues over (under) expenditures (14,875,000) (17,171,217) (15,491,896) 1,679,321

Other financing sources Proceeds of general obligation debt 15,000,000 19,500,000 19,500,000 -

Total other financing sources 15,000,000 19,500,000 19,500,000 -

Other financing uses Operating transfers out (125,000) (234,000) (234,000) -

Total other financing uses (125,000) (234,000) (234,000) -

Revenues and other financing sources over (under) expenditures and other financing uses - 2,094,783 3,774,104 1,679,321

Fund balanceBeginning of year 2,330,405 2,330,405 2,330,405 -

End of year 2,330,405$ 4,425,188$ 6,104,509$ 1,679,321$


Budget Amounts

55


Debt Service Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015


Original Final Basis (Unfavorable)Revenues Local government 4,743,000$ 6,105,000$ 6,105,000$ -$

Miscellaneous - institutional revenue 2,000 2,000 1,516 (484)

Total revenues 4,745,000 6,107,000 6,106,516 (484)

Expenditures

Physical plant 6,232,000 6,341,000 5,982,918 358,082

Total expenditures 6,232,000 6,341,000 5,982,918 358,082

Revenues over (under) expenditures (1,487,000) (234,000) 123,598 357,598

Other financing sources Operating transfers in 1,487,000 234,000 234,000 -

Total other financing sources 1,487,000 234,000 234,000 -

Revenues and other financing sources over (under) expenditures - - 357,598 357,598


End of year 461,790$ 461,790$ 819,388$ 357,598$


Budget Amounts

56


Enterprise Fund - Schedule of Revenues, Expenditures, and Changes in Net Position- Budget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015


Original Final Basis (Unfavorable)Revenues Miscellaneous - institutional revenue 154,000$ 158,684$ 107,828$ (50,856)$

Total revenues 154,000 158,684 107,828 (50,856)

Expenditures Auxiliary services 154,000 158,126 103,270 54,856

Total expenditures 154,000 158,126 103,270 54,856

Revenues over (under) expenditures - 558 4,558 4,000

Other financing sources Operating transfers in - 10,000 10,000 -

Total other financing sources - 10,000 10,000 -

Other financing uses Operating transfers out - (10,000) (10,000) -

Total other financing uses - (10,000) (10,000) -

Revenues and other financing sources over (under) expenditures and other financing uses - 558 4,558 4,000

Net positionBeginning of year 415,498 415,498 415,498 -

End of year 415,498$ 416,056$ 420,056$ 4,000$


Budget Amounts

57


Internal Service Funds - Schedule of Revenues, Expenditures, and Changes in Net Position - Budget and Actual (Non-GAAP Budgetary Basis)Year Ended June 30, 2015


Original Final Basis (Unfavorable)Revenues Miscellaneous - institutional revenue 167,470$ 167,470$ 167,470$ -$

Total revenues 167,470 167,470 167,470 -

Expenditures Auxiliary services 175,470 175,470 171,292 4,178

Total expenditures 175,470 175,470 171,292 4,178

Revenues over (under) expenditures (8,000) (8,000) (3,822) 4,178

Net positionBeginning of year 279,090 279,090 279,090 -

End of year 271,090$ 271,090$ 275,268$ 4,178$


Budget Amounts

58


Schedule to Reconcile the Non- GAAP Budgetary Combined Balance Sheet - All Fund Types to the Statement of Net PositionJune 30, 2015

General Capital

ASSETS AND OTHER DEBITS Fund Operating Non - Aidable Projects Fund

AssetsCash and cash equivalents 6,032,608$ 569,614$ 11,577$ 7,544,217$ Investments 520,882 - 67,000 - Receivables:

Taxes 3,532,033 - - - Federal and state 217,044 231,697 667,338 - Accounts 452,155 - 27,808 -

Due from other funds 761,926 - - - Prepaid items 77,121 - - 74,658 Post-employment benefits - - - - Net pension asset - - - - Deferred outflow of resources - actuarial - - - - Deferred outflow of resources - contributionsFixed assets - - - - Less: accumulated depreciation - - - -

Total assets and other debits 11,593,769$ 801,311$ 773,723$ 7,618,875$

LIABILITIES AND FUND BALANCE/NET POSITION

LiabilitiesAccounts payable 401,407$ 10,741$ 872$ 727,979$ Accrued liabilities 1,514,614 120,761 2,527 9,392 Accrued interest - - - - Due to other funds - - 717,437 - Unearned revenue - student fees 214,999 - - - Due to student organizations - - - - General obligation debt payable - - - - Unamortized premium on general obligation debt - - - -

Total liabilities 2,131,020 131,502 720,836 737,371

Fund balance/Net positionNet investment in capital assets - - - - Net position - - - - Fund balances:

Reserved for debt service - - - - Reserved for capital projects - - - 6,029,851 Reserved for student financial assistance - - 52,887 - Reserved for prepaid items 77,121 - - 74,658 Reserved for pensions - - - - Unreserved - Designated for operations 5,482,729 - - - Unreserved - Designated for State aid fluctuations 257,000 - - - Unreserved - Designated for subsequent years 386,000 - - - Unreserved - Designated for subsequent year 3,250,935 669,809 - -

Budgetary basis fund balance 9,453,785 669,809 52,887 6,104,509

Reserve for encumbrances 8,964 - - 776,995

Total fund balance/net position 9,462,749 669,809 52,887 6,881,504

Total liabilities and fund balance/net position 11,593,769$ 801,311$ 773,723$ 7,618,875$

Special Revenue Fund

59

Debt Enterprise Internal Agency Reconciling Statement of

Service Fund Fund Service Fund Funds Total Items Net Position

1,545,181$ 457,142$ 275,268$ 576,867$ 17,012,474$ -$ 17,012,474$ 837 - - - 588,719 - 588,719

- - - - 3,532,033 - 3,532,033 - - - - 1,116,079 - 1,116,079 - 3,467 - 114,650 598,080 - 598,080 - - - - 761,926 (761,926) - - - - - 151,779 - 151,779 - - - - - 2,964,029 2,964,029 - - - - - 2,921,424 2,921,424 - - - - - 1,879,048 1,879,048

534,189 534,189 - - - - - 68,642,280 68,642,280 - - - - - 17,175,649 17,175,649

1,546,018$ 460,609$ 275,268$ 691,517$ 23,761,090$ 59,003,395$ 82,764,485$

-$ 1,461$ -$ 406$ 1,142,866$ -$ 1,142,866$ - 1,936 - 1,669 1,650,899 - 1,650,899 - - - - - 265,987 265,987 - 37,156 - 7,333 761,926 (761,926) - - - - - 214,999 214,999 - - - 682,109 682,109 - 682,109 - - - - - 45,435,000 45,435,000

726,630 - - - 726,630 - 726,630

726,630 40,553 - 691,517 5,179,429 44,939,061 50,118,490

- - - - - 15,513,135 15,513,135 - 420,056 275,268 - 695,324 12,909,824 13,605,148

819,388 - - - 819,388 (265,987) 553,401 - - - - 6,029,851 (6,029,851) - - - - - 52,887 - 52,887 - - - - 151,779 (151,779) - - - - - - 2,921,424 2,921,424 - - - - 5,482,729 (5,482,729) - - - - - 257,000 (257,000) - - - - - 386,000 (386,000) - - - - - 3,920,744 (3,920,744) -

819,388 420,056 275,268 - 17,795,702 14,850,293 32,645,995

- - - - 785,959 (785,959) -

819,388 420,056 275,268 - 18,581,661 14,064,334 32,645,995

1,546,018$ 460,609$ 275,268$ 691,517$ 23,761,090$ 59,003,395$ 82,764,485$

60


Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Statement of Revenues, Expenses, and Changes in Net PositionYear Ended June 30, 2015

General CapitalFund Operating Non - Aidable Projects Fund

RevenuesLocal government - tax levy 5,653,660$ 682,922$ -$ -$ Intergovernmental revenue:

State aids 12,835,623 646,775 874,482 4,736 Federal aids 18,053 1,121,022 11,290,475 78,998

Tuition and fees:Statutory program fees 6,234,905 - - - Material fees 360,238 663 - - Other student fees 421,068 13,619 - -

Miscellaneous - institutional revenue 1,196,110 458 141,150 6,695

Total revenues 26,719,657 2,465,459 12,306,107 90,429

ExpendituresCurrent:

Instruction 15,998,938 1,600,710 - 4,194,047 Instructional resources 2,042,912 51,396 - 1,935,159 Student services 2,425,850 705,887 12,219,389 190,964 General institutional 4,432,707 52,791 107,678 948,504 Physical plant 2,676,690 - - 8,313,651 Student aid - - - - Auxiliary - - - - Depreciation - - - - Loss on disposition of fixed assets - - - -

Debt serviceInterest and fiscal charges - - - -


Excess (deficiency) of revenues over expenditures (857,440) 54,675 (20,960) (15,491,896)

Other financing sources (uses)Operating transfers in - - 10,000 - Operating transfers out (10,000) - - (234,000) Proceeds from long-term debt - - - 19,500,000

Total other financing sources (uses) (10,000) - 10,000 19,266,000

Excess (deficiency) of revenues and other financingsources over expenditures and other financing uses (867,440) 54,675 (10,960) 3,774,104

Fund balances/Net position:Beginning of year 10,321,225 615,134 63,847 2,330,405

Prior period adjustment for pension contributions

Beginning of year, as restated 10,321,225 615,134 63,847 2,330,405

End of year 9,453,785$ 669,809$ 52,887$ 6,104,509$


61

Statement of Revenues, Expenses

Debt Enterprise Internal Reconciling and Changes inService Fund Fund Service Fund Total Items Net Position

6,105,000$ -$ -$ 12,441,582$ -$ 12,441,582$

- - - 14,361,616 - 14,361,616 - - - 12,508,548 (5,682,666) 6,825,882

- - - 6,234,905 (2,863,565) 3,371,340 - - - 360,901 (165,634) 195,267 - - - 434,687 (199,536) 235,151

1,516 107,828 167,470 1,621,227 (167,470) 1,453,757

6,106,516 107,828 167,470 47,963,466 (9,078,871) 38,884,595

- - - 21,793,695 (1,665,132) 20,128,563 - - - 4,029,467 (1,863,744) 2,165,723 - - - 15,542,090 (11,731,914) 3,810,176 - - - 5,541,680 85,138 5,626,818

5,982,918 - - 16,973,259 (15,465,080) 1,508,179 - - - - 2,297,505 2,297,505 - 103,270 171,292 274,562 (171,291) 103,271 - - - - 2,378,490 2,378,490 - - - - 111,876 111,876

- - - - 1,115,944 1,115,944

5,982,918 103,270 171,292 64,154,753 (24,908,208) 39,246,545

123,598 4,558 (3,822) (16,191,287) 15,829,337 (361,950)

234,000 10,000 - 254,000 (254,000) - - (10,000) - (254,000) 254,000 - - - - 19,500,000 (19,500,000) -

234,000 - - 19,500,000 (19,500,000) -

357,598 4,558 (3,822) 3,308,713 (3,670,663) (361,950)

461,790 415,498 279,090 14,486,989 13,175,108 27,662,097

5,345,848 5,345,848

461,790 415,498 279,090 14,486,989 18,520,956 33,007,945

819,388$ 420,056$ 275,268$ 17,795,702$ 14,850,293$ 32,645,995$


62


Schedule to Reconcile the Budget (Non-GAAP) Basis Financial Statements to theStatement of Revenues, Expenses and Changes in Net Position (Continued)Year Ended June 30, 2015

(1) State grant revenue is presented on the Statement of Revenues, Expenses and Changes in Net Position as follows:

Operating 1,525,993$ Non-operating 12,835,623

Total 14,361,616$

(2) Other institutional revenue is reported in three separate lines on the Statement of Revenues, Expenses and Changes in Net Position as follows:

Auxiliary enterprise revenues 107,828$ Contract revenues 675,424 Miscellaneous income 650,942 Investment income 19,563

Total 1,453,757$

(3) Reconciliation of budgetary basis fund balance and net position as presented on the Statement of Revenue, Expenses, and Changes in Net Position as follows:

2015

Budgetary basis fund equity 17,795,702$

Capital assets - cost 68,642,280 Accumulated depreciation on capital assets (17,175,649) Net OPEB Assets 2,964,029 General obligation debt (45,435,000) Accrued interest on long-term debt (265,987) Net pension asset 2,921,424 Deferred outflows of resources 2,413,237 Encumbrances 785,959

Net position per basic financial statements 32,645,995$


63


Schedule to Reconcile the Non- GAAP Budgetary Combined Balance Sheet - All Fund Types to the Statement of Net PositionJune 30, 2014

General Capital

ASSETS AND OTHER DEBITS Fund Operating Non - Aidable Projects Fund

AssetsCash and cash equivalents 2,761,043$ 536,376$ 19,302$ 4,920,103$ Investments 2,535,295 - 67,000 - Receivables:

Taxes 6,046,575 - - - Federal and state 173,397 271,120 672,952 - Accounts - - 28,269 -

Due from other funds 730,542 - - - Prepaid items 177,290 - - 37,679 Post-employment benefits - - - - Fixed assets - - - - Less: accumulated depreciation - - - -

Total assets and other debits 12,424,142$ 807,496$ 787,523$ 4,957,782$

LIABILITIES AND FUND BALANCE/NET POSITION

LiabilitiesAccounts payable 410,933$ 16,769$ 32,361$ 1,049,074$ Accrued liabilities 1,617,822 153,837 1,163 - Accrued interest - - - - Due to other funds - - 690,152 - Unearned revenue - student fees 26,799 - - - Due to student organizations - - - - General obligation debt payable - - - - Unamortized premium on general obligation debt - - - -

Total liabilities 2,055,554 170,606 723,676 1,049,074

Fund balance/net positionNet investment in capital assets - - - - Net position - - - - Fund balances:

Reserved for debt service - - - - Reserved for capital projects - - - 2,330,405 Reserved for student financial assistance - - 63,847 - Reserved for prepaid items 177,290 - - - Unreserved - Designated for operations 5,808,629 - - - Unreserved - Designated for State aid fluctuations 299,000 - - - Unreserved - Designated for subsequent years 448,000 - - - Unreserved - Designated for subsequent year 3,588,306 615,134 - -

Budgetary basis fund balance 10,321,225 615,134 63,847 2,330,405

Reserve for encumbrances 47,363 21,756 - 1,578,303

Total fund balance/net position 10,368,588 636,890 63,847 3,908,708

Total liabilities and fund balance/net position 12,424,142$ 807,496$ 787,523$ 4,957,782$


64

Debt Enterprise Internal Agency Reconciling Statement of

Service Fund Fund Service Fund Funds Total Items Net Position

806,535$ 453,799$ 279,090$ 570,982$ 10,347,230$ -$ 10,347,230$ 837 - - - 2,603,132 - 2,603,132

- - - - 6,046,575 - 6,046,575 - - - - 1,117,469 - 1,117,469 - 3,528 - 118,786 150,583 - 150,583 - - - - 730,542 (730,542) - - - - - 214,969 - 214,969 - - - - - 2,979,865 2,979,865 - - - - - 55,200,794 55,200,794 - - - - - 15,585,012 15,585,012

807,372$ 457,327$ 279,090$ 689,768$ 21,210,500$ 41,865,105$ 63,075,605$

-$ 866$ -$ -$ 1,510,003$ -$ 1,510,003$ - 818 - - 1,773,640 - 1,773,640 - - - - - 182,961 182,961 - 40,145 - 245 730,542 (730,542) - - - - - 26,799 26,799 - - - 689,523 689,523 - 689,523 - - - - - 30,885,000 30,885,000

345,582 - - - 345,582 - 345,582

345,582 41,829 - 689,768 5,076,089 30,337,419 35,413,508

- - - - - 15,754,490 15,754,490 - 415,498 279,090 - 694,588 10,870,343 11,564,931

461,790 - - - 461,790 (182,961) 278,829 - - - - 2,330,405 (2,330,405) - - - - - 63,847 - 63,847 - - - - 177,290 (177,290) - - - - - 5,808,629 (5,808,629) - - - - - 299,000 (299,000) - - - - - 448,000 (448,000) - - - - - 4,203,440 (4,203,440) -

461,790 415,498 279,090 - 14,486,989 13,175,108 27,662,097

- - - - 1,647,422 (1,647,422) -

461,790 415,498 279,090 - 16,134,411 11,527,686 27,662,097

807,372$ 457,327$ 279,090$ 689,768$ 21,210,500$ 41,865,105$ 63,075,605$


65


Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Statement of Revenues, Expenses, and Changes in Net PositionYear Ended June 30, 2014

General CapitalFund Operating Non - Aidable Projects Fund

RevenuesLocal government - tax levy 15,108,582$ 897,700$ -$ -$ Intergovernmental revenue:

State aids 2,967,380 709,477 898,214 - Federal aids 19,959 975,943 12,836,247 -

Tuition and fees:Statutory program fees 6,265,821 - - - Material fees 386,118 1,034 - - Other student fees 404,162 20,906 - -

Miscellaneous - institutional revenue 1,691,080 5,302 139,075 751,239

Total revenues 26,843,102 2,610,362 13,873,536 751,239

ExpendituresCurrent:

Instruction 16,655,138 1,858,602 - 1,504,099 Instructional resources 2,043,660 90,477 - 2,452,568 Student services 2,355,355 661,853 13,814,591 4,489 General institutional 4,610,924 - 103,577 1,065,731 Physical plant 2,231,313 - - 8,402,260 Student aid - - - - Auxiliary - - - - Depreciation - - - - Loss on disposition of fixed assets - - - -

Debt serviceInterest and fiscal charges - - - -


Excess (deficiency) of revenues over expenditures (1,053,288) (570) (44,632) (12,677,908)

Other financing sources (uses)Operating transfers in - - 10,000 - Operating transfers out (10,000) - - (125,000) Proceeds from long-term debt - - - 14,740,000 Refinancing of long-term debt - - - -

Total other financing sources (uses) (10,000) - 10,000 14,615,000

Excess (deficiency) of revenues and other financingsources over expenditures and other financing uses (1,063,288) (570) (34,632) 1,937,092

Fund balances/net position:Beginning of year 11,384,513 615,704 98,479 393,313

End of year 10,321,225$ 615,134$ 63,847$ 2,330,405$


66

Statement of Revenues, Expenses

Debt Enterprise Internal Reconciling and Changes inService Fund Fund Service Fund Total Items Net Position

4,743,100$ -$ -$ 20,749,382$ -$ 20,749,382$

- - - 4,575,071 - 4,575,071 - - - 13,832,149 (7,009,668) 6,822,481

- - - 6,265,821 (2,723,902) 3,541,919 - - - 387,152 (168,321) 218,831 - - - 425,068 (184,937) 240,131 387 148,520 194,500 2,930,103 (194,500) 2,735,603

4,743,487 148,520 194,500 49,164,746 (10,281,328) 38,883,418

- - - 20,017,839 (1,412,583) 18,605,256 - - - 4,586,705 (1,618,014) 2,968,691 - - - 16,836,288 (12,782,959) 4,053,329 - - - 5,780,232 (782,478) 4,997,754

4,861,051 - - 15,494,624 (13,169,281) 2,325,343 - - - - 2,688,798 2,688,798 - 144,080 183,546 327,626 (184,139) 143,487 - - - - 1,698,292 1,698,292 - - - - 156,241 156,241

- - - - 877,452 877,452

4,861,051 144,080 183,546 63,043,314 (24,528,671) 38,514,643

(117,564) 4,440 10,954 (13,878,568) 14,247,343 368,775

125,000 - - 135,000 (135,000) - - - - (135,000) 135,000 -

6,405,000 - - 21,145,000 (21,145,000) - (6,580,722) - - (6,580,722) 6,580,722 -

(50,722) - - 14,564,278 (14,564,278) -

(168,286) 4,440 10,954 685,710 (316,935) 368,775

630,076 411,058 268,136 13,801,279 13,492,043 27,293,322

461,790$ 415,498$ 279,090$ 14,486,989$ 13,175,108$ 27,662,097$


Other Reports

67

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters District Board Blackhawk Technical College District Janesville, Wisconsin We have audited, in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of Blackhawk Technical College District (the “College”), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements, and have issued our report thereon dated December 15, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the College’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we do not express an opinion on the effectiveness of the College’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit the attention of those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our test disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance, and the results of that testing, and not to provide an opinion on the effectiveness of the College’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Wipfli LLP

December 15, 2015 Eau Claire, Wisconsin

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Independent Auditor’s Report on Compliance For Each Major Federal and State Program and on Internal Control Over Compliance District Board Blackhawk Technical College District Janesville, Wisconsin Report on Compliance for Each Major Federal and State Program We have audited Blackhawk Technical College District’s (the “College”) compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and the State of Wisconsin Single Audit Guidelines, issued by the Wisconsin Department of Administration, that could have a direct and material effect on each of its major federal and state programs for the year ended June 30, 2015. The College’s major federal and state programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility for Compliance Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal and state programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the College’s major federal and state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and the State of Wisconsin Single Audit Guidelines, issued by the Wisconsin Department of Administration. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal or state program occurred. An audit includes examining, on a test basis, evidence about the College’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

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We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal and state program. However, our audit does not provide a legal determination of the College’s compliance. Opinion on Each Major Federal and State Program In our opinion, the Blackhawk Technical College District complied, in all material respects, with the requirements referred to above that could have a direct and material effect on its major federal and state programs for the year ended June 30, 2015. Report on Internal Control Over Compliance Management of the College is responsible for establishing and maintaining effective internal control over compliance (internal control) with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the College’s internal control with the types requirements that could have a direct and material effect on a major federal or state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal and state program and to test and report on internal control in accordance with OMB Circular A-133, Audits of State, Local Governments and Non-Profit Organizations, and the State of Wisconsin Single Audit Guidelines, but not for the purpose of expressing an opinion on the effectiveness of internal control. Accordingly, we do not express an opinion on the effectiveness of the College’s internal control. A deficiency in internal control exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency in internal control, or a combination of deficiencies, in internal control with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control, yet important enough to merit the attention of those charged with governance. Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control and the results of that testing based on the requirements of OMB Circular A-133 and the State of Wisconsin Single Audit Guidelines. Accordingly, this report is not suitable for any other purpose.

Wipfli LLP December 15, 2015 Eau Claire, Wisconsin

Blackhawk Technical College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2015

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CFDA/Grant Grant

Agency/Program/Grant Title Number Amount Federal Match Expenditures

U.S. DEPARTMENT OF LABORDirect Programs

Trade Adjustment Assistance Community College and Career Training Grants 17.282

Making the Future: The Wisconsin Strategy 083 584,831$ 253,550$ -$ 253,550$ INTERFACE 087 829,850 282,925 - 282,925

Passed through Chippewa Valley Technical CollegeACT for Healthcare 098 778,851 29,756 - 29,756

Total 17.282 566,231 - 566,231

U.S. DEPARTMENT OF TRANSPORTATIONPassed through the Wisconsin Technical College System Board

Interagency Hazardous Materials Public Sector Training and Planning Grants 20.703 n/a 1,503 - 1,503

U.S. DEPARTMENT OF VETERANS AFFAIRS

VA Educational Reporting Fee 64.027 n/a 1,201 - 1,201

U.S. DEPARTMENT OF EDUCATION

Direct ProgramsStudent Financial Assistance Cluster

Federal Supplemental Educational Opportunity Grants 84.007 SEOG 2014-15 E-P007A114485 n/a 72,192 - 72,192

Federal Work Study Program 84.033FWS 2014-15 E-P033A124485 n/a 81,569 - 81,569

Federal Pell Grant Program 84.063Pell 2014-15 E-P063P122672 n/a 5,454,048 - 5,454,048

Administrative Fee 15,349 - 15,349

Revenue

Blackhawk Technical College District Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2015

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CFDA/Grant Grant

Agency/Program/Grant Title Number Amount Federal Match Expenditures

Revenue

U.S. DEPARTMENT OF EDUCATION (continued)Direct Programs (continued)

Federal Direct Student Loan Program 84.268Direct Loan Program E-P268K132672 n/a 5,676,680$ -$ 5,676,680$ Parent's PLUS Loan E-P268K122672 n/a 5,986 - 5,986

Total Student Financial Assistance Cluster 11,305,824 - 11,305,824

Passed through the Wisconsin Technical College System Board

Adult Education-Basic Grant to States 84.002Integrated English & Civics Education 05-445-146-165 31,353$ 31,353 - 31,353 Adult Basic Education 05-646-146-125 190,658 190,658 269,800 460,458 ABE Rock County Prisoners Project 05-825-146-115 48,561 48,561 16,974 65,535

Total 84.002 270,572 286,774 557,346

Career and Technical Education - Basic Grants to States 84.048Career Prep 05-073-150-215 35,476 35,468 - 35,476 Program Improvement Research 05-423-150-255 72,051 59,770 - 59,770 Student Support Services - Non Traditional 05-424-150-265 18,013 15,245 - 15,245 Student Support Services/Guidance & Counseling 05-471-150-235 270,192 252,734 240,769 493,503

