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FY 23 Audit CFR FinalFISCAL YEAR 2023 July 1, 2022 - June 30, 2023 CITY OF KALISPELL, MONTANA ANNUAL COMPREHENSIVE FINANCIAL REPORT Prepared by the City of Kalispell Finance Department INTRODUCTORY SECTION CITY OF KALISPELL ANNUAL COMPREHENSIVE FINANCIAL REPORT TABLE OF CONTENTS 1 INTRODUCTORY SECTION Table of Contents .................................................................................................................................................. 1-2 ACFR Letter of Transmittal ................................................................................................................................ 3-6 Organizational Chart ........................................................................................................................................... 7 City Elected and Appointed Officials .................................................................................................................. 8 FINANCIAL SECTION Independent Auditor’s Report…………………………………………………………………………………. 10-13 Management’s Discussion and Analysis………………………………………………………………….....…. 14-25 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ..................................................................................................................... 28 Statement of Activities ......................................................................................................................... 29 Governmental Fund Financial Statements: Balance Sheet – Governmental Funds ................................................................................................ 31-32 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position ..... 33 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds .. 34 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities ...................................................................... 35 Proprietary Fund Financial Statements: Statement of Net Position – Proprietary Funds ................................................................................. 37 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds .................. 38 Statement of Cash Flows – Proprietary Funds .................................................................................. 39 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position – Custodial Funds…………………………………………... 41-42 Notes to the Financial Statements…………………………………………………………………… 43-102 Required Supplementary Information other than Management Discussion and Analysis: Schedule of City’s Total Liability and Related Ratios – Other Post-Employment Healthcare Benefits .............................................................................................................................. 104 Schedule of City Contributions – Other Post-Employment Healthcare Benefits............................ 105 Schedule of Proportionate Share of the Net Pension Liability/Schedule of Contributions Post Employment Benefits/Required Notes………………………………………………………106-116 Budgetary Comparison Schedule – General and Major Special Revenue/Required Notes…..... 117-120 Supplemental Information: Combining and Individual Governmental Fund Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds……………………………………125-132 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds………………………………………………………………....133-140 Budgetary Comparison Schedule – Nonmajor Governmental Funds…………………………………………………………………142-164 Combining and Individual Proprietary Fund Statements: Combining Statement of Net Position – Nonmajor Proprietary Funds ......................................... 166 Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position – Nonmajor Proprietary Funds ....................................................................................................... 167 Combining Statement of Cash Flows – Nonmajor Proprietary Funds .......................................... 168 Combining and Individual Internal Service Fund Statements: Combining Statement of Net Position – Internal Service Funds………………………………...... 170 Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position - Internal Service Funds……………………………………………………………………………. 171 Combining Statement of Cash Flows – Internal Service Funds ………………………………….... 172 CITY OF KALISPELL ANNUAL COMPREHENSIVE FINANCIAL REPORT TABLE OF CONTENTS 2 Combining and Individual Custodial Fund Statements: Combining Statement of Net Position – Custodial Funds……...………………………………...... 174 Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position - Custodial Funds……...…………………………………………………………………………….. 175 STATISTICAL SECTION Financial Trends Net Position by Component ..................................................................................................................... 177 Changes in Net Position ........................................................................................................................... 178 Fund Balances of Governmental Funds ................................................................................................. 179 Changes in Fund Balances, Governmental Funds ................................................................................ 180 Revenue Capacity Market Value of Taxable Property......................................................................................................... 181 Direct and Overlapping Property Tax Rates ......................................................................................... 182 Principal Property Tax Payers ............................................................................................................... 183 Property Tax Levies and Collections ...................................................................................................... 184 Debt Capacity Ratios of Outstanding Debt by Type ...................................................................................................... 185 Ratios of General Bonded Debt Outstanding ........................................................................................ 186 Legal Debt Margin Information ............................................................................................................. 187 Direct and Overlapping Governmental Activities Debt ........................................................................ 188 Pledged Revenue Coverage ..................................................................................................................... 189 Demographics and Economics Demographic and Economic Statistics ................................................................................................... 190 Principal Employers ................................................................................................................................ 191 Operating Statistics Full-time Equivalent City Government Employees by Function/Program ......................................... 192 Operating Indicators by Function .......................................................................................................... 193 Capital Assets Statistics by Function/Program ..................................................................................... 194 Additional Information The Water System .................................................................................................................................... 195 The Sewer System .................................................................................................................................... 196 Tax Increment District Information ....................................................................................................... 197-199 Special Improvement District Information ............................................................................................ 200 General Obligation Debt Ratios .............................................................................................................. 201 West Side TIF Operating Data………………………………………………………………………… 202 SINGLE AUDIT SECTION 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 ........................................................................................................... 206-207 Independent Auditor’s Report on Compliance for Each Major Program and Report on Internal Control Over Compliance Required by Uniform Guidance ............................................................................... 208-210 Schedule of Expenditures of Federal Awards and Notes ................................................................................ 211 Notes to the Schedule of Expenditures of Federal Awards ............................................................................. 212 Schedule of Findings and Questioned Costs ..................................................................................................... 213-217 City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 Telephone (406) 758-7000 Fax - (406) 758-7758 March 31, 2024 To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell, Montana: State law requires that all general-purpose local governments publish within six months of the close of each fiscal year (by December 31) a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP). State law also requires a biannual audit of these statements in accordance with generally accepted auditing standards by a firm of licensed certified public accountants to be completed within 9 months of the close of every other fiscal year (by March 31). It is the belief of the City Council and the Executive staff that an annual audit assures a higher level of financial management and fiscal responsibility. Pursuant to this policy and these requirements, the audited annual financial report for the City of Kalispell, Montana for the fiscal year ended June 30, 2023, is submitted for your review. Management Representation The Finance Office prepared this report. Responsibility for the accuracy and completeness of the presented data, including all disclosures, rests with the City. We believe the data presented is accurate in all material aspects. The material is presented in a manner designed to state fairly the financial position and results of operations of the City as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City’s financial affairs have been included. To provide a reasonable basis for making these representations, management of the City has established and maintains an internal control system designed to ensure that the assets of the City are protected from loss, theft, or abuse. The internal control system has been designed to also ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States (US GAAP) and to comply with laws and regulations. The system of internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgements by management. Independent Auditor Eide Bailly LLP, a firm of licensed certified public accountants, has audited the financial statements of the City. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2023, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that City’s financial statements for the fiscal year ended June 30, 2023, are fairly presented in conformity with US GAAP. The 3 independent auditor’s report is presented as a component of the financial section of this report. Transmittal Letter GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). The letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Kalispell’s MD&A immediately precedes the City’s basic financial statements within this report. Profile of the City of Kalispell The City of Kalispell, incorporated in 1892, is the county seat of Flathead County located in the western part of the State of Montana. This historically has been one of the top growth areas in the state. The City of Kalispell is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing council. The City of Kalispell operates under the council-manager form of government. Policy-making and legislative authority are vested in a governing council consisting of the mayor and eight other members. The governing council is responsible for, among other things, passing ordinances, adopting the budget, appointing boards, and hiring the City Manager. The City Manager is responsible for conducting the policies and ordinances of the governing council, and for overseeing the day-to-day operations of the City. The council is elected on a non-partisan basis. Council members are elected by district to serve four-year staggered terms, with four council members elected every two years. The mayor is elected at large for a four-year term. All significant operations of the City, as defined by the National Council of Governmental Accounting, Statement #3, have been included in the accompanying financial statements. The City provides a full range of municipal services including police, fire, building, planning, and zoning, city court, parks and recreation, streets, community development, and general administrative services. The City also operates as Enterprise funds: water, sewer, and solid waste. In addition, the City presents financial data for two component units on the combined statements. The Downtown Business Improvement District and the Tourism Business Improvement District are both discreetly presented governmental type component units. The annual budget serves as the foundation for the City of Kalispell’s financial planning and control. All departments of the City of Kalispell are required to submit requests for appropriation to the City Manager. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the council for review. The council is required to hold a public hearing on the proposed budget and to adopt a final budget. The appropriated budget is prepared by fund, function, and department. Budgetary control is decentralized to the point that departments are responsible for expending within fund budgetary limits. Budget to Actual Comparisons The State municipal budget law stipulates that money, other than payments from agency funds, may not be drawn from the treasury of a municipality except pursuant to an appropriation. Therefore, a legally adopted budget is required for all funds, with the exception of agency funds. The City legally adopts a budget for the required funds. Consistent with past years, the City established the legal spending level at the fund level for 4 the fiscal year 2023 budget. The City Manager and Finance Director may make transfers of appropriations within a fund. Transfers between funds, however, require approval of the City Council. Budget-to-actual comparisons are provided in the report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, the comparison is part of the required supplementary information. Factors Affecting Financial Condition With the spike in population growth and lag in housing growth Kalispell’s population has exceeded the available housing inventory. According to data from the U.S. Decennial Census, Flathead County’s housing supply grew by 6.2% from 2010 to 2020 while the population grew by 14.8%. This has contributed to the rise in housing prices, which grew by 49.9% in Kalispell since the pandemic. The June median list price of a home in Kalispell was $599,950. This compares to $585,000 in June of 2022. Although Kalispell is not near a major metropolitan center, hundreds of technology and manufacturing companies, from computer equipment to food and beverage to pharmaceuticals, have found the area to be favorable for their operations. Tourism is one of the area’s major economic drivers. With Glacier National Park visitations setting annual records, a major ski resort within a few miles, the proximity of Canada, and other shoulder season draws, there is not many days of the year that visitors do not purchase services in Kalispell and the Flathead Valley. The City of Kalispell has experienced a population increase of over 15% between the 2020 census and 2022 census. As of the most current population census, the estimated population of Kalispell is 28,450. Revenue Growth and Reform City revenues can be considered statutorily limited, circumstantial, or discretionary. The City has very little control over the growth of restricted and circumstantial revenues. Although the City ‘controls’ the growth or discretionary revenue, it is still subject to typical community pressures for conservative growth. Since November 1986 and the passage of Initiative 105, which limited certain property taxes to the 1986 levels, the ability of the City to raise revenue for basic services is increasingly difficult. Then the legislature, with SB184, lowered tax rates forcing the City to increase mill levies to maintain the same level of revenue. The City’s cash reserves in most funds vary between 10% and 20% of appropriations. State law allows for reserves of 50%. Reserves provide for cash flow between tax revenue receipts to keep the City from having to borrow funds for operations. Additional revenues generated by increased taxable valuation come with the additional costs of an increased service area. The City of Kalispell’s Police and Fire Departments, Cour system, Building Department, Public Works, and Parks have felt the increased pressure from the influx of people to Flathead County. These pressures impact the budgets of all departments. The Montana constitution and state law require periodic reappraisal of property in the interest of equal taxation (15-7-111, MCA). The State of Montana, through the Department of Revenue (DOR), is responsible or valuing all taxable real and personal property. Every other year, the DOR is required by state law to conduct a reappraisal of residential, commercial, industrial, agricultural and forestland property in the state. 5 Major Initiatives On December 4, 2017, the Kalispell City Council adopted the Downtown Plan as an amendment to the City of Kalispell Growth Policy Plan by Resolution No. 5846. The Downtown Plan addresses a number of key topics that affect the future growth and development of Downtown Kalispell. A number of goals/guiding principles were identified within the implementation chapter of the Downtown Plan. Goal/guiding principle number three states “creation of a Downtown Tax Increment Finance District to assist with implementation of this plan.” The tax increment funds could be used for appropriate public infrastructure projects in support of the redevelopment of blighted conditions. The American Rescue Plan Act (ARPA) was signed into law March 11, 2021, to address the COVID-19 pandemic. The ACT has provided state and local aid to make necessary investments in water, sewer, and storm infrastructure. On October 8, 2021, the Governor awarded the City of Kalispell several Competitive and Minimum Allocation Grants for Water, Sewer, and Stormwater projects. Replacement of Original 1920s Era Water and Sewer Mains in Downtown Kalispell is Kalispell’s largest ARPA project receiving grant allocations and focused on replacement of Kalispell’s aging critical infrastructure set to begin in spring of 2023. Acknowledgments The completion of the Annual Financial Report on a timely basis was made possible by the entire staff of the Finance Department and the cooperation of all City departments. I would also like to give recognition to the mayor, governing council, and the city manager for their consistent support for maintaining the highest standards in the management of the city of Kalispell’s finances. Respectfully submitted, Aimee Cooke Finance Director 6 CITY OF KALISPELL, MONTANA ORGANIZATIONAL CHART CITIZENS OF KALISPELL CITY COUNCIL MAYOR Mark JohnsonWARD I WARD II WARD III WARD IV KariGabriel Sam Nunnally Jessica Dahlman Jed FisherSandy Carlson Chad Graham Ryan Hunter Sid Daoud CITY CLERKAimeeBrunckhorst MUNICIPAL JUDGELori Adams CITY MANAGERDoug Russell PUBLIC SAFETYPOLICE Jordan Venezio LEGALJohnna Preble FINANCE Aimee Cooke PLANNING, BUILDING & COMMUNITY DEVELOPMENTJarod Nygren PARKS & RECREATION Chad Fincher PUBLICSAFETYFIRE Daniel Pearce INFORMATIONTECHNOLOGY Erika Billiet PUBLIC WORKSSusieTurner HUMAN RESOURCESDenise Michel 7 CITY OF KALISPELL, MONTANA CITY ELECTED AND APPOINTED OFFICIALS TERM EXPIRES 12/2026 Ward I 12/2023 Ward III 12/2025 Ward I 12/2026 Ward III 12/2023 Ward II 12/2023 Ward IV 12/2023 Ward II 12/2026 Ward IV 12/2025 ELECTED OFFICIALS Mayor Mark Johnson Council members: Kari Gabriel Jessica Dahlman Sandy Carlson Ryan Hunter Sam Nunnally Sid Daoud Chad Graham Jed Fisher APPOINTED CITY OFFICIALS City Manager City Attorney City Clerk Police Chief Fire Chief Finance Director Public Works Director Parks Director Planning, Building, Community Dev. Human Resource Director City Treasurer Doug Russell Johnna Preble Aimee Brunckhorst Jordan Venezio Dan Pearce Aimee Cooke Susie Turner Chad Fincher Jarod Nygren Denise Michel Krista Lammers 8 FINANCIAL SECTION 9 What inspires you, inspires us. | eidebailly.com 7001 E. Belleview Ave., Ste. 700 | Denver, CO 80237-2733 | TF 866.740.4100 | T 303.770.5700 | F 303.770.7581 | EOE Independent Auditor’s Report Honorable Mayor and Members of City Council City of Kalispell, Montana Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Kalispell (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Kalispell, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Correction of Errors As discussed in Note 3J to the financial statements, certain errors resulting in an overstatement of amounts previously reported for fixed assets and an understatement of amounts previously reported for accounts receivable as of June 30, 2023, were discovered by management of the City during the current year. Accordingly, a restatement has been made to the Tourism Business Improvement District net position amount as of June 30, 2023, to correct the error. 10 In addition, the City determined there were errors in amounts previously reported on the Statement of Cash Flows of the proprietary funds. The beginning balance of cash and cash equivalents as of July 1, 2022 was restated to correct the errors. Our opinions are not modified with respect to these matters. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we •Exercise professional judgment and maintain professional skepticism throughout the audit. •Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. •Obtain an understanding of internal control relevant to the audit 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 City’s internal control. Accordingly, no such opinion is expressed. •Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. •Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. 11 We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Schedule of Total Liability and Related Ratios – OPEB, Schedule of Contributions –OPEB, Schedule of Proportionate Share of the Net Pension Liability for the Last Ten Fiscal Years for PERS, MPORS, and FURS, Schedule of Contributions for the Last Ten Fiscal Years for PERS, MPORS, and FURS, and Budgetary Comparison Schedule for the General Fund, Street Maintenance Fund, and American Recovery Plan Act Fund, be presented to supplement the basic financial statements. Such information is the responsibility of management and 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 GAAS, 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining fund financial statements and the individual budgetary comparison schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining fund financial statements and individual budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. 12 In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 28, 2024 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 grant agreements and other matters. The purpose of that report is solely 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 effectiveness of the City’s 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 the City’s internal control over financial reporting and compliance. Denver, Colorado March 28, 2024 13 MANAGEMENT’S DISCUSSION AND ANALYSIS 14 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Kalispell, we offer readers of the City of Kalispell’s financial statements this narrative overview and analysis of the financial activities of the City of Kalispell for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. Financial Highlights ➢The assets and deferred outflows of the City of Kalispell exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $236,874,314 (net position). Of this amount, $23,348,196 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors. ➢Total City net position increased by $21,755,105 over the prior fiscal year. Developers contributed $9,506,044 of streets, and over $1,200,000 of water and sewer infrastructure were contributed to the City. ➢As of June 30, the City’s governmental funds reported combined ending fund balances of $26,578,303, an increase of $3,192,218 over the prior year. Of this amount $1,065,242 is available for spending at the government’s discretion (unassigned fund balance). ➢At fiscal year-end, the total of the committed, assigned, and unassigned components of fund balance for the general fund was $4,027,017 or 31% of fiscal year 2023 total general fund expenditures. ➢The City’s total debt decreased by $610,732 (2%) during fiscal year 2023. Debt of governmental activities decreased (9%) due to no new borrowings for fiscal year 23. Business-type activities increased (1%) due to partial Montana State Revolving Loans (SRF) being drawn on in both sewer and water funds. Overview of the Financial Statements There are three main components to the City of Kalispell’s financial statements 1.) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. Other supplementary material is included in this report in addition to the basic financial statements themselves. The City of Kalispell intends for this discussion and analysis to be used in conjunction with the basic financial statements, and other material, as an introduction and to help the user better understand the information. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City of Kalispell’s finances. The way information is presented in these statements is comparable to how the financial information of a private-sector business would be presented. The statement of net position presents information on all the City of Kalispell’s assets and deferred outflows of resources, and liabilities and deferred inflows of resources. The difference between these two (assets and deferred outflows of resources minus liabilities and deferred inflows of resources) is reported as net position. Net position can be a useful tool in evaluating the financial health of an entity. A substantial decrease in net position may be a sign of deteriorating financial outlook. 15 The change in net position during the most recent fiscal period is presented by the statement of activities. The statement of activities reports changes in net position at the time the event takes place without regard to the corresponding cash transaction. This results in some revenues and expenses being reported in this statement that will result in cash flow until a future fiscal period. Some examples of this would be uncollected but earned taxes and earned leave benefits. The government-wide financial statements of the City of Kalispell are segregated to distinguish between functions supported predominantly by taxes and intergovernmental revenues (governmental activities) and those that are intended to recover most of their costs through user fees and charges for services (business-type activities). The governmental activities of the City of Kalispell include general government/administration, public safety, public works, parks and recreation, and community development. The business-type activities of the City of Kalispell include water distribution, sewer collection and treatment, and solid waste collection. The government-wide financial statements include, in addition to the primary government described in the above paragraph, a legally separate Business Improvement District and a legally separate Tourism Business Improvement District. The financial information of these component units is reported separately on the Government-wide financial statements. Fund Financial Statements The City of Kalispell, like most other governmental entities, uses fund accounting. Funds are set up to account for specific activities or objectives of the government. Funds also aid in ensuring compliance with legal requirements. The City of Kalispell categorizes its funds as either governmental, proprietary, or fiduciary. ➢Governmental funds correspond with the functions reported as governmental activities in the government-wide financial statements. Governmental fund financial statements, by focusing on near-term inflows and outflows of spendable resources, may be more useful in evaluating a government’s short-term fiscal health than the government-wide financial statements. ➢A reconciliation has been prepared to help users more easily compare the governmental fund balance sheet to the government-wide statement of activities. These reconciliations can be useful in contrasting, comparing, and understanding the long-term impact (government-wide statements) of near-term decisions (governmental funds statements). ➢The City of Kalispell maintains numerous individual governmental funds. The governmental fund balance sheet and statement of revenues, expenditures, and changes in fund balance present information separately only for funds which are considered major. Major funds are determined by a formula which considers the percentage of total governmental assets, liabilities, revenues, and expenditures contained in each individual fund. The City of Kalispell has three major governmental funds; the General Fund (always a major fund), the Street Maintenance (special revenue) fund, and the American Rescue Plan Act fund. All non-major funds are presented as a group. ➢The City of Kalispell adopts an annual appropriated budget for its funds. A budgetary comparison statement has been provided for the general fund and the other major governmental funds to demonstrate compliance with this budget. 16 ➢The City of Kalispell maintains two different types of proprietary funds. Enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Water, sewer, and solid waste make up the City of Kalispell’s enterprise funds. ➢The City of Kalispell uses two internal service funds to accumulate and allocate its information technology transactions and central garage transactions internally among its various functions. Under the old reporting model internal service funds were reported as proprietary funds because they recovered most of their cost through user fees from other funds. Under the new model these funds are eliminated through an allocation process and categorized as either a governmental or business-type activity. Because the City of Kalispell’s internal service funds benefit governmental morse so than business-type functions, they have been included within the governmental activities in the government-wide financial statements. ➢Information in the proprietary fund financial statements is of the same type as that provided in the government-wide financial statements, however, it is more detailed. Individual fund data is provided for the water fund and the sewer fund, classified as major funds. Individual data is not required for the solid waste fund, because it is not classified as a major fund. ➢The City of Kalispell maintains one fund to account for resources held by the government for the benefit of outside parties. This fiduciary fund is not reflected in the government-wide financial statements because the resources are not available to support the City of Kalispell’s own programs. The City of Kalispell must ensure that the assets reported in this fund are used for their intended purpose. The accounting method used for fiduciary funds is like that used for proprietary funds. Notes to the Financial Statements The information contained in the government-wide and fund financial statements is meant to be used in concurrence with the notes to the financial statements. The notes present further details of the data provided by these statements. Other Information GASB Statement 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions schedules, GASB Statement 68 – Accounting and Financial Reporting for Pensions schedules, and the general and major special revenue funds budgetary comparison schedules is included in the section for required supplementary information on pages 91-108. ANALYZING THE CITY AS A WHOLE As mentioned prior, net position can be an important indicator of an entity’s financial well-being. For the period ending June 30, 2023, the City of Kalispell’s assets and deferred outflows or resources exceeded liabilities and deferred inflows or resources by $236,874,314. The largest portion of the City’s net position ($178,270,818 or 75%) reflects its net investment in capital assets (e.g., land, buildings, machinery and equipment, infrastructures). The City uses these capital 17 assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A summary of net position is shown in the following table: An additional portion of the City’s net position ($35,255,300 or 15%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($23,348,196) may be used to meet the City’s ongoing obligations to citizens and creditors. The Net position of the City increased almost 10% for fiscal year 2023 in comparison to fiscal year 2022 ($236 million compared to $215 million). Governmental Business-type Activities Activities Change Change FY23 FY22 Inc (Dec)FY23 FY22 Inc (Dec) Current and Other Assets 39,421,209$ 37,489,494$ 1,931,715$ 49,462,957$ 43,890,797$ 5,572,160$ Capital Assets 94,858,771 89,098,814 5,759,957$ 112,342,964 105,516,167 6,826,797 Total Assets 134,279,980 126,588,308 7,691,672 161,805,921 149,406,964 12,398,957 Deferred Outflows of Resources 4,816,676 3,997,285 819,391 526,719 575,038 (48,319) Long-term Liabilities Outstanding 21,094,865$ 17,405,533$ 3,689,332$ 23,776,138$ 23,513,475$ 262,663$ Other Liabilities 11,614,371 12,680,559 (1,066,188) 2,926,582 2,854,653 71,929 Total Liabilities 32,709,236 30,086,092 2,623,144 26,702,720 26,368,128 334,592 Deferred Inflow of Resources 2,648,285 5,724,384 (3,076,099) 2,494,741 3,268,712 (773,971) Net Position: Net Investment in Capital Assets 88,825,475 82,820,953 6,004,522 89,445,343 82,548,606 6,896,737 Restricted 22,491,754 18,926,543 3,565,211 12,763,546 12,120,363 643,183 Unrestricted (7,578,094) (6,972,378) (605,716) 30,926,290 25,676,193 5,250,097 Total net position 103,739,135$ 94,775,118$ 8,964,017$ 133,135,179$ 120,345,162$ 12,790,017$ 18 Governmental Activities. Governmental activities in fiscal year 2023 increased the City’s net position by $8,965,088, a decrease of $2,400,493 when compared to the prior fiscal year. Overall, revenues of the governmental funds decreased 4.8% ($2,030,137). Expenses increased about 1.0% or ($370,356). The key elements of the overall net position change were: Total program revenues decreased ($2,954,931 or 11.5%), while general revenues increased ($924,794 or 9.4%) Capital Grants and Contributions (program revenues) were $3,743,602 less than fiscal year 2022. This is due to the FY22 completion of the Tiger Grant (Parkline Trail) project. Public Safetys program expenses increased about 10% ($1,459,329). This increase can be attributed to the purchase of a new ambulance as well as the acquisition of three new vehicles in the public safety building department. Governmental Business-type Activities Activities Change Change FY23 FY22 Inc (Dec) FY23 FY22 Inc (Dec) Revenues Program revenues (by major source): Charges for services 8,937,848 9,467,107 (529,259) 18,852,006 18,383,444 468,562 Operating grants and contributions 3,473,355 2,155,425 1,317,930 61,459 153,555 (92,096) Capital grants and contributions 9,576,378 13,319,980 (3,743,602) 4,338,411 2,360,036 1,978,375 General revenues (by major source):- - - - - Property taxes for general purposes 11,458,918 10,489,024 969,894 - - - Video poker approptionment 58,275 58,525 (250)-- - Miscellaneous 482,528 575,644 (93,116) -- - Interest/investment earnings 833,935 210,249 623,686 1,185,464 276,681 908,783 State entitlement 3,544,415 3,069,588 474,827 -- - Gas Tax 1,304,854$ 919,184$ 385,670 -$ -$ - Unrealized gain (loss) on Investments (615,226)$ -$ (615,226) (1,116,521)$ -$(1,116,521) Transfers - net (820,691)$ -$ (820,691) 820,691$ -$ 820,691 Total Revenues 38,234,589$ 40,264,726$ (2,030,137)$ 24,141,510$ 21,173,716$ 2,967,794$ Program expenses General government 4,507,930$ 3,734,145$ 773,785$ --- Public Safety 14,023,407 12,563,009 1,459,329 --- Public Works 6,367,131 6,247,092 120,039 --- Parks and recreation 3,336,771 2,653,248 683,523 --- Community development 369,085 3,075,663 (2,706,578)--- Debt service - interest 238,044 262,187 (24,143)--- Miscellaneous 428,202 363,801 64,401 --- Water --- 3,320,393$ 3,660,118 (339,725)$ Sewer --- 6,787,742 6,886,496 (98,754) Solid Waste --- 1,243,358 1,191,379 51,979 Total expenses $ 28,899,145 29,270,570 $ 370,356$ 11,351,493$ 11,737,993$ (386,500)$ Excess (deficiency) before special items and transfers $ 11,365,581 8,964,019 $ (2,400,493)$ 12,790,017$ 9,835,723$ 2,954,294$ Gain (loss) on sale of capital assets -$ -$ -$ -$ -$ -$ Extraordinary item - Contribution to other Gov't -$ -$ -$ -$ -$ -$ Increase (decrease) in net position 8,964,019$ 11,365,581$ (2,400,493)$ 12,790,017$ 9,835,723$ 2,954,294$ Net Position - beginning 94,775,116$ 83,409,538$ 11,365,578$ 120,345,162$ 110,509,545$ 9,835,617$ Restatement -$ -$ -$ -$ -$ -$ Net Position - ending 94,775,119$ 103,739,135 $ $ 8,964,016 133,135,179$ 120,345,268$ 12,789,911$ 19 ➢Community Developments program expenses decreased about 80% ($2,706,578). This decrease can be attributed to the completion of the Glacier Rail Project in fiscal year 2022 withing the Westside TIF Fund. The table and charts on this page help illustrate the information presented above. The table and bar chart present the cost and net cost (total cost less revenues generated by the activity) of each of the City’s largest governmental programs; General Government (administration), Public Safety (police and fire), Public Works (streets, light maintenance and signs and signals), Culture and Recreation (parks, urban forestry, pool, etc.), and Community Development. Net cost shows the financial burden placed on City taxpayers by each of these functions. The pie chart illustrates the different revenue sources for the City’s governmental activities and how much each source contributes. Business-type activities. Business-type activities increased the City of Kalispell’s net position by $12,790,017, ($2,954,294) more than in fiscal year 2022. The factors leading to this increase were: ➢Overall, revenues of the City’s business-type activities increased $3,263,624. An increase in charges for services revenue (water and sewer rate increases) of 468,562, as well as a $1,978,375 in capital grants and contributions in water and sewer. Most of this increase is developers’ contributions of infrastructure in water and sewer infrastructure. 