CITY OF BLACKFOOT, IDAHO BASIC FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION SEPTEMBER 30, 2017

Transcription

1 , IDAHO BASIC FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION SEPTEMBER 30, 2017

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3 AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2017 TABLE OF CONTENTS Page Number FINANCIAL SECTION Independent Auditor s Opinion 6 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 10 Statement of Activities 12 Fund Financial Statements: Balance Sheet Governmental Funds 14 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 16 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Proprietary Funds: Statement of Net Position 21 Statement of Revenues, Expenses and Changes in Net Position 22 Statement of Cash Flows 23 Fiduciary Funds: Statement of Net Position Clerk s Trust Fund 24 Notes to Financial Statements 25 3

4 AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2017 TABLE OF CONTENTS (CONTINUED) Page Number Required Supplementary Information: Schedule of Employer s Share of Net Pension Liability 52 Schedule of Employer s Contributions 52 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund 53 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Street Fund 56 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Ambulance Fund 57 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Parks and Recreation Fund 58 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Water Capital Fund 60 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Wastewater Capital Fund 61 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Blackfoot Urban Renewal District 62 Other Supplemental Information: Combining Balance Sheet - Non-major Governmental Funds 64 Expenditures, and Changes in Fund Balances - Non-major Governmental Funds 66 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Airport Fund 68 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Cemetery Fund 69 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Library Fund 70 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Capital Improvements Fund 71 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Fire and Ambulance Replacement Fund 72 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Golf Course Capital Fund 73 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Street Capital Fund 74 4

5 AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2017 TABLE OF CONTENTS (CONTINUED) Page Number Other Supplemental Information - Continued: Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Sanitation Capital Fund 75 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Parks Capital Fund 76 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Library Capital Fund 77 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual Health Care Reserve Fund 78 Single Audit Section: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 80 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance With OMB Circular A Schedule of Expenditures of Federal Awards 84 Schedule of Findings and Questioned Costs 85 5

6 Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive morganh@ida.net Phone : (208) Pocatello, Idaho Fax: (208) Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Report on the Financial Statements Independent Auditor's Report I have audited the accompanying financial statements of the governmental activities, the business-type activities, the Blackfoot Urban Renewal District (a discretely presented component unit), each major fund, and the aggregate remaining fund information of the City of Blackfoot as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the City 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. Auditor s Responsibility My responsibility is to express opinions on these financial statements based on my audit. I conducted my audit 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 I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, I 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. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinions. 6

7 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, the Blackfoot Urban Renewal District (a discretely presented component unit), each major fund, and the respective changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America Required Supplementary Information The City has not presented the Management s Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not required to be part of, the basic financial statements. My opinion on the basic financial statements is not affected by this missing information. Accounting principles generally accepted in the United States of America require that the schedules of Net Pension Liability and Employer s Contributions, and the major fund budgetary comparison information 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, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. I 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 my inquiries, the basic financial statements, and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance. Other Information My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. 7

8 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 3 The combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated January 19, 2018, on my consideration of the City s internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City s internal control over financial reporting and compliance. Pocatello, Idaho January 19, 2018 Morgan J Hatt CPA PC 8

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10 STATEMENT OF NET POSITION SEPTEMBER 30, 2017 Total Governmental Business-type Primary ASSETS: Activities Activities Government Current Assets: Cash and investments $5,396,697 $4,692,314 $10,089,011 Property taxes receivable 202, ,796 Other receivables 807,200 66, ,242 Utility accounts receivable, net 592, ,607 Golf Inventory 53,141 53,141 Non-current Assets: Land 1,048, ,229 1,519,469 Capital assets, net 15,561,180 18,666,781 34,227,961 Total Assets: 23,069,254 24,488,973 47,558,227 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 262,232 52, ,422 LIABILITIES: Current liabilities: Accounts payable 672, , ,033 Accrued leave 457,575 74, ,774 Customer deposits 79,310 79,310 Lease payable due within one year 9,223 9,223 Note payable EPA due within one year 179, ,217 Revenue bonds due within one year 215, ,000 Non-current liabilities: 0 Lease payable due beyond one year 48,047 48,047 DEQ Loan WW ,154,012 3,154,012 Note payable EPA due beyond one year 2,866,022 2,866,022 Revenue bonds due beyond one year 220, ,000 City's share of unfunded PERSI liability 1,670, ,370 2,002,377 Total Liabilities: 2,857,619 7,288,396 10,146,015 DEFERRED OUTFLOWS: Deferred PERSI inflow of resources 250,511 49, ,368 NET POSITION: Net investment in capital assets 16,552,150 12,515,920 29,068,070 Unrestricted 3,671,206 4,686,990 8,358,196 Total Net Position: $20,223,356 $17,202,910 $37,426,266 The accompanying notes are an integral part of these statements. 10

