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HomeMy WebLinkAbout2013CITY OF CHUBBUCK, IDAHO AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2013 AND 2012 Certified Public Accountants Management Discussion and Analysis CITY OF CHUBBUCK, IDAHO Statements of Net Position 19 ANNUAL FINANCIAL REPORT 20 Balance Sheets - Governmental Funds SEPTEMBER 30, 2013 AND 2012 Statement of Fiduciary Net Position - Recreational Program Fund 28 TABLE OF CONTENTS 39 Notes to Financial Statements 30-43 Page Title Page Budgetary Comparison Schedule - General Fund 1 Table of Contents 46 2 Introductory Section Combining Balance Sheet - Nonmajor Governmental Funds 48 Letter of Transmittal 3-5 List of Principal Officials Budgetary Comparison Schedule - Nonmajor Governmental Funds 6 Organizational Chart 51 7 Financial Section Matters Based on an Audit of Financial Statements Performed in Accordance with Independent Auditor's Report 52-53 8-9 Management Discussion and Analysis 10-18 Statements of Net Position 19 Statements of Activities 20 Balance Sheets - Governmental Funds 21 Statements of revenues, Expenditures, and Changes in Fund Balances - Govemmental Funds 22-23 Statements of Net Position - Proprietary Funds 24 Statements of Revenues, Expenses, and Changes In Net Position - Proprietary Funds 25 Statements of Cash Flows - Proprietary Funds 26-27 Statement of Fiduciary Net Position - Recreational Program Fund 28 Statement of Changes in Fiduciary Net Position - Recreational Program Fund 39 Notes to Financial Statements 30-43 Required Supplementary Information 44 Budgetary Comparison Schedule - General Fund 45 Notes to Required Supplementary Information 46 Other Supplementary Information 47 Combining Balance Sheet - Nonmajor Governmental Funds 48 Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds 49 Budgetary Comparison Schedule - Nonmajor Governmental Funds 50 Compliance and Single Audit Section 51 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 52-53 Independent Auditor's Report on Compliance with Requirements that Could have a Direct and Material Effect on each Major Program and on Internal control over compliance in Accordance with OMB Circular A-1 33 54-55 Schedule of Expenditures of Federal Awards 56 Schedule of Findings and Questioned Costs 57 Summary Schedule of Prior Audit Findings 58 DEATON & COMPANY, CHARTERED i �iwMwMrr ' a[11 01 mill 1 1 1 www.citvofchubbuc:k.us 5160 Yellowstone, PO Box 5604 Chubbuck, ID 83202 (208) 237-2400 phone (208) 238-2371 fax MAYOR Kevin England March 30, 2014 COUNCIL MEMBERS Kermit Morrison Ryan Lewis Josh Ellis Brent Marshall The Honorable Mayor Kevin England, Members of the City Council, and Citizens of the City of Chubbuck: Idaho State Law requires that all general-purpose local governments with an annual budget that exceeds two hundred fifty thousand dollars submit copies of their audited financial statements to the legislative council. The statements must be presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS) by a firm of licensed certified public accountants. Pursuant to those requirements, we hereby issue the comprehensive annual financial report for the City of Chubbuck for the fiscal year ended September 30, 2013. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive frame -work of internal control that is has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Deaton & Company, Chartered, a firm of licensed certified public accountants has issued an unqualified opinion on the City of Chubbuck's financial statements for the year ended September 30, 2013. The independent auditor's report is located at the front of the financial section of this report. Management's Discussion and Analysis (MD &A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complement this letter of transmittal and should be read in conjunction with it. Profile of the City of Chubbuck The City of Chubbuck (population 14,156) was incorporated in 1450. Chubbuck is located in the southeastern portion of the State of Idaho. Chubbuck has a land area of 4.19 square miles and is bordered by the City of Pocatello, with its own population of 54,810. The City is located in Bannock County with a 2013 estimate census population of 83,277. The City is empowered to levy property taxes on both real and personal property within the city limits, It also is empowered by state statue to extend its corporate limits by annexation, which it had done from time to time. The City of Chubbuck operates under the Council -Mayor form of government. Policy-making and legislative authority are vested in a governing council (City Council) consisting of the Mayor and four other members, all elected on a non-partisan basis. The Council is responsible for passing ordinances, adopting budget, appointing committees, approval of internal control framework and hiring city management. The Mayor acts as the Chief Executive Officer and oversees the day-to-day operations of the City. The Mayor and Council members are elected at large for 4 -year terms, with two of the Council members standing for election every two years. The City of Chubbuck provides a full range of services. These services include Public Safety (police, fire, animal control, and building inspection); Environmental Health (sanitation, water, waste water treatment and storm water management); Transportation (street & highway maintenance and traffic engineering); Recreational (parks and recreation); Neighborhood Quality (engineering, planning and development, community services) and Administration (mayor/council, finance, elections, human resources, legal risk management, and information technology). In addition to general government activities, the Mayor and City Council exercise, or have the ability to exercise, oversight of the Chubbuck Development Authority, a legally separate corporation. Therefore, its activities are included as a separate component unit in the reporting entity. The annual budget serves as the foundation for the City of Chubbuck's financial planning and control. After reviewing service levels from the previous fiscal year, the Council analyzes draft budget requests during May. The Chief Financial Officer and Mayor are responsible for preparing a draft budget for the Council. The budget is prepared by fund, function and activity, and includes information on the past year, current year estimates and requested appropriation for the next fiscal year. Prior to August 1, the City's Chief Financial Officer and the Mayor submit the proposed budget to the City Council for review. The City Council holds public hearings and may add to, subtract from or change the proposed budget, but may not change the form of the budget. Prior to August 30, the budget is legally enacted through passage of the annual appropriation ordinance (not in excess of the proposed budget) by the City Council. Expenditures may not exceed budgeted appropriations at the fund level. City management can legally amend or transfer appropriations within individual funds but not between funds which requires the approval of the City Council in a budget amendment, which follows a public notice, public hearing and amended ordinances adoption process similar to the adoption of the original budget. Budgets are integrated into the accounting system to facilitate management control during the year. The Council reviews service levels for all departments prior to entertaining budget requests for the next fiscal year. Revenue projections receive equal attention and the Council makes budget decisions 4 Chubbuck has a land area of 4.19 square miles and is bordered by the City of Pocatello, with its own population of 54,810. The City is located in Bannock County with a 2013 estimate census population of 83,277. The City is empowered to levy property taxes on both real and personal property within the city limits, It also is empowered by state statue to extend its corporate limits by annexation, which it had done from time to time. The City of Chubbuck operates under the Council -Mayor form of government. Policy-making and legislative authority are vested in a governing council (City Council) consisting of the Mayor and four other members, all elected on a non-partisan basis. The Council is responsible for passing ordinances, adopting budget, appointing committees, approval of internal control framework and hiring city management. The Mayor acts as the Chief Executive Officer and oversees the day-to-day operations of the City. The Mayor and Council members are elected at large for 4 -year terms, with two of the Council members standing for election every two years. The City of Chubbuck provides a full range of services. These services include Public Safety (police, fire, animal control, and building inspection); Environmental Health (sanitation, water, waste water treatment and storm water management); Transportation (street & highway maintenance and traffic engineering); Recreational (parks and recreation); Neighborhood Quality (engineering, planning and development, community services) and Administration (mayor/council, finance, elections, human resources, legal risk management, and information technology). In addition to general government activities, the Mayor and City Council exercise, or have the ability to exercise, oversight of the Chubbuck Development Authority, a legally separate corporation. Therefore, its activities are included as a separate component unit in the reporting entity. The annual budget serves as the foundation for the City of Chubbuck's financial planning and control. After reviewing service levels from the previous fiscal year, the Council analyzes draft budget requests during May. The Chief Financial Officer and Mayor are responsible for preparing a draft budget for the Council. The budget is prepared by fund, function and activity, and includes information on the past year, current year estimates and requested appropriation for the next fiscal year. Prior to August 1, the City's Chief Financial Officer and the Mayor submit the proposed budget to the City Council for review. The City Council holds public hearings and may add to, subtract from or change the proposed budget, but may not change the form of the budget. Prior to August 30, the budget is legally enacted through passage of the annual appropriation ordinance (not in excess of the proposed budget) by the City Council. Expenditures may not exceed budgeted appropriations at the fund level. City management can legally amend or transfer appropriations within individual funds but not between funds which requires the approval of the City Council in a budget amendment, which follows a public notice, public hearing and amended ordinances adoption process similar to the adoption of the original budget. Budgets are integrated into the accounting system to facilitate management control during the year. The Council reviews service levels for all departments prior to entertaining budget requests for the next fiscal year. Revenue projections receive equal attention and the Council makes budget decisions sufficient to balance the budget against projected revenues. Cash balances and budget to actual trends are monitored monthly. The preparation of the comprehensive annual financial report was made possible by the dedicated service of the entire staff of the City and, in particular, the Clerk's Office. Each member of these departments has our sincere appreciation for the contributions made in the preparation of this project. Credit also must be given to the Mayor and the City Council for their support for maintaining high standards of professionalism in the management of the City of Chubbuck's finances. Respectfully submitted March 28, 2014 Rich Morg City Clerk � �'fl►1l!'