20 ➢Program expenses decreased 3% from the prior fiscal year. Expenses of the water department personnel costs were down $394,000 due to staffing shortages on vacancies that have not been filled. The following charts help illustrate the information presented above related to business-type activities net position. ANALYZING THE CITY’S INDIVIDUAL FUNDS Governmental Funds The focus of the City of Kalispell’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources (fund balance). Spendable fund balance (restricted, committed, assigned, and unassigned) is a useful tool when assessing the net resources a government has available to spend at the end of a fiscal period. At the end of fiscal year 2023, the City of Kalispell’s governmental funds reported combined ending fund balances of $26,578,303, an increase of $3,191,149 in comparison with the prior fiscal year. Approximately 4% of this amount ($1,065,242) constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of the fund balance is either nonspendable, 21 restricted, or assigned to indicate that it is 1) not in spendable form ($59,532), 2) restricted for particular purposes ($22,491,754), or 3) assigned for particular purposes ($2,961,775). MAJOR GOVERNMENTAL FUNDS The General Fund is the chief operating fund of the City of Kalispell. At the end of fiscal year 2023 unassigned fund balance of the general fund was $1,065,242, while total fund balance was $4,027,017. The fund balance decreased by $1,403,075 during fiscal year 2023. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total general fund expenditures. Unassigned fund balance represents approximately 10 percent of total general fund expenditures, while total fund balance represents approximately 33% percent of that same amount. The Street Maintenance fund is a special revenue fund established to account for the maintenance, construction, equipment, and other costs incurred in the maintenance of the City’s streets. Assessments on properties within the City of Kalispell boundaries are the main source of this fund’s revenue. On June 30, 2023, the fund balance of this fund was $3,923,001, a $320,775 increase from the prior fiscal year. The American Rescue Plan Act (ARPA) fund is a capital project fund established to account for the federal and state funding attributable to ARPA. This funding is to go towards infrastructure projects approved through a process by the State of Montana. Proprietary Funds The City of Kalispell’s proprietary funds financial statements provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position and the total growth in net position of the proprietary funds by fund are: FUND BALANCE - TOTAL 4,027,017$ 3,923,001$ -$ NONSPENDABLE Long-term recievables -$ -$ -$ Prepaids -$ 18,728$ -$ TOTAL NONSPENDABLE -$ 18,728$ -$ RESTRICTED Housing & Community Development Public Works -$ 3,904,273$ -$ TOTAL RESTRICTED -$ 3,904,273$ -$ ASSIGNMENTS Capital Equipment -$ -$ -$ Downtown Parking 23,542$ -$ -$ Misc.2,938,233$ -$ -$ TOTAL ASSIGNMENTS 2,961,775$ -$ -$ UNASSIGNED 1,065,242$ -$ -$ GENERAL FUND STREET MAINT.PLAN ACT AMERICAN RESCUE Proprietary Fund Net Position % of Unrestricted Unrestricted Change in % Change in Net Position Net Position Net Position Net Position Water - major fund 12,813,256$ 41%4,063,785$ 32% Sewer - major fund 16,854,853$ 55%8,682,849$ 68% Other - solid waste 1,258,181$ 4%43,383$ 0% Total 30,926,290$ 100%12,790,017$ 100% 22 For the discussion regarding major changes in net position of the proprietary funds see the explanation above in the business-type activities of statement of activities. GENERAL FUND BUDGETARY HIGHLIGHTS The City of Kalispell’s general fund expenditures budget for fiscal year 2023 was $13,681,051. Actual expenditures for the year were $12,817,378, a favorable variance of $863,673, mostly attributable to salary vacancy savings. Actual revenues of the general fund were $12,517,865, $385,675 more than the budgeted amount of $12,132,190. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At the end of 2023, the City of Kalispell has $207,385,811, net of depreciation invested in a broad range of capital assets, including police and fire equipment, streets, buildings, land, park facilities, garbage collection equipment, and water and sewer lines. Major Governmental funds capital asset events during the fiscal year 2023 included the following: ➢Vehicles and other equipment with a cost basis of $314,293 were added. This included three (3) new police vehicles and three (3) new building department vehicles. o The street department purchased equipment costing $432,437. This included a front-end loader, skid steer, deicer tank and leaf pro. Governmental Business-type Total activities activities 2023 2022 2023 2022 2023 2022 Land 3,743,166$ 3,743,166$ 354,021$ 354,021$ 4,097,187$ 4,097,187$ Buildings 5,005,458 5,532,838 26,341 28,683 5,031,799 5,561,521 Improvements (not buildings) 13,239,425 13,967,061 13,239,425 13,967,061 Machinery and equipment 4,072,866 3,970,984 615,952 757,400 4,688,818 4,728,384 Information Technology 105,453 131,444 105,453 131,444 Central Garage 92,193 102,695 92,193 102,695 Infrastructure 68,334,562 61,418,804 68,334,562 61,418,804 Construction in Progress 268,800 231,824 9,215,185 5,558,484 9,483,985 5,790,308 Source of Supply 4,479,296 4,638,284 4,479,296 4,638,284 Pumping Plant 1,706,128 1,786,958 1,706,128 1,786,958 Treatment Plant 15,710,798 16,654,695 15,710,798 16,654,695 Transmission and Distribution 63,560,179 62,043,752 63,560,179 62,043,752 General Plant 642,756 735,322 642,756 735,322 Storm Sewer system 16,032,305 12,848,335 16,032,305 12,848,335 Right to Use - lease 23,886$ - 106,444 - Right to Use - Subscription 31,122$ 19,475 Total 94,916,931$ 89,098,816$ 112,468,880$ 105,405,934$ 207,385,811$ 194,504,750$ *assets of the City's internal service funds included in governmental activities CITY OF KALISPELL'S CAPITAL ASSETS (NET OF DEPRECIATION/AMORIZATION)* 23 o The Parks department purchased equipment costing $197,898. This included a john deer tractor, walker mower, toro grounds master, air compressor and vehicle purchase. ➢Building improvements include HVAC system upgrade to City Hall, and the completion of station 61 dorm remodel project. ➢Paved 4 alleys at a total cost of $17,683. Replaced 1172’, 3.6 blocks of sidewalks valued at $106,439. ➢Disposed assets with a cost basis of $242,713. ➢Sewer, stormwater, and water infrastructure construction in progress with value of $199,384 were transferred to business-type activities from governmental activities (ARPA). Major Business-type funds capital asset events during the fiscal year 2023 included the following: ➢Water Meter System Upgrade at a cost of $453,929. ➢$1,027 linear feet of new water main was installed at a value of $414,384. ➢3,985 linear feet of new stormwater main valued at $414,014 was installed and contributed to the City by developers. ➢$2,094 linear feet of stormwater main replacement and repair valued at $1,319,773. ➢9,217 linear feet stormwater regional facilities and piping project valued at $3,389,246. ➢Disposed fully depreciated assets of the water/sewer department with a cost basis of $61,591. ➢Purchased a 2023 Spartan Leaf Pro at a cost of $115,815, split with street department. Additional information on capital assets can be found in the notes of the basic financial statements (Note D. Capital Assets pages 51-52). Debt At the end of fiscal year 2023, the City of Kalispell had a total long-term debt outstanding of $28,930,914. Of this amount $3,990,000 represents bonds secured solely by specific revenue sources (i.e., revenue bonds). The remainder consists of $23,360,675 outstanding on State Revolving Fund loans for water and sewer infrastructure. There is also $831,738 of special assessment debt for which the City of Kalispell is liable in the event of default by the property owners subject to the assessment, and $748,502 of loans for the purchase of other property and equipment ($370,079) and for gap lending ($378,423). Other obligations for the City of Kalispell include accrued vacation pay and sick leave (compensated absences ($2,151,006), OPEB liability ($2,333,614), pension liability ($14,375,964), lease and SBITA Governmental Business-type Total activities activities 2023 2022 2023 2022 2023 2022 General obligation bonds -$ -$ -$ -$ -$ - Revenue/Urban Renewal bonds 3,990,000 4,200,000 -$ -$ 3,990,000$ 4,200,000 SRF loans 463,054 490,320 22,897,621 22,857,328 23,360,675 23,347,648 Assessments 831,738 1,069,154 831,738 1,069,154 Contract debt/loans 748,502 924,844 - - 748,502 924,844 Total 6,033,294$ 6,684,318$ 22,897,621$ 22,857,328$ 28,930,914$ 29,541,646$ CITY OF KALISPELL'S OUTSTANDING DEBT 24 purchase liability ($154,323). More detailed information about the City’s long-term liabilities is presented in the notes to the financial statements (Note E. Long-Term Debt pages 54-58). ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The City’s elected and appointed officials considered many factors when adopting the fiscal year 2023 budget, before imposing tax rates and fees of the business-type activities. Some of these factors include, capital improvements identified in the City’s Capital Improvement Program, inflation rates, the City’s collective bargaining units, the local economy, national and world events (pandemic), and the citizen’s ability to pay. Inflation rates as well as interest rates have a significant impact on the cost of City projects. For the year, inflation rates continued to increase. The Bureau of Labor Statistics of the U.S. Department of Labor reported the Consumer Price Index-Unadjusted for all items at an increase of 3.2 percent in June of 2023. 25 BASIC FINANCIAL STATEMENTS 26 GOVERNMENT – WIDE FINANCIAL STATEMENTS 27 City of Kalispell, Montana Statement of Net Position June 30, 2023 Governmental Activities Business-type Activities Total Downtown BID Tourism BID ASSETS Current assets: $29,531,054 $28,944,319 $58,475,373 $46,625 $231,358 2,005,199 113,090 2,118,289 3,773 - 448,536 746,539 1,195,075 - 146,286 2,305,023 -2,747,026 - - 1,791,221 4,004,175 5,795,396 11,636 - 69,943 70,499 140,442 - - -76,655 76,655 - - -40,407 40,407 - - 72,450 442,003 514,453 - - Cash and investments Taxes and assessments receivable, net Accounts receivable Notes, loans, and contracts receivable Due from other governments Prepaid expenses Inventories Lease Receivable Contracts Receivable Due from Other 72,639 25,275 97,914 - - Total current assets 36,296,065 34,462,962 70,759,027 62,034 377,644 Noncurrent assets: 3,070,137 12,696,720 15,766,857 - - 3,743,166 354,021 4,097,187 - - 268,800 9,215,185 9,483,985 - 48,850 90,846,805 102,773,758 193,620,563 - - -2,177,356 2,177,356 - - Restricted cash and investments Capital assets - land Capital assets - construction in progress Capital assets - net of depreciation Lease Receivable Lease/SITA Right of use asset, net 55,007 125,919 180,926 - - Total noncurrent assets 97,983,915 127,342,959 225,326,874 - 48,850 Total Assets 134,279,980 161,805,921 296,085,901 62,034 426,494 DEFERRED OUTFLOWS OF RESOURCES Pensions 3,693,891 452,583 4,146,474 - - OPEB 1,122,785 74,136 1,196,921 - - Total deferred outflows of resources 4,816,676 526,719 5,343,395 - - LIABILITIES Current liabilities: Accounts payable 580,495 397,415 977,910 7,449 36,420 Accrued payables 271 - 271 - - Accrued payroll 691,187 171,433 862,620 - - Revenues collected in advance 5,433,048 - 5,433,048 - - Operating debt 28,314 - 28,314 - - Capital debt 655,167 1,899,792 2,554,959 - - Compensated absences payable 1,318,583 268,369 1,586,952 - - Lease/SBITA Purchase 22,146 13,581 35,727 - - Due to Contractor - Retainage -249,051 249,051 - - Due to P/R Benefit Providers 352,590 - 352,590 - - Deposits Payable 2,532,570 - 2,532,570 - - Total current liabilities 11,614,371 2,999,641 14,614,012 7,449 36,420 Noncurrent liabilities: Deposits payable 250 338,041 338,291 - - Operating debt 350,109 - 350,109 - - Capital debt 5,378,129 20,997,829 26,375,958 - - Compensated absences payable 438,082 125,972 564,054 - - Total OPEB liability 2,190,225 143,390 2,333,615 - - Net pension liability 12,705,209 1,985,509 14,690,718 - - Lease/SBITA Purchase 32,861 112,338 145,199 - - Total noncurrent liabilities 21,094,865 23,703,079 44,797,944 - - Total Liabilities 32,709,236 26,702,720 59,411,956 7,449 36,420 DEFERRED INFLOWS OF RESOURCES Pensions 654,872 145,357 800,229 - - OPEB 1,993,413 131,621 2,125,034 - - Leases -2,217,763 2,217,763 - - Total deferred inflows of resources 2,648,285 2,494,741 5,143,026 - - NET POSITION Net investment in capital assets 88,825,475 89,196,292 178,021,767 - - Restricted for:- General government 18,456 18,456 - - Public safety 5,424,424 5,424,424 - - Public works 7,636,890 7,636,890 - - Culture & recreation 2,948,195 2,948,195 - - Housing & community development 4,827,444 4,827,444 - - Debt service 1,636,345 1,118,307 2,754,652 - - Replacement and depreciation -726,476 726,476 - - Capital projects -10,518,763 10,518,763 - - Other Purposes -649,051 649,051 - - Unrestricted (7,637,626)30,926,290 23,288,664 54,585 390,074 Total net position $103,739,135 $133,135,179 $236,874,314 $54,585 $390,074 The notes to the financial statements are an integral part of this statement. Primary Government Component Units 28 City of Kalispell, Montana Statement of Activities For the Fiscal Year Ended June 30, 2023 Component Units Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Business-Type Activities Total Downtown BID Tourism BID Functions/Programs Primary government: Governmental activities: General government $4,507,930 $1,364,907 $479,577 $- $(2,663,446) $(2,663,446) Public safety 14,022,338 3,082,696 2,238,408 3,041 (8,698,193) (8,698,193) Public works 6,367,131 2,980,423 708,930 9,506,044 6,828,266 6,828,266 Culture and recreation 3,336,771 1,456,528 36,618 - (1,843,625) (1,843,625) Housing and community development 369,085 53,294 9,822 67,293 (238,676) (238,676) Debt service - interest and other charges 238,044 - - - (238,044) (238,044) Miscellaneous 428,202 - - - (428,202) (428,202) Total governmental activities 29,269,501 8,937,848 3,473,355 9,576,378 (7,281,920) (7,281,920) Business-type activities: Water 3,320,393 5,541,201 20,762 1,192,357 $3,433,927 3,433,927 Sewer 6,787,742 11,990,402 28,544 3,146,054 8,377,258 8,377,258 Solid Waste 1,243,358 1,320,403 12,153 - 89,198 89,198 Total business-type activities 11,351,493 18,852,006 61,459 4,338,411 11,900,383 11,900,383 Total primary government $40,620,994 $27,789,854 $3,534,814 $13,914,789 (7,281,920) 11,900,383 4,618,463 Component units: Downtown BID $150,305 $117,574 $6,500 $(26,231) Tourism BID 710,572 568,448 (142,124) Total component units $860,877 $686,022 $6,500 $- $(26,231) $(142,124) General revenues: 11,458,918 - 11,458,918 3,544,415 - 3,544,415 833,935 1,185,464 2,019,399 1,369 3,612 482,528 - 482,528 1,304,854 - 1,304,854 58,275 - 58,275 Property taxes for general purposes Unrestricted federal/state shared revenues Unrestricted investment earnings Miscellaneous Gas Tax Video Poker Apportionment Unrealized gain/(loss) on Investments (615,226) (1,116,521) (1,731,747) (1,753) Transfers - net (820,691) 820,691 - Total general revenues and transfers 16,247,008 889,634 17,136,642 (384) 3,612 Change in net position 8,965,088 12,790,017 21,755,105 (26,615) (138,512) Net position - beginning 94,775,116 120,345,162 215,120,278 81,200 428,965 Restatements 99,621 Net position - beginning restated 94,775,116 120,345,162 215,120,278 81,200 528,586 Net position - ending $103,739,135 $133,135,179 $236,874,314 $54,585 $ 390,074 The notes to the financial statements are an integral part of this statement Primary Government Net (Expense) Revenue and Changes in Net Program Revenues 29 GOVERNMENTAL FUND FINANCIAL STATEMENTS MAJOR GOVERNMENTAL FUNDS General Fund – The City’s primary operating fund and accounts for the financial operations of the City not accounted for in any other fund. Principal sources of revenue are property taxes, state and local shared revenue, charges for services, and fines and forfeitures. Principal expenditures are for public safety. Street Maintenance – Accounts for special assessment revenues levied, received, and expended to keep streets clean, safe, and driveable. American Recovery Act – Accounts for funds received by the City through this Act for approved City infrastructure projects. 30 City of Kalispell, Montana Balance Sheet Governmental Funds June 30, 2023 General Fund Street Maintenance American Recovery Act Grant Total Nonmajor Governmental Funds Total Governmental Funds ASSETS Current assets Cash and investments $6,782,575 $3,958,218 $5,461,387 $12,570,959 $28,773,139 Taxes and assessments receivable, net 277,279 145,317 - 1,582,603 2,005,199 Accounts receivable 300 - - 448,236 448,536 Notes, loans, and contracts receivable - - - 2,305,023 2,305,023 Advances to other funds 243,468 - - - 243,468 Due from other funds 48,784 - - - 48,784 Due from other governments 397,292 156,318 - 1,237,611 1,791,221 Prepaid expenses - 18,728 - 40,804 59,532 Contracts Receivable 25,634 - - - 25,634 Due from Other 40,077 - - 32,562 72,639 Total current assets 7,815,409 4,278,581 5,461,387 18,217,798 35,773,175 Noncurrent assets Restricted cash and investments - - - 3,070,137 3,070,137 Total noncurrent assets - - - 3,070,137 3,070,137 Total assets 7,815,409 4,278,581 5,461,387 21,287,935 38,843,312 LIABILITIES Current liabilities Accounts payable 213,394 151,568 28,339 156,225 549,526 Accrued payables - - - 271 271 Accrued payroll 412,559 58,445 - 184,222 655,226 Due to other funds - - - 48,784 48,784 Revenues collected in advance - - 5,433,048 - 5,433,048 Advances from other funds - - - 243,468 243,468 Due to P/R Benefit Providers 352,590 - - - 352,590 Deposits Payable 2,532,570 - - - 2,532,570 Total current liabilities 3,511,113 210,013 5,461,387 632,970 9,815,483 Noncurrent liabilities Deposits payable - 250 - - 250 Total noncurrent liabilities - 250 - - 250 Total liabilities 3,511,113 210,263 5,461,387 632,970 9,815,733 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue 277,279 145,317 - 1,582,602 2,005,198 Ambulance Revenue - - - 444,078 444,078 Total deferred inflows of resources 277,279 145,317 - 2,026,680 2,449,276 Major Governmental Funds 31 City of Kalispell, Montana Balance Sheet Governmental Funds June 30, 2023 General Fund Street Maintenance American Recovery Act Grant Total Nonmajor Governmental Funds Total Governmental Funds Major Governmental Funds FUND BALANCES Nonspendable Prepaid expenses - 18,728 - 40,804 59,532 Restricted for: General government - - - 18,456 18,456 Public safety - - - 5,424,424 5,424,424 Public works - 3,904,273 - 3,732,617 7,636,890 Culture & recreation - - - 2,948,195 2,948,195 Housing & community development - - - 4,827,444 4,827,444 Debt service - - - 1,636,345 1,636,345 Assigned to: General government 53,073 - - - 53,073 Public safety 23,542 - - - 23,542 Miscellaneous 2,885,160 - - - 2,885,160 Unassigned 1,065,242 - - - 1,065,242 Total fund balances $4,027,017 $3,923,001 $- $18,628,285 $26,578,303 Total liabilities, deferred inflows of resources and fund balance $7,815,409 $4,278,581 $5,461,387 $21,287,935 $38,843,312 The notes to the financial statements are an integral part of this statement. 32 City of Kalispell, Montana Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2023 Total fund balances - governmental funds 26,578,303 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Land 3,743,166 Construction in progress 268,800 Depreciable capital assets (net)90,652,310 94,664,276 Taxes and Assessments receivable that will be collected but are not available soon enough to pay for current-period expenditures are deferred inflows of resources in the funds. 2,005,199 Internal service funds are used by management to to account for any activity that provide goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a cost-reimbursement basis. The percentage of assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds attributable to governmental activities are reported on the Statement of Net Position.901,255 Long-term liabilities (current and non-current portions) are not due and payable in the current period and therefore are not reported as liabilities in the funds. Operating debt (378,423) Capital debt (6,033,296) Compensated absences payable (1,715,213) OPEB liability (2,190,225) Pension liability (12,705,209) (23,022,366) Employer contributions to a plan during the reporting period not recognized as of the plan's measurement date and the proportionate share of collective plan expense that is applicable to future periods are reported as deferred outflows of resouces on the Statement of Net Position. Pensions 3,693,891 OPEB 1,122,785 The proportionate share of reductions to collective plan expense that are applicable to future periods is reported as deferred inflows of resouces on the Statement of Net Position. Pensions (654,872) OPEB (1,993,413) Ambulance receivables that will be collected but are not available soon enough to pay for current-period expenditures are deferred inflows of resources in the funds. 444,078 Total net position - governmental activities 103,739,135 The notes to the financial statements are an integral part of this statement. 33 City of Kalispell, Montana Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For Fiscal Year Ended June 30, 2023 General Fund Street Maintenance American Recovery Act Grant Total Nonmajor Governmental Funds Total Governmental Funds $6,956,522 $2,960,929 $- $5,392,788 $15,310,239 225,055 9,703 - - 234,758 3,313,731 - 661,307 1,917,561 5,892,599 1,165,972 9,791 - 3,018,114 4,193,877 347,630 - - - 347,630 135,824 22,992 - 241,974 400,790 373,131 91,904 - 322,577 787,612 REVENUES Taxes and assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscellaneous Investment earnings Net Increae (Decrease) in FMV of Investments (177,030) (101,661) - (336,535) (615,226) Total revenues 12,340,835 2,993,658 661,307 10,556,479 26,552,279 EXPENDITURES Current: General government 2,926,852 - - 1,816 2,928,668 Public safety 8,933,009 - - 2,535,780 11,468,789 Public works 139,282 2,368,868 - 706,364 3,214,514 Culture and recreation 21,600 - - 2,439,525 2,461,125 Housing and community development 51,540 - - 252,262 303,802 Miscellaneous 428,202 - - - 428,202 Debt service - principal 47,106 27,266 - 560,163 634,535 Debt service - interest and other charges 4,641 12,915 - 218,775 236,331 Capital outlay 265,146 432,437 - 728,210 1,425,793 Total expenditures 12,817,378 2,841,486 - 7,442,895 23,101,759 0 Excess (deficiency) of revenues over (under) expenditures (476,543) 152,172 661,307 3,113,584 3,450,520 OTHER FINANCING SOURCES (USES) Transfers in 1,090,000 - - 2,868,255 3,958,255 Transfers (out)(2,016,532) (44,347) (661,307) (1,857,376) (4,579,562) Proceeds from general long term debt - 212,950 - 148,986 361,936 Total other financing sources (uses)(926,532) 168,603 (661,307) 1,159,865 (259,371) Net change in fund balance (1,403,075) 320,775 - 4,273,449 3,191,149 Fund balances - beginning 5,430,092 3,602,226 - 14,354,836 23,387,154 Fund balances - ending $4,027,017 $3,923,001 $- $ 18,628,285 $ 26,578,303 The notes to the financial statements are an integral part of this statement. Major Governmental Funds 34 City of Kalispell, Montana Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2023 Net change in fund balances - total governmental funds 3,191,149 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital assets purchased - capital outlay 1,425,793 Depreciation expense (4,970,558) (3,544,765) In the Statement of Activities, the acquisition value of capital asset donations is recognized as revenue. Governmental funds do not recognize these revenues: Acquisition value of donated capital assets 9,506,044 Revenues reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in governmental funds: Tax and assessment revenue (30,213) The change in compensated absences payable is reported as an increase or decrease to expense on the Statement of Activities, but is not recognized as an increase or decrease to expenditures on the Statement of Revenues, Expenditures and Changes in Fund Balance: Change in compensated absence liability (49,667) Repayment of debt principal during the reporting period consumes current financial resources and are recognized as expenditures in the governmental funds, but the repayment of long-term debt principle balances reduces the liability in the Statement of Net Position: Long-term debt principal payments 634,535 Long term debt incurred during the reporting period provide current financial resources to governmental funds and are recognized as an inflow, an other financing source, in the Statement of Reveneus, Expenditures, and Changes in Fund Balances. Long term debt incurred is recognized as an increase in liabilities in the Statement of Net Position. Proceeds from general long-term debt (361,936) Internal service funds are used by management to to account for any activity that provides goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a cost-reimbursement basis.. The percentage of net revenue of the internal service funds attributable to governmental activities is reported on the Government-Wide Statement of Activities. Revenues and expenditures attributable to governmental funds are not reported on the Statement of Revenues, Expenditures and Changes in Fund Balance.(143,763) The change in other post employment benefits is reported as an expense on the Statement of Activities, but is not reported as an expenditure on the Statement of Revenues, Expenditures and Changes in Fund Balance:1,077,144 Employer contributions made to pension plans during the reporting period consume current financial resources, thus are reported as expenditures in the Statement of Revenues, Expenditures, and Changes in Fund Balances. However, only the amount of pension expense recognized by the plan during the measurement period is reported as expenses in the Statement of Activities.(3,559,188) The difference between on-behalf contributions to fund pension liabilities recognized as revenue during the reporting period in the Statement of Revenues, Expenditures, and Changes in Fund Balances and on-behalf contributions recognized during the measurement period increases (decreases) operating grants and contributions reported on the Statement of Activities.2,359,719 Revenues from ambulance services reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in governmental funds:46,638 Capital contributions of infrastructure assets from homeowners are not current financial resources and therefore are not reported in governmental funds. 37,706 A transfer of a governmental capital asset to a enterprise fund is not recorded on the statement of revenue expenditure and changes of fund balance. In the statement of activities these transactions are reported as transfer out of governmental activities. (199,384) Change in net position - Statement of Activities 8,964,019 The notes to the financial statements are an integral part of this statement. 35 PROPRIETARY FUND FINANCIAL STATEMENTS MAJOR ENTERPRISE FUNDS Water Fund – Accounts for the City’s water utility operations, including water impact fees. Sewer Fund – Accounts for the City’s sewer and storm water utility operations, including sewer and storm impact fees. INTERNAL SERVICE FUNDS Information Technology Fund – used to account for the goods and services provided by the information technology department to other departments of the City on a cost- reimbursement basis. Central Garage Fund – used to account for the goods and services provided by the central garage to other departments of the City on a cost-reimbursement basis. 