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Home My WebLink About2011CITY OF CHUBBUCK, IDAHO AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2011 AND 2010 1}V. TON &- COM l'ANY. C HARTERED CITY OF CHUB6UCK, IDAHO ANNUAL FINANCIAL REPORT SEPTEMBER 30, 2011 ANO 2010 TABLE OF CONTENTS P_Yffa� Tina Paga 1 Table of Contents Auditors Reports IndependentAWd Qes Report 3 Financial Statiarrwants Statements of Net Assets 4 SWarrients of Adl0fts 6 Balen ce Sluts - Govarnmenial Funds 6 Statements of Revenues, Expenditures, and Changes in Fund Balances - Governmental funds 7-6 Statements of Net Assets - Propriatsry F unds 9 Statements of Revenues_ Expenses, and Changes in Net Assets- Prophetary Funds 10 Sta'L�rnents of Cash Mows - Proprietary Funds 1142 Notes to Financial Statements 13-26 Required Supplementary Information 27 8udge%ry Comparison Schedule - General Fund 26 Ni3tea to Required Suppiamentary information 26 Othor Supplementary Information Com binmp Salanes Sheet- NonmajorGovammental Funds 31 Statemonl of Revenues, Expenditures, end Changes in Fund Balances - Nonmaior Governmental Funds 32 Budgetary Comparison Schedule - Nonmkur Governmental Funds 33 Camp Ila nee and Single Audit Se( -tion 34 Report on infernal Control Over Fl"ridal Reporling and on Compllance and Other Maws BaW on an Audit of Flnar}cial Statements Performed in Accordance wish Government Auditing Standards 35 Independent Auditor's Report on Compliance with Requirements that Could have a Direct and Materiel Effect on each Major program and on tntemW control over compliance in Accordance with OIAB Circular A-133 36 Schadule of Expendilurea of Federal Awards 37 Schedule of Findings and Questioned Costs M-39 Summary Schedule of Prior Audit Findingis 40 DrATi N K {'t}�w-kNy, ciiALt'fl• ED Dealtrir & Comp iky, Chartered Ccrtificd Pubhu 2A"uuntwiv. 215 ]forth 9th_ Suite A I'ocateIlo. IL) k3_5201-527# (21W) 212-41325 Mm Nh 7r ItIM7 tic Ln of L -m A51 Nhlle An mninma Mpmhrr dA mrrlrr 1• iaiirr ML- riflM Rihllr brie;a,m„nN INOEPENDENTAUDITOR'S REPORT To the City council Clay of Chubbudc We have audited the accompanyirrq financial statements of line govemmertal activftle6, the bkksIne6s m actiuHles, the aggregale diiicralaly presenind aomp6n6nt urrtts, each malar fund, and the nggregaln remalning fund informnlion of City of Chubbuck as of and fgr the years ended September 30, 2011 and 2010, which WIOUWely comprlae the {flys basic finanplal otatCrrlents. as fisted in the table of corrtenis_ These fnancial statements are the resporisibility of tine CHy of ChubbuJCk'e management, Otrr m6ponsiblllty Is to avpreas ppinlwa on 1heae ftnandat statements based on our sudH_ The prior year asummar¢ed comparative informalton has been derived from he Cigr'S 2010 tul9txaal statements and, In our reW dated Am ZZ, 2011, we expresso ungcaal o opmipria on the reopmOve financial statements of the dovemmerrtal activities, the busfrrme- type activities, #* aggregato discretely presenter¢ 04mpondnt Unitas, sacci mapw fund, and the aggregate ramalri ft fund Information. Wis coma-mtsd our audit In accmrdacrca with auditing aslandards generally occupied In the Unlled States of America and the standards applicable W lirrancial audits c antaned in Government AWiOng SlerrdarrJS. ErSUO'0 uy the Conrptrcllcr Gon[tral Of the UnW States. Those standlarda require that we plan and perform the audit 10 obtaln rmonable asstimnrA about whelher the flnancJat statements are free of maisdal missialenrent. An audit Includes examining, on a lest basis, evidence supporting the amounis and disclosures in the fmanoial stalerneat3. An audit also mdudes assessing the oocoUnting princtpies used and the significant estimates made by managemerit, as .well as evalualing " overall flnandal siafamenr presentatlon_ Wa believe that our audH provides a reasonable basks for aur oNnlons_ In our opinGon, the financial asiatemants referred to above present fairly, in a6 material respects, the respective finanoiuf position of the governmonlal aoiivilies, ttv business -type adtxlties. the aggregate discretely presented Component units, each major fiord. and Ube aggM9at& rernalning fi.rhd inkirmation of the City of Chubbuck as of Seplempar 30, 2411 and 2010, and Ina raspeotive oihangaa In financial poasHlan and cash flava, where applicable, lhersof for the years then ended in confarmtly with accounling principles generally aCroepted rrr the United Slates of America. In aCcortldr:Ca will Goverrimenl Auditing Sland2rds. we hove also issued our report dated May 11, 2(12, on out Wnsidaration of the CHy of Chut)Nrck'6 litternal corrtml over financial reporting and inn our testa of Ito camplance vAh mertafn provlalons of taws, regulations. contracts. ai1d grant ag reemerrta and other MEOW% The purpose of that report is to deacribe Ute scope of our testing of Inlerr*l control aver financial reporting acrid i coni pdianc a and the results of that les", and not tD provide ao opiolon on the Inlernal corrtrol mmr flnandal reportJrng or an camplia rwa. That report Is an Integral pari of an audit performed In accordance with Government Auditing Standards and important for assessing the results of our audit. Accounting principles generally uorrepted in the United StUIRS of America require that budgetary Cornparison information an parge6 29 through 33 he presented to supplernent the WiG financial staterrler$a. Sudo Infoma5an, aMhough not a part of the baalc financial atatemenls, is required by the Govammental Accounting Standards Board, wha considers if to be an easeniiel part of financial reporting for pli;cing the uasic financial statements in an appropriale operational_ economic, or historical 00 text. We have applleA oetialn IlmNW prowdunm in the required supplementary Infannatlon In accmrdance wHh audHing slandarda ganerelly accepted in the Untied States of America. which consisted of inqurles of marrdgemenl abouk Ute melhDds of prepafmg 1ho Information a W comparing the information for consistency vtilh managernenl'6 rWonees to Our Jnquilries, the Mesio fiirramlat statements, and other knowledge wa obtalrierd during our audit of the basle financial statements. We do not express an opinion or provide any assurance an she inlormaticn because the limited procedures do r104 provide us vita wffnrient evidence to express an opiriion provide arra assurance_ Our audit was conducted for the purpose of formIng opirti OM on the financial StdterrieNis tft t MlWlvely cornprisa the Silty of Ghubbuck's financial ataiements as a whole_ The mombining and Individual nanmafor fund financial statements are presented Ior purposes of addlllcnal analysis and are rtol a required pert of Ile 1F7ancial slalernents- The a �ampanying schedule of expenditures of federal awards is pterentm! for purposes of additiional analysis as required by U.S. t?flipe of Managerrreni and Budget Circular A-133, Audits of Slates, Local Gavemmanls, and Non-Prollt Orgardxationa, and is alio not a required purl of the financial statements. The combining and arrdrvidual rionmajer lurid frrlanpul statements and the schedule of expenditures of federal awards are the responsibility of mansgemerht and were derlved form and relate dlrecily in Ihtt underlying amoouniing and ocher racards used to prepare 1hs financial statements. The informasfion has been subjected to the auditing praeedure5 applied In the audit of tyre financial statements aN certain additivnal procedures, including Comparing and reconciling such information dirmlly to the ronderrying Dkcwtsttirrg arbd other te0rfris used to propare this flnandal asiaiernants or to foe flnandal statements lhemselves, and other additional procedures in accordance with auditimg standards generate accepted in the United SfateB of America, in our opinion, the informalion ks fairly stated in all material respects in relation to the finanarkl 6tatenwto as a whole. I he City Iles not preseril.0d lle required management's discussion and $nalysis khat accounting principles generally accepted in the klrltted Stares Ns determined Is necessary 10 supplamenl, allhougn nal required to be part of, the basle finanetal afatemenls, Pocatello_ Idaho May 11. 