Colorado School of Mines
Financial Statements and Independent Auditor’s Reports

Financial Audit
Years Ended June 30, 2016 and 2015

















 



TABLE OF CONTENTS


PAGE

Independent Auditors’ Report ......................................................................................................... 1

Management’s Discussion and Analysis (Unaudited) .................................................................... 3

Financial Statements
Statements of Net Position ................................................................................................. 16
Statements of Revenues, Expenses, and Changes in Net Position .................................. 17
Statements of Cash Flows ................................................................................................. 18

Notes to Financial Statements ...................................................................................................... 20

Required Supplementary Information (Unaudited)
Defined Benefit Pension Plan Schedules

Schedule of the Proportionate Share of the Net Pension Liability ........................ 51

Schedule of Contributions and Related Ratios ..................................................... 51


CliftonLarsonAllen LLP
CLAconnect.com





Independent Auditors’ Report
 
Members of the Legislative Audit Committee:


Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities and the
discretely presented component unit of Colorado School of Mines (the University), an institution of
higher education of the State of Colorado, as of and for the years ended June 30, 2016 and 2015, and
the related notes to the financial statements, which collectively comprise the University’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 of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.

Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audits and the
reports of other auditors. We did not audit the financial statements of the Colorado School of Mines
Foundation, Inc. (the Foundation), a discretely presented component unit, discussed in note 1 to the
financial statements, for the years ended June 30, 2016 and 2015. Those financial statements were
audited by a n other auditor, whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for the Foundation, is based solely on the report of another auditor.
We conducted our audits in accordance with auditing standards generally accepted in the United
States of America 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 audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. The financial statements of the
Foundation were not audited in accordance with Government Auditing Standards.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors’ 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.

1


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

Opinions
In our opinion, based on our audits and the report of the other auditor, the financial statements referred
to above present fairly, in all material respects, the respective financial position of the business-type
activities and the discretely presented component unit of Colorado School of Mines as of June 30,
2016 and 2015, and the respective changes in financial position, and where applicable, cash flows
thereof for the year then ended, in accordance with accounting principles generally accepted in the
United States of America.

Emphasis of Matter
As discussed in Note 1, the financial statements of the University, an institution of higher education of
the State of Colorado, are intended to present the financial position, the changes in financial position,
and cash flows of only that portion of the business-type activities of the State of Colorado that is
attributable to the transactions of the University. They do not purport to, and do not, present fairly the
financial position of the State of Colorado as of June 30, 2016 and 2015, the changes in its
financial position, or, where applicable, its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America. Our opinions are not
modified with respect to this matter.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the defined benefit pension plan schedules as listed in the table of contents
be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the financial statements in an
appropriate operational, economic, or historical context. We and other auditors have applied certain
limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the financial statements, and other knowledge we obtained
during our audit of the 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.


a


CliftonLarsonAllen LLP
Broomfield, Colorado
November 22, 2016
2


Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Management is pleased to present this financial discussion and analysis of the Colorado School of Mines
(University). It is intended to make the University’s financial statements easier to understand and communicate
the University’s financial situation in an open and accountable manner. It provides an objective analysis of the
University’s financial position (Statements of Net Position) and results of operations (Statements of Revenues,
Expenses, and Changes in Net Position) as of and for the years ended June 30, 2016 and 2015 (Fiscal Years 2016
and 2015, respectively) with comparative information for Fiscal Year 2014. University management is
responsible for the completeness and fairness of this discussion and analysis and the financial statements, as well
as the underlying system of internal controls.
Understanding the Financial Statements
Financial highlights are presented in this discussion and analysis to help your assessment of the University’s
financial activities. Since the presentation includes highly summarized data, it should be read in conjunction with
the financial statements, which have the following six parts:
Independent Auditors’ Report presents unmodified opinions prepared by our auditors, an independent
certified public accounting firm, on the fairness, in all material respects, of our financial statements.
Statements of Net Position present the assets, deferred outflows of resources, liabilities, deferred inflows
of resources, and net position of the University at a point in time. Their purpose is to present a financial
snapshot of the University. They aid readers in determining the assets available to continue the
University’s operations; how much the University owes to employees, vendors and creditors; and a
picture of net positions and their availability for expenditure by the University.
Statements of Revenues, Expenses and Changes in Net Position present the total revenues earned and
expenses incurred by the University for operating, nonoperating, and other related activities during a
period of time. Their purpose is to assess the University’s operating and nonoperating activities.
Statements of Cash Flows present the cash receipts and disbursements of the University during a period
of time. Their purpose is to assess the University’s ability to generate net cash flows to meet its
obligations as they come due.
Notes to the Financial Statements present additional information to support the financial statements and
are commonly referred to as “Notes.” Their purpose is to clarify and expand on the information in the
financial statements. Notes are referenced in this discussion and analysis to indicate where details of the
financial highlights may be found.
Required Supplementary Information (RSI) presents additional information that differs from the basic
financial statements. In this report, the RSI includes schedules on the University’s proportionate share of
the Public Employees Retirement Association (PERA) pension liability and related information.
We suggest that you combine this financial discussion and analysis with relevant nonfinancial indicators to assess
the overall health of the University. Examples of nonfinancial indicators include trend and quality of student
applicants, incoming class size and quality, student retention, building condition, and campus safety. Information
about nonfinancial indicators is not included in this discussion and analysis but may be obtained from the
University’s Public Relations Office. It should be noted that the University’s financial statements include the
presentation of a discretely presented component unit, the Colorado School of Mines Foundation, Incorporated
(the Foundation), which is a required presentation by accounting standards. The Foundation is not included in
this financial discussion and analysis.
3

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Financial Highlights
Selected financial highlights for Fiscal Year 2016 include:
 Total University assets increased by 3.8 percent, total University liabilities increased by 9.5 percent and
total net position decreased by 4.1 percent. The decrease in net position and the deficit in unrestricted net
position is the result of recording the University’s proportionate share of the Colorado Public Employees’
Retirement Association (PERA) pension liability.
 The University’s net pension liability increased 14.6 percent, which also caused increases in the deferred
outflows and inflows of resources.
 Operating revenues increased by 3.8 percent while operating expenses increased by 8.5 percent.
 The University was engaged in several major construction projects including the CoorsTek Center for
Applied Sciences and Engineering, the Heating Plant Renovation, and the Student Center and Traditional
Halls Renovations.
The following sections provide further explanations of the University’s financial health.
Statements of Net Position
Table 1 - Condensed Statements of Net Position presents a financial snapshot of the University and serves, over
time, as a useful indicator of the strength of the University’s financial position. It presents the fiscal resources
(assets), claims against those resources (liabilities), and residual net position available for future operations (net
position). Analysis of the University’s deferred outflows and inflows of resources, capital assets, and related debt
is included in the section titled Capital Assets and Debt Management, while this section provides analysis of the
University’s noncapital assets and liabilities.
4

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)


Table 1 - Condensed Statements of Net Position as of June 30, 2016, 2015, and 2014 (all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014

2016 2015 2014
Amount
Percent Amount Percent
Assets







Cash and Restricted Cash
$ 143,132
146,352
168,241
(3,220)
(2.2%)
$ (21,899)
(13.0%)
Other
Noncapital
Assets
61,821 59,222 61,353 2,599
4.4 (2,131) (3.5)
Net Capital Assets
354,018
332,830
293,168
21,188
6.4
39,662
13.5
Total Assets
$ 558,971
538,404
522,762
20,567
3.8%
$ 15,642
3.0%
Deferred Outflows of Resources
$ 59,432
29,465
14,275
29,967
101.7%
$ 15,190
106.4%
Liabilities







Non-debt Liabilities
$ 341,811
307,527
46,330
34,284
11.1%
$ 261,197
563.8%
Debt
Liabilities
224,708 209,910 220,458 14,798
7.0 (10,548) (4.8)
Total Liabilities
$ 566,519
517,437
266,788
49,082
9.5%
$ 250,649
94.0%
Deferred Inflows of Resources
$ 3,516
19
-
3,497
18,405%
$ 19
100%
Net Position







Net Investment in Capital Assets
$ 174,605
161,559
133,694
13,046
8.1%
$ 27,865
20.8%
Restricted:


Nonexpendable
Purposes
6,335 6,336 5,794
(1) 0.0
542 9.4
Expendable
Purposes
20,109 21,846 25,773 (1,737) (8.0) (3,927) (15.2)
Unrestricted (152,681)
(139,328)
104,988
(13,353)
9.6
(244,316)
(232.7)
Total Net Position
$ 48,368
50,413
270,249
(2,045)
(4.1%) $ (219,836)
(81.3%)
Assets
Cash and restricted cash comprises approximately 69.8 percent and 71.2 percent of the University’s total
noncapital assets as of June 30, 2016 and 2015, respectively. Restricted cash of $39,172,000 and $39,139,000, as
of June 30, 2016 and 2015, respectively, primarily consists of unspent revenue bond proceeds that will be used for
capital related activity as well as unspent gifts, grants, and contract revenues. Total cash and restricted cash
decreased during the past two fiscal years as a result of continued spending on various capital projects. The
Statements of Cash Flows provide additional information on where cash is received and how it is used by the
University. The increase in other noncapital assets from Fiscal Year 2015 to Fiscal Year 2016 is the result of
increased accounts receivables due from the federal government and private sponsors which offset a decline in the
value of the University’s investments due to poor market conditions. The decrease in other noncapital assets from
Fiscal Year 2014 to Fiscal Year 2015 is the result of improved collections on outstanding receivables and a
decrease in the value of the University’s investment due to a decline in market conditions.
Non-Debt Liabilities
The University’s non-debt related liabilities totaling $341,811,000 and $307,527,000 as of June 30, 2016 and
2015, respectively, comprise 60.3 percent and 59.4 percent, respectively, of the total liabilities. The two largest
categories of non-debt related liabilities are the net pension liability (86.6 percent of total non-debt related
liabilities) and unearned revenue related to summer tuition and fees and sponsored projects (4.8 percent of total
non-debt related liabilities). As a result of implementing Governmental Accounting Standards Board Statement
No. 68, Accounting and Financial Reporting for Pensions (Statement No. 68), in Fiscal Year 2015, the University
recorded as a liability, its proportionate share of the net pension liability of the cost-sharing multiple-employer
defined benefit pension fund, administered by the Public Employees’ Retirement Association (PERA), that the
University contributes to on behalf of its employees. While the University is required to record this liability, the
University is under no obligation to fund the liability, nor does the University have any ability to affect funding,
benefit, or annual required contribution decisions of the plan. Those decisions are controlled by PERA and the
State’s General Assembly. See Note 12 of the accompanying financial statements for more information related to
5

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

the net pension liability. Unearned tuition and fees represent cash collected for the summer term that extends
beyond the end of the fiscal year. Unearned sponsored project revenue represents amounts paid by grantors and
contractors for which the University has not met all of the requirements for revenue recognition. These amounts
will be recognized as revenue in future periods after all requirements have been satisfied. See Note 7 for
additional information on the University’s unearned revenues.
The non-debt related liabilities increased from 2015 to 2016 due mainly to the increase in net pension liability of
$37,801,000. The non-debt related liabilities increased from 2014 to 2015 due to the first year recording of the
net pension liability of $258,474,000 and an increase in amounts due to vendors of $4,400,000 related to
construction activity on campus.
Net Position
A portion of the University’s net position has restrictions imposed by external parties, such as donors, or are
invested in capital assets (property, plant, and equipment) and are therefore not immediately available to spend.
To help understand these restrictions, the University’s net position is shown in four categories.
 The largest category of net position relates to the University’s net investment in capital assets. This
consists of the University’s capital assets less accumulated depreciation and related debt issued to fund
the purchase or construction of those assets. This amount represents the University’s investments in
campus facilities and equipment that is necessary to carry out the teaching, research, and student centered
mission of the University. The increases in each of the past three years reflect the University’s
commitment to improving the students’ on campus experience through new and renovated student and
academic facilities along with various infrastructure improvements. Additional discussion on the
University’s capital activity is included in the Capital Assets and Debt Management section of this
discussion and analysis.
 Net position restricted nonexpendable represents gift funds received from donors whereby the donor has
specified the original principal be set aside for perpetual investment (endowment) with a set amount of
spendable distribution based on University policy. The majority of the endowment assets benefiting the
University are managed by the Foundation, which is a discretely presented component unit. See Note 1.
 Net position restricted expendable represents funds received for specific purposes, but for which the
University is allowed to fully expend those funds in accordance with the purposes identified by the
individual or entity providing the funds. This includes spendable distributions and accumulated
undistributed earnings from the University’s endowments.
 Net position unrestricted represents the amount available for spending for any lawful purpose and are at
the full discretion of management. In some instances, management or the Board has placed internal
designations on the use of these funds. As discussed above, the decrease in unrestricted net position
reflects the recording of the University’s proportionate share of PERA’s net pension liability and the
associated pension expenses beyond the University’s annual required contributions. Table 2 –
Unrestricted Net Position reflects the impact on the University’s unrestricted net position of recording the
net pension liability and associated deferred outflows and inflows of resources.
Table 2 – Unrestricted Net Position (in thousands)



6/30/16 6/30/15
Unrestricted Net Position with Pension Impact
$ (152,681)
(139,328)
Cumulative effect on Unrestricted Net Position associated
with the net pension liability
260,475
243,712
Unrestricted Net Position without Pension Impact
$ 107,794
104,384
Because the University is not required, and has no plans, to fund the net pension liability, the
unrestricted net position without the pension impact is used for budgetary and operational purposes.
6

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Statements of Revenues, Expenses and Changes in Net Position
Table 3 - Condensed Statements of Revenues, Expenses and Changes in Net Position presents the financial
activity of the University during the fiscal year. A key component of these statements is the differentiation
between operating and nonoperating activities. Operating revenues, such as tuition and auxiliary operations, are
earned primarily by providing services to the students and various constituencies of the University. Operating
expenses are incurred to provide services, primarily instruction and research, or acquire goods necessary to carry
out the mission of the University for which the University earns operating revenues. Nonoperating revenues are
received when goods or services are not directly provided and include contributions, investment income, federal
interest subsidies, and Pell grant revenue. Nonoperating expenses include interest on long term debt, bond
issuance costs, and gains/losses on disposals of assets.
Table 3 - Condensed Statements of Revenues, Expenses and Changes in Net Position for Years Ended June 30, 2016,
2015, and 2014(all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014

2016 2015 2014
Amount
Percent Amount Percent
Operating Revenues
$ 215,741
207,782
199,739
7,959
3.8% $ 8,043
4.0%
Operating Expenses
252,028
232,387
206,201
19,641
8.5
26,186
12.7
Operating (Loss)
(36,287) (24,605) (6,462) (11,682) 47.5
(18,143) 280.8
Net Nonoperating Revenues
18,430
19,802
18,443
(1,372)
(6.9)
1,359
7.4
Income (Loss) Before Other
Revenues
(17,857) (4,803) 11,981 (13,054) 271.8 (16,784)
(140.1)
Other Revenues
15,812
19,517
18,715
(3,705)
(19.0)
802
4.3
Increase in Net Position
(2,045) 14,714 30,696 (16,759)
(113.9) (15,982)
(52.1)
Net Position, Beginning of Year
50,413
270,249
239,553
(219,836)
(81.3)
30,696
12.8
Adjustment for change in
accounting principle
-
(234,550) -
234,550 (100.0) (234,550) 100.0
Net Position, End of Year
$ 48,368
50,413
270,249
(2,045)
(4.1%)
$ (219,836)
81.3%
Table 4 - Operating and Nonoperating Revenues for the Years Ended June 30, 2016, 2015, and 2014 provides
gross operating and nonoperating (noncapital) revenues by major sources. As Table 4 shows, the University’s
total operating revenues increased 3.8 percent and 4.0 percent for Fiscal Years 2016 and 2015, respectively, while
non-operating revenues have decreased in each of the last two years. The decreases are primarily the result of
lower investment income each year.
7

