HomeMy WebLinkAbout2004CITY OF CHUBBUCK
AUDITED FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
ANNUAL FINANCIAL REPORT
SEPTEMBER 30, 2004
TABLE OF CONTENTS
Page
Title Page 1
Table of Contents 2
Auditor's Reports
Independent Auditor's Report
3-4
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
6
Financial Statements
Statement of Net Assets
6
Statement of Activities
7
Balance Sheet - Governmental Funds
8
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
9-10
Statement of Net Assets - Proprietary Funds
11
Statement of Revenues, Expenses, and Changes in Net Assets - Proprietary
Funds
12
Statement of Cash Flows - Proprietary Funds
13
Notes to Financial Statements
14-23
Required Supplementary Information
24
Budgetary Comparison Schedule - General Fund
25
Budgetary Comparison Schedule - Development Fund
26
Other Supplementary Information
27
Combining Balance Sheet - Nonmajor Governmental Funds
28
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Governmental Funds
29
Budgetary Comparison Schedule - Nonmajor Governmental Funds
30
DEATON & COMPANY, CHARTERED
Deaton & Company, Chartered
Certified Public ACCOL1Z]tantS
215 North 9th, Suite A
Pocatello, ID 83201-5278
(208)232-5825
Menhets of ldahu Society of Ce] Iified Public Accountants
Mem burs of Atnerican Institute of Ccr6fied Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the City Council
City of Chubbuck, Idaho
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of City of Chubbuck as of and
for the year ended September 30, 2004, which collectively comprise the City's basic financial statements
as listed in the table of contents. These financial statements are the responsibility of City of Chubbuck's
management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund,
and the aggregate remaining fund information of the City of Chubbuck as of September 30, 2004, and the
respective changes in financial position and cash flows, where applicable, thereof for the year then ended
in conformity with accounting principles generally accepted in the United States of America.
As described in Note 1, the City has implemented a new financial reporting model required by the
provisions of GASB Statement No. 34, Basic Financial Statements and Management's Discussion and
Analysis for State and Local Governments, as amended and interpreted, as of September 30, 2004.
In accordance with Government Auditing Standards, we have also issued our report dated June 8, 2005,
on our consideration of the City's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
The required supplementary information is not a required part of the basic financial statements but is
supplementary information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Chubbuck's basic financial statements. The combining and individual nonmajor fund
financial statements are presented for purposes of additional analysis and are not a required part of the
basic financial statements. The combining and individual nonmajor fund financial statements have been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a
whole.
The City 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
June 8, 2005
DEATON & COMPANY, CHARTERED
Deaton & Company, Chartered
Certified PUblic Accountants
215 North 9th. Suite A
Pocatello. ID $3201-5278
(208) 232-5825
N lem6er, "I" Idaho Sa wly 4-CmiGrd Public Aucuuntane,
Menflicr+ of Amerirm Itl,ii Rile of CM11Wd Public Accu ,nfdfira
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 City Councii
City of Chubbuck, Idaho
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of City of Chubbuck as of and for the year
ended September 30, 2004, which collectively comprise the City of Chubbuck's basic financial statements
and have issued our report thereon dated June 8, 2005. 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 City of Chubbuck's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the
financial statements and not to provide an opinion on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in
the internal control that might be material weaknesses. A material weakness is a reportable condition in
which the design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that misstatements caused by error or fraud in amounts that would be material
in relation to the financial statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. We noted no matters involving
the internal control over financial reporting and its operation that we consider to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Chubbuck'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. However, we noted certain matters that we reported to
management of City of Chubbuck in a setarate letter dated June 8, 2005.
This report is intended for the information and use of management, City Council, and federal awarding
agencies. However, this report is a matter of public record and its distribution is not limited.