36 City of Kalispell, Montana Statement of Net Position Proprietary Funds June 30, 2023 Governmental Activities 5210 5310 Water Sewer Total Nonmajor Enterprise Funds Total Enterprise Funds Internal Service Funds ASSETS Current assets Cash and cash equivalents $7,586,984 $15,334,078 $1,050,848 $23,971,910 $409,669 Investments 4,399,165 - 573,244 4,972,409 348,246 Taxes and assessments receivable, net - 74,322 38,768 113,090 - Accounts receivable 303,012 443,527 - 746,539 - Due from other governments 1,567,200 2,362,675 74,300 4,004,175 - Prepaid expenses 27,061 36,053 7,385 70,499 10,411 Inventories 76,655 - - 76,655 - Lease/SBITA Receivable 40,407 - - 40,407 - Contracts Receivable 61,942 380,061 - 442,003 46,816 Due from Other 25,275 - - 25,275 - Total current assets 14,087,701 18,630,716 1,744,545 34,462,962 815,142 Noncurrent assets Restricted cash and cash equivalents - 1,574,244 - 1,574,244 - Restricted investments 1,394,445 9,728,031 - 11,122,476 - Capital assets - land 105,958 248,063 - 354,021 - Capital assets - construction in progress 4,964,211 4,250,974 - 9,215,185 - Capital assets - net of depreciation 35,089,099 67,227,204 457,455 102,773,758 194,495 Lease/SBITA Receivable 2,177,356 - - 2,177,356 - Lease/SBITA Right of use asset, net - 120,724 5,195 125,919 28,404 Total noncurrent assets 43,731,069 83,149,240 462,650 127,342,959 222,899 Total assets 57,818,770 101,779,956 2,207,195 161,805,921 1,038,041 DEFERRED OUTFLOWS OF RESOURCES Pensions 152,887 210,197 89,499 452,583 - OPEB 40,655 33,481 - 74,136 - Total deferred outflows of resources 193,542 243,678 89,499 526,719 - LIABILITIES Current liabilities Accounts payable 171,209 189,027 37,179 397,415 30,969 Accrued payroll 55,944 86,162 29,327 171,433 35,961 Capital debt 384,033 1,515,759 - 1,899,792 - Compensated absences payable 83,331 123,663 61,375 268,369 27,112 Lease/SBITA Purchase - 11,056 2,525 13,581 9,217 Due to Contractor - Retainage 96,832 152,219 - 249,051 - Total current liabilities 791,349 2,077,886 130,406 2,999,641 103,259 Noncurrent liabilities Deposits payable 124,707 213,334 - 338,041 - Capital debt 4,412,331 16,585,498 - 20,997,829 - Compensated absences payable 41,677 57,697 26,598 125,972 14,340 Total OPEB liability 78,508 64,882 - 143,390 - Net pension liability 670,723 922,147 392,639 1,985,509 - Lease/SBITA Purchase - 109,668 2,670 112,338 19,187 Total noncurrent liabilities 5,327,946 17,953,226 421,907 23,703,079 33,527 Total liabilities 6,119,295 20,031,112 552,313 26,702,720 136,786 DEFERRED INFLOWS OF RESOURCES Pensions 49,103 67,509 28,745 145,357 - OPEB 72,179 59,442 - 131,621 - Leases 2,217,763 - - 2,217,763 - Total deferred inflows of resources 2,339,045 126,951 28,745 2,494,741 - NET POSITION Net investment in capital assets 35,362,904 53,624,984 457,455 89,445,343 194,495 Debt service 227,273 891,034 - 1,118,307 - Replacement and depreciation - 726,476 - 726,476 - Capital projects 1,150,539 9,368,224 - 10,518,763 - Other Purposes - 400,000 - 400,000 - Unrestricted 12,813,256 16,854,853 1,258,181 30,926,290 706,760 Total net position $49,553,972 $81,865,571 $1,715,636 $133,135,179 $901,255 The notes to the financial statements are an integral part of this statement. Major Enterprise Funds Business-Type Activities 37 City of Kalispell, Montana Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For Fiscal Year Ended June 30, 2023 Governmental Activities 5210 5310 Water Sewer Other Enterprise Funds Totals Internal Service Funds OPERATING REVENUES Charges for services $4,773,510 $7,940,738 $1,317,230 $14,031,478 $1,144,126 Miscellaneous revenues 319,223 62,897 3,173 385,293 445 Special assessments - 2,004,552 - 2,004,552 - On-behalf - pensions 20,762 28,544 12,153 61,459 - Lease Revenue 40,407 - - 40,407 - Total operating revenues 5,153,902 10,036,731 1,332,556 16,523,189 1,144,571 OPERATING EXPENSES Personal services 818,002 1,694,290 664,713 3,177,005 729,527 Supplies 136,722 320,463 161,572 618,757 488,077 Purchased services 499,440 1,222,549 94,508 1,816,497 529,986 Building materials 211,352 47,369 - 258,721 - Fixed charges 371,917 639,854 203,860 1,215,631 35,230 Depreciation 1,182,191 2,408,219 118,269 3,708,679 67,182 Total operating expenses 3,219,624 6,332,744 1,242,922 10,795,290 1,850,002 Operating income (loss)1,934,278 3,703,987 89,634 5,727,899 (705,431) - - - - 191,716 - - - - 370,000 454,484 694,728 36,252 1,185,464 20,946 (100,769) (454,998) (436) (556,203) (1,713) 408,061 1,982,215 - 2,390,276 - (354,062) (720,392) (42,067) (1,116,521) (19,281) NON-OPERATING REVENUES (EXPENSES) Licenses/permits revenue Intergovernmental revenue Interest revenue Debt service interest expense Impact Fees Net Increase (decrease) in fair market value of Investment Total non-operating revenues (expenses)407,714 1,501,553 (6,251) 1,903,016 561,668 Income (loss) before contributions, transfers, special & extraordinary items 2,341,992 5,205,540 83,383 7,630,915 (143,763) Capital contributions 1,192,357 3,146,054 - 4,338,411 - Transfers in 529,436 331,255 - 860,691 - Transfers (out)- - (40,000) (40,000) - Change in net position 4,063,785 8,682,849 43,383 12,790,017 (143,763) Net position - beginning 45,490,187 73,182,722 1,672,253 120,345,162 1,045,018 Net position - ending $49,553,972 $81,865,571 $1,715,636 $133,135,179 $901,255 The notes to the financial statements are an integral part of this statement. Major Enterprise Funds Business-Type Activities 38 City of Kalispell, Montana Statement of Cash FlowsProprietary Fund For Fiscal Year Ended June 30, 2023 Governmental Activities 5210 5310 Water Sewer Total Nonmajor Enterprise Funds Total Enterprise Funds Internal Service Funds Cash Flows from Operating Activities: Cash received from customers $4,752,345 $ 9,910,808 $ 1,303,721 $ 15,966,874 $ 1,144,126 Cash received from miscellaneous sources 319,223 62,897 3,173 385,293 445 Cash paid to suppliers of goods and services (1,513,946) (2,341,476) (438,530) (4,293,952) (1,066,590) Cash paid to employees (1,191,531) (1,980,427) (600,722) (3,772,680) (717,458) Cash received (paid) from deposits 111,073 192,292 - 303,365 - Net cash provided (used) by operating activities 2,477,164 5,844,094 267,642 8,588,900 (639,477) Cash Flows from Non-Capital and Related Financing Activities: Transfers to other funds - - (40,000) (40,000) - Transfers from other funds 529,436 331,255 - 860,691 - Intergovernmental revenue received - - - - 370,000 Cash received from Charter Franchise Fees - - - - 191,716 Net cash provided (used) by non-capital and related financing activities 529,436 331,255 (40,000) 820,691 561,716 Cash Flows from Capital and Related Financing Activities: Principal paid on capital debt (353,545) (1,473,188) - (1,826,733) - Proceeds from capital debt - 439,876 - 1,867,026 - Interest paid on capital debt (100,769) (454,998) (436) (556,203) (1,713) Acquisition and construction of capital assets (4,133,145)(5,769,585) (2,388) (10,533,193) (27,538) Capital Contributions received - 467,053 (13,162) 541,308 - Cash received from contractors-retainage 71,105 142,219 - 213,324 - Cash received from Impact Fees 408,061 1,982,215 - 2,390,276 - Net cash provided (used) by non-capital and related financing activities (4,108,293) (4,666,408)(15,986) (8,790,687)(29,251) Cash Flows from Investing Activities: Interest on investments 454,484 694,728 36,252 1,185,464 20,946 Increase (Decrease) in fair value of investments (354,062) (720,392) (42,067) (1,116,521) (19,281) Change in Current and Noncurrent portions of notes, loans, and contracts receivable 48,022 198,676 - 246,698 1,674 Net cash provided (used) by investing activities 148,444 173,012 (5,815) 315,641 3,339 Net increase (decrease) in cash and cash equivalents (953,249) 1,681,953 205,841 934,545 (103,673) Cash and cash equivalents as of: June 30, 2022 14,333,843 24,067,908 1,418,251 39,820,002 861,588 Restatement to cash and cash equivalents (5,793,610) (9,728,031) (573,244) (16,094,885) (348,246) Restated cash and cash equivalents at June 30, 2022 8,540,233 14,339,877 845,007 23,725,117 513,342 June 30, 2023 $7,586,984 $ 16,908,322 $ 1,050,848 $ 25,546,154 $ 409,669 Displayed on Statement of Net Position-Proprietary Funds as: Cash and cash equivalents $7,586,984 $ 15,334,078 $ 1,050,848 $ 23,971,910 $ 409,669 Restricted cash and cash eqivalents - 1,574,244 - 1,574,244 - Total at end of year $7,586,984 $ 16,908,322 $ 1,050,848 $ 25,546,154 $ 409,669 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss)$1,934,278 $3,703,987 $89,634 $ 5,727,899 $ (705,431) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 1,182,191 2,408,219 118,269 3,708,679 67,182 Landfill closure/postclosure care expense (25,275) - - (25,275) - Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in assessments receivable - (21,110) (13,509) (34,619) - (Increase) decrease in accounts receivable (36,297) (13,372) - (49,669) - (Increase) decrease in prepaid items - 1 - 1 - (Increase) decrease in inventories (5,644) - - (5,644) - Increase (decrease) in customer deposits 111,073 192,292 - 303,365 - Increase (decrease) in accounts payable (288,871) (111,242) 21,410 (378,703) (13,297) Increase (decrease) in accrued payables 8,844 4,450 6,474 19,768 8,930 Increase (decrease) in compensated absences payable (2,992) (15,658) 18,303 (347) 3,139 Increase (decrease) in OPEB liability (47,654) (101,033) - (148,687) - Increase (decrease) in net pension liability (95,570) 124,293 128,654 157,377 - (Increase) decrease in deferred outflows-pension 51,845 2,968 (18,969) 35,844 - Increase (decrease) in deferred inflows-pension (274,176) (269,086) (82,624) (625,886) - (Increase) decrease in deferred outflows-OPEB (3,153) 15,628 - 12,475 - Increase (decrease) in deferred inflows-OPEB (31,435) (76,243) - (107,678) - Net cash provided (used) by operating activities $2,477,164 $5,844,094 $267,642 $ 8,588,900 $ (639,477) Schedule of non-cash transactions Depreciation 1,182,191 2,408,219 118,269 3,708,679 67,182 The notes to the financial statements are an integral part of this statement. Major Enterprise Funds Business-type Activities 39 FIDUCIARY FUND FINANCIAL STATEMENTS CUSTODIAL FUNDS Custodial Funds – used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds. 40 City of Kalispell, Montana Statement of Fiduciary Net Position Fiduciary Funds June 30, 2023 Custodial Funds ASSETS Cash and cash equivalents $47,196 Total assets 47,196 NET POSITION Restricted for: Individuals, organizations, and other governments 47,196 Total net position $47,196 The notes to the financial statements are an integral part of this statement. 41 City of Kalispell, Montana Statement of Changes in Fiduciary Net Position Fiduciary Funds June 30, 2023 Custodial Funds ADDITIONS KPD Evidence Deposit 34,661 Bed Tax Collection 568,448 Total additions 603,109 DEDUCTIONS Payment to outside entities 568,448 Total deductions 568,448 Change in net position 34,661 Net position - beginning 12,535 Net position - ending $ 47,196 The notes to the financial statements are an integral part of this statement. 42 NOTES TO THE FINANCIAL STATEMENTS 43 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Kalispell’s accompanying financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB), the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accompanying financial statements present the financial position of the City and the various funds and fund types, the results of operations of the City and the various funds and fund types, and the cash flows of the proprietary funds. The financial statements are presented as of June 30, 2023, and for the year then ended. The more significant accounting policies of the City are described below. Recently Implemented Accounting Pronouncements As of July 1, 2022, the City adopted GASB Statement No. 96, Subscription Based Information Technology Arrangements (SBITAs). The implementation of this standard establishes that a SBITA results in a right to use subscription IT asset-an intangible asset - and a corresponding liability. The standard provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA. The Statement requires recognition of certain SBITA assets and liabilities for SBITAs that previously were recognized as outflows of resources based on the payment provisions of the contract. There was no change to beginning balances of the right to use subscription asset and subscription liability as a result of implementing this standard. As a result of these adjustments there was no effect on beginning net positon. A.Financial Reporting Entity In determining the financial reporting entity, the City complies with the provisions for 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. Primary Government The City of Kalispell is a political subdivision of the State of Montana governed by an elected Mayor and Council duly elected by the registered voters of the City. The City utilizes the City Manager form of government. The City is considered a primary government because it is a general-purpose local government. Further, it meets the following criteria: (a) It has a separately elected governing body (b) It is legally separate and (c) It is fiscally independent from the State and other local governments. The accompanying financial statements present the primary government and entities for which the government is considered financially accountable (component units). These financial statements include all funds, agencies, boards, commissions, and authorities, which meet the criteria for inclusion in the City’s financial report. These criteria include financial accountability, appointment of a majority of the secondary government and the financial benefit or burden derived by the primary government from a secondary government. 44 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Discretely Presented Component Units Discretely presented component units are separate legal entities that meet the component unit criteria described above but do not meet the criteria for blending. The City’s discretely presented component units, the Downtown Business Improvement District and the Tourism Business Improvement District are legally separate organizations of the City, but the City is financially accountable. Neither the Business Improvement District nor the Tourism Business Improvement District issue financial statements separate from the City of Kalispell. The City reports the two component units in separate columns to emphasize that they are legally separate from the City and from each other. Downtown Business Improvement District On April 3, 2017, by resolution 5801, the City created the Downtown Business Improvement District (BID). The Mayor and City Council appoint the Board of Directors. The City is able to impose its will on the BID as it is authorized to levy assessments to support the activities of the BID and approves their annual budget. The purpose of said Business Improvement District is to promote the health, safety, prosperity, security, and general welfare of the inhabitants of the City of Kalispell and the proposed district and appears to be of special benefit to the property within the District. The District boundaries are roughly 3rd Avenue East to 3rd Avenue West between Center Street and 5th Street South. Publicly owned property and owner-occupied single-family dwellings are exempt from the assessments related to the District. Tourism Business Improvement District On May 3, 2010, by resolution 5425, the City created the Tourism Business Improvement District (TBID). The Mayor with the approval of the City Council, appointed seven owners of property within the district to act as the Board of Trustees of the District. The City is able to impose its will on the TBID as it is authorized to levy assessments to support the activities of the TBID and approves their annual budget. The purpose of said Tourism Business Improvement District is to promote the health, safety, prosperity, security, and general welfare of the inhabitants of the City of Kalispell and the proposed district and appears to be of special benefit to the property within the District. The District is made up of those properties within the corporate limits of the City of Kalispell with five or more rooms providing overnight stays for transient patrons at its business. B.Basis of Presentation, Measurement Focus, and Basis of Accounting Government-wide Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these government-wide financial statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported seperately from certain legally separate component units for which the primary government is financially accountable. 45 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Eliminations have been made to minimize the double counting of business-type activities. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City does not charge indirect expenses to programs or functions. The types of programs reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) operating grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Certain eliminations have been made as prescribed by GASB 34 regarding inter-fund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund financial statements have been eliminated; however, interfund services provided and used are not eliminated in the process of consolidation. Interfund services provided and used are not eliminated in the process of consolidation. Measurement Focus and Basis of Accounting On the government-wide Statement of Net Position and the Statement of Activities, both governmental and business-type activities are presented using the economic resources measurement focus and 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, regardless of the timing of the 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. The City generally applies restricted resources to expenses incurred before using unrestricted resources when both restricted and unrestricted net assets are available. The City has chosen not to accrue the interest payable of general long-term debt at year-end. This practice results in interest expense reported for governmental activities on the statement of activities to equal the interest expenditure on the statement of revenues, expenditures, and changes in fund balance. Although this is contrary to full accrual accounting, the City feels that it is immaterial in the presentation of its financial statements. 46 Fund Financial Statements Basis of Presentation The financial records of the City are organized into funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance- related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. Funds are organized into three categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within governmental and proprietary categories. Each major fund is displayed in a separate column in the governmental or proprietary funds statements. All the remaining funds are aggregated and reported in a single column as non- major funds. A fund is considered major if it is the primary operating fund of the City (General Fund) 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 b)Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise funds are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. Measurement focus and Basis of Accounting Governmental funds are used to account for the City’s general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual, (i.e., when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are collected within 60 days after year-end (except for property taxes). Property taxes are considered available if collected within 30 days after year end. Expenditures are recorded when the related fund liability is incurred except for un-matured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Real and personal property taxes, special assessments, charges for current services, and interest earnings are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as revenue at that time. The City recorded real and personal property taxes and assessments levied for the current year as revenue. Taxes and assessments receivable remaining unpaid at year-end and not expected to be collected soon enough thereafter to be available to pay obligations of the current year were recorded as deferred inflow of resources, with a corresponding reduction in revenues, as required by generally accepted accounting principles. In addition, prior period delinquent taxes and assessments collected in the current period were recorded as revenue in the current period as required by generally accepted accounting principles. 47 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Major Governmental Funds The City reports the following major governmental funds: The General Fund is always a major fund. This is the City’s primary operating fund, and it accounts for all financial resources of the City except those required to be accounted for in other funds. The Street Maintenance Fund (special revenue) fund was established to account for the repairs and other costs incurred in the maintenance of the City’s streets. An assessment of the City of Kalispell’s taxpayers is the main source of revenue for this fund. The American Recovery Act Infrastructure (capital project) fund was established to account for Federal dollars received as part of the American Recovery Act. These grant funds will be used with local water and sewer fund dollars for the construction cost associated with allowed infrastructure projects. Proprietary funds are accounted for using the accrual basis of accounting. These funds account for operations that are primarily financed by user charges. The flow of economic resources focuses concerns determining costs as a means of maintaining the capital investment and management control. Revenues are recognized when earned and expenses are recognized when incurred. Allocations of costs, such as depreciation, are recorded in proprietary funds. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connections with a proprietary fund’s principal ongoing operations. The principal operating revenues for enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. Major Proprietary Funds The City reports the following major proprietary funds: The Water Fund accounts for the activities of the City’s water distribution operations. The Sewer Fund accounts for the activities of the City’s sewer collection and treatment operations and includes the storm sewer system. Additionally, the City reports the following fund types: Internal Service. These funds account for the financing of goods and services provided by one department to other departments on a cost reimbursement basis. These funds account for the City’s fleet repair and maintenance (Central Garage) and provide technology systems and a means to 48 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 distribute public information (Information Technology) to City staff for their respective provisions of services to the City of Kalispell. Eliminations have been made to minimize the double accounting of internal activities. The City’s policy for internal service elimination is to eliminate amounts related to overhead and indirect expenditures and not services provided. Assets of the internal service fund are allocated to the governmental-type funds and the business-type funds based on which fund type benefits the most from its services. Accordingly, the Information Technology and Central Garage funds’ assets are included with the governmental activities. All Fiduciary Funds reported account for assets held by the City of Kalispell in a trustee capacity (custodial fund). The custodial fund does not present results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. The Kalispell Police Department (KPD) Evidence custodial fund accounts for assets that the City holds as evidence but will be returned to the owner when it is no longer required as evidence. The Tourism Business Improvement District (TBID) custodial fund accounts for money received for hotel bed tax collections. These funds are held for quarterly distribution to TBID. C. Assets, Liabilities, and Net Assets or Equity 1.Cash, cash equivalents, and Investments Cash and investments are under the management of the City’s Treasurer and consist primarily of demand deposits and investments in U.S. Government Bonds. Interest income earned on City deposits is distributed to the appropriate funds utilizing a formula based on the average balance of cash and investments of each fund. Montana State statutes authorize the City to invest in interest-bearing savings accounts, certificates of deposits, and time deposits insured up to $250,000 by the Federal Deposit Insurance Corporation or fully collateralized, U.S. government and U.S. agency obligations and repurchase agreements where there is a master repurchase agreement and collateral held by a third party. Cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and have maturities at purchase date of three months or less. The City’s cash and cash equivalents (including restricted assets) are cash on hand, demand, savings and time deposits, STIP and all short-term investments with original maturity dates of three months or less from the date of acquisition. Investments, with limited exceptions, are reported at fair value. Investments in nonparticipating certificates of deposit are reported at cost. Money market investments, including U.S. Treasury and Agency obligations, which mature within one year of acquisition are reported at amortized cost. Fair value is defined as the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is determined annually, and requires the use of valuation techniques, a specific method or a combination of methods using one or more of three approaches: market, cost, or income approach. 49 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 2.Receivables Between Funds Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either interfund receivables/payables (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as due to/from other funds. Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. Taxes Property tax levies are set within forty-five days of the state providing shared revenue figures, in connection with the budget process. Real property (and certain attached personal property) taxes are billed within ten days after the third Monday in October and are due in equal installments on November 30 and the following May 31. After those dates, they become delinquent, and a lien is filed upon the property. After three years, the City may exercise the lien and take title to the property. Special assessments are billed in two equal installments due November 30 and the following May 31. Personal property taxes (other than those billed with real estate) are generally billed no later than the second Monday in July (normally in May or June), based on the prior November’s levies. Personal property taxes, other than mobile homes, are due thirty days after billing. Mobile home taxes are billed in two halves, the first due thirty days after billing: the second due September 30. The tax billings are considered past due after the respective due dates are subject to penalty and interest charges. An allowance for uncollectable accounts was not maintained for real and personal property taxes and special assessments receivable. The direct write-off method is used for these accounts. Ambulance An allowance, based on history, for estimated uncollectible accounts receivable of 55% is maintained for the Ambulance fund. This allowance account has been adjusted to $547,842 at June 30, 2023. $996,077 55% $547,842 Ambulance accounts receivable Allowance Percentage Total Allowance @ June 30, 2023 Water/Sewer A reserve for estimated uncollectible accounts receivable of 0.5% of metered sales is maintained for the Water Fund and Sewer Fund. The reserve balances are as follows for June 30, 2023: Water $23,696 Sewer $39,705 50 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Lease Receivables The City of Kalispell entered into a contract to lease a portion of its water tower space for a period of 25 years to the following: The City of Kalispell has accrued a receivable for water tower leases. The remaining receivable for these leases was $2,177,356 for the year ended June 30, 2023. Deferred inflows related to these leases were $2,217,763 as of June 30, 2023. Interest revenue recognized on these leases was $67,235 for year ended June 30, 2023. Principle receipts of $40,407 were recognized during the fiscal year. The interest rate used to value the lease was 1.03%. Final receipt is expected in fiscal year 2045. The following are lease receivables to the City of Kalispell on June 30, 2023. Contracts The following are contracts receivable to the City of Kalispell on June 30, 2023. 3.Inventories and Prepaid Items Inventories for materials and supplies for governmental fund types are expended at the time of purchase. The amounts on hand in governmental funds are considered immaterial. Enterprise Fund inventory of materials and supplies are valued at cost and First-In-First-Out (FIFO) method is utilized. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items arise when charges are entered in the accounts for benefits not yet received. In subsequent periods, when the benefit criteria are met, or when the City has a legal claim to the resources, the prepaid items are removed from the balance sheet and expenses are recognized. 4.Restricted Assets Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain resources set aside Lease Origination Date Interest Rate Lease Term Maturity Date Annual Payment Bullitt 7/1/2021 1.03% 25 years 6/1/2045 30,236$ Sprint 7/1/2021 1.03% 25 years 6/1/2045 29,572$ Verizon 7/1/2021 1.03% 25 years 12/1/2041 44,666$ For Fiscal Year Ended Lease Receivable Beginning Balance Principal Interest Total Lease Receivable Ending Balance 2024 2,217,763$ 44,908$ 65,926$ 110,834$ 2,172,855$ 2025 2,172,855$ 49,643$ 64,514$ 114,157$ 2,123,212$ 2026 2,123,212$ 54,629$ 62,957$ 117,586$ 2,068,583$ 2027 2,068,583$ 59,868$ 61,246$ 121,114$ 2,008,715$ 2028 2,008,715$ 65,370$ 59,376$ 124,746$ 1,943,345$ 2029 1,943,345$ 71,153$ 57,336$ 128,489$ 1,872,192$ 2030-2045 1,872,192$ 1,872,192$ 480,828$ 2,353,017$ -$ Total 2,217,763$ 852,183$ 3,069,943$ Source Amount Municipal Court 25,634$ Franchise Fees-Charter (formerly Bresnan)46,701$ Total Governmental Activities 72,335$ Impact Fees 61,942$ Impact Fees 380,061$ Total Proprietary Funds 442,003$ Total City contracts receivable 514,338$ 51 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. When an expense is incurred for which both restricted and unrestricted net assets are available, it is the City’s policy to first apply the restricted resources. 5.Capital Assets Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business-type activities columns in the governmental-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value. More detailed information on the City’s streets and all capital assets can be found in Note 3, D. Capital Assets. Police vehicles are an exception despite a useful life less than 5 years. The City has determined that it is important to capitalize and depreciate these because the total cost, as a group, is substantial. The costs of normal maintenance and repairs that do not add to the value of the assets or extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Depreciation has been provided for the property, plant and equipment of the City of Kalispell using the straight-line method. The useful lives of these assets have been estimated as follows: Buildings 20-50 years Improvements Other than buildings 10-50 years Streets 40 years Machinery, vehicles and equipment 3-20 years Water and Sewer lines, pump stations 10-50 years Intangible assets 5-50 years 6.Compensated Absences It is the City’s policy and state law to permit employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid to employees upon separation from City service. Employees are allowed to accumulate and carry over a maximum of two times their annual accumulation of vacation. Any vacation leave time accumulated over this maximum carryover must be used within 90 days of the new calendar year. There is no restriction on the amount of sick leave that may be accumulated. Upon separation, employees are paid 100 percent of accumulated vacation and 25 percent of accumulated sick leave. In fiscal year 2012, the City of Kalispell began offering a voluntary employees beneficiary association (VEBA) plan. A tax-free post-retirement medical expense account used by retirees and their eligible dependents to pay for any eligible medical expenses. The plan is funded by 50% of the employee’s unused sick leave at the time of retirement, which is contributed by the City into the plan. The benefit 52 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 to the retirees of this plan is that they receive two times the amount of unused sick leave at retirement, none of which is subject to tax. The liability associated with governmental fund-type employees is reported in Governmental Activities column of the Statement of Net Position, while the liability associated with proprietary fund- type employees is recorded in the respective fund and the Business-type Activities column of the Statement of Net Position. For the purpose of reporting these compensated absences payable as current or noncurrent, the City assumes all employees will use their vacation accumulated as of June 30 in the succeeding fiscal year (current). The City also assumes sick leave accumulated as of June 30 will remain accumulated in the succeeding fiscal year (long-term). 7.Long-Term Debt and Lease Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, or proprietary fund type statement of net position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether withheld from the actual debt proceeds received, are reported as debt service expenditures. The City of Kalispell, the lessee, has entered into lease agreements for the contractual right to use (RTU) another entity’s nonfinancial asset for a period of time (referred to as the lease term) in an exchange or exchange-like transaction. Under the provisions of GASB Statement No. 87-Leases, a lessee with lease contract(s) having a determined term or more than 12 months are required to report the present value of future lease principal payments for the right to use the nonfinancial assets as a lease asset, an intangible asset, which is amortized on a straight line basis over the lease term and as a lease payable in the government-wide and/or in the proprietary and fiduciary statement of net position. The City of Kalispell on September 7th, 2018 entered into a lease agreement with BNSF Railway Company to construct and maintain one pipeline across or along the rail corridor. The term of the lease purchase is 25 years with an interest rate of 3.00%. Business-Type Activities Fiscal Year Ended Principal Interest Total 2024 4,116$ 3,193$ 7,309$ 2025 4,458$ 3,070$ 7,528$ 2026 4,818$ 2,936$ 7,754$ 2027 5,195$ 2,792$ 7,987$ 2028 5,591$ 2,636$ 8,227$ 2029-2038 82,266$ 14,872$ 97,138$ Totals:106,444$ 29,499$ 135,943$ At June 30, 2023, the principal and interest requirements to maturity are as follows; 53 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 The City has entered into multiple printer lease agreements with various leasing companies to provide printing equipment for its operations. The term and interest rate varies by lease agreement. The total amount of lease assets and related accumulated amortization for the fiscal year end June 30, 2023, are as follows: The City of Kalispell, the lessor, owns nonfinancial assets and has entered into lease agreement(s) giving another entity the contractual right to use (RTU) the City of Kalispell nonfinancial asset for a period of time (referred to as the lease term) in an exchange or exchange-like transaction. Under the provisions of GASB Statement No. 87-Leases, a lessor with lease contract(s) having a determined term of more than 12 months are required to report the present value of future principal lease payments as a lease receivable and a deferred inflow of resources-lease revenue in the fund level balance sheet and/or the statement of net position. Lease revenue is recognized as an inflow on a straight-line basis over the lease term. 8.SBITA Under the provisions of GASB Statement No. 96-Subscripton Based Information Technology (SBITA), a government with SBITA arrangement(s) having a determined term of more than 12 months are required to report a subscription right-to-use asset, an intangible asset, and a corresponding subscription liability. The subscription asset is amortized on a straight-line basis over the subscription term. The subscription liability is measured using the present value of future principal payments at the commencement of the subscription term. The asset and liability are reported in the government- wide and/or in the proprietary and fiduciary statement of net position. Governmental Activities Fiscal Year Ended Principal Interest Total 2024 7,021$ 1,100$ 8,121$ 2025 7,196$ 534$ 7,730$ 2026 6,765$ 318$ 7,083$ 2027 1,713$ 107$ 1,820$ 2028 1,191$ 23$ -$ Total 23,886$ 2,082$ 24,754$ At June 30, 2023, the principal and interest requirements to maturity are as follows; Intangible right-to-use (RTU) lease assets being amortized: Lease asset-Intangible 33,874 110,233 Total lease assets being amortized 33,874$ 110,233$ Less accumulated amortization for: Lease asset-Intangible (9,988) (3,789) Total accumulated amortization (9,988)$ (3,789)$ Total lease asset value 23,886$ 106,444$ Governmental Activities Business- Type 54 The City has entered into agreement(s) for the contractual right to use (RTU) another party’s information technology (IT) software alone or in combination with tangible capital assets (the underlying IT assets). The City Entered into a 3-year subscription arrangement for ArcGis Pro on July 7, 2022. The government is required to make annual payments of $27,500, with the first payment due on August 1, 2022. The estimated useful life of the software is 3 years. The annual interest rate charged on the software subscription is 5.75%. The total amount of subscription assets and related accumulated amortization for the fiscal year ended June 30, 2023 are as follows: Governmental Activities Business-Type Activities Intangible right-to-use (RTU) subscription assets:45,423 28,426 Less accumulated amortization (14,302) (8,951) Net subscription assets 31,121$ 19,475$ Governmental Activities Fiscal Year Ended Principal Interest Total 2024 15,126$ 1,789$ 16,915$ 2025 15,995$ 920$ 16,915$ 2026 -$ 2027 -$ 2028 -$ 2029-2038 -$ -$ -$ Total 31,121$ 2,709$ 33,830$ At June 30, 2023, the subscription principal and interest requirements to maturity are as follows; Business-Type Activities Fiscal Year Ended Principal Interest Total 2024 9,465$ 1,119$ 10,584$ 2025 10,010$ 576$ 10,586$ 2026 -$ 2027 -$ 2028 -$ 2029-2038 -$ Totals:19,475$ 1,695$ 21,170$ At June 30, 2023, the subscription principal and interest requirements to maturity are as follows; 55 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 9.Net Position/Fund Balance Net position in the government wide and proprietary fund financial statements show the amount of the capital assets less any outstanding debt issued to fund them as “net investment in capital assets.” Restricted net position are those that have constraints placed on them by external parties or imposed by law or enabling legislation. The City implemented GASB Statement 54 for fiscal year 2011. As a result, the classifications for fund balance now used for governmental funds are reported in two general classifications, non-spendable and spendable: Non-spendable represents the portion of fund balance that is not in spendable form such as inventories and prepaids, and, in the general fund, long-term notes and loans receivable. Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned. Restricted fund balance contains balances that can be spent only for the specific purposes stipulated by external parties or through enabling legislation. External parties include grantors, debt covenants, votes, and laws and regulations of other governments. Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority, the City Council. The City Council formally adopts a Resolution to establish, modify, or rescind a fund balance commitment. Assigned fund balances are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. Fund balances are assigned by the governing body. The City Council has the authority to express assignments in the General fund. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. Also included in the assigned fund balance for the general fund are assignments for the portion of the current general fund balance projected to be used to fund expenditures and other cash outflows more than the expected revenues and other cash inflows in the next fiscal year. Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. In other funds, the unassigned classifications is used only to report a deficit balance resulting from overspending for specific purposes for which amounts have been restricted, committed, or assigned. General Fund: restricted, committed, assigned, unassigned Special Revenue Funds: restricted, committed, assigned Debt Service Funds: assigned, committed, restricted Capital Project Funds: restricted, committed, assigned 56 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Data Policies The State of Montana’s budget law stipulates that money, other than payments from Agency funds, may not be drawn from the treasury of municipality except pursuant to an appropriation. The City legally adopts a budget for the required funds. Process An annual appropriated operating budget is adopted each fiscal year for the general fund, special revenue funds, debt service funds and capital projects funds on the modified accrual basis. In addition, a budget is adopted for the enterprise and internal service funds on a full accrual basis. The appropriated budget is prepared by fund, function, and for the general fund and certain other funds, by department. The final budget is legally enacted by the City Council, after holding public hearings as required by State statutes, and within forty-five days of the State providing final shared revenue figures. The City Manager and Finance Director may make budget appropriation transfers within a fund between general classifications of salaries and wages, maintenance and operation and capital outlay. Reported budget amounts represent the originally adopted budget as amended by resolution of the City Council. It is management’s responsibility to see that the budget is followed to the budgetary line item. The City Council may amend a final budget when shortfalls in budgeted revenues require reductions in approved appropriations to avert deficit spending; when savings result from unanticipated adjustments in projected expenditures; when unanticipated state or federal monies are received; or when a public emergency occurs which could not have been foreseen at the time of adoption. The City Manager is granted budget amendment authority for the expenditure of funds from debt service funds, enterprise funds, internal service funds, trust funds, federal and state grants accepted and approved by the City Council, special assessments, and donations. The procedure to amend the budget in total can be made only after the City prepares a resolution, notice is published of a public hearing, and a public hearing is held in accordance with state law. The City had no violations of budget law for fiscal year 2023, as all expenditures/expenses in total by fund are less than the related appropriations or are transfers of closed funds as allowed by State law. All budget amendments and closeout transfers during FY2023 are described below: The 1000 General Fund budget was increased $1,056,532. This change was to make the adjusting entry for repayment of advance that was completed in FY22. The adjusting entry is to correct advance to/advance from other fund balances. The 5310 Sewer Enterprise fund was increased $45,000. This change was due to the Fermenter Rehabilitation project amount exceeding the budgeted amount. The 5311 Sewer Impact Fee Fund was increased $50,000. This change was due to the EQ Basin project amount exceeding the budgeted amount. 57 NOTE 3. DETAILED NOTES ON ALL FUNDS A.Cash, Cash Equivalents, and Investments The City categorizes its fair value measurements within the fair value hierarchy established by GAAP. The hierarchy, as follows, is based on the valuation inputs used to measure fair value. Valuation techniques used maximize the use of observable inputs and minimize the use of unobservable inputs. •Leve 1 inputs – Quotes prices in active markets for identical assets; these investments are valued using prices quoted in active markets. •Level 2 inputs – Significant other observable inputs; these investments are valued using matrix pricing. •Level 3 Inputs – Significant unobservable inputs; these investments are valued using consensus pricing. On June 30, 2023, the carrying amount of the City’s deposits in local banks and investments is $74,567,409. Interest bearing account balances are covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per depositor. In addition, all noninterest bearing transaction account balances are fully insured by FDIC coverage. The remaining balances are covered by collateral held by the pledging bank’s agent in the City’s name. The City’s reports cash and investments as follows: Reconciliation of carrying amount to deposit balances: Under the City’s investment policy and as authorized by Montana law, the City is restricted to investing funds in specific types of investment instruments. These investments are low risk, locked into a guaranteed rate of return, and are, therefore, not impacted significantly by changes in short term interest Unrestricted Restricted Total $29,531,054 $3,070,137 $32,601,191 28,944,319 12,696,720 41,641,039 47,196 47,196 Governmental activities Business-type activities Fiduciary funds Component units 277,983 277,983 $58,800,552 $15,766,857 $74,567,409 Governmental Fair Value & Business Measurement Investment Activities Agency Component Units Total level: Certificates of Deposit $735,000$ 735,000$ U.S. Treasury Securities 750,000 750,000 U.S. Government Bonds 27,492,219 27,492,219 Level 2 State of Montana - Short Term Investment Pool Account 38,985,662 38,985,662 S & C Bonds - internal 39,737 39,737 Demand deposits 6,236,632 47,196$ $ 277,983 6,561,811 Petty Cash 2,980 2,980 74,242,230$ 47,196$ $ 277,983 $ 74,567,409 58 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 rates. Along with limitations placed on investments by state law, the City minimizes custodial credit risk by restrictions set forth in City policy. Custodial credit risk for investments is the risk that in the event of a financial institution failure, the City’s investments may not be returned, or the City will not be able to recover the collateral securities in the possession of the outside party. The City voluntarily participates in the STIP (Short Term Investment Pool) administered by the Montana Board of Investments (MBOI). Shares, the prices of which are fixed at $1.00 per share, represent a local government’s STIP ownership and participants may buy or sell shares with one-business days’ notice. STIP administrative expenses are charged daily against the STIP income, which is distributed on the first calendar day of each month. Shareholders have the option to automatically reinvest their distribution income in additional shares. STIP is not registered with the Securities and Exchange Commission. STIP is not FDIC insured or otherwise insured or guaranteed by the federal government, the State of Montana, the MBOI or any other entity against investment losses and there is no guaranteed rate of return on funds invested in STIP shares. The MBOI maintains a reserve fund to offset possible losses and limit fluctuations in STIP’s valuation. The STIP investment portfolio consists of securities with maximum maturity of two years. Information on investments held in STOP can be found in the Annual Report on the MBOI website at Annual Reports - Montana Board of Investments (investmentmt.com). Investments in the pool are reported at a Net Asset Value (NAV). The fair value of pooled investments is determined annually and is based on year-end market prices. The unit value of the pool is fixed at $1 for both participant redemptions and purchases. Investments in STIP are carried and reported at cost. STIP income is automatically reinvested in additional units. The STIP is not rated by a national rating agency. B. Interfund Receivables and Payables (Due to/from Other Funds) The composition of interfund balances and due to/from as of June 30, 2023, was as follows: C. Transfers The following is an analysis of transfers between funds during Fiscal Year 2023: Receivable Fund Payable Fund Amount Purpose General Fund - Major Governmental Health Insurance - Special Revenue 48,634 S/T Loan SID Revolving - Debt Service S & C's - Debt Service 150 S/T Loan Total - Due To Other Funds (Governmental Funds) 48,784$ From To Amount Purpose Health - Special Revenue Fund General - Major Governmental 1,090,000 Operations Health - Special Revenue Fund Parks - Special Revenue Fund 111,000 Operations General Fund - Major Governmental Ambulance - Special Revenue 890,000 Operations General Fund - Major Governmental Drug Grant - Special Revenue Fund 64,000 Operations General Fund - Major Governmental Block Grant - Special Revenue Fund 6,000 Operations CIP - Governmental Water - Enterprise Fund 199,384 Operations ARPA - Enterprise FUND Water - Enterprise Fund 330,052 Operations ARPA - Enterprise FUND Sewer - Enterprise Fund 331,255 Operations Old School Tech TIF - Special Revenue FundSID - 344 - Special Revenue Fund 50,000 Operations Old School Ind TIF - Special Revenue Fund SID - 344 - Special Revenue Fund 6,000 Operations Solid Waste - Enterprise Fund Gas Tax - Special Revenue Fund 40,000 Operations Special Street - Special Revenue Fund BaRSAA - Special Revenue Fund 44,347 Operations General Fund - Major Governmental CD - Special Revenue Fund 1,056,532 Operations Westside TIF Debt Service Westside TIF - Special Revenue Fund 600,000 Operations S & C's - Debt Service Fund SID Revolving - Debt Service Fund 376 Close Out TOTAL 4,818,946$ 59 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 D. Capital Assets Capital asset activities for the year ended June 30, 2023 were as follows: Assets Contributed In fiscal year 2023, Governmental Activities report contributed assets with a value of $9,543,750. $37,706 of these contributed assets were sidewalks replaced or repaired and paid for by homeowner’s directly (not assessed), and developers contributed $9,506,044 of streets to the City. In fiscal year 2023; Business-type Activities report contributed assets with a value of $1,252,672. Developers contributed five seven hundred eighteen linear feet (5,718’) of water mains, including 14 new fire hydrants valued at $648,346 to the water fund. These 5,718 linear feet of mains were distributed among four different projects (developments). The Sewer fund received sewer and storm mains. Developers contributed three thousand nine hundred eighty-five linear feet (3,985’) of sewer mains ($414,014), and one thousand five hundred thirty-six linear feet (1,536’) of storm sewer mains ($190,312). These 5,521 linear feet of mains were distributed among six different projects (developments). Construction in Progress Additions to construction in progress of governmental activities include an additional $246,360 towards the purchase of an ambulance. Reductions to construction in progress of governmental activities included $10,000 related to completion of Fire Station 61 dorm remodel project, and an additional $199,384 transfer from the American Rescue Plan (ARPA) to enterprise fund for water/sewer main replacement project. Additions to construction in progress of business-type activities was $7,474,730. This included the lower zone reservoir rehab and roof replacement project ($98,067); replacement of north main well ($460,072); continuing the development of a new well and associated storage ($2,063,851); making improvements to lift station #9 (979,118); improvements to lift station #3 ($355,923); lift station #10 control panel relocate(47,102); water/sewer main replacement project ($2,786,910); design and construction of fermenter for the wastewater treatment plan ($47,228); construction phase of a new EQ Basin for the wastewater treatment plant ($170,416); design and construction of a stormwater quality treatment facility ($351,492); and design and construction of a stormwater quality treatment facility on main and Wyoming St. ($114,550). Reductions to construction in progress of business-type activities included, in the sewer (storm) fund, the completion of Regional Facilities and piping project ($3,389,245); and in the water fund, the completion of 2nd Ave West water main replacement ($428,784). 60 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Governmental activities depreciation was charged to functions/programs of the primary government as follows: Balance Balance Governmental Activities:July 1, 2022 Additions Contributions Transfers Deductions June 30, 2023 Capital assets not being depreciated: Land 3,743,166$ -$ -$ -$ -$ 3,743,166$ Construction in Progress 231,824 246,360 (209,384) - 268,800 Total capital assets not being depreciated 3,974,990 246,360 - (209,384) - 4,011,966 Capital assets being depreciated: Buildings 16,869,454 50,967 - 10,000 - 16,930,421 Improvements other than buildings 26,952,325 165,598 37,706 - - 27,155,629 Machinery and equipment General 11,119,644 944,628 - - (237,688) 11,826,584 Ambulance 583,330 18,239 - - - 601,569 Parking 46,071 - - - (5,025) 41,046 Infrastructure 103,533,160 - 9,506,044 - - 113,039,204 Total capital assets being depreciated 159,103,984 1,179,433 9,543,750 10,000 (242,713) 169,594,454 Less accumulated depreciation for: Buildings (11,336,616) (588,347) - - - (11,924,963) Improvements other than buildings (12,985,264) (930,940) - - - (13,916,204) Machinery and equipment General (7,310,352) (813,461) - - 237,688 (7,886,125) Ambulance (421,638) (47,524) - - - (469,162) Parking (46,071) - - - 5,025 (41,046) Infrastructure (42,114,356) (2,590,286) - - - (44,704,642) Total accumulated depreciation (74,214,297) (4,970,558) - - 242,713 (78,942,142) Capital assets being amortorized: Right to use asset Intangible - Subscription Asset - 38,829 - - - 38,829 Less accumulated amortization - Subscription - (12,226) - - - (12,226) Total accumulated amortization - 26,603 - - - 26,603 Total capital assets being depreciated, net 84,889,687 (3,791,124) 9,543,750 10,000 - 90,652,313 Total capital assets being amortorized, net - 26,603 - - - 26,603 Governmental activities capital assets, net 88,864,677$ (3,518,161)$ 9,543,750$ (199,384)$ -$ 94,690,882$ Balance Balance Internal service funds:July 1, 2022 Additions Contributions Transfers Deductions June 30, 2023 Information Technology 566,940$ 15,475$ -$ -$ -$ 582,415$ Less accumulated depreciation - Information Technology (435,496) (41,466) - - - (476,962) Capital Asset being amortorized: Right to use asset - Lease 60,843 15,410 - - - 76,253$ Right to use asset - Subscription - 6,594 - - - 6,594$ (42,379) (9,988) - - - (52,367)$ Less accumulated amoritzation - Subscription - (2,076) - - - (2,076)$ Central Garage 348,191 - - - (11,925) 336,266 Less accumulated depreciation - Central Garage (245,496) (16,802) - - 15,075 (247,223) Internal service funds assets, net 252,603$ (32,853)$ -$ -$ -$ 222,899$ Less accumulated amortization - Lease Governmental Activities Depreciaton Amortization Total General Government 3,661,104$ 9,735 3,670,839$ Public Safety 552,099 552,099$ Public Works 25,221 - 25,221$ Parks and Recreation 732,134 2,491 734,625$ Total Governmental Activites 4,970,558$ 12,226$ 4,982,784$ 61 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Business-type activities depreciation was charged to functions/programs of the primary government as follows: Balance Transfers/ Construction Balance Business-type activities:July 1, 2022 Additions Contributions in Progress Deductions June 30, 2023 Capital assets not being depreciated: Land Water (Asset type: 070)105,958 - - - - 105,958 Sewer (Asset type: 120)221,513 - - - - 221,513 Sewer (Storm) (Asset type: 150)26,550 - - - - 26,550 Construction in progress Water 1,803,164 3,589,831 - (428,784) - 4,964,211 Sewer 289,556 3,418,857 - -- 3,708,413 Storm 3,465,764 466,042 - (3,389,245) 542,561 Solid Waste - - - - - Total capital assets not being depreciated 5,912,505 7,474,730 - (3,818,029) - 9,569,206 Capital assets being depreciated: Water - General Plant (Asset type: 060)1,241,773 - - (26,596) 1,215,177 Source of Supply (Asset type: 070)6,437,073 22,252 - - - 6,459,325 Transmission and Distribution (Asset type: 080) 40,461,417 506,590 648,346 428,784 42,045,137 Pumping Plant (Asset type: 090)3,981,044 3,981,044 Sewer General Plant (Asset type: 130)1,154,078 - (34,995) 1,119,083 Transmision and Distribution (Asset type: 140) 48,547,945 1,318,815 414,014 - 50,280,774 Storm Sewer System (Asset type: 150)19,697,173 57,908 190,312 3,389,245 - 23,334,638 Treatment Plant Equipment (Asset type: 180)639,867 - 639,867 Treatment Plant (Asset type: 190)42,356,411 - 42,356,411 Solid Waste Buildings (Asset type: 111)345,442 - 345,442 Machinery and equipment (Asset type: 110)2,098,233 - - - 2,098,233 Total capital assets being depreciated 166,960,456 1,905,565 1,252,672 3,818,029 (61,591) 173,875,131 Capital assets being amortorized: Right to use asset Intangible - Lease Asset 126,019 - 126,019 Intangible - Subscription Asset 28,426 28,426 Total capital assets being amortorized 126,019 28,426 - - - 154,445 Less accumulated depreciation for: Water General Plant (Asset type: 060)(965,529) (41,376) - 26,596 (980,309) Source of Supply (Asset type: 070)(1,798,789) (181,240) - - (1,980,029) Transmision and Distribution (Asset type: 080) (12,497,584) (878,746) - (13,376,330) Pumping Plant (Asset type: 090)(2,194,086) (80,830) - (2,274,916) Sewer General Plant (Asset type: 130)(695,000) (51,190) - 34,995 (711,195) Transmision and Distribution (Asset type: 140) (14,468,026) (921,376) - - (15,389,402) Storm Sewer System (Asset type: 150)(6,848,838) (453,495) - - - (7,302,333) Treatment Plant Equipment (Asset type: 180)(427,119) (27,909) - - (455,028) Treatment Plant (Asset type: 190)(25,701,716) (943,897) - - (26,645,613) Solid Waste Buildings (Asset type: 111)(316,759) (2,342) - - (319,101) Machinery and equipment (Asset type: 110)(1,553,581) (113,539) - - (1,667,120) Total accumulated depreciation (67,467,027) (3,695,940) - - 61,591 (71,101,376) Less accumulated amortization for: Right to use assets Intangible - Lease Asset (15,786) (3,789) (19,575) Intangible - Subscription Asset (8,951) (8,951) Total accumulated amortizaton (15,786) (12,740) - - - (28,526) Total capital assets being depreciated, net 99,493,429 (1,790,375) 1,252,672 3,818,029 - 102,773,755 Total capital assets being amortorized, net 110,233 15,686 - - - 125,919 Business-type activities capital assets, net 105,516,167$ 5,700,041$ 1,252,672$ -$ -$ 112,468,880$ Business-Type Activities Depreciaton Amortization Total Water 1,182,191$ 1,182,191$ Sewer -$ Sanitary 972,567 6,177 978,744$ Treatment 971,806 971,806$ Storm 453,495 4,175 457,670$ Solid Waste 115,881 2,388 118,269$ Total Buisiness-type Activites 3,695,940$ 12,740$ 3,708,680$ 62 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 E. Long-Term Debt During the year ended June 30, 2023, the following changes occurred in long-term liabilities: *The governmental funds that are expected to liquidate the compensated absences, pension and other postemployment benefits labilities are the General, Parks, Ambulance, Building, Light Maintenance, Street Maintenance, and Urban Forestry. Balance Balance Due within July 1, 2022 Additions Reductions June 30, 2023 1 year Governmental Activities: Revenue Bonds 4,200,000$ -$ (210,000)$ 3,990,000$ 215,000$ State Revolving Fund 490,320 - (27,266) 463,054 27,728 Assessments 1,069,155 14,380 (251,797) 831,738 252,614 Contract Debt/Loans 518,386 347,555 (117,439) 748,502 159,825 Intermediary Program 406,457 - (28,034) 378,423 28,314 SBITA Purchase - 38,829 (12,226) 26,603 12,930 Compensated Absences*1,665,546 1,256,441 (1,206,774) 1,715,213 1,291,471 Other postemployment benefits*2,716,579 - (526,354) 2,190,225 - Pensions*8,161,041 4,544,168 - 12,705,209 - Governmental Activities Sub Total 19,227,484$ 6,201,373$ (2,379,890)$ 23,048,967$ 1,987,882$ Internal Service Funds: Lease Purchase 18,464$ 15,410$ (9,988)$ 23,886$ 7,021$ SBITA Purchase -$ 6,594$ (2,076)$ 4,518$ 2,196$ Compensated Absences 38,313$ 33,458$ (30,319)$ 41,452$ 27,112$ Internal Service Funds Sub Total 56,777$ 55,462$ (42,383)$ 69,856$ 36,329$ Government-wide Governmental Activities 19,284,261$ 6,256,835$ (2,422,273)$ 23,118,823$ 2,024,211$ Balance Balance Due within July 1, 2022 Additions Reductions June 30, 2023 1 year Business-type Activities: State Revolving Fund 22,857,328$ 1,867,026$ (1,826,733)$ 22,897,621$ 1,899,792$ Lease Purchase 110,233 - (3,789) 106,444 4,116 SBITA Purchase - 28,426 (8,951) 19,475 9,465 Compensated Absences 394,689 199,788 (200,136) 394,341 268,369 Other postemployment benefits 292,077 - (148,688) 143,389 - Pensions 1,828,132 - (157,377) 1,985,509 - Business-type Activities Total 25,482,459$ 2,095,240$ (2,345,674)$ 25,546,779$ 2,181,742$ Total City 44,766,720$ 8,352,075$ (4,767,947)$ 48,665,602$ 4,205,953$ 63 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Legal Debt Margin At June 30, 2023, the general obligation debt issued by the City did not exceed its legal debt margin as demonstrated by the following computation: *A State of Montana, Board of Investment’s attorney gave an opinion that loans under 7-5-4306, MCA are subject to the limit of indebtedness. These loans are displayed on page 58 (Loans/ Contracted Debt). Special Assessment Debt – Special assessment bonds are secured by a lien on the assessed properties. The primary source of repayment is the assessments levied against the benefiting properties. However, the City is liable, to an extent, for repayment of these special assessment bonds. State law authorizes the City to establish a revolving fund to ensure the payment of debt service on the bonds if assessed property owner’s default. Total assessed value of taxable property (market value-2023)5,292,800,723$ General limitation percentage 2.50% General limitation of indebtedness 132,320,018 Outstanding general obligation bonds at June 30 0 Outstanding loans subject to limitation* Park Improvements 30,996 Parks Equipment 134,605 Public Safety Equipment 369,951 SID Bonds 792,000 Total debt subject to limit 1,327,552 Excess limit over outstanding debt margin $130,992,466 Origination Interest Due Principal Annual Balance Purpose Date Rate Term Date Amount Payment June 30, 2023 SID344 6/15/2006 5.10% 20 years 2026 4,520,000$ 230,000$ 690,000$ SID345 5/15/2014 3.00% 15 years 2029 242,000 varies 102,000 2014 S&C 1/6/2012 3.25% 8 years 2023 7,845 981$ - 2015 S&C 4/12/2013 3.50% 8 years 2024 9,272 1,159$ 1,159 2016 S&C 1/2/2014 3.75% 8 years 2025 9,792 1,224$ 2,448 2017 S&C 1/2/2015 4.50% 8 years 2026 4,288 536$ 1,608 2018 S&C 1/4/2016 5.50% 8 years 2027 7,145 893$ 3,572 2019 S&C 6/30/2016 4.75% 8 years 2028 15,824 1,978$ 9,890 2020 S&C 1/4/2021 3.25% 8 years 2029 4,046 506$ 3,034 2021 S&C 1/6/2022 3.25% 8 years 2030 4,165 521$ 3,645 2022 S&C 1/4/2023 7.50% 8 years 2031 14,380 1,798$ 14,380 Total Special Assessment Bonds 4,838,757$ 831,738$ *In the event that all future and delinquent assessments are paid and that there are no future adjustments to assessments by the City of Kalispell, there is a projected surplus of principal assessments in SID's 344 and 345 of $45,107 and $24,232, respectively. 64 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Revenue Bonds – Revenue bonds are directly related to and paid from the fund. The 2018 West Side Tax Increment bonds are accounted for in the Government-wide financial statements and are paid directly from tax increment in the district. Significant Provisions of the Series 2018 West Side Tax Increment Urban Renewal Revenue Bonds The 2018 Bonds mature on January 1, 2037. The 2018 Bonds with stated maturities from 2019 through 2028 shall not be subject to redemption prior to their stated maturities. The 2018 Bonds with stated maturities on or after July 1, 2029, will be subject to redemption on July 1, 2028, and any day thereafter, at the option of the City, in whole or in part, at a redemption price equal to the principal amount thereof to be redeemed plus interest accrued to the redemption date, without premium. Interest on the Bonds varies from 3.00% for the Bonds with stated maturities from July 1, 2019, through July 1, 2025, to 5.00% for the $500,000 Term Bond with the stated maturity of January 1, 2033. Reserve Account – The City shall maintain a debt service reserve account with a balance equal to the lesser of: (i) ten percent (10%) of the original principal amounts of the Bonds; (ii) the maximum amount of principal and interest payable on the Bonds in the current or any future fiscal year; or (iii) 125% of the average debt service on the Bonds payable in any fiscal year. 125% of the average debt service ($6,043,125/16 years) $472,119 City’s Reserve $480,011 State Revolving Fund – the City has thirteen (13) loan agreements with the State Revolving Fund (SRF). These obligations are to be repaid from the operating income of the fund. Issue Interest Final Bonds Balance Purpose Date Rate Term Maturity Issued June 30, 2023 Governmental Activities: 2018 - West Side TIF 5/29/18 3%-5% 19 years 1/1/37 $ 4,960,000 3,990,000$ Governmental Activities Sub Total 4,960,000$ 3,990,000$ SRF LOANS Interest Amount Outstanding Purpose Origination Rate Term Borrowed June 30, 2023 Governmental Activities: 2017 Streets - 4th Ave E FY18 2.50% 20 years 615,098$ 463,054$ Governmental Activities Sub Total 615,098$ 463,054$ Business-type Activities: 2013 Sewer - WWTP Digester Lid FY13 3.00% 20 years 1,102,748$ 626,000$ 2012 Sewer - Hwy 93 S FY13 2.25% 12 years 1,009,000 94,000 2012 Sewer - WWTP System Improvements FY13 2.25% 15 years 12,827,000 3,852,000 2018 Sewer - Westside Interceptor FY18 2.50% 30 years 12,194,841 10,643,000 2023 Sewer - Liftstation #9 FY23 2.50% 20 years 883,122 856,122 2012 Water - Sheepherders Well/Storage FY13 2.25% 15 years 1,340,000 402,000 2017 Water - 4th Ave E FY18 2.50% 20 years 1,974,988 1,486,812 2020 Water - Refunding 2004 Bond FY20 2.50% 4 years 365,648 84,648 2020 Water - 4 Mi. Dr. Transmission FY20 2.50% 20 years 2,147,108 1,839,000 2023 Water - Upperzone Well/Tank FY23 2.50% 30 years 983,904 983,904 2021 Storm - Regional Facilities FY21 2.50% 20 years 2,152,737 1,976,000 2017 Storm Sewer - 4th Ave E FY18 2.50% 20 years 71,914 54,135 Business-type Activities Sub Total 37,053,010$ 22,897,621$ Total SRF Loans 37,668,108$ 23,360,675$ 65 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Water Debt Required Information Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12 of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service account was zero as of June 30, 2023, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. Reserve Account - The City shall keep in the reserve account an amount equal to or greater than 50% of the maximum amount of principal and interest required in the current or any subsequent fiscal year ($547,406 * 0.50 = $273,703). As of June 30, 2023, the debt service reserve account contains $273,703. Maximum P & I $ 547,406 Total Reserve Requirement $ 273,703 Reserve balance 6/30/23 $ 273,703 Property Insurance – The City will cause all buildings, properties, fixtures, and equipment to be kept insured in amounts that are ordinarily carried. Liability Insurance – The City will carry insurance against liability of the City and its employees. Rates and Charges – Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year net revenues more than such current expenses, equal to 110% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year. Sewer Debt Required Information Operating Reserve – The city shall keep in the operating reserve account an amount equal to one month’s operating expenses. As of June 30, 2023, the operating reserve account contains $400,000. Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12 of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service account was zero as of June 30, 2023, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or Water Fund Cash Flow Debt Coverage Water Service Charges 4,773,510$ Misc. Revenue 319,223 Total Operating Revenue 5,092,733 Less: Operating Expense (excludes depreciation)2,037,433 Available for Debt Service 3,055,300$ **Maximum Debt Service 547,406$ Estimated Coverage FY23 558% **includes all water fund borrowings 66 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 principal balance. Reserve Account - The City shall keep in the reserve account an amount equal to or greater than 50% of the maximum amount of principal and interest required in the current or any subsequent fiscal year ($2,226,508 * 0.50 = $1,113,254). As of June 30, 2023, the debt service reserve account contains $1,113,254. Bond reserve dollars are held in both the storm fund ($70,807), and sewer fund ($1,042,447). Rates and Charges – Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year net revenues more than such current expenses, equal to 110% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year. Sewer Fund Cash Flow Debt Coverage *Operating Revenue 8,003,635$ Total 8,003,635 Less: Operating Expense (excludes depreciation)3,924,525 Available for Debt Service 4,079,110$ **Maximum Debt Service 2,226,508$ Estimated Coverage FY23 183% *includes storm sewer assessments **includes all sewer/storm fund borrowings Loans/Contracted Debt Origination Interest Due Principal Balance Purpose Date Rate Term Date Amount June 30, 2023 Governmental Activities BOI: Woodland Playground (Parks)8/23/2019 varies 5 years 2/15/2025 97,772 30,996 BOI:Mower (Parks)2/16/2018 varies 5 years 2/15/2023 35,191 - BOI:Spray Gator (Parks)6/30/2018 varies 5 years 2/15/2023 26,336 - BOI:Fire Pumper 3/16/2018 varies 10 years 2/15/2028 467,684 253,897 BOI:Ambulance 1/19/2021 varies 5 years 2/15/2026 189,438 116,054 BOI: Front end Loader (Streets) 6/2/2023 varies 5 years 8/15/2028 212,950 212,950 BOI: Tractor (Parks)11/25/2022 varies 5 years 2/15/2028 43,000 43,000 BOI: Truck/Mower (KYAC) 11/25/2022 varies 5 years 2/15/2028 12,605 12,605 BOI: Toolcat (Parkline)11/25/2022 varies 5 years 2/15/2028 79,000 79,000 Sub total BOI loans 1,163,976$ 748,502$ USDA:Intermediary Relending Program 10/12/2004 1.00% 30 years 10/12/2034 520,000$ 248,375$ Relending Program 11/27/2006 1.00% 30 years 11/27/2036 257,500 130,047 Sub total USDA Intermediary 777,500 378,421 Total loans/contracted debt - Governmental Activities 1,941,476$ 1,126,924$ BOI - Board of Investments Intercap Loan Program 67 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Requirements to amortize debt The annual requirements to amortize all long-term debt outstanding; excluding compensated absences payable, other post-employment benefits, and net pension liability, as of June 30, 2023, were as follows: F. Employee Benefit Pension Plans Substantially all City of Kalispell full-time employees participate in one of three statewide, cost sharing, multiple-employer retirement benefit plans administered by the Public Employees Retirement Board (PERB). The authority to establish or amend contribution requirements for all plans and provide cost of living adjustments for defined benefits plans is assigned to the State legislature. PERB issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for these plans. It is available from the Montana Public Employees Retirement Administration (MPERA) at 100 North Park Avenue, Suite 200, P.O. Box 200131, Helena, Montana, 59620- 0131 or at their website, http://mpera.mt.gov. The Montana Public Employees Retirement Administration (MPERA) prepares its financial statements using the accrual basis of accounting. For the purposes of measuring the net pension liability, deferred inflows of resources and deferred outflows of resources related to pensions, pension expense, Governmental Activities: SPECIAL ASSESSMENT CONTRACTED INTERMEDIARY SRF REVENUE FY BONDS LOANS/DEBT LOAN PROGRAM LOANS BONDS ENDED PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST TOTAL 2024 252,614 40,851 159,825 9,190 28,314 3,784 27,729 11,406 215,000 150,925 899,638 2025 255,456 27,710 165,388 9,510 28,598 3,501 28,191 10,707 220,000 144,475 893,536 2026 254,232 15,058 158,783 9,130 28,884 3,215 28,884 10,000 230,000 137,875 876,061 2027 21,694 2,468 122,872 7,065 29,173 2,926 29,808 9,272 235,000 130,688 590,966 2028 20,802 1,677 105,723 6,079 29,465 2,635 30,732 8,521 245,000 123,050 573,684 2029-2033 26,940 46 35,911 2,065 151,801 8,694 166,370 30,588 1,350,000 477,512 2,249,927 2034-2038 - - - - 82,188 1,621 151,340 8,458 1,495,000 283,688 2,022,295 2039-2043 - - - - - - - - - - - TOTAL 831,738$ 87,810$ 748,502$ 43,039$ 378,423$ 26,376$ 463,054$ 88,952$ 3,990,000$ 1,448,213$ 8,106,107$ Business-type Activities: SRF FY LOANS(1)(2) ENDED PRINCIPAL INTEREST TOTAL 2024 1,899,792 554,213 2,454,005 2025 1,762,113 510,043 2,272,156 2026 1,803,886 468,085 2,271,971 2027 1,849,465 425,132 2,274,597 2028 769,083 387,352 1,156,435 2029-3033 4,147,218 1,051,737 5,198,955 2034-2038 4,191,033 1,322,308 5,513,341 2039-2043 3,404,082 797,220 4,201,302 2044-2048 2,879,197 372,214 3,251,411 2049-2053 191,752 3,604 TOTAL 22,897,621$ 5,891,908$ 28,594,173$ (1) The 2023 sewer fund SRF loan ($883,122) is included on this schedule. The City has not drawn all funds for this loan. An amortization schedule will not be available until all funds have been drawn. Final loan amount will be approximately $1,775,000. (2) The 2023 water fund SRF loan ($983,904) is included on this schedule. The City has not drawn all funds for this loan. An amortization schedule will not be available until all funds have been drawn. Final loan amount will be approximately $19,854,000. 