HomeMy WebLinkAboutConservation Futures JLT Jefferson land Trust
r ` `tit Board of Directors
, y. 2023
David Brownell
Brian Rogers Executive Director
Board President North Olympic History Center
Chancellor of University of
Tom Sanford
Alaska Fairbanks, retired
Executive Director
System's Finance Vice President,
North Olympic Land Trust
retired
Barry Mitzman Marcia Schwendiman
Reporter, retired Health policy analyst, retired
Strategic communications director,
retired Rick York
Botanist and Biologist, retired
Jane Guiltinan
Ed Thompson
Naturopothic physician, retired
Attorney and land conservation
Craig Britton professional, retired
Treasurer
Julie Lockhart
General Manager for Midpeninsula
Regional Open Space District, retired Educator and nonprofit professional,
retired
Historic Preservation Committee, City
of Port Townsend
Tim Lawson
Sherry Moller Former director of Port Townsend
Secretary School of Woodworking
Plan Manager
Washington FAIR Plan
JEFFERSON LAND TRUST
ORGANIZATIONAL CHART
BOARD OF DIRECTORS
➢ RICHARD TUCKER- Executive Director
D SARAH SPAETH- Director of Conservation and Strategic Partnerships
BLAISE SULLIVAN-Conservation Coordinator
➢ ERIK KINGFISHER-Stewardship Director
CARRIE CLENDANIEL- Preserve Manager
MARLOWE MOSER—Stewardship Assistant
D KATE GODMAN- Director of Philanthropy
SARAH ZABLOCKI-AXLING- Development Manager
VACANT—Development Assistant
RIC BREWER-Community Relations& Events Manager
STEPHANIE WIEGAND-Communications Manager
LILLY SCHNEIDER—Communications Coordinator
PAULA McNEES- Finance Manager
n CRISTINA VILLALOBOS—Administrative& Preserve Assistant(Matrixed to Stewardship)
JEFFERSON LAND TRUST
2023 COMPILED OPERATING BUDGET
Jefferson Land Trust
For Jefferson County Conservation Futures application uses
INCOME
Restricted Funds
Federal,State&County Grants 58,810
Foundation Grants 105,000
Donor Restricted 250,000
Investment -
Operations Income
Annual Contributions 814,000
Special Events 48,000
Fee for Service 128,250
Investment Income -
Other/Release from Restriction 192,450
Foundation Grants/Unrestricted 13,000
Total Income 1,609,510
EXPENSE
Direct Program 131,450
Acquisition &Conveyance -
Land/Easement Holding _ 57,270
Professional Services 138,000
General &Administrative 1,279,832
Total Expense 1,606,552
Net Income 2,958
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TIZEASU%Y
DISTRICT DIRECTOR
2 CUPANIA CIRCLE--
MONTEREY PARK, CA 91755-7406
Employer Identification Number:
Date: SAY 3 109'� 91-1465078
Case Number:
954109002
JEFFERSON LAND TRUST Contact Person:
C/O DOUG MASON PRES TYRONE THOMAS
PO BOX 1610 Contact Telephone Number:
PORT TOWNSEND, WA 98368-0109 (213) 894-2289
Our Letter Dated:
May 08, 1990
Addendum Applies:
No
Dear Applicant:
This modifies our letter of the above date in which we stated that you
would be treated as an organization that is not a private foundation until the
expiration of your advance ruling period.
Your exempt status under section Sol(a) of the Internal Revenue Code as an
organization described in section Sol(c) (3) is still in effect. Based on the s
information you submitted, we have determined that you are not a private
foundation within the meaning of section 509(a) of the Code because you are an
organization of the type described in section 509(a) (1) and 3.70(b) (1) (A) (vi)
Grantors and contributors may rely on this determination unless the
Internal Revenue Service publishes notice to the contrary. However, if you
lose your section 509(a) (1) status, a grantor or contributor may not rely on
this, determination if he or she was in part responsible for, or was aware of,
the act or failure to act, or the substantial or material change on the part of
the organization that resulted in your loss of such status, or if he or she
acquired knowledge that the Internal Revenue service had given notice that you
would no longer be classified as a section 509(a) (1) organization.
If we have indicated in the heading of tilis letter that an addendum
applies, the addendum enclosed is an integral part of this letter.
Because this letter could help resolve any questions about your private
foundation status, please keep it in your permanent records.
If you have any questions, please contact the person whose name and
telephone number are shown above.
Sincerely yours,
Richard R. Orosco
District Director
Letter 1050 (DO/CG)
Jefferson Land Trust
CONSERVATION FUTURES 2023 RESOLUTION
February 21,2023
WHEREAS,Jefferson Land Trust is an applicant or sponsor for more than one Conservation Futures
Funding application,and Conservation Futures Funding Application process requires that Jefferson
Land Trust prioritize its projects,AND
WHEREAS, Jefferson Land Trust has been working since the 1990s in partnership with
Washington Department of Wildlife, Jefferson County,North Olympic Salmon Coalition,
Jamestown S'Klallam Tribe, Port Gamble S'Klallam Tribe, WSU-Extension and Jefferson
County Conservation District to protect and restore Chimacum Creek, and
WHEREAS, Chimacum Creek is spawning habitat for the Endangered Species Act(ESA)-listed
Hood Canal Summer Chum. The lower two miles of Chimacum Creek is critical spawning
habitat for this threatened species, and
WHERAS,Jefferson Land Trust and other conservation partners have already conserved over
150 acres in the lower two miles of Chimacum Creek, and
WHEREAS,the Lower Chimacum Creek Mainstem application will permanently protect 2.83
additional acres will protect critical habitat and allow for riparian restoration on currently
threatened parcels, AND
WHEREAS,Jefferson Land Trust has been working for over a decade in partnership with Jefferson
County Conservation District,the Hood Canal Salmon Enhancement Group and private landowners
to preserve the watersheds of Quilcene Bay,and
WHEREAS,the Schmidt Farm includes approximately 67 acres of lowland pasture of prime
agricultural soils and Jakeway Creek riparian habitat and will be protected for water quality,
agricultural uses and wildlife habitat in the Quilcene Bay area,and
WHEREAS,the Schmidt Farm is directly adjacent to the Mahan protected property,Lower Donovan
Nature Preserve,and other protected lands; it is indicated as priority forest and habitat land in several
local and regional plans,and significant project funding is likely from the US Navy and the
landowner is eager to complete the project,and
WHEREAS,this important community asset will require stewardship in perpetuity, to include annual
monitoring,maintenance,and management,AND
WHEREAS, Jefferson Land Trust has been working since 2001 in partnership with the Hood
Canal Coordinating, Department of Fish and Wildlife, Jamestown S'Klallam Tribe,North