11 Blackfoot Urban Renewal Agency Totals Reporting Entity $1,149,295 $11,238,306 8, , , ,607 53,141 1,519,469 34,227,961 1,158,008 48,716, ,422 2, , ,774 79,310 9, ,217 60, , ,047 3,154,012 2,866, , ,000 2,002, ,215 10,888, ,368 29,068, ,793 8,773,989 $415,793 $37,842,059 The accompanying notes are an integral part of these statements. 11

12 STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2017 Program Revenues Charges for Grants and Expenses Services Contributions Primary Government: Governmental Activities: General government $1,687,529 $245,777 $150,000 Public safety 5,931,562 2,328,318 58,334 Parks and recreation 1,733, ,626 44,762 Library 426, , Highways and streets 957,222 91,748 Airport 217,610 36, ,922 Interest on long-term debt 0 Total Governmental Activities: 10,953,864 3,790, ,662 Business-type Activities: Water 1,188,077 1,848,755 Sewer 2,305,111 2,789, ,077 Sanitation 923,168 1,231,090 Interest on long-term debt 69,848 Total Business-type Activities: 4,486,204 5,869, ,077 Total Primary Government: $15,440,068 $9,659,705 $1,498,739 Component Units: Interest on long-term debt $55,825 Blackfoot Urban Renewal Agency 305,348 $100 $361,173 $100 $0 General Revenues: Property taxes Sales and use tax County road and bridge State of Idaho revenue sharing State of Idaho liquor receipts State highway user collections Investment earnings Sale of assets Admin charges Health deductible charges Total General Revenues and Transfers: Change in net position: Net Position October 1, 2016: Net Position September 30, 2017 The accompanying notes are an integral part of these statements. 12

13 Net (Expense) Revenue and Changes in Net Position Primary Government Blackfoot Governmental Business-type Urban Renewal Activities Activities Total Agency ($1,291,752) ($1,291,752) (3,544,910) (3,544,910) (839,675) (839,675) (187,367) (187,367) (865,474) (865,474) 462, , (6,267,138) (6,267,138) $660, ,678 1,086,762 1,086, , ,922 (69,848) (69,848) 1,985,514 1,985,514 (4,281,624) ($55,825) (305,248) 3,951,310 3,951, , , ,221 4,370 50,160 50, , , , , , , , ,282 2,961 2, ,267 (806,267) 0 45,916 (45,916) 0 6,699,973 (852,183) 5,847, , ,835 1,133,331 1,566, ,369 19,790,521 16,069,579 35,860, ,424 $20,223,356 $17,202,910 $37,426,266 $415,793 The accompanying notes are an integral part of these statements. 13

14 BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2017 Parks and General Street Ambulance Recreation ASSETS: Fund Fund Fund Fund Cash and investments $4,963 Receivables: Property taxes $160,803 $11,919 11,016 Bingham County 148,090 12, State of Idaho 118, ,028 Other 19,789 Golf clubhouse inventory 53,141 Due from other funds 408,745 Total Assets: $855,939 $164,747 $0 $69,619 LIABILITIES: Accounts payable $121,165 $18,186 $20,605 $60,660 Due to other funds 73, ,526 Total Liabilities: 121,165 91, ,131 60,660 DEFERRED INFLOW OF RECOURCES: Unavailable revenue - Property taxes 130,508 10,454 8,959 FUND BALANCE: Assigned - Capital Improvements Committed 63,097 0 Unassigned 604,266 (437,131) Total Fund Balance: 604,266 63,097 (437,131) 0 Total Liabilities, Deferred Resources, & Fund Balance: $855,939 $164,747 $0 $69,619 The accompanying notes are an integral part of these statements. 14

