HomeMy WebLinkAbout2010 CDACHUBBUCK DEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE CITY OF CHUBBUCK, IDAHO
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2010
WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2009
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
TABLE OF CONTENTS
Page
Title Page
1
Table of Contents
2
AUDITOR'S REPORTS
3
FINANCIAL STATEMENTS
Government Wide
Statements of net assets
4
Statements of activities
5
Governmental Funds
Balance sheets
6
Statements of revenues, expenditures, and changes in fund balances
7
NOTES TO FINANCIAL STATEMENTS
8-11
REQUIRED SUPPLEMENTARY INFORMATION
12
Statement of revenues and expenditures - budget to actual
13
Notes to the statement of revenues and expenditures - budget to actual
14
REPORTS REQUIRED BY GENERALLY ACCEPTED GOVERNMENT AUDITING
STANDARDS
Report on Compliance and on Internal Control Over Financial Reporting
Based on an Audit of Financial Statements Performed in Accordance
With Government Auditing Standards
15-16
2
DEATON & COMPANY, CHARTERED
Deaton & Company, Chartered
Certified Public Accountants RLJV
215 North 9th, Suite A
Pocatello, ID 83201-5278
(208)232-5825
Members of ldaho Society of Certified Public Accountants
Members of American Institute of Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Chubbuck Development Authority
Chubbuck, Idaho
We have audited the accompanying financial statements of the governmental activities, and each major fund, of
Chubbuck Development Authority, as of and for the years ended September 30, 2010 and 2009, which
collectively comprise the Authority's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of Chubbuck Development Authority's management. Our responsibility is to
express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, and each major fund of the Chubbuck Development Authority, as
of September 30, 2010 and 2009, and the respective changes in financial position for the years then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated May 31, 2011, on our
consideration of the Chubbuck Development Authority's internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
The required supplementary information on page 13 is not a required part of the basic financial statements but is
supplementary information required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the required supplementary information. However, we did not audit
the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the Chubbuck Development Authority's basic financial statements. The combining and individual nonmajor fund
financial statements are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The combining and individual nonmajor fund financial statements have been subjected to
the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as a whole.
The Authority has not presented the required Management's discussion and analysis that accounting principles
generally accepted in the United States has determined is necessary to supplement, although not required to be
part of, the basic financial statements.
Chubbuck, Idaho
May 31, 2011
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF NET ASSETS
SEPTEMBER 30, 2010
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2009
ASSETS
Cash and cash equivalents
Other receivables
Property tax receivable
LIABILITIES
Accounts payable
NET ASSETS
Unrestricted
Governmental Activities
2010 2009
$ 3,039,331 $ 1,568,413
25,000 -
99,375 45,422
3,163, 706 1,613,835
83,905 21,316
83,905 21,316
$ 3,079,801 $ 1,592,519
The accompanying notes are an integral part of these financial 1W HWI, CONIPANY, CHARTERED
Page 4
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2010
WITH COMPARATIVE TOTAL FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2009
EXPENSES
Administration
Project payments
REVENUES
Property taxes
Interest and other
CHANGE IN NET ASSETS
BEGINNING NET ASSETS
ENDING NET ASSETS
Governmental Activities
2010 2009
$ - $ 7,636
215,230 1,587,659
215,230 1,595,295
1,688,770 1,821,068
13,742 149,993
1,702,512
1,487,282
1,592,519
$ 3,079,801
1,971,061
375,766
1,216, 753
$ 1,592,519
The accompanying notes are an integral part of these financial VeA"9A COMPANY, CHARTERED
Page 5
CHUBBUCK DEVELOPMENT AUTHORITY
BALANCE SHEETS
GOVERNMENTALFUNDS
SEPTEMBER 30, 2010
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2009
FUND BALANCES
Unreserved
General fund 3,005,830 3,005,830 1,549,644
3,005,830 3,005,830 1,549,644
$ 3,163,706
Amounts reported for governmental activities in the statements of net assets
are different because:
Certain receivables are not current resources and are reported as deferred
revenues in the governmental funds 73,971 42,875
Net Assets of Governmental Activities
$ 3,079,801 $ 1,592,519
The accompanying notes are an integral part of these financial Ii tMtk, COMPANY, CHARTERED
Page 6
General
Fund
2010
2009
ASSETS
Cash and cash equivalents
$ 3,039,331
$ 3,039,331
$ 1,568,413
Other receivables
25,000
25,000
-
Property tax receivable
99,375
99,375
45,422
$ 3,163,706
$ 3,163,706
$ 1,613,835
LIABILITIES
Accounts payable
$ 83,905
$ 83,905
$ 21,316
Deferred tax revenues
73,971
73,971
42,875
157,876
157,876
64,191
FUND BALANCES
Unreserved
General fund 3,005,830 3,005,830 1,549,644
3,005,830 3,005,830 1,549,644
$ 3,163,706
Amounts reported for governmental activities in the statements of net assets
are different because:
Certain receivables are not current resources and are reported as deferred
revenues in the governmental funds 73,971 42,875
Net Assets of Governmental Activities
$ 3,079,801 $ 1,592,519
The accompanying notes are an integral part of these financial Ii tMtk, COMPANY, CHARTERED
Page 6
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2010
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Property taxes
Interest revenue
Reimbursements and other revenue
EXPENDITURES
Administration
Projects and grants
EXCESS REVENUES OR (EXPENDITURES)
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Net change in fund balances -total governmental funds
General
Fund 2010 2009
$ 1,657,674 $ 1,657,674 $ 1,812,231
13,742 13,742 23,808
- - 126,185
1,671,416 1,671,416 1,962,224
- - 7,636
215,230 215,230 1,587,659
215,230 215,230 1,595,295
1,456,186 1,456,186 366,929
1,549,644 1,549,644 1,182,715
$ 3,005,830 $ 3,005,830 $ 1,549,644
Amounts reported for governmental activities in the statements of activities are
different because:
Governmental funds only report taxes received within sixty days as current fund
revenues. All taxes receivable are treated as revenues in the statement of
activities.
Change in Net Assets of Governmental Activities
$ 1,456,186 $ 366,929
31,096 8,837
$ 1,487,282 $ 375,766
The accompanying notes are an integral part of these financial �WRVNtk, COMPANY, CHARTERED
Page 7
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Summary of Significant Accounting Policies
A. Reporting Entity
The Idaho Urban Renewal Law of 1965 authorized the Mayor, with advice and consent of the City Council, to appoint a
board of commissioners for an urban renewal agency to function within the municipality of Chubbuck, provided that the
Council has first passed a resolution finding that one or more such areas are necessary, and that there is a need for an
urban renewal agency to function in the City.
Chubbuck's urban renewal agency, Chubbuck Development Authority (CDA), was found necessary by resolution in
1992 and the board members were appointed thereafter. Unlike other advisory boards to the City Council, state law
declares this agency to be "an independent public body corporate and politic" and gives it a wide range of authority to
effectuate urban renewal.
Under generally accepted accounting principles, as adopted by the Governmental Accounting Standards Board, the
CDA is included in the Annual Financial Statements of the City of Chubbuck as a discretely presented component unit.
B. Government -wide and fund financial statements
The government -wide financial statements (i.e., the statement of net assets and the statement of changes in net
assets) report information on all of the nonfiduciary activities of the government. For the most part, the effect of
interfund activity has been removed from these statements.
C. Measurement focus, basis of accounting, and financial statement presentation
The government -wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter
to pay liabilities of the current period. For this purpose, the authority considers revenues to be available if they are
collected within 60 days of the end of the current fiscal year.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and
so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when cash is received by the authority.
As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements.
Page 8 DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Summary of Significant Accounting Policies (Continued
D. Assets, liabilities, and net assets or equity
1. Deposits and investments
Unrestricted cash balances from all funds are combined and invested in investments authorized under Idaho State
Code. Earnings from these investments are credited to the funds based on the monthly balance of cash in each fund.
Cash includes cash on hand, deposits and other investments which are immediately convertible to cash or have a
maturity of less than 90 days.
CDA is authorized under State Code to invest in obligations of the U.S. Treasury, U.S. Government backed institutions,
commercial paper, and repurchase agreements. CDA's policy is to restrict investment to highly liquid money market
accounts.
2. Receivables and payables
Property taxes receivable are recorded when certified by the State Tax Commission in October of each year. Taxes not
received within sixty days of year-end are deferred. The taxing authorities within each tax increment financing district
levy property taxes by the third Monday of September on a market value basis. These taxes are billed to the taxpayers
in November and are due December 20. Real property taxes not paid constitute a lien on the property when entered on
the real property assessment roll as delinquent on the first day of January of the succeeding year. Property taxes are
assessed and collected for the Authority by Bannock County.
3. Restricted assets reported on the statement of net assets
It is the Authorities policy to first apply restricted resources when an expense is incurred for purposes for which both
restricted and unrestricted net assets are available.
4. Capital Assets
The Authority has no capital assets
5. Compensated Absences
The Authority has no liability for compensated absences
6. Fund Equity
In the fund financial statements, governmental funds report reservation of fund balance for amounts that are not
available for appropriation or are legally segregated by outside third -party for use for specific purposes. Designations of
fund balance represent tentative management plans that are subject to change.
NOTE 2 - Reconciliation of Government -wide and Fund Financial Statements
A. Explanation of certain differences between the governmental fund balance sheet and the government -wide
statement of net assets.
The governmental fund balance sheet includes the reconciliation between fund balance - total governmental funds and
net assets - governmental activities as reported in the government -wide statement of net assets. One element of the
reconciliation explains that "Certain receivables are not current resources and are reported as deferred revenues in the
governmental funds". The detail of this difference is as follows:
Deferred Property Taxes $ 73,971
Page 9 DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - Stewardship, compliance and accountability
A. Budgetary Information
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.
The Board of the Chubbuck Development Authority does not and is not required to hold public meeting in conjunction
with adoption of its annual budget. The new budget is submitted to the board at its meeting in October as part of the
cash report presented by the Treasurer. When the cash report is approved by the board the budget is approved as
well. Budgets may be amended by the same procedure used to adopt the budget.
NOTE 4. Detailed notes on all funds
A. Deposits and Investments
Cash and cash equivalents at yearend consist of the following:
Deposits Bank Book
Cash in Local Government Investment Pool (LGIP) $ 3,039,331 $ 3,039,331
The Authority has no investments.
Deposits - Custodial Credit Risk for deposits is the risk that, in the event of bank (financial institute) failure, the
government's deposits may not be returned to it. 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.
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.
Deposits and Investment transactions are subject to a variety of risks.
Interest Rate Risk is the risk that changes in interest rates will adversely affect the value of an investment. This risk in
null since the Authority has no investments.
Credit Risk is the risk that an issuer or a counter party to an investment will not fulfill its obligations.
Concentration of Credit Risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The
Authority has a concentration risk of $1,568,413 due to all trust deposits held within one trust department and invested
in the same fund.
Page 10
DEA'fON &COMPANY, CHAR'CERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 4. Detailed notes on all funds (continued)
B. Receivables
1. Property Taxes
Property tax revenues are recognized and accrued when billed by Bannock County. CDA's property taxes, levied by
the third Monday of September on a market value basis, are billed to the taxpayers in November. Half of the real,
personal and mobile home property taxes are due on December 20 and the remainder is due the following June 20.
Other property taxes are due December 20. Real property taxes not paid constitute a lien on the property when entered
on the real property assessment roll as delinquent on the first day of January of the succeeding year. Property taxes
are assessed and collected for CDA by Bannock County.
2. Property Tax Receivable and Deferred Property Taxes
At yearend, property tax receivable and deferred tax revenues consisted of the following:
General fund
NOTE 5. Other Information
A. Contingent Liabilities
Receivables Deferred Tax
_$ 99,375 $ 73.971
The majority of the revenue collected by CDA is derived from tax increment financing. Tax increment financing is a
method of segregating a portion of the property taxes paid on properties within an urban renewal district to fund
improvements for which the district was formed. This is accomplished by freezing the market value of property within
the district.
A contingent liability exists when the market value increase in the district is not large enough to fund any debt incurred
by the district to finance the improvements within the district.
B. Subsequent Events
Subsequent events were evaluated up to May 31, 2011, the date the financial statements were available to be issued.
Page 11 DEATON & COMPANY, CHARTERED
REQUIRED SUPPLEMENTARY INFORMATION
Page 12
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENT OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2010
REVENUES
GENERALFUND
Property taxes
Interest revenue
EXPENDITURES
GENERAL FUND
Administration
Projects and grants
Playground equipment
Hawthorne Pavilion
Evans Lane
Capell park
Briscoe Road
Hiline Road
Afton Meadows
Adams Street/ Park Lawn
West Chubbuck Road
Philbin intersect
Hawthorne/Chubbuck signal
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Original
Amended
1,746
(1,746)
Budget
Budget
Actual
(10,461)
Amounts
Amounts
Amounts
Variance
-
-
816
(816)
$ 1,873,928
$ 1,873,928
$ 1,657,674
$ (216,254)
15,000
15,000
13,742
(1,258)
1,888,928
1,888,928
1,671,416
(217,512)
-
-
1,746
(1,746)
10,000
10,000
20,461
(10,461)
15,000
15,000
11,843
3,157
-
-
816
(816)
3,752
(3,752)
-
-
9,851
(9,851)
25,000
25,000
73,907
(48,907)
-
-
16,709
(16,709)
3,000
3,000
23,300
(20,300)
-
-
2,448
(2,448)
1,300,000
1,300,000
22,618
1,277,382
535,928
535,928
27,779
508,149
1,888,928
1,888,928
215,230
1,673,698
$ -
$ -
1,456,186
$ 1,456,186
1,549,644
$ 3,005,830
Page 13 DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO REQUIRED SUPPLEMENTAL INFORMATION
NOTE 1 -EXPENSES IN EXCESS OF BUDGET
PROJECTS
The Authority did not budget sufficient expenditures for increased administration expenditures
in the following projects.
Playground equipment
Evans Lane
East Chubbuck intersection
Capell park
Briscoe Road
Hiline Road
Afton Meadows
Adams Street/ Park Lawn
West Chubbuck Road
REVENUE IN EXCESS OF BUDGET
Decreased expenditures in other projects were used to pay under -budgeted expenditures.
14
DEATON & COMPANY, CHARTERED
Deaton & Company, Chartered
Certified Public Accountants
215 North 9th, Suite A
Pocatello, ID 83201-5278
(208) 232-5825
Mmnbers of &ha Society 4Cenified Public Aceoundnt,
W,nbe nFA.eflwan(natms of Cenihed Nbk Acro. mwn
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 Board of Commissioners
Chubbuck Development Authority
Chubbuck, Idaho
We have audited the financial statements of the governmental activities, and each major fund information of
Chubbuck Development Authority, as of and for the years ended September 30, 2010 and 2009, which
collectively comprise the Chubbuck Development Authority's basic financial statements and have issued our
report thereon dated May 31, 2011. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Chubbuck Development Authority's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
Chubbuck Development Authority's internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of the Chubbuck Development Authority's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on
a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects the Chubbuck Development Authority's ability to initiate, authorize, record, process, or report
financial data reliably in accordance with generally accepted accounting principles such that there is more than
a remote likelihood that a misstatement of the Chubbuck Development Authority's financial statements that is
more than inconsequential will not be prevented or detected by the Chubbuck Development Authority's internal
control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of the financial statements will not be prevented or
detected by the Chubbuck Development Authority's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Chubbuck Development Authority'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.
This report is intended solely for the information and use of management, Board of Commissioners, others
within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should
not be used by anyone other than these specified parties.
•�-c-_-'�.-..- ,c_ Gam.._-�-'
Chubbuck, Idaho
May 31, 2011
DEATON & COMPANY, CHARTERED