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Home My WebLink About2007CITY OF CHUBBUCK AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2007 AND 2006 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO ANNUAL FINANCIAL REPORT SEPTEMBER 30, 2007 AND 2006 Va131111:1111401Were] WkWO W Paqe Title Page 1 Table of Contents 2 Auditor's Reports Independent Auditor's Report 3 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 4 Financial Statements Statements of Net Assets 5 Statements of Activities 6 Balance Sheets - Governmental Funds 7 Statements of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 8 - g Statements of Net Assets - Proprietary Funds 10 Statements of Revenues, Expenses, and Changes in Net Assets - Proprietary Funds 11 Statements of Cash Flows - Proprietary Funds Notes to Financial Statements 12 13-24 Required Supplementary Information 25 Budgetary Comparison Schedule - General Fund 26 Budgetary Comparison Schedule - Development Fund 27 Notes to Required Supplementary Information 28 Other Supplementary Information 29 Combining Balance Sheet - Nonmajor Governmental Funds 30 Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds 31 Budgetary Comparison Schedule - Nonmajor Governmental Funds 32 DEATON & COMPANY, CHARTERED Deaton & Company, Chartered Certified Public Accountants 215 North 9th, Suite A Pocatello, ID 83201-5278 (208) 232-5825 Members d Idaho S.6, of Cw led Nbk Accounwns Members of American Ml iUm of Cmt ld Nblic Accowuan�s INDEPENDENT AUDITOR'S REPORT To the City Council City of Chubbuck, Idaho We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Chubbuck as of and for the years ended September 30, 2007 and 2006, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Chubbuck's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Chubbuck as of September 30, 2007 and 2006, and the respective - changes in financial position and cash flows, where applicable, thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated August 18, 2008, on our consideration of the City of Chubbuck's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and important for assessing the results of our audit. The budgetary comparison information on pages 25 through 28, is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Chubbuck'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 combining and individual nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairy stated in all material respects in relation to the basic financial statements taken as a whole. The City has not presented the required 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. Pocatello, Idah August 18, 2008 Deaton & Company, Chartered Certified Public Accountants 215 North 9th, Suite A Pocatello, ID 83201-5278 (208) 232-5825 Me,nbers of Idaho Soda, of Certified PubGe Aau um nns Members ofA,neticon Institute ar Cetlitied Public Accountants .. . W A 1 . i i ( e♦ i i i� F f. �t .�_ A r ■ a•ML �. . .■ a ■ fid ma 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 To the City Council City of Chubbuck, Idaho We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Chubbuck as of and for the years ended September 30, 2007 and 2006, which collectively comprise the City of Chubbuck's basic financial statements and have issued our report thereon dated August 18, 2008. We conducted our 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Chubbuck's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Chubbuck's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Chubbuck's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City of Chubbuck's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City of Chubbuck's financial statements that is more than inconsequential will not be prevented or detected by the City of Chubbuck's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the City of Chubbuck's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Chubbuck's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under This report is intended for the information and use of management, City Council, and federal awarding agencies. However, this report is a matter of public record and its distribution is not limited. Pocatel, 1 / August 18, 2008 '61 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBLICK, IDAHO STATEMENTS OF NET ASSETS SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS AT SEPTEMBER 30, 2006 Governmental Business -type Activities Activities 2007 2006 ASSETS Current assets Cash $ 2,808,868 $ 1,345,255 $ 4,154,123 $ 2,045,077 Property taxes receivable 206,695 - 206,695 210,636 Intergovernmental receivables 180,417 180,417 184,306 Internal balances (451,533) 451,533 - Other accounts receivable 712,206 712,206 693,643 2,744,447 2,508,994 5,253,441 3,133,662 Noncurrent assets Restricted assets Employee benefit fund 176,234 - 176,234 261,073 Bond reserves - 876,091 876,091 932,323 Water deposits 145,055 145,055 140,346 Capital assets 7,160,546 8,248,327 15,408,873 14,729,425 Accumulated depreciation (4,314,375) (3,940,464) (8,254,839) (7,772,304) 3,022,405 5,329,009 8,351,414 8,290,863 5,766,852 7,838,003 13,604,855 11,424,525 LIABILITIES Current liabilities Accounts payable 73,635 165,354 238,989 253,625 Accrued bond interest - 23,466 23,466 28,754 Current portion compensated absences 26,909 13,565 40,474 37,406 Current portion of bonds payable - 180,000 180,000 170,000 Current portion of long-term debt - 13,694 13,694 13,260 Current portion capital lease obligation 70,330 - 70,330 75,071 Payable from restricted assets - Employee benefit fund 176,234 - 176,234 261,073 Water deposits - 145,055 145,055 140,346 347,108 541,134 888,242 979,535 Noncurrent liabilities Bonds payable - 575,000 575,000 755,000 Note payable - 327,205 327,205 340,899 Capital lease obligation 61,260 - 61,260 98,927 Accrued compensated absences 242,193 122,082 364,275 336,662 303,453 1,024,287 1,327,740 1,531,488 650,561 1,565,421 2,215,982 2,511,023 NET ASSETS Invested in capital assets, net of related debt 2,714,581 3,211,964 5,926,545 5,144,442 Restricted for bond service 876,091 876,091 932,323 Unrestricted 2,401,710 2,184,527 4,586,237 2,836,737 $ 