15 Water Wastewater Other Total Blackfoot Capital Capital Governmental Primary Urban Renewal Fund Fund Funds Governmental Agency $2,097,965 $1,197,225 $2,096,544 $5,396,697 $1,149,295 19, ,796 8,713 5, , , , ,428 53, , ,111 $2,097,965 $1,197,225 $2,629,450 $7,014,945 $1,158,008 $452,151 $672,767 $2,215 65, ,111 $0 $0 517,726 1,227,878 2,215 15, ,350 8,479 2,097,965 1,197,225 1,457,751 4,752, , ,216 1,147,314 (65,575) 101,560 2,097,965 1,197,225 2,096,295 5,621,717 1,147,314 $2,097,965 $1,197,225 $2,629,450 $7,014,945 $1,158,008 The accompanying notes are an integral part of these statements. 15

16 RECONCILIATION OF THE BALANCFE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017 Total Blackfoot Primary Urban Renewal Government Agency Total Fund Balance: $5,621,717 $1,147,314 Total net assets reported on the Statement of Net Position is different from the fund balance reported on the Balance Sheet because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in the governmental funds. Cost of capital assets: 40,990,725 Depreciation expense to date: (24,381,305) Some of the City's property taxes will be collected after year-end and are not available to pay current period expenditures. They are reported as deferred revenue in the governmental funds. 165,350 8,479 Deferred amounts are not current financial resources/uses. Therefore, they are not reported in the governmental funds. Deferred PERSI outflows: 262,232 Deferred PERSI inflows: (250,511) Long-term liabilities are not due and payable in the current period. Therefore, they are not reported as liabilities in the governmental funds. Accrued leave: (457,575) Equipment leases payable: (57,270) Revenue bonds payable: (740,000) City's share of unfunded PERSI liability: (1,670,007) Change in Net Position: $20,223,356 $415,793 16

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18 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2017 Parks and General Street Ambulance Recreation REVENUE: Fund Fund Fund Fund Property taxes $3,089,797 $306,283 $215,264 Sales and use taxes 436,072 42,587 21,376 Franchise taxes 113,784 90,307 Licenses and fees 68,568 $732, ,248 County shared 50, ,642 20,000 State of Idaho 590, ,214 Blackfoot - Snake River Fire District 833,824 School District Resource Officer 109,850 Grants and contributions 162,569 44,640 24,762 Interest 156,849 2,464 Administrative charges 806,267 Miscellaneous 113,251 1, ,390 Total Revenue: 6,481,473 1,041,456 1,342,416 1,059,040 EXPENDITURES: Current Operating: General government 1,489,406 Public safety 4,574,079 1,321,643 Parks and recreation 1,678,929 Library Highways and streets 1,565,919 Airport Capital Outlay Debt service - principal Debt service - interest Total Expenditures: 6,063,485 1,565,919 1,321,643 1,678,929 EXCESS REVENUE (EXPENDITURES): 417,988 (524,463) 20,773 (619,889) OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds (504,289) 619,889 NET CHANGE IN FUND BALANCES: (86,301) (524,463) 20,773 0 FUND BALANCE - BEGINNING: 690, ,560 (457,904) 0 FUND BALANCE - ENDING: $604,266 $63,097 ($437,131) $0 The accompanying notes are an integral part of these statements. 18

19 Water Wastewater Other Total Blackfoot Capital Capital Governmental Primary Urban Renewal Fund Fund Funds Government Agency $365,213 $3,976,557 $624,852 41, , , ,130 2,086, ,802 1,138, , , , ,537 3, ,282 4, ,267 72, , $0 $0 1,635,933 11,560, , ,683 1,687,089 19,497 5,895,722 33,874 1,712, , ,218 1,565, , , ,851 60,000 57, ,474,151 12,104, , ,782 (543,809) 208,149 (115,600) ,182 (543,809) 208,149 2,097,965 1,197,225 2,050,113 6,165, ,165 $2,097,965 $1,197,225 $2,096,295 $5,621,717 $1,147,314 The accompanying notes are an integral part of these statements. 19

20 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2017 Total Blackfoot Primary Urban Renewal Government Agency Net Change in Fund Balance -Total Governmental Funds: ($543,809) $208,149 Because some property taxes will not be collected for several months after the City's year-end, they are not considered current resources in the governmental funds. They are, however, considered as revenue in the Statement of Activities. This amount is the current year change in deferred taxes: (25,247) 1,220 Governmental funds report capital outlays as current year expenditures. In the Statement of Activities, the cost of these assets is allocated over their estimated useful lives as depreciation expense. This is the amount of current capital outlay for new equipment: 2,228,925 This is the amount of current year depreciation: (1,103,036) This is the amount of new assets transferred from BURA: Long-term liabilities are not recorded in Governmental funds. This is the amount of current year capital lease payments: This is the amount of current year bond payment payment: 60,000 Liability for personal leave days are not recorded in Governmental funds. This is the increase in leave during the year: (102,882) Revenues and expenses that do not require the use of current financial resources are not reported in the Governmental funds. This is the current net PERSI expense: (21,116) Change in Net Position: $432,835 $269,369 The accompanying notes are an integral part of these statements. 20