Pocatello, Idaho
June 8, 2005
CITY OF CHUBBUCK, IDAHO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
See accompanying notes to financial sataternents
Total
$ 859,144
1,450,707
187,332
171,396
494,567
3,163,146
181,022
872,128
119,065
461,949
13,868,496
(6,950,576)
8,552,084
11,715,230
124,747
28,335
150,000
38,174
71,122
181,022
119,065
712,465
1,085,000
461,949
187,971
255,016
1,989,936
2,702,401
5,423,827
872,128
2,716,874
$ 9,012,829
D)EATON & COMPANY, CHARTERED
Governmental
Business -type
Activities
Activities
ASSETS
Current assets
Cash
$ 495,830
$ 363,314
Investments
837,233
613,474
Property taxes receivable
187,332
-
Intergovernmental receivables
171,396
Other accounts receivable
21,044
473,523
1,712,835
1,450,311
Noncurrent assets
Restricted assets - cash
Employee benefit fund
181,022
-
Bond reserves
-
872,128
Water deposits
-
119,065
Note Receivable - General Fund
-
461 949
Capital assets
6,495,951
7,372,545
Accumulated depreciation
(3,621,033)
(3,329,543)
3,055,940
5,496,144
4,768,775
6,946,455
LIABILITIES
Current Liabilities
Accounts payable
61,098
63,649
Accrued compensated absences
19,250
9,085
Current portion of bonds payable
-
150,000
Accrued bond interest
-
38,174
Capital lease obligation
71,122
Payable from restricted assets -
Employee benefit fund
181,022
-
Water deposits
-
119,065
332,492
379,973
Noncurrent Liabilities
Bonds payable
-
1,085,000
Note payable - Proprietary fund
461,949
Capital lease obligation
187,971
-
Accrued compensated absences
173,251
81,765
823,171
1,166,765
1,155,663
1,546,738
NET ASSETS
Invested in capital assets,
net of related debt
2,615,825
2,808,002
Restricted for bond service
-
872,128
Unrestricted
997,287
1,719,587
$ 3,613,112
$ 5,399,717
6
See accompanying notes to financial sataternents
Total
$ 859,144
1,450,707
187,332
171,396
494,567
3,163,146
181,022
872,128
119,065
461,949
13,868,496
(6,950,576)
8,552,084
11,715,230
124,747
28,335
150,000
38,174
71,122
181,022
119,065
712,465
1,085,000
461,949
187,971
255,016
1,989,936
2,702,401
5,423,827
872,128
2,716,874
$ 9,012,829
D)EATON & COMPANY, CHARTERED
EXPENDITURES
General government
Law enforcement
Fire control
Building inspection
Street
Parks and recreation
Health and welfare
Development fund
Other special revenue funds
Business -type activities
Utilities
CHANGES IN NET ASSETS
CITY OF CHUBBUCK, IDAHO
STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2004
Net (expense)/revenue
General revenues
General property taxes and sales tax
Franchise fees
Intergovernmental
Operating grants
Leases and rents
Interest income
Miscellaneous
NET CHANGE IN NET ASSETS
BEGINNING NET ASSETS
General Business -type
Activities Activities
$ (4,378,967) $ 116,831
Total
$ (4,262,136)
3,840,304
Program Revenues
3,840,304
138,537
-
Capital
Net
-
Charges for
Grants and
(Expense)/
Expenses
Services
Contributions
Revenue
25,776
23,492
49,268
$ 142,298
$ 101,786
$ -
$ (40,512)
1,882,924
-
255,008
(1,882,924)
673,837
102,546
22,903
(548,388)
92,411
219,535
-
127,124
571,318
-
(571,318)
381,424
38,728
-
(342,696)
17,616
-
-
(17,616)
1,216,438
75,636
-
(1,140,802)
38,035
-
76,200
38,165
5,016,301
538,231
99,103
(4,378,967)
3,071,425
3,188,256
-
116,831
$ 8,087,726
$ 3,726,487
$ 99,103
$ (4,262,136)
Net (expense)/revenue
General revenues
General property taxes and sales tax
Franchise fees
Intergovernmental
Operating grants
Leases and rents
Interest income
Miscellaneous
NET CHANGE IN NET ASSETS
BEGINNING NET ASSETS
General Business -type
Activities Activities
$ (4,378,967) $ 116,831
Total
$ (4,262,136)
3,840,304
-
3,840,304
138,537
-
138,537
525,148
-
525,148
57,988
-
57,988
22,733
-
22,733
25,776
23,492
49,268
23,489
-
23,489
4,633,975
ZAK
4,657,467
255,008
140,323
395,331
3,358,104
5,449,801
8,807,905
PRIOR PERIOD ADJUSTMENT - (190,407) (190,407)
ENDING NET ASSETS $ 3,613,112 $ 5,399,717 $ 9,012,829
7
See accompanying notes to financial satatements
DFATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2004
LIABILITIES
Accounts payable
Employee benefit fund
Accrued compensated absences
Deferred revenue
FUND BALANCES
Unreserved, reported in:
General Fund
Special revenue fund
61,098
181,022 -
19,250 -
59,977 26,250
321,347 26,250
61,098
181,022
- 19,250
86,227
347,597
347,855 - - 347,855
- 711,376 487,029 1,198,405
347,855 711,376 487,029 1,546,260
$ 669,202 $ 737,626 $ 487,029
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital assets used in governmental activities are not financial resources and therefore
are not reported in the funds, net of accumulated depreciation of $3,621,033
2,874 918
Deferred tax revenue represents amounts that were not available to fund current
Other
Total
86,227
General
Development
Governmental
Governmental
Remodel loan to sewer fund
Fund
Fund
Funds
Funds
ASSETS
Net assets of governmental funds
$3,613,112
Cash
$ 59,685
$ 254,996
$ 181,149
$ 495,830
Investments
100,781
430,572
305,880
837,233
Property taxes receivable
156,318
31,014
-
187,332
Intergovernmental receivables
171,396
-
-
171,396
Other receivables
-
21,044
-
21,044
Restricted assets - cash
181,022
-
-
181,022
$ 669,202
$ 737,626
$ 487,029
$1,893,857
LIABILITIES
Accounts payable
Employee benefit fund
Accrued compensated absences
Deferred revenue
FUND BALANCES
Unreserved, reported in:
General Fund
Special revenue fund
61,098
181,022 -
19,250 -
59,977 26,250
321,347 26,250
61,098
181,022
- 19,250
86,227
347,597
347,855 - - 347,855
- 711,376 487,029 1,198,405
347,855 711,376 487,029 1,546,260
$ 669,202 $ 737,626 $ 487,029
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital assets used in governmental activities are not financial resources and therefore
are not reported in the funds, net of accumulated depreciation of $3,621,033
2,874 918
Deferred tax revenue represents amounts that were not available to fund current
expenditures and therefore are not reported in the funds
86,227
Long-term liabilities are not due and payable in the current period and therfore are not
