HomeMy WebLinkAbout2015 CDACHUBBUCK DEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE CITY OF CHUBBUCK, IDAHO
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2015
WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2014
Certified Public Accountants
CHUBBUCK DEVELOPMENT AUTHORITY
TABLE OF CONTENTS
Page
Title Page
1
Table of Contents
2
AUDITOR'S REPORTS
3-5
FINANCIAL STATEMENTS
Government Wide
Statements of net position
6
Statements of activities
7
Governmental Funds
Balance sheets
8
Statements of revenues, expenditures, and changes in fund balances
9
NOTES TO FINANCIAL STATEMENTS
10-13
REQUIRED SUPPLEMENTARY INFORMATION
14
Statement of revenues and expenditures - budget to actual
15
Notes to the statement of revenues and expenditures - budget to actual
16
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
17-18
FA
Deaton & Company, Chartered
Certified Public AccountantsIWATI"VEE215 North 9th, Suite A JILAEAL&A
Pocatello, Idaho 83201-5278
(208) 232-5825 ��
Members of Idaho Society of certified Public Accountants —
Members of American Institute of certified Public Accounwnrs
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Chubbuck Development Authority
Chubbuck, Idaho
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and each
major fund of the Chubbuck Development Authority, a component unit of the City of Chubbuck, Idaho,
as of and for the year ended September 30, 2015, 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 governmental activities and each major fund information of the
Chubbuck Development Authority, as of September 30, 2015, and the respective changes in financial
position for the years 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 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.
Management has omitted the management and discussion analysis that accounting principles
generally accepted in the United States of America require to be presented to supplement the basic
financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this
missing information.
Other Information
We also have previously audited, in accordance with auditing standards generally accepted in the
United States of America, the Authority's basic financial statements for the year ended September 30,
2014, which are not presented with the accompanying financial statements and we expressed
unmodified opinions on the respective financial statements of the governmental activities, and the
aggregate remaining fund information. That audit was conducted for the purpose of forming opinions
on the financial statements that collectively comprise the Chubbuck Development Authority's basic
financial statements as a whole. The summarized comparative information is consistent, in all
material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 24,
2016, on our consideration of the 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 24, 2016
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF NET POSITION
SEPTEMBER 30, 2015
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2014
ASSETS
Cash and cash equivalents
Property tax receivable
LIABILITIES
Accounts payable
NET POSITION
Unrestricted
Governmental Activities
2015 2014
$ 3,141,045 $ 2,061,683
88,694 109,532
3,229,739 2,171,215
348,277 236,099
348,277 236,099
$ 2,881,462 $ 1,935,116
The accompanying notes are an integral part of these financial statements
Paae 6
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2015
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2014
EXPENSES
Project payments
Grant to CIAWCA
Professional services
REVENUES
Property taxes
Interest and other
CHANGE IN NET POSITION
BEGINNING NET POSITION
ENDING NET POSITION
Governmental Activities
2015 2014
$ 1,070,456
228,000
S 24n
1,301,696
$ 1,679,325
228,000
3,240
1,910,565
2,221,381 2,097,431
26,661 13,969
2,248, 042 2,111,400
946,346 200,835
1,935,116 1,734,281
$ 2,881,462 $ 1,935,116
The accompanying notes are an integral part of these financial statements
Paae 7
ASSETS
Cash and cash equivalents
Property tax receivable
LIABILITIES
Accounts payable
Deferred tax revenues
FUND BALANCES
CHUBBUCK DEVELOPMENT AUTHORITY
BALANCE SHEETS
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2015
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2014
General
Fund 2015 2014
$3,141,045
$ 3,141,045
$ 2,061,683
88,694
88,694
109,532
$ 3,229,739
$ 3,229,739
$ 2,171,215
$ 348,277
$ 348,277
$ 236,099
82,482
82,482
103,798
430,759
430,759
339,897
Committed 228,000 228,000 228,000
Unassigned 2,570,980 2,570,980 1,603,318
2,798,980 2,798,980 1,831,318
$ 3,229,739
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 82,482 103,798
Net Position of Governmental Activities $ 2,881,462 $ 1,935,116
The accompanying notes are an integral part of these financial statements
Page 8
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2014
REVENUES
Property taxes
Interest revenue
Other revenue
EXPENDITURES
Projects and grants
Professional services
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Net change in fund balances -total governmental funds
General
1,298,456
Fund
2015
$ 2,242,697
$ 2,242,697
21,661
21,661
5,000
5,000
2,269,358
2,264,358
2014
$ 2,082,774
13,969
2,096,743
1,298,456
1,298,456
1,910,565
3,240
3,240
-
1,301,696
1,301,696
1,910,565
967,662
967,662
186,178
1,831,318
1,831,318
1,645,140
$ 2,798,980
$ 2,798,980
$ 1,831,318
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
$ 967,662 $ 186,178
(21,316) 14,657
$ 946,346 $ 200,835
The accompanying notes are an integral part of these financial statements
Paae 9
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 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 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 10
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
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. When unrestricted resources are spent, the order of spending is
committed (if applicable), assigned (if applicable) and unassigned.