!'r Daniel Christensen Finance Clerk CITY OF CHUBBUCK, IDAHO List of Principal Officials SEPTEMBER 30, 2013 Title Name Elected Officials Mayor Kevin England Council President Ryan Lewis Council Member Kermit Morrison Council Member Josh Ellis Council Member Brent Marshall City Officials City Attorney Tom Holmes Public Works Director Steven Smart Public Works Superintendent Bryan Hall City Clerk/Treasurer Rich Morgan Human Resource Officer Eric Jablonski Financial Officer Dan Christensen City Planner Paul Andrus Police Chief Randy Severe Computer Information Systems Andy Despain Parks & Recreation Bill Guinn Fire Chief Eric King 2 CITY OF CHUBBUCK ORGANIZATION CHART Deaton & Company, Chartered _ - Certified Public Accountants 215 North 9th, Suite AFBI Pocatello, Idaho 83201-5278 (208) 232-5825 Members of Idaho Society of Certified PublicAccountanr Memhers of American Institute of Certified Public AccuuntunLv INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Chubbuck, Idaho Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Chubbuck as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, the aggregate remaining fund information, and the respective budgetary comparison for the General Fund, the Street Fund and the other major special revenue funds of the City of Chubbuck, as of September 30, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and other required supplemental information on pages 10-18 and 45-46 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information 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 introductory section, combining and individual nonmajor fund financial statements and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole. The prior year summarized comparative information has been derived from the City's 2012 audited financial statements and, in our report dated March 29, 2013, we expressed unqualified opinions on the respective financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information. This information is consistent, in all material respects, with the audited financial statements from which it has been derived. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 28, 2014, on our consideration of the City of Chubbuck's intemal 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Chubbuck's internal control over financial reporting and compliance. Chubbuck, Idaho March 28, 2014 DEATON & COMPANY, CHARTERED City of Chubbuck Management's Discussion and Analysis For the Year Ended September 30, 2013 As management of the City of Chubbuck, we offer readers of the City of Chubbuck's financial statements this narrative overview and analysis of the financial activities for the fiscal year ended September 30, 2013. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. Financial Highlights • The assets of the City of Chubbuck exceed its liabilities at the close of the most recent fiscal year by $33,378,845 (net position). • At the end of the current fiscal year, unassigned fund balances for the general fund was $2,708,737 or 40 percent of total general fund expenditures. • The governments net position increased by $6,161,882. Approximately half of this increase, $2,515,852, is attributed to capital contributions from the Chubbuck Development Authority. • In the City's business -type activities, operating revenues increased by $177,093. And operating expenses increased by $342,733. These increases are due to a combination of changes in services offered, increases in services used and increases in operating costs. • During the current fiscal year, City of Chubbuck's debt had an increase of $17,206,506. (Including compensated absences). This was primarily due to the CIAWWC Authority's advance payable of $18,179,220 blended into governmental activities. • The Chubbuck Impact Area Waste Water Collection Authority has been blended with the governmental activities in the primary government do to the implementation of GASB Statement No. 61. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Chubbuck's basic financial statements. The City's basic financial statements are comprised of three components: 1) governmental -wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial - statements themselves. Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private -sector business. The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City's is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the fiscal year. All changes in the assets are reported when the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported 10 in this statement for some items that will only result in cash flows in the future fiscal periods ( e.g. uncollected taxes and earned but unused compensated absences). Both of the government -wide financial statements distinguish functions of the City of Chubbuck that are principally supported by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Chubbuck include general government and administration, public safety, parks, and highway streets and roads. The business -type activities of the City include water and sewer, and sanitation operations. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated from specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. All of the funds of the City of Chubbuck can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on current sources and uses of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluation a government's near-term financing equipments. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Chubbuck maintains seven individual governmental funds. Information's is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, which is the City's only major governmental fund. Data from the other six funds are combined into a single, aggregated presentation. Individual fund date for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Chubbuck adopts an annual appropriated budget of its general fund, major funds, and its nonmajor funds. Budgetary comparison schedules have been provided for these funds to demonstrate compliance with these budgets. The basic governmental fund financial statements may be found on pages 20-22 of this report. Proprietary Funds. The City of Chubbuck maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Chubbuck uses enterprise funds to account for its Water department, Waste Water department, and Sanitation department Internal service funds are an accounting device used to accumulate 11 and allocate costs internally among the City of Chubbuck's various functions. The City of Chubbuck uses an internal service fund to account for its central garage operations. Because this service predominantly benefits business type functions rather than the governmental type functions, it has been included within the business type activities in the financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements include the operational and financial date from both the types of funds. The Water, Sewer, and Sanitation funds are major funds and their information is shown in separate columns. The internal service fund and the non -major enterprise funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the non -major enterprise fund is provided in the form of coming in statements elsewhere in this report. The City of Chubbuck adopts an annual appropriated budget for its proprietary funds. However, the City does not provide budgetary comparison schedules for proprietary funds. The basic proprietary fund financial statements may be found on pages 23-26 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of Chubbuck's own programs. The accounting used for fiduciary funds is similar to proprietary funds. The City of Chubbuck adopts an annual appropriated budget for its fiduciary fund. However, the City does not provide budgetary comparison schedules for fiduciary funds. The fiduciary fund financial statements can be found on pages 27-28 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements may be found on pages 29-42 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's budgeted expense and revenues versus actual expenses and revenues. The combining statement referred to earlier in connection with non -major governmental funds is presented following the required supplementary information on budget comparison. Government -wide Financial Analysis As noted earlier, net position may serve over time as useful indicator of government's financial position. In the case of the City of Chubbuck, assets exceeded liabilities by $33,378,845 as of September 30, 2013. The largest portion of the City of Chubbuck's net assets (35%) reflects its investments in capital assets (e.g., land, building, equipment, improvements, contraction in progress and infrastructure), less any debt used to acquire those assets that is still outstanding. 12 The City uses these capital assets to provide service to citizens; consequently these assets are not available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Below is a summary of the City of Chubbuck's Net Position statement. City of Chubbuck's Net Position An additional portion of the City of Chubbuck's net assets $165,781 represent resources that are subject to external restriction on how they may be used. The remaining balance of unrestricted net assets ($17,599,198) may be used to meet the governments' on going obligation to citizens and creditors. As of September 30, 2013, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business - type activities. At the end of the current fiscal year, 98 percent of the liabilities are made up of noncurrent liabilities. This primarily represents notes payable and bonds discussed in note 9 pages 38-41 of the notes to financial statements. Governmental activities. Governmental activities' key elements are broken down in the following charts. Government activities increased net position by $3,137,275 and business -type activates increased net position by $3,024,608, The City of Chubbuck's direct charges to users of governmental services made up $399,850. These charges are for park rentals, building permits and other fees related to public safety and administration. Public safety, the largest portion in fiscal year 2013, includes the fire department and police department and accounts for $4,096,230 in expenditures. The second largest portion of expenditures is the street department which accounts for $1,286,377. General government accounts for $352,910 in expenditures. 13 Governments l Activities &W nass Activities Tots f 2013 2012 2013 2012 2013 2012 AUM tunentand ottierassets S 3,592,593 S 3373,762 5 31,553,509 S 30259197 5 35156,102 i $ 33642,899. capitalassets 2.8,950,913 7,706,751 ! 8,914,109 $,246,564 37,865,022: 15,952,915 Total assets 32,543,5D6 11,079,953 -. 40,477,61a 38,515,861 73,021,124 49,595,814 LMSMITIB Lona -term) iabilitesovtstandina 38,551,345 261,740 19,719,498 21,055,376 38,284843 21,317,116 Other liabilites 246,445 215,256 1114991( 903,401 1,361,436 1,118,857 Totsllisbilites 18,797,790 476,995 20,844,489 31,958,777 39,642,279 22,435,773 NU POSMINI Invested Incaptial assets, netts related debt 10,153,123 : 7,706,251 5,460,149 4,402,647 15,613,866 12,108,898 Restricted - - 155,7$1 169A81 165,781 169,061 Unrastrictad 31592,593 2,896,706 14,006,605 11,985,355 17,549,198 , 14,882,062 Toto lnot pasktion 5 13,745,716 S 14502,957 ' S 19,633,129 Is 16,557,084 5 33,379,845 S 27,166,041 An additional portion of the City of Chubbuck's net assets $165,781 represent resources that are subject to external restriction on how they may be used. The remaining balance of unrestricted net assets ($17,599,198) may be used to meet the governments' on going obligation to citizens and creditors. As of September 30, 2013, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business - type activities. At the end of the current fiscal year, 98 percent of the liabilities are made up of noncurrent liabilities. This primarily represents notes payable and bonds discussed in note 9 pages 38-41 of the notes to financial statements. Governmental activities. Governmental activities' key elements are broken down in the following charts. Government activities increased net position by $3,137,275 and business -type activates increased net position by $3,024,608, The City of Chubbuck's direct charges to users of governmental services made up $399,850. These charges are for park rentals, building permits and other fees related to public safety and administration. Public safety, the largest portion in fiscal year 2013, includes the fire department and police department and accounts for $4,096,230 in expenditures. The second largest portion of expenditures is the street department which accounts for $1,286,377. General government accounts for $352,910 in expenditures. 13 Below is summary of the City of Chubbuck's Changes in Net Position. City of Chubbuck's Changes in Net Position Oorernm.rrtta I A[tiTl till BU3Iltay3 ACt Wkias Totai 2013 - 2012 2013 2012. 2.013 2012 REVMUES Projram ravanuas: Ghia rias for aarvlaRl S 399,650 = $ 350,942 5 7,414,671 5 7,240,114 s _7,614,721 $ _ _ 7,591,211 Operstlossranr3■ndconrrlbuvp s 128,823 _43,612 128,618 43,612 6enaral rsvanuc Propert"X*s and Sala1 rax 4 982 426 4,594,553 - - 4,982 426 4,594,553 Otfa4r uzal _ 1233,673 11161,901 - - - 1,238,673 1,161,401 �Otlf4r 184221 72,506 3,044 42921 ]87265 115,427 capital Contrl"tions .,.. 2294772 2663.248: 261,081 1,125220 2,515853 _..,_ 3,606,468 CIAWWC AutbvrltY Total Reranws _ 5,41. 6,769 8,906 812 7,676,996 ; 8,408,260 17,095,756 17.315.072 Eamtsm 1 Gan and 6pvammant -... 352,910 235,127 - 352,910 _235,127 Pubik"fory 4,086,230 3,8&1,651 _-..1,245,664- - _- _ 4,096,230 3,864,651 '6uildin�6lnspacelon and itraat.... - 1.786.377. -°.-..- 1,286,377 _. ...1,245,864 iPHksaral rats atlpn 494,692 534,574. -.,. -. - 494,692 534,574 i Haa Itn, vra Mara, a nd oxhar 44.702 ",575, 44,702 4;575 - �Water _ - ..1.466,297 .1.398,887_._. _.... 1.46,297..__ �se-V _ _ - 2,072,020 .1,116,071 _. 1.847,034. 2,072,020 1,847.034 �sootagon _ _ - _ - -.. 1.132,300 -.. 1.146,071.__.... ],132.300 j C1AW WC Auth *Ott 4574: - ITOM. la�lnsas 6,279,485 5,448„793 4,654,388 4,376,221 10.933,673-x,327013 rf4c11Ek% lM MEF ASSM 3,137,27F, 2 956,021• 3,024,606 4 030 039 6,1b],883 ' 6,966 060 { MfrPOSfrgNtte6irntint,_ ,,.., _.. SO 606,M2 T 533 353 -. 16,575,046 ,12,642,655 _. ..(15,611)' 27,163,538. .33,425 20,076,006. Prior Period Adjuatanent -. 111,565 33.4251, 95,974 MET POSMON —M.5 ' 5 13,7454717 S 10,602,987 S 19,633,129 S 26,557,08; S 33,378,646 - S 27,160,040 Revenue by Source - Government Activities 184,221 14 ■C hargesfor servkes 0operating grants and contributions ■ Property taxes and sales tax ■ Othertaxe s ■Other ■ Capital Contributions ■ GIA W WC Authority Expenses and Program Revenues — Governmental Activities 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 ■ Expenses ■ Revenue The majority of the City of Chubbuck's governmental activities' revenue is received from property and sales tax (52 percent). This amount would be 73 percent of the revenue received without this fiscal year's capital contributions from Chubbuck Development Authority. When all taxes are added together, they make up 64 percent of the budget or 92 percent without the current fiscal years' capital contributions from Chubbuck Development Authority. When revenues are compared to expenses, it shows that none of the City of Chubbuck's programs are self supporting. They all require tax support to continue at their current level of service. For the most part, increases in expenses closely paralleled inflation and growth in the demand for services. No significant transaction occurred outside of the Major funds for fiscal year 2013. No significant losses or revenues were received during the year. The major fund in the City is the general fund. Significant transactions within the general fund this year mainly consisted of payments of personnel, law enforcement expenses, fire department expenses, and street maintenance. 15 Business -type activities. Businesses -type activities' key elements are broken down in the following charts. Revenue by Source - Business Type Activities ■Charges for services Mother ■ Capital Contributions Expenses and Program Revenues - Business Type Activities $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Water Sewer Sanitation ■ Revenue ■ Expense • One of the major sources of the City of Chubbuck's business -type activities' revenue is received from charges for services (97 percent). Currently, the City of Chubbuck's business type activities do not use property taxes for any type of funding. • The second major source is capital contributions (3 percent). These contributions were received by water only. • When revenues are compared to expenses, it shows that all of the City of Chubbuck's programs are self-supporting. 16 Financial Analysis of the Government's Funds As noted earlier, the City of Chubbuck uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the City of Chubbuck's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Chubbuck's financing requirements. In particular, unreserved fund balance may serve as a useful measure of the government's net recourses available for spending at the end of the fiscal year. At the end of the current fiscal year the City of Chubbuck's governmental funds reported combined ending fund balances of $3,199,631. Of which $2,708,737 of this total is unassigned fund balance (79 percent). The general fund is the chief operating fund of the City of Chubbuck. In the general fund, the City budgeted for no change in the fund balance. Operating revenues were less than operating expenditures. However, due to other financing sources and uses the net change in the general fund increased $359,907 for fiscal year 2013. As a measure of liquidity, it may be useful to compare both unassigned fund balance and total fund expenditures. Unassigned fund balance represents 39 percent of total general fund expenditures. Proprietary funds. The City of Chubbuck's proprietary fund statements provide the same type of information found in the government -wide financial statements, but in more detail. Unrestricted net positions of the respective proprietary funds are Water: $5,254,169, Sewer: $6,920,562, and Sanitation: $447,193. The water funds had an increase in net assets of $1,348,339; the sewer fund had an increase in net assets of $1,194,174; and the sanitation fund and an increase in net assets of $544,684. General Fund Budgetary Highlights The City made no revisions to the original appropriations approved by the City Council. As stated earlier revenues were less than budgeted and expenses were less than budgeted. This accounts for a $359,907 increase in the general fund balance. The variance in expenditures was due to an increase in expenditures of capital outlays and other operating expenditures in the Fire, Heath and Welfare, and Street departments over budget. Capital Asset and Debt Administration Capital assets. The City of Chubbuck's investment in capital assets for its governmental and business - type activities as of September 30, 2013 amounts to $19,456,892 (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery, equipment, other improvements, and infrastructure. The total increase in the City of Chubbuck's investment in capital assets for the fiscal year was $21,912,107. The increase in assets includes contributions from the Chubbuck Development Authority of $2,515,853 and the CIAWWC Authority's capital assets blended into governmental activities with $18,408,131. 