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HomeMy WebLinkAbout2011 CDAHUBBUDK DEVELOPMENT AUTHORITY ITY A COMPONENT UNIT OF THE CITY OF CHUBBUCK, IDAHO FINANCIAL STATEMENTS AS OF SEPTEMBER 0, 2011 WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2010 DEATON & i'(IMPArlY, C ARSERFD HUBBUCK 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 a0vities 6 Governmental Funds Balance sheets g Statements of revenues, expenditures, and changes in fund balances 7 NOTES TO FINANCIAL STATEMENTS 8-11 REQUIRED SUPPLEMENTARY 1NFOIRMATION 12 Statement of revenues and expenditures - budget to actual 19 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 Intornal Control Over Financial Reporting Based on an Audit of FinanciaJ Statements Performed in Accordance With Govern mer;t Auditing Standards 15-16 DEATON &- COM PANY4 CIIAR'I'1~:EtED Denton tic Company, Chrirti`ml — -- Ccrtifiod Public Accountanii 215 NvAll 91.11. Swhc A W Ir Nix:lrP.11r7, 1D 8201 278 ( 208) 31- 5825 - Mermken of Icaho So iel+ or Cenrma I'ulxi- A+Muu4utlo--- ?iemlxr� ofAm rxjn Jr :ia:e or L.eo.:..� N1, N AA4v.''1141r11} 12119494211]4a■a1111]1N1"WICTCTILINI 1 To the Board of Commissioners Chubbuck Development Authority Chubbuck, Idaho We have audited the accompanying flnancJat statements of the governmental actiwilies, and each major fund, of Chubbuck Development Authority, component unit of Cry of Chubbuck, as of and for the years ended September iii, 2011 and 2014, which collectively comprise the Authorltyr9 basic Financial ataternents as hated In the table of contents. These financial statements are the teaponsibility of Chubbuck Development Authority's management. Our responsibility is to express. opinions on these financial statements based an our audit. The prior year summarized comparative information has been derived from the Authority's 2011) financial statements and, in our report dated May 31, 2011, we expressed unqualified opinions on the respective financial st>aterrients of the governmental activitles, and each major fund inforrnat;on- We conducted our audit in aeoordance with auditing Mandardis ge-rerally accepted in the United States of America and the standards applicable 10 financial at,dlts contalned In Govemmerit Auditing Standards, issued by the Comptrollar General of the United States Those standards require that we plan and perform the audit to obtain mawmable assurance about whether the flr►anclal statements aril free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the flnanolal stwiernerns. An audit also Includes assessing Ute accounting principles used and significant $afimates made by managennantr as well as evaluating the overall financial statement pmsentaMn. We belleve ftt ol+r audit provides a reasonab4e In our opinion, the financial statements referred to above p¢eaent fairly, in all materlal rerspeuts, the respective financial poli#ion of the governmental activities, and each rnajcw fund of the Chubbuck DeveloprrieM Authority, as of September 30, 20111 and the respective changes in flnanci.al position fpr the years then ended in ooillormity with accounting principles generally accepted in the United States of America. In accordance with Govemmeni Auditing Standards, wn have also Issued aur report dated March 22, 2012, on our consideratlon of the Chubbuck Development Aufhoriyia intermal control over financial reporting and on our tests of its compliance with certain proviisiona of laws, rep ulatlons, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over firiancial reporting and romptianca and Hie results of that testing, and not to provide an opinion ori the internal control over financial reporting or ori compliance. That report is an Integral part of an audit performed in accordance with Government Auditing Slandards and should be considered in assessing the results of our audit. Accounting principles gerisrally accepted in #tie United States of America (require that budgetary Comparison information on page 13 be presented to auppAernent the basic financial Statements. Such informati on, although not a part of the basic fi nencial stafinTmnts, Is required by the Governrnenial Accounting St"dards Board, who csmsiders it to be an essential part of financial reporting for placlag the basic financial siatemnnta in an appropriate operatlonal, economic, or historical context. We hava applied certain Limited procedures to the requl red supplementary Information in accordance with auditing stanldafds generally accepted in the United Mates of America, which consisted of inquiries of management about the methods of preparing the information and comparing the informabun for consistency with mmnagernant's responses to our inquiries, the basic financial statements, 2nd other knowledge we obtained during our audit of the basic financial statements, We do not express an opiriion or provide any assurance on the information because the limited procedures do not provide us with suffFdsni evidence to express an opinion provide any assurance. The Authority has not presented the (required Managemarit's discussion and analysis that accounting principles generally acceptiid in the United States has determined is necessary to supplement, although not required to be part cif, the basic financial statements. Pocatello, Idaho March 22. 