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)


Table 4 - Operating and Nonoperating Revenues for Years Ended June 30, 2016, 2015, and 2014 (all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014

2016 2015
2014
Amount
Percent Amount Percent
Operating
Revenues

Student Tuition and Fees, Net
$ 115,537
115,027
104,589
$ 510
0.4%
$ 10,438
10.0%
Grants and Contracts
59,932
55,998
60,601 3,934 7.0 (4,603)
(7.6)
Fee for Service
14,390
12,475
11,636
1,915
15.4
839
7.2
Auxiliary
Enterprises,
Net
22,314
21,304
19,870 1,010 4.7 1,434 7.2
Other Operating
3,568
2,978
3,043
590
19.8
(65)
(2.1)
Total Operating Revenues
215,741
207,782
199,739 7,959 3.8 8,043 4.0
Nonoperating Revenues







State Appropriations
2,898
1,858
2,218
1,040
56.0
(360)
(16.2)
Gifts
19,931
20,258
16,581
(327)
(1.6)
3,677
22.2
Investment Income, Net
(361)
890
5,914
(1,251)
(140.6)
(5,024)
(85.0)
Federal Nonoperating
4,081
4,367
4,240
(286)
(6.5)
127
3.0
Other Nonoperating, Net
165
155
76
10
6.5
79
103.9
Total Nonoperating Revenues
26,714 27,528 29,029
(814)
(3.0) (1,501)
(5.2)
Total Revenues (noncapital)
$ 242,455
235,310
228,768
7,145
3.0%
$ 6,542
2.9%
The University has experienced increases in most sources of operating revenues over the past three years. The
increase in student tuition and fees reflects a combination of increases in tuition rates and enrollment (see Tables
13 and 14) which offset decreases in the University’s continuing education program.
Student Tuition and Fees (net) increased only 0.4 percent from Fiscal Year 2015 due to a decline in continuing
education revenue associated with the decline in the energy and commodities market along with an increase in
scholarship allowance. Grants and Contracts revenue for Fiscal Year 2016 was comparable to Fiscal Year 2014.
Fiscal Year 2015 revenue reflected a decline as compared to Fiscal Years 2016 and 2014 which was driven by the
federal government shutdown in Fiscal Year 2014 causing delays in the government issuing awards. As a result,
Fiscal Year 2016 and Fiscal Year 2014 revenues are higher than Fiscal Year 2015 revenue by 7.0 percent and 8.2
percent respectively. The University remains committed to increasing its focus and national role as a research
institution. In Fiscal Year 2016, the University secured research awards of $60,200,000 compared to $63,900,000
in Fiscal Year 2015 and $53,700,000 in Fiscal Year 2014. The University continues to focus on securing funding
from both Federal and private industry sources as additional resources are focused towards research. Revenue
from the Federal Government represents approximately 60.1 percent and 61.6 percent of total grants and contracts
revenue for Fiscal Years 2016 and 2015, respectively. Revenue generated from grants and contracts also benefit
the University in that they generally allow for reimbursement of a portion of any related administrative and
facility overhead costs. In Fiscal Years 2016 and 2015, the University received approximately $11,966,000 and
$11,682,000, respectively, of such administrative and facility overhead costs reimbursements.
The University receives funding from the State of Colorado in two ways; (1) fee for service contracts with the
Department of Higher Education and (2) stipends to qualified undergraduate students used to pay a portion of
tuition. Funding in Fiscal Years 2016 and 2015 related to fee for service contracts increased by $1,915,000 and
$839,000, respectively. The level of funding received from the State is dependent on the State’s budgetary
process.
8

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

The anticipated funding related to student stipends is incorporated into the University’s student tuition rates.
Table 5 – College Opportunity Fund (COF) – Undergraduate Student Stipends reflects the amount of COF
stipends applied toward student accounts, the per credit hour stipend allotted per student approved by the State
Legislature, and the total number of stipend eligible hours that students applied for during the past three years.
Table 5 – College Opportunity Fund –Undergraduate Student Stipends

2016 2015 2014
Student stipends
$ 6,157,000
6,194,000
5,177,000
Stipend allotment
$ 75/hour
$ 75/hour
$ 64/hour
Stipend eligible hours
82,100.75
82,858.50
80,956.50
Gifts for noncapital purposes, received primarily from the University’s Foundation, remained flat in Fiscal Year
2016, compared to Fiscal Year 2015. The University and Foundation are nearing the end of a five year
fundraising campaign. This campaign has resulted in several large non-capital and capital donations in support of
the University’s academic and research missions. As the State’s budget for higher education continues to be
uncertain, the University will need to look to other sources of funding as well as contributions to supplement
funding challenges in other areas.
Federal nonoperating revenues consist of interest subsidies received for taxable Build America Bonds (BAB)
issued by the University in addition to financial aid received under the Pell program. The University received
$1,161,000, $1,164,000, and $1,177,000 in federal interest subsidies in Fiscal Years 2016, 2015, and 2014,
respectively. The decrease in revenue experienced during the past three years is a direct result of the federal
sequestration and legislation passed to reduce federal subsidies on BAB’s by approximately 8 percent. Revenues
from the Pell program for Fiscal Years 2016, 2015, and 2014 were $2,921,000, $3,203,000, and $3,064,000,
respectively. Revenues fluctuate based on student activity in the Pell program each year.

Over the past three years, the University has experienced fluctuations in investment income due to continued
unfavorable financial markets that impact the fair market value of the University’s investments held by the
Foundation and amounts held by the State Treasurer. The University experienced unrealized gains (losses) in
Fiscal Years 2016, 2015, and 2014 of ($1,581,000), ($179,000), and $4,351,000, respectively. The realized
investment income was $1,498,000, $1,884,000, and $2,205,000, respectively, for this same periods.
The programmatic and natural classification uses of University resources are displayed in Table 6 - Operating
Expenses by Function and Natural Classification.
9

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Table 6 - Operating Expenses by Function and Natural Classifications for Years Ended June 30, 2016, 2015, and 2014
(all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014
2016
2015
2014
Amount
Percent Amount Percent
By Functional Expense







Education
and
General

Instruction
$ 79,830
73,685
64,595
6,145
8.3% $ 9,090
14.1%
Research
48,891 46,923 46,691 1,968 4.2
232 0.5
Public
Service
327 448 165 (121)
(27.0) 283
171.5
Academic
Support
21,544 18,934 16,058 2,610 13.8 2,876 17.9
Student
Services
8,242 7,309 6,044 933 12.8 1,265 20.9
Institutional
Support
23,339 18,240 15,555 5,099 28.0 2,685 17.3
Operation and Maintenance of Plant
23,994
22,720
16,969
1,274
5.6
5,751
33.9
Scholarships and Fellowships
1,177
1,484
1,221
(307)
(20.7)
263
21.5
Total Education and General
207,344
189,743
167,298
17,601
9.3
22,445
13.4
Auxiliary
Enterprises
26,513 25,866 22,690
647 2.5 3,176 14.0
Depreciation and amortization
18,171
16,778
16,213
1,393
8.3
565
3.5
Total Operating Expenses
$ 252,028
232,387
206,201
19,641
8.5%
$ 26,186
12.7%








By Natural Classification







Salaries and Benefits
$ 168,674
151,734
131,712
16,940
11.2% $ 20,022
15.2%
Operating
Expenses
65,183 63,875 58,276 1,308
2.0 5,599
9.6
Depreciation
18,171 16,778 16,213 1,393
8.3
565
3.5
Total Operating Expenses
$ 252,028
232,387
206,201
19,641
8.5% $ 26,186
12.7%
Operating expenses increased overall by 8.5 percent from Fiscal Year 2015 to 2016 and by 12.7 percent from
Fiscal Year 2014 to 2015. The increases in the past two years are attributed to the following:
 Increases in salaries and benefits in support of the teaching and research missions and the administration
of the University. The salary increases of $3,868,000 results from a combination of merit increases and
hiring new faculty and staff to address operational demands. The increase in benefits of $13,072,000 is
primarily the result of increased pension expenses and increased costs of University provided health
benefits. In Fiscal Year 2016, the University recorded $16,763,000 of pension related expenses related to
Statement No. 68. For Fiscal Year 2015, pension related expenses increased $9,162,000 due to the
implementation of Statement No. 68. These increases impact most of the functional expense categories.
 Increases in general operating costs, including payments to subcontractors related to sponsored project
activity, lab equipment and supplies, software licenses, non-capitalized campus facility improvements,
and student meal plans, which offset decreases in student health insurance and purchases of sponsored
owned and funded equipment.
 The amounts reported for scholarships and fellowships expenses do not reflect the actual resources
dedicated to student aid. The majority of the University’s financial aid resources are applied to the
students’ accounts, which do not result in a disbursement to the student. Financial aid applied to student
accounts are netted against tuition and fee revenue as scholarship allowance. The University’s total
financial aid resources benefiting students were $30,092,000, $27,436,000, and $24,556,000, in Fiscal
Years 2016, 2015, and 2014, respectively.
10

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Capital Assets and Debt Management
As indicated in Table 7 - Capital Asset Categories, the University’s capital assets consist of land, works of art,
construction in progress, land improvements, buildings and improvements, software, equipment, library materials,
and intangible assets with a gross book value of $562,555,000, $526,276,000, and $471,217,000 at June 30, 2016,
2015 and 2014, respectively. Accumulated depreciation on depreciable assets totaled $208,537,000,
$193,446,000, and $178,049,000, respectively. The University continues to invest in academic and auxiliary
facilities to enhance the educational and campus experience for students. During the construction of a project,
costs are accumulated in construction in progress. Upon completion of the project, the costs are moved out of
construction in progress into the appropriate asset classification.
Table 7 - Capital Asset Categories (before depreciation) as of June 30, 2016, 2015, and 2014 (all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014

2016 2015 2014
Amount
Percent Amount Percent
Land
$ 7,652
7,652
7,652
-
0.0%
$ -
0.0%
Works
of
Art
187 - -
187
100 - -
Construction in Progress
31,403
45,352
31,943
(13,949)
(30.8)
13,409
42.0
Land
Improvements
20,153 19,918 19,918
235
1.2
-
-
Buildings & Improvements
416,748
373,618
336,698
43,130
11.5
36,920
11.0
Software
2,028 1,803 1,742 225 12.5
61 3.5
Equipment
71,509 65,191 60,668 6,318
9.7 4,523
7.5
Library
materials
12,275 12,142 11,996
133
1.1
146
1.2
Intangible
600
600
600
-
0.0
-
-
Total Capital Assets
$ 562,555
526,276
471,217
36,279
6.9%
$ 55,059
11.7%
During the past three years, the University has completed or began construction on the following capital projects:
Completed Projects
 Elm Street Residence and Dining Hall. This is a 209 bed residence hall and 600 seat student dining
facility. This was a $34,000,000 debt financed project that will be repaid by revenues generated by the
University’s housing and dining operations. The new residence hall was placed into service in September
2014 and the dining hall was placed in service in January 2015.
 Starzer Welcome Center. This is the new headquarters of the Foundation, the Colorado School of Mines
Alumni Association, and the University’s Undergraduate Admissions Office. The $11,268,000 project
was funded from a combination of donations, debt financing, and University resources. The debt issued
to finance a portion of the project will be repaid from rent received from the Foundation. The Starzer
Welcome Center was placed into service in November 2015.
 Clear Creek Athletic Complex. The project constructed and equipped the Harold and Patricia Korrel
Athletic Center, a contemporary football stadium including coaches’ offices, locker rooms, training
facilities and meeting rooms for more than 200 football and track and field athletes. The Center also
houses offices, event facilities, and functional space for club sports and intramurals. The Complex also
includes the new Marv Kay football stadium along with a new soccer building with locker and restroom
facilities, conference rooms, and a press box. This $25,256,000 project was funded from a combination of
gifts, debt financing, and University resources. The Clear Creek Athletic Complex was placed into service
in September 2015.
11

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Active Projects
 The CoorsTek Center for Applied Sciences and Engineering. The University broke ground on a
$52,426,000 academic and research building that will bring together interdisciplinary instructors and
researchers in biotechnology, materials characterization and nuclear engineering. This new facility will
also serve as the new home for the University’s Physics program and the College for Applied Science and
Engineering. The project is funded through a significant private donation, State appropriation, and
University resources. The CoorsTek Center for Applied Science and Engineering is anticipated to be
placed into service in the fall of 2017.
 Heating Plant Renovation Phase 1. This is a $13,454,000 project to upgrade the University’s heating and
cooling plant facilities funded by a state appropriation and University resources.
 Student Center Renovation. This is a $11,335,000 project to update and renovate the University Student
Center funded by debt financing and University resources. The debt issued to finance a portion of the
project will be repaid from Student Center operations.
A list of the larger on-going capital projects is detailed in Table 8 – Current Capital Construction Projects.
Further detail regarding capital asset activity can be found in Note 4.
Table 8 – Current Capital Construction Projects (in thousands)
Project Description
Financing Sources
Budget
The CoorsTek Center for Applied Sciences and
Engineering
Gifts, State appropriation, University resources
$ 52,426
Heating Plant Renovation
State appropriation, University resources
13,454
Student Center Renovation
Debt financing, University resources
11,335
18th Street Plaza
University resources
1,775
Edgar Mine Renovation
Gifts
1,000

In addition to operating and nonoperating revenues, the University received capital revenues in the amount shown
in Table 9 – Capital Revenues. The increase in capital appropriations and contributions from the State over the
prior year is related to the construction of the CoorsTek Center for Applied Sciences and Engineering
($7,882,000) and the Heating Plant Renovation ($2,162,000). The majority of capital grants and gifts received in
Fiscal Years 2015 and 2014 is primarily related to the construction of the Clear Creek Athletic Complex, the
Starzer Welcome Center, and the retirement of bonds associated with the construction of Marquez Hall.
Table 9 – Capital Revenues for the Years Ended June 30, 2016, 2015, and 2014 (all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014
Revenue Classification
2016
2015
2014 Amount Percent Amount Percent
Capital appropriations and
contributions from the State
$ 10,044
1,760
-
8,284
470.7% $ 1,760
100.0%
Academic facility fee
3,334
3,274
3,153
60
1.8
121
3.8
Capital grants and gifts
2,414
13,827
4,332
(11,413)
(82.5)
9,495
219.2
Total Capital Revenues
$ 15,792
18,861
7,485
(3,069)
(16.3%)
$ 11,376
152.0%

12

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Table 10 – Deferred Outflows/Inflows of Resources details the types and amounts of such activity. In accordance
with accounting standards, the University is required to separately disclose the change in the fair market value of
the interest rate swap in the Statement of Net Position in sections labeled Deferred Outflows of Resources or
Deferred Inflows of Resources, depending on the change in the fair market value. As of June 30, 2016, 2015, and
2014, the outstanding swap had a fair market value of ($13,222,000), ($9,515,000), and ($8,566,000),
respectively. The change in fair market value of the interest rate swap as of June 30, 2016 and 2015 resulted in
$3,937,000 and $1,170,000, respectively, being recorded as additional deferred outflow of resources in the
Statement of Net Position.
Table 10 – Deferred Outflows/Inflows of Resources at June 30, 2016, 2015, and 2014 (all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014
Type 2016
2015
2014 Amount Percent Amount
Percent
Loss on bond refunding
$ 14,012
12,517
13,278
1,495
11.9% $ (761)
(5.7%)
Components of pension liability
39,316 14,781
- 24,535
166.0 14,781 100.0
SWAP
valuation
6,104 2,167 997 3,937 181.7 1,170 117.4
Total Deferred Outflows of Resources
$ 59,432
29,465
14,275 29,967 101.7% $