Olympic Salmon Coalition, Jefferson County Conservation District, and Jefferson County to
Jefferson Land Trust Page 1 of 2
acquire and restore critical salmon spawning,rearing and migratory habitat in the Snow and
Salmon Creek watershed,and
WHEREAS,these professional naturalist and scientists have recommended that Snow Creek
habitat protections be expanded to provide further benefits for migrating salmonids and other
wildlife species, and
WHEREAS,the North Barry property has been identified as a priority for habitat,and
WHEREAS,this important community asset will require stewardship in perpetuity,to include
annual monitoring,maintenance, and management,AND
BE IT HEREBY RESOLVED that Jefferson Land Trust agreed at its February 21,2023 Board of
Directors meeting to sponsor three applications to the Jefferson County Conservation Futures
Program. The Board agreed that the highest priority is funding for acquisition of parcels in the
Lower Chimacum Creek Mainstem. These properties for sale in the corridor are high priority for
protection due to the prime spawning habitat for ESA-listed threatened Hood Canal Summer
Chum salmon. The second highest priority is funding for the acquisition of a conservation
easement on the 67-acre Schmidt Farm due to the prime agricultural soils, salmon habitat and
other wildlife corridor habitat provided by Jakeway Creek which feeds into Quilcene Bay,
landowner willingness,match from the State Farmland Preservation Program,and match from
the US Nary REPI program. The Board agrees that the third highest priority is funding for the
acquisition of the fee interest of the 28-acre North Barry property along Snow Creek due to the
prime salmon spawning habitat and the addition to existing protection by several conservation
partners throughout the Snow and Salmon Creek watershed; landowner willingness, and
potential match from the Salmon Recovery Funding Board.
Signed this 2� of March 2023
:j—�
utho ed fiy Rbard of Directors at their February 21,2023 meeting
Jefferson Land Trust
Jefferson Land Trust Page 2 of 2
JEFFERSON LAND TRUST AND SUBSIDIARY
Consolidated Financial Statements
For the Years Ended December 31, 2021 and 2020
TABLE OF CONTENTS
Independent Auditor's Report .......................................................................................................... 1
Consolidated Financial Statements:
Consolidated Statement of Financial Position...................................................................... 3
Consolidated Statement of Activities and Changes in Net Assets-2021 .............................. 5
Consolidated Statement of Activities and Changes in Net Assets-2020 .............................. 6
Consolidated Statement of Functional Expenses-2021......................................................... 7
Consolidated Statement of Functional Expenses-2020......................................................... 8
Consolidated Statement of Cash Flows ................................................................................9
Consolidating Statement of Financial Position..................................................................... 11
Consolidating Statement of Activities and Changes in Net Assets...................................... 12
Consolidating Statement of Functional Expenses................................................................. 13
Notes to the Consolidated Financial Statements................................................................... 14
A
ken
anders, Inc Ps 324 So.Main Street,Unit A,Montesano,WA 98563
CERTIFIED PUBLIC ACCOUNTANTS Telephone(360)533-3370 Fax(360)532-7123
&CONSULTANTS aikenandsandersoaiken-sanders.com
Independent Auditor's Report
To the Board of Directors
Jefferson Land Trust&Subsidiary
Port Townsend,WA
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of Jefferson Land Trust and Subsidiary
(collectively,JLT, a nonprofit organization), which comprise the consolidated statement of financial position as of
December 31,2021 and 2020,and the related consolidated statements of activities and changes in net assets,functional
expenses,and cash flows for the years then ended,and the related notes to the consolidated financial statements.
In our opinion,the financial statements referred to above present fairly,in all material respects,the financial position
of JLT,as of December 31,2021 and 2020,and changes in net assets and its cash flows for the years then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America
(GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of JLT and to meet our
other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits.We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement,whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate,that raise substantial doubt about JLT's ability to continue as a going concern for one
year after the date that the financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may
involve collusion,forgery,intentional omissions,misrepresentations,or the override of internal control.Misstatements
are considered material if there is a substantial likelihood that,individually or in the aggregate,they would influence
the judgment made by a reasonable user based on the financial statements.
1
MEMBER AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND WASHINGTON SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
In performing an audit in accordance with GAAS,we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements,whether due to fraud
or error, and design and perform audit procedures responsive to those risks. Such procedures include
examining,on a test basis,evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness
of JLT's internal control.Accordingly,no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management,as well as evaluate the overall presentation of the financial
statements.
• Conclude whether,in our judgment,there are conditions or events,considered in the aggregate,that raise
substantial doubt about JLT's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit,significant audit findings,and certain internal control—related matters that we identified
during the audit.
Other Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole.
The supplementary information on pages 11-13 is presented for purposes of additional analysis and is not a required
part of the consolidated 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 consolidated financial
statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated
financial statements and to certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion,the information is fairly stated, in all material respects, in
relation to the financial statements as a whole.