68 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 information about the fiduciary net position and additions to, and deductions from, fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose, member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the period incurred. Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards Board (GASB) statements. Total City of Kalispell pension expense from all three (3) plans (PERS, MPORS, FURS) the City participates in were $3,187,983. Contributions to pension plans are as required by state statute. Information about each plan follows: PUBLIC EMPLOYEES' RETIRMENT SYSTEM - DEFINED BENEFIT GASB 68 NOTES TO THE FINANACIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2023 (REPORTING DATE), JUNE 30, 2022 (MEASUREMENT DATE) In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non- employer contributing entity are required to recognize and report certain amounts associated with participation in the Public Employees’ Retirement System Defined Benefit Retirement Plan (the Plan). This includes the proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions. Employers are provided guidance in GASB Statement 68, paragraph 74, where pension amounts must be combined as a total or aggregate for reporting, whether provided through cost-sharing, single-employer, or agent plans. This report provides information for employers who are using a June 30, 2022, measurement date for the 2023 reporting. If an employer’s fiscal year end is after June 30th, the employer will not use the measurements shown in this report but will need to wait for the measurement date as of June 30, 2023. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the Net Pension Liability (NPL); Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB). 69 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 GENERAL INFORMATION ABOUT THE PENSION PLAN Plan Description: The PERS-Defined Benefit Retirement Plan (DBRP), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing plan established July 1, 1945, and governed by Title 19, chapters 2 & 3, Montana Code Annotated (MCA). This plan provides retirement benefits to covered employees of the State, and local governments, and certain employees of the Montana University System, and school districts. Benefits are established by state law and can only be amended by the Legislature. All new members are initially members of the PERS-DBRP and have a 12-month window during which they choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be participants of both the defined benefit and defined contribution retirement plans. All new members from the universities also have a third option to join the university system’s Montana University System Retirement Program (MUS-RP). Benefits provided: The PERS-DBRP provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and highest average compensation (HAC). Member rights are vested after five years of service. SERVICE RETIREMENT: •Hired prior to July 1, 2011: o Age 60, 5 years of membership service o Age 65, regardless of membership service o Any age, 30 years of membership service •Hired on or after July 1, 2011: o Age 65, 5 years of membership service o Age 70, regardless of membership service EARLY RETIREMENT: •Hired prior to July 1, 2011: o Age 50, 5 years of membership service o Any age, 25 years of membership service•Hired on or after July 1, 2011: o Age 55, 5 years of membership service Second Retirement: (requires returning to PERS-covered employer or PERS service) •Retired before January 1, 2016 and accumulate less than 2 years additional service credit or retired on or after January 1, 2016 and accumulate less than 5 years additional service credit: o A refund of member’s contributions plus return interest (currently 2.02% effective July 1, 2018). o No service credit for second employment. o Start the same benefit amount the month following termination; and o Guaranteed Annual Benefit Adjustment (GABA) starts again in the January immediately following the second retirement. •Retired before January 1, 2016 and accumulate at least 2 years of additional service credit: o A recalculated retirement benefit based on provisions in effect after the initial retirement; and 70 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 o GABA starts on the recalculated benefit in the January after receiving the new benefit for 12 months. •Retired on or after January 1, 2016 and accumulate 5 or more years of service credit: o The same retirement as prior to the return to service. o A second retirement benefit as prior to the second period of service based on laws in effect upon the rehire date; and o GABA starts on both benefits in the January after receiving the original and the new benefit for 12 months. MEMBER’S HIGHEST AVERAGE COMPENSATION (HAC) •Hired prior to July 1, 2011 highest average compensation during any consecutive 36 months. •Hired on or after July 1, 2011 – highest average compensation during any consecutive 60 months. COMPENSATION CAP •Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of a member’s highest average compensation. MONTHLY BENEFIT FORMULA •Members hired prior to July 1, 2011 o Less than 25 years of membership service: 1.785% of HAC per year of service credit; o 25 years of membership service or more: 2% of HAC per year of service credit. •Members hired on or after July 1, 2011 o Less than 10 years of membership service: 1.5% of HAC per year of service credit; o 10 years or more, but less than 30 years of membership service: 1.785% of HAC per year of service credit; o 30 years or more of membership service: 2% of HAC per year of service credit. GUARANTEED ANNUAL BENEFIT ADJUSTMENT (GABA) After the member has completed 12 full months of retirement, the member’s benefit increases by the applicable percentage (provided below) each January, inclusive of all other adjustments to the member’s benefit. •3.0% for members hired prior to July 1, 2007 •1.5% for members hired between July 1, 2007 and June 30, 2013 •Members hired on or after July 1, 2013: (a)1.5% for each year PERS is funded at or above 90%; (b)1.5% reduced by 0.1% for each 2.0% PERS is funded below 90%; and (c)0% whenever the amortization period for PERS is 40 years or more Contributions: The State Legislature has the authority to establish and amend contribution rates. Member and employer contribution rates are specified by Montana Statute and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. Special Funding: The state of Montana, as the non-employer contributing entity, paid to the Plan, additional contributions that qualify as special funding. Those employers who received special funding are all participating employers. 71 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Not Special Funding: Per Montana law, state agencies and universities paid their own additional contributions. The employer paid contributions are not accounted for as special funding for state agencies and universities but are reported as employer contributions. Member and employer contribution rates are shown in the table below. 1.Member contributions to the system of 7.9% are temporary and will be decreased to 6.9% on January 1 following actuary valuation results that show the amortization period has dropped below 25 years and would remain below 25 years following the reduction of both the additional employer and additional member contribution rates. 2.Employer contributions to the system: a.Effective July 1, 2014, following the 2013 Legislative session, PERS-employer contributions increase an additional 0.1% a year and will continue over 10 years through 2024. The additional employer contributions including the 0.27% added in 2007 and 2009, will terminate on January 1 following actuary valuation results that show the amortization period has dropped below 25 years and would remain below the 25 years following the reduction of both the additional employer and additional member contributions rates. b.Effective July 1, 2013, employers are required to make contributions on working retirees’ compensation. Member contributions for working retirees are not required. c.The portion of employer contributions allocated to the Plan Choice Rate (PCR) are included in the employers reporting. The PCR was paid off effective March 2016 and the contributions previously directed to the PCR are now directed to member accounts. 3.Non-Employer Contributions: Fiscal Member State & Universities Local Government School Districts Year Hired < 07/01/11 Hired > 07/01/11 Employer Employer State Employer State 2023 7.900% 7.900% 9.070% 8.970% 0.100% 8.700% 0.370% 2022 7.900% 7.900% 8.970% 8.870% 0.100% 8.600% 0.370% 2021 7.900% 7.900% 8.870% 8.770% 0.100% 8.500% 0.370% 2020 7.900% 7.900% 8.770% 8.670% 0.100% 8.400% 0.370% 2019 7.900% 7.900% 8.670% 8.570% 0.100% 8.300% 0.370% 2018 7.900% 7.900% 8.570% 8.470% 0.100% 8.200% 0.370% 2017 7.900% 7.900% 8.470% 8.370% 0.100% 8.100% 0.370% 2016 7.900% 7.900% 8.370% 8.270% 0.100% 8.000% 0.370% 2015 7.900% 7.900% 8.270% 8.170% 0.100% 7.900% 0.370% 2014 7.900% 7.900% 8.170% 8.070% 0.100% 7.800% 0.370% 2012 – 2013 6.900% 7.900% 7.170% 7.070% 0.100% 6.800% 0.370% 2010 – 2011 6.900% 7.170% 7.070% 0.100% 6.800% 0.370% 2008 – 2009 6.900% 7.035% 6.935% 0.100% 6.800% 0.235% 2000 - 2007 6.900% 6.900% 6.800% 0.100% 6.800% 0.100% 72 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 a.Special Funding i.The state contributed 0.1% of members’ compensation on behalf of local government entities. ii.The state contributed 0.37% of members’ compensation on behalf of school district entities. iii.The state contributed a Statutory Appropriation from the General Fund of $34,633,570. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions GASB Statement 68 allows a measurement date of up to 12 months before the employer’s fiscal year-end. The basis for the Total Pension Liability (TPL) as of June 30, 2022, is on an actuarial valuation performed by the Plan’s actuary as of June 30, 2022. The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). The proportionate shares of the employer’s and the State of Montana’s NPL for June 30, 2022, and 2021, are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. The state’s proportionate share for a particular employer equals the ratio of the contributions for the particular employer to the total state contributions paid. The employer recorded a liability of $9,198,996 and the employer’s proportionate share was 0.386856 percent. Changes in actuarial assumptions and methods: The following changes in assumptions or other inputs were made that affected the measurement of the TPL. 1.The discount rate was increased from 7.06% to 7.30%. 2.The investment rate of return was increased from 7.06% to 7.30%. 3.Updated all mortality tables to the PUB2010 tables for general employees. 4.Updated the rates of withdrawal, retirement, and disability. 5.Lowered the payroll growth assumption from 3.50% to 3.25%. 6.The inflation rate was increased from 2.40% to 2.75%. Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes to the Plan between the measurement date of the collective NPL and the employer’s reporting date that are expected to have a significant effect on As of measurement date Net Pension Liability as of 6/30/2022 Net Pension Liability as of 6/30/2021 Percent of Collective NPL as of 6/30/2022 Percent of Collective NPL as of 6/30/2021 Change in Percent of Collective NPL CITY OF KALISPELL Proportionate Share $ 9,198,996 $ 6,193,855 0.386856% 0.341594% 0.045262% State of Montana Proportionate Share associated with Employer $ 2,747,175 $ 1,825,504 0.115530% 0.100677% 0.014853% Total $ 11,946,171 $ 8,019,359 0.502386% 0.442271% 0.060115% 73 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 the employer’s proportionate share of the collective NPL. Pension Expense: At June 30, 2022, the employer recognized a Pension Expense of $1,253,184 for its proportionate share of the Plan’s pension expense. The employer also recognized grant revenue of $284,746 for the support provided by the State of Montana for its proportionate share of the pension expense associated with the employer. Recognition of Deferred Inflows and Outflows: At June 30, 2022, the employer reported its proportionate share of the Plan’s deferred outflows of resources and deferred inflows of resources from the following sources: Other amounts reported as deferred outflows and inflows of resources related to pensions are recognized in the employer’s pension expense as follows: Actuarial Assumptions: The total pension liability as of June 30, 2022, was determined on the results of an actuarial valuation date of June 30, 2022, using the following actuarial assumptions, applied to all periods Pension Expense as Pension Expense as of As of measurement date of 6/30/2022 6/30/2021 CITY OF KALISPELL’s Proportionate Share $1,253,184 $109,267 State of Montana Proportionate Share associated with the Employer 284,746 520,254 Total $1,537,930 $629,521 Deferred Outflows of Deferred Inflows of Resources Resources Expected vs. Actual Experience $117,269 - Projected Investment Earnings vs. Actual Investment Earnings 270,355 - Changes in Assumptions 342,810 673,451 Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions 670,115 - Employer Contributions Subsequent to the Measurement Date 696,299 Total $1,400,549 $673,451 For the Measurement Recognition of Deferred Outflows and Deferred Inflows in Year ended June 30: future years as an increase or (decrease) to Pension Expense 2023 $427,813 2024 $(24,665) 2025 $(291,591) 2026 $615,541 Thereafter $ 0 - 74 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 included in the measurement. Among those assumptions were the following: The actuarial assumptions and methods utilized in the June 30, 2022 valuation, were developed in the five-year experience study for the period ending 2021. Discount Rate: The discount rate used to measure the TPL was 7.30%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities would be made based on the Board’s funding policy, which established the contractually required rates under the Montana Code Annotated. The state contributed 0.10% of the salaries paid by local governments and 0.37% paid by school districts. In addition, the state contributed a statutory appropriation from the general fund. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2126. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. Investment Return (net of pension plan investment expense, including inflation) 7.30% General Wage Growth * *includes Inflation at 3.50% 2.75% Merit Increases 0% to 4.80% Postretirement Benefit Increases 1. Guaranteed Annual Benefit Adjustment (GABA) each January • After the member has completed 12 full months of retirement, the member’s benefit increases by the applicable percentage (provided below) each January, inclusive of all other adjustments to the member’s benefit. • Members hired prior to July 1, 2007 • Members hired between July 1, 2007 & June 30, 2013 • Members hired on or after July 1, 2013 • For each year PERS is funded at or above 90% • The 1.5% is reduced by 0.1% for each 2.0% PERS is funded below 90% • 0% whenever the amortization period for PERS is 40 years or more 3.0% 1.5% 1.5% 0% Mortality: • Active Participants PUB-2010 General Amount Weighted Employer Mortality projected to 2021 for males and females. Projected generationally using MP-2021. • Disabled Retirees PUB-2010 General Amount Weighted Disabled Retiree Mortality table, projected to 2021, set forward one year for both males and females. • Contingent Survivors PUB-2010 General Amount Weighted Contingent Survivor Mortality projected to 2021 with ages set forward one year for males and females. Projected generationally using MP-2021. • Healthy Retirees PUB-2010 General Amount Weighted Healthy Retiree Mortality table projected to 2021, with ages set forward one year and adjusted 104% for males and 103% for females. Projected generationally using MP-2021. 75 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Target Allocations: The long-term expected rate of return on pension plan investments is reviewed as part of regular experience studies prepared for the Plan about every five years. The long-term rate of return as of June 30, 2022, is based on analysis in the experience study report dated May 2, 2022 without consideration for the administrative expense analysis shown. Several factors are considered in evaluating the long-term rate of return assumption including long-term historical data, estimates inherent in current market data, and an analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation), along with estimates of variability and correlations for each asset class. These ranges were combined to develop the long- term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and then adding expected inflation. The assumption is intended to be a long-term assumption (30 to 50 years) and is not expected to change absent a significant change in the asset allocation, a change in the underlying inflation assumption, or a fundamental change in the market that alters expected returns in future years. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class as of the most recent experience study, are summarized in the following table. Sensitivity of the proportionate share of the net pension liability to changes in the discount rate: The following presents the employer’s sensitivity of the NPL to the discount rate in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.30%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. PERS Disclosure for the defined contribution plan CITY OF KALISPELL contributed to the state of Montana Public Employee Retirement System Defined Contribution Retirement Plan (PERS-DCRP) for employees that have elected the DCRP. The PERS-DCRP is Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Arithmetic Basis Cash 3.0% (0.33%) Domestic Equity 30.0% 5.90% International Equity 17.0% 7.14% Private Investments 15.0% 9.13% Real Assets 5.0% 4.03% Real Estate 9.0% 5.41% Core Fixed Income 15.0% 1.14% Non-Core Fixed Income 6.00% 3.02% Total 100.0% As of measurement date 1.0% Decrease (6.30%) Current Discount Rate 1.0% Increase (8.30%) CITY OF KALISPELL’s Net Pension Liability $13,260,782 $9,198,996 $5,791,207 76 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 administered by the PERB and is reported as a multiple- employer plan established July 1, 2002, and governed by Title 19, chapters 2 & 3, MCA. All new PERS members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be participants of both the defined benefit and defined contribution retirement plans. Member and employer contribution rates are specified by state law and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. The state Legislature has the authority to establish and amend contribution rates. Benefits are dependent upon eligibility and individual account balances. Participants are vested immediately in their own contributions and attributable income. Participants are vested after 5 years of membership service for the employer’s contributions to individual accounts and the attributable income. Non-vested contributions are forfeited upon termination of employment per 19-3-2117(5), MCA. Such forfeitures are used to cover the administrative expenses of the PERS-DCRP. At the plan level for the measurement period ended June 30, 2022, the PERS-DCRP employer did not recognize any net pension liability or pension expense for the defined contribution plan. Plan level non- vested forfeitures for the 344 employers that have participants in the PERS-DCRP totaled $1,681,603. Pension plan fiduciary net position: The stand-alone financial statements of the Montana Public Employees Retirement Board (PERB) Annual Comprehensive Financial Report (ACFR) and the GASB 68 Report disclose the Plan's fiduciary net position. These reports, as well as the actuarial valuations and experience study, are available from the PERB at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or are available on the MPERA website at https://mpera.mt.gov/about/annualreports1/annualreports. MUNICIPAL POLICE OFFICERS’ RETIRMENT SYSTEM GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2023 (REPORTING DATE), JUNE 30, 2022 (MEASURMENT DATE) In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with participation in the Municipal Police Officers’ Retirement System (the Plan). This includes the proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions. Employers are provided guidance in GASB Statement 68, paragraph 74, where pension amounts must be combined as a total or aggregate for reporting, whether provided through cost-sharing, single-employer, or agent plans. This report provides information for employers who are using a June 30, 2022 measurement date for the 2023 reporting. Summary of Significant Accounting Policies MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the Net Pension Liability (NPL); Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when 77 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB). General Information about the Pension Plan Plan Description: The Municipal Police Officers’ Retirement System (MPORS), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing defined benefit plan established in 1974 and governed by Title 19, chapters 2 & 9, Montana Code Annotated (MCA). This plan provides retirement benefits to all municipal police officers employed by first- and second-class cities and other cities that adopt the plan. Benefits are established by state law and can only be amended by the Legislature. Deferred Retirement Option Plan (DROP): Beginning July 2002, eligible members of MPORS can participate in the DROP by filing a one-time irrevocable election with the Board. The DROP is governed by Title 19, Chapter 9, Part 12, MCA. A member must have completed at least twenty years of membership service to be eligible. They may elect to participate in the DROP for a minimum of one month and a maximum of 60 months and may only participate in the DROP once. A participant remains a member of the MPORS but will not receive membership service or service credit in the system for the duration of the member’s DROP period. During participation in the DROP, all mandatory contributions continue to the retirement system. A monthly benefit is calculated based on salary and years of service to date as of the beginning of the DROP period. The monthly benefit is paid into the member’s DROP account until the end of the DROP period. At the end of the DROP period, the participant may receive the balance of the DROP account in a lump-sum payment or in a direct rollover to another eligible plan, as allowed by the IRS. If the participant continues employment after the DROP period ends, they will again accrue membership service and service credit. The DROP account cannot be distributed until employment is formally terminated. Benefits provided: MPORS provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and compensation. Member rights are vested after five years of service. Service retirement and monthly benefit formula: •20 years of membership service, regardless of age. •Age 50 with 5 years of membership service (Early Retirement). •2.5% of FAC x years of service credit. Second retirement: Re-calculated using specific criteria for members who return to covered MPORS employment prior to July 1, 2017: •Less than 20 years of membership service, upon re-employment, repay benefits and subsequent retirement is based on total MPORS service. •More than 20 years of membership service, upon re-employment, receives initial benefit and a new retirement benefit based on additional service credit and FAC after re-employment. Applies to retirement system members re-employed in a MPORS position on or after July 1, 2017: •If the member works more than 480 hours in a calendar year and accumulates less 78 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 than 5 years of service credit before terminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; o starting the first month following termination of service, receives the same retirement benefit previously paid to the member; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a Guaranteed Annual Benefit Adjustment (GABA) in January immediately following second retirement. •If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives: *the same retirement benefit previously paid to the member, and *a second retirement benefit for the period of reemployment calculated based on the laws in effect as of the members rehire date; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA: *on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12 months. •A member who returns to covered service is not eligible for a disability benefit. Member’s final average compensation (FAC) •Hired prior to July 1, 1977 - average monthly compensation of final year of service; •Hired on or after July 1, 1977 - final average compensation (FAC) for last consecutive 36 months. Compensation Cap •Hired on or after July 1, 2013: 110% annual cap on compensation considered as a part of a member’s FAC. Guaranteed Annual Benefit Adjustment (GABA) •Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months, a GABA will be made each year in January equal to 3%. Minimum benefit adjustment (non-GABA) •The minimum benefit provided may not be less than 50% of the compensation paid to a newly confirmed police officer of the employer that last employed the member as a police officer in the current fiscal year. Contributions: The State Legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are specified by Montana Statute and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. Special Funding: MCA 19-9-702 requires the State of Montana to contribute a percentage of total compensation directly to the Plan annually after the end of each fiscal year. Member, Employer and State contribution rates are shown in the table below. 79 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions GASB Statement 68 allows a measurement date of up to 12 months before the employer’s fiscal year- end. The basis for the Total Pension Liability (TPL) as of June 30, 2022, is on an actuarial valuation performed by the Plan’s actuary as of June 30, 2022. The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). The proportionate shares of the employer’s and the State of Montana’s NPL for June 30, 2022, and 2021, are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. Due to the existence of the special funding situation, the state is required to report a proportionate share of a local government’s collective NPL that is associated with the non-state employer. The state’s proportionate share for a particular employer equals the ratio of the contributions for the particular employer to the total state contributions paid. The employer recorded a liability of $3,545,857 and the employer’s proportionate share was 1.5011 percent. Changes in actuarial assumptions and methods: The following changes in assumptions or other inputs were made that affected the measurement of the TPL. 1.The discount rate was increased from 7.06% to 7.30%. 2.The investment rate of return increased from 7.06% to 7.30%. 3.All mortality assumptions were updated to the PUB2010 tables for public safety employees. 4.Rates of withdrawal, retirement, disability retirement, and merit increases were updated. 5.Payroll growth assumption was lowered from 3.50% to 3.25%. 6.The inflation rate was increased from 2.40% to 2.75%. Fiscal Year Hired < 7/1/75 Member Hired Hired > 6/30/75 > 6/30/79 Hired > 6/30/97 GABA Employer State 2000 - 2023 5.800% 7.000% 8.500% 9.000% 14.410% 29.370% 1998 - 1999 7.800% 9.000% 10.500% 11.000% 14.410% 29.370% 1997 7.800% 9.000% 10.500% 14.360% 29.370% As of measurement date Net Pension Liability as of 6/30/2022 Net Pension Liability as of 6/30/2021 Percent of Collective NPL as of 6/30/2022 Percent of Collective NPL as of 6/30/2021 Change in Percent of Collective NPL CITY OF KALISPELL Proportionate Share $ 3,545,857 $ 2,761,059 1.5011% 1.5188% (0.0177)% State of Montana Proportionate Share associated with Employer 7,206,839 5,612,007 3.0510% 3.0871% (0.0361)% Total $ 10,752,696 $ 8,373,066 4.5521% 4.6059% (0.0538)% 80 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes to the Plan between the measurement date of the collective NPL and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense: At June 30, 2022 measurement date, the employer recognized its proportionate share of the Plan’s pension expense of $572,488. The employer also recognized grant revenue of $1,235,601 for the support provided by the State of Montana for its proportionate share of the pension expense associated with the employer. Recognition of Deferred Inflows and Outflows: At June 30, 2022, the employer reported its proportionate share of the Plan’s deferred outflows of resources and deferred inflows of resources from the following sources: Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense as of Pension Expense as of As of measurement date 6/30/2022 6/30/2021 CITY OF KALISPELL’s Proportionate Share $572,488 $407,915 State of Montana Proportionate Share associated with the Employer 1,235,601 826,360 Total $1,808,090 $1,234,275 As of measurement date Deferred Outflows of Resources Deferred Inflows of Resources Expected vs. Actual Experience $15,770 $18,578 Projected Investment Earnings vs. Actual Investment Earnings 129,153 - Changes in Assumptions 312,921 68,060 Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions - 13,042 Employer Contributions Subsequent to the Measurement Date 407,721 Total $457,845 $99,680 - 81 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Actuarial Assumptions: The total pension liability as of June 30, 2022, was determined by an actuarial valuation date of June 30, 2022, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: The actuarial assumptions and methods utilized in the June 30, 2022 valuation, were developed in the five-year experience study for the period ending June 30, 2021. Discount Rate: The discount rate used to measure the TPL was 7.30%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities would be made based on the Board’s funding policy, which For the Measurement Year Recognition of Deferred Outflows and Deferred Inflows in ended June 30: future years as an increase or (decrease) to Pension Expense 2023 $192,838 2024 $73,693 2025 $(100,275) 2026 $191,908 Thereafter $0 Investment Return (net of pension plan investment expense, including inflation) 7.30% General Wage Growth * *includes Inflation at 3.50% 2.75% Merit Increases 1.0% to 6.4% Postretirement Benefit Increases 1. Guaranteed Annual Benefit Adjustment (GABA) each January • Members hired on or after July 1, 1997 or those electing GABA • Requires 12 full months of retirement before GABA will be made 2. Minimum Benefit Adjustment (non-GABA) • Benefit for a retired member or member’s survivor and member did not elect GABA 3.0% The minimum benefit provided should not be less than 50% of the monthly compensation paid to a newly confirmed police officer of the employer that last employed the member as a police officer Mortality: • Active Participants PUB-2010 Safety Amount Weighted Employee Mortality projected to 2021 for males and females. Projected generationally using MP-2021. • Healthy Retirees Mortality continued: PUB-2010 Safety Amount Weighted Healthy Retiree mortality table projected to 2021 set forward one year for males and adjusted 105% for males and 100% for females. Projected generationally using MP-2021. • Disabled Retiree PUB-2010 Safety Amount Weighted Disabled Retiree mortality table projected to 2021, set forward 1 year for males. • Contingent Survivor PUB-2010 Safety Amount Weighted Contingent Survivor Mortality projected to 2021, set forward one year for males. Projected generationally using MP-2021. 82 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 established the contractually required rates under the Montana Code Annotated. The state contributed 29.37% of the salaries paid by employers. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2134. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. Target Allocations: The long-term expected rate of return on pension plan investments is reviewed as part of regular experience studies prepared for the Plan about every five years. The long-term rate of return as of June 30, 2022 is based on analysis in the experience study report dated May 2, 2022, without consideration for the administrative expense analysis shown. Several factors are considered in evaluating the long-term rate of return assumption including long-term historical data, estimates inherent in current market data, and an analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation), along with estimates of variability and correlations for each asset class. These ranges were combined to develop the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and then adding expected inflation. The assumption is intended to be a long-term assumption (30 to 50 years) and is not expected to change absent a significant change in the asset allocation, a change in the underlying inflation assumption, or a fundamental change in the market that alters expected returns in future years. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class as of the most recent experience study, are summarized in the following table. Sensitivity of the proportionate share of the net pension liability to changes in the discount rate: The following presents the employer’s sensitivity of the NPL to the discount rate in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.30%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Arithmetic Basis Cash 3.0% (0.33%) Domestic Equity 30.0% 5.90% International Equity 17.0% 7.14% Private Investments 15.0% 9.13% Real Assets 5.0% 4.03% Real Estate 9.0% 5.41% Core Fixed Income 15.0% 1.14% Non-Core Fixed Income 6.0% 3.02% Total 100.0% 83 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Pension plan fiduciary net position: The stand-alone financial statements (76d) of the Montana Public Employees Retirement Board (PERB) Annual Comprehensive Financial Report (ACFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. These reports, as well as the actuarial valuations and experience study, are available from the PERB at PO Box 200131, Helena MT 59620- 0131, (406) 444-3154 or are available on the MPERA website at https://mpera.mt.gov/about/annualreports1/annualreports. FIREFIGHTERS’ UNIFIED RETIREMENT SYSTEM GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2023 (REPORTING DATE), JUNE 30, 2022 (MEASURMENT DATE) In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with participation in the Firefighters’ Unified Retirement System (the Plan). This includes the proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions. Employers are provided guidance in GASB Statement 68, paragraph 74, where pension amounts must be combined as a total or aggregate for reporting, whether provided through cost-sharing, single-employer, or agent pension plans. This report provides information for employers who are using a June 30, 2022 measurement date for the 2023 reporting. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the Net Pension Liability (NPL); Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB). As of measurement date 1.0% Decrease (6.30%) Current Discount Rate 1.0% Increase (8.30%) CITY OF KALISPELL’s Net Pension Liability $5,343,110 $3,545,857 $2,118,481 84 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 GENERAL INFORMATION ABOUT THE PENSION PLAN Plan Description: The Firefighters’ Unified Retirement System (FURS), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing defined benefit plan established in 1981, and governed by Title 19, chapters 2 & 13, Montana Code Annotated (MCA). This plan provides retirement benefits to firefighters employed by first- and second-class cities, other cities and rural fire district departments that adopt the plan, and to firefighters hired by the Montana Air National Guard on or after October 1, 2001. Benefits are established by state law and can only be amended by the Legislature. Benefits provided: The FURS provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and highest average compensation (HAC). Member rights are vested after five years of service. SERVICE RETIREMENT AND MONTHLY BENEFIT FORMULA: •Hired on or after July 1, 1981, or member has elected to be covered by GABA: o 20 years of membership service, regardless of age o 2.5% of HAC x years of service credit•Hired prior to July 1, 1981, and who had not elected to be covered by GABA, the greater of above, or: o If membership service is less than 20 years: 2% of the highest monthly compensation (HMC) for each year of service credit, or o If membership service is greater or equal to 20 years: 50% of HMC plus 2% of HMC for each year of service credit in excess of 20 •Early retirement: Age 50 with 5 years of membership service - Normal retirement benefit calculated using HAC and service credit SECOND RETIREMENT: Applies to retirement system members re-employed in a FURS position on or after July 1, 2017: If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before terminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; 85 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 o starting the first month following termination of service, receives the same retirement benefit previously paid to the member; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a Guaranteed Annual Benefit Adjustment (GABA) in January immediately following second retirement. •If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives: *the same retirement benefit previously paid to the member; and *a second retirement benefit for the period of reemployment calculated based on the laws in effect as of the members’ rehire date, and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA: *on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12 months. •A member who returns to covered service is not eligible for a disability benefit. MEMBER’S COMPENSATION PERIOD USED IN BENEFIT CALCULATION •Hired prior to July 1, 1981 and not electing GABA: highest monthly compensation (HMC); •Hired after June 30, 1981 and those electing GABA: highest average compensation (HAC) during any consecutive 36 months (or shorter period of total service). •Part-time firefighter: 15% of regular compensation of a newly confirmed full-time firefighter. COMPENSATION CAP •Hired on or after July 1, 2013: 110% annual cap on compensation considered as a part of a member’s HAC. GUARANTEED ANNUAL BENEFIT ADJUSTMENT (GABA) Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months – the member’s benefit increases by 3.0% each January. MINIMUM BENEFIT ADJUSTMENT (NON-GABA) A member with 10 or more years of membership service who has not elected to be covered under GABA - the minimum benefit provided may not be less than 50% of the monthly compensation paid to a newly confirmed active firefighter of the employer that last employed the member as a firefighter in the current fiscal year. Contributions: The State Legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are specified by Montana Statute and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. Special Funding: MCA 19-13-604 requires the State of Montana to contribute a percentage of total 86 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 compensation directly to the Plan annually after the end of each fiscal year. Member, Employer and State contribution rates are shown in the table below. PENSION LIABILITIES, PENSION EXPENSE, AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS GASB Statement 68 allows a measurement date of up to 12 months before the employer’s fiscal year- end. The basis for the Total Pension Liability (TPL) as of June 30, 2022, is on an actuarial valuation performed by the Plan’s actuary as of June 30, 2022. The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). The proportionate shares of the employer’s and the State of Montana’s NPL for June 30, 2022, and 2021, are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. Due to the existence of the special funding situation, the state is required to report a proportionate share of a local government’s collective NPL that is associated with the non-state employer. The state’s proportionate share for a particular employer equals the ratio of the contributions for the particular employer to the total state contributions paid. The employer recorded a liability of $1,945,865 and the employer’s proportionate share was 1.2250 percent. Changes in actuarial assumptions and methods: The following changes in assumptions or other inputs were made that affected the measurement of the TPL. 1.The discount rate was increased from 7.06% to 7.30%. 2.The investment rate of return was increased from 7.06% to 7.30%. 3.The payroll growth rate was reduced from 3.50% to 3.25%. 4.All mortality tables were updated to the PUB2010 tables for public safety employees. 5.Updated the rates of withdrawal, retirement, disability and merit increase scales. 6.The inflation rate was increased from 2.40% to 2.75%. Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes to the Plan between the measurement date Member Fiscal Year Non-GABA GABA Employer State 1998 – 2023 9.500% 10.700% 14.360% 32.610% 1997 7.800% 14.360% 32.610% As of measurement date Net Pension Liability as of 6/30/2022 Net Pension Liability as of 6/30/2021 Percent of Collective NPL as of 6/30/2022 Percent of Collective NPL as of 6/30/2021 Change in Percent of Collective NPL CITY OF KALISPELL Proportionate Share $ 1,945,865 $ 1,034,261 1.2250% 1.2086% 0.0164% State of Montana Proportionate Share associated with Employer 4,402,430 2,347,443 2.7714% 2.7431% 0.0283% Total $ 6,348,295 $ 3,381,704 3.9964% 3.9517% 0.0447% 87 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 of the collective NPL and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense: At June 30, 2022 measurement date, the employer recognized its proportionate share of the Plan’s pension expense of $370,383. The employer also recognized grant revenue of $900,831 for the support provided by the State of Montana for its proportionate share of the pension expense that is associated with the employer. Recognition of Deferred Inflows and Outflows: At June 30, 2022, the employer reported its proportionate share of the Plan’s deferred outflows of resources and deferred inflows of resources from the following sources: Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense as of Pension Expense as of As of measurement date 6/30/2022 6/30/2021 CITY OF KALISPELL’s Proportionate Share $370,383 $172,779 State of Montana Proportionate Share associated with the Employer 900,831 407,125 Total $1,271,214 $579,904 As of measurement date Deferred Outflows of Resources Deferred Inflows of Resources Expected vs. Actual Experience $169,709 $3,802 Projected Investment Earnings vs. Actual Investment Earnings 122,211 - Changes in Assumptions 505,684 - Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions -23,297 Employer Contributions Subsequent to the Measurement Date 386,456 Total $797,604 $27,099 For the Measurement Year Recognition of Deferred Outflows and Deferred Inflows in ended June 30: future years as an increase or (decrease) to Pension Expense 2023 $146,902 2024 $122,257 2025 $86,666 2026 $317,990 Thereafter $96,691 - 88 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Actuarial Assumptions: The total pension liability as of June 30, 2022, was determined by an actuarial valuation date of June 30, 2022, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: The actuarial assumptions and methods utilized in the June 30, 2022 valuation, were developed in the five-year experience study for the period ending June 30, 2021. Discount Rate: The discount rate used to measure the TPL was 7.30%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities would be made based on the Board’s funding policy, which established the contractually required rates under the Montana Code Annotated. The state contributed 32.61% of the salaries paid by employers. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2133. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. Target Allocations: The long-term expected rate of return on pension plan investments is reviewed as part of regular experience studies prepared for the Plan about every five years. The long-term rate of return as of June 30, 2022, is based on analysis in the experience study report dated May 2, 2022, Investment Return (net of pension plan investment expense, including inflation) 7.30% General Wage Growth * *includes Inflation at 3.50% 2.75% Merit Increases 1.00% to 6.40% Postretirement Benefit Increases 1. Guaranteed Annual Benefit Adjustment (GABA) each January • Members hired on or after July 1, 1997 or those electing GABA • Requires 12 full months of retirement before GABA will be made 2. Minimum Benefit Adjustment (non-GABA) • Members with 10 or more years of membership service and member did not elect GABA 3.0% The minimum benefit provided should be less than 50% of the current base compensation of a newly confirmed active firefighter of the employer that last employed the member as a fire fighter Mortality: • Active Participants PUB-2010 Safety Amount Weighted Healthy Retiree Mortality Table projected to 2021 for males and females. Projected generationally using MP-2021. • Healthy Retirees Mortality continued: PUB-2010 Safety Amount Weighted Healthy Retiree Mortality Table projected to 2021, set forward one year for males, adjusted 105% for males and 100% for females. Projected generationally using MP-2021. • Contingent Survivors PUB-2010 Safety Amount Weighted Contingent Survivor Mortality Table projected to 2021,with ages set forward one year for males. Projected generationally using MP-2021. • Disabled Retirees PUB-2010 Safety Amount Weighted Disabled Retiree Mortality Table projected to 2021, set forward one year for males. 89 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 without consideration for the administrative expense analysis shown. Several factors are considered in evaluating the long-term rate of return assumption including long-term historical data, estimates inherent in current market data, and an analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation), along with estimates of variability and correlations for each asset class. These ranges were combined to develop the long- term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and then adding expected inflation. The assumption is intended to be a long-term assumption (30 to 50 years) and is not expected to change absent a significant change in the asset allocation, a change in the underlying inflation assumption, or a fundamental change in the market that alters expected returns in future years. The target asset allocation and best estimates of arithmetic real rate of return for each major asset class as of the most recent experience study, are summarized in the following table. Sensitivity of the proportionate share of the net pension liability to changes in the discount rate : The following presents the employer’s sensitivity of the NPL to the discount rate in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.30%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. Pension plan fiduciary net position: The stand-alone financial statements (76d) of the Montana Public Employees Retirement Board (PERB) Annual Comprehensive Financial Report (ACFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. The reports, as well as the actuarial valuations and experience study, are available from the PERB at PO Box 200131, Helena MT 59620- 0131, (406) 444-3154 or are available on the MPERA website at https://mpera.mt.gov/about/annualreports1/annualreports. Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Arithmetic Basis Cash 3.0% (0.33%) Domestic Equity 30.0% 5.90% International Equity 17.0% 7.14% Private Investments 15.0% 9.13% Real Assets 5.0% 4.03% Real Estate 9.0% 5.41% Core Fixed Income 15.0% 1.14% Non-Core Fixed Income 6.0% 3.02% Total 100.0% As of measurement date 1.0% Decrease (6.30%) Current Discount Rate 1.0% Increase (8.30%) CITY OF KALISPELL’s Net Pension Liability $3,372,498 $1,945,865 $806,706 90 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 G. Postemployment Health Insurance Benefits (OPEB) Plan Description. In fiscal year 2023, the City of Kalispell provided employee medical insurance through a single-employer plan run by the Montana Municipal Interlocal Authority (MMIA). The City also provided dental through single-employer defined benefit plan. As required by state law (2-18- 704, MCA), terminated employees may remain on the City’s health insurance plan for up to 18 months if they pay the monthly premiums. This benefit is required under federal C.O.B.R.A. law. In accordance with Montana State law (see below), retirees may remain on the City’s health plan if they wish. The City’s contract with Allegiance Benefits details the plan eligibility. MMIA is the administrator of the benefit plan, which covers both active and retired members. The City’s retirees may continue coverage for themselves and their covered eligible dependents if they are eligible for public employees’ retirement by virtue of their employment with the City of Kalispell. To continue coverage, retirees are required to pay the full cost of the benefit. The City’s current labor contracts do not include any obligations for payments to retirees. Montana Codes Annotated (MCA) Section 2-18-704 states (1) an insurance contract or plan issued under this part must contain provisions that permit: (a)The member of a group who retires from active service under the appropriate retirement provisions of a defined benefit plan provided by law or, in the case of the defined contribution plan provided in Title 19, chapter 3, part 21, a member with at least 5 years of service and who is a least age 50 while in covered employment to remain a member of the group until the member becomes eligible for Medicare under the federal Health Insurance for the Aged Act, 42 U.S. C. 1395, as amended, unless the member is a participant in another group plan with substantially the same or greater benefits at an equivalent cost or group plan with substantially the same or greater benefits at an equivalent cost; (b)The surviving spouse of a member to remain a member of the group as long as the spouse is eligible for retirement benefits accrued by the deceased member as provided by law unless the spouse is eligible for Medicare under the federal Health Insurance for the Aged Act or unless the spouse has or is eligible for equivalent insurance coverage as provided in subsection (1)(a); (c)The surviving children of a member to remain members of the group if they are eligible for retirement benefits accrued by the deceased member as provide by law unless they have equivalent coverage in subsection (1)(a) or are eligible for insurance coverage by virtue of the employment of a surviving parent or legal guardian. Funding Policy. MMIA health insurance rates are actuarially set annually, and benefits altered to ensure the plans remain properly funded. The City receives a monthly bill that it can allocate to participants as it wishes. The City pays MMIA the monthly premiums and has no further liability for health claims. The City plans to continue funding the employee health insurance plan on a “pay as you go” basis and does not plan to fund this liability since it has paid the full amount due each month. 91 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 OPEB Liabilities, OPEB Expenses, and Deferred Outflows of Resources Related to OPEB. The City’s total other post-employment benefit (OPEB) liability of $2,333,613 as of June 30, 2023, was determined by an actuarial valuation as of that date. Actuarial assumptions and other inputs. The total OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.00 percent Salary increases 3.50 percent Discount rate 4.13 percent Premium trend rate 2.50 percent Retirees share of benefit-related costs 100 percent of projected premiums for retirees The discount rate was based on the S&P Municipal Bond 20 Year High Grade Rate Index as of June 30, 2023. Mortality rates were based on the RP-2000 Combined Mortality Table Projection BB projected to 2020, males set back one year; consistent with PERS, FURS, and MPORS Pension Actuarial Valuation 6/30/22. The actuarial assumptions used in the June 30, 2023 valuation represent a reasonable long-term expectation of future OPEB outcomes. The assumptions are tested with each valuation for ongoing reasonableness and are updated when appropriate. Changes in the Total OPEB Liability. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The following table presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or higher than the current discount rate. Total OPEB Liability OPEB Liability at June 30,2022 3,008,655$ Changes for the year: Service cost 149,521$ Interest 124,257$ Difference between expected and actual experience 148,753$ Changes in assumptions 378,221$ Change of benefit terms (1,475,794)$ OPEB Liability at June 30,2022 $2,333,613 1% Decrease Discount Rate 1% Increase (3.13%) (4.13%) (5.13%) Total OPEB Liability 2,541,384$ 2,333,613$ 2,145,443$ 92 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates. The following table presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a medical trend rate that is 1-percentage-point lower or higher than the current trend rate. For the year ended June 30, 2023, the City reported deferred inflows and deferred outflows of resources related to OPEB from the following sources: Amounts reported as deferred outflows/deferred outflows of resources related to OPEB as of June 30, 2023 will be recognized in OPEB expense as follows: 1% Decrease Trend Rate 1% Increase (1.5%) (2.5%) (3.5%) Total OPEB Liability 2,088,352$ 2,333,613$ 2,619,797$ Deferred Inflows Deferred Outflows of Resources of Resources Differences between expected and actual experience 91,794)$ (6 134,213$ Changes in assumptions or other inputs $ (1,433,240)1,062,707$ Total $ (2,125,034)1,196,920$ Fiscal Year Ending OPEB June 30: Expense Amount 2024 (118,533)$ 2025 (118,533)$ 2026 (118,533)$ 2027 (118,533)$ 2028 (118,533)$ Thereafter (335,449)$ 93 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 H. Amounts Due From Other Governments On June 30, 2023, the amounts due from other governments consisted of the following: I.Restricted Cash/Investments The following restricted cash/investments were held as of June 30, 2023. These amounts are reported within the cash/investment accounts on the Balance Sheet – Governmental Funds, and as restricted cash and investments on the Statement of Net Position – Proprietary Funds. General Fund Amount Debt Service Funds Amount Due from:Due from: Flathead County-Taxes 396,400$ Flathead County-Taxes 78,114$ State of Montana-Video Gaming Fees 725$ U.S. Treasury 167$ Total Governmental Funds 1,791,221$ Sub Total 397,292$ Special Revenue Funds Amount Due from:Enterprise Funds Amount Flathead County-Taxes 384,793$ Due from: Flathead County-EMS Levy -$ Flathead County-Impact Fees 63,358$ Flathead County-Stonegarden -$ Flathead County-Taxes 180,398$ Montana Board of Crime Control 13,856$ DNRC / ARPA 2,333,269$ U.S. DOJ 14,614$ DNRC / WRF-SRF Funding 1,427,150$ City of Billings - Hazmat 5,000$ Total Business-type Funds 4,004,175$ MDOT / BARSAA 897,552$ Sub Total 1,315,815$ Total City of Kalispell 5,795,396$ RESTRICTED CASH: Business-type Activities July 1, 2022 Additions Subtractions June 30, 2023 Water Bond Reserve 227,273$ 46,430$ -$ 273,703 Plant Investment/Impact Fees (1)1,456,241 473,827 (809,326) 1,120,742 Sewer Operating Reserve (2)400,000 - - 400,000 Bond Reserve 922,617 197,559 (6,922) 1,113,254 Plant Investment/Impact Fees (sanitary) (1)3,847,779 1,269,944 (861,957) 4,255,766 Plant Investment/Impact Fees (treatment plant) (1) 2,996,349 848,157 (845,981) 2,998,525 Plant Investment/Impact Fees (storm) (1)1,744,301 203,290 (139,337) 1,808,254 Treatment Plant Replacement (3)525,804 467,246 (266,574) 726,476 Total business-type activities restricted cash/investments 12,120,364 3,506,453 (2,930,097) 12,696,720 Governmental Activities Impact Fees Public Safety Growth related Capital (1)2,021,099 331,867 (61,932) 2,291,032 Urban Forestry Developers (4)152,014 5,304 (12,238) 145,080 Debt Service Westside TIF Bond Reserve 480,011 - - 480,011 Debt Service SID 345 Bond Reserve 11,172 - - 11,172 Debt Service Revolving Fund - SID 344 Bond Reserve 136,000 - (5,258) 130,742 Debt Service Revolving Fund - SID 345 Bond Reserve 12,100 - - 12,100 Total governmental activities restricted cash/investments 2,812,396 337,171 (79,428) 3,070,137 Total restricted cash/investments 14,932,760$ 3,843,624$ (3,009,525)$ 15,766,857$ 94 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 (1)Plant investment/impact fee cash. Montana State legislation regulating impact fees to fund capital improvements, MCA 7-6-1601 through 7-6-1604 (see 7-6-1603 below related to expending impact fees), became effective April 19, 2005 and sets forth the procedures and requirements for the imposition of impact fees by local governments. On October 16, 2006, by ordinance no. 1587, the Kalispell City Council authorized and established the procedure and imposition of impact fees to fund capital improvements related to additional capacity (growth). MCA 7-6-1603 states, “the collection and expenditure of impact fees must be reasonably related to the benefits accruing to the development paying the impact fees…” (2)Sewer operating reserve cash is restricted by ordinance no. 859 (1-month operating expenses). (3)Treatment plant replacement cash is restricted by an agreement with Flathead County Water District (third party). (4)Urban forestry receives cash from developers to be used to plant trees in new city developments (third party). J. Restatements During the 2023 fiscal year, the following adjustments relating to prior years’ transactions were made to fund balance or net position accounts. In prior years, the City’s cash flow statements included in cash and investments certain investments not meeting its accounting policy definition of cash and cash equivalents as provided for by GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities that use Proprietary Fund Accounting. Cash and cash equivalents are defined to include investments which have an original maturity of three months or less. During 2023, the City corrected beginning cash and cash equivalents to exclude investments not meeting its cash equivalents definition. This change resulted in a restatement of beginning cash and cash equivalents reported in the cash flow statement of each respective fund as follows: Fund Net Position Beginning Restatement Restated Net Position Beginning Reason TBID - Component Unit -(46,348) -Prior Period Adjustment to correct CIP & record depreciation TBID - Component Unit -146,286 -Prior Period Adjustment to record bed tax collected in FY23 TBID - Component Unit -(317) -Prior Period Adjustment to correct financials 428,965Total TBID Component Unit $ 99,621$ 528,586$ * The Change in net position for the Tourism Business Improvement District component unit would have increased by $99,621 for the year ended June 30, 2022 had these amounts been properly recorded in the prior year. Total Nonmajor Internal Water Sewer Enterprise Fund Service Funds Cash and cash equivalents on July 1, 2022, as previously reported 14,333,843$ 24,067,908$ 1,418,251$ 861,588$ Adjustment to correct misstatement (5,793,610)$ (9,728,031)$ (573,244)$ (348,246)$ Cash and cash equivalents on July 1, 2022, as restated 8,540,233$ 14,339,877$ 845,007$ 513,342$ 95 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 K.Joint Ventures Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose, which are subject to joint control, in which the participating governments retain 1) an ongoing financial interest or 2) an ongoing financial responsibility. City-County Health Department The City-County Health Department is operated under an interlocal agreement between Flathead County and the City of Kalispell. The Department operates under the supervision and control of the City-County Health Board. The Board consists of seven members, six of whom are appointed by the Board of County Commissioners. The Department is financed, in addition to revenue generated by providing health services, by the City and the County levying an identical mill levy in order that all property within the City of Kalispell and all property in Flathead County outside the City limits are taxed equally. The operation is accounted for in the County Health Fund and is included in the general-purpose financial statements of Flathead County within the Special Revenue Fund. 911 Dispatch Center The 911 Dispatch Center is operated under an interlocal agreement between Flathead County, the City of Columbia Falls, the City of Whitefish, and the City of Kalispell. The Center operates under the supervision and control of the Flathead Emergency Communications Center Board. The Board consists of six members, the Flathead County Sheriff, a County Commissioner chosen by the Board of County Commissioners, the County Attorney or other elected County officer, and an elected official or designee from each of the cities of Kalispell, Whitefish, and Columbia Falls. The Department is financed by funds received by all members from the State (9-1-1 fees) pursuant to Section 10-4-302, M.C.A. Any additional operating funds needed will be shared proportionally by all members. Under the supervision of the Board, the Director shall hire and direct staff to carry out the responsibilities of the County’s Office of Emergency Services and the Flathead County Fire Service Area. L. County Provided Services The City of Kalispell is provided various financial services by Flathead County. The County serves as cashier and treasurer for the City for tax assessment collections and other revenues received by the County, which are subject to distribution to the various taxing jurisdictions located in the County. The collections made by the County on behalf of the City are accounted for in an agency fund in the City's name and are periodically remitted to the City by the County Treasurer. The County charges the City for fees associated with City Special Assessments. M.Risk Management The City faces a considerable number of risks of loss, including a) damage to and loss of property and contents, b) employee torts, c) professional liability, i.e., errors and omissions, d) environmental damage, e) workers’ compensation, i.e. employee injuries, and f) medical insurance costs of employees. A variety of methods are used to provide insurance for these risks. Commercial policies, transferring all risks of 96 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 loss, except for relatively small deductible amounts are purchased for property and content damage and professional liabilities. The City participates in two statewide public risk pools operated by the Montana Municipal Insurance Authority, for workers’ compensation and for tort liability coverage. Employee medical insurance is provided through a statewide health insurance pool administered by MMIA. Given the lack of coverage available, the City has no coverage for potential losses from environmental damages. Effective July 1, 1987 The City of Kalispell joined with other Montana cities to form the Montana Municipal Insurance Authority, a self-insurance pool offering Worker's Compensation and Liability Coverage. Both public entity risk pools currently operate as common risk management and insurance programs for the member governments. The liability limits for damages in tort action are $750,000 per claim and $1.5 million per occurrence with an $11,250 deductible per occurrence. State tort law limits the City’s liability to $1.5 million. The city pays an annual premium for its employee injury insurance coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers’ compensation program issued bonds in the amount of $4.41 million and $7.610 million, respectively, to immediately finance the necessary insurance reserves. All members signed a contingent note for a pro rata share of this liability in case operating revenue was insufficient to cover the debt service. The City’s share is $201,445 for liability and $281,715 for Workers’ Compensation to finance the necessary insurance reserves. Based on the plan’s current financial position, the City does not expect to make any payment on these notes. Separate financial statements are available from the Montana Municipal Insurance Authority. On October 1, 2004, Kalispell signed a 5-year agreement, since then extended, and through the Montana Municipal Insurance Authority, to create a statewide health insurance pool. The City pays the total monthly premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the City pays a percentage of the extra costs. N.Contingencies The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. The effect on the financial statements cannot be determined at this time due to litigation. Accordingly, no provision has been made in the financial statements for these contingent liabilities. 97 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 O.Receivables Taxes/Assessments Receivable The following funds had taxes and/or assessments receivable at June 30, 2023. Accounts Receivable At June 30, 2023, the Ambulance fund had accounts receivable deferred net of $448,236. Total net accounts receivable of the Ambulance fund is $444,078. The difference is the result of $4,158 being receivable, and therefore recognized as revenue, prior to the Ambulance fund conversion from a proprietary fund to a special revenue fund. Loans Receivable Community Development Loan Revolving Second Avenue West Partners In August of 2002, the City of Kalispell entered two (2) notes receivable agreements with 2nd Avenue West Partners, L.P. (Hampstead Partners) for property on 2nd Avenue West in Kalispell. The property consists of a 40-unit low-income apartment complex known as 2nd Avenue West Independent Living Center. As stipulated in the agreement, this property is restricted as low-income housing, and shall remain as such for a period of thirty-five years. One of these notes is for $480,000, and bears interest at 1% per annum. The second of these notes is for $400,000, and bears interest at 4.81% per annum. These loans mature on February 28, 2032. Payments of interest on the note are due on or before the last day of the taxable year, to the extent FUND Source Amount General - Major Governmental Taxes 277,279$ Downtown TIF Taxes 10,875 Westside TIF Taxes 1,369 Parks Taxes 47,203 Old School "Tech" TIF Taxes 53,706 Old School "Ind" TIF Taxes 56,665 Rail Park TEDD Taxes 12,662 Health Levy Taxes 44,886 Light Maintenance District Assessments 24,722 Street Maintenance - Major GovernmentalAssessments 145,317 Urban Forestry Assessments 31,926 Westside TIF debt service Taxes 54,685 SID 344 - Major Governmental Assessments 1,110,933 SID 345 Assessments 92,316 S & C's Assessments 40,655 Total Governmental Funds 2,005,199$ Sewer - Major Business-type Assessments 74,322 Solid waste Assessments 38,768 Total Business-type Funds 113,090 Total City 2,118,289$ 98 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 there is surplus cash, as defined by the note. Unpaid interest shall accrue until paid, but not compound on the first loan. Payments of principal are not required until the maturity date of the loans. The notes are secured by a deed of trust on the property. Accrued interest as of June 30, 2023, is $100,455, and $644,054, respectively. Community Development Block Grant Economic Development Program In fiscal year 2007, the City entered a community development program with funding from a community development block grant economic development program. Eligibility for these low interest loans is tied to the creation of jobs within Kalispell with a percentage of the jobs created to be filled by low and moderate-income persons. Rural Development Loan Revolving On May 5, 2003, the City Council passed Resolution No. 4780 establishing an Economic Development Revolving Loan Fund (ED RLF) for small business retention and expansion. The resolution also created an Economic Development Loan Review Committee to process all applications for assistance. Additionally, on August 16, 2004 and again on November 6, 2006, the City Council, by Resolution No. 4929 and 5158, respectively, authorized the City Manager to enter into loan agreements with the United States Department of Agriculture, Rural Development office, in the amount of $520,000 and $750,000. These monies will be used to assist in the retention and expansion of small business, which may stimulate economic development activity by assisting the private sector where a funding gap exists, and alternative sources of public and private financing are not adequate. SUMMARY COMMUNITY DEVELOPMENT LOANS RECEIVABLE P.City Court Contracts Receivable Contracts receivable of the City Court, because of the uncertainty regarding when and if they will be collected, are no longer booked as an asset on the statement of net position/balance sheet of the Governmental-Type/General Fund. These receivables, at June 30, 2023, amounted to $2,733,956. From orig.