15,190 106.4%
Components of pension liability
$ 3,516
19
-
3,497
18,405.3%
19
100.0%
Total Deferred Inflows of Resources
$ 3,516
19
-
3,497
18,405.3% $ 19
100.0%
With the implementation of Statement No. 68, certain amounts associated with recording the University’s
proportionate share of the net pension liability are required to be reported as either a deferred outflow or deferred
inflow of University resources. These deferred outflows or inflows of resources are amortized to expense over a
period of years depending on the specific type. See Note 12 and the RSI for additional information.
The University’s long-term obligations, as shown in Table 11 – Long-Term Debt Categories, are comprised
principally of various revenue bonds issued to finance construction of the capital assets discussed above. As of
June 30, 2016, 2015, and 2014, bonds and leases payable of $211,486,000, $200,395,000, and $211,892,000,
respectively, were outstanding.
Table 11 – Long-Term Debt Categories at June 30, 2016, 2015, and 2014 (all dollars in thousands)




Increase (Decrease)




2016 vs 2015
2015 vs 2014
Debt Type
2016
2015
2014
Amount Percent Amount Percent
Revenue bonds
$ 211,389
200,395
211,892
10,994
5.5%
$ (11,497)
(5.4%)
Capital
leases
97 - -
97
100.0 - -
Total Long-Term Debt
$ 211,486
200,395
211,892 11,091 5.5%
$

(11,497) (6.0%)
During Fiscal Year 2016, the University issued $34,690,000 of Series 2016 bonds of which $13,090,000 provided
bridge funding for the construction of the CoorsTek Center for Applied Sciences and Engineering with the
remaining $21,600,000 was used to refinance $11,070,000 of the Series 2009A bonds and $10,530,000 of the
Series 2009C bonds.
During Fiscal Year 2015, in addition to the normal debt service payments, the University paid $4,790,000 to retire
the Series 2009D bonds and paid $270,000 in additional principal payments related to the Refunding and
Improvement Series 2004 bonds.
Three of the University’s outstanding bond issues qualify as Build America Bonds (BAB). As qualified BAB, the
University expects to receive a cash subsidy payment from the United States Treasury, referred to as Federal
Direct Payments, equal to a percentage of the interest payable on the bonds on or around each interest payment
date.
13

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Factors Impacting Future Periods
The University’s ability to maintain and improve the quality of academic programs, undertake new strategic
initiatives, and meet its core mission and ongoing operational needs is impacted by many factors, principally by:
student enrollment and the resulting tuition and fees revenue, research volume, the level of state support, and the
University’s largest expense, compensation costs.
Fiscal Year 2017 brings a moderating of our revenue sources. The University will see a slight increase in
financial support from the State and expects a softening of our primary revenue source due to our moderating of
tuition rate increases along with the leveling off of undergraduate and graduate enrollment. The University has
taken several steps to counteract this leveling off, including opening the University’s enrollment wait list six
weeks earlier and offering additional financial aid packages. The University is also experiencing a decrease in
donations which is a reflection of what is occurring in the energy and commodities industries. These pressures
have made it more difficult to manage the delicate balance of making strategic and critical investments while
minimizing the impact on students and tuition.
State funding in the form of a fee for service contract and student stipends is budgeted to increase 0.4 percent in
Fiscal Year 2017. This compares to increases of 10 percent and 11 percent, respectively, in Fiscal Years 2016
and 2015 as shown in Table 12 - State Operating Support.
Table 12 – State Operating Support (all dollars in thousands)
% of Total State Operating
Total Operating
Support to Total
Fiscal Year
State Support *
Revenues
Operating Revenues
2017** $20,639
239,605
9.0%
2016 20,547
215,741
9.5
2015 18,669
207,782
9.0
2014 16,813
199,739
8.4




*State support includes a fee for service contract and student stipends funded from the
College Opportunity Fund.
**Fiscal Year 2017 Amount of State Support is based on amounts included in the State’s
Long Appropriation Act (Long Bill). Total Operating Revenues is based on the University’s
Fiscal Year 2017 projected revenues.
To offset increases in operating costs, the University increased resident undergraduate tuition rates and non-
resident undergraduate tuition rates for Fiscal Year 2017 by 3.0 percent and 4.0 percent, respectively. This
compares to increases for Fiscal Year 2016 of 2.6 percent and 3.9 percent, respectively. Table 13 - Full Time
Tuition and Room and Board Charges per Year, provides a trend of tuition and room and board charges for the
past four academic years.
Table 13 - Full Time Tuition and Room and Board Charges per Year
Annual Full-time

Undergraduate Tuition Rates
Annual Room and Board (avg.)
Academic
Year Residents*
Non-residents Double
Single
Meal
Plan
2017
$

15,690
34,020 6,316 7,546 5,332
2016
15,225
32,700 5,362 6,668 5,236
2015
14,790
31,470 5,106 6,350 4,986
2014
14,400
30,330 4,910 6,106 4,801
* Reported net of student stipends
14

Colorado School of Mines
Management’s Discussion and Analysis
(unaudited)

Tuition rates combined with enrollment changes have a significant impact on the University’s ability to provide
the quality of education expected by our students. Table 14 – Fall Enrollment Trends presents undergraduate,
graduate and combined enrollments for each of the last three academic years.
Table 14 - Fall Enrollment Trends





Undergraduate Students
Graduate Students
Total
Academic
Non-
Non-
Non-
Year Residents
residents Total Residents
residents Total
Residents
residents Total
2016 2,896 1,875 4,771 448 382 830 3,456 2,353 5,809
2015 2,947 1,713 4,660 465 404 869 3,412 2,117 5,529
2014 2,896 1,585 4,481 483 351 834 3,379 1,935 5,314

Table 15 - Fall Semester Undergraduate Admissions Trends highlights the University’s ability to attract freshmen
students and transfer students. As demonstrated by Tables 14 and 15, the University continues to be very
successful in attracting new students.

Table 15 - Fall Semester Undergraduate Admissions Trends
Number of
Number
Percent
Number
Percent

Fall of Year
Applicants
Accepted
Accepted
Committed
Committed

2016 12,794 5,245 41.0%
1,126 21.5%
2015 12,420 4,848 37.4%
1,132 24.4%

2014 13,195 4,768 36.1%
1,159 24.3%
In addition to steps taken to address revenues, the University continues to look at ways to control increases in
operating costs. Beginning January 2017, the University will provide an alternative retirement plan for newly
hired faculty. The anticipated employer contribution to the Mines Defined Contribution Plan is expected to be in
the 12 percent range compared to the combined 20.15 percent required retirement contribution to PERA for
existing employees. Existing academic and administrative faculty will be given the opportunity to move from
PERA to the Mines Defined Contribution Plan. The financial savings to the University will increase significantly
in future years as the workforce turns over and a larger percentage of academic and administrative faculty move to
the new retirement plan.
Given all of the economic conditions of the past few years, the University’s financial health is well-positioned.
Over the past few years, the University has ended the year with an overall increase in net position, setting aside
the impact of implementing Statement No. 68, primarily due to strong enrollment, modest tuition increases,
consistent contributions, and deliberate measures taken to contain costs. Research activity remains strong with
Fiscal Year 2016 research award volume decreasing slightly from the record year of Fiscal Year 2015, but was
higher than the research award volume in Fiscal Year 2014.
As the University looks forward, it must ensure that the human capital, physical infrastructure, and financial aid
resources accommodates student academic and social needs and expectations, optimizes the professional
opportunities for its faculty, fosters growth in research, and enhances business process, all with a single focus of
being a world-class institution. The University’s Fiscal Year 2017 budget was developed to devote resources to
all of these strategic areas.
Requests for Information
This financial report is designed to provide a general overview of the Colorado School of Mines’ finances for all
those with an interest in the University’s finances. Questions concerning any other information provided in this
report or requests for additional financial information should be addressed to the Department of Finance and
Administration, 1500 Illinois Street, Golden, Colorado 80401-1887.
15

Colorado School of Mines
Statements of Net Position
June 30, 2016 and 2015 (in thousands)


2016 2015
Component
Component
University
Unit University Unit
Assets


Current
Assets

Cash and cash equivalents
$ 103,960
11,503
107,213
9,303
Short term investments
-
162
-
159
Accounts and loans receivable,
net
25,077 6,230
17,185 3,820
Other
assets
801 -
590 -
Total Current Assets
129,838 17,895
124,988 13,282
Noncurrent
Assets

Restricted cash and cash equivalents
39,172
59
39,139
64
Investments
31,075 282,089 33,731 308,741
Accounts and loans receivable

4,868 27,863 4,840 32,061
Other
assets
- 751
2,876 709
Capital assets, net
354,018
-
332,830
3
Total
Noncurrent
Assets
429,133 310,762 413,416 341,578
Total Assets
$ 558,971
328,657
538,404
354,860
Total Deferred Outflows of Resources
$ 59,432
-
29,465
-
Liabilities

Current
Liabilities

Accounts payable and accrued liabilities
$ 19,815
3,287
24,598
2,159
Accrued compensated absences
610
-
575
-
Unearned
revenue
16,536 -
15,124 -
Bonds
payable
7,758 -
5,460 -
Other
liabilities
971 -
1,547 -
Total Current Liabilities
45,690 3,287
47,304 2,159
Noncurrent
Liabilities

Accrued compensated absences
5,973
-
5,548
-
Bonds
payable
203,728 -
194,935 -
Interest rate swap agreement
13,222
-
9,515
-
Pension
liability
296,275 -
258,474 -
Other
liabilities
1,631 41,726 1,661 44,931
Total Noncurrent Liabilities
520,829
41,726
470,133
44,931
Total Liabilities
$ 566,519
45,013
517,437
47,090
Total Deferred Inflows of Resources
$ 3,516
-
19
-
Net Position




Net investment in capital assets
$174,605
-
161,559
3
Restricted
for
nonexpendable
purposes

Instruction
3,360 -
3,340 -
Scholarships and fellowships
2,051
75,166
2,038
80,352
Other
924 80,737
958 86,462
Total restricted for nonexpendable purposes
6,335
155,903
6,336
166,814
Restricted
for
expendable
purposes

Scholarships and fellowships
3,813
41,977
4,165
47,362
Loans
4,289 1,631 4,190 1,660
Research
6,123 2,526 6,368 2,487
Capital
projects
2,420 7,840 3,176 7,468
Other
3,464 54,013 3,947 57,789
Total restricted for expendable purposes
20,109
107,987
21,846
116,766
Unrestricted (152,681)
19,754
(139,328)
24,187
Total Net Position
$ 48,368
283,644
50,413
307,770
The accompanying notes are an integral part of the financial statements
16

Colorado School of Mines
Statements of Revenues, Expenses and Changes in Net Position
Years Ended June 30, 2016 and 2015 (in thousands)

2016
2015
Component
Component
University
Unit University Unit
Operating
Revenues


Tuition and fees, (net of scholarship allowance of
$28,544 in 2016 and $25,696 in 2015)
$ 115,537
-
115,027
-
Fee for service
14,390
-
12,475
-
Federal grants and contracts
36,010
-
34,489
-
State grants and contracts
5,021
-
3,614
-
Nongovernmental grants and contracts
18,901
-
17,895
-
Auxiliary enterprises, (net of scholarship allowance
of $371 in 2016 and $256 in 2015)
22,314
-
21,304
-
Contributions -
14,534
-
33,091
Other operating revenues
3,568
2,594
2,978
2,423
Total Operating Revenues
215,741
17,128
207,782
35,514
Operating Expenses




Education and General




Instruction 79,830
-
73,685
-
Research 48,891
-
46,923
-
Public service
327
-
448
-
Academic support
21,544
-
18,934
-
Student services
8,242
-
7,309
-
Institutional support
23,339 28,417
18,240
38,662
Operation and maintenance of plant
23,994
-
22,720
-
Scholarships and fellowships
1,177
-
1,484
-
Total Education and General
207,344
28,417
189,743
38,662
Auxiliary enterprises
26,513
-
25,866
-
Depreciation and amortization
18,171
3
16,778
3
Total Operating Expenses
252,028
28,420
232,387
38,665
Operating Income (Loss)
(36,287)
(11,292)
(24,605)
(3,151)
Nonoperating Revenues (Expenses)




State appropriations, non-capital
2,898
-
1,858
-
Contributions from the Foundation
18,905
-
19,374
-
Contributions 1,026
-
884
-
Investment income, net
(361)
(12,834)
890
(1,833)
Interest on debt
(8,163)
-
(7,689)
-
Federal nonoperating revenue
4,081
-
4,367
-
Other nonoperating expenses
(121)
-
(37)
-
Other nonoperating revenue
165
-
155
-
Net Nonoperating Revenues (Expenses)
18,430
(12,834)
19,802
(1,833)
Loss Before Other Revenues
(17,857)
(24,126)
(4,803)
(4,984)
Capital appropriations and contributions from state
10,044
-
1,760
-
Academic facility fee
3,334
-
3,274
-
Capital grants and gifts
2,414
-
13,827
-
Additions to permanent endowments
20
-
656
-
Total Other Revenues
15,812
-
19,517
-
Increase (Decrease) in Net Position (2,045)
(24,126) 14,714 (4,984)
Net Position, Beginning of Year
50,413 307,770
270,249
312,754
Adjustment for change in accounting principle
- -
(234,550)
-
Net Position, Beginning of Year, Restated
50,413 307,770 35,699
312,754
Net Position, End of Year
$ 48,368
283,644
50,413
307,770




The accompanying notes are an integral part of the financial statements
17

Colorado School of Mines
Statements of Cash Flows
Years Ended June 30, 2016 and 2015 (in thousands)

2016
2015
Cash Flows from Operating Activities:


Tuition and fees
$ 115,731
115,367
Grants and contracts
68,697
70,918
Sales of services from auxiliary enterprises
22,048
20,795
Collection of loans to students
1,047
1,157
Rental income
1,321
1,326
Receipts from the Foundation 1,667
2,213
Other operating receipts 2,319
1,789
Payments to employees
(99,945)
(96,052)
Payments for employee benefits
(48,247)
(49,163)
Payments to suppliers
(62,770)
(59,724)
Developmental services fees
(1,900)
(1,900)
Scholarships disbursed
(1,019)
(1,441)
Loans issued to students
(957)
(1,004)
Net cash provided by (used for) operating activities
(2,008)
4,281
Cash Flows from Noncapital Financing Activities:


Receipts from the Foundation
16,247
16,320
State Appropriations, non-capital
2,898
1,858
Gifts and grants for other than capital purposes
1,740
1,433
Additions to permanent endowments
20
656
Principal payments on noncapital debt
(295)
(290)
Interest payments on noncapital debt
(89)
(104)
Funds invested with the Foundation
(166)
(654)
Federal nonoperating revenue
2,921
3,275
Direct lending receipts
29,265
29,966
Direct lending disbursements
(29,265)
(29,966)
Agency inflows
9,988
9,648
Agency outflows
(9,977)
(9,656)
Net cash provided by noncapital financing activities
23,287
22,486
Cash Flows from Capital and Related Financing Activities:


State Appropriations, capital
10,044
1,680
Capital gifts
2,366
13,803
Academic facility fees
3,334
3,274
Bond proceeds
14,191
-
Bond issuance and other loan costs
(150)
(12)
Acquisition and construction of capital assets
(45,513)
(49,804)
Principal payments on capital debt
(5,199)
(11,100)
Interest payments on capital debt
(6,480)
(9,151)
Federal nonoperating revenue
1,161
1,092
Net cash used for capital and related financing activities
(26,246)
(50,218)
Cash Flows from Investing activities:


Interest and dividends on investments
1,747
1,562
Net cash provided by investing activities
1,747
1,562
Net Decrease in cash and cash equivalents
(3,220)
(21,889)
Cash and cash equivalents, Beginning of Year
146,352 168,241
Cash and cash equivalents, End of Year
$ 143,132
146,352
The accompanying notes are an integral part of the financial statements
18

Colorado School of Mines
Statements of Cash Flows
Years Ended June 30, 2016 and 2015 (in thousands)



2016 2015
Reconciliation of Operating Loss to Net Cash Provided by
Operating Activities:


Operating loss
$ (36,287)
(24,605)
Adjustments to reconcile operating loss to net cash provided by
operating activities


Depreciation and amortization expense
18,171
16,778
Noncash operating expenses
16,763
9,317
Insurance recoveries
-
23
Receipts of items classified as non-operating revenues
1,832
2,213
Changes in assets and liabilities


Accounts and loans receivables (6,970)
2,115
Other assets
2,666
10
Loans to students
(21)
79
Accounts payable and accrued liabilities
521
(2,283)
Unearned revenue
1,412
649
Accrued compensated absences
460
11
Other liabilities
20,483
14,736
Changes in deferred outflows and inflows


Deferred outflows
(24,535)
(14,781)
Deferred inflows
3,497
19
Net cash provided by (used for) operating activities
$ (2,008)
4,281



Noncash Investing, Capital and Financing Activities:


Capital assets acquired by donations, state funded, and payable
increases
$ 5,307
10,961
Fair value change in interest rate swap
(3,401)
(693)
Realized/unrealized losses on investments
(1,581)
(179)
Administrative fees on investments
526
493
Accretion of interest on deep discount debt
559
567
Amortization of premiums/discounts
916
674
Amortization of deferred losses and swap termination
779
538
Bond underwriter costs
115
-
Write-off of unamortized deferred loss
2,504
-
Loss on disposal of assets
(366)
(25)


The accompanying notes are an integral part of the financial statements
19

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Note 1:
Basis of Presentation and Summary of Significant Accounting Policies
Governance
Colorado School of Mines (the University) is a public institution of higher education with a primary
emphasis in engineering and science education and research. The University is governed by a nine member
Board of Trustees. Seven voting members are appointed by the Governor of the State of Colorado with the
consent of the Colorado Senate. Two non-voting members, representing the faculty and students of the
University, are voted in by the respective constituents.
Financial Reporting Entity and Basis of Presentation
The University’s financial reporting entity includes the operations of the University and all related entities
for which the University is financially accountable or that provide services to the University, referred to as
blended component units. Financial accountability may stem from the University’s ability to appoint a
majority of the governing board of the related organization, its ability to impose its will on the related
organization, its ability to access assets, or its responsibility for debts of the related organization. The
University includes the following blended component units:
 Colorado School of Mines Building Corporation: established in June 1976 as a separate corporation
under the laws of the State of Colorado. The purpose of the corporation was to build a facility that
would house the United States Geological Survey (USGS). The Corporation collects annual rent
payments from the USGS. Upon dissolution, subject to certain provisions, any assets remaining
shall be transferred to the University. Separate financial statements are not prepared.
 Colorado School of Mines Development Corporation: established in September 2001 as a separate
corporation under the laws of the State of Colorado. The corporation was formed for the purpose
of issuing obligations for or assisting in the financing of capital expenditures on behalf of or for the
benefit of the Colorado School of Mines. Separate financial statements are not prepared. The
Corporation was dissolved on December 19, 2014 and the remaining assets were transferred to the
University.
 Mines Applied Technology Transfer Inc. (MATTI): established in 2002 as a separate corporation
under the laws of the State of Colorado with a December 31 year end. The purpose of MATTI, a
not-for-profit 501(c)(3), is to further the education, research, development and public services
objectives of the University and to further the transfer of newly created technologies from the
University to the private sector. The corporation is operated exclusively for the benefit of the
University. Upon dissolution, subject to certain provisions, any assets remaining shall be
transferred to the University. Separate financial statements are not prepared.


20

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Discretely Presented Component Unit
The University’s financial statements include one supporting organization as a discretely presented
component unit (DPCU) of the University.
Colorado School of Mines Foundation, Incorporated (the Foundation) is a legally separate entity
incorporated under Article 40, Title 7 of the Colorado Revised Statutes of 1973. The Foundation was
established in 1928 to promote the welfare, development and growth of the University. The Foundation has
a determination letter from the Internal Revenue Service stating it qualifies under Section 501(c)(3) of the
Internal Revenue Code as a public charity. Although the University does not control the timing of receipts
received by the Foundation, the majority of resources or income thereon the Foundation holds and invests
are restricted by the donors for the benefit of the University. Because these restricted resources held by the
Foundation can only be used by, or for the benefit of, the University, the Foundation is considered a
component unit of the University and is discretely presented in the University’s financial statements.
Separately issued financial statements are available by contacting the Foundation at PO Box 4005, Golden,
Colorado, 80401-0005.
Related Organizations
The Table Mountain Research Center (TMRC), formerly the Colorado School of Mines Research Institute
(CSMRI), a not-for-profit corporation, was established in 1949 as a separate corporation under the laws of
the State of Colorado. The purpose of TMRC is to promote, encourage and aid scientific and technological
investigation and research.
TMRC ceased active operations during 1987 and sold most of its real estate in 1988.
Relationship to State of Colorado
Article VIII, Section 5 of the Colorado Constitution declares the University to be a state institution. Thus,
for financial reporting purposes, the University is included as part of the State’s primary government.
Basis of Accounting and Presentation
For financial reporting purposes, the University is considered a special-purpose government engaged only
in business-type activities. Accordingly, the University’s financial statements have been prepared using the
economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of
accounting, revenues are recognized when earned, and expenses are recorded when an obligation is
incurred.
The University applies all applicable Governmental Accounting Standards Board (GASB) pronouncements.
The Foundation reports under FASB standards. As such, certain revenue recognition criteria and
presentation features are different from GASB revenue recognition criteria and presentation features.
Modifications have been made to the Foundation’s financial information in the University’s financial
reporting entity for these differences.
Significant Accounting Policies
Cash and Cash Equivalents
The University considers all highly liquid investments with original maturities of three months or less to be
cash equivalents. Cash equivalents consist primarily of funds invested through the State Treasurer’s Cash
Management Program and money market funds with brokers.

21

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents include amounts whose use is constrained either through external party
restrictions or imposition by law. Restricted purposes include gifts, endowments, debt funded project
construction and debt service reserves.
Investments and Investment Income
Investments in equity and debt securities are carried at fair value. Fair value is determined using quoted
market prices. Investments include, but are not limited to, funds managed by the Foundation on behalf of
the University.
Investment income consists of interest and dividend income and the net change for the year in the fair value
of investments carried at fair value.
Accounts and Loans Receivables
Accounts and loans receivables consist of tuition and fee charges to students, charges for auxiliary
enterprise services provided to students, faculty and staff, reimbursements outstanding on research contracts
and grants, and short and long-term loans issued to students under various federal and other loan programs
to cover tuition and fee charges. Receivables are recorded net of estimated uncollectible amounts. The
University also administers student loans on behalf of the discretely presented component unit. The student
loans administered by the University are recorded as a receivable from the student, included with loans to
students in the Statements of Net Position, and a liability to the component unit.
Inventories
Inventories are stated at the lower of cost, determined using the FIFO (first-in, first-out) method, or market.
Bond Issuance Costs
Bond issuance costs incurred on revenue bond issues are expensed in the year the bond issue occurs.
Capital Assets
Capital assets are recorded at cost at the date of acquisition, or fair value at the date of donation, if acquired
by gift. Depreciation is computed using the straight-line method over the estimated useful life of each asset.
The following estimated useful lives are being used by the University:
Land improvements
20 years
Buildings and improvements
20 – 40 years
Equipment
3 – 10 years
Library materials
10 years
For equipment, the capitalization policy includes all items with a value of $5,000 or more, and an estimated
useful life of greater than one year.
Renovations to buildings and other improvements that significantly increase the value or extend the useful
life of the structure are capitalized. For renovations and improvements, the capitalization policy includes
items with a value of $50,000 or more. Routine repairs and maintenance are charged to operating expense.
Major outlays for capital assets and improvements are capitalized as construction in progress throughout the
building project. Interest incurred during the construction phase is included as part of the value of the
construction in progress.

22

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Assets recorded under capital lease agreements are recorded at the present value of future minimum lease
payments and are amortized over either the term of the lease or the estimated useful life of the asset,
whichever period is shorter. Such amortization is included as depreciation expense in the accompanying
financial statements.
Intangible assets are carried at cost and are comprised of an indefeasible right to use certain fiber optic
cables. Intangible assets are being amortized over 20 years.
Compensated Absences
University policies permit most employees to accumulate vacation and sick leave benefits that may be
realized as paid time-off or, in limited circumstances, as a cash payment. Expense and the related liabilities
that are recognized as vacation benefits are earned whether the employee is expected to realize the benefit
as time-off or in cash. Expense and the related liability for sick leave benefits are recognized when earned
to the extent the employee is expected to realize the benefit in cash determined using the termination
payment method. Sick leave benefits expected to be realized as paid time-off are recognized as expense
when the time-off occurs and no liability is accrued for such benefits employees have earned but not yet
realized. Compensated absence liabilities are computed using the regular pay and termination pay rates in
effect as of July 1 plus an additional amount for compensation-related payments such as Social Security and
Medicare taxes computed using rates in effect at that date.
Unearned Revenue – Tuition, Fees and Grants
Unearned revenue represents student tuition and fees, for which the University has not provided the
associated services, and advances on grants and contract awards for which the University has not provided
services or has not met all of the applicable eligibility requirements.
Bonds
Bonds represent debt by borrowing or financing usually for the acquisition of land, buildings, equipment, or
capital construction. The University has an ISDA (International Swaps and Derivatives Association)
Master Swap Agreement in order to convert certain variable rate debt to a synthetic fixed rate, thereby
economically hedging against changes in the cash flow requirements of the University’s variable interest
rate debt obligations (Note 9).
Deferred Outflows/Inflows of Resources
Deferred outflows of resources represent losses on various bond refundings, the mark to market valuation of
the University’s SWAP agreement, and net pension liability related items. For current refundings and
advance refundings resulting in defeasance of debt, the difference between the reacquisition price and the
net carrying amount of the old debt is reported as a deferred outflow of resources on the Statement of Net
Position and amortized as a component of interest expense over the remaining life of the old debt or the life
of the new debt, whichever is shorter. For the net pension liability related items, the difference between
expected and actual experiences, the net difference between projected and actual earnings on pension plan
investments, the changes in the University’s proportionate share of the net pension liability, and
contributions paid to PERA subsequent to the plan’s measurement date are all reported as either a deferred
outflow or a deferred inflow of resources on the Statement of Net Position and are amortized as a
component of pension expense over varying amounts of time.

23

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Classification of Revenues
The University has classified its revenues as either operating or nonoperating revenues according to the
following criteria:
Operating revenues – Operating revenues include activities that have the characteristics of exchange or
exchange like transactions, program-specific, or government-mandated non-exchange transactions,
such as (1) student tuition and fees, (2) sales and services of auxiliary enterprises, (3) contracts and
grants for research activities and (4) interest on student loans.
Nonoperating revenues – Nonoperating revenues include activities that have the characteristics of non-
exchange transactions, such as gifts and contributions and other revenue sources that are not deemed
operating revenues including Federal Pell revenue and interest subsidy payments associated with Build
America Bonds.
Scholarship Discounts and Allowances
Student tuition and fee revenues and certain other revenues from students are reported net of scholarship
allowances in the Statements of Revenues, Expenses and Changes in Net Position. Scholarship allowances
are the difference between the stated charge for goods and services provided by the University and the
amount that is paid by students and/or third-parties making payments on the students’ behalf. Certain
governmental grants, such as Pell grants and other Federal, State or nongovernmental programs are
recorded as either operating or nonoperating revenues in the University’s financial statements. To the
extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the
University has recorded a scholarship allowance.
Donor Restricted Endowments
Disbursements of the net appreciation (realized and unrealized) of investments of endowment gifts are
permitted by state law, except where a donor has specified otherwise. The amount of earnings and net
appreciation available for spending by the University and the Foundation is based on a spending rate set by
the Foundation board on an annual basis. For the years ended June 30, 2016 and 2015, the authorized
spending rate was equal to the 4.5 percent of the rolling 36-month average market value of the endowment
investments. Earnings in excess of the amount authorized for spending are available in future years and are
included in the value of the related investment.
Application of Restricted and Unrestricted Resources
The University first applies restricted resources when an expense or outlay is incurred for purposes for
which both restricted and unrestricted resources are available.
Income Taxes
As a state institution of higher education, the income of the University is generally exempt from federal and
state income taxes under Section 115(a) of the Internal Revenue Code and a similar provision of state law.
However, the University is subject to federal income tax on any unrelated business taxable income. There
was no tax liability related to income generated from activities unrelated to the University’s exempt purpose
as of June 30, 2016 and 2015.

24

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Reclassifications
Certain 2015 amounts have been reclassified to conform to the 2016 presentation.
Note 2:
Cash and Cash Equivalents and Investments
The University’s and DPCU cash and cash equivalents as of June 30 are detailed in Table 2.1, Cash and
Cash Equivalents.
TABLE 2.1 Cash and Cash Equivalents (in thousands)
Type 2016
2015
University

Cash on hand
$ 14
12
Cash with U.S. financial institutions
10,850
14,419
Cash with State Treasurer
132,268
131,921
Total Cash and Cash Equivalents-University
$ 143,132
146,352
Discretely Presented Component Unit

Cash with U.S. financial institutions
$ 11,562
9,367
Total Cash and Cash Equivalents-DPCU
$ 11,562
9,367
Deposits
The University deposits the majority of its cash with the Colorado State Treasurer (Treasury) pursuant to
Colorado Revised Statutes (C.R.S.). The Treasury pools these deposits and invests them in securities
authorized by Section 24-75-601.1, C.R.S. The Treasury acts as a bank for all state agencies and many
state supported institutions of higher education. Monies deposited in the Treasury are invested until the
cash is needed. As of June 30, 2016, the University had cash on deposit with the Treasury of $132,268,000
which represented approximately 1.8 percent of the total $7,408.5 million fair value of deposits in the State
Treasury Pool (Pool). As of June 30, 2015, the University had cash on deposit with the Treasury of
$131,921,000 which represented approximately 1.7 percent of the total $7,661.8 million fair value of
deposits in the Pool.
For financial reporting purposes all of the Treasury’s investments are reported at fair value, which is
determined based on quoted market prices in active markets for identical assets ($230 million) and
significant other observable inputs ($7,178.5 million) at fiscal year-end. On the basis of the University’s
participation in the Pool, the University reports as an increase or decrease in cash for its share of the
Treasury’s unrealized gains and losses on the Pool’s underlying investments. The State Treasurer does not
invest any of the Pool’s resources in any external investment pool, and there is no assignment of income
related to participation in the Pool. The unrealized gains/losses included in income reflect only the change
in fair value for the fiscal year.