5,116,291 $ 6,272,582 $ 11,388,873 $ 8,913,502 '61 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2006 EXPENDITURES General government Law enforcement Fire control Building inspection Street Parks and recreation Health and welfare Development fund Other special revenue funds Business -type activities Utilities CHANGES IN NET ASSETS Program Revenues 2007 2006 $ 148,176 Operating Net Net Charges for Grants and (Expense) (Expense) Expenses Services Contributions Revenue Revenue $ 166,391 $ 221,482 $ - $ 55,091 $ 148,176 1,997,249 - 12,649 (1,984,600) (2,125,780) 974,041 293,714 44,542 (635,785) (502,200) 166,090 - - (166,090) (138,923) 631,702 - - (631,702) (777,895) 602,645 58,136 1,000 (543,509) (591,286) 24,505 - - (24,505) (11,585) 744,808 (744,808) (1,173,552) 111,983 - (111,983) 984 5,419,414 573,332 58,191 (4,787,891) (5,172,061) 4,080,190 5,087,044 1,006,854 44,168 $ 9,499,604 $ 5,660,376 $ 58,191 $ (3,781,037) $ (5,127,893) Net (expense)/revenue General revenues General property taxes and sales tax Franchise fees Intergovernmental Leases and rents Interest income Sale of assets Other revenue Transfers in (out) NET CHANGE IN NET ASSETS BEGINNING NET ASSETS ENDING NET ASSETS General Business -type Activities Activities $ (4,787,891) $ 1,006,854 2007 2006 $ (3,781,037) $ (5,127,893) 4,971,951 - 4,971,951 4,396,710 195,214 - 195,214 173,551 658,629 - 658,629 605,362 40,295 - 40,295 28,179 118,408 97,452 215,860 131,712 - - - 7,715 174,459 174,459 104,081 12,686 (12,686) - - 6,171,642 84,766 6,256,408 5,447,310 1,383,751 1,091,620 2,475,371 319,417 3,732,540 5,180,962 8,913,502 8,594,085 $ 5,116,291 $ 6,272,582 $ 11,388,873 $ 8,913,502 2 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO BALANCE SHEETS GOVERNMENTALFUNDS SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS AT SEPTEMBER 30, 2006 ASSETS Cash Accounts receivable Property and sales taxes receivable Intergovernmental receivables Restricted assets - cash LIABILITIES Accounts payable Employee benefit fund Interfund payable Accrued compensated absences Deferred revenue FUND BALANCES Unreserved, reported in: General fund Special revenue fund Other General Development Governmental Fund Fund Funds 2007 2006 $ 831,384 $ 1,346,635 $ 630,849 $ 2,808,868 $ 1,415,418 - - - - 10,090 179,159 27,536 - 206,695 210,636 180,417 - - 180,417 184,306 176,234 - 176,234 261,073 $ 1,367,194 $ 1,374,171 $ 630,849 $ 3,372,214 $ 2,081,523 $ 71,333 $ 2,302 $ - $ 73,635 $ 99,615 176,234 - - 176,234 261,073 451,533 - 451,533 405,717 26,909 - - 26,909 25,436 22,493 25,938 - 48,431 88,763 748,502 28,240 .7 776,742 880,604 618,692 - - 618,692 23,408 - 1,345,931 630,849 1,976,780 1,177,511 618,692 1,345,931 630,849 2,595,472 1,200,919 $ 1,367,194 $ 1,374,171 $ 630,849 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds, net of accumulated depreciation of $4,314,375. Deferred tax revenue represents amounts that were not available to fund current expenditures and therefore are not reported in the funds Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: Capital lease Accrued compensated absences Net assets of governmental funds 7 See accompanying notes to financial statements 2,846,171 2,845,786 48,431 88,763 (131,590) (173,998) (242,193) (228,930) $ 5,116,291 $ 3,732,540 DENTON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2006 REVENUES General property taxes and sales tax Franchise fees Intergovernmental Parks revenue Licenses, permits and fines Grants Fire protection and prevention Leases and rents Interest income Donations Other revenues EXPENDITURES General government Law enforcement Fire control Building inspection Street Parks and recreation Health and welfare Development fund Street guarantee fund Court fund Parks Fund EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Capital lease Principal payments on leases Proceeds from sale of assets Transfers in (out) NET CHANGE IN FUND BALANCES BEGINNING FUND BALANCE ENDING FUND BALANCE 0 See accompanying notes to financial statements (Continued) DEATON & COMPANY, CHARTERED Other General Development Governmental Fund Fund Funds 2007 2006 $3,598,121 $ 1,400,912 $ 13,250 $5,012,283 $4,390,663 195,214 - - 195,214 173,551 658,629 - - 658,629 605,362 58,136 - - 58,136 45,490 221,481 - - 221,481 332,807 58,191 - - 58,191 255,864 293,714 - - 293,714 138,651 40,295 - - 40,295 28,179 23,770 63,231 31,407 118,408 57,436 - - 40,540 40,540 98,028 23,169 94,768 15,982 133,919 104,081 5,170,720 1,558,911 101,179 6,830,810 6,230,112 148,808 - - 148,808 128,779 2,042,398 - - 2,042,398 2,040,132 889,346 - - 889,346 987,023 160,533 - - 160,533 138,923 623,376 - - 623,376 761,166 660,779 - - 660,779 647,379 24,505 - - 24,505 11,585 - 744,808 - 744,808 1,165,895 - 30,785 30,785 72,434 58,898 58,898 2,610 - - 22,300 22,300 22,000 4,549,745 744,808 111,983 5,406,536 5,977,926 620,975 814,103 (10,804) 1,424,274 252,186 62,645 - 62,645 - (105,052) (105,052) (80,330) - - 10,090 16,716 (4,030) 12,686 (25,691) (4,030) (29,721) (70,240) 595,284 810,073 (10,804) 1,394,553 181,946 23,408 535,858 641,653 1,200,919 1,018,973 $ 618,692 $ 1,345,931 $ 630,849 $ 2,595,472 $1,200,919 0 See accompanying notes to financial statements (Continued) DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED SEPTEMBER 30, 2006 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2005 2007 2006 Reconciliation of the change in fund balances - total governmental funds to the change in net assets of governmental activities: Net change in fund balances - total governmental funds $ 1,394,553 $ 181,946 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets: Capital asset purchases capitalized 265,414 266,037 Depreciation expense (265,029) (242,150) The net affect of sales transactions involving capital assets (2,375) Deferred revenues are not recorded as current period receipts (40,332) 6,047 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items 42,408 80,330 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental fund: Accrued compensated absences (13,263) (32,630) Change in net assets $ 1,383,751 $ 257,205 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS AT SEPTEMBER 30, 2006 ASSETS 2007 2006 Current assets Cash and cash equivalents $ 1,345,255 $ 629,659 Accounts receivable 712,206 683,553 2,057,461 1,313,212 Noncurrent assets Restricted assets Bond reserves 876,091 932,323 Water deposits 145,055 140,346 Interfund receivable 451,533 405,717 Capital assets 8,248,327 7,834,293 Accumulated depreciation (3,940,464) (3,722,958) 5,780,542 5,589,721 7,838,003 6,902,933 LIABILITIES Current Liabilities Accounts payable 165,354 154,010 Accrued compensated absences 13,565 11,970 Current portion of bonds payable 180,000 170,000 Accrued bond interest 23,466 28,754 Current portion of long-term debt 13,694 13,260 Payable from restricted assets - Water deposits 145,055 140,346 541,134 518,340 Noncurrent Liabilities Bonds payable 575,000 755,000 Note payable 327,205 340,899 Compensated absences 122,082 107,732 1,024,287 1,203,631 1,565,421 1,721,971 NET ASSETS Invested in capital assets, net of related debt 3,211,964 2,832,176 Restricted for bond service 876,091 932,323 Unrestricted 2,184, 527 1,416,463 $ 6,272,582 $ 5,180,962 IU] See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30. 2006 2007 2006 OPERATING REVENUES Service revenue $ 4,332,044 $ 2,900,936 Revenue used as security for revenue bond: Charges for services 755,000 925,000 5,087,044 3,825,936 OPERATING EXPENSES Salaries and wages 967,188 907,993 Personnel benefits 423,837 418,991 Repairs and maintenance 533,117 544,205 Supplies 106,958 163,887 Travel, meetings, and training 16,698 12,133 Fuels and lubricants 40,607 34,773 Telephone and communications 16,785 12,492 Utilities 113,123 96,962 Treatment - Pocatello 808,979 660,854 Sanitation contract 604,649 573,538 Insurance 65,095 83,025 Other purchased services 38,834 28,160 Professional services 64,930 9,493 Facilities plan 6,677 15,088 Depreciation 217,506 204,023 4,024,983 3,765,617 OPERATING INCOME 1,062,061 60,319 NONOPERATING REVENUE (EXPENSE) Interest income 97,452 74,276 Interest expense (55,207) (72,383) Transfers out (12,686) - 29,559 1,893 NET INCOME (LOSS) 1,091,620 62,212 BEGINNING NET ASSETS 5,180,962 5,118,750 ENDING NET ASSETS $ 6,272,582 $ 5,180,962 11 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2006 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from revenues Cash paid to suppliers and employees Change in water deposits Net cash provided by operating activities CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES Transfer to other funds Internal loan to other funds Change in restricted cash Net cash used in noncapital financing activities CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on capital debt Interest paid on capital debt Capital expenditures Net cash used in capital and related financing activities CASH FLOW FROM INVESTING ACTIVITIES Cash from reclassification of investments Interest and dividend received Amount received on note Net cash provided by financing activities NET DECREASE IN CASH AND CASH EQUIVALENTS BEGINNING CASH AND CASH EQUIVALENTS ENDING CASH AND CASH EQUIVALENTS OPERATING INCOME 2007 2006 $ 5,058,391 $ 3,637,622 (3,780,188) (3,493,579) 4,709 9,375 1,282,912 153,418 (12,686) - (102,048) 51,523 (67,331) (63,211) (67,331) (183,260) (209,589) (60,495) (77,303) (414,034) (56,721) (657,789) (343,613) 97,452 56,232 153,684 715,596 629,659 $ 1,345,255 RECONCILIATIONS OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation (Increase) decrease in assets Accounts receivable Increase (decrease) in liabilities Accounts payable Accrued compensated absences Water deposits payable Total adjustments 2007 $ 1,062,061 217,506 (28,653) 11,344 15,945 4,709 220,851 475,231 74,276 56,232 605,739 348,213 281,446 $ 629,659 $ 60,319 204,023 (188,314) 49,748 18,267 9,375 93,099 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,282,912 $ 153,418 12 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 1 OF 12) NOTE 1 - Summary of Significant Accounting Policies The City's financial statements comply with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the government -wide financial statements and the fund financial statements for the proprietary funds, Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, have been applied unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. For enterprise funds, GASB Statement Nos. 20 and 34 provide the City the option of electing to apply FASB pronouncements issued after November 30, 1989. The City has elected not to apply those pronouncements. The accounting and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this Note. A. Reporting Entity The City's financial reporting entity comprises the following: Primary Government In determining the financial reporting entity, the City complies with the provisions of GASB Statement No. 14, "The Financial Reporting Entity". Currently, the City has no potential component units. B. Basis of Presentation Government -wide Statements The Statement of Net Assets and Statement of Activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business -type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Business -type activities are financed in whole or in part by fees charged to external parties for goods or services. Fund Financial Statements Fund financial statements of the reporting entity are organized into funds, each of which is considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self -balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds are organized into three major categories: Governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a. Total assets, liabilities, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type. b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. 13 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 2 OF 12) NOTE 1 - Summary of Significant Accounting Policies (Continued) B. Basis of Presentation (Continued) Governmental Funds General Fund The General Fund is the general operating fund of the City and is always classified as a major fund. All financial resources, except those required to be accounted for in another fund, are accounted for in the General Fund. Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Proprietary Funds Enterprise Funds Enterprise funds are used to account for business -like activities provided to the general public. These activities are financed primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes the water, sewer and sanitation funds. C. Measurement Focus and Basis of Accounting Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when"transactions are recorded regardless of the measurement focus applied. Measurement Focus On the government -wide Statement of Net Assets and the Statement of Activities, both governmental and business -like activities are presented using the economic resources measurement focus as defined in item b. below. In the fund financial statements, the "current financial resources" measurement focus or the "economic resources" measurement focus is used as appropriate: a. All governmental funds utilize a "current financial resources" measurement focus. Only current financial assets and liabilities are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. b. The proprietary fund utilizes an "economic resources" measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net assets. 14 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 3 OF 12) NOTE 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus and Basis of Accounting (Continued) Basis of Accounting In the government -wide Statement of Net Assets and Statement of Activities, both governmental and business- like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting form exchange and exchange - like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when "measurable and available." Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days after year end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are reported when due. All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. The effect of interfund activity has been eliminated from the government -wide financial statements. D. Budgets and Encumbrances Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the general and special revenue funds. All annual appropriations lapse at fiscal year end. Each month the City prepares a financial report that reflects the actual and budgeted financial data. A strict purchase order system is used in controlling and maintaining expenditures within budget categories. This data is reviewed by the City Council. The City does not use the encumbrance method of accounting. The General Fund incurred expenditures in excess of appropriations of the following amounts for the year: General government $ 5,095 Fire control 55,959 Building inspection 15,802 Principal payments on leases 105,052 The excess expenditures were provided by decreased expenditures in other functional expenditures. E. Cash and Cash Equivalents For the purpose of the Statement of Net Assets, "cash and cash equivalents" includes all demand, savings accounts, certificates of deposits, and state investing pools of the City. For the purpose of the proprietary fund Statement of Cash Flows, "cash and cash equivalents" include all demand and savings accounts, and certificates of deposit or short-term investments with an original maturity of three months or less. 15 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 4 OF 12) NOTE 1 - Summary of Significant Accounting Policies (Continued) F. Property, Plant, and Equipment The accounting treatment for property, plant and equipment depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government - wide or fund financial statements. Government -wide Statements In the government -wide financial statements, fixed assets are accounted for as capital assets. All fixed assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated fixed assets which are recorded at their estimated fair value at the date of donation. Estimated historical cost was used to value the majority of the assets acquired prior to September 30, 2003. Governmental fund infrastructure assets were not capitalized prior to October 1, 2003. Depreciation of all exhaustible fixed assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows: Buildings Other structures Vehicles Equipment Fund Financial Statements 20-50 years 5-40 years 5-30 years 2-40 years In the fund financial statements, fixed assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Fixed assets used in proprietary fund operations are accounted for the same as in the government -wide statements. G. Restricted Assets Restricted assets include cash and investments of the general fund that are legally restricted as to their use. The primary restricted assets are related to employee benefits. Restricted assets include cash and investments of the proprietary fund that are legally restricted as to their use. The primary restricted assets are related to utility deposits and bond reserve requirements. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. H. Long-term Debt The accounting treatment of long-term debt depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government -wide or fund financial statements. 16 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 5 OF 12) NOTE 1 - Summary of Significant Accounting Policies (Continued) H. Long-term Debt (Continued) All long-term debt to be repaid from governmental and business -type resources are reported as liabilities in the government -wide statements. The long-term debt consists primarily of notes payable, capital leases, and accrued compensated absences. Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. Debt proceeds are reported as other financing sources. Payment of principle and interest are reported as expenditures. The accounting for proprietary funds is the same in the fund statements as it is in the government -wide statements. Comparative data/reclassifications Comparative total data for the prior year has been presented in the fund financial statements in order to provide an understanding of the changes in assets and operations of these funds. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. J. Compensated Absences The City's policies regarding vacation time permit employees to accumulate earned but unused vacation leave. The liability for these unpaid compensated absences is recorded as long-term debt in the government -wide statements. The current portion of this debt is estimated based on historical trends. In the fund financial statements, governmental funds report only the compensated absence liability payable from expendable available financial resources, while the proprietary funds report the liability as it is incurred. K. Equity Classifications Government -wide Statements Equity is classified as net assets and displayed in three components: a. Invested in capital assets, net of related debt - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages notes, or other borrowings that are attributable to the acquisition, construction, or improvement of these assets. b. Restricted net assets - Consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. c. Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt." 17 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 6 OF 12) NOTE 1 - Summary of Significant Accounting Policies (Continued) K. Equity Classifications (Continued) Fund Statements Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved. Unreserved can be further split between designated and undesignated. Proprietary fund equity is classified the same as in the government -wide statements. L. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the City to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2 - Legal Compliance - Budgets Approximately six to seven months before the start of a new fiscal year, the City's financial officer submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The budget is prepared by fund, function and activity, and includes information on the past year, current year estimates and requested appropriations for the next fiscal year. The City Council holds public hearings and may add to, subtract from or change appropriations, but may not change the form of the budget. Any changes in the budget must be within the revenues and reserves estimated as available to the City or the revenue estimates must be changed by an affirmative vote of a majority of the City Council. After public hearings and before the end of the fiscal year, the City Council formally adopts the budget. Expenditures may not legally exceed budgeted appropriations at the activity level. During the year, several supplementary appropriations may be necessary. NOTE 3 - Restricted Assets and Payable from Restricted Assets Assets have been set aside for special items and are restricted for that purpose. To date cash has been restricted for the following items: Governmental Health insurance $ 176,234 The Health Insurance Deposit account is restricted for payments of insurance premiums and claims. Proprietary Bond reserves Water deposits Total $ 876,091 145,055 $ 1,021,146 Bond reserves are amounts the City is legally required to reserve for the repayment of outstanding bonds. in DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 7 OF 12) NOTE 3 - Restricted Assets and Payable from Restricted Assets (Continued) Water deposits are collected from individuals who have a history of collection problems. Money on deposit may be used to pay past due balances or is returned when the payer's payment history improves. Restricted water deposits totaled $145,055 at yearend. NOTE 4 - Property Tax Bannock County has the responsibility of assessing and collecting all property taxes. Taxes levied for the year are payable in two installments due December 20th of the current year and June 20th of the following year. The County remits property taxes collected to the City monthly. Property taxes are recognized as revenue when received for monthly reporting purposes. At year end, an accrual is made to recognize property taxes receivable at year end. At year end, $206,695 in outstanding property taxes were expected to be collected and remitted by the County. NOTE 5 - Cash and Cash Equivalents and Investments Deposits at year end consist of the following: Deposits Cash in bank - carrying amount Restricted Unrestricted $ 1,197,380 4,154,123 $ 5,351,503 Bank Deposits - Custodial Credit Risk for deposits is the risk that, in the event of bank failure, the government's deposits may not be returned to it. At year end the carrying amount of the City's deposits (cash and certificates of deposit) was $5,351,503 and the bank balance was $5,838,226. The deposits were covered by federal depository insurance of $100,000 per bank. The City uses various commercial banks to limit their exposure to custodial credit risk, however, the City's deposits in the bank at yearend exceeded the federal depository insurance in the amount of $2,340,297. Investments - The City has no investments NOTE 6 - Concentration of Credit Risk Interest Rate Risk is the risk that changes in interest rates will adversely affect the value of a deposit. The City manages its exposure to declines in fair value by limiting the average maturity of its deposits to one year or less, or redeemable on demand with no penalty. Credit Risk is the risk that an issuer or a counterparty to a deposit will not fulfill its obligations. The City seeks to minimize credit risk through diversification of deposits within the choices allowed under state statutes. Concentration of Credit Risk is the risk of loss attributed to the magnitude of an investment in a single issuer. Exclusive of the State of Idaho Investment Pool, the City's deposits in any one issuer does not represent a concentration of total credit risk. The funds in the State of Idaho Investment Pool are in a variety of investments which are required to have an A quality credit rating or better. The City is subject to credit risk on deposits with banks that exceed the FDIC maximum insured balance amount. 