%To Orig. Amt.Balance Purpose CD Loan Revolving 2006 5.00 Distinctive Countertops 288,619 8,612 Jobs 2017 3.00 Norm's News 33,765 3,774 Jobs 2018 3.00 Wheatons 46,991 7,699 Jobs 2002 1.00 Hampstead Partners*480,000 480,000 Low Income Housing 2002 4.81 Hampstead Partners*400,000 400,000 Low Income Housing 2002 1.00 Hampstead Partners - Interest Portion*- 99,071 Low Income Housing 2002 4.81 Hampstead Partners - Interest Portion*- 645,438 Low Income Housing RD Loan Revolving 2006 6.50 Distinctive Countertops 175,000 5,374 Small Business 2020 3.00 PKM, LLC (NW DRYWALL)250,000 218,352 Small Business Westside TIF 2020 3.00 PKM, LLC (NW DRYWALL)500,000 436,703 Redevelopment Total Governmental Funds 2,174,375$ 2,305,023$ *Long Term Loans Receivable - Matures 2032 99 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 Q. Fund Balance Classification by Major Purposes The table presented below displays the City’s fund balances by major purpose as displayed on page 23, the governmental funds balance sheet. S. Subsequent Events Safe Streets for All Grant The City of Kalispell has been awarded $520,000 from the US Department of Transportation’s Safe Streets and Roads for All Grant Program for a planning study for the Downtown Corridor. This will provide for a thorough planning and community outreach effort involving multiple stakeholders for the corridor. Total American Other Total General Street Rescue Governmental Governmental Fund Maint. Plan Act Funds Funds Nonspendable - not in spendable form Long-term recievables - - - - - Prepaids - 18,728 - 40,804 59,532 Total nonspendable - 18,728 - 40,804 59,532 Restricted General Government-Health Insurance - - - 18,456 18,456 Public Safety - Opioid - - - 37,293 37,293 Public Safety-admin.- - - 13,879 13,879 Public Safety-EMS - - - 26,451 26,451 Public Safety-Building Inspection - - - 2,948,133 2,948,133 Public Safety-Fire capital improvements - - - 2,075,114 2,075,114 Public Safety-Police capital improvements - - - 215,919 215,919 Public Safety-Police equip.- - - 23,446 23,446 Public Safety-Police personnel - - - 45,197 45,197 Public Safety-Fire equip.- - - 6,368 6,368 Public Safety-Fire personnel - - - 32,624 32,624 Public Works-Street cleanning and Maint.- 3,904,273 - 21,006 3,925,279 Public Works-Street Lights - -- 1,041,232 1,041,232 Public Works-roads and streets - -- 2,083,349 2,083,349 Public Works-transportation infrastructure - -- 587,030 587,030 Culture and Recreation-Park improvements - -- 255,477 255,477 Culture and Recreation-Equipment - -- 245,976 245,976 Culture and Recreation-Programs - -- 1,267,950 1,267,950 Culture and Recreation-trees and maintenance - -- 1,178,792 1,178,792 Community Development- Rail Park Tedd - -- 143,640 143,640 Community Development-Downtown TIF - -- 447,055 447,055 Community Development-Old School Station - -- 43,924 43,924 Community Development-South Kalispell TIF - -- 184,954 184,954 Community Development-Westside TIF - -- 1,235,361 1,235,361 Community Development-Revolving loan funds - -- 2,772,510 2,772,510 Debt Service-SID - -- 225,009 225,009 Debt Service-Old School improvements - -- 23,413 23,413 Debt Service-The Willows improvements - -- 25,839 25,839 Debt Service-S & C warrants - -- 337 337 Debt Service-Core area improvements - -- 1,361,747 1,361,747 Total restricted - 3,904,273 18,587,481 22,491,754 Assigned Capital Equipment - - - - - Parking 23,542 - - - 23,542 Miscellaneous 2,938,233 - - - 2,938,233 Total assigned 2,961,775 - - - 2,961,775 Unassigned 1,065,242 - - - 1,065,242 Total fund balances 4,027,017 3,923,001 - 18,628,285 26,578,303 100 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 project budget will be $650,000 with a 20% match coming from the City of Kalispell ($80,000) and Montana Department of Transportation ($50,000). Development Services Loan Program Transition The City of Kalispell has entered into a mutually beneficial arrangement to transfer both the Community Development Block Grant (CDBG) and the United State department of Agriculture Office of Rural Development Intermediary Relending Program (IRP) funds to Montana West Economic Development (MWED). This will allow MWED to expand its loan program offerings in the City to benefit small business and eliminate duplication of services. MWED will provide services to the City related to the management and administration of the two City loan programs. Storage Tank and Well SRF Loan Construction has begun on the elevated storage tank in the north region of the City’s upper pressure zone. This is a very large project which includes well facilities, transmission main, a water tower to service growth expansion, and replacing Noffsinger water supply with the North Main Well facility in the lower pressure zone. The City entered into a $19 million loan agreement with the State of Montana Department of Natural Resources and Conservation revolving loan fund program (SRF). Impact fees may be used to repay a portion of this 30-year loan. T. Commitments The City entered into contract(s) for professional engineering and construction services for the Stormwater Quality Treatment Facility-8th Ave W, 11 St W Outfall, 1st Ave W South of City Shops- Ashley Creek Drainage (STX-50 & STX-51) The contract(s) commitment for the project is $1,111,949.60. For the year ended June 30, 2023, the City had incurred $428,011 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into a contract for construction services for the Stormwater Quality Treatment Facility- Main & Wyoming St Outfall to the Stillwater River (STX-41 & STX-49). The contract commitment for the project is $539,862.74. For the year ended June 30, 2023, the City had incurred $114,550 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into a contract for professional engineering services for the Lower Zone Tank(s) Replacement and Rehabilitation (W-RR-11) project. The project is scheduled to go out to bid for tank #1 in March 2024 and tank #2 will be bid in March of 2025. The current professional services contract commitment for the project is $293,000. For the year ended June 30, 2023, the City had incurred $214,031 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into contract(s) for professional engineering and construction services for the N. Main Well-Noffsinger Replacement (W-RR-14) project. The contract(s) commitment for the project is $4,239,086. For the year ended June 30, 2023, the City had incurred $943,404 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into contract(s) for professional engineering and construction services for the 1 MG Elevated Storage Tank & Wells (W-T-01,W-W-01 & W-W-02) project. The contract commitment 101 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 for the project is $19,107,012. For the year ended June 30, 2023, the City had incurred $2,838,936 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into contract(s) for professional engineering and construction services for the Downtown Water and Sewer Main Replacement project. The Professional Services, Easements Procurement and Construction commitments for the project is $8,930,090.85. For the year ended June 30, 2023, the City had incurred $2,786,911 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into contract(s) for professional engineering and construction services for Lift Station #3 Improvement project. The Professional Services and Construction commitments for the project are $6,348,452.97. For the year ended June 30, 2023, the City had incurred $394,754 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into contract(s) for professional engineering and construction services for Lift Station #9 Improvement project. The Professional Services and Construction commitments for the project are $1,483,007. For the year ended June 30, 2023, the City had incurred $1,009,063 towards the project, which is reported as construction in progress in the Statement of Net Position. The City is upgrading and relocating the control panel for Lift station #10. The project is being completed in-house. The total project budget is $60,000. For the year ended June 30, 2023, the City had incurred $47,102.46 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into a contract for professional engineering services for the Wastewater Treatment Plant Fermenter Rehabilitation (WWTP-Misc 8) Project. The project went out to bid in February 2024 and the City received no bids for the project. The engineering consultant will investigate different engineering and bidding specifications and rebid the project at a later date. Total project costs are estimated at $2,891,961. For the year ended June 30, 2023, the City had incurred $103,539 towards the project, which is reported as construction in progress in the Statement of Net Position. The City entered into a contract for professional engineering services for the Wastewater Treatment Plant Equalization Basin Expansion (WWTP-EQB-2) Project. The project went out to bid in February 2024 and the bids exceeded the engineer’s cost estimate and the bids were rejected. The engineering consultant will investigate different engineering and bidding specifications and rebid the project at a later date. Total project costs are estimated at $2,731,453. For the year ended June 30, 2023, the City had incurred $303,347 towards the project, which is reported as construction in progress in the Statement of Net Position. 102 City of Kalispell, Montana Notes to Financial Statements June 30, 2023 REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS 103 2017 2018 2019 2020 2021 2022 2023 Total OPEB Liability Service cost 332,296$ 298,579$ 227,903$ 253,580$ 326,193$ 208,761$ 149,521$ Interest 79,695$ 137,494$ 135,435$ 76,055$ 72,682$ 157,217$ 124,257$ Difference between expected and actual experience 13,222$ (137,426)$ (736,800)$ (98,937)$ (235,464)$ (48,744)$ 148,753$ Changes in assumptions 1,013,936$ (253,167)$ (798,142)$ 244,123$ 346,504$ (1,152,520)$ 378,221$ Changes in benefit terms -$ -$ -$ -$ -$ -$ -$ Contributions by employer -$ -$ -$ -$ -$ -$ -$ Net change in total OPEB liability 1,439,149$ 45,480$ (1,171,604)$ 474,821$ 509,915$ (835,286)$ (675,042)$ Total OPEB liability-beginning (restated) 2,546,180$ 3,985,329$ 4,030,809$ 2,859,205$ 3,334,026$ 3,843,941$ 3,008,655$ Total OPEB liability-ending 3,985,329$ 4,030,809$ 2,859,205$ 3,334,026$ 3,843,941$ 3,008,655$ 2,333,613$ Covered-employee payroll 10,456,215$ 10,748,989$ 11,430,605$ 11,794,098$ 12,822,159$ 13,270,935$ 15,925,614$ Total OPEB liability as a percentage of covered- employee payroll 38.1% 37.5% 25.0% 28.3% 30.0% 22.7% 14.7% Notes to Schedule: Changes of assumptions and other inputs Discount trend 3.13% 3.45% 3.36% 2.66% 2.18% 4.09% 4.13% Medical trend 4.50% 4.50% 3.50% 3.50% 3.20% 3.20% 2.50% Governmental Accounting Standards Board, Statement 75 requires this information to be provided for 10 years. Because fiscal year 2018 was the first year of implementation, 10 years is not available. SCHEDULE OF TOTAL LIABILITY AND RELATED RATIOS OTHER POSTEMPLOYMENT BENEFITS June 30, 2023 2017 2018 2019 2020 2021 2022 2023 Contractually required contribution -$ -$ -$ -$ -$ -$ -$ Contributions in relation to the contractually required contribution -$ -$ -$ -$ -$ -$ -$ Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ -$ City's covered-employee payroll 10,456,215$ 10,748,989$ 11,430,605$ 11,794,098$ 12,822,159$ 13,270,935$ 15,925,614$ Contributions as a percentage of covered- employee payroll 0%0%0%0%0%0%0% Governmental Accounting Standards Board, Statement 75 requires this information to be provided for 10 years. Because fiscal year 2018 was the first year of implementation, 10 years is not available. City of Kalispell SCHEDULE OF CONTRIBUTIONS OTHER POSTEMPLOYMENT BENEFITS June 30, 2023 104 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Public Employees Retirement Plan (PERS) Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability For the Last Ten Fiscal Years* As of measurement date 2022 2021 2020 2019 2018 2017 2016 2015 2014 Employer’s proportion of the Net Pension Liability (percentage) 0.386856% 0.341594% 0.343687% 0.347860% 0.342578% 0.453698% 0.431402% 0.426464% 0.436421% Employer’s Net Pension Liability (amount) $9,198,996 $6,193,855 $9,067,196 $7,271,356 $7,150,099 $8,836,349 $7,348,266 $5,961,419 $5,437,857 State’s Net Pension Liability (amount) 2,747,175 1,825,504 2,856,744 2,365,647 2,393,378 117,668 89,787 73,226 66,405 Total $11,946,171 $8,019,359 $11,923,940 $9,637,003 $9,543,477 $8,954,017 $7,438,053 $6,034,645 $5,504,262 Employer’s Covered Payroll1 $6,798,579 $6,033,845 $5,766,515 $5,739,639 $5,633,887 $5,628,154 $5,167,438 $4,976,919 $4,978,271 Employer’s Proportionate Share as a percent of Covered Payroll 135.31% 102.65% 157.24% 126.69% 126.91% 157.00% 142.20% 119.78% 111.22% Plan Fiduciary Net Position as a percent of Total Pension Liability 73.66% 79.91% 68.90% 73.85% 73.47% 73.75% 74.71% 78.40% 79.87% 105 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Required Supplementary Information Schedule of Contributions For the Last Ten Fiscal Years* As of most recent FYE (reporting date) 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required DB Contributions 696,299 $604,638 $534,715 $505,222 $493,648 $477,191 $471,085 $431,923 $410,118 Plan Choice Rate Required Contributions $0 $0 $0 $0 $0 $0 $0 $12,468 $19,991 Contributions in Relation to the Contractually Required Contributions 696,299 $604,638 $534,715 $505,222 $493,648 $477,191 $471,085 $444,391 $430,109 Contribution Deficiency (Excess) $0 $0 $0 $0 $0 $0 $0 $0 $0 Employer’s Covered Payroll1 7,762,522 $6,798,579 $6,033,845 $5,766,515 $5,739,639 $5,633,887 $5,628,154 $5,167,438 $4,976,919 Contributions as a percent of Covered Payroll 8.97% 8.89% 8.86% 8.76% 8.60% 8.47% 8.37% 8.60% 8.64% *The amounts presented for each fiscal year were determined as of June 30, the measurement date (1) All employer adjustments made in fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers proportionate share. Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 106 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Changes of Benefit Terms The following changes to the plan provisions were made as identified: 2017: Working Retiree Limitations – for PERS Effective July 1, 2017, if a PERS retiree returns as an independent contractor to what would otherwise be PERS-covered employment, general contractor overhead costs are excluded from PERS working retiree limitations. Refunds 1)Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulated contributions in a lump sum. 2)Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do so within 90 days of termination of service. 3)Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only alump-sum payment. Interest credited to member accounts – Effective July 1, 2017, the interest rate credited to member accounts increased from 0.25% to 0.77%. Lump-sum payouts Effective July 1, 2017, lump-sum payouts in all systems are limited to the member’s accumulated contributions rate than the present value of the member’s benefit. Disabled PERS Defined Contribution (DC) Members PERS members hired after July 1, 2011, have a normal retirement age of 65. PERS DC members hired after July 1, 2011 who became disabled were previously only eligible for a disability benefit until age 65. Effective July 1, 2017, these individuals will be eligible for a disability benefit until they reach 70, thus ensuring the same 5-year time period available to PERS DC disabled members hired prior to July 1, 2011, who have a normal retirement age of 60 and are eligible for a disability benefit until age 65. Changes in Actuarial Assumptions and Methods Method and assumptions used in calculations of actuarially determined contributions The following actuarial assumptions and methods were used to determine contribution rates reported for fiscal year ending June 30, 2022, which were based on the results of the June 30, 2021 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.65% *Includes inflation at 2.75% Merit salary increase 0% to 8.47% Asset valuation method Four-year smoothed market Actuarial cost method Entry age Normal Amortization method Level percentage of payroll, open Remaining amortizati period 30 years 107 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Mortality (Healthy members) For Males and Females: RP 2000 Combined Employee and Annuitant Mortality Table projected to 2020 using Scale BB, males set back 1 year Mortality (Disabled members) For Males and Females: RP 2000 Combined Mortality Table, with no projections Admin Expense as % of Payroll 0.29% Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies from year to year based on the prior year’s actual administrative expenses. The actuarial assumptions and methods utilized in the June 30, 2021 valuation, were developed in the six-year experience study for the period ending 2016. 108 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Municipal Police Officers' Retirement Plan (MPORS) Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability For the Last Ten Fiscal Years* As of measurement date 2022 2021 2020 2019 2018 2017 2016 2015 2014 Employer’s proportion of the Net Pension Liability (percentage) 1.5011% 1.5188% 1.4976% 1.5182% 1.5868% 1.6383% 1.5682% 1.5255% 1.5019% Employer’s Net Pension Liability (amount) $3,545,857 $2,761,059 $3,663,004 $3,021,804 $2,717,519 $2,914,803 $2,822,947 $2,523,431 $2,359,962 State’s Net Pension Liability (amount) $7,206,839 $5,612,007 $7,387,909 $6,153,443 $5,555,145 $5,940,859 $5,603,673 $5,112,711 $4,767,405 Total $10,752,696 $8,373,066 $11,050,913 $9,175,247 $8,272,665 $8,855,662 $8,426,620 $7,636,141 $7,127,367 Employer’s Covered Payroll1 $2,800,297 $2,748,824 $2,565,473 $2,502,092 $2,504,658 $2,449,995 $2,213,762 $2,111,268 $2,015,102 Employer’s Proportionate Share as a percent of Covered Payroll 126.62% 100.45% 142.78% 120.77% 108.50% 118.97% 127.52% 119.52% 117.11% Plan Fiduciary Net Position as a percent of Total Pension Liability 69.67% 75.76% 64.84% 68.84% 70.95% 68.34% 65.62% 66.90% 67.01% *The amounts presented for each fiscal year were determined as of June 30, the measurement date. 1All employer adjustments made in fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers proportionate share. Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 109 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Required Supplementary Information Schedule of Contributions For the Last Ten Fiscal Years* As of reporting date 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required Contributions $407,721 $406,491 $395,576 $373,776 $361,987 $374,615 $353,045 $324,287 $306,050 Contributions in Relation to the Contractually Required Contributions $407,721 $406,491 $395,576 $373,776 $361,987 $374,615 $353,045 $324,287 $306,050 Contribution Deficiency (Excess) $0 $0 $0 $0 $0 $0 $0 $0 $0 Employer’s Covered Payroll1 $2,829,433 $2,800,297 $2,748,824 $2,565,473 $2,502,092 $2,504,658 $2,449,995 $2,213,762 $2,111,268 Contributions as a percent of Covered Payroll 14.41% 14.52% 14.39% 14.57% 14.47% 14.96% 14.41% 14.65% 14.50% *The amounts presented for each fiscal year were determined as of June 30, the most recent fiscal year end. 1All employer adjustments made in fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers proportionate share. Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 110 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Changes of Benefit Terms The following changes to the plan provision were made as identified: 2017: Working Retiree Limitations – for MPORS Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from which they retired. •Members who return for less than 480 hours in a calendar year. o may not become an active member in the system; andoare subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in thecalendar year. •Members who return for 480 or more hours in a calendar year: o must become an active member of the system; o will stop receiving a retirement benefit from the system; and o will be eligible for a second retirement benefit if they earn 5 or more years of service credit throughtheir second employment. •Employee, employer and state contributions, if any, apply as follows: o employer contributions and state contributions (if any) must be paid on all working retirees; o employee contributions must be paid on working retirees who return to covered employment for 480 or more hours in a calendar year.Second Retirement Benefit – for MPORS Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired. •If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before terminating again, the member: o is not awarded service credit for the period of reemployment;o is refunded the accumulated contributions associated with the period of reemployment; o starting the first month following termination of service, receives the same retirement benefit previously paid to the member; and o does not accrue post-retirement benefit adjustments during the term of reemployment butreceives a Guaranteed Annual Benefit Adjustment (GABA) in January immediately following secondretirement. •If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives:*the same retirement benefit previously paid to the member, and *a second retirement benefit for the period of reemployment calculated based on the laws ineffect as of the member’s rehire date; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives aGABA:*on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12months. •A member who returns to covered service is not eligible for a disability benefit. 111 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Refunds •Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund theiraccumulated contributions in a lump sum. •Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do so within 90 days of termination of service. •Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment. Interest credited to member accounts •Effective July 1, 2017, the interest rate credited to member accounts increased from 0.25% to 0.77%. Lump-sum payouts •Effective July 1, 2017, lump-sum payouts in all systems are limited to the member’s accumulated contributions rate than the present value of the member’s benefit. Changes in Actuarial Assumptions and Methods Method and assumptions used in calculations of actuarially determined contributions The following actuarial assumptions and methods were used to determine contribution rates reported for fiscal year ending June 30, 2022, which were based on the results of the June 30, 2021 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.65% *Includes inflation at 2.75% Merit salary increases 0% to 6.60% Asset valuation method Four-year smoothed market Actuarial cost method Entry Age Normal Amortization method Level percentage of pay, open Mortality (Healthy members) For Males and Females: RP 2000 Combined Employee and Annuitant Mortality Table projected to 2020 using Scale BB, males set back 1 year Mortality (Disabled members) For Males and Females: RP 2000 Combined Mortality Table Admin Expense as % of Payroll 0.17% Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies from year to year based on the prior year’s actual administrative expenses. The actuarial assumptions and methods utilized in the June 30, 2021 valuation, were developed in the six-year experience study for the period ending 2016. 112 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Firefighters Unified Retirement System (FURS) Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability For the Last Ten Fiscal Years* As of measurement date 2022 2021 2020 2019 2018 2017 2016 2015 2014 Employer’s proportion of the Net Pension Liability (percentage) 1.2250% 1.2086% 1.1645% 1.1622% 1.2872% 1.4637% 1.3965% 1.4196% 1.4283% Employer’s Net Pension Liability (amount) $1,945,865 $1,034,261 $1,822,118 $1,333,236 $1,482,534 $1,654,528 $1,594,992 $1,451,892 $1,394,256 State’s Net Pension Liability (amount) $4,402,430 $2,347,443 $4,107,673 $3,224,436 $3,389,894 $3,757,250 $3,613,749 $3,233,749 $3,145,374 Total $6,348,295 $3,381,704 $5,929,791 $4,557,671 $4,872,428 $5,411,778 $5,208,741 $4,685,641 $4,539,630 Employer’s Covered Payroll1 $2,373,613 $2,224,092 $2,032,772 $2,015,410 $2,027,325 $2,188,185 $1,966,524 $1,907,689 $1,855,316 Employer’s Proportionate Share as a percent of Covered Payroll 81.98% 46.50% 89.64% 66.15% 73.13% 75.61% 81.11% 76.11% 75.15% Plan Fiduciary Net Position as a percent of Total Pension Liability 78.76% 87.72% 75.34% 80.08% 79.03% 77.77% 75.48% 76.90% 76.71% *The amounts presented for each fiscal year were determined as of June 30, the measurement date. 1All employer adjustments made in fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers proportionate share. Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 113 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Required Supplementary Information Schedule of Contributions For the Last Ten Fiscal Years* As of reporting date 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required Contributions $386,456 $343,319 $318,176 $299,206 $277,747 $298,390 $314,224 $281,160 $279,275 Contributions in Relation to the Contractually Required Contributions $386,456 $343,319 $318,176 $299,206 $277,747 $298,390 $314,224 $281,160 $279,275 Contribution Deficiency (Excess) $0 $0 $0 $0 $0 $0 $0 $0 $0 Employer’s Covered Payroll1 $2,691,199 $2,373,613 $2,224,092 $2,032,772 $2,015,410 $2,027,325 $2,188,185 $1,966,524 $1,907,689 Contributions as a percent of Covered Payroll 14.36% 14.46% 14.31% 14.72% 13.78% 14.72% 14.36% 14.30% 14.64% *The amounts presented for each fiscal year were determined as of June 30, the most recent fiscal year end. 1All employer adjustments made in fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers proportionate share. Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 114 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Changes of Benefit Terms The following changes to the plan provision were made as identified: 2017: Working Retiree Limitations – for FURS Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from which they retired. •Members who return for less than 480 hours in a calendar year: o may not become an active member in the system; and o are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in thecalendar year. •Members who return for 480 or more hours in a calendar year: o must become an active member of the system;o will stop receiving a retirement benefit from the system; andowill be eligible for a second retirement benefit if they earn 5 or more years of service credit throughtheir second employment. •Employee, employer and state contributions, if any, apply as follows: o employer contributions and state contributions (if any) must be paid on all working retirees; o employee contributions must be paid in working retirees who return to covered employment for 480or more hours in a calendar year.Second Retirement Benefit – for FURS Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired. •If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before terminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; o starting the first month following termination of service, receives the same retirement benefitpreviously paid to the member; and o does not accrue post-retirement benefit adjustments during the term of reemployment butreceives a Guaranteed Annual Benefit Adjustment (GABA) in January immediately following secondretirement. •If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again, the member: o is awarded service credit for the period of reemployment;o starting the first month following termination of service, receives:*the same retirement benefit previously paid to the member, and *a second retirement benefit for the period of reemployment calculated based on the laws in effect as of the member’s rehire date; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives aGABA: *on the initial retirement benefit in January immediately following second retirement, and*on the second retirement benefit starting in January after receiving that benefit for at least 12months. •A member who returns to covered service is not eligible for a disability benefit. Refunds •Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulated contributions in a lump sum. •Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover theirrefund must do so within 90 days of termination of service. •Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment. 115 City of Kalispell, Montana Required Supplementary Information June 30, 2023 Interest credited to member accounts •Effective July 1, 2017, the interest rate credited to member accounts increased from 0.25% to 0.77%. Lump-sum payouts •Effective July 1, 2017, lump-sum payouts in all systems are limited to the member’s accumulated contributionsrate than the present value of the member’s benefit. Changes in Actuarial Assumptions and Methods Method and assumptions used in calculations of actuarially determined contributions The following actuarial assumptions and methods were used to determine contribution rates reported for fiscal year ending June 30, 2022, which were based on the results of the June 30, 2021 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.65% *Includes inflation at 2.75% Merit salary increases 0% to 6.30% Asset valuation method Four-year smoothed market Actuarial cost method Entry Age Normal Amortization method Level percentage of payroll, open Mortality (Healthy members) For Males and Females: RP 2000 Combined Employee and Annuitant Mortality Table projected to 2020 using Scale BB, males set back 1 year. Mortality (Disabled members) For Males and Females: RP 2000 Combined Mortality Table Admin Expense as % of Payroll 0.13% Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies from year to year based on the prior year’s actual administrative expenses. The actuarial assumptions and methods utilized in the June 30, 2021 valuation, were developed in the six-year experience study for the period ending 2016. 116 City of Kalispell, Montana Required Supplementary Information June 30, 2023 City of Kalispell Budgetary Comparison Schedule For Fiscal Year Ended June 30, 2023 VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) 6,990,000$ 6,990,000$ 6,956,522$ (33,478)$ 165,000$ 165,000$ 225,055$ 60,055$ 3,257,064$ 3,257,064$ 3,313,731$ 56,667$ 1,145,126$ 1,145,126$ 1,165,972$ 20,846$ 495,000$ 495,000$ 347,630$ (147,370)$ 50,000$ 50,000$ 135,824$ 85,824$ 30,000$ 30,000$ 373,131$ 343,131$ REVENUES Taxes and Assessments Licenses and permits Intergovernmental Charges for Services Fines and Forfeitures Miscellaneous Investment and Royalty EarningsUnrealized loss on investments -$ -$ (177,030)$ (177,030)$ Total revenues 12,132,190$ 12,132,190$ 12,340,835$ 208,645$ EXPENDTIURES Current: General Government 3,221,401.00 3,221,401.00 2,995,542.00 225,859.00 Personal services 2,619,529 2,619,529 2,444,497 175,032 Operations and maintenance 528,872 528,872 482,355 46,517 Public Safety 9,780,794 9,780,794 9,181,212 599,582 Personal services 8,508,441 8,508,441 8,009,090 499,351 Operations and maintenance 1,001,463 1,001,463 923,919 77,544 Public Works 97,807 97,807 139,282 (41,475) Personal services 31,080 31,080 28,364 2,716 Operations and maintenance 66,727 66,727 110,918 (44,191) Culture and Recreation 21,600 21,600 21,600 - Operations and maintenance 21,600 21,600 21,600 - Housing and Community Development 75,794 75,794 51,540 24,254 Personal services 66,344 66,344 45,077 21,267 Operations and maintenance 9,450 9,450 6,463 2,987 Miscellaneous 483,655 483,655 428,202 55,453 Debt Service 76,586 76,586 51,747 24,839 Debt service - principal 65,921 65,921 47,106 18,815 Debt service - interest and other charges 10,665 10,665 4,641 6,024 Capital outlay 267,304 267,304 265,146 2,158 Total expenditures 13,681,051 13,681,051 12,817,378 863,673 Excess (deficiency) of revenues over (under) expenditures (1,548,861) (1,548,861) (476,543) 1,072,318 OTHER FINANCING SOURCES (USES) Transfers in 1,100,000 1,100,000 1,090,000 (10,000) Transfers (out)(965,300) (2,021,832) (2,016,532) 5,300 Total other financing sources (uses)134,700 (921,832) (926,532) (4,700) Net change in fund balance (1,414,161) (2,470,693) (1,403,075) 1,067,618 Fund balances - beginning 5,430,092 Fund balances - ending 4,027,017 The notes to the financial statements are an integral part of this statement. GENERAL FUND 117 and Actual (Budgetary Basis) City of KalispellBudgetary Comparison Schedule For Fiscal Year Ended June 30, 2023 VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 2,929,500$ 2,929,500$ 2,960,929$ 31,429$ Licenses and permits -$ -$ 9,703$ 9,703$ Charges for Services 5,000$ 5,000$ 9,791$ 4,791$ Miscellaneous 500$ 500$ 22,992$ 22,492$ Investment and Royalty Earnings 11,000$ 11,000$ 91,904$ 80,904$ Internal Services -$ -$ (101,661)$ (101,661)$ Total revenues 2,946,000$ 2,946,000$ 2,993,658$ 47,658$ EXPENDTIURES Current: Public Works 3,375,573$ 3,375,573$ 2,841,486$ 534,087$ Personal services 1,454,524$ 1,454,524$ 1,239,370$ 215,154$ Operations and maintenance 1,343,234$ 1,343,234$ 1,129,498$ 213,736$ Debt Service 66,292$ 66,292$ 40,181$ 26,111$ Debt service - principal 52,266$ 52,266$ 27,266$ 25,000$ Debt service - interest and other charges 14,026$ 14,026$ 12,915$ 1,111$ Capital outlay 511,523$ 511,523$ 432,437$ 79,086$ Total expenditures 3,375,573$ 3,375,573$ 2,841,486$ 534,087$ 0 Excess (deficiency) of revenues over (under) expenditures (429,573)$ (429,573)$ 152,172$ 581,745$ 0 OTHER FINANCING SOURCES (USES) Transfers (out)(30,000) (30,000) (44,347) (14,347) Proceeds from general long term debt 250,000 250,000 212,950 (37,050) Total other financing sources (uses)220,000 220,000 168,603 (51,397) Net change in fund balance (209,573) (209,573) 320,775 530,348 Fund balances - beginning 3,602,226 Fund balances - ending 3,923,001 The notes to the financial statements are an integral part of this statement. Street Maintenance 2500 118 City of Kalispell, Montana Budgetary Comparison Schedule For Fiscal Year Ended June 30, 2023 VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental -$ -$ 661,307$ 661,307$ Total Revenues - - 661,307 661,307 District court - - - - Contributions to pension or investment trust funds - - - - EXPENDTIURES Current: Capital Outlay 6,094,354 6,094,354 - 6,094,354 Total Expenditures 6,094,354 6,094,354 - 6,094,354 Debt service-principal - - - - Excess (deficiency) of revenues over (under) expenditures (6,094,354) (6,094,354) 661,307 (5,433,047) Debt service-interest and other charges - - - - OTHER FINANCING SOURCES (USES) Transfers in - - - - Transfers (out)- - (661,307) (661,307) Total other financing sources (uses)- - (661,307) (661,307) Net change in fund balance (6,094,354) (6,094,354) - (6,094,354) Fund balances - beginning - Restatements - Fund balances - beginning restated - Fund balances - ending -$ The notes to the financial statements are an integral part of this statement. 