reported in the funds:
Remodel loan to sewer fund
(461,949)
Capital lease
(259,093)
Accrued compensated absences
(173,251)
Net assets of governmental funds
$3,613,112
See accompanying notes to financial satatements
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2004
REVENUES
General property taxes and sales tax
Franchise fees
Intergovernmental
Parks revenue
Licenses, permits and fines
Grants
Fire protection and prevention
Leases and rents
Interest income
Donations
Miscellaneous
EXPENDITURES
General government
Law Enforcement
Fire control
Building inspection
Street
Parks and recreation
Health and Welfare
Development fund
Street guarantee fund
Court fund
Parks Fund
NET CHANGE IN FUND BALANCES
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Other Total
General Development Governmental Governmental
Fund Fund ;=Ilnrlr
$ 2,614,916
$ 1,139,161
$ -
$ 3,754,077
138,537
-
-
138,537
575,443
-
-
575,443
38,728
-
-
38,728
271,026
-
-
271,026
80,891
-
-
80,891
102,546
-
-
102,546
22,733
-
-
22,733
9,876
10,974
4,926
25,776
-
-
76,200
76,200
4,487
75,636
19,002
99,125
3,859,183
1,225,771
100,128
5,185,082
140,843
-
-
140,843
1,815,421
-
-
1,815,421
675,666
-
-
675,666
92,411
-
-
92,411
582,395
-
-
582,395
424,368
-
-
424,368
17,616
-
-
17,616
-
1,216,438
-
1,216,438
-
-
15,000
15,000
-
-
435
435
-
-
22,600
22,600
3,748,720
1,216,438
38,035
5,003,193
110,463
9,333
62,093
181,889
237,392
702,043
424,936
1,364,371
$ 347,855 $ 711,376 $ 487,029 $1,546,260
0
See accompanying notes to financial satatements
(Continued)
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2004
Reconciliation of the change in fund balances - total governmental funds
to the change in net assets of governmental activities:
Net change in fund balances - total governmental funds $ 181,889
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report capital outlays as expenditures while governmental
activities report depreciation expense to allocate those expenditures over
the life of the assets:
Capital asset purchases capitalized
158,873
Depreciation expense
(249,247)
Deferred revenues are not recorded as current period receipts
86,227
Repayment of debt principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the Statement of Net Assets:
Capital lease obligation principal payments
71,829
Some expenses reported in the Statement of Activities do not require the use
of current financial resources and therefore are not reported as expenditures
in governmental fund:
Accrued compensated absences
5,437
Change in net assets
$ 255,008
10
See accompanying notes to financial satatements
DEATON & COMPANY, CHARTERED
ASSETS
Current assets
Cash
Investments
Accounts receivable
Noncurrent assets
Restricted assets - cash
Bond reserves
Water deposits
Note receivable - General Fund
Capital assets
Accumulated depreciation
LIABILITIES
Current Liabilities
Accounts payable
Accrued compensated absences
Current portion of bonds payable
Accrued bond interest
Payable from resticted assets -
Water deposits
Noncurrent Liabilities
Bonds payable
Compensated absences
NET ASSETS
Invested in capital assets,
net of related debt
Restricted for bond service
Unrestricted
CITY OF CHUBBUCK, IDAHO
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2004
11
See accompanying notes to financial satatements
Total
Proprietary
Funds
$ 363,314
613,474
473,523
1,450,311
872,128
119,065
461,949
7,372,545
(3,329,543)
5,496,144
6,946,455
63,649
9,085
150,000
38,174
119,065
379,973
1,085,000
81,765
1,166, 765
1,546,738
2,808,002
872,128
1,719,587
$ 5,399,717
DEA.TON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2004
Total
Proprietary
OPERATING REVENUES Funds
Service revenue $ 3,188,256
OPERATING EXPENSES
Salaries and wages
Personnel benefits
Repairs and maintenance
Supplies
Travel, meetings, and training
Fuels and lubricants
Telephone and communications
Utilities
Treatment - Pocatello
Sanitation contract
Insurance
Other purchased services
Facilities Plan
Depreciation
OPERATING INCOME
NONOPERATING REVENUE (EXPENSE)
Interest income
Interest expense
NET INCOME
BEGINNING NET ASSETS
PRIOR PERIOD ADJUSTMENT
ENDING NET ASSETS
12
See accompanying notes to financial satatements
674,556
347,657
319,158
206,006
14,844
27,767
8,977
89,737
530,710
474,453
31,713
71,480
20,755
175.47
L,yy�,Ltit3
194,968
23,492
(78,137)
(54,645)
140,323
5,449,801
(190,407)
$ 5,399,717
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from revenues
Cash paid to suppliers and employees
Change in water deposits
Interest income
Interest expense
Net cash provided by operating activities
CASH FLOW FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures
Investing in notes receivable
Net cash used in financing activities
CASH FLOW FROM FINANCING ACTIVITIES
Bond principal payments
NET DECREASE IN CASH
BEGINNING CASH
ENDING CASH
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
NET INCOME
ADJUSTMENTS TO RECONCILE
NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Depreciation
(Increase) decrease in assets
Accounts receivable
Increase (decrease) in liabilities
Accounts payable
Accrued compensated absences
Accrued bond interest
Water deposits payable
Total adjustments
NET CASH PROVIDED BY OPERATING ACTIVITIES
13
See accompanying notes to financial satatements
$ 3,138, 731
(2,822,329)
17,027
23,492
(82,434)
274.487
(88,156)
(461,949)
(550,105)
(145,000)
(420,618)
2,388,599
$ 1,967,981
$ 140,323
175,475
(49,525)
(6,998)
2,482
(4,297)
17,027
134,164
$ 274,487
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 1 OF 10)
NOTE 1 - Summary of Significant Accounting Policies
The City's financial statements comply with generally accepted accounting principles (GAAP). GAAP includes
all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the government -wide
financial statements and the fund financial statements for the proprietary funds, Financial Accounting
Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before