19 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 8 OF 12) NOTE 6 - Concentration of Credit Risk (Continued) Additionally, the City grants credit to customers in the City for utility service. This extension of credit potentially subjects the City to credit risk. NOTE 7 - Changes in Fixed Assets A summary of general fixed assets at year end is as follows: A summary of proprietary type fixed assets at year end is as follows Beginning Ending Balance Additions Deletions Balance Nondepreciable assets - Land $ 62,404 $ 28,462 $ - $ 90,866 Office Equipment 215,212 17,682 - 232,894 Buildings and Improvements 2,642,285 - - 2,642,285 Vehicles and Equipment 3,975,231 219,270 - 4,194,501 6,895,132 265,414 - 7,160,546 Accumulated Depreciation 4,049,346 265,029 - 4,314,375 $ 2,845,786 $ 385 $ - $ 2,846,171 A summary of proprietary type fixed assets at year end is as follows NOTE 8 - Interfund Receivables. Payables and Transfers Interfund balances at yearend consisted of the following amounts: Due to Utility Fund Due from General Fund $ 451,533 The balance of $451,533 due to the utility fund from the general fund resulted from two loans. The first loan originated in July 2005, in the amount of $461,949, with annual payments of $56,232, to assist the general fund in a legal payment. The second loan originated in February 2007, in the amount of $102,048, with annual payments of $32,000, was to assist in purchasing fixed assets. 20 DEATON & COMPANY, CHARTERED Beginning Ending Balance Additions Deletions Balance Nondepreciable assets - Land $ 263,112 $ 232,461 $ - $ 495,573 Office Equipment 162,405 - - 162,405 Buildings and Improvements 6,569,692 - - 6,569,692 Vehicles and Equipment 839,084 181,573 - 1,020,657 7,834,293 414,034 - 8,248,327 Accumulated Depreciation 3,722,958 217,506 - 3,940,464 $ 4,111,335 $ 196,528 $ $ 4,307,863 NOTE 8 - Interfund Receivables. Payables and Transfers Interfund balances at yearend consisted of the following amounts: Due to Utility Fund Due from General Fund $ 451,533 The balance of $451,533 due to the utility fund from the general fund resulted from two loans. The first loan originated in July 2005, in the amount of $461,949, with annual payments of $56,232, to assist the general fund in a legal payment. The second loan originated in February 2007, in the amount of $102,048, with annual payments of $32,000, was to assist in purchasing fixed assets. 20 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 9 OF 12) NOTE 8 - Interfund Receivables, Pavables and Transfers (Continued) Interfund transfers: Transfer out: Development Fund Utility Fund Transfer in General Fund $ 4,030 12,686 $ 16,716 The balance of $16,716 transfered to general fund was for the assistance in purchasing capital assets. NOTE 9 - Long-term Debt and Accrued Compensation Accrued Compensated Absences: Current portion Noncurrent portion Long-term Debt Governmental Business -type $ 26,909 $ 13,565 242,193 122,082 $ 269.102 $ 135.647 The City's long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business -type activities. Governmental Activities: As of year end, the governmental long-term debt of the City consisted of the following: Capital Lease Obligation: Vehicles capital lease; issue amount $66,156; dated November 6, 2006; interest rate of 5.75% with final maturity dated February 15, 2008. Telephone System capital lease; issue amount $30,986; dated May 30, 2003; interest rate of 4.25% with final maturity dated September 30, 2007. Backhoe capital lease; issue amount of $97,740; dated November 12, 2003; interest rate of 3.6% with final maturity dated November 12, 2008. Police Video System capital lease; issue amount of $60,851; dated September 25, 2006; interest rate of 5.7% with final maturity dated February 15, 2009. Less current portion Noncurrent portion 21 $ 32,663 6,542 52,076 40,309 131,590 70,330 $ 98,927 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 10 OF 12) NOTE 9 - Long-term Debt and Accrued Compensation (Continued) Business -type activities: In 2006, the City refinanced a construction line of credit for a note payable with the Department of Environmental Quality with an interest rate of 3.25% and semi-annual payments for 20 years. Current portion Noncurrent portion $ 13,694 327,205 $ 340,899 The City issued two utility bonds. On October 1, 1972, the City issued its Sewer Revenue Bonds, at 5.425% and mature on October 1, 2013. The Water Fund Certificate was issued in May of 1995, with interest rates up to 7.25% and a maturity date of April 1, 2010. Bonds Payable: Interest Sewer Revenue Bond $ 330,000 Water Fund Certificates 425,000 $ 6,370 755,000 Less current portion 180,000 Noncurrent portion _$ 575.000 Annual Debt Service Requirements Year Ending Governmental Activities Business -type Activities September 30 Principal Interest Principal Interest 2008 $ 70,330 $ 6,370 $ 193,694 $ 56,552 2009 61,260 2,660 204,143 44,680 2010 - - 219,607 32,107 2011 - - 70,085 18,728 2012 - - 75,579 14,784 2013-2017 - - 150,896 39,370 2018-2022 - - 100,921 22,396 2023-2026 - 80,974 5,348 $ 131,590 $ 9,030 $ 1,095,899 $ 233,965 Changes in long-term liabilities Long-term liability activity for the year ended, was as follows: Beginning Ending Due within Balance Additions Reductions Balance one year Governmental activities Capital leases $ 173,998 $ 66,156 $ 108,564 $ 131,590 $ 70,330 Compensated absences 254,366 40,172 25,436 269,102 26,909 $ 428,364 $ 106,328 $ 134,000 $ 400,692 $ 97,239 22 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 11 OF 12) NOTE 9 - Lona -term Debt and Accrued Compensation (Continued) NOTE 10 - Pension Disclosures The Public Employee Retirement System of Idaho (PERSI), a cost sharing multi-employer public retirement system, was created by the Idaho State Legislature. It is a defined benefit plan requiring that both the member and the employer to contribute. The plan provides benefits based on members' years of service, age, and compensation. In addition, benefits are provided for disability, death, and survivors of eligible members or beneficiaries. The authority to establish and amend benefit provisions is established in Idaho Code. Designed as a mandatory system for eligible state and school district employees, the legislation provided for other political subdivisions to participate by contractual agreement with PERSI. Financial reports for the plan are available from PERSI upon request. After 5 years of