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
formal 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 11
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 position - governmental activities as reported in the government -wide statement of net position. 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
$ 82,482
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
Cash in bank
The Authority has no investments.
Bank Book
3,141,045 3,141,045
3,141,045 $ 3,141,045
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.
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. Because
the Authority has all trust deposits held within one trust department and invested in the same fund a concentration risk
exists. Deposits are held in an institution covered by FDIC and are insured up to $250,000. The Authority's
concentration of credit risk was $2,891,045.
Page 12
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
$ 88,694 $ 82,482
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 24, 2016, the date the financial statements were available to be issued.
The CDA will implement a new tax increment financing (TIF) district for fiscal year 2016. The TIF district will be titled as
the Pine Ridge Mall Urban Renewal District.
Page 13
REQUIRED SUPPLEMENTARY INFORMATION
Page 14
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENT OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2015
Original Amended
Budget Budget Actual
Amounts Amounts Amounts
REVENUES
GENERALFUND
Variance
Property taxes
$ 2,000,000
$ 2,000,000
$ 2,242,697
$ 242,697
Interest revenue
15,000
15,000
21,661
6,661
Other revenue
-
-
5,000
5,000
2,015,000
2,015,000
2,269,358
254,358
EXPENDITURES
GENERALFUND
Administration and other expenses
9,000
9,000
4,673
4,327
Projects and grants
NWSI grant
228,000
228,000
228,000
-
Allstate
28,750
28,750
28,750
-
Knudsen Lane
-
-
18,320
(18,320)
Water system
-
-
11,328
(11,328)
Stuart Addition Streets
-
-
15,417
(15,417)
Hiline Rd to Flandro
-
-
2,861
(2,861)
Dell Road
-
-
269,359
(269,359)
Whitaker Road
1,300,000
1,300,000
687,570
612,430
Tennis Courts
-
-
35,418
(35,418)
1,565,750
1,565,750
1,301,696
264,054
NET CHANGE IN FUND BALANCE
$ 449,250
$ 449,250
967,662
$ 518,412
BEGINNING FUND BALANCE
1,831,318
ENDING FUND BALANCE
$ 2,798,980
Page 15
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO REQUIRED SUPPLEMENTAL INFORMATION
NOTE 1 - EXPENSES IN EXCESS OF BUDGET
PROJECTS
The Authority did not budget sufficient expenditure for increased expenditure in the following
projects.
Knudsen Lane
Water System
Stuart Addition Streets
Hiline Road to Flandro
Dell Road
Tennis Courts
REVENUE IN EXCESS OF BUDGET
Revenues in excess of budget and decreased expenditures in Whitaker Road were used to
pay under -budgeted expenditures.
Page 16
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
INDEPENDENT AUDITOR'S 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, 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 and each major fund, and the aggregate remaining fund information of
Chubbuck Development Authority, as of and for the years ended September 30, 2015, 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 24, 2016.
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 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.
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.
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.
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.
Chubbuck, Idaho
March 24, 2016