25

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Investments in the Pool are exposed to custodial credit risk if the securities are uninsured, are not registered
in the State’s name, and are held by either the counterparty to the investment purchase or the counterparty’s
trust department or agent but not in the State’s name. As of June 30, 2016 and 2015, none of the
investments in the Pool are subject to custodial credit risk.
Credit quality risk is the risk that the issuer or other counterparty to a debt security will not fulfill its
obligations. This risk is assessed by national rating agencies that assign a credit quality rating for many
investments. Credit quality ratings for obligations of the U.S. government or obligations explicitly
guaranteed by the U.S. government are not reported; however, credit quality ratings are reported for
obligations of U.S. government agencies that are not explicitly guaranteed by the U.S. government. Based
on these parameters, as of June 30, 2016 and 2015, approximately 83.8 percent and 88.0 percent,
respectively, of investments of the Pool are subject to credit quality risk reporting. As of June 30, 2016 and
2015, except for $77,761,610 and $87,396,440, respectively, of corporate bonds rated lower medium and $0
and $25,018,750, respectively, of corporate bonds rated very speculative, these investments are rated from
upper medium to the highest quality, which indicates that the issuer has strong capacity to pay principal and
interest when due.
Interest rate risk is the risk that changes in the market rate of interest will adversely affect the value of an
investment. In addition to statutory limitations on the types of investments, the State Treasurer’s
investment policy mitigates interest rate risk through the use of maturity limits set to meet the needs of the
individual fund if the Treasurer is investing for a specific fund rather than the Pool. The Treasurer actively
manages the time to maturity in reacting to changes in the yield curve, economic forecasts, and liquidity
needs of the participating funds. The Treasurer further limits investment risk by setting a
minimum/maximum range for the percentage of investments subject to interest rate risk and by laddering
maturities and credit ratings. The weighted average maturity of investments in the Pool is shown in Table
2.2, Weighted Average Maturities.
Table 2.2 Weighted Average Maturities (maturities in years)
2016 2015
Weighted
Weighted
Average
Percent of the
Average
Percent of the
Investment Type
Maturity
Treasury Pool
Maturity
Treasury Pool
Commercial paper
0.094
11.5%
0.063
6.3%
U.S. Government securities
1.343
49.0
1.339
47.5
Asset-Backed securities
2.585
14.0
2.528
18.5
Corporate bonds
1.985
22.4
2.196
22.9
Money market mutual funds
0.000
3.1
0.010
4.8
The Pool was not subject to foreign currency risk or concentration of credit risk in Fiscal Years 2016 and
2015.
Additional information on investments of the Pool may be obtained in the State’s Comprehensive Annual
Financial Report for the year ended June 30, 2016.
Deposits not with the Treasury are exposed to custodial credit risk (the risk that, in the event of the failure
of a depository financial institution, the government would not be able to recover deposits or would not be
able to recover collateral securities that are in the possession of an outside party), if they are not covered by
depository insurance (FDIC) and the deposits are uncollateralized, collateralized with securities held by the
pledging financial institution, except for deposits collateralized by certain types of collateral pools including
a single financial institution collateral pool where the fair value of the pool is equal to or exceeds all
uninsured public deposits held by the financial institution (the Public Deposit Protection Act) or
collateralized with securities held by the pledging financial institution’s trust department or agent but not in

26

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

the depositor – government’s name. Accordingly, none of the University’s deposits as of June 30, 2016 and
2015 are deemed to be exposed to custodial credit risk. As of June 30, 2016 and 2015, the DPCU
maintained balances in various operating accounts in excess of federally insured limits totaling
approximately $11,100,000, and $9,100,000, respectively.
Investments
The University has authority to invest institutional funds in any investment deemed advisable by the
governing board per section 15-1-1106, C.R.S. The University may legally invest in direct obligations of,
and other obligations guaranteed as to principal by, the U.S. Treasury and U.S. agencies and
instrumentalities and in bank repurchase agreements. It may also invest, to a limited extent, in equity
securities.
Credit Quality Risk – Credit quality risk is the risk that an issuer of an investment will not fulfill its
obligation to the holder of the investment. Credit risk only applies to debt investments. This is measured by
the assignment of a rating by a nationally recognized statistical rating organization (NRSRO). The
University has no investment policy that would further limit its investment choices beyond those allowed by
State statute. The corporate bond funds are mutual funds and therefore are not rated.
Interest Rate Risk – Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Interest rate risk only applies to debt investments. Generally, the longer the
maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates.
Interest rate risk inherent in the University’s investments is measured by monitoring the modified duration
of the overall investments portfolio. Modified duration estimates the sensitivity of the University’s
investments to changes in the interest rates. The University does not have a formal investment policy that
limits investment maturities as a means of managing its exposure to fair value losses arising from increasing
interest rates.
Concentration of Credit Risk – Concentration of credit risk is the risk of loss attributed to the magnitude of
an entity’s investment in a single issuer. At June 30, 2016 and 2015, no single investment of the University
exceeded 5 percent of the total investments.
The University’s investments are managed by the Foundation, on behalf of the University and are reflected
in the Foundation’s Long-term Investment Pool (LTIP). The University’s investments represent a
portionate share of the Foundation’s LTIP and therefore, the University does not own any specific
investments. As such the fair value measurement for the University’s investments are reported as Level 3
as described below. The University investments are under the Foundation’s LTIP policy. This policy
requires funds to be managed in a diversified manner to reduce risks with the goal of providing a steady
stream of funding for the University. The LTIP must be over a broad investment spectrum in order to
create a mix of potential returns that, in the aggregate, would achieve the overall portfolio objectives. This
diversification is to ensure that adverse or unexpected developments arising in one security or asset class
will not have a significant detrimental impact on the entire portfolio. This policy minimizes concentration
credit risk.
The Foundation categorizes fair value measurements of investments within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the valuation inputs
used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical
assets at the measurement date; Level 2 inputs are significant other than quoted prices that are observable
for the investment either directly or indirectly; Level 3 are significant unobservable inputs where little or no
market data is available, which requires the entity to develop its own assumptions. The fair value
measuresment of investments as of June 30, 2016 and 2015 are shown in Table 2.3 Fair Value
Measurements.

27

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015


Table 2.3 Fair Value Measurements (in thousands)

2016

Investment Type
Level 1
Level 2
Level 3
Total
University

Corporate equity securities
$ 267
-
-
267
Investments with Foundation
-
30,808
30,808
Total Investments-University
$ 267
-
30,808
31,075
Discretely Presented Component Unit

Cash -
3,555
-
3,555
Corporate equity securities
66,842
54,374
-
121,216
Hedge funds
-
35,708
23,447
59,155
Private equity
-
-
44,824
44,824
Corporate bond funds
17,287
-
9,583
26,870
Restricted Stock
-
-
-
-
Split-interest agreements
11,628
-
125
11,753
Gift annuity agreements
4,032
-
-
4,032
Beneficial interest investments
10,246
419
19
10,684
Total Investments-DPCU
$ 110,035
94,056
77,998
282,089

2015

Investment Type
Level 1
Level 2
Level 3
Total
University

Corporate equity securities
$ 301
-
-
301
Investments with Foundation
-
-
33,430
33,430
Total Investments-University
301
-
33,430
33,731
Discretely Presented Component Unit

Cash
-
14,188
-
14,188
Corporate equity securities
84,683
45,643
-
130,326
Hedge funds
-
19,219
41,408
60,627
Private equity
-
-
45,906
45,906
Corporate bond funds
22,661
6,633
-
29,294
Restricted Stock
-
-
370
370
Split-interest agreements
12,003
-
142
12,145
Gift annuity agreements
4,115
-
553
4,668
Beneficial interest investments
10,913
275
29
11,217
Total Investments-DPCU
$ 134,375
85,958
88,408
308,741

28

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Note 3:
Accounts, Contributions and Loans Receivable
Table 3.1, Accounts Receivable, segregates receivables as of June 30, 2016 and 2015, by type.
TABLE 3.1 Accounts Receivable (in thousands)

2016
Gross
Net
Net Current
Type of Receivable
Receivables Allowance
Receivable
Portion
University




Student accounts
$ 3,934
1,243
2,691
2,691
Student
loans
5,538 150
5,388 520
Federal
government
9,532
- 9,532 9,532
Private
sponsors
6,727 753 5,974 5,974
DPCU
2,858
- 2,858 2,858
Other
3,502
- 3,502 3,502
Total Receivable-University
$
32,091 2,146 29,945 25,077
Discretely Presented Component Unit



Contributions*
$35,667 3,205
32,462 6,230
Due from University
1,631
-
1,631
-
Total Receivable-DPCU
$ 37,298 3,205
34,093 6,230


2015
Gross
Net
Net Current
Type of Receivable
Receivables Allowance
Receivable
Portion
University




Student accounts
$ 4,058
1,291
2,767
2,767
Student
loans
5,522 155
5,367 527
Federal
government
8,066
- 8,066 8,066
Private
sponsors
3,375 954 2,421 2,421
DPCU
1,897
- 1,897 1,897
Other
1,507
- 1,507 1,507
Total Receivable-University
$
24,425 2,400 22,025 17,185
Discretely Presented Component Unit



Contributions*
$

38,159 3,939
34,220 3,820
Due from University
1,661
-
1,661
-
Total Receivable-DPCU
$ 39,820 3,939
35,881 3,820
*The allowance on the contributions receivable is comprised of uncollectible and unamortized discounts of $1,440 and $1,765,
respectively, for June 30, 2016, and $1,849 and $2,090 respectively, as of June 30, 2015.

29

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Note 4:
Capital Assets
Table 4.1, Capital Assets, presents the changes in capital assets and accumulated depreciation by major
asset category for the years ended June 30, 2016 and 2015.
TABLE 4.1 Capital Assets (in thousands)




Category
Balance 2015
Additions
Deletions
Transfers
Balance 2016
Nondepreciable
capital
assets

Land
$ 7,652
-
-
-
7,652
Works
of
Art
-
187 - -
187
Construction in progress
45,352
32,602
58
(46,493)
31,403
Total nondepreciable assets
53,004
32,789
58
(46,493)
39,242
Depreciable
capital
assets

Land
improvements
19,918 - -
235
20,153
Buildings and improvements
373,618
-
2,316
45,446
416,748
Software 1,803
225
-
-
2,028
Equipment
65,191 6,816 1,310 812 71,509
Library materials
12,142
141
8
-
12,275
Intangible
assets
600 - - - 600
Total depreciable capital assets
$ 473,272
7,182
3,634
46,493
523,313
Category
Balance 2015
Additions
Deletions
Transfers
Balance 2016
Less accumulated depreciation





Land improvements
$ 10,046
739
-
-
10,785
Buildings 131,369
11,255
1,984
-
140,640
Software 1,443
255
-
-
1,698
Equipment 39,053
5,714
1,088
-
43,679
Library materials
11,335
175
8
-
11,502
Intangible assets
200
33
-
-
233
Total accumulated depreciation
193,446 18,171
3,080
- 208,537
Net depreciable assets
279,826
(10,989)
554
46,493
314,776
Total Net Capital Assets
$ 332,830
21,800
612
-
354,018
Category
Balance 2014
Additions
Deletions
Transfers
Balance 2015
Nondepreciable
capital
assets

Land
$ 7,652
-
-
-
7,652
Construction in progress
31,943
50,833
265
(37,159)
45,352
Total nondepreciable assets
39,595
50,833
265
(37,159)
53,004
Depreciable
capital
assets

Land
improvements
19,918 - - -
19,918
Buildings and improvements
336,698
-
-
36,920
373,618
Software 1,742
126
65
-
1,803
Equipment
60,668 5,746 1,462 239 65,191
Library materials
11,996
155
9
-
12,142
Intangible
assets
600 - - - 600
Total depreciable capital assets
$ 431,622
6,027
1,536
37,159
473,272

30

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015


TABLE 4.1 Capital Assets (in thousands)
Category
Balance
2014 Additions Deletions Transfers
Balance
2015
Less accumulated depreciation





Land improvements
$ 9,311
735
-
-
10,046
Buildings 121,052
10,317
-
-
131,369
Software 1,241
246
44
-
1,443
Equipment 35,117
5,280
1,344
-
39,053
Library materials
11,161
183
9
-
11,335
Intangible assets
167
33
-
-
200
Total accumulated depreciation
178,049 16,794
1,397
- 193,446
Net depreciable assets
253,573
(10,767)
139
37,159
279,826
Total Net Capital Assets
$ 293,168
40,066
404
-
332,830
The total interest costs related to capital asset debt incurred by the University during the years ended June
30, 2016 and 2015, was $8,100,000 and $9,151,000, respectively. The University capitalizes interest costs
as a component of construction in progress during the period of construction, based on interest costs of
borrowing specifically for the project, net of interest earned on investments acquired with the proceeds of
the tax-exempt debt. The total amount of interest costs capitalized as part of construction in progress during
the years ended June 30, 2016 and 2015 was $886,000 and $1,937,000, respectively.

Note 5:
Deferred Outflows of Resources
Table 5.1, Deferred Outflows of resources details the types and amounts of deferred outflows of resources
as of June 30, 2016 and 2015.
TABLE 5.1 Deferred Outflows of Resources (in thousands)
Deferred Outflows of Resources 2016
2015
Loss on bond refundings
$ 14,012
12,517
Components of pension liability
39,316
14,781
SWAP valuation
6,104
2,167
Total Deferred Outflows of Resources $

59,432

29,465

Note 6:
Accounts Payable and Accrued Liabilities
Table 6.1, Accounts Payable and Accrued Liabilities, details the accounts payable and accrued expenses as
of June 30, 2016 and 2015.
TABLE 6.1 Accounts Payable and Accrued Liabilities (in thousands)
Type 2016
2015
Accounts payable - vendors
$ 9,690
15,254
Accrued salaries and benefits
8,978
8,622
Accrued interest payable
1,147
722
Total Accounts Payable and Accrued Liabilities
$ 19,815
24,598


31

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

The University leases various buildings and equipment under operating lease rental agreements. Operating
leases do not give rise to property rights or meet other capital lease criteria, and therefore, the related assets
and liabilities are not recorded in the accompanying financial statements. For Fiscal Years 2016 and 2015,
total rent expense under these agreements was $341,000 and $275,000, respectively. Table 6.2, Future
Minimum Operating Lease Payments, details the future minimum operating lease payments.
TABLE 6.2 Future Minimum Operating Lease Payments (in thousands)
Minimum
Years Ending June 30
Lease Payment
2017 $
287
2018 162
2019 134
2020 137
Total Operating Lease Payments
$ 720
The University leases office space to an unrelated single tenant. The lease term is 10 years and expires in
July 2018. The annual rent payment of $1,321,000 is paid in monthly installments and is recorded as other
operating revenue.
Note 7:
Unearned Revenue
Table 7.1, Unearned Revenue, details the types and amounts of unearned revenue as of June 30, 2016 and
2015.
TABLE 7.1 Unearned Revenue (in thousands)
Type 2016
2015
Tuition and fees
$ 5,459
5,017
Grants and contracts
10,338
9,221
Miscellaneous 739
886
Total Unearned Revenue
$ 16,536
15,124

Note 8:
Compensated Absences
Table 8.1, Compensated Absences, presents the changes in compensated absences for the years ended June
30, 2016 and 2015.
TABLE 8.1 Compensated Absences (in thousands)