201.2 CITY OF CHUSBUCK, IDAHO STATEMENTS OF NET ASSETS EPTEi419ER 30, 2011 4 See accampanying notes to financial statements DE AYON & COM VA NV, CRA 19TERED Governmental Business -type Development CtAWWC Activities Activities Total Authority Authority ASSTS Current assets Cash and cash equivalent 3,142,042 S 8,023,419 S 11,165.461 $ 3,6556,886 $ 16,2136 Property taxes receivable 276,604 - 276,644 132,270 - IntergIovernmentel recanrables 213,679 - 213,679 - - Internal halarices (796,185) 796,185 - - Other accounts receivable - 706,043 7D6,043 25,000 2,83f,140 9,525,647 12,361,767 3,814,156 16,2 Noncurrerr# assets m -- -- Rastricted assets Bond reserves - 237,981 237,981 - - ater deposits - 154,930 154,930 - - Advanre to joint venture - 17,642,935 17,642,93.5 - - apRal assets 9,235,291 11,971,886 21,207,179 - 17,829,414 Arcurnulateddepreciation (4,153,120) (5,368,957) {9,522,077} - - 6,082,171 24,838,777 29,720,948 - 17,529,414 7,918,311 34,164.424 42,082,735 3,814,158 17,645,680 LIABILITIES Curren# liabilities Accounts payable 59,027 42,485 101,515 117,355 - Accrued paymd1 60,298 21,161 81,459 - A=rued bond interest - 8,346 8,346 - - Current portion compensated absences 53,126 20,130 73,256 - - Current portion of bonds payable - 165,000 165,000 4 Current portion of tong -term debt 1,161,789 1,161,789 - - Payable from restricted assets - _ Water deposits - 154,930 154,930 - - 172,451 1,5573,844 1,746,295 117,356 Noncurrent liabilities Bonds payable - 7,940,334 1.140,330 - Note payable - 18,027,077 18,027,077 - - Accrued cornpensaled sbsenoas 212,509 80,518 293,027 Advance payable - - - 17,642,935 212,509 2(047.925 20,260,434 - 17,642,935 384,960 21,621,769 22,006,729 117.356 17,642.935 NET ASSETS Invei5ted in capital assets, net of related debt 5,082,171 2,260,822 7,342,993 - - Restricted for bond service - 297.961 237,981 - - Unrestricted 2,451,180 14,049,852 12,485,032 3,696,800 2,745 $ 7,533-351 $ 12,542,655 20,076,006 3,896,800 S 2,745 4 See accampanying notes to financial statements DE AYON & COM VA NV, CRA 19TERED FunctlonsfPragrarrms Primary Government Governmental activsbes; General government Law enforcumiani Fire control Building Inspection street Parka and recreation Health and welfare Other special revenue funds ousine55-type activities Water Sewer Slgnit�bn Total primary gevemment CITY OF CHUBBUCK, IDAHO STATEMENTS OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 3D, 2011 Program Revanuos Total Operating Net Charges for Granta and (Expense) Development CIAWC Expenses Services Contributions Revenue Authority Authority 229,618 237,249 $ - $ 7,833 $ - - 2,714,226 - 58-465 {2.665,761) - 1,170,902 180,021] - (991)02) - 165,214 - - (165,214) 831,182 22.849 - (831,182) - 544,793 70,900 - (473,893) - - 44,487 - - (44,467} 857 - 6,220 5,363 - 5,701,277 488,169 84,995 (5,148,423) - 620,777 2.636,564 3,157,341 1.356,305 2,204,728 - 849,423 1.669.179 2,863,260 - 1,194,082 1.174.725 1.644, 935 - 47D.210 - 4,199,209 671iW3 26137116 `4, 900.485 $ 7,201,092 pp- 64.885 S (2,634, 708) $ - Component Unit: Chubbuck Development Authority $ 1,227,256 CIAWVti+C Authority - $ 1,227,258 NO (expenseyrevenue General revanuax General property taxes and sales tax Franchise feQs Intergovernmental L9aass and rants Interest Income Gain on sate of assets Capital contributions Other revenue NET CHANGE IN NET ASSETS BEGINNING NET ASSETS PRION PERIOD ADJUSTMENT ENDING NET ASSETS $ (1,227,268) $ - Gartaral Buginess-t" Development OIAWWC Activities Ac#Pvlties Total Authorlty Authority S (5,148,423) $ 2.613,716 S (2,634,708) $ (1,227,256) $ 4,441,868 - 4,441.858 1,82.5,321 178.839 - 179.339 _ - 797.354 797.354 - 2.745 60.844 - 50.M4 - - 30,738 22.849 63.567 18,936 16,242 - 16,242 - 217,034 - 21 7, 034 - _ 35,491 - 35,491 - - 5,769,200 22.849... 6.792,049 1,844.257 2,745 620,777 2.636,564 3,157,341 618,999 2,745 6,896,033 10,006,091 16,901,124 3,079,801 - 17,541 - 17,541 - - $ 7,533,351 $12,642,655 $ 20,079,006 $ 3,696.800 3 2,745 5 See accompanying notes to fnarxciat statements 1}EXIDN'.&- CONII.PANY, CHARTERED CITY OF CHUBBUCK, IDAHO BALANCE SHEETS GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 WITH COMPARATIVE. TOTAL$ AS OF SEPTEMBER 30, 20'10 Other General Governmental Fund Funds Total ASSETS Cash Property and sales taxes receivable Intergovernmental receivables LIABILITIES Accounts payable Accrued payroll Interfund payable Acurued Compensated absences Deferred revenue FUND BALANCES Unroserved, reported in: Committee! Unassigned 2010 $ 2,512,602 $ 629.440 $ 3,142,042 S 2,561,374 2M604 - 276,604 255,551 213,675 213,679 214.503 $ 3,002,885 5 629 440 $ 3,632,325 3,032,368 Long-term iiaNilities are not due and payable In the current period and therefore are not $ 59,027 $ - S 69,027 $ 62,586 80,298 - 80,298 149.335 796.185 - 796,185 661,776 53,126 - 53,126 66,715 150,185 - 150,185 144,161 1,11021 - 1,11$,821 1,084,573 829,440 629,440 613.032 1.0"'064 - 1, 884, 084 1,334r763 1,664.064 525,440 2,513,504 1.847,785 $ 3,002,885 $ 529.440 3,032,368 Amounts raported for governmental activities in the Statement of Net Assets are differant because. Capital assets used in govemmental activities are not financial resources and therefore are riot reported in the funds. net of accumulated depreciation of $4,163.120. 5,982,171 Deferred tax revenue represents amounts that were not available to fund current expenditures and therefore are not reported Irl the funds 150,18$ Long-term iiaNilities are not due and payable In the current period and therefore are not reported In the funds: Accrued compensated absences (212,609) Net assets of governmental funds $ 7,533,351 6 See accompanying nates to Flnenclal statements DEATOIN & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF REVENUES. EXPENDITURES, AHO CHANGES IN FUND EA.LANCES GOVERNMENTALFUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH COMPARATIVE TOTALS POR THE YEAR ENDED SEPTEMBER 30, 2010 EXPENDMURES General government 186,863 Other 186.863 301,208 Law enforcement General Governmental 2,610,615 2,409,109 Fire control Fund Fun45 Total 2010 REVENUES 165,214 165,214 157,878 General property taxes and sales tax 4,435,834 $ - $ 4x435,834 $ 4,133,709 Franchise fees 179,839 - 179,839 227,744 Intergovernmental 797,354 797,354 817,906 Parks revenue 1,877 857 1,977 2.499 Licenses, permits and fines 237,249 - 237,249 121,602 Grants 56,455 - 58.455 1$$,025 Fire protection and prevention 180,020 - 180,020 195,564 Leases and rents 50,644 - 50,644 19,491 Interest income 27,522 3.216 30.738 19,292 Dcnatlons 104 6.120 6,220 26,240 Charges for services 68,923 - 68,923 55,897 Other revenues 27,562 7,929 35,491 34,086 Interest expense 6,055,489 17,265 8,082,754 5,812,847 EXPENDMURES General government 186,863 186.863 301,208 Law enforcement 2,616,515 - 2,610,615 2,409,109 Fire control 1,127,747 1,127.747 1,D24,047 Building inspection 165,214 165,214 157,878 Street 788,358 - 788,366 732r617 Parks and reraeatiari 498,356 - 498,365 578,779 Health and welfare 44,487 44,487 56,154 Court fund - 857 857 - Parks Fund - - 30,419 Capital outlays 58,690 - 58.691) 166,821 5.486.227 857 5,487,084 5,488,929 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 579,262 16,408 595,670 354,218 OTHER FINANCING SOURCES Prvoeeds from capital I"se - - - 65,772 Principal psyrnerits on leases (43,139) - (43,139) (72,0$9} Interest expense (3,084) - (3,494) (4,743) Proceeds from sale of assets 16,242 16,242 (29,961) (299,961) 8,9d0 NET CHANGE IN FUND BALANCES 549,301 15,408 565,7D9 383,158 BEGINNING FUND BALANCE 1,334,783 613,032 1,947,795 1,95$,942 ENDING FUND BALANCE $ 1,884,064 $ 829,440 2,513,504 $ 2,320,100 (Continued) 7 See accompanying notes to financial statements 1)F,xT0 .N & CO NIP.�6NY, c'11A[C FRED CITY OF CHUBDUCK, IDAHO STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 RowneiIiation of the change in fund balances - total governmental funds to the change in net assets of governmental activities, Net change in fund balances - Wal governmental funds Amounts reported for governmental activities in the 5tWernont of Aclivilies era differeni because; Governmental funds report capital outlays as axpendilure$ while gavernmerrial activltles report depreciation expense to allocate Those expenditures over the Ilfe of the assets. Gaphal asset contribAons from ather entities are not recognized as a revenue for govemmental purposes, but are required to be recognized on the Statement of Activities: Contributed capital assets Capital asset purchases capitalized Depreciation expense Deferred revenues are not recorded 2s current period receiptE The Gssuanre at long-term dabs (a -g-, bonds, leaser.) provides current financial resources to govemmerdal funds, while the repayment of the principal of Tong -term debt consumes Rhe 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 relalad items Some expenses reported in the Staturneni of Activities do not require the use of currertit financial resouroes and therefore are not feported as expenditures in gavemmental fund; Accrued compensated absences Change in net assets See accompanying notes to financial statements 2011 Total 565,719 217.034 58,690 (32+1.184) 6.024 43,139 54.365 $ 620,7-77 1]I:A'II} CO NIP,�LX `,C1PkWI'ERtIl CITY OF CHUBBUCK, IDAHO STATEMENTS OF NET A$9ETS PROPRIETARY FUNDS SEPTEMBER 31}, 21311 WITH COMPARATIVE TOTAL -S A9 OF SEPTEMBER 30, 2010 25,9,45,293 $6,444,967 1,M.657 Adjuom&m ro reSmet th'a cansNidstion of iniemel gerviva fund swultAs related to an4w*se sdiwLies. 9 12,483,717 $969376759 $ 68.938 $ 68,332 5$,939 12,542,655 See actornpanying nates to financial stalements 1)EATON OL CC1MY-1,NY, UrLARTERVD Internal Internal Sarrlcs Service A89ET$ 1J aWr Sewer Sanitation Total 2010 -Funds 2011 Funds 2414 R 1lurrent assets Cash and cash equlve lents $4ro64,343 52.814,218 51,148,868 $ 8,023.419 $3.792,655 $ - 5 Accounts recelvabte 277,$93 289,279 138.871 706.443 612,747 4,342,236 3,089,497 1,287,7298.729,452 4,405,442 _ Noncurrent assets ReArkAed assets Band resertteS 194,081 68.900 237,981 132,85Q Water deposits 154,530 - - 154,934 152,149 Inteliund receivable 313,d6l 364,900 117,824 796,165 661.776 - - Advanoe to joint venture - 17,842,935 - 17,642.M 12,114,939 - Capita I assets 5,281,815 4,126.224 2,304,206 11,712,745 11,261,067 259,843 259,943 Accumulated depreciation (1,753,217 (2,764,415)6�37,,,%3) (5,171,225) (4,785,237) (197r732} (1$6,667} 4,186,074 19.422,544 1,784.437 25,373,451 19,537.304 61,811 72.875 8,60$,306 22,5222041 3,072,188 34,102,513 23.9+42,706 61,911 72,976 LIABILITIE=S CtArent Liabilities Accounts payable 25,287 6,195 9,033 38,515 2,452,244 2,973 1,069 Payroll payahle 9,616 7.412 033 21,181 81,9&4 - 3.575 Acamedcampansstedabsences 9,296 $,296 1,535 24,130 1057 - - Current portion of bonds payablc 100,040 65roo0 - 165,000 60.000 - Accrued Interest - - $.So 9.346 63,035 - - Current pw6on of long-term debt 15,579 883.249 312,901 1,161,769 321,159 Payable from restrlcited assets - ater depcm to 154,930 - - 154,930 152.109 - ! 