17 City of C, b0bulck"s Capital Ass.ets (net of accumulated depreciation) Additional information on the City of Chubbuck's capital assets can be found in note 8 on page 38 of this report. Long-term debt. At the end of the current fiscal year, the City of Chubbuck had total debt outstanding of $38,280,843. Of this amount, $16,873,075 is comprised of notes to the Department of Environmental Quality for waste water infrastructure. Long-term debt also includes bonds with a remaining balance of $1,705,619 used for purchasing water shares. City of Chubbuck Long Terni Debt Debt Type aovemm enta l Activities Business Acti vibes Water Revenue Bonds Tota l $ 1,830,000 Sewer Revenue Bonds 2013 -... 2012 2013 _.., 2612 2013 2012 Land S 234,319 $ 90,866. 5 709,854 5 709,884,._ . 5 944,173 5 - 800,720 Buildings Imp, 3,248,868 2,854,621 9,335,681 9,056,424 12,584,549 11,911,045 MachireryS Equip. 3,930,204 3,751,745 3,304,571 3,006,025 ; 7,234,775 6,757,771 Infrastructure 3,258,383 3,075,550 - - 3,258,383 -. 3,075,550 Work inProgress 22,801,074 2,327,235: 19,660; 22,801,074 2,340,895 Water Rights 1,&22,508 1,192,442! 1,822.508. 1,192.443 Bond Fees 18,013 18,013 Total 5 33,472,848 5 13,044017 S 15,172,614 S 14,002,419 � S 4$645,462 ; S 25,896.436 Additional information on the City of Chubbuck's capital assets can be found in note 8 on page 38 of this report. Long-term debt. At the end of the current fiscal year, the City of Chubbuck had total debt outstanding of $38,280,843. Of this amount, $16,873,075 is comprised of notes to the Department of Environmental Quality for waste water infrastructure. Long-term debt also includes bonds with a remaining balance of $1,705,619 used for purchasing water shares. City of Chubbuck Long Terni Debt Debt Type _ 2013 Balance 2012 Balance Water Revenue Bonds $ 1,720,000 $ 1,830,000 Sewer Revenue Bonds - - Water- DEQ Loan 251,448 267,790 Sewer - DEQ Loans 16,873,075 17,671,318 Notes Payable Sanitation 1,386,299 1,641,413 Compensated Absences 415,424 „ 410,865 $ 20,646,246: $ 21,821,386 The State of Idaho mandates a general obligation debt limit of 2% of the assessed market value of taxable property within the City boundaries. The City of Chubbuck currently carries a note in the amount of $154,929 as general obligation debt. The limit totaled $8,925,249 on September 30, 2013. The City of Chubbuck's general obligation note above is subject to this limit. Therefore $8,770,320 is available for future general obligation indebtedness. Additional information on the City of Chubbuck's long-term debt can be found in note 9 on pages 38-41 of this report. Request for information The financial report is designed to provide our patrons of the City of Chubbuck and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have question about this report or need any additional financial information, contact the Mayor and City Council at 5602 Yellowstone Ave, Chubbuck, ID 83202, telephone (208)237-2400. 18 CITY OF CHUBBUCK, IDAHO STATEMENTS OF NET POSITION SEPTEMBER 30, 2013 ASSETS Current assets Cash and cash equivalent Property taxes receivable Intergovernmental receivables Other accounts receivable Noncurrent assets Restricted assets Bond reserves Utility deposits Advance to joint venture Capital assets Accumulated depreciation LIABILITIES Current liabilities Accounts payable Accrued payroll Accrued bond interest Current portion compensated absences Current portion of bonds payable Current portion of long-term debt Current portion capital lease obligation Payable from restricted assets - Water deposits Noncurrent liabilities Bonds payable Note payable Accrued compensated absences Advance payable NET POSITION Invested in capital assets, net of related debt Restricted for bond service Unrestricted Governmental Business -type Development Activities Activities Total Authority $ 3,007,750 $ 12,290,425 $ 15,298,175 $ 1,649,558 335,744 - 335,744 91,351 246,240 - 246,240 - 2,859 717,778 720,637 - 3,592,593 13, 008, 203 16, 600, 796 1,740,909 - 165,781 165,781 - - 210,305 210,305 - - 18,179,220 18,179,220 - 33,472,848 15,172,614 48,645,462 - 4,521,935 (6,258,505) (10,780,440) - 28,950,913 27,469,415 56,420,328 - 32,543,506 40,477,618 73,021,124 1,740,909 78,125 167,643 245,768 6,628 79,347 25,081 104,428 - - 5,764 5,764 - 61,234 21,851 83,085 - - 110,000 110,000 - - 574,347 574,347 - 27,739 - 27,739 - - 210,305 210,305 - 246,445 1,114,991 1,361,436 6,628 - 1,705,619 1,705,619 - 127,190 17,936,475 18,063,665 - 244,935 87,404 332,339 - 18,179,220 - 18,179,220 - 18,551,345 19,729,498 38,280,843 -- 18,797,790 20,844,489 39,642,279 6,628 10,153,123 5,460,743 15,613,866 - - 165,781 165,781 - 3,592,593 14,006,605 17, 599,198 1,734,281 $13,745,716 $ 19,633,129 $ 33,378,845 $ 1,734,281 19 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED Functions/Programs Primary Government: Governmental activities: General government Law enforcement Fire control Building inspection Street Parks and recreation Health and welfare Other special revenue funds CIAWWC Authority Business -type activities Water Sewer Sanitation Total primary government CITY OF CHUBBUCK, IDAHO STATEMENTS OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2013 Program Revenues Total Operating Net Charges for Grants and (Expense) Development Expenses Services Contributions Revenue Authority $ 352,910 $ 203,578 3 - $ (149,332) . $ - 2,782,655 - 74,500 (2,708,155) - 1,313,575 191,317 - (1,122,258) - 163,631 - - (163,631) - 1,122,746 - - (1,122,746) - 494,692 4,955 - (489,737) - 39,552 - - (39,552) - 5,150 - 54,318 49,168 - 4,574 - 228,000 (4,574) 6,279,485 399,850 128,818 (5,750,817) - 1,466,297 2,582,932 - 1,116,635 - 2,072,020 3,182,335 - 1,110,315 - 1,116,071 1,649,604 - 533,533 - 4,654,388 7,414,871 - 2,760,483 - $ 10,933,873 $ 7,814,721 $ 128,818 $ (2,990,334) $ - Component Unit: Chubbuck Development Authority $ 2,734,766 2,734,766 Net(expense)/revenue General revenues General property taxes and sales tax Franchise fees Intergovernmental Leases and rents Interest income Gain on sale of assets Capital contributions Otherrevenue CIAWWC Authority NET CHANGE IN NET POSITION BEGINNING NET POSITION - restated PRIOR PERIOD ADJUSTMENT ENDING NET POSITION $ (2,734,766)_ $ (2,734,766) General Business -type Development Activities Activities Total Authority $ (5,750,817) $ 2,760,483 $ (2,990,334) $ (2,734,766) 4,982,426 - 4,982,426 2,206,890 192,151 - 192,151 - 955,679 - 955,679 - 90,843 - 90,843 - 60,367 644 61,011 19,227 34,788 2,400 37,188 - 2,254,771 261,081 2,515,852 - 89,066 - 89,066 - 228,000 - 228,000 - 8,888,091 264,125 9,152,216 2,226,117 3,137,274 3,024,608 6,161,882 (508,649) 10,608,442 16,557,083 27,165,525 2,242,930 - 51,438 51,438 - $ 13,745,716 $ 19,633,129 $ 33,378,845 $ 1,734,281 20 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2012 CIAWWC Other General Authority Governmental Fund Fund Funds Total 2012 ASSETS Cash $ 2,516,856 $ - $ 490,894 $ 3,007,750 $ 2,808,335 Accounts receivable 2,859 - - 2,859 565 Property and sales taxes receivable 335,744 - - 335,744 325,267 Intergovernmental receivables 246,240 - - 246,240 239,536 $ 3,101,699 $ - $ 490,894 $ 3,592,593 $ 3,373,703 LIABILITIES Accounts payable $ 78,125 $ - $ - $ 78,125 $ 79,683 Accrued payroll 79,347 - - 79,347 70,138 Accrued compensated absences 61,234 - - 61,234 65,435 218,706 - - 218,706 215,256 DEFERRED INFLOWS OF RESOURCES Unavailable revenues 174,256 - - 174,256 176,779 FUND BALANCES Unreserved, reported in: Committed - - 490,894 490,894 632,838 Unassigned 2,708,737 - - 2,708,737 2,348,830 2,708,737 - 490,894 3,199,631 2,981,668 $ 3,101,699 $ - $ 490,894 $ 3,373,703 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 $4,521,935. 28,950,913 26,005,385 Deferred tax revenue represents amounts that were not available to fund current expenditures and therefore are not reported in the funds 174,256 176,779 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: Note Payable (154,929) - Accrued compensated absences (244,935) (261,740) Advance payable1( 8,179,220 X18,282,069) Net position of governmental funds 21 See accompanying notes to financial statements $ 13,745,716 10,620,023 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 EXPENDITURES General government 326,399 CIAWWC Other 326,399 214,382 Law enforcement General Authority Governmental 2,669,035 2,494,222 Fire control Fund Fund Funds Total 2012 REVENUES 163,631 - - 163,631 158,409 General property taxes and sales tax $ 4,984,949 $ - $ - $ 4,984,949 $ 4,567,959 Franchise fees 192,151 - - 192,151 201,128 Intergovernmental 955,679 - - 955,679 908,227 Parks revenue 1,720 - - 1,720 2,399 Licenses, permits and fines 203,578 - - 203,578 133,808 Grants 74,500 228,000 - 302,500 27,892 Fire protection and prevention 191,317 - - 191,317 210,650 Leases and rents 90,843 - - 90,843 52,546 Interest income 60,367 - - 60,367 36,797 Donations - - 54,318 54,318 15,720 Charges for services 3,235 - - 3,235 4,135 Other revenues 81,454 - 7,612 89,066 18,486 6,839,793 228,000 61,930 7,129,723 6,179,747 EXPENDITURES General government 326,399 - - 326,399 214,382 Law enforcement 2,669,035 - - 2,669,035 2,494,222 Fire control 1,211,430 - - 1,211,430 1,174,659 Building inspection 163,631 - - 163,631 158,409 Street 1,054,574 - - 1,054,574 1,035,804 Parks and recreation 437,882 - - 437,882 488,874 Health and welfare 39,552 - - 39,552 31,462 Street guarantee fund - - 5,000 5,000 - Court fund - - 150 150 2,780 Parks Fund - - - - 14,333 Capital outlays 968,502 - - 968,502 225,467 CIAWWC Authority - 4,574 - 4,574 - 6,871,005 4,574 5,150 6,880,729 5,840,392 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (31,212) 223,426 56,780 248,994 339,355 OTHER FINANCING SOURCES (USES) Proceeds from note payable 175,281 - - 175,281 - Principal payments (20,352) (228,911) - (249,263) - Interest expense (5,330) - - (5,330) - Proceeds from sale of assets 42,796 - - 42,796 17,223 Transfers in (out) 198,724 - (198,724) - - 391,119 (228,911) (198,724) (36,516) 17,223 NET CHANGE IN FUND BALANCES 359,907 (5,485) (141,944) 212,478 356,578 BEGINNING FUND BALANCE 2,348,830 5,485 632,838 2,987,153 2,625,090 ENDING FUND BALANCE $ 2,708,737 $ - $ 490,894 $ 3,199,631 $ 2,981,668 (Continued) 22 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 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 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 contributions from other entities are not recognized as a revenue for governmental purposes, but are required to be recognized on the Statement of Activities: Contributed capital assets Capital asset purchases capitalized Depreciation expense The net affect of sales transactions involving capital assets Deferred inflows of resources; unavailable revenues are not recorded as current period receipts 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 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 Change in net assets 23 See