November 30, 1989, have been applied unless those pronouncements conflict with or contradict GASB
pronouncements, in which case, GASB prevails. For enterprise funds, GASB Statement Nos. 20 and 34
provide the City the option of electing to apply FASB pronouncements issued after November 30, 1989. The
City has elected not to apply those pronouncements. The accounting and reporting framework and the more
significant accounting policies are discussed in subsequent subsections of this Note. For the fiscal year ended
September 30, 2004 the City implemented the new financial reporting requirements of GASB Statement Nos.
33 and 34. As a result, an entirely new financial presentation format has been implemented.
A. Reporting Entity
The City's financial reporting entity comprises the following:
Primary Government
In determining the financial reporting entity, the City complies with the provisions of GASB Statement No. 14,
"The Financial Reporting Entity," and includes all component units of which the City appointed a voting majority
of the units' board; the City is either able to impose its will on the unit or a financial benefit or burden
relationship exists. Currently, the City has no potential component units.
B. Basis of Presentation
Government -wide Statements
The Statement of Net Assets and Statement of Activities display information about the reporting government as
a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish
between governmental and business -type activities. Governmental activities generally are financed through
taxes, intergovernmental revenues, and other non-exchange revenues. Business -type activities are financed in
whole or in part by fees charged to external parties for goods or services.
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which is considered to be
separate accounting entities. Each fund is accounted for by providing a separate set of self -balancing accounts
that constitute its assets, liabilities, fund equity, revenues, and expenditurelexpenses. Funds are organized into
three major categories: Governmental, proprietary, and fiduciary. An emphasis is placed on major funds within
the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of
the City or meets the following criteria:
a. Total assets, liabilities, revenues or expenditures/expenses of that individual governmental or
enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type;
and
Total assets, liabilities, revenues, or expend itures/expenses of the individual governmental fund or
enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise
funds combined.
14
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 2 OF 10)
NOTE 1 - Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation (Continued)
Governmental Funds
General Fund
The General Fund is the general operating fund of the City and is always classified as a major fund. All
financial resources, except those required to be accounted for in another fund, are accounted for in the General
Fund.
Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally
restricted to expenditures for specific purposes.
Proprietary Funds
Enterprise Funds
Enterprise funds are used to account for business -like activities provided to the general public. These activities
are financed primarily by user charges and the measurement of financial activity focuses on net income
measurement similar to the private sector. The reporting entity includes the water, sewer and sanitation funds.
C. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial
statements. Basis of accounting refers to "when" transactions are recorded regardless of the measurement
focus applied.
Measurement Focus
On the government -wide Statement of Net Assets and the Statement of Activities, both governmental and
business -like activities are presented using the economic resources measurement focus as defined in item b.
below.
In the fund financial statements, the "current financial resources" measurement focus or the "economic
resources" measurement focus is used as appropriate:
a. All governmental funds utilize a "current financial resources" measurement focus. Only current
financial assets and liabilities are generally included on their balance sheets. Their operating
statements present sources and uses of available spendable financial resources during a given
period. These funds use fund balance as their measure of available spendable financial resources at
the end of the period.
b. The proprietary fund utilizes an "economic resources" measurement focus. The accounting
objectives of this measurement focus are the determination of operating income, changes in net
assets (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current
or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net
assets.
15
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 3 OF 10)
NOTE 1 - Summary of Significant Accountinq Policies Continued
C. Measurement Focus and Basis of Accounting (Continued)
Basis of Accounting
In the government -wide Statement of Net Assets and Statement of Activities, both governmental and business-
like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting,
revenues are recognized when earned and expenses are recorded when the liability is incurred or economic
asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting form exchange and exchange -
like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds are presented on the modified accrual basis of
accounting. Under this modified accrual basis of accounting, revenues are recognized when "measurable and
available." Measurable means knowing or being able to reasonably estimate the amount. Available means
collectible within the current period or within sixty days after year end. Expenditures (including capital outlay)
are recorded when the related fund liability is incurred, except for general obligation bond principal and interest
which are reported when due.