314,7_08 921,142 335,011 1,570,671 2.729,489 2.973 4r644 Noncurrent Liabildies Revenue bonds payable, not unwo izrz prenliurn 1,944,330 - 'i,940,334 55,040 - Note payable 267,791 18,118,898 1.W,448 48,a27,077 11.136,936 - Compensated absences 37,184 37,184 6,15E3 60.518 74,222 - 2,245,305 16.156,022 1,645,598 20,D47,925 11,275,858 -_ 2,500,013 17,077,174 1,981,804 21.518,796 14,004,947 2,973 4.644 NBT ASSETS Invesled In capita] assets, net of related debt 1,204rB98 1,280,809 1.666,613 4.152,320 302,512 61.911 72,976 Restricted for bond gervice 169.001 68.wo -237,981 132,860 - - tlnrestrFded 4,674.314 4,095,153_ (578,456) 8,083416 6,922,697 (2,Q73) (4,644) 25,9,45,293 $6,444,967 1,M.657 Adjuom&m ro reSmet th'a cansNidstion of iniemel gerviva fund swultAs related to an4w*se sdiwLies. 9 12,483,717 $969376759 $ 68.938 $ 68,332 5$,939 12,542,655 See actornpanying nates to financial stalements 1)EATON OL CC1MY-1,NY, UrLARTERVD CITY OF CHUBBUCK, IDAHO $1`A.TEMEHTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS PPOPRIETARY rUNI)S FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH COMPARATIVE TOTALS FOR THE YEAR EN DEV SEPTEMBER 3% 2014 OPERATING REVENUES Serwlca revenue Revenue used as security for revenue band; Charges for services OPERATING EXPENSES Salaries and wages Personnel benefits Repair and maimen nice SuppHds and I4oIs Garbage conlainers Travel, meetings, and training Fuels and lubricants fele Wrle and cammunioeuons Utilities Treatment - Pocalello Insurance 01har purchased services Frafeusrwrel services FadRiee plan Bad dabl Nvizpation OPERATING INCOME NONOPMALMO REVENUE-(EAPEKSe) interest Inanme Interest expense Capital o411tf�is LDs9 from asset disposal Transfers In (Out) NET INCOME (LOSS) 0EGrNNI40 NET AWET8 PRIOR PERIOD ADJUSTMEW ENDING NET ASSETS 14,386 6,035 2,527 22.&414 22.844 Intimal internal [113,300) (130,378) (159,497) - - Sorvicis Service Water Samr Sanlbrlfan TOW 2090 Funds 2011 Funds 2490 164,398 $2,798,260 $1,588,269 $4,550,957 $5,931,295 $ 55,725 $ 61,773 66,000 2.166,530 125.000 _2,W.S90 2,204.728 3,863,266 1,568r269 5r&%,197 6,0x6,295 56,725 61,773 500,022 395,168 225,792 1,1159,982 1,95dr799 - 373,288 195,848 119,4D5 587,3+04 5#6,411 - 135,dU3 69,431 344,055 499,089 633,638 8,366 19,968 23,007 24,1313 24,174 72,017 69.955 9,874 26.665 - - 3D,722 30,722 7,314 - - 6,325 1,264 6,529 10,966 2,494 774 15,739 7,361 74,351 97,421 71x671 22,552 1688 7.017 5,196 8,195 19,409 13.006 72 65 136,643 16,830 3,454 155,627 130,705 12,477 12,555 - 805,433 - 8Q8,41:33 852,719 - 26,241 17,726 24,0% 63.962 162,279 2,023 - - 2,023 13x572 - - 33,497 9,62x4 43,121 63,598 2,646 - 2,040 8,197 - - 26,217 9,735 37,942 38,012 - 110,116 93.611 176,060 386,987 427,966 11,066 11,465 1,345,727 1,i 1.678 995,365 4,642,714 4.213,801 66,124 78,171 &514,001 1,241,582 592,944 2,553,487 1,842,495 {9,394} (14,399) 14,386 6,035 2,527 22.&414 22.844 (9,578) (7,500) [113,300) (130,378) (159,497) - - - - (3.470) 4r766 (1,454) (116,773) (147,529) (139,723) 863,708 1,100,118 4i3,t31 2,545,958 1,762,772 5,080,694 4,244,7+49.. 808,426 35,9413. ZR S5.444. $1.0,90.557 Adjustment to rellect Me can6oudelion of inlemai service fu nd aobvdim relaled W "rDrise 1un06 19,394) Change in net a$SM a# bueinese•tMe Miwities2 55 11,2161 10 (9,394) {141,399) 68,332 82,731 3 5$,930 S 98.332 See accompanying noles to financial sistements 1) 1., & CON1I'ANY, CRARTERED rl r I + I UL 0 � � , E T " 00ju � G � I C � � LL p� i*i {O Fi CD NL7 pq C+] C+p} N [+} k7 M 0) 13� LO O r m CJ CD iC] od L N sr+ P- 64 r fl o Lo r ai Ld 0 � rs LU 10 q err LL " W Y' i+lpp c+7 S+] til i ] ' IRS F- W CO LU 06 W C 47 � tri 1- *l, m RI 4x 0 LUTZ C r� r to o coo o 0 ua � M u5 to c°4nC4, toQpff) -� =5o" 0 � as o 0 cf Z W 3 Q} r 0— sv O ,..� Ni W L 4 H � � Vi 7 48 07 $ > ujW Cf z {y _r W W DIV :3 zzco ac �' W Via' a x�'m _ LU 'o f a� Z S Z LL m 4) E 42 o V t IC YJ A An W to w LM z �° - LL pp told q} +C4 ,C {LLQ Z z Z Z Z p C)C)4 SQL) LLLLLL PL d W ik {} { 4 Z W t 0 0 r LU # rLu ay i uWi Z UJ woC5LP) 'LLb a w W M°°�z _4La MLL {.}XZ00 LL 0 M 4 fn Lu �S wtr~UCS C za. No W U. W C9 N e � � LL as bc� r (D m p (y C D 1 3 LL. u co LD 04NM IN O 000 W P- u i br) tp a �- 4a tQ v qLO pi N i4 ift Q LO o r r? t+S 6 uo Q6 cl r 975 La o Vlr +# C* W 9 05 W < m CL 0 0 m �u U- °w gin P- cn T z W W LN CITY OF CHt1IBSUCIK, IDAHO NOTES TO FINANCIAL STATEMENT (PAGE I OF 114� NOTE I Y ummary of S ignificant Account na..PQllcie.� The City's financial statements comply with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronounrements within the rodifiGatlon. The govemment-+ride financial statements. including the enterprise, funds and the fund financial statements for the proprietary funds, are also under GASB codification. The accounting and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this note. Applicable GASB staternents have been implemented through GASB 54. A. Reporting Entity The City's financial reporting entity comprises the following: Pnmary Government In determining the financlal reporting entity, the City complies with the provisions of GASB Statement leo, 14, "Tile Financial Reporting Entity Currently. the City reports two component unit; the Chubbuck Development Authority and the Chubbuck Impact Area Waste Water Authority Discretely Presented Component Units Chubbuck DevelvpmentAuthority (CDA) One component unit reported in the combined financial statements represents the financial balances and transactions of the Chubbuck Development Authority (CDA). CDA is a legally separate entity incorporated under the State of Idaho's urban renewal laws. CDA works with the City to develop blighted areas within the City using tax increment financing to fund projects. These projects could include providing infrastructures, purchasing land and demcllshing blighted structures or rehabllitating structures to provide for low incanne housing, among others. The Board of Commissioners of the Authority consists of 7-9 members, which are appointed by the Mayor. Complete flnanclal statements of the Authority can be obtained from the Treasury, City of Chubbuck, 5160 Yellowstone Ave, Chubbuck, Idaho 83202, Chubbuck Impact Area Waste Water Collection Authority (CIAWWCA) Effective September 1, 207, Bannock County, Idaho, City of Pocatello, Idaho and the City of Chubbuck, Idaho entered into a Joint Powers Agreement creating the Chubbtick Impact Area Wastewater Collection Authority for the purpose of flnancang, designing, acquiring, constructing, managing, and operating a sewage collectlon facillty, along with transmission mains and lift stations to serve those who own and operate a collection system under Idaho Law for the residence of the City of Chubbuck, Idaho. The Authority is a public entity of the State of Idaho, therefore, the Authoritys income is exempt form Federal and Idaho Jni--orne taxes. A six -member board governs the Chubbuck Impact Area Wastewater Collection Authority with two members representing Bannock County, two members representing the City of Pocatello and two members representing the City of Chubbuck. The City of Chubbuck provides loans to the Authority with no interest of maturity date. Outstanding balance of loans to the authority at yearend totaled $17,642,925- 13 CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAIGE 2 OF 14) NOTE 1 - S u m m a ry of S iQ nifican€ Accou nti ng Policies Continued A. Reporting Entity (Continued) Upon termination of this Agreement, title to all buildings, improvements, facilities, equipment and personal property held by the Authority shall vest In the City of Chubbuck. Complete financial statements of the Authority can be obtained from the Treasury, City of Chubbuck, 5150 Yellowstone Ave, Chubbuck, Idaho 83202. 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 ffduclary funds. The statements distinguish between governmantal and business -type activities, Govemmentall activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revent,es. Business -type activities are financed in whole or in part by fess charged to extemal parries for goods or servic-es, 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 expenditurefexpenses Funds are organized into three major ca*gories: Governmental, proprietary, and fiduclary. An emphasis is placed on major funds within the governmental and pro prletary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a, Total a5&et5r liabilities, revenues or expand itureslexpanses 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 govemmantaI and enterprise funds combined. 