credited service, members become fully vested in retirement benefits earned to date. Members are eligible for retirement benefits upon attainment of the ages specified for their employment classification. For each month of credited service, the annual service retirement allowance is 2.0% (2.3% police/firefighter) of the average monthly salary for the highest consecutive 42 months. The contribution requirements of the City of Chubbuck and its employees are established and may be amended by the PERSI Board of Trustees. For the year ended September 30, 2006 the required contribution rate as a percentage of covered payroll for members was 6.23% for general members and 7.65% for police/firefighters. The employer rate as a percentage of covered payroll was 10.39% for general members and 10.73% for police/firefighter members. The City of Chubbuck contributions required and paid were $329,628, $302,324, and $484,641, for the three years ended September 30, 2007, 2006, and 2005, respectively. NOTE 11 - Risk Management The City is exposed to various risks of loss. The City has obtained commercial insurance to reduce the risk of substantial losses. NOTE 12 - Subsequent Events On June 5, 2008, the City borrowed $1,375,000 from a bank with a maturity date of December 5, 2008. The note was used to assist in the implementation of the City's new enterprise sanitation fund. In July 2008, the City borrowed $1,400,000 from the Department of Environmental Quality at 3% to be paid in biannual installments over 20 years. The note is used to finance the designing and constructing of the Chubbuck Northwest Sewer Interceptor. It may also be used to finance services to provide environmental Feld studies, public involvement, and agency permit applications. If funds allow, it may include the purchase of needed right-of-way for construction of the sewer system. 23 DEATON & COMPANY, CHARTERED Beginning Ending Due within Balance Additions Reductions Balance one year Business -type activities Bonds payable $ 925,000 $ $ 170,000 $ 755,000 $ 180,000 Note payable 354,159 13,260 340,899 13,694 Compensated absences 119,702 27,915 11,970 135,647 13,565 $1,398,861 $ 27,915 $ 195,230 $ 1,231,546 $ 207,259 NOTE 10 - Pension Disclosures The Public Employee Retirement System of Idaho (PERSI), a cost sharing multi-employer public retirement system, was created by the Idaho State Legislature. It is a defined benefit plan requiring that both the member and the employer to contribute. The plan provides benefits based on members' years of service, age, and compensation. In addition, benefits are provided for disability, death, and survivors of eligible members or beneficiaries. The authority to establish and amend benefit provisions is established in Idaho Code. Designed as a mandatory system for eligible state and school district employees, the legislation provided for other political subdivisions to participate by contractual agreement with PERSI. Financial reports for the plan are available from PERSI upon request. After 5 years of credited service, members become fully vested in retirement benefits earned to date. Members are eligible for retirement benefits upon attainment of the ages specified for their employment classification. For each month of credited service, the annual service retirement allowance is 2.0% (2.3% police/firefighter) of the average monthly salary for the highest consecutive 42 months. The contribution requirements of the City of Chubbuck and its employees are established and may be amended by the PERSI Board of Trustees. For the year ended September 30, 2006 the required contribution rate as a percentage of covered payroll for members was 6.23% for general members and 7.65% for police/firefighters. The employer rate as a percentage of covered payroll was 10.39% for general members and 10.73% for police/firefighter members. The City of Chubbuck contributions required and paid were $329,628, $302,324, and $484,641, for the three years ended September 30, 2007, 2006, and 2005, respectively. NOTE 11 - Risk Management The City is exposed to various risks of loss. The City has obtained commercial insurance to reduce the risk of substantial losses. NOTE 12 - Subsequent Events On June 5, 2008, the City borrowed $1,375,000 from a bank with a maturity date of December 5, 2008. The note was used to assist in the implementation of the City's new enterprise sanitation fund. In July 2008, the City borrowed $1,400,000 from the Department of Environmental Quality at 3% to be paid in biannual installments over 20 years. The note is used to finance the designing and constructing of the Chubbuck Northwest Sewer Interceptor. It may also be used to finance services to provide environmental Feld studies, public involvement, and agency permit applications. If funds allow, it may include the purchase of needed right-of-way for construction of the sewer system. 23 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 12 OF 12) NOTE 13 - Correction of an Error During the year the City found that in the prior year the internal payables in the general fund were not reported in the governmental funds but were shown as a reconciling item to the Statement of Net Assets in the Government. wide financials. The correction decreased the ending fund balance for the year ended September 30, 2006 in the general fund by $349,485. Because the internal balance was shown as a reconciling item for Government - wide reporting there was no affect on the Government -wide financial statements. During the year the City also found that cash and revenue were overstated in the proprietary fund in the amount of $56,232 in the prior year. The correction decreased cash in the statement of assets and the statement of net assets in the business type activities and proprietary fund. It also decreased the net income and net changes in net assets in the statement of revenues, expenses and changes in net assets in the statement of activities for the proprietary fund and statement of changes in the business -type entity. The cash flow statement was also amended to reflect the correct amount of cash received from revenues. The 2006 comparative totals, for each statement affected, have been corrected to reflect the finding. 