Aiken&Sanders, Inc.,PS
Certified Public Accountants
&Consultants
June 21,2022
Montesano,WA
2
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Financial Position
As of December 31, 2021 and December 31, 2020
Assets
2021 2020
Current Assets:
Cash and cash equivalents $ 1,479,474 $ 1,021,656
Accounts receivable 4,652 2,991
Current pledges receivable 1,017,724 96,431
Note receivable-current portion 5,650 5,650
Total Current Assets 2,507,500 1,126,728
Land and Conservation Easements:
Habitat land 6,529,764 5,700,364
Working land 97,728 97,728
Open space land 332,761 332,761
Land for sale 458,751 -
Conservation easements 67 66
Total Land and Conservation Easements 7,419,071 6,130,919
Fixed Assets:
Furniture, equipment, and improvements 97,340 97,146
Less: Accumulated depreciation (54,333) (68,497)
Fixed assets, net 43,007 28,649
Other Assets:
Long term pledges receivable 16,542 18,949
Long term note receivable 41,577 41,577
Land hold fee-net 16,666 24,999
Investments 1,084,530 926,253
Total Other Assets 1,159,315 1,011,778
Total Assets $ 11,128,893 $ 8,298,074
The accompanying notes are an integral part of these financial statements
3
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Financial Position
As of December 31, 2021 and December 31, 2020
Liabilities& Net Assets
2021 2020
Current Liabilities:
Accounts payable $ 14,227 $ 17,289
Accrued liabilities and deferred revenue 84,540 83,864
Line of credit 83,537 -
Total Current Liabilities 182,304 101,153
Long-Term Liabilities:
Note payable - 119,740
Total Liabilities 182,304 220,893
Net Assets:
Without donor restrictions
Undesignated 1,222,389 430,554
Board designated 7,181,832 6,294,385
8,404,221 6,724,939
With donor restrictions 2,542,368 1,352,242
Total Net Assets 10,946,589 8,077,181
Total Liabilities&Net Assets $ 11,128,893 $ 8,298,074
The aeeompattying notes are an integral part of these financial statements
4
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Activities and Changes in Net Assets
For the Year Ended December 31,2021
Without Donor With Donor Total
Restrictions Restrictions 2021
Support and Revenues:
Gifts and contributions $ 1,534,523 $ 1,588,023 $ 3,122,546
Donated land 382,400 - 382,400
Grants and contracts 720,657 - 720,657
Special events income,net of
expenses of$6,993 32,027 - 32,027
Net investment return 162,538 - 162,538
Net assets released from restriction 397,897 (397,897) -
Total Support and Revenue 3,230,042 1,190,126 4,420,168
Expenses:
Program services 1,018,681 - 1,018,681
Management and general 308,619 - 308,619
Fundraising 223,460 - 223,460
Total Expenses 1,550,760 - 1,550,760
Change in Net Assets 1,679,282 1,190,126 2,869,408
Net Assets, Beginning of Year 6,724,939 1,352,242 8,077,181
Net Assets, End of Year $ 8,404,221 $ 2,542,368 $ 10,946,589
The accompanying notes are an integral part of these financial statements
5
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Activities and Changes in Net Assets
For the Year Ended December 31,2020
Without Donor With Donor Total
Restrictions Restrictions 2020
Support and Revenues:
Gifts and contributions $ 686,232 $ 227,560 $ 913,792
Grants and contracts 1,315,167 - 1,315,167
Special events income,net of
expenses of$9,782 26,116 - 26,116
Net investment return 89,846 594 90,440
Net assets released from restriction 196,659 (196,659) -
Total Support and Revenue 2,314,020 31,495 2,345,515
Expenses:
Program services 1,233,983 - 1,233,983
Management and general 205,689 - 205,689
Fundraising 323,834 - 323,834
Total Expenses 1,763,506 - 1,763,506
Change in Net Assets 550,514 31,495 582,009
Net Assets, Beginning of Year 6,174,425 1,320,747 7,495,172
Net Assets,End of Year $ 6,724,939 $ 1,352,242 $ 8,077,181
The accompan}ring notes are an integral part of these financial statements
6
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Functional Expenses
For the Year Ended December 31,2021
Management Fund- Total
Program and General Raising 2021
Salaries $ 313,964 S 177,005 $ 131,269 S 622,238
Payroll taxes 25,209 14,208 10,541 49,958
Employee benefits 43,427 24,476 18,159 86,062
Value of conservation easements written down 159,999 - - 159,999
Professional fees 301,876 27,253 25,541 354,670
Land and stewardship expenses 94,295 - - 84,295
Rent �7,988 4,437 1,707 34,132
Public awareness 1,627 2,113 1,173 4,913
Dues and subscriptions 1,639 17,924 4,803 24,366
Insurance 11,759 6,628 4,917 23,304
Postage and printing 8,166 26 8,848 17,040
Other 3,650 10,641 522 14,813
Interest expense 197 20 - 217
Travel and seminars 4,991 5,841 116 10,948
Office supplies 8,477 9,394 6,280 24,151
Telephone 809 456 338 1,603
Depreciation and amortization 2,307 5,594 - 7,891
Utilities 9,962 1,564 601 12,027
Web design and maintenance 1,684 - - 1,694
Bad debts 5,578 36 - 5,614
Bank fees 1,177 1,013 8,645 10,835
Total Expenses $ 1,018,681 $ 309,619 S 223,460 S 1,550,760
The accompant,ing notes are an integral part of these financial statements
7
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Functional Expenses
For the Year Ended December 31,2020
Management Fund- Total
Program and General Raising 2020
Salaries $ 271,807 $ 125,383 $ 186,789 $ 583,979
Payroll taxes 22,341 10,306 15,353 48,000
Employee benefits 36,806 16,979 25,293 79,078
Value of conservation easements written down 621,997 - - 621,997
Professional fees 117,181 6,898 24,503 148,582
Land and stewardship expenses 78,044 - - 78,044
Rent 27,145 4,219 1,623 32,987
Public awareness 2,145 40 3,171 5,356
Dues and subscriptions 1,819 17,664 8,706 28,189
Insurance 7,117 3,283 4,891 15,291
Postage and printing 436 159 17,262 17,857
Other 15,444 1,121 17,757 34,322
Interest expense - 3,507 - 3,507
Travel and seminars 5,176 2,095 1,562 8,833
Office supplies 19,276 1,454 8,151 28,881
Telephone 123 57 85 265
Depreciation and amortization 1,800 6,029 - 7,829
Utilities 4,813 6,022 144 10,979
Web design and maintenance 352 - 100 452
Bank fees 161 473 8,444 9,078
Total Expenses $ 1,233,983 $ 205,689 $ 323,834 $ 1,763,506
The accompat ying notes are an integral part of these financial statements.