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 resourOes, except those required to be accounted for in another fund, are accounted for In the General Fund. Special Revenue Funds Special Ravenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes, 14 CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL. STATEMENTS (PAGE 3 OF 14) NOTE 1 - Summary of Significant Accaunting Policies ( Q ontinued) B. Basis of Presentation (Continued) Pro rieta Funds Enterprise Funds Enterprise funds are used to account for business -lake activities Provided to the general public. These activities are financed primarily by ui er 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. Internal Service Funds Intema4 service funds account for repairs and maintenance service for vehicles and equipment provided to other departments or agencies of the C4 on a cost reimbursement basis_ C. Measurement Focus and Basis of Accounting Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Sesis of accounting refers to when" transactions are recorded regardle55 of the measurement focus applied. Measurement Focus On the government -wide Statement of Net Assets and the Statement of Activities, both govemmental and business -like activities are presented using the erorsomic resources measurement focus as defined in item b_ below. In the fund financial statements, the "current financial resources" measurement focus or the "economic resource" m e asu rement focus is used es 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 heir measure of available spendable financial resources at the end of the period, La, The proprietary fund utilizes an "economlo 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 liabllitles (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net assets_ Basis of Accounting In the govemment-wide Staternent of Net Assets and Statement of Activities, beth 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. 15 1} 1'_A:1 .N & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL. STATEMENTS JPAGE 4 OF 14) NDTE I - Summary of SignificartAccoWntong Policies (Continued) C. Measurernent Focus and Basis of Accounting (Continued) in the fund financial statements, governmental. funds are presented cn 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 accruai basis of acc ounfing. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used - 7h e sed_The effect of interfund activity has been eliminated from the govemment-wide financial statements. D. Budgets and Encumbrances Budgets are adopted on a basis consistent with generally accepted accounting principles_ Annual appropoated budgets are adapted for the general end special revenue funds. All annual appropriations lapse at fisc -al 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 excess expenditures were funded by donated capital outlays, decreased expendlitures in other functional expenditures, and proceeds in excess of the amount budgeted. 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 Flown 'cash and cash equivalents' include all demand and savings accounts, and ce6ficates of deposit or short -terra Investments with an anginal maturity of three months or less. 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 -vide 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 cast was used to valua the majority of the assets acquired prior to September 30, 2003. is DVA: IDN & (70NIVANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 5 OF 14) NOTIE 1 - Summa ry of Si g n i f icant Ac ou ntinq Policies Continued F_ Property, Plant, and Equipment {Continued} Governmental fund infrastructure assets were not capitalized prior to October 1.. 2003, Depreclatlon of all exhaustible fixed assets is recorded as an allmated expense In the Statement of Activities, with accumulated depreciation reflected in the Statement of Not Assets. Depreciation is provided over the assets' estimated useful hoes 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 Fuad Financial Statements 20-54 years 5-40 yeafs 5,30 years 2-40 years In the fund financial statements, foxed assets used in governmental fund operations are accounted for as capital outlay expenditures of the govemmental fund upon acqulsltlon. Fixed assets used in proprietary fund operations are si--munted for the carne as in the government -wide statements. G Restricted Assets Restricted assets include cash and investments of the general fund that are legally restriioted as to their use. The primary restricted assets afe related to employee benefits_ Restricted assets include cash and investments of the propriietary 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 +ase, 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 an whether the assets are used in govemmental fund operations or proprietary fund operations and whether they are reported in the government -wide or fund financial statements. All long-term debt to be repaid from governmental and business -type resources are reported as IiabiliGes in the gcvemrnent-wide statements. The long -tern debt consists primarily of notes payable, capital teases, 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 principal and interest are reported as expenditures_ The accounting for proprietary funds is the same in the fund sWernents as It is in the government- wlde statements. 17 E1 .,xi,oN, & COMP.,*.NY, ciiAwrERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS {PAGE 6 OF 14) NOTE 1 - Summa of Si n ificant Azco u n ti nq Policles Continued i_ Comparative daWreclassificatlons Comparative total data for the prior year has been presented fn 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 Clty's policies regarding vacation time permit employees to accumulate earned but unused vacation leave, The IiabiJity for these unpaid compensated absences is recorded as long-term debt in the government -wide statements. The current portion of this debt is estlrnat J based on historical trends_ In the fund financial statements, governmental funds report only the compensated absence liability payable from expendable available financlal resources, while the proprietary funds report the liability as it is Incurred, K. Equity Classifications Government -vide Statements Equity is classffJied 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 aocurnulated depredation and reduced by the outstanding ba.lanCes of any bOrlds, mortgage$ notesr or other borrowings that are attributabfe to the acquisition, construction, or improvement of these assets. b_ Restricted net assets - Conists of net assets with constraints placed on the use either by (1) exberrEal groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitubonal provisions ur 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." Fund Statements In the fund financial statements, governmental funds report the following classifications of fund balance: Nonspendabie (terns- This category includes a portion of net resources that cannot be spent because of their form or because they must ba maintained intact, This includes Inventories and prepaid items. Restricted items- This category includes resources where Ilrrtiitations are imposed by external entitles, such as grantors and creditors, or to comply with laws and regulations of govemments. Committed category includes amounts that can only be used for the specific purposes determined by a formal action of the City's highest level of decision-making authority for the City_ Commitments may be changed or lifted only by the Council taking the same formal action that imposed the constraint originally. Assigned sterns -Assigned items represent the Oity's intent to use certain resources for specific purposes. The City Council may establish the intended use of these funds for a designated purpose. Unassigned ifems- Represents the remainder of the City's equity in governmental fund -type balances In excess of the afore mentioned classifications_ is ny.t-r()x & COMPANY. Ch ARJE.ItFB CITY OF CHUBSUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PACE 7 OF 14) NOTE1- ma of Si nifi t Accountln boli Continued L- Use of E=stimates The preparation of financial staterroents in conformrty with generally accepted accounting principles requires the City to make estimates and assumptions that affect certain reported amounts and dlaclosures- Accordingly, actual results could difi'erfrom 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 subrnft 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 informatlon 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 epprop0ations, 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 end before the end of the fiscal year, the City Council faunally adopts the tudget, 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 frorn Restricted Assets Assets have been set aside for spec& items and are restricted for that purpose, Restricted resources are usad only after the unrestricted resources are deWeted. To date cash has been restricted for the following items; Proprietary Bond reserves Vater deposits Total 3 237,98'1 1,54,930 $ 392,911 Bond reserves are amounts the City is legally required to reserve for the repayment of outstanding bonds. Water deposlts are collected from individuals who have a history of collectlon 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 $154,939 atyearend. NOTE 4 - Pro a 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 2Oth. of the following year. The County remits property taxes collected to the City monthly - property taxes are reoognized as revenua when received for monthly reporting purposes. At year end., an accrual is made to recognize property taxes receivable at year end. At year end, $278,504 in outstanding property taxes were expected to be collected and remitted by the County. 