All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues
are recognized when earned and expenses are recorded when the liability is incurred or economic asset used.
D. Budgets and Encumbrances
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.
Each month the City prepares a financial report that reflects the actual and budgeted financial data. A strict
purchase order system is used in controlling and maintaining expenditures within budget categories. This data
is reviewed by the City Council. The City does not use the encumbrance method of accounting.
The General Fund incurred expenditures in excess of appropriations of the following amounts for the year
ended September 30, 2004:
Fire control $ 2,449
Street $ 48,449
Parks and recreation $ 5,167
Health and Welfare $ 3,216
Street guarantee fund $ 9,500
The excess expenditures were provided by available fund balance in the fund.
E. Cash and Investments
For the purpose of the Statement of Net Assets, "cash, including time deposits" includes all demand, savings
accounts, and certificates of deposits of the City. For the purpose of the proprietary fund Statement of Cash
Flows, "cash and cash equivalents" include all demand and savings accounts, and certificates of deposit or
short-term investments with an original maturity of three months or less.
16
DE ETON & C'!h'!i1',1NY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 4 OF 10)
NOTE 1 - Summary of Significant Accountinq Policies Continued
F. Property, Plant, and Equipment
Investments are carried at fair value except for short-term U.S. Treasury obligations with a remaining maturity
at the time of purchase of one year or less. Those investments are reported at amortized cost. Fair value is
based on quoted market price.
The accounting treatment for property, plant and equipment depends on whether the assets are used in
governmental fund operations or proprietary fund operations and whether they are reported in the government -
wide or fund financial statements.
Government -wide Statements
In the government -wide financial statements, fixed assets are accounted for as capital assets. All fixed assets
are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated fixed assets
which are recorded at their estimated fair value at the date of donation. Estimated historical cost was used to
value the majority of the assets acquired prior to September 30, 2003.
Prior to October, 2003, governmental fund infrastructure assets were not capitalized. Only new purchases after
October 1, 2003 will be capitalized.
Depreciation of all exhaustible fixed assets is recorded as an allocated expense in the Statement of Activities,
with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the
assets' estimated useful lives using the straight-line method of depreciation. The range of estimated useful
lives by type of asset is as follows:
Buildings
Other structures
Vehicles
Equipment
Fund Financial Statements
20-50 years
5-40 years
5-30 years
2-40 years
In the fund financial statements, fixed assets used in governmental fund operations are accounted for as
capital outlay expenditures of the governmental fund upon acquisition. Fixed assets used in proprietary fund
operations are accounted for the same as in the government -wide statements.
Restricted Assets
Restricted assets include cash and investments of the general fund that are legally restricted as to their use.
The primary restricted assets are related to employee benefits.
Restricted assets include cash and investments of the proprietary fund that are legally restricted as to their use.
The primary restricted assets are related to utility deposits.
G. Long-term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government -wide or fund
financial statements.
17
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 5 OF 10)
NOTE 1 - Summary of Significant Accounting Policies Continued
G. Long-term Debt (Continued)
All long-term debt to be repaid from governmental and business -type resources are reported as liabilities in the
government -wide statements. The long-term debt consists primarily of notes payable, capital leases, and
accrued compensated absences.
Long-term debt for governmental
proceeds are reported as other
expenditures. The accounting fo
government -wide statements.
H. Compensated Absences
funds is not reported as liabilities in the fund financial statements. Debt
financing sources. Payment of principle and interest are reported as
r proprietary funds is the same in the fund statements as it is in the
The City's policies regarding vacation time permit employees to accumulate earned but unused vacation leave.
The liability for these unpaid compensated absences is recorded as long-term debt in the government -wide
statements. The current portion of this debt is estimated based on historical trends. In the fund financial
statements, governmental funds report only the compensated absence liability payable from expendable
available financial resources, while the proprietary funds report the liability as it is incurred.
Equity Classifications
Government -wide Statements
Equity is classified as net assets and displayed in three components:
Invested in capital assets, net of related debt - Consists of capital assets including restricted capital
assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds,
mortgages notes, or other borrowings that are attributable to the acquisition, construction, or
improvement of these assets.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested
in capital assets, net of related debt."
Fund Statements
Governmental fund equity is classified as fund balance. Fund Balance is further classified as reserved and
unreserved. Unreserved can be further split between designated and undesignated. Proprietary fund equity is
classified the same as in the government -wide statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires the
City to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
18
DEATON & COMPANY, CHARTERED
CITY OF CHUBSUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 6 OF 10)
NOTE 2 - regal Compliance - Budgets
Approximately six to seven months before the start of a new fiscal year, the City's financial officer submits to
the City Council a proposed operating budget for the fiscal year commencing the following October 1. The
budget is prepared by fund, function and activity, and includes information on the past year, current year
estimates and requested appropriations for the next fiscal year.
The City Council holds public hearings and may add to, subtract from or change appropriations, but may not
change the form of the budget. Any changes in the budget must be within the revenues and reserves
estimated as available to the City or the revenue estimates must be changed by an affirmative vote of a
majority of the City Council. After public hearings and before the end of the fiscal year, the City Council formally
adopts the budget.