Total 84.048 363,217 240,769 603,994

Total U.S Department of Education 11,939,613 527,543 12,467,164

TOTAL EXPENDITURES OF FEDERAL AWARDS 12,508,548$ 527,543$ 13,036,100$

Blackhawk Technical College District Schedule of Expenditures of State Awards Year Ended June 30, 2015

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State Catalog/ Grant

State Agency/Program/Title Grant Number Amount State Match Expenditures

Wisconsin Department of Revenue Exempt Computer Aid 835.109 n/a 47,029$ -$ 47,029$

Wisconsin Higher Education Aids Board

Wisconsin Higher Education Grants 235.102 n/a 803,398 - 803,398 Remission of Fees for Veterans and Dependents 235.105 n/a 88,462 - 88,462 Minority Retention Grant 235.107 n/a 8,220 - 8,220 Wisconsin Covenant Scholars Grant 235.108 n/a 19,377 - 19,377 Talent Incentive Program 235.114 n/a 24,737 - 24,737 HEAB Nursing Student Loan Fund 235.117 n/a 6,000 - 6,000 Wisconsin Covenant Foundation Grant 235.131 n/a 12,750 - 12,750

Total Wisconsin Higher Education Aids Board 962,944 - 962,944

Wisconsin Department of Public Instruction

Precollege Scholarship Program 255.903

05-084 62,500$ 24,289 - 24,289

Wisconsin Technical College System Board General State Aid 292.105 n/a 2,583,300 - 2,583,300 Performance Based Aid 292.105 n/a 376,946 - 376,946 General State Aid Prior Year Adjustment 292.105 n/a (73,400) - (73,400)

Total 292.105 2,886,846 - 2,886,846

Workforce Training Grant Program 292.116

Regal Beloit 05-043-116-114 26,659 4,083 - 4,083 SSI Technologies 05-085-116-114 165,265 17,642 - 17,642 Hufcor Electro-Mechanical Skills 05-086-116-114 51,873 4,135 - 4,135

Total 292.116 25,860 - 25,860

Revenue

Blackhawk Technical College District Schedule of Expenditures of State Awards (Continued) Year Ended June 30, 2015

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Revenue

Wisconsin Technical College System Board (Continued) Grants to District Boards 292.124 Student Support 05-088-124-165 193,500$ 141,214$ 47,071$ 188,285$ Teaching Learning Center 05-089-124-155 50,829 50,829 - 50,829 Career Pathways 05-090-124-125 118,945 94,440 31,479 125,918 Personal Care Worker 05-091-124-125 3,478 3,039 1,013 4,052 SSI Technologies 05-093-124-175 21,608 81,726 - 81,726 Hufcor 05-095-124-175 21,608 17,035 - 17,035 Advanced Manufacturing 03-118-124-185 18,900 2,190 - 2,190

Total 292.124 390,472 79,563 470,035

Fire Fighter Training 2% 292.137 n/a 15,777 - 15,777

Property Tax Relief Aid 292.162 n/a 9,797,362 - 9,797,362

Total Wisconsin Technical College System Board 14,150,579 79,563 14,230,142

Wisconsin Department of Transportation Motorcycle Safety 20.395 (4) (aq) Motorcycle Safety Program 0094-14-04 4,681 1,875 4,552 6,427 Motorcycle Safety Program 0094-15-04 14,476 2,694 8,820 11,514

Total 20.395 (4) (aq) 4,569 13,372 17,941

Wisconsin Department of Natural Resources

State Aid in Lieu of Property Taxes 370.503 n/a 147 - 147

Blackhawk Technical College District Schedule of Expenditures of State Awards (Continued) Year Ended June 30, 2015

76



Revenue

Wisconsin Department of Corrections Passed through the Rock County Sheriff's Department 410.111 Rock County Basic Skills 14/15 932 78,676$ 61,247$ -$ 61,247$ Rock County Basic Skills 15/16 932 - 3,060 - 3,060

Total 410.111 64,307 - 64,307

Wisconsin Department of Workforce Development

Youth Apprenticeship 445.107

Youth Apprenticeship Program - FY14 Carryover 066 68,400 5,551 - 5,551 Youth Apprenticeship Program - FY15 066 59,400 58,321 27,638 85,959

Total 63,872 27,638 91,510

Blueprint For Prosperity 455.109

Correction Training Officer Certification 092 419,524 78,142 - 78,142

TOTAL EXPENDITURES OF STATE AWARDS 14,361,616$ 120,573$ 14,482,189$

See accompanying notes to the Schedules of Expenditures of Federal and State Awards.

Blackhawk Technical College District Notes to the Schedules of Expenditures of Federal and State Awards Year Ended June 30, 2015

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Note 1

Summary of Significant Accounting Policies The Blackhawk Technical College District Board oversees the operation of Blackhawk Technical College District (the “College”) under the provisions of Chapter 38 of the Wisconsin Statutes. The College includes the majority of Rock County and Green County. All significant operations of the College are included in the scope of the Office of Management and Budget Circular No. A-133 (Single Audit), Audits of States, Local Governments, and Non-Profit Organizations and State of Wisconsin Single Audit Guidelines. Although the Department of Health Services has been designated as the College’s cognizant agency for the Single Audit, certain responsibilities related to the single audit have been delegated by this department to the Wisconsin Technical College System.

1. Programs Subject to Single Audit All significant federal and state awards received by the College (either directly from the federal government or the State of Wisconsin or passed through the State of Wisconsin) have been included in the Schedule of Expenditures of Federal and State Awards.

2. Basis of Presentation

The accompanying Schedules of Expenditures of Federal and State Awards are prepared on the accrual basis of accounting.

Note 2 Federal Direct Student Loans (FDL) The FDL (Federal CFDA Number 84.268) is comprised of the following loan types:

Subsidized Stafford loans 3,532,982$ Unsubsidized Stafford loans 2,143,698 Parent's PLUS loan 5,986

Total FDL 5,682,666$

Blackhawk Technical College District Notes to the Schedules of Expenditures of Federal and State Awards (Continued) Year Ended June 30, 2015

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Note 3 Pass Through Funds to Subrecipients During the fiscal year ended June 30, 2015, there were no funds passed through to a subrecipient.

Note 4 Reconciliation of Revenues to the Basic Financial Statements The following is a reconciliation of federal awards per the Schedule of Expenditures of Federal Awards, to the federal revenues per the College’s basic financial statements. Revenues per Schedule of Expenditures of Federal Awards 12,508,548$

Financial aid not recognized as revenue (5,682,666)

Revenues per basic financial statements 6,825,882$

The following is a reconciliation of state awards per the Schedule of Expenditures of State Awards to the state revenues per the College’s basic financial statements. Revenues per Schedule of Expenditures of State Awards 14,361,616$

State revenues per basic financial statements: Non-operating revenue 12,835,623$ Operating revenue 1,525,993

Total 14,361,616$

Blackhawk Technical College District Schedule of Findings and Questioned Costs Year Ended June 30, 2015

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Financial Statements

Type of auditor’s report issued: Unmodified

Internal control over financial reporting in accordance with GAGAS:

Material weakness(es) identified? No

Significant deficiency(ies) identified not considered to be material weakness(es)? None reported

Noncompliance material to the financial statements? No

Federal Awards

Internal control over major programs:Material weakness(es) identified? No

Significant deficiency(ies) identified not considered to be material weakness(es)? No

Type of auditor’s report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with Circular A-133 Section .510(a)? No

Identification of major federal programs:

CFDA Number Name of Federal Program or Cluster

17.282 Trade Adjustment Assistance Community College and Career Training Grants

Student Financial Assistance Cluster:84.007 Federal Supplemental Educational

Opportunity Grants

84.033 Federal Work-Study Program

84.063 Federal Pell Grant Program

84.268 Federal Direct Student Loan Program

Dollar threshold used to distinguish between Type A and Type B Programs $300,000

Auditee qualified as a low-risk auditee? Yes

Section I - Summary of Auditor's Results

Blackhawk Technical College District Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2015

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State Financial Assistance

Internal control over major programs:Material weakness(es) identified? No

Significant deficiency(ies) identified not considered to be material weakness(es)? None reported

Type of auditor’s report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with the State of Wisconsin Single Audit Guidelines ? No

Identification of major state programs:

CFDA Number Name of State Program or Cluster

292.105 State Aid for Technical Colleges292.124 Grants to District Boards

None reported.

Section I - Summary of Auditor's Results (Continued)

Section II - Financial Statement Findings

There were no findings required to be reported in accordance with Generally Accepted Government Auditing Standards.