19 CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS jPAGE 8 OF 14) NOTE 5 - Cash and Q05h Equivalents and Investments. Primary Government: Deposits at year end consist of the following: Deposits Cash in bank - ,arrying amount Restricted Urirestncted $ 392,911 11,165,461 11, 558,372 Bank Deposits - Custodial Credit Risk for deposits is the rlsk that, in the event of bank failure, the gcvernrnent's deposits may not be returned to it. At yearend, the rarrying amount of the Clys deposits (cash and certificates of deposit) was $11,558.372 and the bank balance was $12,008,935. The deposits were covered by colate ra lized accounts or federal depository insurance of $250,000 per #yank, Non-interest barring account were insured up to 100%. The City uses various commercial banks to limit their exposure to custodial credit risk, however, some of the Chys deposits including the State of Idaho, Local Ccvernment Investment Pool (IMP) at yearend were not insured nor colateraiized in the amount of $59 ,BB3, The State Treasurers Investment Pools {LIP} operates in accordance with appropriate state laws and regulation a_ The reported value of the pools is the same as the fair value of the pool shares_ Investmants - The City has no investments Componenk Unit - Chubbuolk Development AuthorFty (CDA): Deposits at year and consist of the following: Deposits Cash in bank - carrying amount Unrestricted $ 3,856,686 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 yearend the carfying arnount and bank balance of CDA's deposits (cash and certificates of deposit) was $3.656,886_ At year-end, all the Authorlty's deposits were held in the LGIR, Deposits In tho LGIP are not insured or guaranteed by th.s Federal Deposit Insurance Corporation, the State of Idaho or any other govemment agency. DA's deposits in the bank at yearend were subject to custodial credit risk, The State Traasurers Investment Pools (LGiP) oper9tes in accordance with appropriate state laws and regulallons_ The reported value of the poals is the same as the fair value of the pool shares. Jnvestrnents - The CDA has nc investments 20 BF,ATUN & COMPANY. CHARTERED CITE' OF CHUSBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 9 OF 14) NOTE S - Cesl� Gash E uivalents and nvestments Coritin Component UnIt - Chubbuck Impact Area Waste Water Colfeatlion Authority (CIAVMCA): DepCsits and Investoren#s - The CiAWWCA has no deposits or Investrnen#s_ Deposits at year end consist of the following: Deposits Cash in bank - carrying amount Unrestricted $ 16,266 Bank DeposIts - Custodial Credit RJsk for deposits is the risk that, in the event of bank failure, the governrnent's deposits may not be returned to R. At yearend the carrying amount and bank batance of CIAWWCA's deposits (cash and Certificates of deposit) was $16,266. At year-end, all the Authoril y's deposits were meld in the a financial institution. Ali deposits were guaranteed by the Federal Nposit Insurance Corporation and were not subject to custodJal Credit risk. NOTE 6 - Receivables All trade receivables are shown net of allowance for doubtful accounts, Doubtful accounts are based on an aging delinquent balance report_ Historically 100% of property taxes have been oollec#ed, therefore, there is no allowance for unoollectible property tax receivables. Receivables as of year -and for the City's business -type Funds are as follows: Water Sewer Sanitation Total Accounts Receivables14 164, ,705 Allowance for Doubtful Accounts 46,19U 41,635)(25,837) _ (113.B62} 2771593 289,27 138,879 766,043 NOTE 7 - Concentration of Credit Rlsk Interest Rate Rkak 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 lim9ing the average maturity of its deposits to one year or less, or redeemable on demand with no penalty. Cr if 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 diversJfication of deposits within the choices allowed under state sta#utas. Onr+cerntratiorr c� Credit Risk is the risk of loss attributed to the magnitude of an investment in a single issuer. Exclusive of the State of Idaho LGIR, the City's deposits in any one issuer does not represent a concentration of total credit risk. The funds in the State of Idaho LGIP are in a variety of investments which are required to have an A quality credit rating or better - Th e etter_ The City is subject to credit risk on deposits in banks that exceed the FDIC maximum insured balance amount. Additionally, the City grants credit to Customers in the City for utility service_ This extension of credit potentially subjects the City to credit risk. 21 DEATON C;()l4iP, NY. C:HAKI'ERE.I.) CITY OF BHUBBUCK, IDAHO NOTES TO FINANCIAL STATJEN!ENTS {PAGE 10 OF 14) NOTE 8 - Chan es in Fixed Assets A Surnmary of general fixed assets at year end is as follows: Work in process Infrastructures Nondepreciable assets - Land Office Equipment Buildings and Improvements Vehicles and Equipment Accumulates! Depreciation Beginning Balance Additions 2,116,290 $ 14,257 366,098 2-02,777 S Deletions Ending Balance 2,130,547 568,875 90,866 - - 90,856 226,049 - 226,049 2,868,733 - - 2,858,733 3,347.211 - 56,990 55,680 3,350,221 9,015,247 275,724 55,580 9,235,291 3,884'616 324,194 55,680 4,153,120 $ 5,1 M,631 $ (48,490� $ - 5,082,171 A summary of praprietary type fixed assets at year end is as follows: Nondepreciable assets Land Water Rights Office Equipment Buildings and I m proverne n ts Vehicles and Equipment Bond Fees Accumulated Deprecimon Beginning Balance Additions 709,854 $ - 417,850 1%,905 General Fund 7,949,755 $ 313,461 2,664,196 14,028 - 19, 340 11,520,710 431,878 $ Deletions Ending Balance $ 709,854 417,850 196,905 7,948,755 2,678,224 19,300 11, 971,888 4,871,905 397,052 5,368,957 $ 6,548,806 34,826 $ - 02,831 NOTE 9 - Interfund Receivables, Payables and Transfers Interfund balances at yearend comsisted of the following amounts: Due to Due from General Fund Water Fund $ 313,461 Sewer Fund 364,900 Sanitation Fund 117,824 $ 798,185 The balance of $364,900 due to the sewef fund from the general fund resulted from three loans. The firet Ivan originated in July 2005, in the amount of $461,949, with annual payments of $58,232_ to assist the general fund in a legal payment. Outstanding balance at year end was $237,021_ The second loan originated in February 2007, in the amount of $102,048, Wth annual payments of $32,000, was to assist in purchasing fixed assets. No payments have been made as of Septernber 30, 2010_ The third loan, in the amount of $168,696, was to assist in the payment of the employee benefit expenditures_ This loan has a zero percent interest rate and wlli be paid hack as funds become available. 22 DEAT()ti S& COMI1 kNY� UEiAW1'1-711FD CMY OF CHUB13UCK, IDAHO NOTE TO FINANCIAL STATEMENTS (PAGE 11 OF 14) NOTE 9 - Interfund Receivables. Payables and Transfers (Continued) The balarfce of $313,461 due to the water fund from the general fund was to assist in the payment of the employee benefit expenditures_ This loan has a zero percent interest rate and will be paid back as funds become available. The balance of $117,824 due to the sanitation fund from the general fund was a cash allocation error found by the City and MIJ he paid in the 2012 fiscal year. NOTE 14 - Long-term Debt and Accajod Com nsation Accrued Compensated Absences; Current portion Noncurrent portion Long-term Debt; Business -type activities= Governmental Bvsiness-type 53,126 25,130 212,509 80,518 $ 265.635 $ 100,648 In 2406, the CFty refinanced s avns#Tuction line of credit for a note payable with the Department of Environmental Quality (DEQ) with an interest rate of 3.25% and semiannual payments of $12,302 for 20 years. Current portion Noncurrent portion 15,579 267,791 $ 283,370 At yearend the City was authorized, on a line -of -credit, to borrowed $18,841,414 from the Department of Environmental Quality (DEQ) under five {5} separate loans. One Joan of $1,400,000 requires the principal and 3% interest to be paid in biannual installments over 20 years_ The other four (4) loans have zero percent interest rate and are required to be paid in biannual instatlments over 20 years at the close of the loan. At yearend two of the five loans were closed. The notes are used to finance the designJng and oonstructing of the Chubbuck Northwest Sewer Interceptor_ It may also be used to finance services to provide environmental field stu[ties, 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. At yearend the balance available to the CJty was $2.880.3 96- 23 rW.AT(A & COMPANY, CRA;crERET) CITY OF CHt1BBUO , iDAH O NOTES TO FINAhf IAL STATEMENTS {PAGE 12 QF 14� NOTE 18 - Lrmq-terrn Qebt and ACcrued—QM2ersaflon (Continued} Long-term Debt: (Continued) Business -type activities- (Continued) Total Award DEC line of credit at 3%, with blannual payment of S47,5D4 for 20 years, and a maturity date of November 1, 2430, Loan closed April 28, 2010. 1,400,000 DEQ line of credit at zero percent interest, with biannual Payment of $5,499 for 20 gears, and a maturity date of November 9 , 2030_ Loan closed April 22, 2010. DEQ fine of credit at 7-ero percent interest, with biannual payment of $86,273 for 20 years, and a maturity date of February 19, 2030. DEQ line of credit at zero percent interest, with biannual payment of $93,698 for 20 years, and a maturity date of Felocuary 16, 2030. DEQ line of credit at zero percent interest, with biannual payment of $2,281 for 20 gears, and a maturity date of February 16. 