8
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Cash Flows
For the Years Ended December 31, 2021 and December 31, 2020
2021 2020
Cash flows from operating activities:
Cash received from grantors,donors and customers $ 2,696,236 $ 2,348,926
Cash paid to suppliers and employees (1,392,386) (1,704,808)
Cash paid for interest (217) (3,507)
Cash received from interest 14,701 7,130
Net cash provided(used)by operating activities 1,318,334 647,741
Cash flows from investing activities:
Cash paid for investments (29,667) (151,728)
Cash received from investments 13,615 249,544
Proceeds from notes receivable - 2,080
Cash paid for property and equipment (22,249) -
Cash paid for land (905,752) (323,000)
Net cash provided(used)by investing activities (944,053) (223,104)
Cash flows from financing activities:
Cash paid to loans - (175,000)
Cash received from line of credit 83,537 -
Cash received from loans - 119,740
Net cash provided(used)by financing activities 83,537 (55,260)
Net increase (decrease) in cash & cash equivalents 457,818 369,377
Cash & cash equivalents at beginning of year 1,021,656 652,279
Cash & cash equivalents at end of year $ 1,479,474 $ 1,021,656
The accompanying notes are an integral part of these financial statements
9
Jefferson Land Trust and Subsidiary
A Washington Not For Profit Organization
Consolidated Statement of Cash Flows
For the Years Ended December 31,2021 and December 31,2020
2021 2020
Reconciliation of increase(decrease)in net assets to net cash
provided(used) by operating activities:
Increase(decrease) in net assets: $ 2,869,408 $ 582,009
Adjustments:
Depreciation and amortization 7,891 7,829
Bad debts 5,614 -
Land hold fee amortization(adjustment) 8,331 8,331
Debt forgiveness (119,740) -
Realized and unrealized losses(gains)on investments (147,837) (68,538)
Donated land (382,400) -
Changes in assets and liabilities:
(Increase)decrease in accounts receivable (1,661) 40,755
(Increase)decrease in pledges receivable (918,886) 28,542
(Increase)decrease in prepaid expense - 5,425
Increase(decrease)in accounts payable (3,062) 7,440
Increase(decrease) in accrued expenses and deferred revenue 676 35,948
Net cash provided(used)by operating activities $ 1,318,334 $ 647,741
The accompanying notes are an integral part of these financial statements
10
JEFFERSON LAND TRUST AND SUBSIDIARY
Consolidating Statement of Financial Position
Year Ended December 31,2021
Jefferson Land JLT Resources, Consolidated
Trust LLC Subtotal Eliminations 2021
Assets
Current Assets:
Cash and cash equivalents $ 1,455,243 $ 24,231 $ 1,479,474 $ $ 1,479,474
Accounts receivable 4,652 - 4,652 - 4,652
Current pledges receivable 1,017,724 - 1,017,724 - 1,017,724
Note receivable-current portion 5,650 - 5,650 - 5,650
Total Current Assets 2,483,269 24,231 2,507,500 - 2,507,500
Land and Conservation Easements:
Habitat land 6,404,524 125,240 6,529,764 - 6,529,764
Working land 97,728 - 97,728 - 97,728
Open space land 332,761 - 332,761 - 332,761
Land for sale 458,751 - 458,751 - 458,751
Conservation easements 67 - 67 - 67
Total Land and Conservation Easements 7,293,831 125,240 7,419,071 - 7,419,071
Fixed Assets:
Furniture,equipment,and improvemen 97,203 10,137 97,340 - 97,340
Less:Accumulated depreciation (53,826) (507) (54,333) - (54,333)
Total Fixed Assets 33,377 9,630 43,007 - 43,007
Other Assets:
Long term pledges receivable 16,542 - 16,542 - 16,542
Long term notes receivable 41,577 - 41,577 41,577
Land hold fee-net 16,666 16,666 - 16,666
Investments 1,312,090 1,312,090 (227,560) 1,084,530
Total Other Assets 1,386,875 - 1,386,875 (227,560) 1,159,315
Total Assets $ 11,197,352 S 159,101 $ 11,356,453 $ (227,560) S 11,128,893
Liabilities
Current Liabilities
Accounts payable $ 13,891 $ 336 $ 14,227 $ $ 14,227
Accrued liabilities and deferred revenw 84,540 - 84,540 84,540
Line of credit 83,537 - 83,537 83,537
Total Current Liabilities 181,968 336 182,304 182,304
Long Term Liabilities
Note payable - - -
Total Liabilities 181,968 336 182,304 - 182,304
Net Assets
With Donor Restrictions 2,542,368 - 2,542,368 - 2,542,368
Without Donor Restrictions 8,473,016 158,765 8,631,781 (227,560) 8,404,221
Total Net Assets 11,015,384 158,765 11,174,149 (227,560) 10,946,589
Liabilities&Net Assets S 11,197,352 S 159,101 S 11,356,453 S (227,560) S 11,128,893
The accompanying notes are an integral part of these ftnancial.statements.
11
JEFFERSON LAND TRUST AND SUBSIDIARY
Consolidating Statement of Activities
Year Ended December 31,2021
JLT Resources, Consolidated
Jefferson Land Trust LLC Subtotal Eliminations 2021
Support and Revenues
Gifts and contributions $ 3,122,546 S $ 3,122,546 $ S 3,122,546
Donated land 382,400 382,400 382,400
Grants and contracts 720,657 720,657 720,657
Special events income,net of
expenses ofS6,993 32,027 32,027 32,027
Net investment return 162,501 37 162,538 162,538
Net assets released from restriction - -
Total Support and Revenues 4,420,131 37 4,420,168 - 4,420,168
Program Expenses
Jefferson Land Trust 1,014,414 1,014,414 1,014,414
JLT Resources,LLC 4,267 4,267 4,267
Total Program Expenses 1,014,414 4,267 1,018,681 1,018,681
Management and general 308,619 - 308,619 308,619
Fundraising 223,460 223,460 223,460
Total Expenses 1,546,493 4,267 19550,760 1,550,760
Change in Net Assets 2,873,638 (4,230) 2,869,408 2,969,408
Net assets-Beginning of Year 8.141,746 162,995 8,304,741 (127S60) 8,077,181
Net assets-End of the Year $ 11.015,384 $ 158,765 S 11,174,149 S (227,560) S 10,946,589
The accompanJying notes are an integral part of these finaecial statements.
