HomeMy WebLinkAbout2018 CDAThe urban renewal agency for the City of Chubbuck, Idaho
CHUBBUCK DEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE CITY OF CHUBBUCK, IDAHO
AUDITED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2018
WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2017
CHUBBUCK DEVELOPMENT AUTHORITY
TABLE OF CONTENTS
Page
Title Page
1
Table of Contents
2
AUDITOR'S REPORTS
3-5
MANAGEMENT'S DISCUSSION AND ANALYSIS
6-9
FINANCIAL STATEMENTS
Government Wide
Statements of net position
10
Statements of activities
11
Governmental Funds
Balance sheets
12
Statements of revenues, expenditures, and changes in fund balances
13
NOTES TO FINANCIAL STATEMENTS
14-18
REQUIRED SUPPLEMENTARY INFORMATION
19
Schedule of revenues and expenditures - budget to actual - General Fund
20
Schedule of revenues and expenditures - budget to actual - Chubbuck and Pine Ridge
Mall Urban District Fund
21
Notes to the statement of revenues and expenditures - budget to actual
22
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 23-24
E
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 Ac<ountenu
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, 2018, 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.
Opinion
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, 2018, and the respective changes in financial
position for the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management discussion and analysis and budgetary comparison information on pages 6 - 9 and 20 -
22, respectively, 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.
Other Information
We have also 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 303
2017, which are shown as summarized comparative totals and not as fully disclosed comparative
financials 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 January 9,
2019, 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,ldaho
January 9, 2019
Chubbuck Development Authority
Management's Discussion and Analysis
For the Year Ended September 30, 2018
As management of the Chubbuck Development Authority, we offer readers of the Chubbuck
Development Authority's financial statements this narrative overview and analysis of the financial
activities for the fiscal year ended September 30, 2018. We encourage readers to consider the
information presented here in conjunction with additional information that we have furnished in our
financial statements and notes to the financial statements.
Financial Highlights
• The assets and deferred outflows of the Chubbuck Development Authority exceed
its liabilities and deferred inflows at the close of the most recent fiscal year by
$898,954 (net position).
• The Authority's net position decreased from 2017 to 2018 by $1,632,583.
• At the end of the current fiscal year, fund balances for the Authority was $877,020
or 20 percent of total fund expenditures.
• During the current fiscal year, the Authority's liabilities increased by $304,054. The
increase was primarily due to outstanding construction contracts.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Authority's basic financial
statements. The Authority's basic financial statements are comprised of three components:
1) governmental -wide financial statements, 2) Urban Renewal District financial statements and 3) notes
to the financial statements. This report also contains other supplementary information in addition to the
basic financial -statements themselves.
Government -wide financial statements. The government -wide financial statements are designed to
provide readers with a broad overview of the Chubbuck Development Authority's finances, in a manner
similar to a private -sector business.
The Statement of Net Position presents information on all of the Chubbuck Development Authority's
assets, deferred outflows and liabilities with deferred inflows, with the difference between each
reported as net position. over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the Authority's is improving or deteriorating.
The Statement of Activities presents information showing how the Chubbuck Development Authority's
net position changed during the fiscal year. All changes in the assets are reported when the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in the future
fiscal periods (e.g. uncollected taxes).
Both of the government -wide financial statements distinguish functions of the Chubbuck Development
Authority that are principally supported by taxes. The governmental activities of the Chubbuck
Development Authority infrastructural renewal, development and administration.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated from specific activities or objectives. The Chubbuck
Development Authority, like other Development Authorities, uses fund accounting to ensure and
demonstrate compliance with finance -related legal requirements. All of the funds of the Development
Authority can be divided into three categories: general funds, Chubbuck Urban Renewal District Funds,
and Pine Ridge Mall Urban Renewal District Funds.
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting.
Governmental
fund
financial
statements are reported
using the current financial resources
measurement
focus
and the
modified accrual basis of
accounting.
The Chubbuck Development Authority adopts an annual appropriated budget for its funds.
General Funds. General funds are used to account for daily administration and general
activities of the Authority.
Chubbuck Urban Renewal District Fund and Pine Ridge Mall Urban Renewal District
Fund. The Chubbuck Development Authority maintains two different types of proprietary
funds. These funds are used to maintain control over resources for each district. The funds help
ensure that the resources are used as legally required.
Notes to the Financial
Statements.
The notes provide additional
information that is essential to a
full understanding of the
data provided
in the government -wide and
fund financial statements.