accompanying notes to financial statements 2013 Total $ 212,478 2,254,771 968,502 (378,733) (8,008) (2,523) 73,982 16,805 $ 3,137,274 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2012 Noncurrent assets Restricted assets Bond reserves Utility deposits Interfund receivable Advance to joint venture Capital assets Accumulated depreciation LIABILITIES Current Liabilities Accounts payable Payroll payable Accrued compensated absences Current portion of bonds payable Accrued interest Current portion of long-term debt Payable from restricted assets - Wated Sewer deposits Noncurrent Liabilities Revenue bonds payable, net unamortized premium Note payable Compensated absences NET POSITION Invested in capital assets, net of related debt Restricted for bond service Unrestricted 165,781 - - 165,781 Internal Internal - 208,235 1,820 Service Service ASSETS Water Sewer Sanitation Total 2012 Funds 2013 Funds 2012 Current assets - 18,179,220 18,282,069 - Cash and cash equivalents $5,066,984 $5,499,282 $1,724,159 $12,290,425 $10,879,107 $ $ - Accounts receivable 281,523 284,947 151,308 717,778 756,616 5,348,507 5,784,229 1,875,467 13,008,203 11,635,723 Noncurrent assets Restricted assets Bond reserves Utility deposits Interfund receivable Advance to joint venture Capital assets Accumulated depreciation LIABILITIES Current Liabilities Accounts payable Payroll payable Accrued compensated absences Current portion of bonds payable Accrued interest Current portion of long-term debt Payable from restricted assets - Wated Sewer deposits Noncurrent Liabilities Revenue bonds payable, net unamortized premium Note payable Compensated absences NET POSITION Invested in capital assets, net of related debt Restricted for bond service Unrestricted 165,781 - - 165,781 169,081 - 208,235 1,820 250 210,305 182,324 - 18,179,220 - 18,179,220 18,282,069 - - 8,069,355 4,133,072 2,710,544 14,912,971 13,770,007 259,643 259,643 (1,976,619) (3,044,468) (1,019,970) (6,041,057) (5,576,603) (217,448) (206,383) 6,466,752 19,269,644 1,690,824 27,427,220 26,826,878 42,195 53,260 11,815,259 25,053,873 3,566,291 40,435,423 38,462,601 42,195 53,260 32,118 110,248 23,659 166,025 93,345 1,618 1,531 11,519 8,863 4,699 25,081 22,083 - 10,140 10,140 1,571 21,851 16,737 - - 110,000 - - 110,000 110,000 - - - - 5,764 5,764 65,966 16,616 436,512 121,219 574,347 411,413 - 208,235 1,820 250 210,305 182,324 - - 388,628 567,583 157,162 1,113,373 901,870 1,618 1,531 1,705,619 - - 1,705,619 1,824,814 - - 234,832 16,436,563 1,265,080 17,936,475 19,163,609 - - 40,561 40,561 6,282 87,404 66,953 - 1,981,012 16,477,124 1,271,362 19,729,498 21,0555,376 - - 2,369,640 17,044,707 1,428,524 20,842,871 21,957,246 1,618 1,531 4,025,669 1,088,604 1,690,574 6,804,847 5,990,800 42,195 53,260 165,781 - - 165,781 169,081- - 5,254,169 6,920,562 447,193 12,621,924 10,345,474 (1,618) (1,531) $ 9,445,619 $ 8,009,166 $ 2,137,767 Adjustment to reflect the consolidation of internal service fund activities related to enterprise activities. 24 19,592,552 $16,505,355 $ 40,577$ 51,729 40,577 $19,633,129 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 NONOPERATING REVENUE (EXPENSE) Interest income 644 - 644 32,121 - Interest expense (58,338) (77,839) Internal Internal Capital Contributions 261,081 - 261,081 1,125,220 - Gain (Loss) from asset disposal 2,400 - - Service Service Water Sewer Sanitation Total 2012 Funds 2013 Funds 2012 OPERATING REVENUES 8,097,280 6,814,992 1,593,083 - 51,728 68,332 PRIOR PERIOD ADJUSTMENT (32,421) 83,659 - - Service revenue $ 767,313 $3,182,335 $1,584,390 $5,534,038 $5,237,750 $ 65,214 $ 67,555 Revenue used as security service hand activities related to enterprise funds (11,151) Change in net assets of business -type adivites $ 3,024,608 for revenue bond: Charges for services 1,815,619 - 1,815,619 1,934,814 - - 2,582,932 3,182,335 1,584,390 7,349,657 7,172,564 85,214 67,555 OPERATING EXPENSES Salaries and wages 542,665 421,979 216,917 1,181,561 1,122,322 - - Personnel benefits 245,702 210,886 105,575 562,163 416,771 4,377 13,815 Rep airsand maintenance 155,101 246,968 299,272 701,341 713,096 21,265 11,767 Supplies and toots 54,512 7,219 40,272 102,003 111,190 5,074 3,567 Travel, meetings, and training 4,905 - 2,395 7,300 9,956 905 - Fuels and lubricants 22,181 4,819 59,135 86,135 108,002 20,597 24,755 Telephone and communications 3,695 2,727 2,665 9,087 12,766 - - Utilities 156,886 9,554 3,499 169,939 149,103 13,082 12,209 Treatment - Pocatello - 993,042 - 993,042 867,688 - - Insurance 18,740 12,743 14,242 45,725 47,009 Other purchased services 15,842 - - 15,842 7,348 Professional services 41,478 23,114 11,469 76,061 89,904 Facilities plan - - - - 3,396 Bad debt 1,900 5,370 1,196 8,466 16,611 - Depreciation 144,352 133,599 205,230 483,181 423,951 11,065 8,652 1,407,959 2,072,020 961,867 4,441,846 4,099,113 76,365 74,765 OPERATING INCOME 1,174,973 1,110,315 622,523 2,907,811 3,073,451 (11,151) (7,210) NONOPERATING REVENUE (EXPENSE) Interest income 644 - 644 32,121 - Interest expense (58,338) (77,839) (136,177) (204,343) - Capital Contributions 261,081 - 261,081 1,125,220 - Gain (Loss) from asset disposal 2,400 - - 2,400 10,800 - 205,787 - (77,839) 127,948 963,798 NET INCOME (LOSS) 1,380,760 1,110,315 544,684 3,035,759 4,037,249 (11,151) (7,210) BEGINNING NET POSITION, restated 8,097,280 6,814,992 1,593,083 - 51,728 68,332 PRIOR PERIOD ADJUSTMENT (32,421) 83,659 - - ENDING NET POSITION $9,445,619 $8,009,166 $2,137,767 $4,037,249 $ 40,577 $ 61,122 Adjustment to reflect the consolidation of Internal service hand activities related to enterprise funds (11,151) Change in net assets of business -type adivites $ 3,024,608 25 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBSUCK, IDAHO STATEMENTS OF CASH FLOWS - PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from revenues Cash paid to suppliers Cash paid to employees Net cash provided by operating activities CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES Transfer from (to) other funds Internal loan from (to) other funds Advance to joint venture Change in restricted cash Net cash (used) in noncapital financing activities CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from debt Principal paid on capital debt Interest paid on capital debt Proceeds from sale of capital assets Purchase of capital assets Net cash provided (used) in capital and related financing activities CASH FLOW FROM INVESTING ACTIVITIES Interest and dividend received Net cash provided by financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS BEGINNING CASH AND CASH EQUIVALENTS PRIOR PERIOD ADJUSTMENT ENDING CASH AND CASH EQUIVALENTS DEATON & COMPANY, CHARTERED (645,173) (792,744) (255,437) (1,693,354) (940,315) (836,648) (850,366) (590,972) (2,277,986) (887,007) 644 - - 644 32,121 - - 644 Internal Internal 32,121 - - 533,251 568,043 258,586 1,359,880 2,855,688 - - Service Service Water Sewer Sanitation Total 2012 Funds 2012 Funds 2011 $2,607,210 $3,182,504 $1,590,315 $ 7,380,029 $ 7,105,380 $ 65,214 $ 67,555 (467,305) (1,248,091) (418,399) (2,133,795) (2,065,628) (60,837) (67,555) (773,950) (618,853) (322,358) (1,715,161) (1,555,129) (4.377)- 1,365,955 1,315,560 849,558 3,531,073 3,484,623 - - - - - - 678,361 - - - - - - 117,824 - - - 102,849 - 102,849 (639,134) - - 3,300 - - 3,300 68,900 - - 3,300 102,849 - 105,149 225,951 - - - - - - 713,732 - - (135,537) - (255,114) (390,651) (498,092) - - (58,338) (57,622) (80,421) (196,381) (162,332) - - 2,400 - - 2,400 - (645,173) (792,744) (255,437) (1,693,354) (940,315) (836,648) (850,366) (590,972) (2,277,986) (887,007) 644 - - 644 32,121 - - 644 - - 644 32,121 - - 533,251 568,043 258,586 1,359,880 2,855,688 - - 4,566,154 4,847,380 1,465,573 10,879,107 8,023,419 - - (32,421) 83,859 - 51,438 - $5,066,984 $5,499,282 $1,724,159 $ 12,290,425 $ 10,879,107 $ 26 See accompanying nates to financial statements CITY OF CHUBBUCK, IDAHO STATEMENTS OF CASH FLOWS - PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 RECONCILIATIONS OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation Bad debt expense Prior period adjustment (Increase) decrease in assets Accounts receivable Increase (decrease) in liabilities Accounts payable Accrued compensated absences Total adjustments NET CASH PROVIDED BY OPERATING ACTIVITIES DEATON & CONWANY, CHARTERED Water Sewer Sanitation Total $1,174,973 $1,110,315 $ 622,523 $ 2,907,811 Internal Internal Service Service 2012 Funds 2013 Funds 2012 $ 3,073,451 $ (11,151) $ (7,210) 144,352 133,599 205,230 483,181 423,951 11,065 8,652 1,900 5,370 1,196 8,466 - - - 24,278 169 5,925 30,372 (50,573) - - 7,878 53,533 14,267 75,678 54,752 86 (1,442) 12,574 12,574 417 25,565 (16,958) - - 190,982 205,245 227,035 623,262 411,172 11,151 7,210 $1,365,955 $1,315,560 $ 849,558 $ 3,531,073 $ 3,484,623 $ - $ - 27 See accompanying notes to financial statements CITY OF CHUBBUCK, IDAHO STATEMENT OF FIDUCIARY NET ASSETS RECREATIONAL PROGRAMS FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Recreation Programs Trust Fund 2013 2012 Assets Cash $ 36,468 $ 20,797 36,468 20,797 Liabilities Accounts payable Net Assets Held in trust for recreation programs $ 36,468 $ 20,797 28 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS RECREATIONAL PROGRAMS FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Additions Contributions: Registration Fees Sponsorships Total additions Deductions Director's compensation Boy's baseball Girl's softball Tee/tiger ball Total deductions Change in net assets Net assets - beginning of the year Prior period adjustment Net assets - end of the year 29 Recreation Programs Trust Fund 2013 $ 57,170 13,136 70,306 4,500 22,983 20,335 6,817 544,635 15,671 20,797 $ 36,468 2012 $ 48,325 16,441 64,766 4,500 25,644 16,961 6,609 53,714 11,052 9,745 $ 20,797 See accompanying notes to financial statements DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 1 OF 14` NOTE 7 - Summary of Sianificant Accountina Policies The City's financial statements comply with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronouncements within the codification. The government -wide 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 statements have been implemented through GASB 63. 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 reports two component unit; the Chubbuck Development Authority and the Chubbuck Impact Area Waste Water Authority. Discretely Presented Component Unit Chubbuck Development Authority (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 demolishing blighted structures or rehabilitating structures to provide for low income housing, among others. The Board of Commissioners of the Authority consists of 7-9 members, which are appointed by the Mayor. Complete financial statements of the Authority can be obtained from the Treasury, City of Chubbuck, 5160 Yellowstone Ave, Chubbuck, Idaho 83202. Blended Component Unit Chubbuck Impact Area Waste Water Collection Authority (CIAWWCA) Effective September 1, 2007, Bannock County, Idaho, City of Pocatello, Idaho and the City of Chubbuck, Idaho entered into a Joint Powers Agreement creating the Chubbuck Impact Area Wastewater Collection Authority for the purpose of financing, designing, acquiring, constructing, managing, and operating a sewage collection facility along with transmission mains and lift stations to serve those who own and operate a collection system under Idaho Law for the residents of the City of Chubbuck, Idaho. The Authority is a public entity of the State of Idaho, therefore, the Authority's income is exempt form Federal and Idaho income 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 or maturity date. Outstanding balance of loans to the authority at year-end totaled $18,179,220. 30 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 2 OF 14) NOTE 1 - Summa of Significant Accounting 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, 5160 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 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. Fend 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 expend iturelexpenses. 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 govemmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental 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 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. 31 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 3 OF 14) NOTE 1 - Summary of Significant Accounting Policies (Continued) B. Basis of Presentation (Continued) 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. Internal Service Funds Internal service funds account for repairs and maintenance service for vehicles and equipment provided to other departments or agencies of the City 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. 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 govemmental 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. 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 from exchange and exchange - like transactions are recognized when the exchange takes place. 32 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 4 OF 14) NOTE 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus and Basis of Accounting (Continued) 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 excess expenditures were funded by donated capital outlays, decreased expenditures 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 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. 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, 33 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 5 OF 14) NOTE 1 - Summary of Significant Accounting_ Policies (Continued) F. Property, Plant, and Equipment (Continued) 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 5-40 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. 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 principal 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. 34 DEATON & COMPANY, CHARTERED CITY OF CHUSBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 6 OF 14) NOTE 1 - Summary of Significant Accounting Policies (,..,Continued) I. 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." Fund Statements In the fund financial statements, governmental funds report the following classifications of fund balance: Nonspendable items- This category includes a portion of net resources that cannot be spent because of their form or because they must be maintained intact. This Includes inventories and prepaid items. Restricted items- This category includes resources where limitations are imposed by external entities, such as grantors and creditors, or to comply with laws and regulations of governments. Committed items -This 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 items -Assigned items represent the City'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 items- Represents the remainder of the City's equity in governmental fund -type balances in excess of the aforementioned classifications. 35 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 7 OF 14) NOTE 1 - Summary of Significant Accounting Policies (Continued) 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. Restricted resources are used only after the unrestricted resources are depleted. To date cash has been restricted for the following items: Proprietary Bond reserves Utility deposits Total $ 165,781 210,305 $ 376,086 Bond reserves are amounts the City is legally required to reserve for the repayment of outstanding bonds. Water deposits are collected from individuals who receive utility services from the City. Money on deposit may be used to pay past due balances or is returned when the payer stops utility service. Restricted utility deposits totaled $210,305 at year-end. 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, $335,744 in outstanding property taxes were expected to be collected and remitted by the County. 36 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 8 OF 14) NOTE 5 - Cash and Cash Equivalents and Investments Primary Government: Deposits at year end consist of the following: Deposits Cash in bank - carrying amount Restricted $ 376,086 Unrestricted 15,298,175 $ 15,674,261 Fiduciary Fund: Cash $ 36,468 $ 36,468 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 $15,710,729 and the bank balance was $12,564,440. The deposits were covered by collateralized accounts or federal depository insurance of $250,000 per bank. The City uses various commercial banks to limit their exposure to custodial credit risk, however, some of the City's deposits including the State of Idaho, Local Government Investment Pool (LGIP) at year-end were not insured nor collateralized in the amount of $3,316,155. The State Treasurer's Investment Pools (LGIP) operates in accordance with appropriate state laws and regulations. The reported value of the pools is the same as the fair value of the pool shares. Investments - The City has no investments Component Unit - Chubbuck Development Authority (CDA): Deposits at year end consist of the following: Deposits Cash in bank - carrying amount Unrestricted $ 1,649,558 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 and bank balance of CDA's deposits (cash and certificates of deposit) was $1,649,558. At year-end, all the Authority's deposits were held in the LGIP. Deposits in the LGIP are not insured or guaranteed by the Federal Deposit Insurance Corporation, the State of Idaho or any other government agency. CDA's deposits in the bank at year-end were subject to custodial credit risk_ The State Treasurer's Investment Pools (LGIP) operates in accordance with appropriate state laws and regulations. The reported value of the pools is the same as the fair value of the pool shares. Investments - The CDA has no investments 37 DEATON & COMPANY, CHARTERED CITY OF CHUSBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 9 OF 14) NOTE 5 - Cash and Cash Equivalents and Investments (Continued) Component Unit - Chubbuck Impact Area Waste Water Collection Authority (CIAWWCA), Deposits and Investments - The CIAWWCA has no deposits or investments. Deposits at year end consist of the following: Deposits Cash in bank - carrying amount Unrestricted 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 and bank balance of CIAWWCA's deposits (cash and certificates of deposit) was $0. At year-end, all the Authority's deposits were held in a financial institution. All deposits were guaranteed by the Federal Deposit Insurance Corporation and were not subject to custodial 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 collected, therefore, there is no allowance for uncollectible property tax receivables. Receivables as of year-end for the City's business -type funds are as follows: Water Sewer Sanitation Total Accounts Receivables $ 329,737 5841,643 Allowance for Doubtful Accounts (48,214) (45,204) (30,447) (123,865) $ 281,523 $ 284,947 $ 151,308 $ 717,778 NOTE 7 - 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 LGIP, 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. 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. 38 DEATON & COMPANY, CHARTERED CITY OF CHUBSUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 10 OF 14) NOTE 8 - 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: Nondepreciable assets Land Water Rights Work in process Office Equipment Buildings and Improvements Vehicles and Equipment Bond Fees Accumulated Depreciation NOTE 9 - Long-term Debt and Accrued Compensation Accrued Compensated Absences: Current portion Noncurrent portion Long-term Debt: Beginning Ending Balance Additions Deletions Balance $ 709,854 Beginning - $ 709,854 Ending 644,473 Balance Additions Deletions Balance Nondepreciable assets - 196,905 - - Land $ 90,866 $ 143,453 $ - $ 234,319 Infrastructures 3,075,550 182,833 - 3,258,383 Work in process 20,620,369 2,214,151 33,446 22,801,074 Buildings and Improvements 2,854,621 394,247 - 3,248,868 Vehicles and Equipment 3,751,745 431,627 253,168 3,930,204 30,393,151 3,366,311 286,614 33,472,848 Accumulated Depreciation 4,387,765 378,733 244,563 4,521,935 $ 26,005,386 $ 2,987,578 $ 42,051 28.950.913 A summary of proprietary type fixed assets at year end is as follows: Nondepreciable assets Land Water Rights Work in process Office Equipment Buildings and Improvements Vehicles and Equipment Bond Fees Accumulated Depreciation NOTE 9 - Long-term Debt and Accrued Compensation Accrued Compensated Absences: Current portion Noncurrent portion Long-term Debt: Beginning Ending Balance Additions Deletions Balance $ 709,854 $ - $ - $ 709,854 1,192,442 644,473 14,407 1,822,508 19,660 - 19,660 - 196,905 - - 196,905 9,054,940 280,741 - 9,335,681 2,837,836 288,557 18,727 3,107,666 18,013 - 18,013 - 14, 029, 650 1,213,771 70,807 15,172, 614 5,782,986 512,259 36,740 6,258,505 $ 8,246,664 $ 701,512 $ 34,067 $ 8,914,109 Governmental Business -type $ 61,234 $ 21,851 244,935 87,404 $ 306.169 $ 109.255 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: KU* DEATON & COMPANY, CHARTERED CITY OF CHUBSUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 11 OF 14) NOTE 9 - Long-term Debt and Accrued Compensation Continued Capital Lease Obligation: Equipment purchase note; issue amount $175,281; dated December 3, 2012; interest rate of 2.93% with final maturity dated December 5, 2018. Monthly payments of $2,659. $ 154,929 Less current portion Noncurrent portion Business -type activities: 27,739 $ 127,190 In 2006, the City refinanced a construction line of credit for a note payable with the Department of Environmental Quality (DEQ) with an interest rate of 3.25% and semi-annual payments of $12,332 for 20 years. Current portion Noncurrent portion $ 16,616 234,832 $ 251,448 At year-end the City was authorized, on a line -of -credit, to borrowed $19,841,414 from the Department of Environmental Quality (DEQ) under five (5) separate loans. One loan 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 installments over 20 years at the close of the loan. At year-end two of the five loans were closed. The notes are used to finance the designing and constructing of the Chubbuck Northwest Sewer Interceptor. It may also be used to finance services to provide environmental field 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. At year-end the balance available to the City was $661,678. Available Outstanding DEQ line of credit at zero percent interest, with biannual payment of $5,499 for 20 years, and a maturity date of November 1, 2030, Loan closed April 22, 2010. $ - $ 192,579 DEQ line of credit at zero percent interest, with biannual payment of $200,990 for 20 years, and a maturity date of fiscal year 2034. Loan set to close fiscal year 2014. 661,678 8,039,582 DEQ line of credit at zero percent interest, with biannual payment of $212,757 for 20 years, and a maturity date of May 17, 2033. Loan closed March 26,2013. - 8,510,284 DEQ line of credit at zero percent interest, with biannual payment of $3266 for 20 years, and a maturity date of February 16, 2034. Loan set to close fiscal year 2014. 130,630 $ 661,678 $ 16,873,075 Less current portion 436,512 Noncurrent portion $ 16,436,563 40 DEATON & COMPANY, CHARTERED CITY OF CHUBSUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 12 OF 14) NOTE 9 - Lon -term Debt and Accrued Com ensation Continued 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. These bonds were paid in full on September 10, 2012. The Water Revenue Bonds, Series 2011 was issued September 28, 2011, for 15 years in the amount of $1,930,000 at a premium of $110,330. The bond carries interest rates between 2 and 4.75% and a maturity date of September 1, 2026, Bonds Payable: Water Revenue Bond Less current portion Noncurrent portion Net Premium Principal $ 95,619 $ 1,720,000 $ 95,619 1,720,000 110,000 _ 1.610.000 Bond premiums, net amortization totaled $110,300. Bond expenses, net amortization totaled $19,300. The bond premium and expenses are amortized over fifteen (15) years, the life of the bond. Bond premium amortization of $9,194 and expense of $1,287 was recognized at year-end. Notes Payable On June 4, 2008, the City issued three notes to purchase assets needed in order to collect sanitation for the City. Notes one and two were issued at 5.50% and the third note at 5.25%. The third note was refinanced in 2009. The notes were issued for $936,576, $541,537 and $1,375,000 with monthly payments of $17,890, $6,985, and $9,321, respectively until the maturity date of May 5, 2013, 2016 and 2029, respectively. Notes Payable: Balance Note 1 $ - Note 2 206,040 Note 3 1.180.259 1,386,299 Less current portion 121,219 Noncurrent portion $ 1,265,080 Annual Debt Service Requirements for leases, bonds and notes payable Year Ending Governmental Activities Business -type Activities September 30 Principal Interest Principal Interest 2014 $ 27,739 $ 4,171 $ 1,108,738 $ 237,560 2015 28,567 3,347 1,117,147 233,479 2016 29,414 2,499 1,070,552 182,518 2017 30,287 1,524 1,045,665 139,342 2018 31,186 860 1,036,989 129,968 2019-2023 7,736 37 5,389,743 489,465 2024-2028 - - 5,202,018 186,464 2029-2032 - - 4,259,970 99,032 $ 154,929 $ 12,438 $ 20,230,822 $ 1,697,828 41 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 13 OF 14) NOTE 9 - Long-term Debt and Accrued Compensation Continued Changes in long-term liabilities Long-term liability activity for the year was as follows: Beginning Ending Due within Balance Additions Reductions Balance one year Governmental activities Capital leases $ - $ 175,281 $ 20,352 $ 154,929 $ 27,739 Compensated absences 327,175 422,702 443,708 306,169 61,234 $ 327,175 $ 597,983 $ 464,060 $ 461,098 $ 88,973 Long-term portion $ 244,935 Long-term portion $ 19,633,879 NOTE 10 - Pension Disclosures The Public Employee Retirement System of Idaho (PERSI) - The PERSI Base Plan, a cost sharing multiple - 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 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. After 5 years of credited services, 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/firefighters) of the average monthly salary for the highest consecutive 42 months. PERSI issues publicly available stand alone financial reports that include audited financial statements and required supplementary information. These reports may be obtained from PERSI's website www.persi.tdaho.gov. The contribution requirements of the City of Chubbuck and its employees are established and may be amended by the PERSI Board of Trustees. On July 1, 2013 the required contribution rate as a percentage of covered payrolls for members was increased form 6.23% to 6.79% for general member and from 7.69% to 8.36% for police/firefighter members. The employer rate as a percentage of covered payroll was increased from 10.39% to 11.32% for general members and from 10.73% to 11.66% for police/firefighter members. The City of Chubbuck contributions required and paid were $414,092, $398,799, and $402,921, for the three years ended September 30, 2013, 2012, and 2011, respectively. 42 DEATON & COMPANY, CHARTERED Beginning Ending Due within Balance Additions Reductions Balance one year Business -type activities Bonds payable $ 1,830,000 $ - $ 110,000 $ 1,720,000 $ 110,000 Notes payable 19,575,021 614,724 1,678,923 18,510,822 574,347 Compensated absences 83,690 109,254 83,689 109,255 21,851 $ 21,488,711 - $ 723,978 __$ 1,872,612 $ 20,340,077 $ 706,198 Long-term portion $ 19,633,879 NOTE 10 - Pension Disclosures The Public Employee Retirement System of Idaho (PERSI) - The PERSI Base Plan, a cost sharing multiple - 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 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. After 5 years of credited services, 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/firefighters) of the average monthly salary for the highest consecutive 42 months. PERSI issues publicly available stand alone financial reports that include audited financial statements and required supplementary information. These reports may be obtained from PERSI's website www.persi.tdaho.gov. The contribution requirements of the City of Chubbuck and its employees are established and may be amended by the PERSI Board of Trustees. On July 1, 2013 the required contribution rate as a percentage of covered payrolls for members was increased form 6.23% to 6.79% for general member and from 7.69% to 8.36% for police/firefighter members. The employer rate as a percentage of covered payroll was increased from 10.39% to 11.32% for general members and from 10.73% to 11.66% for police/firefighter members. The City of Chubbuck contributions required and paid were $414,092, $398,799, and $402,921, for the three years ended September 30, 2013, 2012, and 2011, respectively. 42 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO FINANCIAL STATEMENTS (PAGE 14 OF 14) 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 - Subseouent Events Subsequent events were evaluated up to March 28, 2014, the date the financial statements were available to be issued. NOTE 13 - Other Postemplovment Benefits The City complies with Idaho's requirements under the Consolidated Omnibus Budget Reconciliation Act (COBRA). The liability under state requirements related to other insurance COBRA program is not required to be reported. The employment benefit (OPEB). NOTE 14 - Correction of an Error and Prior Period Adjustments Adjustments Business -type activities: post -employment benefits for the medical City does not participate in any other post - During the year the City discovered the Sewer fund had not capitalized interest used to build capital improvements in the amount of $83,859. It was also discovered that expenses were capitalized as water rights but should have been reported as an expense in the amount of $32,421. These adjustments increased the business -type net position by $51,438. NOTE 15 - Accounting Changes and Accounting Standards In fiscal year 2013, the City implemented Governmental Accounting Standards Board (GASB) Statement 61 'The Financial Reporting Entity: Omnibus -An amendment of GASB Statements No. 14 and No. 34", Statement 63 "Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position", and Statement 65 "Items Previously Reported as Assets and Liabilities". Statement 61 modifies certain requirements for inclusion of component units in the financial reporting entity. Statement 63 will improve financial reporting by standardizing the presentation of deferred outflows of resources and deferred inflows of resources and their effect on a government's net position. The objective of Statement 65 is to either properly classify certain items that were previously reported as assets and liabilities as deferred outflows of resources or deferred inflows of resources or to recognize certain items that were previously reported as assets and liabilities as outflows of resources (expenses or expenditures) or inflows of resources (revenues). The implementation of Statement 61 and 65 resulted in the reclassification of the beginning net position of the governmental activities in the government -wide financial statements. The CIAWWCA was included as a blended component unit to the governmental activities and the deferred charges for issuance costs were reported as expenses of the prior period and resulted in the adjustments below. Beginning fund balance Blended Component Unit - CIAWWCA, Beginning fund balance Adjusted beginning fund balance 43 2013 $10,602,957 5,485 $10,608,442 DEATON & COMPANY, CHARTERED REQUIRED SUPPLEMENTARY INFORMATION 44 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final Resources Variance Actual Positive Amounts (Negative) General property taxes and sales tax $ 4,936,090 $ 4,936,090 $ 4,984,949 $ 48,859 Franchise fees 222,000 222,000 192,151 (29,849) Intergovernmental 900,000 900,000 955,679 55,679 Parks revenue 3,600 3,600 1,720 (1,880) Licenses, permits and fines 149,500 149,500 203,578 54,078 Grants - - 74,500 74,500 Fire protection and prevention - - 191,317 191,317 Leases and rents - - 90,843 90,843 Interest income 50,000 50,000 60,367 10,367 Donations - - - - Charges for services 233,000 233,000 3,235 (229,765) Other resources 628,523 628,523 81,454 (547,069) Amounts available for appropriations 7,122,713 7,122,713 6,839,793 (282,920) Charges to appropriations General government Law enforcement Fire control Building inspection Street Parks and recreation Health and welfare Capital Outlays Total charges to appropriations EXCESS OF REVENUES OVER (UNDER) EXPENDITURES Other Financing Sources (Uses) Proceeds from note payable Principal payments on leases Interest expense Proceeds from sale of assets Transfer in (out) NET CHANGE IN FUND BALANCE BEGINNING FUND BALANCE ENDING FUND BALANCE 915,990 915,990 326,399 589,591 2,872,274 2,872,274 2,669,035 203,239 1,205,955 1,205,955 1,211,430 (5,475) 183,257 183,257 163,631 19,626 1,021,415 1,021,415 1,054,574 (33,159) 703,365 703,365 437,882 265,483 33,275 33,275 39,552 (6,277) 130,300 130,300 968,502 (838,202) 7,065, 831 7,065,831 6,871, 005 194,826 56,882 56,882 (31,212) (88,094) - - 175,281 175,281 - - (20,352) (20,352) - - (5,330) (5,330) - - 42,796 42,796 - - 198,724 - - 391,119 192,395 56,882 56,882 359,907 104,301 7,095 7,095 $ 63,977 $ 63,977 45 2,348,830 2,341,735 $ 2,708,737 $ 2,446,036 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2013 NOTE 1 - EXPENDITURES IN EXCESS OF BUDGET GENERALFUND Fire Control The City had expenditures in excess expenditures. Increased maintenance, the budget. These expenditures were departments. Heatlh & Welfare of budget of $5,475 due to an increase in fire control fuel, and equipment expenditures were not accounted for in paid by decreased expenditures in other functions and The City had expenditures in excess of budget of $6,277 due to an increase in health and welfare expenditures. These expenditures were paid by decreased expenditures in other functions and departments. Street The City had expenditures in excess of budget of $33,159 due to an increase in highway, streets and roads expenditures. Increased highway and street maintenance, repairs and maintenance, and personnel expenditures were not accounted for in the budget. These expenditures were paid by decreased expenditures in other functions and departments. Cavital Outlaws The City had expenditures in excess of budget of $838,202 due to the purchase of additional assets not accounted for in the budget. Theses assets included land, equipment, and vehicles that were not accounted for in the budget. These expenditures were paid by decreased expenditures in other functions and departments. 46 DEATON & COMPANY, CHARTERED OTHER SUPPLEMENTARY INFORMATION 47 DEATON & COMPANY, CHARTERED ASSETS Cash FUND BALANCES Committed, reported in: Special revenue fund DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2013 S ecial Revenue Street General Juvenile Road Total Guarantee LID Referral Court Projects Parks Nonmajor Fund Fund Fund Fund Fund Fund Funds $ 10,514 $ - $ 5,059 $ 65,242 $ 164,622 $ 245,457 $ 490,894 $ 10,514 $ - $ 5,059 $ 65,242 $ 164,622 $ 245,457 $ 490,894 48 See accompanying notes to financial statements CITY OF CHUBBUCK, IDAHO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 REVENUES Donations Other revenues EXPENDITURES Other purchased services EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Transfers in (out) NET CHANGE IN FUND BALANCES BEGINNING FUND BALANCE ENDING FUND BALANCE DEATON & COMPANY, CHARTERED 49 See accompanying notes to financial statements Special Revenue Street General Juvenile Road Total Guarantee LID Referral Court Projects Parks Nonmajor Fund Fund Fund Fund Fund Fund Funds $ - $ - $ - $ - $ - $ 54,318 $ 54,318 - - - 7,612 - - 7,612 - - - 7,612 - 54,318 61,930 5,000 - - 150 - - 5,150 5,000 - - 150 - - 5,150 (5,000) - - 7,462 - 54,318 56,780 - (198,724) - - - - (198,724) (5,000) (198,724) - 7,462 - 54,318 (141,944) 15,514 198,724 5,059 57,781 164,622 191,138 632,838 $ 10,514 $ - $ 5,059 $ 65,243 $ 164,622 $ 245,456 $ 490,894 49 See accompanying notes to financial statements CITY OF CHUBBUCK, IDAHO BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final Resources General property taxes and sales tax $ 15,000 $ 15,000 Interest income 11,900 11,900 Donations 80,000 80,000 Other resources 40,000 40,000 Amounts available for appropriations 146,900 146,900 Charges to appropriations Street guarantee fund 15,500 15,500 General LID fund 3,600 3,600 Juvenile referral fund 500 500 Court fund 42,100 42,100 Road projects fund 1,200 1,200 Parks fund 84,000 84,000 Total charges to appropriations 146,900 146,900 NET CHANGE IN FUND BALANCE BEGINNING FUND BALANCE ENDING FUND BALANCE 50 See accompanying notes to financial statements Variance Actual Positive Amounts (Negative) $ - $ (15,000) (11,900) 54,318 (25,682) 7,612 (32,388) 61,930 (84,970) 5,000 10,500 - 3,600 - 500 150 41,950 - 1,200 - 84,000 5,150 141,750 (141,944) (141,944) 632,838 632,838 $ 490,894 $ 490,894 DEATON & COMPANY, CHARTERED COMPLIANCE AND SINGLE AUDIT SECTION 51 DEATON & COMPANY, CHARTERED Deaton & Company, Chartered Certified Public Accountants 215 North 9th, Suite A Pocatello, Idaho 83201-5278 (208) 232-5825 Members of Idaho Society of Certified Public Accountants Members of American Institute of Certified Public Ac—,tams I mum 'all M ra WP M W L t AL i. a • i u . 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 Honorable Mayor and Members of the City Council City of Chubbuck, Idaho We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standardsd issued by the Comptroller General of the United States, 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 year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise City of Chubbuck's basic financial statements, and have issued our report thereon dated March 28, 2014. Internal Control Over Financial Reporting In planning and performing our audit, we considered 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 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 deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did not identify any deficiencies in internal control over financial reporting, that we would consider to be a significant deficiency in internal control over financial reporting. 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 Government Auditing Standards. City of Chubbuck's Response to Findings City of Chubbuck's response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. City of Chubbuck's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. !ng Pocatello, Idaho March 28, 2014 DEATON & COMPANY, CHARTERED Deaton & Company, Chartered Certified Public Accountants 215 North 91h, Suite A Pocatello, Idaho 83201-5278 (208)232-5825 Members of Idaho Society of Certified Public Accountants Members of American Tnstiutle of Certified Pubtic Accountants :' 37 V ► a, td ■ 1k . ■ t ttt�.: s � ■ ,. yr� G L �. L 1 ■ mi wL Z mwmwb INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Honorable Mayor and Members of the City Council City of Chubbuck, Idaho Report on Compliance for Each Major Federal Program We have audited City of Chubbuck's compliance with the types of compliance requirementse described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of Chubbuck's major federal programs for the year ended September 30, 2013. City of Chubbuck's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of City of Chubbuck's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about City of Chubbuck's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of City of Chubbuck's compliance. Opinion on Each Major Federal Program In our opinion, City of Chubbuck, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended Septemeber 30, 2013. Report on Internal Control Over Compliance Management of City of Chubbuck, is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered City of Chubbuck's internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of City of Chubbuck's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in intemal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, 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. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Pocatello, Idaho March 28, 2414 DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Federal CFDA FEDERAL GRANTORIPASS — THROUGH GRANTOR Number Grant No. Grant Awards ENVIRONMENTAL PROTECTION AGENCEYIBUREAU OF LAND MANAGEMENT 15-242 L08AC14105-0005 Loan Awards DEPARTMENT OF ENVIRONMENTAL QUALITY 66-458 OW -9926 66-458 WWO803 66-458 W W 1009 66-458 WW1014 TOTAL EXPENDITURES OF FEDERAL AWARDS ' These awards were through the American Recovery and Reinvestment Act. ** These awards were considered major federal awards. 56 DEATON & COMPANY, CHARTERED Amount Expenditures Total Awarded this Period Expenditures $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 ' $ 279,589 $ - $ 279,589 156,389 - 156,389 5,610,197 469,058 5,062,602 7,171,899 145,666 7,171,899 13,218,074 614,724 12,670,479 $ 13,228,074 $ 624,724 $12,680,479 CITY OF CHUBBUCK, IDAHO SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2013 SUMMARY OF AUDIT RESULTS 1. The auditor's report expresses an unqualified opinion on the financial 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. 3. No instances of noncompliance material to the financial statements of City of Chubbuck were disclosed during the audit. 4. Reportable conditions 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 Control Over Compliance in accordance with OMB Circular A-133. 5. The Auditor's report on compliance for the major federal award programs for City of Chubbuck expresses an unqualified opinion on all major federal programs. 6. Audit findings 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- 458 8. The threshold for distinguishing Types A and B programs was $300,000. 9. City of Chubbuck was considered a high-risk audited. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS AND QUESTIONED COSTS — MAJOR FEDERAL AWARD PROGRAM AUDIT None E#I DEATON & COMPANY, CHARTERED CITY OF CHUBBUCK, IDAHO SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED SEPTEMBER 30, 2013 FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS AND QUESTIONED COSTS — MAJOR FEDERAL AWARD PROGRAM AUDIT None 58 DEATON & COMPANY, CHARTERED