21 STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2017 Totals Water Sewer Sanitation (Memorandum ASSETS: Fund Fund Fund Only) Current Assets: Cash and investments $2,180,709 $1,790,540 $721,065 $4,692,314 Utility accounts receivable 197, , , ,607 Grants receivable 66,042 66,042 Non-current Assets: Land 234, , ,229 Property and equipment - net of depreciation 5,403,689 12,746, ,042 18,666,781 Total Assets: 8,016,911 15,114,026 1,358,036 24,488,973 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 14,250 25,779 12,161 52,190 LIABILITIES: Current liabilities: Accrued leave 27,334 31,006 15,859 74,199 Accounts payable 17, ,356 5, ,266 Customer deposits 79,310 79,310 Bonds payable 215, ,000 Notes payable 179, ,217 Non-current liabilities: Bonds payable 220, ,000 Notes payable 2,866,022 2,866,022 DEQ loan WW ,154,012 3,154,012 Fund's share of unfunded PERSI liability 90, ,170 77, ,370 Total Liabilities: 3,260,036 3,929,544 98,816 7,288,396 DEFERRED INFLOWS: Deferred PERSI inflow of resources 13,613 24,626 11,618 49,857 NET POSITION: Net investment in capital assets 2,593,019 9,393, ,203 12,515,920 Unrestricted 2,164,493 1,791, ,560 4,686,990 Total Net Position: $4,757,512 $11,185,635 $1,259,763 $17,202,910 The accompanying notes are an integral part of these statements. 21

22 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2017 Totals Water Sewer Sanitation (Memorandum OPERATING REVENUE: Fund Fund Fund Only) Service fees $1,832,147 $2,780,428 $1,231,090 $5,843,665 Other 16,608 9,368 25,976 Total Revenue: 1,848,755 2,789,796 1,231,090 5,869,641 OPERATING EXPENSES: Salaries 276, , ,654 1,010,136 Benefits 232, , , ,574 Clothing 3,325 3,178 1,940 8,443 Travel and training 537 4, ,112 Office supplies 14,661 23,430 2,140 40,231 Maintenance 41,448 93,136 38, ,120 Utilities and telephone 188, ,514 3, ,102 Fuel 10,578 26,012 39,429 76,019 Professional services 51, ,844 2, ,028 Department supplies and other 53, ,151 6, ,434 Insurance 18,871 30,460 16,683 66,014 Depreciation 228, ,883 99, ,867 Administrative services 216, , , ,267 Lab & DEQ fees 30,178 19,038 49,216 Lift stations 58,177 58,177 County services 306, ,706 Constructional materials 54,261 75,089 15, ,093 Total Expenses: 1,421,362 2,738,476 1,108,701 5,268,539 OPERATING INCOME (LOSS): 427,393 51, , ,102 NON-OPERATING REVENUES (EXPENSES): Federal and State grants 602, ,077 Debt service-interest (55,598) (14,250) (69,848) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS: 371, , ,389 1,133,331 Transfers (to) from other funds CHANGE IN NET POSITION: 371, , ,389 1,133,331 NET POSITION - BEGINNING: 4,385,717 10,546,488 1,137,374 16,069,579 NET POSITION - ENDING: $4,757,512 $11,185,635 $1,259,763 $17,202,910 The accompanying notes are an integral part of these statements. 22