Other information. In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the Authority's budgeted expense
and revenues versus actual expenses and revenues.
Government -wide Financial Analysis.
Net position may
serve,
over time, as a useful
indicator of
the Authority's
financial position. In the case
of the Authority,
assets
exceeded liabilities by
$898,954 as
of September
30, 2018.
Below is a summary of the Chubbuck Development Authority's Net Position statement.
Chubbuck Development Autft4ri#y4
s Net Position
Governmental Activities
2013 2017
ASSETS
Cash and cash equivalents $ q,475,094 $ 2,7247612
Reimbursement receivable - 77,253
Property tax receivable 257858 27.616
1,500,952 2;829,481
LIABILITIES
%ccounts. payable 6010998 2979944
601,998 297;944
NET POSITION
Unrestricted $ 8987954 $ 225317537
Governmental activities. Governmental activities decreased net position by $1,632,583.
Below is summary of the Chubbuck Development Authority's Changes in Net Position.
a:hubbuck Development Authority's Changes in Net Position
Governmental A�tiwities
Project payments payments S 47060;650
Grant to CIA'WCA 2281000
Professional services 3,240
Administration 276,430
4P568,320
RE1fENI..iEs
Proper -Ly taxes and other
Service and contract revenue
i
CHANGE IN NETPOS1TION
i
BEGINNING NET POSITION
ENC7ING NET PCSITIr�N
Financial Analysis of the Government's Funds
2,7cJ7,522
138v215
2,935,737
(16.32,583j
2,;?31,537
2213;000
2.0'1
2,787;514
22 553, t 42
77x253
2,630,395
('157,"1'f 9;
2;6$8,656
• 225311537
As noted earlier, the Authority uses fund accounting to ensure and demonstrate compliance with
finance -related legal requirements.
Governmental funds. The focus of the Chubbuck
Development Authority's governmental funds is to
provide information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the Chubbuck Development Authority's financing requirements. In
particular, unreserved fund balance may serve as a useful measure of the government's net resources
available for spending at the end of the fiscal year.
General Fund Budgetary Highlights. The general fund did not have a budget appropriated for the
fiscal year. However, the actual revenues exceeded expenses by $1,230 in the general fund.
Current Known Facts and Conditions
The Authority's general fund charged an administration fee of $138,215 to the Chubbuck Urban
Renewal District Fund as authorized by Idaho State statutes. As the Authority used the City of
Chubbuck's personnel to provide the administration services, it paid an administration fee to the
City of Chubbuck in the same amount of $138,215. This has historically not been performed. The
continuation of this fee is undetermined for future fiscal years.
Current Known Facts and Conditions (continued)
During the year the Pine Ridge Mail Urban Renewal District received its first property tax revenue
allocation and paid its first reimbursement to the developer in the amount of $175,023.
The Authority has various projects that were implemented, however, during the year the largest
project (Country Acres), accounted for $3,115,162. This project included street reconstruction,
residential sidewalks, and parking space improvements.
Request for information
The financial report is designed to provide citizens of the City of Chubbucl( and creditors with a general
overview of the Authority's finances and to show the Authority's accountability for the money it
receives. If you have question about this report or need any additional financial information, contact the
Authority at 5160 Yellowstone Ave, Chubbucl(, ID 83202, telephone (208)237-2400.
