HomeMy WebLinkAbout2012 CDACHUBBUCK DEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE CITY OF CHUBBUCK, IDAHO
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2012
WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2011
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
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 Accowg nts
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, component unit of City of Chubbuck, as of and for the years ended September 30, 2012 and 2011, 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. The prior year summarized comparative information has been derived from the Authority's 2011
financial statements and, in our report dated March 22, 2012, we expressed unqualified opinions on the respective financial
statements of the governmental activities, and each major fund information.
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 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
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, 2012, 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 March 25, 2013, 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.
Accounting principles generally accepted in the United States of America require that budgetary comparison information on page 13
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 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.
Pocatello, Idaho
March 25, 2013
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF NET ASSETS
SEPTEMBER 30, 2012
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2011
ASSETS
Cash and cash equivalents
Other receivables
Property tax receivable
LIABILITIES
Accounts payable
NET ASSETS
Unrestricted
Governmental Activities
2012 2011
$2,188,384 $ 3,656,886
25,000 25,000
123,401 132,270
2,336,785 3,814,156
20,122 117,356
20,122 117,356
$ 2,316,663 $ 3,696,800
The accompanying notes are an integral part of these financial statements
Page 4
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2012
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2011
Governmental Activities
EXPENSES
Administration $ 3,150 $ -
Project payments 3,232,943 1,227,258
3,236,093 1,227,258
REVENUES
Property taxes
1,828,285
1,825,321
Interest and other
27,671
18,936
1,855,956
1,844,257
CHANGE IN NET ASSETS
(1,380,137)
616,999
BEGINNING NET ASSETS
3,696,800
3,079,801
ENDING NET ASSETS
$ 2,316,663
$ 3,696,800
The accompanying notes are an integral part of these financial statements
Page 5
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
BALANCE SHEETS
GOVERNMENTALFUNDS
SEPTEMBER 30, 2012
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2011
Certain receivables are not current resources and are reported as deferred
revenues in the governmental funds 73,733 110,340
Net Assets of Governmental Activities
$ 2,316,663 $ 3,696,800
The accompanying notes are an integral part of these financial statements
Page 6
DEATON & COMPANY, CHARTERED
General
Fund
2012
2011
ASSETS
Cash and cash equivalents
$ 2,188,384 $
2,188,384
$ 3,656,886
Other receivables
25,000
25,000
25,000
Property tax receivable
123,401
123,401
132,270
$ 2,336,785 $
2,336,785
$ 3,814,156
LIABILITIES
Accounts payable
$ 20,122 $
20,122
$ 117,356
Deferred tax revenues
73,733
73,733
110,340
93,855
93,855
227,696
FUND BALANCES
Committed
228,000
228,000
-
Unassigned
2,014,930
2,014,930
3,586,460
2,242,930
2,242,930
3,586,460
$ 2,336,785
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 73,733 110,340
Net Assets of Governmental Activities
$ 2,316,663 $ 3,696,800
The accompanying notes are an integral part of these financial statements
Page 6
DEATON & COMPANY, CHARTERED
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
WITH COMPARATIVE TOTAL FOR THE YEAR ENDED SEPTEMBER 30, 2011
REVENUES
Property taxes
Interest revenue
EXPENDITURES
Projects and grants
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Net change in fund balances -total governmental funds
General
Fund 2012 2011
$ 1,864,892
$ 1,864,892
$ 1,788,951
27,671
27,671
18,936
1,892,563
1,892,563
1,807,887
3,236,093
3,236,093
1,227,258
3,236,093
3,236,093
1,227,258
(1,343,530)
(1,343,530)
580,629
3,586,460
3,586,460
3,005,831
$ 2,242,930
$ 2,242,930
$ 3,586,460
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
$ (1,343,530) $ 580,629
(36,607) 36,370
$ (1,380,137) $ 616,999
The accompanying notes are an integral part of these financial statements
Page 7
DEATON & COMPANY, CHARTERED
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 Sianlficant 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 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 9
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
The Authority has committed funds to assist in the loan payments for the sewer interceptor within the City of
Chubbuck. The Authority committed $228,000 which is calculated using the portion of the sewer intercept within the
CDA's legal jurisdiction.
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 govemmental funds and
net assets - governmental activities as reported in the government -wide statement of net assets. One element of the
reconcillation 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
$ 73,733
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
2,203,994 2,188,384
21203,_994 $ 2,188,384_
Deposits - Custodial Credit Risk for deposits is the risk that, in the event of bank (financial instituted failure, the
government's deposits may not be returned to it. The Authority's deposit are covered by federal Deposit Insurance
Corporation or collateralized during the year and were therefore, not subject to custodial credit risk.
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 10
DFATON & 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 has a concentration risk of $1,568,413 due to all trust deposits held within one trust department and invested
in the same fund.
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
$ 123,401 $ 73,733
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 25, 2013, 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, 2012
Original Amended
Budget Budget
Amounts Amounts
REVENUES
GENERALFUND
Actual
Amounts Variance
Property taxes $ 1,663,000 $ 1,663,000 $ 1,864,892 $ 201,892
Interest revenue 15,000 15,000 27,671 12,671
1,678,000 1,678,000 1,892,563 214,563
EXPENDITURES
GENERAL FUND
Administration and other expenses
-
-
9,025
(9,025)
Projects and grants
Playground equipment
25,000
25,000
25,000
Hockey Rink
9,500
(9,500)
Evans Lane
528,000
528,000
1,729,349
(1,201,349)
Hiline Road
248,532
(248,532)
Knudsen Lane
19,241
(19,241)
Joy Street
200,000
200,000
22,111
177,889
Water system
350,000
350,000
349,656
344
Afton Meadows
25,000
25,000
176,955
(151,955)
Allstate project
450,000
450,000
544,927
(94,927)
Chubbuck/Philbin Intersection
100,000
100,000
126,796
(26,796)
1,678,000
1,678,000
3,236,093
(1,558,093)
NET CHANGE IN FUND BALANCE
$ -
$ -
(1,343,530)
$ (1,343,530)
BEGINNING FUND BALANCE
3,586,460
ENDING FUND BALANCE
$ 2,242,930
Page 13
DF,ATON & 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.
Other expenses
Hiline Road
Afton Meadows
Adams Street] Park Lawn
Chubbuck]Philbin Intersection
REVENUE IN EXCESS OF BUDGET
Revenues in excess of budget, decreased expenditures in other projects, and prior fund
balance were used to pay under -budgeted expenditures.
14
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 Tnstitute of Certified Public Ac—tants
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 year ended September 30, 2012, which collectively
comprise the Chubbuck Development Authority's basic financial statements and have issued our report
thereon dated March 25, 2013. 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.
Pocatello, Idaho
March 25, 2013
DEATON & COMPANY, CHARTERED