Section III - Federal and State Financial Assistance Findings and Questioned Costs

Blackhawk Technical College District Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2015

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Section IV – Prior Year Findings and Questioned Costs None reported. Section V – Other Issues Does the auditor's report or the notes to the financial statements include disclosure with regard to substantial doubt as to the auditee's ability to continue as a going concern? No

Does the audit report show audit issues (i.e., material noncompliance, nonmaterial noncompliance, questioned costs, material weakness, reportable condition, management letter comment, excess revenue or excess reserve) related to grants/contracts with funding agencies that require audits to be in accordance with State of Wisconsin Single Audit Guidelines:

Wisconsin Department of Revenue NoWisconsin Higher Education Aids Board NoWisconsin Technical College System Board NoWisconsin Department of Transportation NoWisconsin Department of Corrections NoWisconsin Department of Natural Resources NoWisconsin Department of Workforce Development NoWisconsin Department of Public Instruction No

Was a Management Letter or other document conveying audit comments issued as a result of this audit? Yes Name and Signature of Partner Dan Walker, CPA Date of Report December 15, 2015

Statistical Section

Blackhawk Technical College District Financial Trends – Net Position by Component Last Ten Fiscal Years

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2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Net investment incapital assets 15,513,135$ 15,754,490$ 14,630,406$ 13,773,483$ 12,995,897$ 11,772,244$ 9,784,782$ 8,190,171$ 7,139,203$ 6,906,562$

Restricted for:Debt service 553,401 278,829 477,794 546,942 458,951 726,981 668,855 627,815 582,524 367,882 Pensions 2,921,424 - - - - - - - - - Student financial

assistance 52,887 63,847 98,479 112,813 139,077 154,585 170,211 176,564 184,025 182,468

Unrestricted 13,605,148 11,564,931 12,086,643 13,079,279 13,308,342 13,312,383 11,628,040 9,631,800 8,467,309 7,864,841

Total Net Position 32,645,995$ 27,662,097$ 27,293,322$ 27,512,517$ 26,902,267$ 25,966,193$ 22,251,888$ 18,626,350$ 16,373,061$ 15,321,753$

Blackhawk Technical College District Financial Trends – Changes in Net Position Last Ten Fiscal Years

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2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Operating RevenuesTuition and fees, net of scholarship allowances 3,801,758$ 4,000,881$ 4,411,123$ 5,221,994$ 6,456,293$ 6,845,709$ 6,122,175$ 4,504,073$ 4,178,188$ 3,923,645$ State aids 1,525,993 1,607,691 1,654,800 1,750,700 1,419,869 1,439,854 1,339,492 1,285,291 1,268,348 1,655,481 Federal grants 6,825,882 6,822,481 7,764,081 8,135,545 8,469,065 7,126,315 4,263,090 3,589,961 3,320,055 3,222,849 Contract revenue 675,424 703,095 664,953 594,867 697,487 779,501 618,280 477,516 553,940 551,294 Auxiliary revenues 107,828 148,520 155,266 282,914 247,241 357,488 272,117 273,400 260,466 293,788 Miscellaneous - institutional revenue 650,942 1,868,606 606,285 662,183 641,816 411,035 485,953 258,339 252,293 293,423

Total program revenues 13,587,827 15,151,274 15,256,508 16,648,203 17,931,771 16,959,902 13,101,107 10,388,580 9,833,290 9,940,480

Operating ExpensesInstruction 20,128,563 18,605,256 19,270,434 19,169,314 20,279,840 19,323,435 17,535,638 16,282,231 16,137,721 15,660,520 Instructional Resources 2,165,723 2,968,691 2,699,442 2,704,827 2,600,517 2,630,316 2,460,755 1,846,397 2,419,781 1,784,289 Student Services 3,810,176 4,053,329 4,048,582 4,032,577 4,184,598 3,679,753 3,165,148 3,011,421 2,943,996 2,891,992 General Institutional 5,626,818 4,997,754 5,295,520 5,412,688 5,546,868 4,939,664 4,658,205 3,975,055 4,001,021 3,943,479 Physical Plant 1,508,179 2,325,343 2,021,663 2,170,602 2,333,691 2,207,373 2,070,089 1,932,358 2,023,007 2,153,707 Student Aid 2,297,505 2,688,798 3,228,572 3,807,513 4,531,422 3,872,504 2,410,983 1,805,477 1,470,579 1,607,867 Auxiliary Services 103,271 143,487 161,289 247,789 324,500 338,978 297,536 280,639 292,333 313,428 Depreciation 2,378,490 1,698,292 1,391,807 1,229,306 1,215,457 1,207,977 1,212,153 1,207,014 1,186,933 965,384

Total operating expenses 38,018,725 37,480,950 38,117,309 38,774,616 41,016,893 38,200,000 33,810,507 30,340,592 30,475,371 29,320,666

Operating loss (24,430,898) (22,329,676) (22,860,801) (22,126,413) (23,085,122) (21,240,098) (20,709,400) (19,952,012) (20,642,081) (19,380,186)

Non-operating Revenues (Expenses)Property taxes 12,441,582 20,749,382 20,520,514 20,105,061 20,060,889 20,851,419 20,739,773 19,724,414 18,431,063 17,624,908 State operating appropriations 12,835,623 2,967,380 2,839,940 3,463,383 4,739,837 4,923,842 4,336,620 3,740,079 3,802,490 3,487,399 Investment income 19,563 15,382 26,150 48,891 81,072 118,643 170,780 385,929 514,974 462,034 Loss on disposal of property and equipment (111,876) (156,241) (45,851) (104,598) (20,050) (106,941) (7,388) (692,021) (67,153) (288,403) Interest expense (1,115,944) (877,452) (699,147) (776,074) (840,552) (832,260) (905,147) (653,100) (987,985) (1,018,959)

Total non-operating revenues (expenses) 24,068,948 22,698,451 22,641,606 22,736,663 24,021,196 24,954,703 24,334,638 22,505,301 21,693,389 20,266,979

Change in Net Position (361,950)$ 368,775$ (219,195)$ 610,250$ 936,074$ 3,714,605$ 3,625,238$ 2,553,289$ 1,051,308$ 886,793$

Blackhawk Technical College District Revenue Capacity – Equalized Value of Taxable Property (in Thousands) Last Ten Fiscal Years

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Calendar Personal Increment Total District

Year Residential Commercial Manufacturing Other Property Districts(a) Value(b) Value(c) Tax Rate(d)

2005 $7,827,823 $1,800,418 $361,768 $766,644 $296,266 ($250,658) $10,802,261 $10,214,313 1.72164

2006 8,512,209 1,978,318 371,268 815,718 318,624 (312,223) 11,683,914 11,003,526 1.67007

2007 9,033,670 2,161,346 413,272 825,781 343,797 (444,155) 12,333,711 11,597,147 1.69413

2008 9,430,283 2,280,676 457,174 856,987 376,494 (531,580) 12,870,034 12,097,838 1.70489

2009 9,355,578 2,332,842 428,157 854,556 377,729 (589,753) 12,759,109 11,998,811 1.72928

2010 8,856,866 2,260,519 426,033 859,021 364,471 (520,476) 12,246,434 11,501,174 1.72928

2011 8,582,442 2,252,419 425,730 868,838 357,674 (540,399) 11,946,704 11,229,424 1.78438

2012 8,305,730 2,244,981 452,825 879,130 367,461 (494,570) 11,755,557 11,048,411 1.84839

2013 8,170,396 2,114,126 457,484 860,779 356,915 (483,863) 11,475,837 10,779,159 1.92482

2014 8,475,434 2,214,135 469,081 871,764 375,301 (511,649) 11,894,066 11,192,318 1.11126

Source: Wisconsin Department of Revenue, Bureau of Property Tax

Notes:(a) The TID's (Tax Incremental District) amount does not include the value of exempt computers.(b) Equalized value information for Rock and Green Counties.(c) Small portions of Rock and Green Counties are not in BTC's district.(d) Tax rates are per $1,000 of BTC's equalized value.