23 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2017 Totals Water Sewer Sanitation (Memorandum Fund Fund Fund Only) CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from City patrons $1,841,275 $2,778,929 $1,228,711 $5,848,915 Payments to suppliers (783,157) (1,531,226) (608,285) (2,922,668) Payments to employees (284,468) (512,333) (246,095) (1,042,896) City administrative charges (216,059) (413,815) (176,393) (806,267) Net Cash Provided by Operating Activities: 557, , ,938 1,077,084 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of fixed assets (104,897) (3,043,815) (258,769) (3,407,481) Grants 988, ,037 Transfer to capital funds 0 State revolving loan payments (231,719) (231,719) DEQ loan advance 2,285,366 2,285,366 Bond payments (229,250) (229,250) Net Cash Applied to Financing Activities: (336,616) 338 (258,769) (595,047) CASH FLOWS FROM INVESTING ACTIVITIES: Interest earned on investments NET INCREASE (DECREASE) IN CASH 220, ,893 (60,831) 482,037 CASH AT BEGINNING OF YEAR: 1,959,734 1,468, ,896 4,210,277 CASH AT END OF YEAR: $2,180,709 $1,790,540 $721,065 $4,692,314 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET INCOME: Net income (loss) $371,795 $639,147 $122,389 $1,133,331 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 228, ,883 99, ,867 Net PERSI plan revenue (42,899) (22,023) (14,645) (79,567) Investment income 0 Debt service interest 55,598 14,250 69,848 Grants (602,077) (602,077) Transfers 0 (Increase) decrease in accounts receivable (6,087) (10,867) (2,379) (19,333) Increase (decrease) in accounts payable (49,329) (364,758) (6,898) (420,985) Net Cash Provided by Operating Activities: $557,591 $321,555 $197,938 $1,077,084 The accompanying notes are an integral part of these statements. 23

24 STATEMENT OF NET POSITION FIDUCIARY FUNDS - CLERK'S TRUST FUND SEPTEMBER 30, 2017 ASSETS: Cash and investments $79,344 Total Assets: 79,344 LIABILITIES: Customer deposits 3,798 Blackfoot Youth Committee 7,568 Baseball fields 1,662 Clerk's Trust misc (45) Flag donations 56 We The People 500 Music In The Park 406 Mayor's scholarship 28,582 Elections 2,437 Ground water recharge 5,000 Round-up Program (2,943) Blackfoot Animal Shelter 2,649 Braden/Tracen Project 871 Animal Shelter vaccinations 1,280 Animal Shelter adoptions 24,190 Animal Shelter County 2,297 Patriot Park statue donations 20 Friends of the Library 1,016 Total Liabilities: 79,344 NET POSITION: $0 The accompanying notes are an integral part of these statements. 24

25 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Blackfoot, Idaho (the City ) was incorporated on January 16, 1901, under the provision of the State of Idaho. The City operates under a Council-Mayor form of government. The financial statements of the City of Blackfoot have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for established governmental accounting and financial reporting principles. The more significant of the City of Blackfoot s accounting policies are described below. A. FINANCIAL REPORTING ENTITY For financial reporting purposes, management has considered potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth in generally accepted accounting principles. The basic criterion for including a potential component unit within the reporting entity is the governing body's responsibility for financial accountability. Financial accountability is defined as the level of accountability that exists if a primary government appoints a voting majority of an organization s governing board and is either able to impose its will on that organization or there is potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. Discretely Presented Component Unit The Blackfoot Urban Renewal District was organized to make improvements to infrastructure in specific areas of the City. It derives its revenues from the incremental tax increases that all taxing districts forfeit from increase in value of the land and improvements in new construction areas. 25

26 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Government-wide Financial Statements The Statement of Net Position and the Statement of Changes in Net Position display information about the City. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements are presented on an economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the City s assets and liabilities are included in the accompanying Statement of Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized when the liability is incurred. Property taxes are recognized as revenue in the year for which they are levied. Program service revenues include charges for services, as well as operating contracts with other units of government, such as the Snake River Fire District, the Rural Library District, and the County Ambulance. Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to inter-fund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses for non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with ongoing operations. The principal operating revenues of the Water, Sewer, and Sanitation Funds are charges to City residents. 26

27 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS (CONTINUED) Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, the City s policy is to use restricted resources first, and then unrestricted resources, as they are needed. Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as presented in these Statements to the net assets presented in the Government-wide Financial Statements. Governmental funds are accounted for on a spending or current financial resources measurement focus and on the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances present increases and decreases in net current assets. Under the modified accrual basis of accounting, revenues are recognized when they become both measurable and available as net current assets. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Revenue sources susceptible to accrual include property taxes and inter-governmental revenues. Expenditures are recognized when the related fund liability is incurred. Exceptions to this general rule include accumulated unpaid vacation, sick days, and other employee amounts, which are not accrued. Proprietary Fund Financial Statements Proprietary Funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful for sound financial administration. Goods or services from such activities can be provided either to outside parties or other departments or agencies within the City. 27