24 DEATON & COMPANY, CHARTERED REQUIRED SUPPLEMENTARY INFORMATION DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO BUDGETARY COMPARISON SCHEDULE GENERALFUND YEAR ENDED SEPTEMBER 30, 2007 Charges to appropriations General government Budgeted Amounts 143,713 Variance (5,095) Law enforcement 2,271,171 Actual Positive 228,773 Original Final Amounts (Negative) Resources Building inspection 144,731 144,731 160,533 General property taxes and sales tax $ 3,281,784 $ 3,281,784 $ 3,598,121 $ 316,337 Franchise fees 181,000 181,000 195,214 14,214 Intergovernmental 813,446 813,446 658,629 (154,817) Parks revenue 49,250 49,250 58,136 8,886 Licenses, permits and fines 254,000 254,000 221,481 (32,519) Grants - - 58,191 58,191 Fire protection and prevention 159,080 159,080 293,714 134,634 Leases and rents 25,700 25,700 40,295 14,595 Interest income 5,000 5,000 23,770 18,770 Other resources 12,000 12,000 23,169 11,169 Amounts available for appropriations 4,781,260 4,781,260 5,170,720 389,460 Charges to appropriations General government 143,713 143,713 148,808 (5,095) Law enforcement 2,271,171 2,271,171 2,042,398 228,773 Fire control 833,387 833,387 889,346 (55,959) Building inspection 144,731 144,731 160,533 (15,802) Street 763,212 763,212 623,376 139,836 Parks and recreation 661,651 661,651 660,779 872 Health and welfare 33,395 33,395 24,505 8,890 Total charges to appropriations 4,851,260 4,851,260 4,549,745 301,515 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (70,000) (70,000) 620,975 690,975 Other Financing Sources Capital leases - 62,645 62,645 Principal payments on leases - (105,052) (105,052) Transfers in (out) - 16,716 16,716 - (25,691) (25,691) NET CHANGE IN FUND BALANCE (70,000) (70,000) 595,284 665,284 BEGINNING FUND BALANCE 70,000 70,000 23,408 (46,592) ENDING FUND BALANCE $ - $ - $ 618,692 $ 618,692 ME DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO BUDGETARY COMPARISON SCHEDULE DEVELOPMENT FUND YEAR ENDED SEPTEMBER 30, 2007 Budgeted Amounts Variance Actual Positive Original Final Amounts (Negative) Resources General property taxes and sales tax $ 1,154,000 $ 1,154,000 $ 1,400,912 $ 246,912 Interest income 10,000 10,000 63,231 53,231 Grants - - 94,768 94,768 Amounts available for appropriations 7164,000 1,164,000 1,558,911 394,911 Charges to appropriations Development fund 1,164,000 1,164,000 744,808 419,192 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - - 814,103 814,103 Other Financing Sources Transfers in (out) - - (4,030) (4,030) NET CHANGE IN FUND BALANCE - - 810,073 810,073 BEGINNING FUND BALANCE - - 535,858 535,858 ENDING FUND BALANCE $ - $ $ 1,345,931 $ 1,345,931 27 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2007 NOTE 1 - EXPENDITURES IN EXCESS OF BUDGET GENERALFUND General government The City did not budget a sufficient amount for salaries, and dues expenditures. Fire control The City did not budget a sufficient amount for fire control expenditures. Increased salaries, building and remodeling, supplies and capital outlay expenditures were not accounted for in the budget. Building inspection The City did not budget a sufficient amount for salaries, and capital outlay expenditures within the building inspection expenditures. Other Financing Sources The City did not budget a sufficient amount amount for other financing sources which included lease principal payments. DEVELOPMENT FUND The City did not budget the transfer of funds from the development fund to the general fund. Expenditures in Excess of Budget Expenditures in excess of budget were paid for by non -budgeted revenues, decreased expenditures in other functional expenditures and transfers from other funds. W DEATON & COMPANY, CHARTERED OTHER SUPPLEMENTARY INFORMATION DEATON & COMPANY, CHARTERED N a) c Z O w D O 2 w LL J �Lu FZ a _wNo .� d Q WE M Z, N 7 m m � Z U w Z r 0 Z 0. w 1_ Q N 502 O Z L C O D Z M L 0 O a o 0 I O C 7 O O LL Z r r 0 a O C L C m D M M h (L LL m M 64 EH V) B u a M NC Y .o LL v v a GO M M is co d x V O 3 V V V LL G O) � m Io co - L a co of C V V LL 6 m m m r� U C,C U] In Y J LL W o� 7 fR fA C W m a V V D m c ao m >;LL 0 6 � 0 M O I ON O M M M O p UJ O V 0 T co of O m V •M N d' ((J O O O N (D N o E C 0 L O O Z 69 69 M V Y if (f� ' VJ CO M N I- C O L= N N (D (a 7 .- V (D N N M O M Q LL M M W aa u a (D c0 CO O) N J (6 N C r D m a LL M ❑ » v Z LL LL ? O M (n co V 0) m (D LLJ V) y 7 CM 0 ([J O OJ N N c V f7❑o �� v co v Z Z c or-, 0QmLL N > e» en Q U J MLo LL m YQZm N N N In w CaL N> L a 1 (D V V m W Z F w ' ) LL m 0 7 � W 6s » = U O U ❑ U ❑ LL Z W O ce rn N o a.W r C)'4 >. x W d❑ O O (D co M U c6 2' C (D r r I� W LL U > Z Z W W O I� cn (u co cD of y C a N d0' LL O i 7 V O O M M D � M W (a LL .... Z W U G3 2 W W FQ U U Z Q W J N Q m Z Q LU x M ❑ ¢ U Z N y m J <6 � LL ❑ Q Z Z m M W LL o u u Z W �. 0(D n ._ H a Z Z LL Z a °� N ❑ 2 Z U' W o 0 --5 W t U Z Z a c U U U w W X w z d W Z m W CITY OF CHUBBUCK, IDAHO BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2007 Charges to appropriations Street guarantee fund Budgeted Amounts 15,500 Variance (15,285) General LID fund 3,600 Actual Positive 3,600 Original Final Amounts (Negative) Resources Court fund 42,100 42,100 58,898 General property taxes and sales tax $ 15,000 $ 15,000 $ 13,250 $ (1,750) Interest income 11,900 11,900 31,407 19,507 Donations 80,000 80,000 40,540 (39,460) Other resources 40,000 40,000 15,982 (24,018) Amounts available for appropriations 146,900 146,900 101,179 (45,721) Charges to appropriations Street guarantee fund 15,500 15,500 30,785 (15,285) General LID fund 3,600 3,600 - 3,600 Juvenile referral fund 500 500 - 500 Court fund 42,100 42,100 58,898 (16,798) Road projects fund 1,200 1,200 - 1,200 Parks fund 84,000 84,000 22,300 61,700 Total charges to appropriations 146,900 146,900 111,983 34,917 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - - (10,804) (10,804) BEGINNING FUND BALANCE 641,653 641,653 ENDING FUND BALANCE $ $ $ 630,849 $ 630,849 32 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED