HomeMy WebLinkAbout2013 CDACHUBBUCK DEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE CITY OF CHUBBUCK, IDAHO
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 20'12
Certified Public Accountants
CHUBBUCK DEVELOPMENT AUTHORITY
TABLE OF CONTENTS
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Title Page
1
Table of Contents
2
AUDITOR'S REPORTS
3-4
FINANCIAL STATEMENTS
Government Wide
Statements of net position
5
Statements of activities
6
Governmental Funds
Balance sheets
7
Statements of revenues, expenditures, and changes in fund balances
8
NOTES TO FINANCIAL STATEMENTS
9-12
REQUIRED SUPPLEMENTARY INFORMATION
13
Statement of revenues and expenditures - budget to actual
14
Notes to the statement of revenues and expenditures - budget to actual
15
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
16-17
K
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 Acc000L u
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Chubbuck Development Authority
Report on the Financial Statements
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We have audited the accompanying financial statements of the business -type activities, and the aggregate
remaining fund information of the Chubbuck Development Authority, component unit of City of Chubbuck, Idaho
as of and for the year ended September 30, 2013, and the related notes to the financial statements, which
collectively comprise the Authority'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 business -type activities, and the aggregate remaining fund information, of the Chubbuck
Development Authority, 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 budgetary comparison
information on pages 14-15 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.
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.
Other Information
The prior year summarized comparative information has been derived from the Authority's 2012 audited financial
statements and, in our report dated March 25, 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.
Other Reporting Required by Govemment Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 28, 2014, 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 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 Chubbuck Development Authority's internal control over financial
reporting and compliance.
Chubbuck, Idaho
March 28, 2014
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF NET POSITION
SEPTEMBER 30, 2013
WITH COMPARATIVE TOTAL. AT SEPTEMBER 30, 2012
ASSETS
Cash and cash equivalents
Other receivables
Property tax receivable
LIABILITIES
Accounts payable
NET POSITION
Unrestricted
Governmental Activities
2013 2012
$ 1,649,558 $ 2,188,384
- 25,000
91,351 123,401
1,740,909 2,336,785
6,628 20,122
6,628 20,122
$ 1,734,281 $ 2,316,663
The accompanying notes are an integral part of these financial statements
Page 5 DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2013
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2012
EXPENSES
Administration
Grant to CIAWWCA
Project payments
REVENUES
Property taxes
Interest and other
CHANGE IN NET POSITION
BEGINNING NET POSITION
ENDING NET POSITION
Governmental Activities
2013 2012
$ 3,289
$ 3,150
228,000
2,503,477
3,232,943
2,734,766
3,236,093
2,133,157
1,828,285
19,227
27,671
2,152,384
1,855,956
(582,382)
(1,380,137)
2,316,663 3,696,800
$ 1,734,281 $ 2,316,663
The accompanying notes are an integral part of these financial statements
Page 6 DEATON & COMPANY, CHARTERED
ASSETS
Cash and cash equivalents
Other receivables
Property tax receivable
LIABILITIES
Accounts payable
Deferred tax revenues
FUND BALANCES
Committed
Unassigned
CHUBBUCK DEVELOPMENT AUTHORITY
BALANCE SHEETS
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2013
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2012
General
Fund 2013
$1,649,558
91,351
$ 1,649,558
91,351
2012
$ 2,188,384
25,000
123,401
$1,740,909 $ 1,740,909 $ 2,336,785
$ 6,628
$ 6,628
$ 20,122
89,141
89,141
73,733
95,769
95,769
93,855
228,000
228,000
228,000
1,417,140
1,417,140
2,014,930
1,645,140
1,645,140
2,242,930
$1,740,909
Amounts reported for governmental activities in the statements of net position
are different because:
Certain receivables are not current resources and are reported as deferred
revenues in the governmental funds 89,141 73,733
Net Position of Governmental Activities
$ 1,734,281 $ 2,316,663
The accompanying notes are an integral part of these financial statements
Page 7 DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2012
REVENUES
Property taxes
Interest revenue
EXPENDITURES
Projects and grants
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Net change in fund balances4otai governmental funds
General
Fund 2013
2012
$ 2,117,749 $ 2,117,749 $ 1,864, 692
19,227 19,227 27,671
2,136, 976 2,136, 976 1,892,563
2,734,766 2,734,766 3,236,093
2,734,766 2,734,766 3,236,093
(597,790) (597,790) (1,343,530)
2,242,930 2,242,930 3,586,460
$ 1,645,140 $ 1,645,140 $ 2,242,930
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 Position of Governmental Activities
$ (597,790) $ (1,343,530)
15,408 (36,607)
$ (582,382) $ (1,380,137)
The accompanying notes are an integral part of these financial statements
Page 8 DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Summar 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 Govemmental 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 position and the statement of activities) 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 eamed 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 9
DFATON & COMPANY, CHARTERED
CHUSBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Summary of Sianificant Accountlne 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 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
formai action of the Authority's highest level of decision-making authority for the Authority. Commitments may be
changed or lifted only by the Board taking the same formal action that imposed the constraint originally.
Assigned items -Assigned items represent the Authority's intent to use certain resources for 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 excess
of the aforementioned classifications.
Page 10
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
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
NOTE 3 - Stewardship, compliance and accountability
A. Budgetary Information
$ 89,141
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 Hoard 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
Cash in bank
The Authority has no investments.
Bank Book
$ 1,681,555 $ 1,649,558
$ 1,681,555 $ 1,649,558
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.
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.
Page 11
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 4. Detailed notes on all funds (continued)
A. Deposits and Investments (Continued)
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 had no concentration risk during the year. All deposit were either insured by FDIC or collateralized.
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 CRA 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
$ 91,351 $ 89,1+41
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 March 28, 2014, the date the financial statements were available to be issued.
Page 12
DEATON & COMPANY, CHARTERED
REQUIRED SUPPLEMENTARY INFORMATION
Page 13
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENT OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2013
REVENUES
GENERALFUND
Property taxes
Interest revenue
EXPENDITURES
GENERAL FUND
Administration and other expenses
Projects and grants
CIAWWCA grant
Hockey Rink
Hawthorne & Quinn Intersection
Allstate
Knudsen Lane
Parks Capital
Water system
Dell Road
Valenty Ward
South Afton
Whitaker Road
Tennis Courts
Industry Way
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Original Amended
Budget Budget Actual
Amounts Amounts Amounts
Variance
$ 1,800,000 $ 1,800,000 $ 2,117,749 $ 317,749
15,000 15,000 19,227 4,227
1,815,000 1,815,000 2,136,976 321,976
4,637 (4,637)
228,000
228,000
228,000
-
60,000
60,000
66,527
(6,527)
20,000
20,000
-
20,000
400,000
400,000
-
400,000
2,000,000
2,000,000
2,025,953
(25,953)
25,000
25,000
-
25,000
410,000
410,000
260,261
149,739
8,000
8,000
7,685
315
10,000
10,000
-
10,000
5,000
5,000
-
5,000
15,000
15,000
-
15,000
250,000
250,000
141,703
108,297
9,000
9,000
-
9,000
3,440,000
3,440,000
21734,766
705,234
$ 1,625,000$
(1,625,000)
(597,790)
$ 1,027,210
2,242,930
$ 1,645,140
Page 14 DEATON & COMPANI; 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 expenditures in the following
projects.
Other expenses
Hockey Rink
Knudsen Lane
REVENUE IN EXCESS OF BUDGET
Revenues in excess of budget and decreased expenditures in other projects were used to pay
under -budgeted expenditures.
15
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 Accountants
F. tea, t• • ■ i ■ W t■ VOL I
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
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 Chubbuck
Development Authority, as of and for the year ended September 30, 2013, and the related notes to the
financial statements, which collectively comprise Chubbuck Development Authority'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 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 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 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 consider
to be a significant deficiency in internal control over financial reporting.
Comaliance 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.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of intemal 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.
Pocatello, Idaho
March 28, 2014
DEATON & COMPANY, CHARTERED