Expenditures may not legally exceed budgeted appropriations at the activity level. During the year, several
supplementary appropriations may be necessary.
NOTE 3 - Cash and Cash Equivalents and Cash Flow Activities
For purposes of the statement of cash flows, the proprietary fund types considers all highly liquid investments
with a maturity of three months or less when purchased or time certificates of deposit redeemable on demand
with no penalty to be cash equivalents.
NOTE 4 - Restricted_ Assets and Payable from Restricted Assets
Assets have been set aside for special items and are restricted for that purpose. To date cash has been
restricted for the following items:
Governmental
Employee benefit fund $ 181,022
Proprietary
Bond reserves $ 872,128
Water deposits 119,065
Total $ 991,193
Bond reserves are amounts the City is legally required to reserve for the repayment of outstanding bonds.
Water deposits are collected from individuals who have a history of collection problems. Money on deposit
may be used to pay past due balances or is returned when the payer's payment history improves.
NOTE 5 - Property Tax
Bannock County has the responsibility of assessing and collecting all property taxes. Taxes levied for the year
are payable in two installments due December 20th of the current year and June 20th of the following year.
The County remits property taxes collected to the City monthly.
Property taxes are recognized as revenue when received for monthly
accrual is made to recognize property taxes receivable at year end.
property taxes were expected to be collected and remitted by the County
19
reporting purposes. At year end, an
At year end, $187,332 in outstanding
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL_ STATEMENTS (PAGE 7 OF 10)
NOTE 6 - Concentration of Credit Risk
The City is subject to credit risk on deposits with banks that exceed the FDIC maximum insured balance
amount.
Additionally, the City grants credit to customers in the City for utility service. This extension of credit potentially
subjects the City to credit risk.
NOTE 7 - Cash and Cash Deposits
At September 30, 2004 the carrying amount of the City's deposits (cash and certificates of deposit) was
$2,031,360 and the bank balance was $2,085,718. The deposits were covered by federal depository insurance
of $100,000 per bank. The City was uninsured for $1,785,718 in its bank accounts.
Investments
The City's investments are categorized below to give an indication of the level of risk assumed by the City at
year-end.
Category 1 includes investments that are insured or registered, or for which the securities are held by the
City or its agent in the City's name.
Category 2 includes uninsured or unregistered investments for which the securities are held by the
counterparty's trust department or agent in the City's name.
Category 3 includes uninsured and unregistered investments for which the securities are held by the
counterparty or by its trust department or agent but not in the City's name.
At September 30, 2004, the City did not have any investments in Category 1, Category 2 or Category 3.
Investments in external investment pools are not required to be categorized.
As of September 30, 2004, investments consisted of the following:
Not Required to Carrying/
Be Categorized Fair Value
State of Idaho Local
Government Investment Pool $1,450,707 $ 1.450.707
NOTE 8 - Changes in General Fixed Assets
A summary of general fixed assets at September 30 is as follows:
20
DEATON & COMPA's Y, C11ArrTJAZFD
Balance
Balance
10/1/2003
Additions Deletions
9/30/2004
Land
$ 62,404
$ - $ -
$ 62,404
Office Equipment
203,147
- -
203,147
Buildings and Improvements
2,022,163
573,002 -
2,595,165
Vehicles and Equipment
3,587,416
47,820 -
3,635,236
Total
$ 5.875.130
620 822 $ -
6.495.952
20
DEATON & COMPA's Y, C11ArrTJAZFD
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL STATEMENTS (PAGE 8 OF 10)
NOTE 8 - Changes in General Fixed Assets Continued
A summary of proprietary type fixed assets at September 30 is as follows:
Land
Office Equipment
Buildings and Improvements
Vehicles and Equipment
Total
NOTE 9 - Long-term Debt
Balance
$
10/1/2003
Additions Deletions
$ 172,612
$ 90,500 $ -
154,970
7,435 -
6,113,369
450,751 _
382,908
- _
6.823.859
$ 548.686 $
Balance
9/30/2004
$ 263,112
162,405
6,564,120
382,908
7.3Z2,54,9
The City's long-term debt is segregated between the amounts to be repaid from governmental activities and
amounts to be repaid from business -type activities.
Governmental Activities:
As of September 30, 2004, the governmental long-term debt of the City consisted of the following:
Accrued Compensated Absences.
Current portion
$
19,250
Noncurrent portion
173,251
$
192,501
Capital Lease Obligation:
Caterpillar capital lease; issue amount $233,437; dated June
26, 2001; interest rate of 5.25% with final maturity dated
June 26, 2006.
$
44,816
Fire Engine capital lease; issue amount $194,190; dated
March 7, 2001; interest rate of 5.75% with final maturity
dated March 8, 2007.
105,338
Telephone System capital lease; issue amount $30,986;
dated May 30, 2003; interest rate of 4.25% with final maturity
dated September 30, 2007.
24,609
Back Noe capital lease; issue amount of $97,740; dated
November 12, 2003; interest rate of 3.6% with final maturity
dated November 12, 2008.