2012 CHUBDUCK DEVELOPMENT AUTHORITY STATEMENTS OF NET ASSETS SEPTEMBER 30, 2011 WITH COMPARATIVE TOTAL AT SEPTEMBER 3Q. 2010 ASSETS Cash and cash equivalents Other receivables Property tax receivable LIABILITIES Accoont5 payable NET ASSETS Unrestricted Governmental Act]vltles 2091 2010 $ 3,656,886 S 3,034.331 25,000 25.000 132,270 94,375 3,814,156 3,163,706 117,356 83.405 117,356 — — 83,905 $ 3.6x96,800 S 3,079,801 The accompanying notes are an integral Pert of Ihas Lt, financial statements Page 4 DE ETON X COMPANY, CHARTERED CHUEBUCK DEVELOPMENT AUTHORITY STATEMENTS OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2010 The accompanying notes are an integral part of these financial statements Page 5 DEATON & COMPANY, C'HARTF:RFD Governmental Activities 2011 2410 EXPENSES Administration _ Project payments 1,227,258 215,234 1,227.258 215,230 REVENUES Property taxes 1,825,321 1,688,770 Interest and other 18,936 14,742 1, x44.257 1,702,512 CHANGE IN NET ASSETS 616,999 1,457,282 BEGINNING NET ASSETS 3,079,801 1,552,519 ENDING NET ASSETS 3,695,800 5 3,079,801 The accompanying notes are an integral part of these financial statements Page 5 DEATON & COMPANY, C'HARTF:RFD ASSETS Cash and cash equivalents Other receivables Property tax receivable LIABILITIES Accounts payable Deferred tax revenues FUND BALANCES Unreserved General fund OHUBSUCK DEVELOPMENT AUTHORITY BALANCE SHEETS GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2010 General Fund 2011 2010 $ 3,656,896 3,659,886 3,039,331 25,000 25,000 25,000 132,270 132,270 99,375 3,814,15$ 3,814,156 $ 3,163,706 117,356 $ 117,356 83,905 110,340 110,340 73.971 — 227,666 227,696 157,876 3.586,460 3,686,460 33.814,156 Amounts reported for governmental activities in the statements of net assets are different because: 3,586,460 3,005,630 3,596,464 3,005,830 Certain receivables are not current resources and are reported as deferred revenues in the governmental funds 110,340 73,971 Net Assets of Governmental Actitirities $ 3.696.800 S 3,079,801 The accompanying notes are an integral part of these financial statements Page 6 DEATON & COMPANY. C ARTERED OHUDBUCK DEVELOPMENT AUTHORITY STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE$ GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2010 REVENUES Property taxes Interest revenue EXPENDITURES Projects and grants EXCESS REVENUES OR (EXPENDITURES) BEGINNING FUND BALANCE ENDING FUND BALANCE Net r,hange In fund balances -total governmental funds General Fund 2011 2010 $ 1,788,951 $ 1,789.851 $ 1,667,074 18,936 18.936 13,742 1,807,807 1,807,887 1,671,418 1,227,25E 1,227,258 215,230 1,227,258 1,227,258 215,230 580,828 580.629 1,459.188 3,005.831 3,005,831 1,549,844 $ 3,586,460 3.586,460 $ 3,005,830 Amounts reported fir 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 3 580,620 $ 1,456,186 36,370 31,096 $ 616,999 $ 1,487,282 The acco rn pa ny i n g nvte5 are an integral part of these financial statements Rage 7 RE ATON &- COV1PA NY, C1FARTFRr.n CHUBBUCK DEVELOPMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS NOTE 1 - Summary of Significant Acpountinsa Policles A. Reporting Entity The Idaho Urban Renewal Law of 1855 authorized the Mayor, with advice and consent of the City Council, to appoint a board of commissioners for an urban renewal agency to functlon within the municipality of Chrubbuck, provided that the Council has first passed a rer,,olution ilnding 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 (COA), was found necessary by resolution in 1582 and the board members were appointed thereafker. Unlike other advisory boards to the Clty Council, state Jaye declares this agency to be "sin 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 Arcountrng Standards Board. the ODA is included in the Annual Financial Statements of the City of C.hubbuck as a discretely presented component unit. 8. Ewoverrament wide and ]fund financial sfafements 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 nonfiiduoiary activities of the government. For the Prost part, the effect of interfund activity has been removed from these statements, C. Measurement {coos, basis of accounting, and financial statement preaentatian The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accown ingr. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of relatsd cash Flows- Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items arse recognized as revenue as noon as all eligibility requirements imposed by the provider have been mat. Governmental fund financial statements are reported using tho current financial resources measurement fours and the modified acomat basis of accounting. Revenues are recognized as soon as they are both measurable and available, Revenues are considered to be avaifabie when they are collectible within the current period or sn 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 clays 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 atl 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 authorlty- As a general rule, the effect of intsrfund activity has been eliminated from the government -wide financial statements Page 8 DEA' ON &- COMPANY, CHARTERED CHUBBUGK DEVELOPMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS NOTE 1 - Summary of Significant Accounting Po icles Wontinuedt D. Assets, lrabifrtries, and not assets or equity 1. Dcposrts and investa?&rrts Unrestricted cash balances from all funds are combined and ingested 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. ODA is authorized under State Code to invest in obligations of the U.S_ Treasury, U.S. Government backed institutions, commercial paper, and repurchase agreements. DA's policy Is to restrict investment to highly liquid money market accounts, 2. Receivables arra payabies property taxes receivable are recorded whin certified by the State Tex Com rnission in October of each year. Taxes not received within sixty days of year-end are deferred. The taxing authnritf�s within each tax increment financing distract levy property taxes by the third Monday of Septa mber on a market value basis. These taxes are blued to the taxpayers in Novernber 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 tate first day of January of the succeeding year. Property taxes are assessed and collected for the Authority by Bannock County, 3_ ,Restdcfed 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 A,9sets The Authority has no capital assets_ 5. CorrmpLnnsated Absences The Authority has no liability for compensated absences. 6. f=und Equity In the fund financial statements, governmental funds report the fallowing classifications of fund balance: Nonspondabte sierras- 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 iterns. Restrfcted (terns- 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, Comma#ted items -This category includes amounts that can only be used for the specific purposes determined by a formal action of the Authority's highest level of decision-making authority for the Authorlty_ Commitments may be changed or lifted only by the Board taking the same formal action that imposed the constraint originally. Assigned items -Assignee! items represent the Authority's intent to use certain, resources far specific purposes. The Board may establish the intended use of these funds for a designated purpose Unassigned items- Represents the remainder of the Authority's equity in governmental fund -type balances in ex ss of the aforementioned dassiftcations, Page S DEATON & C OMPA%n. CRARTERED CHUBBLICK DEVELOPMEMT AUTHORITY MOTES TO FINANCIAL STATEMENTS NOTE 2 - Reconcillatfon of Government -wide and Fund Financial 5.1atements A. Explanation of certain, differences between the grovernmental fund balance sheat acrd the government -wide statement of net assets. The governmental fund balance sheet includes the reconciliatlon between fund balance - total governmental funds and net assets - governmental activities as reported in the government -wide statement of net assets, One elernent of the reoonciliation explains that "C a rta i rt receivables are not current resources and are reported as deferred reveriues in the governmental funds". The detail of this difference is as follows: Deferred Property Taxes NOTE 3 - Stewardshipr compliance and accountabilfty A. Budgetary Information 5 110,340 Budgets are adopted on a basis consistent with generally accepted accounting prinoiples, Annual appropriated budgets are adopted for the general and special revenue funds_ All annuaf appropriations lapse at fiscal year em, The Board of the Chuhbuck Development Authority does not and