12
JEFFERSON LAND TRUST AND SUBSIDIARY
Consolidating Statement of Functional Expenses
Year Ended December 31,2021
Total
Jefferson JLT Resources, Program Management& Consolidated
Land Trust LLC Service General Fundraising Eliminations 2021
Salaries $ 313,964 $ $ 313,964 $ 177,005 $ 131,269 $ $ 622,238
Payroll taxes 25,209 25,209 14,208 10,541 49,958
Employee benefits 43,427 43,427 24,476 18,159 96,062
Value of conservation easements written do 159,999 159,999 - - 159,999
Professional fees 299,301 2,575 301,876 27,253 25,541 354,670
Land and stewardship expenses 94,295 - 84,295 - - 94,295
Rent 27,988 27,998 4,437 1,707 34,132
Public awareness 1,627 1,627 2,113 1,173 4,913
Dues and subscriptions 1,639 1,639 17,924 4,803 24,366
Insurance 11,759 11,759 6,628 4,917 23,304
Postage and printing 8,166 8,166 26 8,948 17,040
Other 2,921 729 3,650 10,641 522 14,813
Interest expense 197 - 197 20 - 217
Travel and seminars 4,991 - 4,991 5,941 116 10,948
Office supplies 9,021 456 8,477 9,394 6,280 24,151
Telephone 8W - 809 456 338 1,603
Depreciation and amortization 1,800 507 2,307 5,584 - 7,891
Utilities 9,862 - 9,862 1,564 601 12,027
Web design and maintenance 1,694 1,694 - 1,684
Bad debts 5,578 5,578 36 - 5,614
Bank fees 1,177 - 1,177 1,013 8,645 10,935
Total Expenses S 1,014,414 S 4,267 S 1,018,681 S 308,619 S 223,460 S $ 1,550,760
The accompanying notes are an integral part of these financial statements.
13
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization—
Jefferson Land Trust(The Land Trust) is a Washington not-for-profit corporation formed on April 7, 1989. The
Land Trust's purpose is to acquire, preserve and manage open space lands and easements for land conservation
purposes benefitting the public. The Land Trust also provides information and materials to the public on land
conservation issues. The Land Trust serves Jefferson County on the Olympic Peninsula in Washington State. The
Land Trust has been accredited by the national Land Trust Alliance since August 5,2009.
On September 5,2007,JLT Resources,LLC was formed with the Land Trust as its only member. JLT Resources,
LLC was formed for the purpose of purchasing and holding land for conservation purposes.
Principles of Consolidation--
These financial statements consolidate the statements of Jefferson Land Trust and JLT Resources, LLC
(collectively,"JLT"). Inter-organization balances and transactions have been eliminated in consolidation.
Basis of accounting—
The consolidated financial statements of JLT have been prepared on the accrual basis of accounting.
Basis of presentation—
JLT follows accounting prescribed by the Financial Accounting Standards Board in its Accounting Standards
Codification(ASC) 958 Not-for Profit Entities. Under ASC 958, JLT is required to report information regarding
its financial position and activities according to two classes of net assets: with donor restrictions, and without
donor restrictions.
With Donor Restrictions: Net assets that result from contributions whose use by JLT is restricted by donor
imposed stipulations that may expire with the passage of time or can be fulfilled or otherwise removed by actions
of JLT.
Without Donor Restrictions:Net assets that are not restricted by donor stipulation.
Gifts of goods and equipment are reported as without donor restrictions unless explicit donor stipulations specify
how the donated assets must be used.
Property and Fixed Assets--
Improvements, furniture and equipment are capitalized at cost if purchased, or, if donated,at the approximate fair
value at the date of donation. When retired or otherwise disposed of, the related carrying value and accumulated
depreciation are removed from the respective accounts and the net difference, less any amount realized from
disposition, is reflected in earni�gs. Maintenance and repairs are charged to expense as incurred. Costs of
significant improvements are capitalized. JLT provides for depreciation using the straight-line method over the
estimated useful lives of the assets of five to ten years.
JLT records acquisitions of land at cost if purchased. Land acquired through donation is recorded at fair value,
with fair values generally based on independent professional appraisals. These assets fall into two primary
categories:
14
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Conservation Lands- Real property with significant ecological value for habitat, open space, or working lands.
Stewardship programs of JLT manage these properties to protect the natural biological diversity of the property.
JLT manages its working timberland as a Forest Stewardship Council-Certified, managed forest.
Conservation Easements- Voluntary legal agreements between a landowner and a land trust or government agency
to permanently protect the identified natural features and conservation values of the property. These easements
may be sold or transferred to others so long as the assignee agrees to carry out, in perpetuity, the conservation
purposes intended by the original grantor. Conservation easements owned by JLT protect habitat, open space and
working lands, such as family farms, through its stewardship programs. Easements acquired represent numerous
restrictions over the use and development of land not owned by JLT. Since the benefits of such easements accrue
to the public upon acquisition, the fair market value of easements acquired is shown in the year of acquisition as
an addition to net assets to record the donation of the easement, and unless conveyed to a public agency for
consideration, shown as a reduction in net assets to record the value of the public's benefit and to recognize that
these easements have no marketable value once severed from the land and held by JLT. Easements held by JLT
are carried on the consolidated statement of financial position at$1 each for tracking and accounting purposes. A
total of$67 is recorded in the financial records for the nominal value of easements acquired.
JLT has preserved a total of 4,254 acres of land with 67 current easements. The original acquisition cost of the
easements, expensed when acquired, was in excess of$18,200,000.
Portions of one easement with a value of$145,700 were donated to JLT during 2021. Accordingly, $145,700 of
contribution revenue and $145,700 of related write down expense have been reported on the consolidated
statements of activities for the year ended December 31,2021.
Estimates--
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America(U.S. GAAP)requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual
results could differ from those estimates.
Expense Allocation—
The costs of providing various programs and other activities have been summarized on a functional basis in the
consolidated statement of functional expense. Program expenses represent expenses incurred to fulfill JLT's
exempt purposes. Management and general expenses support that exempt purpose while fundraising expenses are
incurred to raise resources to carry out program activities. Expenses are recorded, when appropriate, to the
function receiving direct benefit. When expenses benefit more than one function, an allocation is made based on
relative benefits provided to each function.
Cash and Cash Equivalents--
For reporting purposes, JLT considers all unrestricted highly liquid investments with a purchased maturity of
three months or less to be cash and cash equivalents.
Concentrations--
JLT maintains its cash in bank deposit accounts with three financial institutions. JLT's cash balances may, at
times,exceed federally insured limits.
15
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
At December 31,2021,one donor's pledges represented approximately 97%of pledges receivable.
At December 31,2020,three donor's pledges represented approximately 52%of pledges receivable.
Investments--
Investments in marketable securities with readily determinable fair values are valued at their fair values in the
consolidated statement of financial position. Certificates of deposit are carved at cost plus accrued interest in the
consolidated statement of financial position. Unrealized gains and losses are included in the change in net assts.