84,330
$
259,093
Current portion
$
71,122
Noncurrent portion
187,971
$
259,093
21
DEATON & CONiPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTES TO FINANCIAL_ STATEMENTS (PAGE 9 OF 10)
NOTE 9 - Long-term Debt (Continued)
Business -type Activities:
Accrued Compensated Absences:
Current portion
Noncurrent portion
Bonds Payable:
Sewer Revenue Bond
Water Fund Certificates
Current portion
Noncurrent portion
Annual Debt Service Requirements
Year Ending
September 30
2005
2006
2007
2008
2009
2010-2013
NOTE 10 - Pension Disclosures
Governmental Activities
Principal
interest
$ 71,122
$ 12,579
74,823
8,878
54,530
4,984
18,077
2,153
40,541
1,459
259.093 S 30,053
9,085
81,765
$
90,850
$ 455,000
780,000
$ 1,235,000
$ 150,000
1,085,000
$ 1,235,000
Business -type Activities
Principal
Interest
$ 150,000
$ 75,148
160,000
66,148
170,000
56,158
180,000
45,583
190,000
34,160
385,000
38,850
1235.000
316.045
The Public Employee Retirement System of Idaho (PERSI), a cost sharing multi-employer public retirement
system, was created by the Idaho State Legislature. It is a defined benefit plan requiring that both the member
and the employer to contribute. The plan provides benefits based on members' years of service, age, and
compensation. in addition, benefits are provided for disability, death, and survivors of eligible members or
beneficiaries. The authority to establish and amend benefit provisions is established in Idaho Code. Designed
as a mandatory system for eligible state and school district employees, the legislation provided for other
political subdivisions to participate by contractual agreement with PERSI. Financial reports for the pian are
available from PERSI upon request.
After 5 years of credited service, members become fully vested in retirement benefits earned to date.
Members are eligible for retirement benefits upon attainment of the ages specified for their employment
classification. For each month of credited service, the annual service retirement allowance is 2.0% (2.3%
policelfirefighter) of the average monthly salary for the highest consecutive 42 months.
The contribution requirements of the City of Chubbuck and its employees are established and may be amended
by the PERSI Board of Trustees. For the year ended September 30, 2004 the required contribution rate for
general employees was 9.77% and 5.86% of covered payroll for the City of Chubbuck and its employees,
respectively, and 10.11% and 7.21% for policelfirefighter employees, for the City of Chubbuck and its
employees, respectively. The City of Chubbuck contributions required and paid were $215,956, $338,710, and
$355,148 for the three years ended September 30, 2004, 2003, and 2002 respectively.
22
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
NOTE 11 -Risk Management NOTES TO FINANCIAL STATEMENTS (PAGE 10 OF 10)
The City is exposed to various risks of loss all being covered by commercial insurance except for the first
$20,000.
NOTE 12 - Prior Period Adjustment
The City has incurred a correction of prior years unrestricted net assets in the amount of $190,406 in the
Proprietary Funds. The correction consists of understatement of water deposits payable of $102,038 and under•
accrual of accrued compensated absences in the amount of $88,368.
23
DEATON & COMPANY, CHARTERED
REQUIRED SUPPLEMENTARY INFORMATION
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
BUDGETARY COMPARISON SCHEDULE
GENERALFUND
YEAR ENDED SEPTEMBER 30, 2004
Beginning budgetary fund balance
Resources
General property taxes and sales tax
Franchise fees
Intergovernmental
Parks revenue
Licenses, permits and fines
Grants
Fire protection and prevention
Leases and rents
Interest income
Miscellaneous
Amounts available for appropriations
Charges to appropriations
General government
Law Enforcement
Fire control
Building inspection
Street
Parks and recreation
Health and Welfare
Total charges to appropriations
Ending budgetary fund balance