Blackhawk Technical College District Revenue Capacity – Direct and Overlapping Property Tax Rates Last Ten Fiscal Years

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Other StateFiscal Debt School Gross Tax Net

Year Operational(b) Service Total County Local(c) Districts State Total Relief Tax Rate

2006 1.33 0.39 1.72 5.71 5.38 9.06 0.77 22.64 (1.21) 21.43 2007 1.28 0.39 1.67 5.37 5.16 8.65 0.83 21.68 (1.39) 20.29 2008 1.30 0.39 1.69 5.31 5.18 8.92 1.05 22.15 (1.47) 20.68 2009 1.31 0.39 1.70 5.29 5.16 8.69 1.16 22.00 (1.56) 20.44 2010 1.34 0.39 1.73 5.62 5.35 9.21 1.29 23.20 (1.55) 21.65 2011 1.38 0.35 1.73 5.99 5.76 10.03 1.29 24.80 (1.60) 23.20 2012 1.41 0.37 1.78 6.27 6.02 10.19 1.41 25.67 (1.63) 24.04 2013 1.44 0.41 1.85 6.47 6.19 10.39 1.38 26.28 (1.65) 24.63 2014 1.48 0.44 1.92 6.75 6.55 10.69 1.43 27.34 (1.70) 25.64 2015 0.57 0.55 1.11 6.57 6.57 10.45 1.39 26.09 (1.64) 24.45

Source: Wisconsin Department of Revenue, Division of State and Local Finance, Bureau of Local Government Services

Notes:(a)

(b) The operational property tax levies for all funds except the Debt Service Fund. This rate may not exceed $1.50 per s.38.16 of Wisconsin State Statutes.2013 WI Statute 145 provided a 'dollar for dollar' reduction in the operational property tax levy and increase in state aid funding, effective in FY 2014-15.

(c) Cities, towns, villages and other special taxing districts (e.g. water districts, utility districts).

Overlapping rates are those of local and county governments that apply to property owners within the District. Not all overlapping rates apply to all property owners within the District. For example, the county rate is made up of the rates for most of Rock and Green Counties. The individual county rates apply only to the property owners within each of those counties. These overlapping tax rates are an average of the rates for each municipality making up the detail in this column since each government can have a different rate.

BTC Direct Rate Overlapping Rates(a)

Blackhawk Technical College District Revenue Capacity – Property Tax Levies and Collections Last Ten Fiscal Years

86

FiscalYear

TotalTax Levy Amount

Percentageof Levy Amount

Percentageof Levy

2006 $17,585,437 $12,473,565 70.93% $17,585,437 100.00%2007 18,376,682 12,821,809 69.77% 18,376,682 100.00%2008 19,662,050 13,688,087 69.62% 19,662,050 100.00%2009 20,625,490 14,098,573 68.36% 20,625,490 100.00%2010 20,749,303 14,114,630 68.02% 20,749,303 100.00%2011 19,888,750 13,690,044 68.83% 19,888,750 100.00%2012 20,037,522 13,963,864 69.69% 20,037,522 100.00%2013 20,421,757 14,258,686 69.82% 20,421,757 100.00%2014 20,747,840 14,701,265 70.86% 14,701,265 70.86%2015 12,437,599 8,905,566 71.60% 8,905,566 71.60%

Notes:(a)

(b)

Total Collections to Date(b)

Under Wisconsin law, personal property taxes and certain installment real estate taxes are collected by city, village, and town treasurers or clerks, who then settle with other taxing units, such as counties, technical colleges and local school districts. Settlements are due from the municipality by the 15th of the month following the due date based on the municipality's payment plan. Certain installment real estate taxes and delinquent taxes are collected by the county treasurers, who then settle with the city, village, and town treasurers and other taxing units before retaining any for county purposes. In practice, any delinquent real estate taxes are withheld from the county's share. Therefore, the District receives 100% of its levy upon receipt of settlement from the county treasurers, although the taxes collected as a percentage of total tax levy will vary in any given fiscal year due to timing of payments received from municipalities.

Full levy is typically collected in mid-August. For 2014, $12,437,599 or 100% was collected by the end of August 2015.

Collected within the Fiscal

Year of the Levy

Blackhawk Technical College District Revenue Capacity – Principal Property Taxpayers Current Year and Ten Years Ago

87

Percentage Percentageof Total of Total

Equalized Equalized Equalized EqualizedTaxpayer Name Valuation Rank Valuation Valuation Rank Valuation

ABC Supply 69,113,749$ 1 0.62% 27,700,718$ 3 0.29%Mercy Health System 61,963,916 2 0.55% 0.00%Kerry Ingredients 40,388,112 3 0.36% 0.00%Dean/St. Mary's/Riverview Clinic 35,837,828 4 0.32% 22,010,145 6 0.23%Blain Supply Farm & Fleet 32,905,136 5 0.29% 27,588,602 4 0.29%Staples Contract & Commercial LLC 32,538,608 6 0.29%Janesville Mall 31,467,835 7 0.28% 35,008,794 2 0.37%GHC Specialty Brands LLC 27,524,928 8 0.25% 24,945,117 5 0.26%Wal-Mart 21,821,709 9 0.19%Frito-Lay 21,398,933 10 0.19% 15,984,662 10 0.17%General Motors 40,775,140 1 0.43%LeMans 18,603,057 7 0.20%Inland Real Estate 18,394,447 8 0.19%Individual 18,250,389 9 0.19%

Total 374,960,754$ 3.35% 249,261,071$ 2.63%

Total Equalized Valuation for the District 11,192,317,904$ 9,471,022,002$

Source: Employer contacts, Rock and Green Counties and municipality official statements. Provided by R.W. Baird & Co., Inc.

2014 2004

Blackhawk Technical College District Revenue Capacity – Enrollment Statistics – Historical Comparisons Current Year and Ten Years Ago

88

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Students Served (1)

Associate Degree 3,002 3,165 4,548 3,987 4,060 3,787 3,114 2,644 2,406 2,412 Technical Diploma 748 879 1,117 1,028 1,492 1,498 1,211 990 875 1,031 Apprentices 63 49 66 72 83 94 140 149 139 141 Vocational Adult 3,041 4,208 3,860 5,751 6,279 6,382 6,479 6,810 8,778 9,205

Community Service(4) 220 243 294 361 201 237 89 65 195 326 Basic Skills 1,025 1,592 1,609 1,556 1,880 2,107 2,288 1,880 2,091 2,212 Total 8,099 10,136 11,494 12,755 13,995 14,105 13,321 12,538 14,484 15,327

Full-time Equivalent Enrollment (2)

Associate Degree 1,355 1,415 1,645 1,909 1,953 1,972 1,537 1,244 1,141 1,168 Technical Diploma 282 317 395 373 537 609 456 336 333 329 Apprentices 10 8 5 11 11 13 20 22 23 21 Vocational Adult 41 58 60 81 89 85 96 99 127 129 Community Service 6 8 10 3 2 3 2 1 2 3 Basic Skills 134 155 171 188 238 234 248 203 214 221 Total 1,828 1,961 2,286 2,565 2,830 2,916 2,359 1,905 1,840 1,871

Total Expenditures(5) $29,987,881 $30,507,322 $30,446,100 $30,120,133 $31,731,560 $30,722,911 $27,477,805 $25,629,377 $25,054,081 $24,491,088

Cost per full-time equivalent student $16,405 $15,557 $13,319 $11,743 $11,213 $10,536 $11,648 $13,454 $13,616 $13,090

Graduate Follow-up statistics (3)

Number of Graduates N/A 728 887 923 1,082 1,053 839 769 743 795Number of Respondents N/A 522 614 494 679 690 504 518 602 653Percent in workforce employed N/A 93% 94% 89% 87% 87% 82% 90% 91% 93%Percent employed in related occupations N/A 84% 79% 78% 73% 77% 79% 88% 83% 83%Median monthly salary N/A $2,773 $2,655 $2,408 $2,600 $2,295 $2,935 $2,463 $2,340 $2,533Percent employed in district N/A 61% 61% 62% 49% 62% 63% 60% 62% 67%Percent employed elsewhere in Wisconsin N/A 25% 30% 25% 29% 22% 29% 29% 31% 29%

Average Age of students 32.9 34.0 35.0 34.4 33.8 34.6 34.0 34.4 36.1 36.3 Age range of students 15-95 12-94 13-93 6-92 11-91 11-95 9-93 9 - 92 9 - 97 9 - 90

Source: Institution Advancement Department and basic financial statements.

(1) Students served represents the unduplicated count of citizens enrolled in BTC courses.(2) A full-time equivalent is basically equal to 30 annual student credits based on a mathematical calculation, which varies somewhat by program and which is subject to state approval and audit of student data.(3) Survey is conducted approximately six months after graduation, therefore, 2014 statistics are not available.(4) Community Service classes are non-credit hobby-type classes(5) For purposes of this calculation, expenditures are based upon the budgetary expenditures from the districts' General and Special Revenue-Aidable funds as reported to the Wisconsin Technical College System.