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF NET POSITION
SEPTEMBER 30, 2018
!1111TH COMPARATIVE TOTAL AT SEPTEMBER 30, 2017
ASSETS
Cash and cash equivalents
Reimbursement receivable
Property tax receivable
LIABILITIES
Accounts payable
NET POSITION
Unrestricted
Governmental Activities
2018 2017
$ 11475,094 $ 21724,612
- 77,253
259858 27,616
1, 500, 952
601,998
601,998
2,829,481
297,944
297.944
$ 2,531,537
The accompanying notes are an integral part of these financial statements
10
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2018
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2017
EXPENSES
Project payments
Grant to CIAWCA
Professional services
Administration
REVENUES
2 787,514
Property taxes
Service and contract revenue
Interest and other
CHANGE IN NET POSITION
BEGINNING NET POSITION
ENDING NET POSITION
Governmental Activities
2018 2017
$ 4,060,650
228,000
3,240
276,430
4,568,320
2,775,622
138,215
21,900
$ 2,556,073
228,000
201
,
2,538,869
77,253
14,273
2,935,737 2,630,395
(1,632,583) (157,119)
2,531,537 2,688,656
$ 898,954 $ 2,531,537
The accompanying notes are an integral part of these financial statements
11
CHUBBUCK DEVELOPMENT AUTHORITY
BALANCE SHEETS
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2018
WITH COMPARATIVE TOTAL AT SEPTEMBER 30, 2017
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
Nonmajor
27,522
Chubbuck
Pine Ridge Mall
General
Urban Renewal
Urban Renewal
Fund
District Fund
District Fund
2018
2017
ASSETS
Cash and cash equivalents
$
139,445
$
1,276,641
$
59,008
$ 1,475,094
$ 2,724,612
Reimbursement receivable
-
-
-
-
77,253
Property tax receivable
-
25,858
-
25,858
27,616
$
139,445
$
1,302,499
$
59,008
$ 1,500,952
$ 2,829,481
LIABILITIES
Accounts payable
$
138,215
$
463,783
$
-
$ 601,998
$ 297,944
Deferred tax revenues
21,934
21,934
27,522
138,215
485,717
-
623,932
325,466
FUND BALANCES
Committed
-
816,782
59,008
875,790
2,504,015
Unassigned
1,230
-
-
1,230
-
1,230
816,782
59,008
877,020
2,504,015
$
139,445
$
1,302,499
$
59,008
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
21,934
27,522
Net Position of Governmental Activities
12
$ 898,954 $ 2,531,537
CHUBBUCK DEVELOPMENT AUTHORITY
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2018
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2017
REVENUES
Property taxes
Interestrevenue
Other revenue
Service and contract revenue
EXPENDITURES
Administration
Projects
Grants
Professional services
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
Nonmajor
Chubbuck Pine Ridge Mall
General Urban Renewal Urban Renewal
Fund District Fund District Fund 2018 2017
$ $ 2,552,680 $ 228,530 $ 2,781,210 $ 2,546,104
17,243 3,427 20,670 14,273
1,230 1,230
138,215 138,215 77,253
1393445 2,569,923 231,957 2,941,325 2,637,630
138,215 138,215 - 276,430 201
3,885,627 175,023 41060,650 2,7843073
228,000 228,000 -
3,240 33240 3,240
1383215 41255,082 175,023 415683320 21787,514
1,230 (1,685,159) 56,934 (1,626,995) (149,884)
2,501,941 2,074 2,504,015 2,653,899
ENDING FUND BALANCE
$
1,230
$ 816,782
$
59,008 $
877,020
$
2,504,015
Net change in fund balances -total
governmental
funds
$ (1,626,995)
$
(149,884)
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.
(5,588)
Change in Net Position of Governmental Activities
The accompanying notes are an integral part of these financial statements
13
$(1,632,583) $ (157,119)
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.
The fund financial statements provide information about the Authority's funds. The emphasis of fund financial
statements is on major funds, each displayed in a separate column.
The Authority reports the following major funds:
The General
Fund is the Authority's
primary operating fund.
It accounts for all financial resources, except those
accounted for
in another fund.
The Chubbuck District Fund, a special revenue fund, accounts for the Authority's operations within fhe revenue
allocation area of that district. The Chubbuck District was established in 1992 and has a termination date in the year
2022.
The Pine Ridge District Fund, a special revenue fund, accounts for the Authority's operations within the revenue
allocation area of that district. The Pine Ridge District was established in 2016 and has a termination date in the year
2036.
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.
iLf
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Summary of Significant Accounting Policies (Continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
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.
D. Assets, liabilities, and net position or fund balance
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 Balance
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.
15
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Summary of Significant Accounting Policies (Continued)
D. Assets, liabilities, and net position or fund balance (continued)
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.
general
Unassigned items- Represents the remainder
of the Authority's
equity
in governmental
fund -type balances in
excess of the aforementioned classifications.
are adopted for the
general
and special revenue funds.
All annual appropriations lapse
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 position.
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
$ 21,934
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
Outstanding checks
16
Bank
$ 1,480,019
(4,926)
$ 1,475,093
Book
$ 1,475,094
$ 1,475,094
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 4 -Detailed Notes on All Funds (Continued)
A. Deposits and investments (continued)
The Authority has no investments.
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 credit risk was $1,230,019.
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
Chubbuck Urban Renewal District Fund
Pine Ridge Mall Urban Renewal District Fund
NOTE 5 -Other Information
A. Contingent liabilities
Receivables Deferred Tax
$ - $ -
25,858 21,934
$ 25,858 $ 21,934
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.
17
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
NOTE 5 -Other Information (Continued
A. Contingent liabilities(continued)
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.
The Pine Ridge Mall Urban Renewal District agreed to pay the developer the property tax revenue collected by the
District until its expiration or the maximum of 11.7 million, which ever is less.
B. Committed Funds
The Chubbuck Development Authority has committed to pay for the portion of the Northwest Sewer Interceptor project
lying inside the Chubbuck Urban Renewal District boundary. That portion has been calculated at $2,287,000. This total
is to be paid in an annual payment of $228,000 to Chubbuck Impact Area Waste Water Collection Authority, which
began in FY 2013.
C. Subsequent events
Subsequent events were evaluated
up to January
9,
2019, the date the financial statements were available to be
issued.
D. Tax abatement
During the year the Authority was not subject to any tax abetments.
m
p � � i. `-;�' � �
19
CHUBBUCK DEVELOPMENT AUTHORITY
SCHEDULE OF REVENUES AND EXPENDITURES -BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2018
REVENUES
Other revenue
Service and contract revenue
EXPENDITURES
Administration
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Original Amended
Budget Budget Actual
Amounts Amounts Amounts
Variance
$ - $ - $ 1,230
$ 1,230
- - 138,215
138,215
- - 139,445
139,445
- - 138,215 (138,215)
- - 138,215 (138,215)
$ - $ - 1,230 $ 1,230
20
$ 1,230
CHUBBUCK DEVELOPMENT AUTHORITY
SCHEDULE OF REVENUES AND EXPENDITURES -BUDGET AND ACTUAL
CHUBBUCK AND PINE RIDGE MALL URBAN RENEWAL DISTRICT FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2018
REVENUES
Property taxes
Interest revenue
EXPENDITURES
Administration and other expenses
Projects and grants
NWSI grant
Allstate
Industry /Southside Way Streets
Stuart Additions Streets
Country Acres Streets
Fiber Optic
Patriot Square TIF reimbursement
Pine Ridge Mall TIF reimbursement
Property Acquisitions
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
Original
Amended
228,000
-
Budget
Budget
Actual
-
Amounts
Amounts
Amounts
Variance
-
-
3,235
(3,235)
$ 2,500,000
$ 2,500,000
$ 2,781,210
$ 281,210
41,000
41,000
20,670
(20,330)
2,541,000
-
2,541,000
(47,784)
2,801,880
-
260,880
143,603 (143,603)
228,000
228,000
228,000
-
362,500
362,500
362,500
-
-
-
215
(215)
-
-
3,235
(3,235)
3,000,000
3,000,000
3,115,162
(115,162)
190,000
190,000
161,604
28,396
-
-
47,784
(47,784)
-
-
175,023
(175,023)
600,000
600,000
192,979
407,021
4,380,500
4,380,500
4,430,105
(49,605)
$ (1,839,500) $ (1,839,500) (1,628,225) $ 211,275
�I
2,504,015
$ 875,790
CHUBBUCK DEVELOPMENT AUTHORITY
NOTES TO REQUIRED SUPPLEMENTAL INFORMATION
NOTE 1 -EXPENSES IN EXCESS OF BUDGET
GENERAL FUND
The Authority did not budget sufficient expenditure for administration expenses.
CHUBBUCK AND PINE RIDGE MALL URBAN RENEWAL DISTRICT FUND
The Authority did not budget sufficient expenditure for increased expenditure in the following
expenses.
Administration and other expenses
Industry / Southside Way Streets
Stuart Additions Streets
Country Acres Streets
Patriot Square TIF reimbursement
Pine Ridge Mall TIF reimbursement
REVENUE IN EXCESS OF BUDGET
GENERAL FUND
Excess revenues funded the excess expenditures in administration expenses.
CHUBBUCK AND PINE RIDGE MALL URBAN RENEWAL DISTRICT FUND
Revenues in excess of budget and decreased expenditures in Fiber Optics and Property
Acquisitions were used to pay under -budgeted expenditures.
22
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 ofAmerican Instibue of Certified Public Aceouamnts
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, 2018, 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 January 9, 2019,
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Chubbuck Development Authority's internal
control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances 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. Accordingly, we do not express an opinion on the
effectiveness of the Chubbuck Development Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
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 Repots
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
January 9, 2019