Grants and Contracts--
JLT receives grants and contracts from federal, state, and local agencies, as well as from private organizations, to
be used for specific programs or land purchases. The excess of grants receivable over reimbursable expenditures
to-date is recorded as deferred revenue.
Federal Income Taxes--
The Internal Revenue Service has determined Jefferson Land Trust and JLT Resources, LLC (a disregarded
entity)to be exempt from federal income taxes under Internal Revenue Code Section 501(c)(3).Contributions to
JLT are deductible as allowed under IRC Section 170(b)(I)(A)(vi).
During the year ended December 31, 2012, the Land Trust elected the provisions of Section 501(h), relating to
expenditures to influence legislation.That election remain in force unless revoked.
Contributions—
Contributions are recognized when received or when a donor makes an unconditional promise to give to JLT.
Contributions that are restricted by the donor are reported as increases in net assets without donor restrictions if
the restrictions expire in the year in which the contributions are recognized. All other donor restricted
contributions are reported as increases in net assets with donor restrictions. When a restriction expires, net assets
with donor restrictions are reclassified to net assets without donor restrictions.
Unconditional promises to give (pledges receivable) are recognized as revenues in the period the pledge is
received. Long term pledges(collection expected in greater than one year)are discounted to the net present value
of future cash flows.Conditional promises to give are recognized only when the conditions on which they depend
are substantially met and the promise becomes unconditional.
Subseauent Events--
On March 11, 2020, the World Health Organization officially declared COVID-19, the disease caused by the
novel coronavirus, a pandemic. COVID-19 has required JLT to make adjustments to operating practice and
delivery of services. JLT has continued its work. Management is closely monitoring the evolution of this
pandemic,including how it may affect the economy and the general population.
JLT has evaluated subsequent events through June 21, 2022, the date on which the consolidated financial
statements were available to be issued.
16
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
B. LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS:
JLT, although it expects to receive current support to fund operations for 2022 and later years, has $594,965 and
$290,844 of financial assets available within one year of the statement of financial position dates on December
31, 2021 and 2020, respectively, to meet cash needs for general operating expenditures. JLT also has $471,239
and $423,194, of board designated assets as of December 31, 2021 and 2020, respectively, that can be reallocated
for general expenditures if needed. Financial assets available within one year consist of the following:
2021 2020
Financial assets at year end $ 3,650,149 $ 2,107,857
Donor restricted to purpose (2,525,826) (1,333,293)
Long term (58,119) (60,526)
Board designations (471,239) (423,194)
Financial assets available to meet
cash needs within one year $ 594,965 $ 290,844
C. NET ASSETS COMPOSITION:
JLT's net assets with donor restrictions consisted of the following at December 31, 2021 and 2020:
2021 2020
Purpose Restriction:
For stewardship of Bullis Forest Preserve $ 41,988 $ 53,750
Chi-yakh-wh 43,156 44,639
Campaign Readiness Fund/Operations 10,124 108,289
Stewardship funding 780,703 766,304
Quimper Wildlife Corridor 440,366 25,051
Karen Mckee Fund 65,000 40,000
Other program restrictions 58,691 120,368
1,440,028 1,158,401
Time Restriction:
Outstanding pledges 1,034,266 125,770
Permanent Restriction
Endowment Fund 68,074 68,071
Total Net Assets With Donor Restrictions $ 2,542,368 $ 1,352,242
17
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
Net assets without donor restrictions consisted of the following at December 31,2021 and 2020:
2021 2020
Designated:
Quimper Wildlife Corridor $ 1,302,503 $ 473,103
Chimacum Creek 388,347 388,347
Duckabush Riparian Forest 492,800 492,800
Duckabush Hacheney 90,000 90,000
Donovan Creek 270,000 270,000
Duckabush Wetlands&Oxbow 530,000 530,000
Bulis Forest Preserve 125,240 125,240
Upper Snow Creek Forest 340,000 340,000
Snow Creek Uncas Preserve 260,000 260,000
Chimacum Commons 90,850 90,850
Snow Creek Estuary 86,000 86,000
Snow Creek-Hopkins 95,000 95,000
Silver Reach 125,000 125,000
Gateway 85,000 85,000
Kilham Corner 81,202 71,202
Fite&Fissler 182,226 182,226
Valley View 1,710,000 1,710,000
Discovery Bay 311,358 311,358
Longmire 145,000 145,000
Stewardship Fund 362,149 204,411
CP Operations Reserve 9,653 9,653
Karen Mckee Board Fund 14,591 114,283
Operations Reserve 84,846 94,846
Conservation easements 67 66
Total Designated 7,181,832 6,294,385
Undesignated 1,222,389 430,554
Total Net Assets Without Donor Restrictions: $ 8,404,221 $ 6,724,939
Net assets of$286,587 and $165,192, respectively, were released from donor restrictions by incurring expenses
satisfying the purpose restriction specified by the donor, and net assets of$111,310 and $31,467, respectively,
were released due to the expiration of time restrictions for the years ended December 31, 2021 and 2020.
18
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
D. PROMISSORY NOTE AND LINE OF CREDIT:
JLT was subject to a promissory note dated December 27, 2018, in connection with the acquisition of the Mraz
Discovery Bay parcel. The note was secured by the acquired land. The original note balance of$175,000 bore
interest at a rate of 2% per year. The note required a balloon payment of principal plus accrued interest on June
28, 2021.JLT paid the note in full during 2020.
JLT entered into a line of credit arrangement with ls` Security Bank during 2021. The line requires monthly
payments of interest at 4.25% on outstanding balances. The line of credit principal balance was $83,537 at
December 31,2021.
E. ENDOWMENTS:
The JLT endowment consists of one fund established to support general operations. As required by U.S. GAAP,
net asset associated with endowment funds are classified and reported based on the existence or absence of donor-
imposed restrictions.
Nature of Endowments and Interpretation of Relevant Laws- JLT's Board of Directors has reviewed the
Washington State Prudent Management of Institutional Funds Act(PMIFA) and, having considered its rights and
obligations thereunder, has determined that it is desirable to preserve, on a long-term basis, the fair value of the
original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the
contrary. As a result of this determination, JLT classifies as nets assets with donor restrictions (a) the original
value of gifts donated to the permanent endowment, and (b) the original value of subsequent gifts to the
permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time
the accumulation is added to the fund.
The remaining portion of the donor-restricted endowment fund that is not classified in net assets with permanent
donor restrictions is classified as net assets with donor restrictions until those amounts are appropriated for
expenditure by JLT in a manner consistent with the standard of prudence prescribed by PMIFA. However, JLT
has informed donors of its spending policy which states that no distributions will be made during the first five
years of the fund's existence or until it reaches a threshold balance of$400,000. Since these milestones have not
yet been reached,JLT adds all amounts earned to the permanently restricted balance.
In accordance with PMIFA, JLT considers the following factors in making a determination to appropriate or
accumulate donor-restricted endowment funds, (1) the duration and preservation of the various funds, (2) the
purposes of the donor-restricted endowment funds, (3) general economic conditions, (4) the possible effect of
inflation and deflation, (5) the expected total return from income and the appreciation of investments, (6) other
resources of JLT, and(7)JLT's investment policies.
Endowment net assets, all permanently restricted, totaled $68,074 and $68,071, respectively, at December 31,
2021 and 2020.
19
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
Changes in endowment net assets for the year ended December 31,2021 are as follows:
Temporary Permanent
Donor Restrictions Donor Restrictions Total
Endowment Net Assets l/l/2021 $ - $ 68,071 S 68,071
Contributions - -
Investment Income - 3 3
Net Appreciation(Depreciation) - -
Endowment Net Assets 12/31/21 $ - $ 68,074 S 68,074
Changes in endowment net assets for the year ended December 31,2020 are as follows:
Temporary Permanent
Donor Restrictions Donor Restrictions Total
Endowment Net Assets l/l/2020 $ - $ 67,477 67,477
Contributions - - -
Investment Income - 594 594
Net Appreciation(Depreciation) - - -
Endowment Net Assets 12/31/20 $ - $ 68,071 $ 68,071
Funds with Deficiencies- From time to time, the fair value of assets associated with individual donor-restricted
endowment funds may fall below the level that the donor or PMIFA requires JLT to retain as a fund of perpetual
duration. In accordance with U.S. GAAP, deficiencies of this nature are reported in net assets with donor
restrictions.There were no such deficiencies as of December 31,2021 or 2020.
Return Objectives and Risk Parameters- JLT has adopted investment and spending policies for endowment
assets that attempt to provide a predictable stream of funding to programs supported by its endowment while
seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of
donor-restricted funds that JLT must hold in perpetuity or for donor-specified periods as well as board-designated
funds. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner
that is intended to produce results that exceed the price and yield results of a custom Policy Index made up of
various indices. The composition of the custom Policy Index is based upon the strategic asset allocation of the
investment portfolio and assumes a moderate level of investment risk. The investment objectives of the
Operations Endowment Fund include maintenance of principal, timely liquidity, and preservation of purchasing
power over time.
Strategies Employed for Achieving Objectives- To satisfy its long-term rate-of-return objective, JLT notes that
for funds earmarked for capital appreciation, appropriate investments include intermediate term bond
funds/ETF's, equity mutual funds,equity ETF's,and unconstrained bond funds.
20
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
Spending Policy and How the Investment Objectives Relate to the Spending Policy- JLT's spending policy
intends that no distributions shall be made from the Operations Endowment Fund for the first five years of its
existence or until it reaches a threshold balance of$400,000, whichever shall first occur. After a five-year period
which ended in December of 2014, or after achieving the $400,000 threshold, distributions shall be made on an
annual basis as determined by the Board. Regular disbursements should be limited to a maximum of 5% of the
value of the portfolio at the beginning of each fiscal year, or one-half of the income generated by the fund for the
most recent fiscal year, whichever is less. At no time will the distribution of the spendable amount result in the
invasion of the original amounts donated.
F. ACCOUNTS RECEIVABLE:
Accounts receivable are stated at the amount management expects to collect from outstanding balances.
Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation
allowance based on its assessment of the current status of individual accounts. Balances still outstanding after
management has used reasonable collection efforts are written off through a charge to the valuation allowance and
a credit to trade accounts receivable.
Historically, bad debts have been immaterial. During 2021 and 2020, there were bad debts of$5,614 and $0,
respectively. As of December 31, 2021,management estimated that all accounts receivable were collectible.
JLT had no material amounts past due at December 31,2021.
G. PLEDGES RECEIVABLE:
JLT received promises to give from a number of donors in 2021 and in years prior to 2021. JLT has provided an
allowance for uncollectible amounts based on its assessment of the current status of individual pledges and has
discounted pledges to current value using a rate of .15%. Pledges receivable at December 31, 2021 are to be
received as follows:
Less than one year $ 1,017,724
Two to five years 24,321
Thereafter -
1,042,045
Less discount to present value (1,579)
Less allowance for uncollectible (6,200)
$ 1,034,266
H. NOTE RECEIVABLE:
On February 15, 2008, JLT granted a loan to an individual in relation to one of the pieces of conservation land
owned by JLT. A promissory noted was received in exchange.
21
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
The promissory note was for the amount of$93,750 and is to be paid in monthly installments of approximately
$600. The note matures on January 15,2028 with an annual interest rate of 5%.
Future expected amounts to be received at December 31,2021 are as follows:
2022 5,650
2023 5,939
2024 6,243
2025 6,562
2026 6,898
Thereafter 15,935
$ 47,227
I. FURNITURE, EQUIPMENT,AND IMPROVEMENTS:
Furniture, Equipment,and Improvements consist of the following at December 31,2021 and 2020:
2021 2020
Furniture&Equipment,and Software $ 57,351 $ 57,157
Accumulated Depreciation and Amortization (32,086) (50,586)
25,265 6,571
Leasehold Improvements 39,989 39,989
Accumulated Depreciation (22,247) (17,911)
17,742 22,078
Fixed Assets-Net $ 43,007 $ 28,649
Accumulated Depreciation and Amortization was $54,333 and $68,497 at December 31, 2021 and 2020,
respectively.
J. ECONOMIC DEPENDENCY:
For 2021 and 2020, grant funding was primarily provided by the State of Washington Recreation and
Conservation Office, State of Washington Department of Commerce, and Jefferson County. A reduction in this
level of support, if it were to occur,could have a significant impact on JLT's operation
K. RETIREMENT PLAN:
JLT maintains a Simplified Employee Pension—Individual Retirement Accounts Contribution Benefit Plan ("the
Plan"). Eligible employees may join the Plan after one year of service. There were employer contributions of
$15,866 and$14,576, respectively, for 2021 or 2020.