is not required to hold public rneetirig in conjunction with adoption of its annual budget. The new budget is submitted to the board at its meeting in October as pert 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 an cy in vestm ents Dash and cash equivalents at yearend consist of the following: Deposits Dash in bank Dash in City of Pocatello allocation pool The Authority has no investments, Bank Book 5 131.430 $ 114,399 3,542,487 3,542,487 3,673,917 $ 3,656,886 Deposits - Custodial Credit Risk for deposits is the risk that, in the event of bank (financial institute) failure, the governments deposits may not be returned to it. At year-end, some of the Authority's deposits were held in the City of Pocatello allocation pool which Include deposits in the State Treasurers lnvestment Pawls (LC'aIP)_ Deposita in the LGIP are not Insured or guaranteed by the f=ederal Deposit Insurance Corporation, the State of Idaho or any other government agency. The portion of LIP Funds allocated to the Authority was unknown at yearend, The State Treasurerrs Investment Pavia (LGIP) operates in accordance with appropriate state laws and regulations. The reported value of the pools fs the sarne as the fair value of the pool shares. Deposits and Investment transactions are subject to a varlety 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, Page 14 DEATON & C O-MI�aNv, (7111ARTFAFD CHUBBUCK DEVELOPMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS NOTE 4. Detailed notes on all funds (continued) A. Deposits and Investments (Continued) Credit Fisk is the risk that an issuer or a counter party to an investment vviN not fulfill its obligations. Concentration of Credit Risk is the risk of loss attributed to the magnitude of an investment in a single isseer, The Authority has a Concentra#ion risk of $1,688,413 due to all trust deposits held within one trust department and invested In the same fund. B. Receivables I- Property Taxes Property tax revenues are recognized and accrued when billed by Bannock County_ CDKprop" taxes, levled by the third Monday of September on a market value basis, are billed to the taxpayers in November_ Ralf of the real, personal and mobile home property taxes are due on Decemher 20 and the remainder is due the folirming ,tune 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 t y Bannock County, . Properly Tax Receivable and Deferred Properfy Taxes At yearend, property tax receivable and deferred tax revenues consisted of the following: General fund NOTE 5. Other information A. Contingent Llab+litias Receivables Deferred Tax 132,270 110,340 The majority of the revenue collected by CDA is derived from tax increment financing. Tax increment financing is a method of segregating a pardon 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 riot 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 Manch 22, 2012, the date the financial statements were available to be issued. Page 11 DEATON & COMPANY. CHARTERED REQUIRED SUPPLEMENTARY INFORMATION Page 1 DEA:IUN & COM 4Y, Cl[AWHCMr. 1) CHUBBUCK DEVELOPMENT AUTH0RtTY STATEMENT OF REVENUES AND EXPJENDITURE8 - BUDGET TO ACTUAL FOR THE YEAR ENDED SEJPTEMJBEJR 30, 2411 Original Amended Budget Budget ActuaJ REVENUESAmounts Amounts Amounts Variance GENERAL FUND Property taxes Interest revenue EXPENDITURES GENERALFUND Admrnistra#inn and other expenses Project5 and grants Playground equipment Hawthorne Pavilion Evans Lane Cf ubbuck Road WOW system Hiline Road Afton Meadows Adams 8trestl Park Lawn Allstate project Hockey rink NET CHANGE IN FUND IBALANCE BEGINNING FUND BALANCE ENDING, FUND BALANCE 1,663,000 $ 1,683,000 $ 1,7B8,951 $ 125,981 15,000 15,004 16,635 3,936 1,676.040 1,678,000 1.807,887 124,887 " - 3,609 (3,809) 14,400 10,000 10,000 15,000 15,000 3,594 11,406 100,000 100,000 86,895 13,105 400,ODO 400,000 194,61)7 205,399 2 30, 000 230,000 27,847 202,353 210,000 210,040 705,057 (495.057) _ - 18,804 (1a,804) - 593 (593) 11000r000 1,000,000 139,005 86 0, 995 18,000 18,000 47,453 (28,453) 1,983,OOr3 1,983,000 1,227,258 755,742 (305,400) $ 31)5,440) 580,624 885,628 3,005,831 3,586,460 Page 13 DENFON s COMPANY, CHARTERF,I) CHIJBIBUCK DEVELOPMENT AUTHORITY NOTES TO REQUIRED SUPPLEMENTAL INFORMATION NOTE 1 - EA ELMS jB- L�OET PROJECTS The Authority did not budget sufficient &xpenditures for increased administration expenditures in the following projects, Other expenses Hiline toad Afton Meadows Adams Street! Park Lawn Hockey rink REVENUE IN EXCESS OF BUDGET Revenues in excess of budget and decreased expenditures in other projects were used to pay under -budgeted expenditures. 14 DFATON b► COMPANY, CHARTERED