28 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS (CONTINUED) Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities are included on the Statement of Net Position. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Net Position. The City s fiduciary funds represent Agency Funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The City reports the following major governmental funds: The General Fund is the City s primary operating fund. It accounts for all financial activities of the City except those required to be accounted for in another fund. The Street Fund is used to account for the operation of the Street Department. Funding is provided by local property taxes and the City s share of State highway taxes. The Ambulance fund is used to account for the activities of the City s paramedics. Funding is provided through user charges and cost sharing with Bingham County. The Parks and Recreation Fund include the City s golf course, swimming pool, and City parks. Funding is provided by local property taxes and user charges. The Water Capital Fund is used to account for money set aside for future construction projects. The Wastewater Capital Fund is used to account for money set aside for future construction projects. The City reports the following major proprietary funds: The Water Fund accounts for the City s water production and distribution. The Sewer Fund accounts for the City s sewer system operation. The Sanitation Fund accounts for the City s refuse collection and disposal. 28

29 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 C. BUDGETING Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the general, special revenue, and debt service funds. All annual appropriations lapse at fiscal year-end. Project-length financial plans are adopted for all capital project funds. In July and August of each year, the various department heads submit their budget requests to the Mayor and Council. Budget meetings are then held to determine what funds will be available for expenditure in the new fiscal year. The budget requests are reduced to match the available revenue and a proposed budget is approved by the Mayor and Council. The proposed budget is published in the local paper and taxpayers are invited to attend a public hearing to express their views concerning the proposed budget. After this public meeting, the budget is approved and is legally enacted through the passage of an ordinance. D. ENCUMBRANCES Encumbrances are not liabilities and they are not recorded as expenditures until receipt of material or services. For budgetary purposes, appropriations lapse at year-end and are rebudgeted the following year. The City does not reserve fund balance for outstanding encumbrances at year-end. E. CASH AND INVESTMENTS The City pools idle cash from all funds for the purpose of increasing income through investment activities. The City considers investments with an original maturity of three months or less to be cash equivalent. The City invests idle cash in the Idaho State Treasurer s local government investment pool. The deposits are stated at cash which approximates market. The State Treasurer combines deposits from all government entities in Idaho who participate in the pool and purchases the following types of investments: Local Certificates of Deposit, Repurchase Agreements, and U.S. Government Securities. The Entities participating in the pool own a percentage of each investment held. This percentage is calculated by dividing the individual entity s deposits by the total deposits held in the pool. The purpose of this is to: increase overall the rate of return, reduce risk of default, and place each entity under the FDIC and FSLIC limits of $250,

30 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 E. CASH AND INVESTMENTS (CONTINUED) Under Idaho Code Section , the City is authorized to invest surplus or idle monies in investments subject to the following standards, guidelines and restrictions: a. City monies shall not be made in any depository of a financial institution in an amount which exceeds ten (10%) of said entity s capital and surplus. Any investment to be made above Federal Deposit Insurance requires the depository to have a current Moody s Bank Credit Report Service rating of A or better. b. No demand deposits or investment in time deposits or certificates of deposit shall be made in financial institutions insured in whole or in part by the Federal Savings and Loan Insurance Corporation or in any State or Federal credit unions insurance programs in an amount in excess of the insurance available. Investments allowable under Idaho Code Section are: a. Bonds, Treasury bills, interest bearing notes, or other obligations of the United States or those for which the faith and credit of the United States are pledged for the payment of principal and interest. b. General obligation or revenue bonds of this State or those for which the faith and credit of this State are pledged for payment of principal and interest. c. General obligation or revenue bonds of any county, city, metropolitan water district, municipal utility district, school district or other taxing district of this State. d. Notes, bonds, debentures, or other similar obligations issued by the Farm Credit System or institutions forming a part thereof under the Farm Credit act of e. Bonds, notes, or other similar obligations issued by public corporations of the State of Idaho including, but not limited to, the Idaho State Building Authority, the Idaho Housing Authority, and the Idaho Water Resource Board. These investments shall not extend beyond seven (7) days. f. Repurchase agreements covered by any legal investment for the State of Idaho. g. Tax anticipation notes and registered warrants of the State of Idaho. h. Tax anticipation bonds or notes and income and revenue anticipation bonds or notes of taxing districts of the State of Idaho. i. Time deposits and savings accounts in state depositories including, but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transactions accounts. 30