22
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
L. LAND AND CONSERVATION EASEMENTS:
Land and conservation easements at December 31 are summarized as follows:
2021 2020
Quimper Wildlife Corridor $ 1,305,501 $ 476,101
Chimacum Creek 385,348 385,348
Duckabush Riparian Forest 492,800 492,800
Duckabush-Hacheney 90,000 90,000
Donovan Creek 205,000 205,000
Duckabush Wetlands &Oxbow 530,000 530,000
Bulis Forest Preserve 125,240 125,240
Upper Snow Creek Forest 340,000 340,000
Snow Creek Uncas Preserve 325,000 325,000
Chimacum Commons 90,850 90,850
Snow Creek Estuary 86,000 86,000
Silver Reach 125,000 125,000
Gateway 85,000 85,000
Kilham Corner 38,930 38,930
Valley View 2,002,000 2,002,000
Discovery Bay 418,583 418,583
Fissler 75,000 75,000
Longmire 145,000 145,000
Snow Creek-Hopkins 95,000 95,000
Land Held for Sale 458,751 -
Conservation easements 67 66
Total Unrestricted Net Assets $ 7,419,071 $ 6,130,919
M. LEASE AGREEMENTS:
On June 21, 2012, JLT entered into an operating lease as lessee for its administrative office in Port Townsend,
Washington. The lease expired in June of 2014 and is now on a month to month basis. The agreement calls for
monthly payments of$2,235 plus utilities, which includes an additional adjacent space for 2021 and 2020. JLT
also rents a storage unit on a month to month basis. Rent expense totaled $34,132 and $32,455, for the years
ended December 31, 2021 and 2020, respectively.
23
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
N. INCOME TAX& UNCERTAIN TAX POSITIONS:
Jefferson Land Trust and JLT Resources, LLC (a disregarded entity) are tax exempt non-profit organizations
under the Internal Revenue Code Section 501(c)(3) and are not classified as a private foundation. Accordingly,
the financial statements do not include any provision for income taxes.
JLT files income tax returns in the U.S. federal jurisdiction. The Trust is no longer subject to U.S. federal income
tax examinations by tax authorities for years before 2018. Currently, there is no examination or pending
examination with the Internal Revenue Service(IRS)or any other state or federal taxing authorities.
JLT adopted the provisions of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes, on January 1,
2009. As of December 31, 2021, there are no tax positions for which the deductibility is certain but for which
there is uncertainty regarding the timing of such deductibility.
O. INVESTMENTS AND FAIR VALUE MEASUREMENTS:
JLT follows U.S. GAAP which establishes a framework for measuring fair value. That framework provides a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
Measurements) and the lowest priority to unobservable inputs (Level 3 Measurements). The three levels of the
fair value hierarchy under ASC 958 are described as follows:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in
active markets that the Trust has the ability to access.
Level 2: Inputs to valuation methodology include: Quoted prices for similar assets or liabilities in active markets.
Quoted prices for identical or similar assets or liabilities in inactive markets. Inputs other than quoted prices that
are observable for the asset or liability. Inputs that are principally from or corroborated by observable market data
by correlation or other means.
Level 3:Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of
any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of
observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value. There have been
no changes in the methodologies used at December 31,2021.
Stocks: Valued at quoted market prices in active markets for identical assets.
Mutual Funds: Valued at quoted market prices in active markets, which represent the net asset value (NAV) of
shares held by the JLT at year end.
Certificates of Deposit:Valued at original investment plus received and accrued interest.
24
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable
value or reflective of future fair values. Furthermore, although the Trust believes its valuation methods are
appropriate and consistent with other market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in a different fair value measurement at the
reporting date.
The following table sets forth by level, within the fair value hierarchy, JLT's assets at fair value as of December
31,2021:
Assets at Fair Value as of December 31,2021
Level Level Level Total
Mutual funds $ 918,294 $ - $ - $ 918,294
Total Assets at Fair Value: $ 918,294 $ - $ - $ 918,294
Certificates of deposit,held
at cost plus accrued interest 166,236
Total Investments $ 1,084,530
The following table sets forth by level, within the fair value hierarchy, JLT's assets at fair value as of December
31,2020:
Assets at Fair Value as of December 31,2020
Level Level Level Total
Mutual funds $ 760,592 $ - $ - $ 760,592
Total Assets at Fair Value: $ 760,592 $ - $ - $ 760,592
Certificates of deposit,held
at cost plus accrued interest 165,661
Total Investments $ 926,253
25
Jefferson Land Trust and Subsidiary
Notes to Consolidated Financial Statements
December 31,2021 and 2020
Investment return for the years ended December 31 consisted of the following:
2021 2020
Interest÷nd income $ 14,701 $ 21,902
Realized/unrealized(loss)gain 147,837 68,538
Total $ 162.538 $ 90,440
P. LAND PURCHASE AND HOLD FEE:
JLT signed a purchase and sale agreement with a third party during 2015 for the purchase of approximately 850
acres of forest land in Jefferson County. The terms of the agreement, dated March 17, 2015, required JLT to
purchase the property for an amount not to exceed the appraised fair market value of the property.
The terms of the agreement required the payment of a $100,000 non-refundable hold fee to the third party to
allow time for the purchase process to be completed and for JLT to raise the necessary funding to complete the
purchase. The hold fee agreement was to expire on March 17, 2019. During 2016, JLT signed an amended
agreement that resulted in the refund of$25,000 of the$100,000 hold fee and extended the agreement to nine year
from the original five years,now expiring in 2023.
JLT adjusted amortization of the hold fee to the new life of the agreement which resulted in an increase to the
hold fee asset of$8,331 in 2016.Amortization expense of$8,331 was recognized during 2021 and 2020.
Q. PAYCHECK PROTECTION PROGRAM LOAN:
In April of 2020, JLT received a loan of $119,740 from Kitsap Bank. The loan was part of the Paycheck
Protection Program, which is a United States Government program intended to mitigate the economic impact of
the Covid-19 Pandemic. The loan was guaranteed by the United States Small Business Administration and carried
a stated interest rate of 1%. The loan term was two years from inception, with interest payments starting on the
7th month following origination. However,the loan was eligible for forgiveness if the loan proceeds were used to
subsidize payroll and certain occupancy costs of JLT. JLT used the loan proceeds for eligible expenses during
2020 and recognized grant income on loan forgiveness,which occurred in 2021.
26