Blackhawk Technical College District Debt Capacity – Ratio of New Debt to Equalized Valuation and Debt Per Capita Current Year and Ten Years Ago

89

Percent ofNet Debt

Less to DebtFiscal Equalized Outstanding Amounts Net Debt Equalized per

Year Population(a) Valuation(b) Debt(c) Available(d) Outstanding Valuation Capita

2006 185,691 10,214,313,441$ 23,200,000$ 597,383$ 22,602,617$ 0.22% 122$ 2007 187,606 11,003,525,696 21,930,000 801,659 21,128,341 0.19% 112.62 2008 188,779 11,597,147,342 20,610,000 835,358 19,774,642 0.17% 104.75 2009 189,912 12,097,837,981 19,285,000 863,019 18,421,981 0.15% 97.00 2010 190,159 11,998,810,726 17,915,000 902,181 17,012,819 0.14% 89.47 2011 190,365 11,501,174,128 20,805,000 638,986 20,166,014 0.18% 105.93 2012 190,404 11,229,423,995 20,165,000 712,536 19,452,464 0.17% 102.16 2013 189,865 11,048,410,839 20,335,000 630,076 19,704,924 0.18% 103.78 2014 186,801 10,779,158,932 30,885,000 431,106 30,453,894 0.28% 163.03 2015 186,747 11,192,317,904 45,435,000 819,388 44,615,612 0.40% 238.91

Notes:(a) Source - Wisconsin Technical College System(b)

(c) Details regarding the District's outstanding debt can be found in the notes to the financial statements.(d) Equals the amount of funds available in the Debt Service Fund restricted for the payment of debt obligations.

TID (Tax Incremental District) Out, excluding value of exempt computer equipment. Equalized valuations are shown on a calendar year basis for the prior year (i.e. 2007 fiscal year would be 2006 calendar year information).

Blackhawk Technical College District Debt Capacity – Direct and Overlapping Debt As of June 30, 2015

90

Percentage Amount

Applicable Applicable

Debt to the to the

Outstanding District District

Overlapping debt

County of

Green 11,005,500$ 79.5% 8,749,373$

Rock 42,395,000 99.8% 42,310,210

Total All Counties 53,400,500 95.6% 51,059,583

City of

Beloit 96,188,421 100.0% 96,188,421

Brodhead 3,276,506 100.0% 3,276,506

Edgerton 4,680,925 92.6% 4,334,537

Evansville 16,779,028 100.0% 16,779,028

Janesville 82,200,000 100.0% 82,200,000

Milton 13,670,000 100.0% 13,670,000

Monroe 9,862,319 100.0% 9,862,319

Total All Cities 226,657,199 99.8% 226,310,811

Village of

Albany 1,398,590 100.0% 1,398,590

Browntown - 100.0% -

Clinton 1,530,060 100.0% 1,530,060

Footville 3,580,583 100.0% 3,580,583

Monticello 1,509,045 100.0% 1,509,045

Orfordville 1,129,715 100.0% 1,129,715

Total All Villages 9,147,993 100.0% 9,147,993

Governmental Unit

Blackhawk Technical College District Debt Capacity – Direct and Overlapping Debt (Continued) As of June 30, 2015

91

Percentage Amount


Debt to the to the

Outstanding District DistrictGovernmental Unit

Town of

Adams 28,000$ 96.2% 26,936$

Albany - 100.0% -

Avon - 100.0% -

Beloit 7,137,595 100.0% 7,137,595

Bradford - 100.0% -

Brooklyn 117,126 43.4% 50,833

Cadiz 80,000 57.1% 45,680

Center - 100.0% -

Clarno - 100.0% -

Clinton - 100.0% -

Decatur - 100.0% -

Exeter 179,803 6.9% 12,406

Fulton 501,401 100.0% 501,401

Harmony 35,167 100.0% 35,167

Janesville - 100.0% -

Jefferson - 100.0% -

Johnstown - 100.0% -

Jordan 230,267 91.1% 209,773

La Prairie - 100.0% -

Lima - 100.0% -

Magnolia - 100.0% -

Milton 233,289 100.0% 233,289

Monroe - 100.0% -

Mount Pleasant 89,323 100.0% 89,323

New Glarus 707,869 0.5% 3,539

Newark - 100.0% -

Plymouth - 100.0% -

Porter - 86.0% -

Rock - 100.0% -

Spring Grove - 100.0% -

Spring Valley - 100.0% -

Sylvester - 100.0% -

Turtle 258,033 100.0% 258,033

Union - 96.1% -

Washington 99,249 96.8% 96,073

York 23,555 0.9% 212

Total All Towns 9,720,677 89.5% 8,700,260


92

Percentage Amount


Debt to the to the


School District of

Albany -$ 100.0% -$

Argyle 415,379 32.7% 135,829

Beloit 69,667,469 100.0% 69,667,469

Beloit Turner 6,550,000 100.0% 6,550,000

Brodhead 525,000 100.0% 525,000

Clinton 8,160,000 99.6% 8,127,360

Delavan-Darien 1,955,000 0.3% 5,865

Edgerton 10,415,956 72.9% 7,593,232

Evansville 15,925,000 99.9% 15,909,075

Fort Atkinson 10,785,000 0.2% 21,570

Janesville 71,775,000 100.0% 71,775,000

Juda 1,419,507 100.0% 1,419,507

Milton 2,728,948 98.7% 2,693,472

Monroe 6,885,000 100.0% 6,885,000

Monticello 1,921,295 100.0% 1,921,295

Parkview (Orfordville) 18,407,616 100.0% 18,407,616

Whitewater 7,585,000 6.1% 462,685

Total All School Districts 235,121,170 90.2% 212,099,975

Special Districts

Consolidated Koshkonong Sanitary District 3,081,081 72.4% 2,230,703

Fulton Sanitary District #2 19,259 100.0% 19,259

Juda Sanitary District #1 - 100.0% -

New Glarus Sanitary District #1 - 100.0% -

Plymouth Sanitary District #1 - 100.0% -

Lake Leota District - 90.2% -

Rock-Koshkonong Lake District - 53.9% -

Total All Special Districts 3,100,340 72.6% 2,249,962

Subtotal Overlapping Debt 537,147,879 94.9% 509,568,584


93

Percentage Amount


Debt to the to the


General Obligation Bond -$ 100.0% -$

General Obligation Notes 45,435,000 100.0% 45,435,000

Subtotal Direct Debt 45,435,000 100.0% 45,435,000

Total Direct and Overlapping Debt 582,582,879$ 95.3% 555,003,584$

2014 Equalized Valuation - TID In 11,683,539,794$

Total Direct and Overlapping Debt 555,003,584$

Direct and Overlapping Debt as a Percentage

of Equalized Valuation 4.8%

Population of District 186,747

Direct and Overlapping Indebtedness - Per Capita 2,972$

Source: Survey of each government unit with the District's boundaries, June 30, 2015

Notes:

Overlapping debt are those that coincide, at least in part, with the geographic boundaries of the District.

This schedule estimates the portion of the outstanding debt of those overlapping governments that is

borne by the residents and businesses of the District. This process recognized, when considering the

District's ability to issue and repay long-term debt, the entire debt burden borne by the residents and

businesses should be taken into account. However, this does not imply every taxpayer is a resident and

therefore responsible for repaying the debt of each overlapping government.

The percentage of overlapping debt applicable to the District is the equalized property value of the

overlapping government located within the District's boundaries as a percentage of total equalized value

of all property for the overlapping government.

Statistical Summary

District Direct Debt

Blackhawk Technical College District Debt Capacity – Legal Debt Margin Information Last Ten Fiscal Years

94

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Equalized valuation - TID In 11,683,539,794$ 11,245,141,222$ 11,525,644,826$ 11,752,283,785$ 12,004,455,318$ 12,571,369,516$ 12,629,418,371$ 12,041,302,232$ 11,315,749,086$ 10,464,971,831$

Debt limit - 5% of equalized valuation(a) 584,176,990 562,257,061 576,282,241 587,614,189 600,222,766 628,568,476 631,470,919 602,065,112 565,787,454 523,248,592

Aggregate Indebtedness

General obligation promissory notes 45,435,000 30,885,000 13,790,000 12,480,000 11,705,000 7,460,000 7,535,000 7,620,000 7,785,000 7,950,000 General obligation bonds - - 6,545,000 7,685,000 9,100,000 10,455,000 11,750,000 12,990,000 14,145,000 15,250,000 Less resources available to fund principal and

interest payments(b) (819,388) (461,790) (630,076) (712,706) (665,421) (919,509) (863,019) (835,358) (801,659) (597,383)

Total net debt applicable to limit 44,615,612 30,423,210 19,704,924 19,452,294 20,139,579 16,995,491 18,421,981 19,774,642 21,128,341 22,602,617