2030. Loan closed January 31, 2011, Less current portion Noncurrent portion 219,975 8,701,260 9,389,518 Available Outstanding - $ 1.396.569 214,476 1,758,668 1,121,728 6.942, 592 6,261,$20 130,630 - 130,630 19,841,414 2,850,396 16,952,087 833,249 16,119, 835 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 Revenue Bonds, Series 2011 was issued Septernber 28, 2011, for 15 years In the amount of $1,830,000 at a premium of $110,330_ The bond carries interest rates between 2 and 4.759 and a maturity date of September 1, 2026_ Bonds Payable: Sewer Revenue Bond Water Revenue Bond Less current portion Noncurrent portion Net Premium _ Principal $ - 65,000 110,330 1,934, 000 $ 110,330 1,995,D0o 1.65,000 1.834.000 Bond premium% net amorhzaUon totaled $110,830. Bond expenses, net amortization totaled $19,300_ The bond premium and expenses are amortized over fifteen (15) years, the life of the bond. No amortlzation was recognized for the bond premiurn or expense at yearend_ 24 DEA: F(ON & M MPAL NV, CHARTERED CITY OF OHUBBUCK,1DAHO NOTES TO FINANCIAL STATEMENTS {RAGE 13 OF 14) NOTE 10 - Lon g - term Debt and Accrued Cam en sajigji (Continued Business -type activities {continued): On June 4, 2008, the City issued three notes to purchase assets needed in order to collect sanitation for the City. Metes one and two were issued at 5,509 and the third note at 5.25%. The third note was refinanced in 2009. The dotes were issued for $936,576, $541,537 and $1,375,000 with monthly payments of $17,690, $6,985, and $8,321, respectively until the mato ity date of May 6, 2013, 2016 and 2029, respectively. Notes Payable; $ 1.930,000 $ Balance $ 1,995,000 Note 1 $ 337,948 319,864 Note 2 1,161,789 342,695 107,450 Note 3 1,272.765 2D 130 $11 675 57410,087,985 $ 1,953.40$ $ 21,284,514 Less currerit portion 312+961 Noncurrent portion S 1,640,446 Ann4,al Debt Service Requirements for leases, bands and notes payable Year Ending Govemmantal Activities Susines"pe Activitki s Septa rn ber 30 Principal Interest Principal Interest 2012 - - $ 1,326,790 $ 206,692 2013 - - 1,214,235 187,806 2014 - 1,086,163 173,424 2015 - - 1,10,363 160,523 2016 1 r079,735 148,777 2017-2021 - - 5,281,904 688,005 2022-2026 - - 5,549,668 323,997 2027-2031 - - 4,545,006 48,955 - $ - $ 21,183,866 S 1.848.779 Changes in long-term Iiabill1les Long-term liability activity for the year was as follows; Governmental activities capitai leases ornpensated ebz3ences BUS ine"-type activities Bolds payable Notes payable Compensated absences Beginning Ending Balance Additions Reductions Balance Dile within one year 43,19 $ - $ 43,139 $ - $ - 333,579 256,213 324,1557 265,835 53,126 $ 308.774 258,213 367r296 $ 265,635 53 126 Beginning Balance Additions Reductlons Ending Balance Due within one year $ 125,000 $ 1.930,000 $ 60.000 $ 1,995,000 $ 165,000 11,457,795 8,050,935 319,864 19,188.866 1,161,789 92,778 107,450 99,181 100,648 2D 130 $11 675 57410,087,985 $ 479,045 $ 21,284,514 _ 1,346,919 25 DEATIII & COM VANV, C.,IIARTE RED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 14 OF 14) NOTE 11 - Pension Disclosures The Public Empioyee Retirement System of idaho (PERSI), a cost sharing multi-employer public retirement system, was created by the Idaho Skate Legislature, It is a defined benefit plan requiring that bath 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, deathand survivors of eligible members or beneficiaries. The authorfty to establish and amend benefit provisions is established in Idaho Code, Designed as a mandatory systern 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 classifrca#Ion. For each month of credited service, the annual service retirement allowance Is 2.0% (2,3% policeffirefighter) 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_ At yearend the required Contribution rate w a percentage of covered payroll for members. was 6.23°/a for general members and 7.65% for policetfirefight,ers_ The employer rate as a percentage of covered payroll was 10.39% for general members and 10.73% for poiicelfirefighter members. The City of Chubbuck contrIbutions required and paid were $402,921, $368.275. and $381,576, for the three years ended September 30, 2011 r 2010, and 2649, respectively. NOTE 12 - Risk Management The City is exposed to various risks of loss, The City has obtained commercial insurance to reduce the tisk of substantial losses. NOTE 1 - Subsequent Events Subsequent events were evaluated up to May 11, 2012, the date the financial statements were available to be issued_ NOTE 14 - Other PoslernioJoyment Benefits The CIty complies with Idaho's requirements under the (COBRA). The liabllity under state requirements related t insurance COBRA program is not required to be reported employment benefit (OPER). NOTE 15 - Correction of an Error and Prior Perlod Adjustments Cor}solidated Omnibus Budget Reconciliation Act o other post -employment benefits for the medlcal The City does not participate in any otter post - During the year, the City found vehicles and equipment. In the general fund, that had been added in prlor years but were not recorded on the books with a book value of $17,541. This adjustrnerits increased the governmental assets in the government wide statement of activities In the arnourit of $17,641. Since the governmental financial reported on the modified accrual basis, thin governmental financial statements were not affected. 26 DEATON & COMPAENY. CHARTERED REQUIRED SUPPLEMENTARY INFORMATION 27 DEATON & COMPANY, CHARTEftM CITY OF CHUBBUCK, IDAHO BUDGETARY COMPARISON SCHEDULE GENERAL PUNT] YEAR ENDED SEPTEMBER 30, 2010 28 DEAT N & V(INIPANY. CJ4AR7'I?RRD Budgeted Amounts Varlance Actual Positive Orw inal Final Amounts (Negative) Resouroes General property taxes. and sales tax $ 4,531,281 $ 4,531,281 $4.436,834 S (95,447) FranchIse fees 222,U04 222,000 179,839 (42,161) Intergovernmental 785,000 785,400 797,354 12,354 Parks revenue 53,600 53,600 52,107 (1,493) Licensee_ permits and fines 139,544 139,500 237,249 97,749 Grants - - 5,335 8,335 Fine protection and prevention - Y 180,020 180,024 Leases and vents - - 54,644 50,644 Interest Income 10,000 10,004 27,522 17,522 Donations - - 100 100 Chanes for services 169,740 188,740 68,923 (120,817) Other resources 20,200 20,200 27,562 7,362 Amounts available for appropria€ions 6,951,321 5,951,321 6,065,489 114,168 Charges to appropriations General goverrirnerit 252,346 252,346 186,863 65,483 Law enforcement 2,689,748 2,889,748 2,616,515 73,233 Fire control 1,099,091 1,099,091 1,127,747 (28,656) Building inspection 159,351 159,351 165,214 (5,863) Street 885,027 885,027 788,356 86,571 Paries and recreation 721,183 721,183 498,355 222,828 Heahtn and welfare 33.276 33,275 44,467 (11,212) Capital Outlays 63,300 63,300 58,690 4,614 Total charges to appropriations 5,903,321 5,903,321 5,486,227 417,094 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 48,000 48,040 579,262 531,262 Other Financing Sources Principal payments on leases (54,000) (54,000) (43,139) 10,861 Interest expense (4,000) (4,000) (3,064) 935 Proceeds from sale of assets w - 16,242 16,242 (58,040) (58,000) (25,961) 28,039 NET CHANGE IN FUND BALANCE (10,000) (10,000) 549,341 558,301 BEGINNING FUND BALANCE 10,004 10,000 1,334,763 1,324,763 ENDING FUND BALANCE $ - - $ 1,884.064 1,864,064 28 DEAT N & V(INIPANY. CJ4AR7'I?RRD CITY OF CHUBSUCK, IDAHO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2011 NOTE 1 - EXPENDITURES IN EXCESS OF SUDGET GENERALFUND Fife Control The City had expenditures in excess of budget of $28,655 due to an increase in fire control expenditures. Increased health Insurance, building maintenance and telephone expenditures were not accounted far in the budget. These expenditures were paid using excess revenues over budget. Boildinci inspection The City had expenditures in excess of budget of $5,863 due to an increase in health insurance expenditures, These expenditures were paid using excess revenues aver budget. Health and WQIfare The Gity did not budget a sufficient amount for the "Transit Bus" "Economic Development Strategy', "Family Service Alliances", and 'Bright Tomorrows" program expenditures and miscellaneous expenditures within the health and welfare expenditures_ Expendltures exceeded budget by $11,212. These expenditures were paid using under budgeted expenditures in other departments_ 29 DEATON & C074RANY, CHARTERED OTHER SUPPLEMENTARY INFORMATION 30 DE:ATON & COMPANY. CHARTF RED ■ LU U 2 E .jr 2 ��2 cl V- Z 0 5 0 LL 2[ �� 22 E m R JCL ty) 2 b A 9 § � / � � # q § o c w % u rm �7 7 \ 2 LL _ _ _ � � \ k to LL CL _ _ to 2 j � 2Lo 0 3 & � n W Q LLI, §§- ■ 0 0 � z R � ■ 2 ■ � ncoLLI & � � » Co 3 2E 0k ■ C6 0�2W z n e 2 k \ Etv� o _ _ ■ LU U 2 E .jr 2 ��2 cl V- Z 0 5 0 LL 2[ �� 22 E m R JCL ty) 2 b A 9 § � / � � # q § C'1 iw CD Lf) L9 N N r CV N W) bµ '1 [+'} � Er�acrwT o co w z �- o oa O's � � LO LO LO 4 M _ {p t6 {y o p} CD CL LL T T Vi I Iq r-fll ! I Nt r- {*J r O L3 L LO tn w C+J m @ �r � LL r r z D LL r CD [y M j�(fj LD I- C4 O W (lS N {.} Ln Mi ZZr"i d) (jLL o >uj it1 iR UJ Nt LU U7 n yrs LU z fl% } LLJ U) z 2 C7 LU UJ f ' ! A 1 1 m LLJ � ir r r LLQL LU Z = :3 0 � LL �• o 0 a LLC cm 0 u +[ LO 3 o — H y LL z i is w LU0 z LL! mLU Z 4 w sn 0 U) LL z m a = W LL z UJ U} z Z LL z M z *.