2016 2015
Beginning of the year
$ 6,123
6,112
Additions 1,051
724
Adjustments/reductions 591
713
End of the year
$ 6,583
6,123
Current Portion
$ 610
575


32

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Note 9:
Bonds and Leases
As of June 30, 2016 and 2015, the categories of long-term obligations are detailed in Table 9.2, Bonds and
Leases Payable. Table 9.3, Changes in Bonds and Leases Payable, presents the changes in bonds and
capital leases payable for the years ended June 30, 2016 and 2015.
Revenue Bonds
A general description of each revenue bond issue, original issuance amount, and the amount outstanding as
of June 30, 2016 and 2015 is detailed in Table 9.4, Revenue Bond Detail.
The University’s fixed rate revenue bonds are payable semi-annually, have serial maturities, contain sinking
fund requirements and contain optional redemption provisions. The University’s variable rate demand
bonds are payable annually, contain sinking fund requirements and contain optional redemption provisions.
The optional redemption provisions allow the University to redeem, at various dates, portions of the
outstanding revenue bonds at varying prices. All University revenue bonds are special limited obligations
of the University. The revenue bonds are secured only by certain pledged revenues and are not pledged by
any encumbrance, mortgage, or other pledge of property, and the revenue bonds do not constitute general
obligations of the University.
The revenue bonds are secured by a pledge of all net revenues as defined by the bond documents. As of
June 30, 2016 and 2015, net auxiliary pledged revenues, total net pledged revenues, and the associated debt
service coverage are shown in Table 9.1, Net Pledged Revenues. The University’s net pledged revenues
will continue to be pledged for the life of the associated revenue bonds as detailed in Table 9.2, Bonds,
Notes, and Leases Payable. The outstanding principal and interest of the related pledged debt is detailed in
Table 9.5, Revenue Bonds Future Minimum Payments. The University believes it is in compliance with all
existing pledged revenue requirements of its outstanding bonds.
TABLE 9.1 Net Pledged Revenues (in thousands)
Source of Net Pledged Revenue
2016 2015
Auxiliary Revenue Bonds


Net auxiliary facilities
$ 13,561
12,685
Renewal and replacement fund
569
612
Net auxiliary pledged revenues
$ 14,130
13,297
Prior obligation auxiliary debt service
770
780
Prior obligation auxiliary debt service coverage
18.35
17.05
Parity Bond Obligations


Institutional Enterprise Revenue Bonds


Student tuition (10 percent)
$ 15,163
16,482
Student facility fees
3,334
3,274
Federal indirect cost recovery
11,966
11,682
Federal interest subsidy
1,161
1,164
Net Institutional Enterprise Pledged Revenues
31,623
32,602
Net Pledged Revenues for Parity Debt
44,983
45,119
Total Parity Debt Service
$ 12,422
18,577
Total Parity Debt Service Coverage
3.62
2.43
Subordinate Bond Obligations


Net Pledged Revenues for Subordinate Debt
$ 32,562
26,542
Subordinate Debt Service
1,260
1,288
Subordinate Debt Service Coverage
25.85
20.61
Percent of Pledged Revenue to Total Revenue
80%
81%
Total Debt Service Coverage
3.17
2.22

33

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

The Auxiliary Facility Enterprise Revenue bonds specify debt service coverage requirements for the
auxiliary facilities. The debt service coverage provisions require net pledged revenues to be equal to 110
percent of the combined principal and interest payments, excluding any reserves, on the Auxiliary Bonds
and any additional bonds due during any subsequent fiscal year. The Auxiliary Facility Enterprise Revenue
bonds are payable from net pledged revenues on parity with the other bonds and the note payable.
A master resolution adopted by the Board includes a covenant by the Board which provides, in summary,
that, while the Bonds are outstanding, and subject to applicable law, the Board will continue to impose such
fees and charges as are included within the gross revenues and will continue the present operation and use
of the institutional enterprise and the facilities. The Board will continue to maintain such reasonable fees,
rental rates and other charges for the use of all facilities and for services rendered by the Institutional
Enterprise as will return annually gross revenue sufficient to pay the prior bond obligations, to pay
operation and maintenance expenses, to pay the annual debt service requirements of the bonds and any
parity obligations payable from the net revenues. In addition, the Board will make any deposits required to
the reserve fund. The debt covenant includes provisions relating to other matters such as maintenance of
insurance coverage for the facilities. The Master Resolution prohibits the Board from selling, destroying,
abandoning, otherwise disposing of or altering at any time the property comprising a part of the facilities
until all bonds payable out of net revenues have been paid or provision has been made to pay all such
bonds. The University believes it is in compliance with these covenants.
The Series 2009B, 2010B, and 2011 bonds qualify as Build America Bonds for purposes of the American
Recovery and Reinvestment Act of 2009 (ARRA) signed into law on February 17, 2009. Pursuant to
ARRA, for the Series 2009B and 2010B bonds, the University expects to receive a cash subsidy payment
from the United States Treasury, referred to as Federal Direct Payments, equal to 35 percent of the interest
payable on the bonds on or around each interest payment date. For the Series 2011 bonds, the University
expects to receive Federal Direct Payments equal to 70 percent of the interest payable on the bonds on or
around each interest payment date. Due to federal budget cuts that occurred during Fiscal Year 2013, the
University received approximately 8.75 percent less in payments under this program. Pursuant to the
Colorado Recovery Act, the Board may pledge any Federal Direct Payments received to the payments of
the bonds. The Board has pledged such payments to the payment of the Series 2009B, 2010B, 2011, and
2012B bonds. In Fiscal Years 2016 and 2015, the University received $1,161,000 and $1,164,000,
respectively, in Federal Direct Payments.
The Series 2009A, 2009B, 2009C, 2009D, and 2012B revenue bonds qualify for the State Intercept
Program established pursuant to Section 23-5-139 CRS. The State Intercept Program provides for the
institutions of higher education to utilize the State of Colorado’s credit rating. The State Treasurer is
obligated to make principal and interest payments when due with respect to the revenue bonds issued by
state supported institutions of higher education if such institution will not make the payment by the due
date.

34

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

The following table provides a summary of the University’s long-term debt obligations as of June 30, 2016
and 2015 (in thousands):
TABLE 9.2 Bonds and Leases Payable (in thousands)
Interest
Final
Balance
Balance
Type
Rates
Maturity
2016
2015
Auxiliary Facilities Enterprise Revenue Bonds
2.5% - 5.4%
2028
$ 10,651
10,866
Institutional Enterprise Revenue Bonds




Variable Rate Demand Bonds
0.312%*
2038
39,535
40,160
Fixed Rate Bonds
3% - 6.29%
2043
151,023
138,249
Subordinate Institutional Enterprise Revenue Bonds
3.00%
2027
10,180
11,120
Total Bonds Payable


211,389
200,395
Capital Leases Payable
7.8% 2020
97 -
Total Bonds and Leases Payable


$ 211,486
200,395
* Variable rate demand bonds are set at an adjustable rate as discussed below. The rates reflected in the table are as of
June 30, 2016.
The demand feature of the Series 2010A variable rate demand bonds applies at the end of an interest rate
mode period. This period can range from weekly to long-term. In June 2015, the University renewed the
direct purchase agreement with Wells Fargo to extend the demand feature to June 2018. In addition, the
University negotiated a new lower support fee of 0.40 percent compared to the prior support fee of 0.65
percent. The interest rate on the Series 2010A variable rate demand bonds is calculated weekly based on 67
percent of the one month London interbank offered rate (LIBOR). The interest rate on the Series 2010A as
of June 30, 2016 and 2015 was 0.312 percent and 0.125 percent, respectively.
Table 9.3, Changes in Bonds and Leases payable presents the changes in bonds, and leases for the years
ended June 30, 2016 and 2015.
TABLE 9.3 Changes in Bonds and Leases Payable (in thousands)
Balance
Balance
Current
Type
2015 Additions
Deductions
2016
Portion
Revenue bonds payable
$ 194,032
35,250
28,580
200,702
7,715
Plus unamortized premiums
6,405
4,961
655
10,711
-
Less unamortized discounts
42
3
21
24
-
Total Bonds Payable
200,395
40,208
29,214
211,389
$7,715
Capital Leases
-
131
34
97
43
Total Bonds and Leases Payable
$ 200,395
40,339
29,248
211,486
$7,758
Balance
Balance
Current
Type
2014 Additions
Deductions
2015
Portion
Revenue bonds payable
$ 204,855
567
11,390
194,032
5,460
Plus unamortized premiums
7,085
-
680
6,405
-
Less unamortized discounts
48
-
6
42
-
Total Bonds Payable
$ 211,892
567
12,064
200,395
5,460


35

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015
Table 9.4, Revenue Bond Detail presents a summary description of the University’s outstanding revenue bonds
for the years ended June 30, 2016 and 2015.
TABLE 9.4 Revenue Bond Detail (in thousands)
Original
Outstanding
Outstanding
Issuance
Balance
Balance
Issuance Description
Amount
2016
2015
Auxiliary Facilities Enterprise Revenue Bonds:
Capital Appreciation, Series 1999 -
Used to fund capital improvements for residence halls,
residential housing, student center and fraternity housing
facilities
$ 7,794
10,672
10,882
Total Auxiliary Facilities Enterprise Revenue Bonds
$ 7,794
10,672
10,882
Institutional Enterprise Revenue Bonds:
Refunding and Improvement Series 2009A -
Used to refund the Colorado School of Mines Development
Corporation Refunding Variable Rate Demand Bonds, Series
2005, refund a portion of the Variable Rate Demand
Improvement Series 2008B, make a payment in connection
with modifying a portion of an existing swap agreement for the
Series 2008B Bonds, and acquire certain real properties
$ 28,720
3,240
16,095
Series 2009B -
Used to fund construction or renovation of certain campus
capital projects including a new residence hall, Weaver
Towers, wellness center and other capital improvements
42,860
42,860
42,860
Refunding Series 2009C -
Used to refund a portion of the Series 2008B and terminate an
existing swap agreement for the Series 2008B bonds
16,745
2,425
14,235
Variable Rate Demand Refunding Series 2010A -
Used to current refund the Refunding Series 2008A
42,860
39,535
40,160
Series 2010B - Taxable Direct Payment Build America Bonds.
Used to construct, improve, renovate and equip new academic
Marquez Hall Wing and provide additional facilities
$ 11,195
11,195
11,195
Series 2011 - Taxable Qualified Energy Conservation Bonds.
Used to finance qualified conservation improvement projects
2,800
1,675
1,970
Series 2012B – Used to fund construction of a new residence hall
and dining facility, renovate the Student Center, provide bridge
funding for construction for a new welcome center, and refund
all of the Series 2002 and a portion of the Series 2004
47,345
44,230
45,515
Series 2016A and B – Used to fund construction, improvements,
and equipping of CoorsTek Center; advance refunding portion
of the Series 2009A bonds and Series 2009C bonds
34,690
34,690
-
Total Institutional Enterprise Revenue Bonds
$ 227,215
179,850
172,030
Subordinate Institutional Enterprise Revenue Bonds:
Series 2012A –
Used to fund construction of new athletic facilities
$ 13,000
10,180
11,120
Total Subordinate Institutional Enterprise Revenue Bonds
$ 13,000
10,180
11,120
Total Revenue Bonds
$ 248,009
200,702
194,032
Plus Premiums
10,711
6,405
Less
Discounts
24
42
Total Revenue Bonds
$ 211,389
200,395
36

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Revenue and Refunding Bond Activity
In February 2016, the University issued $34,690,000 in Institutional Enterprise Revenue and Refunding
Bonds, Series 2016. $13,090,000 of the Series 2016 bonds will be used to finance the construction of the
CoorsTek Center for Applied Sciences and Engineering building. The University placed $25,623,471 from
the Series 2016 bonds into an escrow account to in-substance defease $11,860,000 of the Series 2009A
bonds and $11,260,000 of the Series 2009C bonds. This resulted in a combined economic gain of
$2,222,000, a combined decrease in the debt service cash flows to service the remaining debt of $2,672,000
and a combined deferred loss on refunding of $2,504,000 that is being amortized over the life of Series
2009A bonds for the 2009A refunding and the Series 2016 bonds for the 2009C refunding.
Debt Service Requirements on Revenue Bonds
The future minimum revenue bonds debt service requirements as of June 30, 2016, are shown in Table 9.5,
Revenue Bonds Future Minimum Payments.
TABLE 9.5 Revenue Bonds Future Minimum Payments (in thousands)
Years Ending June 30
Principal
Interest
Total
2017
$ 7,715
8,778
16,493
2018 8,445
8,623
17,068
2019 8,635
8,339
16,974
2020 8,730
8,026
16,756
2021
8,845
7,692
16,537
2022 – 2026
33,420
35,444
68,864
2027 – 2031
32,575
29,258
61,833
2032 – 2036
41,085
20,806
61,891
2037 – 2041
50,170
7,956
58,126
2042 – 2046
4,655
236
4,891
Subtotal 204,275
135,158
339,433
Unaccreted interest -1999 Bonds
(3,573)


Total Debt Service
$ 200,702


Interest Rate SWAP Agreements
In Fiscal Year 2008, the University entered into a floating to fixed interest rate swap agreement (Swap
Agreement) in connection with the 2008A issuance. The Swap Agreement was entered into with the
objective of protecting against the potential of rising interest rates. With the issuance of the Series 2010A
Refunding Bonds, the swap agreement was not terminated and was associated with the Series 2010A
Refunding Bonds. The Swap Agreement has a notional amount of $39,535,000 and $40,160,000 and a fair
value of $(13,222,000) and ($9,515,000) at June 30, 2016 and 2015, respectively. The Swap Agreement
provides for certain payments to or from Morgan Stanley equal to the difference between the fixed rate of
3.59 percent payable by the University and 67 percent of one month USD-LIBOR-BBA, 0.312 and 0.125
percent at June 30, 2016 and 2015, respectively, payable by Morgan Stanley. The fair value of the swap is
classified as a noncurrent liability and the change in fair value of the swap is classified as a deferred outflow
at June 30, 2016 and 2015. On the date of the refunding of the Series 2008A Bonds, the fair market value
of the swap was ($8,301,000) and was included in the calculation of deferred loss on refunding and is being
amortized over the life of the Series 2010A Refunding Bonds. Accumulated amortization of the deferred
loss as of June 30, 2016 and 2015 was $1,183,000 and $954,000, respectively. Morgan Stanley,
counterparty to the Swap Agreement, determined the fair value as of June 30, 2016 and 2015, using a
discounted forecasted cash flows; however, the actual method and significant assumptions used are
proprietary. The Swap Agreement has an effective date of March 5, 2008 and a termination date of
December 1, 2037.