31 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 E. CASH AND INVESTMENTS (CONTINUED) j. Time deposit accounts and savings accounts of Federal savings and loan associations located within the geographical boundaries of the State in amounts not to exceed the insurance provided by the Federal Savings and Loan Insurance Corporation including, but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transaction accounts. k. Revenue bonds of institutions of higher education of the State of Idaho. l. Share, savings and deposit accounts of State and Federal credit unions located within the geographical boundaries of the State in amounts not to exceed the insurance provided by the National Credit Union Share Insurance Fund and/or any other authorized deposit guaranty corporation, including but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transaction accounts. F. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. G. INVENTORY Inventory consists of golf clubhouse merchandise and apparel purchased for resale. Inventory is valued at cost on a first in/first out basis. H. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure (roadways), are defined by the City as any asset with an individual cost of more than $5000 and an estimated useful life of at least one year. The City s assets are capitalized at historical cost or estimated historical cost. Gifts or contributions of assets are recorded at fair market value when received. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets as follows: Buildings: years, Equipment: 5-10 years, and Infrastructure: 40 years. 31

32 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 H. CAPITAL ASSETS (CONTINUED) In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34, which requires the inclusion of infrastructure in local government s basic financial statements. Infrastructure includes the streets, the water purification and distribution system, the sewer collection and treatment system, and all land and buildings used by the City. The City has elected to use the basic approach as defined by Statement No. 34 for asset reporting. Historical cost records do not exist for all of the City s assets dating back to For those assets where actual costs records could not be located, the City estimated costs using standard unit costs appropriate for acquisition date. Accumulated depreciation was computed based on the life of the assets. Book value is computed by deducting the accumulated depreciation from the original cost. I. ACCUMULATED COMPENSATED ABSENCES It is the City s policy to permit employees to accumulate unused vacation and sick leave, some of which will be paid to employees upon their separation from service. This amount is included as a liability in the Government-wide Statements and on the Proprietary Fund Statements. J. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the Statement of Financial Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so it will not be recognized as an outflow of resources (expenditure) until then. The City does have items that qualify for reporting in this category. They are the deferred outflows of resources related to the PERSI pension base plan. In addition to liabilities, the Statement of Financial Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of these items, which arises under the government-wide accrual basis of accounting that qualifies for reporting in this category and one item, which arises only under a modified accrual basis of accounting. Accordingly, the item, unavailable revenue, is reported only in the Governmental Funds Balance Sheet. The governmental funds report unavailable revenues from one source; property taxes. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available. 32

33 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 J. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES (CONTINUED) The other item (reported in the Government-wide Statements) is an amount related to the pension base plan. See note 19 for details on the pension plan. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. K. FUND EQUITY Governmental fund equity is classified as fund balance. Fund balance is further classified as non-spendable, restricted, committed, assigned, or unassigned. Restrictions of the fund balance indicate portions that are legally or contractually segregated for a specific future use. Non-spendable fund balances are required to be maintained intact. Committed portions represent amounts that can only be used for specific purposes pursuant to formal action of the City Council..Assigned portions represent amounts set aside for specific purposes. Remaining fund balances are reported as unassigned. When both restricted and unrestricted fund balances are available for use, it is the City s policy to use restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those restricted fund balance classifications can be used. L. FUND BALANCE FLOW ASSUMPTIONS Sometimes, the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 33

34 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2017 M. NET POSITION FLOW ASSUMPTIONS Net position represents the difference between assets and liabilities. Net investment in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, laws or regulations, or other governments. Sometimes, the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the Government-wide and Proprietary Fund Financial Statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City s policy to consider restricted net position to have been depleted before unrestricted net position is applied. Pensions For purposes of measuring the net pension liability and pension expense, information about the fiduciary net position of the Public Employee Retirement System of Idaho Base Plan (Base Plan) and additions to/deductions from the Base Plan s fiduciary net position have been determined on the same basis as they are reported by the Base Plan. 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. 2. PROPERTY TAX The City s property taxes, levied by the second Monday of September on assessed valuation as of June 30, are payable in two equal installments for real property due December 20, and June 20. Personal taxes are payable on December 20. Assessed valuations are established by the County Assessor s office except for utility property which is established by the State and is currently at 100% of market value. Delinquent payments bear simple interest of 1% per month plus a 2% penalty. Due to the small amount of taxes not collected no adjustment is made for delinquent taxes. Uncollected property taxes are recorded as receivable at year-end, with deferred revenue representing that portion which will not be collected within 60 days after year-end. 34