+ LU LU z W Z m LLI C'1 CITY OF CHUBEU K, IDAHO BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 _ Budgeted Amounts Variance Actual Positrve Original Final Amounts (Negative) Resources General property taxes and sales tax $ 15,000 $ 15.000 5 - (15,000) intwest income 11,400 11,400 3,716 (8,184) Donations 80,000 80,DDD 6,120 (73,880) Other resources 40,500 40,500 7,929 (32,571) Amounts available for appropriations 146.900 146,900 17,285 (129,635) Charges to appropriations Street guarantee Bind 15,500 15,500 w 15,800 General LID fund 3,600 3,6DO - 3,600 Juvenile referral fund 500 600 - 500 Court fund 42,100 42,100 857 41,243 Rmd projects fund 1,204 1,200 - 1,240 Parks fund 84,000 84,000 84,OOQ Total charges to appropriations 146,800 146,940 857 148,043 NET CHANGE IN FUND BALANCE - - 16,408 16,408 BEGINNING FUND BALANCE - - 513,032 613.032 ENDING FUND BALANCE - $ - $25,440 $ 879,440 33 See accompanying notes to financial statements DFATOIN & 1-;i7AiPAKV, CHARTERED OMPLIANCE AND SINGLE AUDIT SECTION 34 DEATON dot COMPANY. CHARTF.RIED DeaUlu & 0 kmpany, Chartered Ccrtifk:d Public Accnunrants 215 NuAll 9ll1, SuilL' A Pocaie.1lei, TTS 91201 5 2 78 (208) 232 5875 wmv-nr I.bh., `,xICW ad Ccrlifled rhblic Accnwxanv NrmPem nra,vpei.�nh<lir!gt<JCcr1Med Fvblic Acca amt REPCRT ON INTERNAL 00NTROL OYER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PEnrORME0 IN ACCORDANCE WITH GOVERNMENT AUDIVA;6 ST-ANDAROS To the City Grauncil City of Chubb uck We hava audited the finanoi2l statements of Ura gavarnmental activities, the busFmess-type activities, the aggregate discretely presented companenet units, each major fund, and the aggregate rernaining fund information of City of Chubbuck as of end for the years ended Septernber 30. 2011 and 201D, which collectively comprise the City of Chubbuck's basic financia.1 statements ar}d have issued our report thereon darted May 11, 2012. We conducted our audit In accordance with auditing standards genarally accepted in the United States of America and the standards applicable to financial audita contained in Government Pwditing Standards, issued by the Comptroller Genefaf of the United Mates. internal Control Qv r Fln n In planning and Pei -forming aur audit, we considered the City of Chubbuck's internal control over financial repordrlg as a basis for designing our auditing procedures far the purpose of expressing our opinions on the financial statements, but not for" purpose of expressing an opinion on the effectiveness of the pity of Chubbuck's intsmal control aver rrnanciat reporting. Accordingly, we do not express an opinlon on the effectiveness of the City of Chubbuck s internal control over financial raparting. A deficient+ in internal control exists when the design ar operation of a control does not allow management or eamployeea, in the normal course of performing their assigned iunctlons, to prevent or detect and correct miastaternersts on a timely balls. A matedal weakness is a deflclency, or a combination of deft❑ranges, is internal control Such that there is a reasonable passibility that a material misstatement ref the entrty's financial statements will not be pfevented, or dateuted and corrected on a timely basis. Our consideration of internal control over financial reporting was for the ilmlted purpose described in the First paragraph of this section and was not #esigned to identify all deficiencies in internal control aver fFnunriai reporting that might be deficiencies, significant deficiencies, or material weakneasea. We did not identify any deficiencies in internal contral over financial reporting that we consider to be material weaknesses, as defined above. However, we identified oertaln deficlencies (2011-1 and 2011-2) in Internal Control over financial reporting, described In the accompanying schedule of findings and questioned mats that we oonsIder to be significant defidendes in intomal control over financier reporting. A significant deficiency is a deficiency, of a combination pt deficiencies, in iniarnar control that is less severe than a materiel weakness, yst important enough to merit attention by those charged with gavefnance, Com pjiange and Other Matters As part of tkbtalning reasonable aasurance about whether Clky of Chubbuck"s financial statements are free of material misstatement, we performed testa 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, dad accordingly, we do rant express such an opinion. The results of our teats disclosed no In Stances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we re ported to management of City of Chubbuck, in a separate letter dated May 11, 2012. This report is intended for the information and use of management_ City Council. and tederal awarding egenctes. However, this report is a matter of public. record and its dilitrlbuilon is not limited. Pocatello, Idaho May 11, 2012 Deatiin & 0 kmVany, Chartered Ck rtifiud Pubhe Accolinianis 215 T\UFLI1 901. buitc A Pocarelfn, TF) 9201-5278 girl$) 2?" 58'5 Momkrn if .r rrrlifrJ Nblic AccnuaLms \ir..nhrr; of -%m rk�n InAlr u^ nr F niiko Nblic Accn1'mnl, INDEPENDE=NT AUDITOR'S REPORT ON COMP L.IANCE WITH REQ U;IREi IF -NTS THAT COULD HAVE A f]IRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMRt_IAI ICE fN ACCORDANCE WiTH OMB CIRCULAR A-1 33 To they Olty Council City of Chubbuck We have audited City of ChubbuCk's compliance with the types of rpmpllance requirements described in the OMB Circular A-133 Compliance Supplement that Could have a direct and rncte6ell effect an each al City of Chubbusk's major federal "rams for the years ended September 30, 2011 and 2010- city Of ChubbuCk'S major federal prograrrks are identified in the summary of audltor's results 6ettlon nt the accompanying schedule of findings and questioned dints. Compliance with the requirements of laws, regulations. contracts, and grants applicable fa each of 46 major federal programs is the responsibility of City of Chubbuck's managemerrt. Our responsibility ig to expms an opinion on City of Chubbuck's Wrnpllarice based on QUF audit, We Goritluded our audit of compliance in adoordande with auditing 6.tandards generally aoceptod in the Urdled Slates DF America, the standards applicable to financia l audits contained in Gmqwmmont Arrdidng SMTKfands. issued by the Comptroller ner2i of the United Stoles; and OMB Circular A-133, Atmku of States, Local Govemment; arrd NorrPrmW 4rgarhJzablo-ns. Those standards grid OMB Circular A-133 require thal we plan and perform the audil to Obtain remnabte assurance about whether rwn=nplianre with the types of compliance requiremonts referred to obuve that could have a dlred and material effect on a "or federal program occurred. An audit includes examinIng, on a tact WSIG. evidence abcvt City of Chutbuck's compliance with those requ6remeni5 and performing such order proaedwes las we considered necessary In the C$Curnstances. We boliewe that our audit provides a reasamabie basis for our opinlon. Our audit does not provido a Ieg21 deterrninalian of City of Chubhuck's compliance with those requirements. In our opinion, City of Chubbuok, oomplied, in all material respect$. with the oaanpiiance requirements referred to above that could have a direct 2n4 material effect on each df its major federal programs for the years ended September 30, 2011 and 2010, Interrenal ConttoI over Onmplionce Management of City of Chixbbuck. is responsible for estobfishing and maintaining affedive intemal control over GOrhpliance with the re virements of laws, ragulatlons, GoMraal&, and grards applicable to federal programs. In planning and performing our audit, we cnnsldered City of CWbbuok's internal control over campliancs wlih the requirements that Gould have a direct and material ef{eal On a major federal program to dalermine the auditing procedures for the purpose of expressing our opinlon on cornpilarm and to lest and report on internal oontrel Omer compliance in accordanca with OMB CIrGUlar A-133, pl,rt not far the purpose cf expressing an opInlan on the effectiveness of intemal control parer opmpliance. Aocardingty, we dp not express an Opinion on the effWive tress of City of C h ubbudr's intemal central over compliance. A deficiency rri intemal oonbof aver oOrnAance exisis whw the design or MeraGpn of a control over Compliance does not allow m anagemenl lir employees, in the normal (Ourae Of performing their assigned functions, to prevent, or deleot and c*rracA. noncompliance wilh a type of compliance reglilremerli of a federar program on a timely basis. A maie:naf weakness on irrlernaf contra{ aver corrtpllame is a defickmy, or wrobinalwn of deficiencies, in internal control ovbr compliance, such that there is a reasonable p9s9abrlity Thai material noncompliance with a typo of conipiiarice requirement of a faderol PnOgram will nal be prevented, or deti9cted and Corrected, on a timely basis. Our consideratlpn Of lntema I oo n1tM1 over financial re porting was for the limited purpose described in the first paragraph of this bedion and wag not designed to identify all deflcioncles in intemal control Over financial reportlflg that might be deficiencies, significant deficiencies, or malerlal weaknosses, We did not idenlify tiny deficiencies in Inlemal Control over finarldal reporting that we WilSidef to be maleFial weaknesses, as defined above. However, we identified cerioin deficiencies (2011-2) in intemal conlrol over lknancilsl reporting, descr Wd in the 2ccompanyirV schedule of flndings and guestioned our that vie oonsider to be significsnl defickHwiss in iniamaf conlrol aver flnantEaI reporting. A significant &frcienLy is a deficiency, or a f mWnatlon of defialenaies, in internal control that is less severe than a material weakness, yet Important enough to I'rrBr11 attention by thane charged with governance. City of Chubbuck's responses to the finding3 idenirfied in aur audit are descilbed In the accpmpatrOn r dmedule of findings and questioned 00sts, We did not audit Clly of Chubbuck's responses and, a=rdiqlyr we exPresa ria apinion on the responses. 