Legal debt margin 539,561,378 531,833,851 556,577,317 568,161,895 580,083,187 611,572,985 613,048,938 582,290,470 544,659,113 500,645,975 Total net debt applicable to the limit as a

percentage of debt limit 7.64% 5.41% 3.42% 3.31% 3.36% 2.70% 2.92% 3.28% 3.73% 4.32%

Debt limit - 2% of equalized valuation(a) 233,670,796 224,902,824 230,512,897 235,045,676 240,089,106 251,427,390 252,588,367 240,826,045 226,314,982 209,299,437

Bonded Indebtedness

General obligation bonds - - 6,545,000 7,685,000 9,100,000 10,455,000 11,750,000 12,990,000 14,145,000 15,250,000 Less resources available to fund principal and

interest payments(b) - - (202,796) (271,616) (291,052) (536,615) (525,822) (526,507) (517,076) (392,676)

Total net debt applicable to limit - - 6,342,204 7,413,384 8,808,948 9,918,385 11,224,178 12,463,493 13,627,924 14,857,324

Legal debt margin 233,670,796 224,902,824 224,170,693 227,632,292 231,280,158 241,509,005 241,364,189 228,362,552 212,687,058 194,442,113 Total net debt applicable to the limit as a

percentage of debt limit 0.00% 0.00% 2.75% 3.15% 3.67% 3.94% 4.44% 5.18% 6.02% 7.10%

Notes:

Detail regarding the District's debt can be found in the Notes to Financial Statements.

(a) Wisconsin State Statutes chapter 67.03 provides: 1) the aggregate amount of indebtedness of any municipality shall not exceed 5% of the value of the taxable property located in the municipality as equalized for state purposes and 2) for any technical college district, the bonded indebtedness for the purpose of purchasing school sites and the construction and equipping of school buildings may not exceed 2% of the value of its taxable property as equalized for state purposes.

(b) Equals the ending fund balance in the Debt Service Fund - Schedule of Revenues, Expenditures, and changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis).

Blackhawk Technical College District Demographic and Economic Information – Demographic and Economic Statistics Last Ten Calendar Years

95

Annual

Public andPersonal Per Capita Median Public Private

Calendar Income Personal Number of Household School High School

Year Population(a) (000's)(a) Income(a) Households(b) Income(b) Enrollment(c) Graduates(d)

2006 193,581 5,926,074$ 30,613$ 82,995 47,681$ 33,870 2,158 5.22%2007 195,116 6,130,778 31,421 83,873 49,562 34,278 2,492 5.20%2008 197,245 6,474,632 32,825 84,474 52,316 34,442 2,575 5.10%2009 197,083 6,209,184 31,505 84,594 49,662 34,405 2,633 9.43%2010 197,160 6,439,293 32,660 84,278 47,860 34,138 2,675 11.69%2011 196,983 6,745,628 34,245 84,368 48,835 33,560 2,426 9.63%2012 197,327 7,216,392 36,571 84,046 48,475 33,529 2,432 8.47%2013 197,829 7,679,635 38,820 83,942 50,395 33,641 2,373 7.86%2014 N/A N/A N/A 84,154 N/A 33,657 2,512 6.92%2015 N/A N/A N/A N/A N/A 33,520 N/A 5.29%

Notes:(a) Source - US Department of Commerce, Bureau of Economic Analysis, for all of Green and Rock counties(b) Source - US Census Bureau, American Community Survey, for all of Green and Rock counties(c) Source - Wisconsin Department of Public Instruction, for all of Green and Rock counties(d) Source - Wisconsin Technical College System School to Work reports for public graduates and Wisconsin Department of Public

Instruction for private graduates(e) Source - Bureau of Labor Statistics

N/A Not available

Rate(e)

Unemployment

Blackhawk Technical College District Demographic and Economic Information – Principal Employers Last Ten Fiscal Years

96

Employees Rank Employees Rank

Mercy Health Systems Health care facility 3,846 1 3,200 2Beloit Memorial Hospital Medical facility 1,550 2 1,000 7Seventh Avenue Internet & catalog shopping 1,500 3School District of Janesville Education 1,306 4 1,416 3Rock County Government 1,193 5 1,324 4School District of Beloit Education 1,106 6 1,024 5Walmart Discount department stores 970 7

Colony Brands Inc.(1) Mfgr./Mail order food and gifts 830 8 1,100 6Data Dimensions Data processing, hosting and related services 824 9GHC Specialty Brands Distributor of safety equipment & supplies 800 10 800 9Truck and Bus Group, Division of General Motors Manufacturer of vehicles 4,800 1Lear Seating Corporation Seating for motor vehicles 973 8Frito-Lay Snack Foods 700 10

Source: Green and Rock counties and official statements of municipalities within Rock and Green counties. Provided by R.W. Baird & Co., Inc.

(1) Colony Brands Inc. employs an additional 5,000-5,500 employees during the holiday season.

2015 2005

Blackhawk Technical College District Operating Information – Full-Time Equivalent District Employees by Employee Group Last Ten Fiscal Years

97

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

By Pay Groups:Full-time instructors 98 99 112 111 114 117 109 101 103 102 Part-time instructors 31 27 29 38 43 42 38 28 26 32 Administration 82 82 75 75 74 74 72 71 74 76 Part-time support personnel 22 26 29 27 30 27 30 26 28 32 Full-time clerical and custodial 41 42 42 43 42 43 41 41 42 44

Total 274 276 287 294 303 303 290 267 273 286

Source: Human Resources Department - employee FTE count as of June 30 of each year.

Blackhawk Technical College District Operating Information – Operational Expenditures per Full-Time Equivalent (FTE) Student Last Ten Fiscal Years

98

Full-time Percent PercentAmount Percent Equivalent Increase/ Per FTE Increase/ Per FTE

Year (in 000's) Increase Students (Decrease) Students (Decrease) Students Rank(1)

2006 $24,491 4.8% 1,870 -3.1% $13,097 8.2% $12,813 11

2007 25,054 2.3% 1,840 -1.6% 13,616 4.0% 13,567 11

2008 25,629 2.3% 1,905 3.5% 13,454 -1.2% 13,725 8

2009 27,478 7.2% 2,358 23.8% 11,653 -13.4% 13,705 3

2010 30,723 11.8% 2,916 23.7% 10,536 -9.6% 12,785 1

2011 31,732 3.3% 2,830 -2.9% 11,213 6.4% 13,172 1

2012 30,120 -5.1% 2,565 -9.4% 11,743 4.7% 13,519 2

2013 30,446 1.1% 2,286 -10.9% 13,318 13.4% 14,272 6

2014 30,507 0.2% 1,961 -14.2% 15,557 16.8% 15,563 11

2015 29,988 -1.7% 1,828 -6.8% 16,405 5.5% (2) (2)

Notes: (1) Rank amoung 16 WTCS districts. (1 is the lowest 16 is the highest)(2) Not yet available(3) For purposes of this calculation, operational expenditures is based upon the budgetary expenditures from the districts' General and Special Revenue-Aidable funds as reported to the Wisconsin Technical College System.

Statewide OperationalExpenditure per StudentRevenue-Aidable Funds)

(General and SpecialOperational Expenditures(3)

Student EnrollmentsBTC Operational

Expenditure per Student

Blackhawk Technical College District Operating Information – Campus Statistics Last Ten Fiscal Year

99

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Square FootageCampuses

Main Campus - Janesville 291,452 291,452 291,452 291,452 291,452 291,452 291,452 291,452 291,452 291,452 Advanced Manufacturing Training Center 110,939 50,000 - - - - - - - - Aviation Center 25,210 25,210 25,210 25,210 25,210 25,210 25,210 25,210 25,210 25,210 Beloit Campus 29,068 29,068 29,068 29,068 15,000 15,000 4,000 4,000 4,000 4,000 Center for Transportation Studies 30,846 30,846 30,846 30,846 30,846 30,846 30,846 30,846 30,846 30,846 Monroe Campus 24,203 24,203 24,203 24,203 24,203 24,203 24,023 24,023 24,023 24,023 Total for campuses 511,718 450,779 400,779 400,779 386,711 386,711 375,531 375,531 375,531 375,531

FacilitiesAdministration Building 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Storage Building - Central Campus 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 Storage Building - Admin 1,650 1,650 1,650 1,650 1,650 1,650 1,650 1,650 1,650 1,650 Total for facilities 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400

Grand Total(1) 523,118 462,179 412,179 412,179 398,111 398,111 386,931 386,931 386,931 386,931

(1) The regional centers are not included in this schedule. The regional centers are not a significant part of the college operations.

Source: Facilities Department

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