Budgeted Amounts
Original Final
$ 18,399 $ 18,399
2,597,890
153,165
581,548
43,700
173,207
87,090
140,000
25,364
13,500
910,000
4,725,464
1,021,886
1,982,674
673,217
98,539
533,946
419,201
14,400
4.743.863
2,597,890
153,165
581,548
43,700
173,207
87,090
140,000
25,364
13,500
910,000
4,725,464
1,021,886
1,982,674
673,217
98,539
533,946
419,201
14,400
4.743 3F3
25
See accompanying notes to financial statements
Actual
Amounts
$ 237,392
2,614,916
138,537
575,443
38,728
271,026
80,891
102,546
22,733
9,876
4,487
3,859,183
140,843
1,815,421
675,666
92,411
582,395
424,368
17 R i f;
�J,146, 120
$ 347,855
Variance
Positive
(Negative)
$ 218,993
17,026
(14,628)
(6,105)
(4,972)
97,819
(6,199)
(37,454)
(2,631)
(3,624)
(905,513)
(866,281)
881,043
167,253
(2,449)
6,128
(48,449)
(5,167)
(3,216)
995 14:3
$ 347,855
DEATON & COMPANY, CHARTERED
CITY OF CHUBBUCK, IDAHO
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT FUND
YEAR ENDED SEPTEMBER 30, 2004
Budgeted Amounts
Original Final
Beginning budgetary fund balance $ - $ _
Resources
Actual
Variance
Positive
(Negative)
$ 702,043
General property taxes and sales tax
1,462,000
1,462,000
1,139,161
(322,839)
Interest income
11,000
11,000
10,974
(26)
Miscellaneous
-
-
75,636
75,636
Amounts available for appropriations
1,473,000
1,473,000
1,225,771
(247,229)
Charges to appropriations
Development fund
1,473,000
1,473,000
1,216,438
256,562
Ending budgetary fund balance
$ -
$ -
$ 711,376
$ 711,376
26
See accompanying notes to financial statements
DEATON & COMPANY, CHAR'T'ERED
U
OTHER SUPPLEMENTARY INFORMATION
DEATON & COMPANY, CHAWFERED
n
a
§
?L�
u
�U�k
k
LU 2q
�Um
2
772
a
(n
2QWLLJ
ƒ\
n 0 §
5mmm
3 0
Zc=
ui
�oR
L j
0
\ �
\
\
o02
a
m
z
O
/
2
\
U)
u
k
C
0
� ' 2
.( 2
2
< \
ƒ\
n 0 §
Zc=
\
L j
/ § §
\ �
\
\
o U -
a
m
/ƒL
/
z
f's
In,
a
G o
0
0
/q
m�
7
7
-NCE
Go
w
M�
LO CD
%
f
U)-
m
G7
%
2
2/
\
0ƒ
\
IL
m
a
/R
/
/
—=
y�
a
a
7 \
ƒ
f
_
m
q'
2
A 2
2
Iw
r
Cli
\ J §
+
>0LL
t
m
c c •
1101
=
7
@
7
7
7
3
/
R
\
\
U-
C
m
_
_
2
/
\
\
\
co
/
ƒ ƒ
\
§
e
_
Ga
GO,
\
U)
u
Q
n e
2
w
.( 2
2
< \
ƒ\
n 0 §
Zc=
\
L j
&
§co
>/
/ t
% \
n e7
a
m
/ƒL
/
\
U)
W
U
Q
J
m
Q
z
m
LL
z
LU
0a
0
oa N
_ = LL
a V J M
❑nam
�aWm
LLI W
m��a
=p O
LzCD
L LLI
O W W o
IL
Waw
Q'
U � O W
z z
W
LCI
w
LL
O
z
W
2
W
h -
Q
1—
W
CD
0
c
m
L
CD O N
co
LO
LCA
M
CD
C3)
N
w N o
0
ca
o
0
0)
o
Cfl C606
00
N
-q'
r
f�
O
(+)
Ch
CD
CN
co
Ip
p LL
z
GO-
C'7 O 1
Ce)
' 1
1 0
0
co
CD
CA
'p
ti 0
Ln
ti
O
CD
O
CD
!�
CD
N
N
Q
<Z
LO
T
Gey
N
C r 1
N
C)
N
1 r
i 1
i
Cn
N
O
CJ)
�
co
CD
1�
O .5-:3
M
ce)
Ix L- LL
�}
UY
Cl) 1 N
T..
1 1
1 LO
LSA
CD
CD
N
i
CJD O
CA O
W
CD
C )
d
C'7
rY
Ln
LCA
co
co
a m
,-
U LL
o
r
1
N I
N
i
1 1
N
L
L
�
�
> m LL
CO 1
C+)
1
!
1
C+7
LO
co
R
L
m
❑ c
C =
N
N
N
`
c7
a) LLNT
64
E{}
LO 1 1
co
LC"]
O
1 1
0
0
LC7
co
0
0o
C4
�
d CLO
L6
LCA
d
N
++ LL
T'
r
M
N
U)
W
U
z
a
W
a
U
U
❑
Q
Z
J
a
U
z
a>`�
m
c
v'
❑
`'
Z7
LL
❑
Q
m
?
ca
C) O
LU
C
❑W
o
L=
z
°w
z
z
LL
ZD
was
o
W
a ai
L)
z
z
w
c❑
IL r�
O
0
X
x
LLQ
z
CO
w
m
N
U)
c
m
E
L)
N
-U
C
{U
0
m
0
c
c
.T
C
c�
a
U
U
L4
(D
a)
[A
CITY OF CHUBBUCK, IDAHO
BUDGETARY COMPARISON SCHEDULE
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2004
Beginning budgetary fund balance
Resources
General property taxes and sales tax
Interest income
Donations
Miscellaneous
Amounts available for appropriations
Charges to appropriations
Street guarantee fund
General LID fund
Juvenile referral fund
Court fund
Road projects fund
Parks fund
Total charges to appropriations
Ending budgetary fund balance
Budgeted Amounts
Actual
Original Final Amounts
$ - $ - $ 424,936
Variance
Positive
(Negative)
$ 424,936
5,000
5,000
-
(5,000)
9,900
9,900
4,926
(4,974)
105,000
105,000
76,200
(28,800)
46,000
46,000
19,002
(26,998)
165,900
165,900
100,128
(65,772)
5,500
3,000
200
48,000
1,200
i nn nnn
1 eo,uuu
5,500
3,000
200
48,000
1,200
108,000
165,900
30
See accompanying notes to financial statements
15,000
435
22,600
$ 487,029
(9,500)
3,000
200
47,565
1,200
85,400
127,865
$ 487,029
DEATON & COMPANY, CHARTERED