1 his report is intanded solely for the Uifdrmatlorr and use of managament, Cily Gouridl, otriers wilhin the enlity, federal awarding agencies. and pass-through entities and is not inlondod la be and should nO be used by anyone other than (hese Specified parties, PoCatella. Idaho may 11, 2412 w i 0 0 w m w r w z w MC w w T N Ix O LL r Ln Cf) 0 aeN N 0 0 r o � � o CL r - M w q r Ln LL z t o A C) 0 z 5 zi 0 u.� LLI E2 0 0 w {3 H rh LL 0 w IOL LL) to w O� 7� W 000co 0 aeN N 0 0 r o � � o • a r - Q q o cO oo cp - u3 1, -L 9 $o�r'r`c'_ LL z t o A C) 0 z 5 zi 0 u.� LLI E2 0 0 w {3 H rh LL 0 w IOL LL) to w O� 7� W 000co 0 aeN N 0 0 r m�u} a rr- 0mto • a r - Q q o cO oo cp - u3 1, -L 9 $o�r'r`c'_ I r v [*J W 4f} F - [h C, � r m ¢ m I-� en qp ao s+! Oi rv_ 0 °ALO o v us a R. as � o � oar 3 trvs`' a ri r x ori Ld C4 a� a+� t co Ln 0 ko in ul o av 1 w w Q LL 0 h - z LU W J W LLL O N LL! CL H So 79 cs r fi • a a i i co Ln 0 ko in ul o av 1 w w Q LL 0 h - z LU W J W LLL O N LL! CL H So 79 cs CITY OF CHUBBUCK, IDAHO SCHEDULE OF FINDINGS AND QUESTIONED COSTS {PAGE 'I OF 2} FOR THE YEAR ENDED SEPTEMBER 30, 2011 SUMMARY OF AIIJDl.T RESULTS 1. The auditor's report expresses an unqualified opinlon on the fFnancial statements of City of Chubbuck. 2, No reportable conditions disclosed during the audit of the financial statements are reported in the Independent Auditor's Report. . No instances of noncompliance materiae to the financial statements of City of hubbuck were disclosed during the audit. 4. Reportable conddlons relating to the audit of major federal award programs included significant deficiencies due to a lack of controls over asset additions and deletions reporting and the Lack of controls over notes and lease liability reporting_ These significant deficiencies are reported In the Report on Compliance with Requirements Applicable to Each Major Program and on Internal Gvntrol f7verCompliance in accordance with OMB CircularA-133. 5. The Auditor's report on compliance for the major federal award programs for City of Chubbuck expresses an unqualified opinion on all rn ajor fede ral prograrr}s, 6, Audit fin ding 9 relative to major federal programs for City of Chubbuck are reported in this Schedule. 7. The programs tested as major programs Included Department of Environmental Quality, CFDA #66- 456 & The threshold for distinguishing Types A and B programs was $300,000, 9_ City of Chubbuck was considered a high-risk auditee_ FINDINGS — FINANCIAL STATEMIENT AUDIT 2011-1 Criteria - Accounting pohlcies require all cash accounts be recorded on the City's general ledger. The City also has en unwfiitten expectation to oomplets cash reconciliations prior to receiving the next month's bank statements. ondfflon - A new bank account that was opened and funded was not included in tha general ledger. Also the expectation of cash rownciIlatlons was not met_ The cash reconciliations were delinquent at EfWt - The City's general ledger did not accurately reflect the cash balance at yearend. Response - Management believes the above significant deficiency is a weakness In Internal controls and has agreed to review their policy to insure the recording and reporting of all cash a000unts are complete and reconciled within a timely maner. Recorrmerrde on - We recommend the City review its policies and procedures to insure all bank accounts are recorded on the City's general ledger and that cash reconciliations are performed within a timely manner. 38 DEAT N & wNfPr1N1", CHARTEREP CITY OF CHUBSUCK, IDAHO SCHEDULE OF FINDINGS AND OUESTI 0NLD CDSTS {PAGE 2 OF 2} FOR THE YEAR ENDED SEPTEMBER 30, 201'1 FINDING S — FINANCIAL STATEMENT AUDIT ( ONTINUED) 2011-2 Criteria - Accounting policies require all pays bles incurred during the period, f6r proprietary funds, be recorded on the City's genefai ledger and that payments for these liabilitles show as a decrease in liabilities, onditbn - The City had entered into a bond agreement for the purchase of water rights, however, neither the assets nor liabilities were recorded on the City's general ledger, We also found that the City expensed payments on notes payable that were recorded in proprietary funds_ Effect - The City's general ledger did not accurately reflect the bond payable and assets and liahilftes were understated at yearend, Respunse - Management believes the above significant deficiency is a weakness in intemal controls and has agreed to review its policles and procedures to insure all payables are recorded on the City's general [edger and that payments to habilItfes decrease the liabilities and are not reported as an expense. Recom endatrm - We recommend the City review its policies and Procedures to insure all payables are recorded on the City's general ledger and that pigyrnents to liabilities decrease the liabilities and gre not reported as an expense- FINDINGS xpense_FINDIN S AND QUESTIONED COSTS — Iv "OR FEDERAL AWARD PROGRAM AUDIT Department of Environmental OualFty► 2011-2 Critstie - Accounting palicles require all paystAes incurred during the period, for proprietary funds, be recorded on the City's general ledger and that payments for these liabilftles show as a decrease in liabilities, Condition - The City had entered into a bond agreement for the purchase of water rights, however, neither the assets nor liabillties were recorded on the City's general ledger, We a150 found that the City expensed payrnents on notes payable that were recorded in proprietary funds_ Effect - The City's general ledger did not accurately reflect the bond payable and assets and liabilites were understated at yearend. Response - Management believes the above significant deficiency is a weakness in internal con#vols and has agreed to review its policies and procedures to insure all payables are recorded on the City's general ledger and that payments to liabilities decrease the Ifabliities and are not reported as an expense. Recommendation - We recornmend the City review its policies and procedures to insure all payables are recorded on the City's general ledger and that payments to liab[lities decrease the liabiJides and are not reported as an expense, 39 CITY OF CHUBBUCK, IDAHO SUMMARY SCHEDULE OF PRIOR AUDIT f INDINOS FOR THE YEAER ENDED SEPTEMBER 30, 2010 FINDINGS — FINANCIAL STATEMENT AUDIT 2010-1 The City's controls over recognizing asset additions and deletions did nOt provide ail additions of assets in the governmental and proprietary funds_ The City's policy requires all goods received with a useful fife of more than one year and a historical cost of $11,000 or greeter to be capitalized. Management Response; Management believes the above significant deficiency is a weakness in internal controls and has agreed to review their policy to insure the recording and reporting of all Capital assets, 2010-2 The City's controls over recording and reporting all liabilities did not provide a proper classification of monies received. Monies received through note agreements or capital leases within business -type entitles are required to be reported on the balance sheet as notes and/or lease {payables. Monies received in the proprietary funds as note payables should not be reported as revenues or netted with expenses. Management Response; Management believes the above significant deficiency is a weakness in internal controls and has agreed to review their policy to insure the recording and reporting of ail liabilities, 1FINDINOS AND QUESTIONED COSTS — MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Environmental Quality 2010-1 The City's controls over recognizing asset additions and deletions did not provide all additions of assets in the governmental and proprietary fonds. The City's policy requires all goods received with a useful life of more than one year and a historical oust of $19,000 or greater to be capitalized. Management Response= Nlanagemeflt believes the above significant deficiency is a weakness in internal controls and has agreed to review their policy to insure the recording and reporting of all capital assets_ 2010-2 The City's controls over recording and repeating all liabilities did not provide a proper classirication of monies received. Monies received through note agreements or capltal leases within business -type entities are required to be reported on the balance sheet as notes and/or lease payables. Monies received in the proprietary funds as note payables should not be reported as revenues or netted with expenses. Management Response. Management believes the above significant deficiency is a weakness in internal controls and has agreed to review their policy to Insure the recording and reporting of all liabilities. 40