37

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

There can be risks inherent to interest rate swaps that the University addresses and monitors pursuant to
entering into interest rate swap agreements:
Termination Risk – The need to terminate the transaction in a market that dictates a termination
payment by the University. It is possible that a termination payment is required in the event of
termination of a swap agreement due to a counterparty default or following a decrease in credit
rating. In general, exercising the right to optionally terminate an agreement should produce a
benefit to the University, either through receipt of a payment from a termination, or if a termination
payment is made by the University, a conversion to a more beneficial debt instrument or credit
relationship.
Credit Risk – The risk that the counterparty will not fulfill its obligations. The University
considers the swap agreement counterparty’s (Morgan Stanley) credit quality rating and whether
the counterparty can withstand continuing credit market turmoil. As of June 30, 2016, Morgan
Stanley’s credit rating is A3 by Moody’s, BBB+ by Standards & Poor’s.
For the outstanding swap agreement the University has a maximum possible loss equivalent to the
swaps’ fair market value at June 30, 2016 and 2015 related to the credit risk. However, the
University was not exposed to this loss because of the negative fair market value of the swaps as of
June 30, 2016 and 2015. In addition, these agreements required no collateral and no initial net cash
receipt or payment by the University.
Basis Index Risk – Basis risk arises as a result of movement in the underlying variable rate indices
that may not be in tandem, creating a cost differential that could result in a net cash outflow from
the University. Basis risk can also result from the use of floating, but different, indices. To
mitigate basis risk, it is the University’s policy that any index used as part of an interest rate swap
agreement shall be a recognized market index, including, but not limited to, the Securities Industry
and Financial Markets Association (SIFMA) or the London Interbank Offered Rate (LIBOR).
As of June 30, 2016, the aggregate debt service payments and net swap cash payments, assuming current
interest rates remain the same, for their term are reflected in Table 9.6, Future Revenue Bonds and Net
Swap Minimum Payments.
TABLE 9.6 Future Revenue Bonds and Net Swap Minimum Payments (in thousands)
SWAP
Total Debt Support
Years Ending June 30
Principal Bond Interest Interest (net)
Service
Fee
2017
$ 675
122
1,283
2,080
157
2018 975
120
1,255
2,350
153
2019 550
117
1,232
1,899
150
2020 575
115
1,213
1,903
148
2021
575
113
1,194
1,882
146
2022 – 2026
4,800
526
5,541
10,867
676
2027 – 2031
11,250
408
4,298
15,956
524
2032 – 2036
14,100
200
2,106
16,406
257
2037 – 2041
6,035
18
183
6,236
22
Total Debt Service
$ 39,535
1,739
18,305
59,579
2,233
Extinguishment of Debt
Previous revenue bond issues considered to be extinguished through in-substance defeasance under
generally accepted accounting principles are not included in the accompanying financial statements. The
amount of debt in this category, covered by assets placed in trust to be used solely for future payments,
amounted to $31,160,000 and $8,040,000 as of June 30, 2016 and 2015, respectively.

38

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Capital Leases
As of June 30, 2016 and 2015, the School had an outstanding liability for capital leases approximating
$97,000 and $0, respectively, with underlying gross capitalized asset cost approximating $131,000 and $0,
respectively. Accumulated amortization as of June 30, 2016 and 2015 is $7,000 and $0, respectively.
Future minimum payments on the capital leases are shown in Table 9.7 Future Minimum Capital Lease
Payments.
Table 9.7 Future Minimum Capital Lease Payments (in thousands)
Year Ending June 30,
Principal Interest Total
2017 $

43
6
49
2018 46
3
49
2019 8
-
8
Total Capital Lease Payments
$ 97
9
106
State of Colorado Certificates of Participation
In Fiscal Year 2008, State of Colorado Senate Bill 08-218 made Federal Mineral Leasing (FML) monies
available for capital construction at institutions of higher education. FML money is derived from ongoing
leasing and production activities on federal lands within Colorado and approximately half of these
payments go to the State of Colorado. The State used part of this money on November 6, 2008 and issued
Certificates of Participation (COP) to support some higher education construction and maintenance projects.
The University received $6,748,000 for a portion of the support in the construction of an addition to the
Brown Hall building. The State of Colorado is responsible for making the principal and interest payments
on the COP.
Note 10: Other Liabilities
Table 10.1, Other Liabilities, details other liabilities as of June 30, 2016 and 2015.
TABLE 10.1 Other Liabilities (in thousands)
2016
2015


Current

Current
Type
Total
Portion
Total
Portion
University




Amounts due to the Foundation
$ 1,684
53
1,746
85
Funds
held
for
others
136 136 121 121
Pollution
remediation
-
- 394 394
Student
deposits
250 250 251 251
Miscellaneous
532 532 696 696
Total Other Liabilities - University
$ 2,602
971
3,208
1,547
Discretely Presented Component Unit



Colorado School of Mines
$30,808
-
33,430
-
Other trust funds
1,115
-
1,100
-
Obligations under split-interest agreements
4,756
-
5,147
-
Obligations under gift annuity agreements
4,628
-
4,908
-
Refunded
advances
59 -
64 -
Other
liabilities
360 -
282 -
Total Other Liabilities - DPCU
$41,726 -

44,931 -


39

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Direct Lending
The University began participation in the Direct Student Loan program operated by the Federal government
in the spring of Fiscal Year 2010. This program enables eligible students or parents to obtain a loan to pay
for the student’s cost of attendance directly through the University rather than through a private lender. The
University is responsible for handling the complete loan process, including funds management, as well as
promissory note functions. The University is not responsible for collection of these loans or for defaults by
borrowers, and therefore these loans are not recognized as receivables in the accompanying financial
statements. Lending activity during the years ended June 30, 2016 and 2015 under these programs were
$29,265,000 and $29,966,000, respectively.
Note 11: Changes in Accounting Principles
Effective July 1 2014, the University adopted Governmental Accounting Standards Board Statement No.
68, Accounting and Financial Reporting for Pensions (Statement No. 68) and Governmental Accounting
Standards Board Statement No. 71, Pension Transition for Contributions Made Subsequent to Measurement
Date (Statement No. 71) which revises and establishes new financial reporting requirements for most
governments that provide their employees with pension benefits. Prior to implementation of Statement No.
68 and Statement No. 71, the University followed GASB Statement No 27, Accounting for Pensions by
State and Local Government Employers. Statement No. 68 requires employers participating in cost-sharing
multiple-employer defined benefit plans to record their proportionate share of the plan’s unfunded pension
liability. Statement No. 71 requires the University to record as a deferred outflow of resources contributions
made to the pension plan subsequent to the measurement date of the net pension liability. The University
participates in the Colorado Public Employees’ Retirement Association (PERA) defined benefit plan.
The University has no legal obligation to fund this shortfall nor does it have any ability to affect funding,
benefit, or annual required contribution decisions made by PERA or the General Assembly.
To the extent practical, changes made to comply with Statement No. 68 should be presented as a
restatement of the Fiscal Year 2014 financial statements. However, PERA did not provide the information
required to restate the University’s Fiscal Year 2014 financial statements; therefore, the impact of adoption
of Statement No. 68 is shown as a cumulative effect adjustment to Net Position, beginning of the year, in
Fiscal Year 2015. The impact of the adoption of Statement No. 68 is detailed Table 11.1 Changes in
Beginning Net Position.
TABLE 11.1 Change in Beginning Net Position (in thousands)
Net Position, beginning of year
$ 270,249
Cumulative effect of application of Statement No. 68
(240,644)
Cumulative effect of application of Statement No. 71
6,094
Net Position, beginning of year as restated
$ 35,699
The University’s proportionate share of PERA’s net pension liability (NPL) directly reduces the
University’s unrestricted net position. The effect on unrestricted net position is shown in Table 11.2 Impact
on Unrestricted Net Position.
Table 11.2 Impact on Unrestricted Net Position (in thousands)


2016 2015
Unrestricted Net Position
$ (152,681)
(139,328)
Cumulative effect of net pension liability
260,475
243,712
Unrestricted Net Position, net of effect of net pension liability
$ 107,794
104,384


40

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Effective July 1, 2015, the University adoptedGovernmental Accounting Standards Board Statement No.
72, Fair Value Measurement and Application, (Statement 72) which requires disclosures to be made about
the fair value measurements, the level of fair value hierarch, and the fair value valuation techniques used to
value the University’s investments. See Note 2 for additional information. There was no effect on net
assets as a result of implementing Statement 72.
Note 12: Pension Plan
Summary of Significant Accounting Policies
The University participates in the State Division Trust Fund (SDTF), a cost-sharing multiple-employer
defined benefit pension fund administered by the Public Employees’ Retirement Association of Colorado
(PERA). The net pension liability (NPL), deferred outflows of resources and deferred inflows of resources
related to pensions, pension expense, information about the fiduciary net position and additions
to/deductions from the fiduciary net position of the SDTF have been determined using the economic
resources measurement focus and the accrual basis of accounting. 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.
Plan Description
All eligible employees of the University are provided with pensions through the SDTF, a cost-sharing
multiple-employer defined benefit pension plan administered by PERA. Plan benefits are specified in Title
24, Article 51 of the Colorado Revised Statutes (C.R.S.), administrative rules set forth at 8 C.C.R. 1502-1,
and applicable provisions of the federal Internal Revenue Code. Colorado State law provisions may be
amended from time to time by the Colorado General Assembly. PERA issues a publicly available
comprehensive annual financial report that can be obtained at www.copera.org/investments/pera-financial-
reports.
Benefits Provided
PERA provides retirement, disability, and survivor benefits. Retirement benefits are determined by the
amount of service credit earned and/or purchased, highest average salary, the benefit structure(s) under
which the member retires, the benefit option selected at retirement, and age at retirement. Retirement
eligibility is specified in tables set forth at C.R.S. § 24-51-602, 604, 1713, and 1714.
The lifetime retirement benefit for all eligible retiring employees under the PERA Benefit Structure is the
greater of the:
 Highest average salary multiplied by 2.5 percent and then multiplied by years of service credit
 The value of the retiring employee’s member contribution account plus a 100 percent match on eligible
amounts as of the retirement date. This amount is then annuitized into a monthly benefit based on life
expectancy and other actuarial factors.
In all cases the service retirement benefit is limited to 100 percent of highest average salary and also cannot
exceed the maximum benefit allowed by federal Internal Revenue Code.
Members may elect to withdraw their member contribution accounts upon termination of employment with
all PERA employers; waiving rights to any lifetime retirement benefits earned. If eligible, the member may
receive a match of either 50 percent or 100 percent on eligible amounts depending on when contributions
were remitted to PERA, the date employment was terminated, whether 5 years of service credit has been
obtained and the benefit structure under which contributions were made.

41

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Benefit recipients who elect to receive a lifetime retirement benefit are generally eligible to receive post-
retirement cost-of-living adjustments, referred to as annual increases in the C.R.S.. Benefit recipients under
the PERA benefit structure who began eligible employment before January 1, 2007 receive an annual
increase of 2 percent, unless PERA has a negative investment year, in which case the annual increase for
the next three years is the lesser of 2 percent or the average of the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) for the prior calendar year. Benefit recipients under the PERA
benefit structure who began eligible employment after January 1, 2007 receive an annual increase of the
lesser of 2 percent or the average CPI-W for the prior calendar year, not to exceed 10 percent of PERA’s
Annual Increase Reserve for the SDTF.
Disability benefits are available for eligible employees once they reach five years of earned service credit
and are determined to meet the definition of disability. The disability benefit amount is based on the
retirement benefit formula shown above considering a minimum 20 years of service credit, if deemed
disabled.
Survivor benefits are determined by several factors, which include the amount of earned service credit,
highest average salary of the deceased, the benefit structure(s) under which service credit was obtained, and
the qualified survivor(s) who will receive the benefits.
Contributions
Eligible employees and the University are required to contribute to the SDTF at a rate set by Colorado
statute. The contribution requirements are established under C.R.S. § 24-51-401, et seq. Eligible employees
are required to contribute 8 percent of their PERA-includable salary. The employer contribution
requirements for all employees are summarized in Table 12.1 Employer Contribution Requirements.
TABLE 12.1 Employer Contribution Requirements
2016
2015

July 1 –
January 1 –
July 1 –
January 1 –
December 31
June 30
December 31
June 30
Employer Contribution Rate1 10.15%
10.15
10.15
10.15
Amount of Employer Contribution
apportioned to the Health Care Trust
Fund as specified in C.R.S. § 24-51-
208(1)(f) 1 (1.02)
(1.02)
(1.02)
(1.02)
Amount Apportioned to the SDTF1 9.13
9.13
9.13
9.13
Amortization Equalization Disbursement
as specified in C.R.S. § 24-51-411 1 4.20 4.60 3.80 4.20
Supplemental Amortization Equalization
Disbursement as specified in C.R.S. §
24-51-411 1 4.00
4.50
3.50
4.00
Total Employer Contribution Rate to the
SDTF1 17.33%
18.23
16.43
17.33
1Rates are expressed as a percentage of salary as defined in C.R.S. § 24-51-101(42).


Employer contributions are recognized by the SDTF in the period in which the compensation becomes
payable to the member and the University is statutorily committed to pay the contributions to the SDTF.
Employer contributions recognized by the SDTF from the University were $14,249,000 and $12,885,000
for the years ended June 30, 2016 and 2015, respectively.

42

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At June 30, 2016 and 2015, the University reported a NPL of $296,275,000 and $258,474,000, respectively,
for its proportionate share of the SDTF NPL. The NPL was measured as of December 31, 2015 and 2014,
respectively, and the total pension liability used to calculate the NPL was determined by an actuarial
valuation as of December 31, 2014, respectively. Standard update procedures were used to roll forward the
total pension liability to December 31, 2015. The University’s proportion of the NPL was based on
University contributions to the SDTF for the calendar years 2015 and 2014 relative to the total contributions
of participating employers to the SDTF. At December 31, 2015 and 2014, the University’s proportion was
2.8133496393 percent and 2.7478159772 percent, respectively, or a change from the prior year of
.0655336621.
For the years ended June 30, 2016 and 2015, the University recognized pension expense of $27,508,000 and
$20,658,000, respectively. At June 30, 2016 and 2015, the University reported deferred outflows of
resources and deferred inflows of resources related to pensions from the sources shown in Table 12.2
Deferred Outflows and Inflows.
TABLE 12.2 Deferred Outflows and Inflows (in thousands)

Deferred Outflows of
Type
Resources
Deferred Inflows of Resources

2016 2015 2016 2015
Difference between expected and actual
experience
$ 4,314
-
9
19
Net difference between projected and actual
earnings on pension plan investments
22,230
5,270
-
-
Changes in proportion and differences
between contributions recognized and
proportionate share of contributions
5,239
2,692
-
-
Changes in assumptions and other inputs
-
-
3,507
-
Contributions subsequent to the measurement
date
7,533
6,819 - -
Total
$ 39,316
14,781
3,516
19
Deferred outflows of resources related to pensions, resulting from contributions subsequent to the
measurement date totaling $7,533,000 will be recognized as a reduction of the NPL in the year ended June
30, 2017. Deferred outflows of resources related to pensions, resulting from contributions subsequent to the
measurement date totaling $6,819,000 were recognized as a reduction of the NPL in the year ended June 30,
2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be amortized to pension expense as shown in Table 12.3 Amortization of Deferred Outflows
and Inflows.
TABLE 12.3 Amortization of Deferred
Outflows and Inflows (in thousands)
Fiscal Year
Amount
2017 $

9,750
2018 8,061
2019 5,887
2020 4,569
Actuarial Assumptions
The total pension liability in the December 31, 2014 actuarial valuation was determined using the actuarial
assumptions shown in Table 12.4 Actuarial Assumptions.

43

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

TABLE 12.4 Actuarial Assumptions
Actuarial Cost Method
Entry Age
Price inflation
2.80%
Real wage growth
1.10%
Wage inflation
3.90%
Salary increases, including wage inflation
3.90 – 9.57%
Long-term investment Rate of Return, net of pension
plan investment expenses, including price inflation
7.50%
Future post-retirement benefit increases:

PERA Benefit Structure hired prior to 1/1/07
2.00%
PERA Benefit Structure hired after 12/31/06
(ad hoc, substantively automatic)
Financed by the Annual Increase Reserve (AIR)
Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate,
with adjustments for mortality improvements based on a projection of Scale AA to 2020 with Males set
back 1 year, and Females set back 2 years.
The actuarial assumptions used in the December 31, 2014 valuation were based on the results of an
actuarial experience study for the period January 1, 2008 through December 31, 2011, adopted by PERA’s
Board on November 13, 2012, and an economic assumption study, adopted by PERA’s Board on November
15, 2013 and January 17, 2014.
Changes to assumptions or other inputs since the December 31, 2013 actuarial valuation are as follows:
 The following programming changes were made:
o Valuation of the full survivor benefit without any reduction for possible remarriage.
o Reflection of the employer match on separation benefits for all eligible years.
o Reflection of one year of service eligibility for survivor annuity benefit.
o Refinement of the 18 month annual increase timing.
o Refinements to directly value certain and life, modified cash refund and pop-up benefit forms.
 The following methodology changes were made:
o Recognition of merit salary increases in the first projection year.
o Elimination of the assumption that 35% of future disabled members elect to receive a refund.
o Removal of the negative value adjustment for liabilities associated with refunds of future
terminating members.
o Adjustments to the timing of the normal cost and unfunded actuarial accrued liability payment
calculations to reflect contributions throughout the year.
The SDTF’s long-term expected rate of return on pension plan investments was determined using a log-
normal distribution analysis in which best estimate ranges of expected future real rates of return (expected
return, net of investment expense and inflation) were developed for each major asset class. These ranges
were 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 then adding expected inflation.
As of the November 15, 2013 adoption of the long-term expected rate of return by the PERA Board, the
target allocation and best estimates of geometric real rates of return for each major asset class are
summarized below.


44

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015


10 Year Expected

Target
Geometric Real

Asset Class
Allocation
Rate of Return*

U.S. Equity – Large Cap
26.76% 5.00

U.S. Equity – Small Cap
4.40 5.19

Non U.S. Equity – Developed
22.06 5.29

Non U.S. Equity – Emerging
6.24 6.76

Core Fixed Income
24.05 0.98

High Yield
1.53 2.64

Long Duration Gov’t/Credit
0.53 1.57

Emerging Market Bonds
0.43 3.04

Real Estate
7.00 5.09


Private Equity
7.00 7.15


Total
100.00%

*In setting the long-term expected rate of return, projections employed to model future

returns provide a range of expected long-term returns that, including expected inflation,
ultimately support a long-term expected rate of return assumption of 7.50%.

Discount Rate
The discount rate used to measure the total pension liability was 7.50 percent. The projection of cash flows
used to determine the discount rate applied the actuarial cost method and assumptions shown above. In
addition, the following methods and assumptions were used in the projection of cash flows:

Total covered payroll for the initial projection year consists of the covered payroll of the active
membership present on the valuation date and the covered payroll of future plan members assumed to be
hired during the year. In subsequent projection years, total covered payroll was assumed to increase
annually at a rate of 3.90%.

Employee contributions were assumed to be made at the current member contribution rate.
Employee contributions for future plan members were used to reduce the estimated amount of total
service costs for future plan members.

Employer contributions were assumed to be made at rates equal to the fixed statutory rates
specified in law, including current and estimated future AED and SAED, until the Actuarial Value
Funding Ratio reaches 103%, at which point, the AED and SAED will each drop 0.50% every year until
they are zero. Additionally, estimated employer contributions included reductions for the funding of the
AIR and retiree health care benefits. For future plan members, employer contributions were further
reduced by the estimated amount of total service costs for future plan members not financed by their
member contributions.

Employer contributions and the amount of total service costs for future plan members were based
upon a process used by the plan to estimate future actuarially determined contributions assuming an
analogous future plan member growth rate.

The AIR balance was excluded from the initial fiduciary net position, as, per statute, AIR
amounts cannot be used to pay benefits until transferred to either the retirement benefits reserve or the
survivor benefits reserve, as appropriate. As the ad hoc post-retirement benefit increases financed by the
AIR are defined to have a present value at the long-term expected rate of return on plan investments equal
to the amount transferred for their future payment, AIR transfers to the fiduciary net position and the
subsequent AIR benefit payments have no impact on the Single Equivalent Interest Rate (SEIR)

45

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

determination process when the timing of AIR cash flows is not a factor (i.e., the plan’s fiduciary net
position is not projected to be depleted). When AIR cash flow timing is a factor in the SEIR
determination process (i.e., the plan’s fiduciary net position is projected to be depleted), AIR transfers to
the fiduciary net position and the subsequent AIR benefit payments were estimated and included in the
projections.

Benefit payments and contributions were assumed to be made at the end of the month.
Based on the above actuarial cost method and assumptions, the SDTF’s fiduciary net position was projected
to be available to make all projected future benefit payments of current 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. The discount rate determination does not use the Municipal Bond
Index Rate. There was no change in the discount rate from the prior measurement date.
Sensitivity of the University’s Proportionate Share of the NPL to Changes in the Discount
Rate.
The following presents the proportionate share of the NPL calculated using the discount rate of 7.50
percent, as well as what the proportionate share of the NPL would be if it were calculated using a discount
rate that is 1-percentage-point lower (6.50 percent) or 1-percentage-point higher (8.50 percent) than the
current rate.

1% Decrease
Current Discount
1% Increase
(6.50%)
Rate (7.50%)
(8.50%)
Proportionate share of the NPL
374,302 296,275 231,008
Pension plan fiduciary net position.
Detailed information about the SDTF’s fiduciary net position is available in PERA’s comprehensive annual
financial report which can be obtained at www.copera.org/investments/pera-financial-reports.
CSM Foundation Retirement Plan
The Foundation participates in a defined contribution pension plan covering substantially all of its
employees. Contributions and costs are based on the number of years of service and a percentage of regular
salary. Pension expense was $180,000 and $150,000 for 2016 and 2015, respectively.
Note 13: Other Postemployment Benefits and Life Insurance
Health Care Plan
Plan Description
The University contributes to the Health Care Trust Fund ("HCTF"), a cost-sharing multiple-employer
healthcare trust administered by PERA. The HCTF benefit provides a health care premium subsidy and
health care programs (known as PERACare) to PERA participating benefit recipients and their eligible
beneficiaries. Title 24, Article 51, Part 12 of the C.R.S., as amended, establishes the HCTF and sets forth a
framework that grants authority to the PERA Board to contract, self-insure and authorize disbursements
necessary in order to carry out the purposes of the PERACare program, including the administration of
health care subsidies. PERA issues a publicly available comprehensive annual financial report that includes
financial statements and required supplementary information for the HCTF. That report can be obtained at
www.copera.org/investments/pera-financial-reports.

46

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Funding Policy
The University is required to contribute at a rate of 1.02 percent of PERA-includable salary for all PERA
members as set by statute. No member contributions are required. The contribution requirements for the
University are established under Title 24, Article 51, Part 4 of the C.R.S., as amended. The apportionment
of the contributions to the HCTF is established under Title 24, Article 51, Section 208(1)(f) of the C.R.S.,
as amended. For the years ending June 30, 2016, June 30, 2015, and June 30, 2014, the University
contributions to the HCTF were $818,000, $778,000 and $732,000, respectively, equal to their required
contributions for each year.
Colorado Higher Education Insurance Benefits Alliance Trust (CHEIBA)
Retired faculty and exempt-administrative staff are eligible to participate in the Colorado Higher Education
Insurance Benefits Alliance Trust (CHEIBA). CHEIBA is a cost-sharing multiple-employer insurance
purchasing pool, which allows for post-employment health coverage until the retiree is eligible for
Medicare.
CHEIBA financial statements are prepared under accounting principles generally accepted in the United
States using the accrual basis of accounting following governmental accounting standards for a business-
type activity. The financial statements can be obtained by contacting the CHEIBA Trust. Contributions are
recognized in the period due. Benefits and refunds are recognized and paid when due according to the
participating plans. The fair value of the Trust’s investments is based on quoted market prices from
national securities exchanges.
There are no long-term contracts for contributions to the plan. Participating Universities can withdraw their
participation in the plan with at least one year’s notice to the CHEIBA board.
Note 14: Discretely Presented Component Unit
Colorado School of Mines Foundation
Distributions made by the Foundation to the University during the years ended June 30, 2016 and 2015
were approximately $21,271,000 and $32,927,000, respectively. These amounts have been recorded as
contributions from the Foundation and as capital grants and gifts in the accompanying financial statements.
As of June 30, 2016 and 2015, the University has recorded an accounts receivable from the Foundation of
$2,858,000 and $1,897,000, respectively. As of June 30, 2016 and 2015, the University has recorded a
liability to the Foundation of $1,684,000 and $1,746,000, respectively.
The University is the ultimate beneficiary of substantially all restricted and trust funds held by the
Foundation and is the income beneficiary of the majority of endowment funds held by the Foundation. The
Foundation also manages a portion of University’s endowments. The University has endowments and other
assets held by the Foundation approximating $30,808,000 and $33,430,000 as of June 30, 2016 and 2015,
respectively.
Note 15: Commitments and Contingencies
Commitments
Contracts have been entered into for the purpose of planning, acquiring, constructing and equipping certain
building additions and other projects, with outstanding amounts totaling approximately $50,258,000 as of
June 30, 2016. These commitments will be funded or financed by donor contributions, state appropriations,
existing revenue bonds, and other campus resources.

47

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

In November 1992, the University and numerous other potentially responsible parties (PRP’s) were notified
by the United States Environmental Protection Agency (EPA) of potential liability pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
(CERCLA). Such potential liability resulted from costs associated with the investigation and cleanup of
hazardous substances at a site owned by the University and leased to the Colorado School of Mines
Research Institute (CSMRI, now known as Table Mountain Research Center or TMRC, following a name
change in December 2012), which performed mining research for a variety of private and governmental
entities. Negotiations with the EPA, the enforcement agency related to past costs, have been resolved. The
Colorado Department of Public Health and Environment (CDPHE) remained involved in the investigation
and cleanup activities at the site for several years. CDPHE had issued to TMRC Radioactive Materials
License No. 617-01 (TMRC License). CDPHE also issued to the Colorado School of Mines Radioactive
Materials License No. 1206-01 (University License) for part of the site. The University license generally
covered the possession and storage of groundwater containing uranium, and any unknown sources of
radioactive material contributing to uranium in groundwater within the portion of the site known as the
lower terrace. The University granted an environmental covenant to CDPHE (restricting use of groundwater
on the upper terrace area of the site) on September 21, 2012. Subsequently, CDPHE terminated the TMRC
license (on December 19, 2012). After the University completed extensive site characterization,
remediation and groundwater monitoring, it submitted a final Groundwater Report to CDPHE
demonstrating that the remaining hazardous substances had been successfully removed from the site. On
February 3, 2014, CDPHE terminated the University license, determining that no further groundwater
monitoring is required. CDPHE also accepted a modification to the existing environmental covenant that
allowed the University to remove all monitoring wells from the site. On June 30, 2015, CDPHE declared
the cleanup goals have been achieved.
In Fiscal Year 2014, the University settled with several PRP’s regarding the cost of the remediation work
for $11,058,000. The University has negotiated another settlement with other PRPs that will recover an
additional $856,000 of its remaining cleanup costs. This settlement is awaiting judicial approval in United
States District Court for the District of Colorado.
The University has obtained a policy of environmental impairment liability insurance for an area that
includes the site through Zurich Insurance. It provided notice to Zurich regarding CDPHE’s termination of
all Radioactive Materials Licenses covering the site, as well as CDPHE’s declaration that the cleanup goals
had been achieved. Based on this “no further action” determination, Zurich has amended the policy’s
“known pollution event schedule” and eliminated the pollution exclusion described in that schedule.
In the normal course of its operations, the University is involved in various litigation matters. Management
believes that any future liability that it may incur as a result of these matters, including the EPA matter
discussed above, will not have a material effect on the University’s financial statements.
Government Grants
The University is currently participating in numerous grants from various departments and agencies of the
Federal and State governments. The expenditures of grant proceeds must be for allowable and eligible
purposes. Single audits and audits by the granting department or agency may result in requests for
reimbursement of unused grant proceeds or disallowed expenditures. Upon notification of final approval by
the granting department or agency, the grants are considered closed. Management believes that any future
liability that it may incur as a result of audits by the granting department or agency will not have a material
effect on the University’s financial statements.

48

Colorado School of Mines
Notes to Financial Statements
June 30, 2016 and 2015

Note 16: Risk Management
The University is subject to risks of loss from liability for accident, property damage and personal injury.
These risks are managed by the State Division of Risk Management, an agency formed by statute and
funded by the Long Appropriations Bill. Therefore, the University is not required to purchase third party
insurance for such risk of loss. Commercial insurance coverage is purchased for employee health benefits.
There has been no reduction in coverage nor have any settlements exceeded coverage in any of the three
preceding years. The University does not retain risk of loss except for damage incurred to property
belonging to the State, limited to a $5,000 deductible per incident.
The State Division of Risk Management is deemed to be a public entity risk pool; therefore, under the
Governmental Immunity Act, the University is protected from suit by the Doctrine of Sovereign Immunity
except under certain circumstances in which immunity is waived.
Note 17: Legislative Appropriations
The Colorado State Legislature establishes spending authority to the University in its annual Long
Appropriations Bill.
For the years ended June 30, 2016 and 2015, appropriated expenses were within the authorized spending
authority. For the years ended June 30, 2016 and 2015, the University had a total appropriation of
$22,659,000 and $20,503,000, respectively. For years ended June 30, 2016 and 2015, the University’s
appropriated funds consisted of $6,157,000 and $6,194,000, respectively, received from students that
qualified for stipends from the College Opportunity Fund, $14,390,000 and $12,475,000, respectively, as
fee-for-service contract revenue and $2,112,000 and $1,834,000, respectively, for the operations of the
Colorado Geological Survey. All other revenues and expenses reported by the University represent non-
appropriated funds. Non-appropriated funds include tuition and fees, grants and contracts, gifts, indirect
cost recoveries, auxiliary revenues and other revenue sources.

49

Colorado School of Mines
Required Supplementary Information
June 30, 2016 and 2015







Required Supplementary Information

50

Colorado School of Mines
Required Supplementary Information
June 30, 2016 and 2015

Schedule of Proportionate Share of NPL ($ in thousands)
Proportionate Share
Plan Fiduciary Net
Proportionate
of the NPL as a
Pension as a
Proportionate
Share of the
Covered
Percentage of
Percentage of the
Calendar
(percentage) of the
Collective Pension
Employee
Covered Employee
Total Pension
Year
Collective NPL
Liability
Payroll
Payroll
Liability
2015 2.8133496393%
$ 296,275
78,246
378.65% 56.11%
2014 2.7478159772%
$ 258,474
73,987
349.35
59.84
2013 2.7014417840%
$ 260,644
69,550
346.00
61.08

Schedule of Contributions and Related Ratios ($ in thousands)
Contributions
Related to the
Contribution as a
Statutorily
Statutorily
Contribution
Covered
Percentage of
Required
Required
deficiency
Employee
Covered Employee
As of June 30
Contributions
Contribution
(excess)
Payroll
Payroll
2016
$ 14,249
14,249
-
78,160
18.23%
2015 12,885 12,885
-
76,271
16.89
2014 11,382 11,382
-
71,143
16.00
2013 10,731 10,731
-
67,566
15.88
2012 7,731 7,731
-
62,962
12.28
2011 7,136 7,136
-
61,456
11.61
2010 7,892 7,892
-
60,759
12.99
2009 7,273 7,273
-
54,393
13.37
2008 6,112 6,112
-
54,431
11.23
2007 5,404 5,404
-
49,578
10.90


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