4393 American Recovery Act Grant 119 A.Budgetary Comparison Schedules BUDGETED FUNDS The City adopts an annual budget for all of its funds in accordance with Title 7, Chapter 6, Part 40 of the Montana Code Annotated Statute requires the adoption of a preliminary budget, public hearings on the preliminary budget and the final adoption of the budget by the first Thursday after the first Tuesday in September or within 30 calendar days of the receipt of the certified taxable valuations from the Department of Revenue. The City must also submit a copy of the final budget to the Department of Administration by the later of October 1 or 60 days after the receipt of taxable values from the Department of Revenue. State statute limits the making of expenditures or incurring of obligations to the amount of the final budget as adopted or as amended. Budget transfers and amendments are authorized by law, and in some instances, may require further public hearings. Any budget amendments providing for additional appropriations must identify the fund reserves, unanticipated revenue, or previously unbudgeted revenue that will fund the appropriations. Appropriations are created by fund, function, and activity and may further be detailed by department. Expenditure limitations imposed by law extend to the department level which is identified as the legal level of budgetary control. BUDGETARY BASIS The City’s budgets are prepared on the budgetary basis (modified accrual) of accounting, which results in accounting for certain funds, proprietary and internal service, on a basis other than generally accepted accounting principles (full accrual). The City’s accounting records are maintained on the basis of cash receipts and disbursements during the year. At year-end, certain adjustments are made to the City’s accounting records to reflect the basis of accounting described above. Reported budget amounts represent the originally adopted budget and the final budget, which includes amendments. Total fund expenditures may not legally exceed the budgeted expenditures. The budget lapses at the end of each year. Results of operations, on the budget basis of accounting, are presented for the general fund and major special revenue funds with legally adopted annual budgets, to provide a meaningful comparison of actual results with the budget. 120 City of Kalispell, Montana Required Supplementary Information June 30, 2023 SUPPLEMENTAL INFORMATION 121 COMBINING AND INDIVIDUAL FUND STATEMENTS NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Downtown TIF – Accounts for monies received and expended for approved projects in this TIF district. Airport TIF – Accounts for monies received and expended for approved projects in this TIF district. Westside TIF - Accounts for monies received and expended for approved projects in this TIF district Parks in Lieu – Accounts for monies received by developer’s for the purpose of making improvements in specific City parks. Parks – Accounts for the monies received and expended in the operations of the City’s Parks Department. Ambulance – Accounts for the monies received and expended in the operations of the City’s Ambulance Department. Old School TIF’s – Accounts for monies received and expended for approved projects in these TIF districts. Rail Park TEDD – Accounts for the monies received and expended for approved projects in and related to the TEDD. Health Levy – Accounts for revenue from the permissive mill levy which provides funding for the fiscal year 2003 health insurance premium rate increase. Building Department – Accounts for all activity of enforcing the building regulations adopted by the City. Impact Fees – Accounts for public safety impact fees received and allowed and approved expenditures of each. Light Maintenance – Accounts for special assessment revenues levied, received, and expended for street lighting. Gas Tax and BARSAA – Accounts for revenues from State gasoline taxes apportioned from the State of Montana Department of Highways. 122 Forestry – Accounts for special assessment revenues levied, received, and expended to care for almost 7000 trees. MACI Grant – Accounts for grant monies received and City matching monies used to purchase equipment (street sweeper) through the Montana Air & Congestion Initiative. Community Development Loan Revolving Fund – this fund accounts for the lending and repayment of monies loaned to businesses and individuals for approved community development projects. CD Misc. - originally established to account for Urban Development Assistance Grants (UDAG). These federal dollars were loaned to businesses and individuals for projects located in economic development zones and approved by the City Community Development department. The main revenue source for this fund is borrower’s interest payments. In fiscal year 2015, this fund, with dollars borrowed from the General fund, purchased six undeveloped properties from Flathead County at the Old School Station Industrial/Technical Park, a City special improvement district. Taxes on these properties were five to seven years delinquent, thereby putting the City’s SID debt service fund at risk of not making the annual payment. The City has since resold these properties satisfying the debt service fund. Rural Development Loan Revolving (2) – Accounts for monies received, grant and other, and expended in the process of providing gap financing for business retention, expansion, or start-up. Law Enforcement Grants (Stonegarden, Drug Enforcement) – Accounts for multiple grants received by the Police Department and all related revenues and expenditures. EPA Brownfields Grant – Accounts for Brownfields revitalization projects monies to be used for phase I and phase II environmental assessments. EPA Brownfields Loan Revolving Grant - Accounts for grant monies received for and expenditures related to environmental assessments. Fire Grants - Accounts for multiple grants received by the Fire Department and all related revenues and expenditures. Hazmat Grant – Accounts for the grant monies received for and expenditures related to respond and remedy hazmat calls of the City Fire Department. 123 DEBT SERVICE FUNDS Westside TIF Debt Service - Accounts for the debt service payments associated with the Westside Tax Increment District. Debt Service Revolving – Accounts for monies associated with the closing out of debt service funds and covering other debt service fund payment shortages. S & C’s - Accounts for the debt service payments associated with Sidewalk & Curb bonds. SID 344 - Accounts for the debt service payments associated with the Special Improvement District #344 bonds. SID 345 - Accounts for the debt service payments associated with the Special Improvement District #345 bonds. CAPITAL PROJECT FUNDS S & C Construction –Accounts for the monies received for and expenditures related to sidewalk and curb construction. 124 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 Downtown TIF Airport TIF Westside TIF Parks-in-Lieu Parks ASSETS Current assets Cash and investments $429,454 $222,743 $800,786 $255,477 $1,549,704 Taxes and assessments receivable, net 10,875 - 1,369 - 47,203 Penalty and interest receivable - - - - - Accounts receivable - - - - - Notes, loans, and contracts receivable - - 436,703 - - Due from other governments 19,202 - - - 65,515 Prepaid expenses - - - - 19,691 Due from Other - - - - 32,562 Total current assets 459,531 222,743 1,238,858 255,477 1,714,675 Noncurrent assets Restricted cash and investments - - - - - Lease/SBITA Right of use asset, net - - - - - Total noncurrent assets - - - - - Total assets 459,531 222,743 1,238,858 255,477 1,714,675 LIABILITIES Current liabilities Accounts payable 271 37,789 - - 47,558 Accrued payables - - - - - Accrued payroll 1,330 - 2,128 - 86,297 Due to other funds - - - - - Advances from other funds - - - - - Lease/SBITA Purchase - - - - - Total current liabilities 1,601 37,789 2,128 - 133,855 Noncurrent liabilities Lease/SBITA Purchase - - - - - Total noncurrent liabilities - - - - - Total liabilities 1,601 37,789 2,128 - 133,855 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue 10,875 - 1,369 - 47,203 Ambulance Revenue - - - - - Total deferred inflows of resources 10,875 - 1,369 - 47,203 FUND BALANCES Nonspendable Prepaid expenses - - - - 19,691 Restricted for:- - - - - General government - - - - - Public safety - - - - - Public works - - - - - Culture & recreation - - - 255,477 1,513,926 Housing & community development 447,055 184,954 1,235,361 - - Unassigned - - - - - Total Fund Balance $447,055 $184,954 $1,235,361 $255,477 $1,533,617 Total Liabilities, Deferred Inflow of Resources and Fund Balance $459,531 $222,743 $1,238,858 $255,477 $1,714,675 The notes to the financial statements are an integral part of this statement. 125 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 Ambulance Old School Tech TIF Old School Industrial TIF Rail Park TEDD Health Levy ASSETS Current assets Cash and investments $82,572 $20,939 $4,716 $143,902 $- Taxes and assessments receivable, net - 53,706 56,665 12,662 44,886 Penalty and interest receivable - - - - - Accounts receivable 448,236 - - - - Notes, loans, and contracts receivable - - - - - Due from other governments - 17,534 735 9 67,090 Prepaid expenses 11,310 - - - - Due from Other - - - - - Total current assets 542,118 92,179 62,116 156,573 111,976 Noncurrent assets Restricted cash and investments - - - - - Lease/SBITA Right of use asset, net - - - - - Total noncurrent assets - - - - - Total assets 542,118 92,179 62,116 156,573 111,976 LIABILITIES Current liabilities Accounts payable 26,713 - - - - Accrued payables - - - 271 - Accrued payroll 33,566 - - - - Due to other funds - - - - 48,634 Advances from other funds - - - - - Lease/SBITA Purchase - - - - - Total current liabilities 60,279 - - 271 48,634 Noncurrent liabilities Lease/SBITA Purchase - - - - - Total noncurrent liabilities - - - - - Total liabilities 60,279 - - 271 48,634 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - 53,706 56,665 12,662 44,886 Ambulance Revenue 444,078 - - - - Total deferred inflows of resources 444,078 53,706 56,665 12,662 44,886 FUND BALANCES Nonspendable Prepaid expenses 11,310 - - - - Restricted for:- - - - - General government - - - - 18,456 Public safety 26,451 - - - - Public works - - - - - Culture & recreation - - - - - Housing & community development - 38,473 5,451 143,640 - Unassigned - - - - - Total Fund Balance $37,761 $38,473 $5,451 $143,640 $18,456 Total Liabilities, Deferred Inflow of Resources and Fund Balance $542,118 $92,179 $62,116 $156,573 $111,976 126 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 Building Dept Public Safety Impact Fees Light Maintenance Gas Tax - BARSAA Urban Forestry ASSETS Current assets Cash and investments $ 2,994,479 $ 13,879 $1,037,197 $ 1,777,612 $ 1,016,788 Taxes and assessments receivable, net - - 24,722 - 31,926 Penalty and interest receivable - - - - - Accounts receivable - - - - - Notes, loans, and contracts receivable - - 24,047 - - Due from other governments - - - 897,552 34,343 Prepaid expenses 9,803 - - - - Due from Other - - - - - Total current assets 3,0004,282 13,879 1,085,966 2,675,164 1,083,057 Noncurrent assets Restricted cash and investments -2,291,033 - 145,079 Lease/SBITA Right of use asset, net 16,263 - - - 5,421 Total noncurrent assets 16,263 2,291,033 - - 150,500 Total assets 3,020,545 2,304,912 1,085,966 2,675,164 1,233,557 LIABILITIES Current liabilities Accounts payable 11,358 - 14,260 4,785 1,144 Accrued payables - - - - - Accrued payroll 34,988 - 5,752 - 16,274 Due to other funds - -- - - Advances from other funds - - - - - Lease/SBITA Purchase 7,904 - - - 2,635 Total current liabilities 54,250 -20,012 4,785 20,053 Noncurrent liabilities Lease/SBITA Purchase 8,359 - - - 2,786 Total noncurrent liabilities 8,359 - - - 2,786 Total liabilities 62,609 -20,012 4,785 22,839 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - 24,722 - 31,926 Ambulance Revenue - - - - - Total deferred inflows of resources - - 24,722 - 31,926 FUND BALANCES Nonspendable Prepaid expenses 9,803 - - - - Restricted for:- - - - - General government - - - - - Public safety 2,948,133 2,304,912 - - - Public works - - 1,041,232 2,670,379 - Culture & recreation - - - - 1,178,792 Housing & community development - - - - - Unassigned - - - - - Total Fund Balance $ 2,957,936 $ 2,304,912 $ 1,041,232 $ 2,670,379 $ 1,178,792 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 3,020,545 $ 2,304,912 $ 1,085,966 $ 2,675,164 $ 1,233,557 The notes to the financial statements are an integral part of this statement. 127 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 MACI Community Development CD Misc. RD Revolving Loans Stonegarden Grant ASSETS Current assets Cash and investments $21,006 $ 233,810 $ 269,628 $542,802 $1,539 Taxes and assessments receivable, net - - - - - Penalty and interest receivable - - - - - Accounts receivable - - - - - Notes, loans, and contracts receivable - 1,644,594 - 223,726 - Due from other governments - - - - - Prepaid expenses - - - - - Due from Other - - - - - Total current assets 21,006 1,878,404 269,628 766,528 1,539 Noncurrent assets Restricted cash and investments - - - - Lease/SBITA Right of use asset, net - - - - - Total noncurrent assets - - - - - Total assets 21,006 1,878,404 269,638 766,528 1,539 LIABILITIES Current liabilities Accounts payable - 197 - - - Accrued payables - - - - - Accrued payroll - - - - - Due to other funds - - - - - Advances from other funds - - 243,468 - - Lease/SBITA Purchase - - - - - Total current liabilities - 197 243,468 - - Noncurrent liabilities Lease/SBITA Purchase - - - - - Total noncurrent liabilities - - - - - Total liabilities - 197 243,468 - - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - - - Ambulance Revenue - - - - - Total deferred inflows of resources - - - - - FUND BALANCES Nonspendable Prepaid expenses - - - - - Restricted for:- - - - - General government - - - - - Public safety - - - - 1,539 Public works 21,006 - - - - Culture & recreation - - - - - Housing & community development - 1,878,207 26,160 766,528 - Unassigned - - - - - Total Fund Balance $21,006 $ 1,878,207 $ 26,160 $766,528 $1,539 Total Liabilities, Deferred Inflow of Resources and Fund Balance $21,006 $ 1,878,404 $ 269,628 $766,528 $1,539 The notes to the financial statements are an integral part of this statement. 128 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 Drug Enforcement Grant Law Enforcement Grant Samaritan House Project National Opioid Settlement ASSETS Current assets Cash and investments $ 33,620 $ 21,051 $- $ 37,293 Taxes and assessments receivable, net --- - Penalty and interest receivable --- - Accounts receivable --- - Notes, loans, and contracts receivable --- - Due from other governments 13,856 14,614 - - Prepaid expenses --- - Due from Other --- - Total current assets 47,476 35,665 -37,293 Noncurrent assets Restricted cash and investments --- - Lease/SBITA Right of use asset, net --- - Total noncurrent assets --- - Total assets 47,476 35,665 -37,293 LIABILITIES Current liabilities Accounts payable - - Accrued payables -12,150 - -- - Accrued payroll 3,818 69 - - Due to other funds --- - Advances from other funds --- - Lease/SBITA Purchase --- - Total current liabilities 3,818 12,219 - - Noncurrent liabilities Lease/SBITA Purchase --- - Total noncurrent liabilities --- - Total liabilities 3,818 12,219 - - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue --- - Ambulance Revenue --- - Total deferred inflows of resources --- - FUND BALANCES Nonspendable Prepaid expenses --- - Restricted for:--- - General government --- - Public safety 43,658 23,446 - 37,293 Public works --- - Culture & recreation --- - Housing & community development --- - Unassigned --- - Total Fund Balance $ 43,658 $ 23,446 $- $ 37,293 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 47,476 $ 35,665 $- $ 37,293 The notes to the financial statements are an integral part of this statement. 129 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 EPA Brownfields Grant Brownfields Loan Revolving Fire Grants Hazmat Grants Airport MDOT Grant Total Nonmajor Governmental Funds ASSETS Current assets Cash and investments $1,115 $100,500 $6,368 $27,624 $- $ 11,646,604 Taxes and assessments receivable, net - - - - - 284,014 Penalty and interest receivable - - - - - - Accounts receivable - - - - - 448,236 Notes, loans, and contracts receivable - - - - - 2,305,023 Due from other governments - - - 5,000 - 1,159,497 Prepaid expenses - - - - - 40,804 Due from Other - - - - - 32,562 Total current assets 1,115 100,500 6,368 32,624 - 15,916,740 Noncurrent assets Restricted cash and investments - - - 2,436,112 Lease/SBITA Right of use asset, net - - - - - 21,684 Total noncurrent assets - - - - - 2,457,796 Total assets 1,115 100,500 6,368 32,624 - 18,374,536 LIABILITIES Current liabilities Accounts payable - - - - - 156,225 Accrued payables - - - - - 271 Accrued payroll - - - - - 184,222 Due to other funds - - - - - 48,634 Advances from other funds - - - - - 243,468 Lease/SBITA Purchase - - - - - 10,539 Total current liabilities - - - - - 643,359 Noncurrent liabilities Lease/SBITA Purchase - - - - - 11,145 Total noncurrent liabilities - - - - - 11,145 Total liabilities - - - - - 654,504 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - - - 284,014 Ambulance Revenue - - - - - 444,078 Total deferred inflows of resources - - - - - 728,092 FUND BALANCES Nonspendable Prepaid expenses - - - - - 40,804 Restricted for:- - - - - - General government - - - - - 18,456 Public safety - - 6,368 32,624 - 5,424,424 Public works - - - - - 3,732,617 Culture & recreation - - - - - 2,948,195 Housing & community development 1,115 100,500 - - - 4,827,444 Unassigned - - - - - - Total Fund Balance $1,115 $100,500 $6,368 $32,624 - $ 16,991,940 Total Liabilities, Deferred Inflow of Resources and Fund Balance $1,115 $100,500 $6,368 $32,624 - $ 18,374,536 The notes to the financial statements are an integral part of this statement. 130 City of Kalispell, Montana Combining Balance Sheet Nonmajor Debt Service Funds June 30, 2023 3188 3500 3600 3644 3645 Westside TIF Debt Service SID Revolving S & C's SID 344 SID 345 Total Nonmajor Debt Service Funds ASSETS Current assets Cash and investments $824,588 $82,167 $- $3,971 $13,629 $$924,355 Taxes and assessments receivable, net 54,685 - 40,655 1,110,933 92,316 1,298,589 Due from other governments 57,147 - 487 19,442 1,038 78,114 Total current assets 936,420 82,167 41,142 1,134,346 106,983 2,301,058 Noncurrent assets Restricted cash and investments 480,011 142,842 - - 11,172 634,025 Total noncurrent assets 480,011 142,842 - - 11,172 634,025 Total assets 1,416,431 225,009 41,142 1,134,346 118,155 2,935,083 0 LIABILITIES Current liabilities Due to other funds - - 150 - - 150 Total current liabilities - - 150 - - 150 Total liabilities - - 150 - - 150 0 DEFERRED INFLOWS OF RESOURCES - - - - - - Property tax/special assessment revenue 54,684 - 40,655 1,110,933 92,316 1,298,588 Total deferred inflows of resources 54,684 - 40,655 1,110,933 92,316 1,298,588 0 FUND BALANCES Restricted for:- - - - - - Debt service 1,361,747 225,009 337 23,413 25,839 1,636,345 Unassigned - - - - - - Total fund balances $1,361,747 $225,009 $337 $23,413 $25,839 $$1,636,345 Total Liabilities, Deferred Inflows of Resources and Fund Balance $1,416,431 $ 225,009 $ 41,142 $ 1,134,346 $ 118,155 $ $ 2,935,083 The notes to the financial statements are an integral part of this statement. 131 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2023 S & C Construction Total Capital Project Funds Total Nonmajor Governmental Funds ASSETS Current assets Cash and investments $- $- $ 12,570,959 Taxes and assessments receivable, net - - 1,582,603 Penalty and interest receivable - - - Accounts receivable - - 448,236 Notes, loans, and contracts receivable - - 2,305,023 Due from other governments - - 1,237,611 Prepaid expenses - - 40,804 Due from Other - - 32,562 Total current assets - - 18,217,798 Noncurrent assets Restricted cash and investments - - 3,070,137 Lease/SBITA Right of use asset, net - - 21,684 Total noncurrent assets - - 3,091,821 Total assets - - 21,309,619 LIABILITIES Current liabilities Accounts payable - - 156,225 Accrued payables - - 271 Accrued payroll - - 184,222 Due to other funds - - 48,784 Advances from other funds - - 243,468 Lease/SBITA Purchase - - 10,539 Total current liabilities - - 643,509 Noncurrent liabilities Lease/SBITA Purchase - - 11,145 Total noncurrent liabilities - - 11,145 Total liabilities - - 654,654 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - 1,582,602 Ambulance Revenue - - 444,078 Total deferred inflows of resources - - 2,026,680 FUND BALANCES Nonspendable Prepaid expenses - - 40,804 Restricted for:- - - General government - - 18,456 Public safety - - 5,424,424 Public works - - 3,732,617 Culture & recreation - - 2,948,195 Housing & community development - - 4,827,444 Debt service - - 1,636,345 Capital projects - - - Total Fund Balance $- $- $18,628,285 Total Liabilities, Deferred Inflow of Resources and Fund Balance $- $- $21,309,619 The notes to the financial statements are an integral part of this statement. 132 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 1 2 3 4 5 Downtown TIF Airport TIF Westside TIF Parks-in-Lieu Parks $224,545 $- $- $- $1,242,283 6,378 - - - - - - - 129,632 685,326 - - - - 85,024 8,750 - 25,539 6,340 30,321 REVENUES Taxes and assessments Intergovernmental Charges for services Miscellaneous Investment earnings Net increase (decrease) on investments (10,517) - (21,033) (7,011) (40,314) Total revenues 229,156 - 4,506 128,961 2,002,640 EXPENDITURES Current: General government - - - - - Public safety - - - - - Public works - 29,386 - - - Public health - -- - - Culture and recreation - -- - 1,903,182 Housing and community development 34,298 - 74,701 - - Conservation of natural resources - - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal - - - - 33,385 Debt service - interest and other charges - - - - 840 Capital outlay - - - - 245,976 0 Total expenditures 34,298 29,386 74,701 - 2,183,383 0 Excess (deficiency) of revenues over (under) expenditures 194,858 (29,386) (70,195) 128,961 (180,743) OTHER FINANCING SOURCES (USES) Transfers in - - 600,000 - 111,000 Transfers (out)- - - - - Proceeds from general long term debt - - - - 134,605 Total other financing sources (uses)- - 600,000 - 245,605 Net change in fund balance 194,858 (29,386) 529,805 128,961 64,862 Fund balances - beginning 252,197 214,340 705,556 126,516 1,468,755 Restatements - - - - - Fund balances - beginning restated 252,197 214,340 705,556 126,516 1,468,755 Fund balances - ending $447,055 $184,954 $1,235,361 $255,477 $1,533,617 The notes to the financial statements are an integral part of this statement. 133 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 6 7 8 9 10 Ambulance Old School Tech TIF Old School Industrial TIF Rail Park TEDD Health Levy $- $76,464 $6,163 $182,201 $1,135,294 167,558 3,483 - 17 28,340 463,286 - - - - 134 - - - - - 831 106 1,912 - REVENUES Taxes and assessments Intergovernmental Charges for services Miscellaneous Investment earnings Net Increase (decrease) on investments - - - (3,506) - Total revenues 630,978 80,778 6,269 180,624 1,163,634 EXPENDITURES Current: General government - - - - - Public safety 1,221,765 - - - - Public works - - - - - Public health - - - - - Culture and recreation - - - - - Housing and community development - 16,745 - 64,074 - Conservation of natural resources - - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal 36,947 - - - - Debt service - interest and other charges 2,156 - - - - Capital outlay 264,599 - - - - 0 Total expenditures 1,525,467 16,745 - 64,074 - 0 Excess (deficiency) of revenues over (under) expenditures (894,489) 64,033 6,269 116,550 1,163,634 OTHER FINANCING SOURCES (USES) Transfers in 890,000 - - - - Transfers (out)- (50,000) (6,000) - (1,201,000) Proceeds from general long term debt - - - - - Total other financing sources (uses)890,000 (50,000) (6,000) - (1,201,000) Net change in fund balance (4,489) 14,033 269 116,550 (37,366) Fund balances - beginning 42,250 24,440 5,182 27,090 55,822 Restatements - - - - - Fund balances - beginning restated 42,250 24,440 5,182 27,090 55,822 Fund balances - ending $37,761 $38,473 $5,451 $143,640 $18,456 The notes to the financial statements are an integral part of this statement. 134 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2023 Building Dept Public Safety Impact Fees Light Maintence Gas Tax BARSAA Urban Forestry REVENUES $- - 439,481 - 641,570 - - - - - 1,383,402 291,166 - 1,304,854 3,425 - - - -- - - - -- - - 85,971 - 31,737 74,443 51,219 24,431 43,274 27,848 Taxes and assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscelleanous Investment earnings Net increase (decrease) on investments (77,122) (57,842)(26,292)(45,572)(29,798) Total revenues 1,380,723 284,543 523,591 1,302,556 674,782 EXPENDITURES Current:- - - - - General government - - - - Public safety 1,111,771 15,000 - - Public works - - 356,942 374,388 - Public Health - - - - - Social and economic services - - - - Culture and recreation - - - 562,696 Housing and community development - - - - Conservation of natural resources - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal - - - - - Debt service - interest and other charges 1,365 - - - - Capital Outlay 123,004 Total expenditures 1,236,140 15,000 356,942 374,388 562,696 Excess (deficiency) of revenues over (under) expenditures 144,583 269,543 166,649 973,740 141,884 OTHER FINANCING SOURCES (USES) Transfers in - - - 84,347 - Transfers (out)- - - - - Proceeds from general long term debt - - - - - Total other financing sources (uses)- - - 84,347 - Capital Contributions Net change in fund balance 143,583 269,543 166,649 1,012,515 112,086 Fund balances - beginning 2,813,353 2,035,369 874,583 1,657,864 1,066,706 Restatements Fund balances - beginning restated $2,813,353 2,035,369 874,583 1,657,864 1,066,706 Fund balances - ending $ 2,957,936 2,304,912 1,041,232 2,670,379 1,178,792 The notes to the financial statements are an integral part of this statement. 135 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2023 MACI Community Development Loan Revolving CD Projects RD Revolving Loan (2) Stonegarden grant REVENUES $- - - - - - - - - - - - - - 3,041 - 53,294 - - - - - - - - - - - - - - 6,063 7,052 7,572 - Taxes and assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscelleanous Investment earnings Net Increase (decrease) on investments - (5,259)(7,011)- - Total revenues - 54,098 41 7,572 3,041 EXPENDITURES Current:- - - - - General government - - - - - Public safety - - - - 2,655 Public works - - - - - Public Health - - - - - Social and economic services - - - - - Culture and recreation - - - - - Housing and community development - 2,871 - 32,598 - Conservation of natural resources - - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal - - - - - Debt service - interest and other charges - - - - - Capital Outlay - Total expenditures - 2,871 - 32,598 2,655 Excess (deficiency) of revenues over (under) expenditures - 51,227 41 (25,026) 386 OTHER FINANCING SOURCES (USES) Transfers in - - 1,056,532 - - Transfers (out)- - - - - Proceeds from general long term debt - - - - - Total other financing sources (uses)- - 1,056,532 - - Capital Contributions Net change in fund balance - 51,227 1,056,573 (25,026) 386 Fund balances - beginning 21,006 1,826,980 (1,030,413) 791,554 1,153 Restatements Fund balances - beginning restated $21,006 1,826,980 (1,030,413) 791,554 1,153 Fund balances - ending $21,006 1,878,207 26,160 766,528 1,539 The notes to the financial statements are an integral part of this statement. 136 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 22 23 24 25 26 Drug Enforcement Grant Law Enforcement Grant Samaritan House Project National Opioid Settlement EPA Brownfields Grant REVENUES Taxes and assessments $- $- $- $- $- Intergovernmental 42,294 25,377 30,000 - 2,592 Charges for services - 12,008 - - - Miscellaneous - - - 37,293 - Investment earnings - - - - - Total revenues 42,294 37,385 30,000 37,293 2,592 EXPENDITURES Current: General government - - - - - Public safety 96,807 53,655 - - - Public works - - - - - Public health - - - - - Culture and recreation - - - - - Housing and community development - - 30,000 - 29,073 Conservation of natural resources - - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal - - - - - Debt service - interest and other charges - - - - - Capital outlay - - - - - Total expenditures 96,807 53,655 30,000 - 29,073 0 Excess (deficiency) of revenues over (under) expenditures (54,513) (16,270)- 37,293 (26,481) OTHER FINANCING SOURCES (USES) Transfers in 64,000 6,000 - - - Transfers (out)- - - - - Proceeds from general long term debt - - - - - Total other financing sources (uses)64,000 6,000 - - - Net change in fund balance 9,487 (10,270)- 37,293 (26,481) Fund balances - beginning 34,171 33,716 - - 27,596 Restatements - - - - Fund balances - beginning restated 34,171 33,716 - - 27,596 Fund balances - ending $43,658 $23,446 $- $37,293 $1,115 The notes to the financial statements are an integral part of this statement. - 137 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2023 Brownfields Loan Revolving Fire Grants Hazmat Total Nonmajor Special Revenues Funds REVENUES $- - - 3,948,001 - - - - - - 21,858 1,639,217 - - - 3,018,114 - - - - - 1,815 - 241,974 - - 1,018 316,719 Taxes and assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscelleanous Investment earnings Unrealized loss on investments - - - (331,277) Total revenues - 1,815 22,876 8,832,748 EXPENDITURES Current:- - - - General government - -- - Public safety - 1,816 34,127 2,965,667 Public works - - - 760,716 Public Health - - - - Social and economic services - - - - Culture and recreation - - - 2,746,079 Housing and community development - - - 267,615 Conservation of natural resources - - - 16,745 Internal services - - - - Miscellaneous - - - - Debt service - principal - - - - Debt service - interest and other charges - - - - Capital Outlay - Total expenditures - 1,816 34,127 6,756,822 Excess (deficiency) of revenues over (under) expenditures - (1) (11,251) 2,075,926 OTHER FINANCING SOURCES (USES) Transfers in - - -2,811,879 Transfers (out)- - - (1,257,000) Proceeds from general long term debt - - - 134,605 Total other financing sources (uses)- - -1,689,484 Capital Contributions Net change in fund balance - (1.00) (11,251) 3,765,410 Fund balances - beginning 100,500 6,369 43,875 13,226,530 Restatements Fund balances - beginning restated $100,500 6,369 43,875 13,226,530 Fund balances - ending $100,500 6,368 32,624 16,991,940 The notes to the financial statements are an integral part of this statement. 138 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2023 Westside TIF Debt Service SID Revolving S & C's SID 344 SID 345 Total Nonmajor Debt Service Funds REVENUES Taxes and assessments $1,217,019 - 9,160 199,626 18,982 1,444,787 Intergovemental 278,344 - - - - 278,344 Investment earnings - 5,858 - - - 5,858 Unrealized loss on investments - (5,258) - - - (5,258) Total revenues 1,495,363 600 9,160 199,626 18,982 1,723,731 EXPENDITURES Debt Service - principle 210,000 - 7,797 230,000 14,000 461,797 Debt Service - interest 157,725 - 1,475 47,320 3,375 209,895 Total expenditures 367,725 - 9,272 277,320 17,375 671,692 Excell (deficiency) of revenues over expenditures 1,127,638 600 (112) (77,694) 1,607 1,052,039 OTHER FINANCIING SOURCES (USES) Transfers In - 376.00 - 56,000 - 56,376 Transfers Out (600,000) - (376) - - (600,376) Total other financing sources and uses (600,000) 376 (376) 56,000 - (544,000) Net change in fund blance 527,638 976 (488) (21,694) 1,607 508,039 - - - - - - Fund balances - beginning 834,109 224,033 825 45,107 24,232 1,128,306 Restatements Fund balances - beginning restated $834,109 224,033 825 45,107 24,232 1,128,306 Fund balances - ending $1,361,747 225,009 337 23,413 25,839 1,636,345 The notes to the financial statements are an integral part of this statement. 139 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2023 S & C Construction Total Nonmajor Capital Project Funds Total Nonmajor Governmental Funds REVENUES Taxes and assessments $- - 5,392,788 Intergovemental - - 1,917,561 Charges for Services - - 3,018,114 Miscelleneous - - 241,974 Investment earnings - - 322,577 Unrealized loss on investments - - (336,535) Total revenues - - 10,556,479 EXPENDITURES General Government - - 1,816 Public Safety - - 2,535,780 Public Works - - 706,364 Parks and Recreation - - 2,439,525 Community Development - - 252,262 Debt Service - principle - - 560,163 Debt Service - interest - - 218,775 Capital Outlay 14,381 14,381 728,210 14,381 14,381 7,442,895Total expenditures Excess (deficiency) of revenues over expenditures (14,381) (14,381) 3,113,584 OTHER FINANCIING SOURCES (USES) Transfers In - - 2,868,255 Transfers Out - - (1,857,376) Proceeds from general long term debt 14,381 14,381 148,986 Total other financing sources and uses 14,381 14,381 1,159,865 Net change in fund blance - - 4,273,449 - - - Fund balances - beginning - - 14,354,836 Restatements Fund balances - beginning restated $- - 14,354,836 Fund balances - ending $- - 18,628,285 The notes to the financial statements are an integral part of this statement. 140 BUDGETARY COMPARISON SCHEDULE – NONMAJOR FUNDS 141 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 2180 2185 Downtown TIF Airport TIF FALSE FALSE VARIANCE WITH VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES 216,378 216,378 224,545 8,167 - - - - - - 6,378 6,378 - - - - 50 50 8,750 8,700 - - - - - - (10,517) (10,517) - - - - Taxes and Assessments Intergovernmental Investment and Royalty Earnings Unrealized loss on investments Total revenues 216,428 216,428 229,156 12,728 - - - - EXPENDTIURES Current: Public Works - - - - 214,339 214,339 29,386 184,953 Personal services - - - - - - - - Operations and maintenance - - - - 214,339 214,339 29,386 184,953 Housing and Community Development 441,698 441,698 34,298 407,400 - - - - Personal services 53,698 53,698 32,678 21,020 - - - - Operations and maintenance 388,000 388,000 1,620 386,380 - - - - Total expenditures 441,698 441,698 34,298 407,400 214,339 214,339 29,386 184,953 Excess (deficiency) of revenues over (under) expenditures (225,270) (225,270)194,858 420,128 (214,339) (214,339) (29,386) 184,953 Net change in fund balance (225,270) (225,270)194,858 420,128 (214,339) (214,339) (29,386) 184,953 Fund balances - beginning 252,197 214,340 Fund balances - ending 447,055 184,954 2180 2185 Downtown TIF Airport TIF 142 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 2180 2185 Downtown TIF Airport TIF 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) -$ -$ -$ -$ -$ -$ 129,632$ 129,632$ 35,776$ 35,776$ 25,539$ (10,237)$ 200$ 200$ 6,340$ 6,140$ -$ -$ (21,033)$ (21,033)$ -$ -$ (7,011)$ (7,011)$ 35,776$ 35,776$ 4,506$ (31,270)$ 200$ 200$ 128,961$ 128,761$ 375,541$ 375,541$ 74,701$ 300,840$ -$ -$ -$ -$ 72,415$ 72,415$ 50,990$ 21,425$ -$ -$ -$ -$ 303,126$ 303,126$ 23,711$ 279,415$ -$ -$ -$ -$ -$ -$ -$ -$ 125,704$ 125,704$ -$ 125,704$ 375,541$ 375,541$ 74,701$ 300,840$ 125,704$ 125,704$ -$ 125,704$ (339,765)$ (339,765)$ (70,195)$ 269,570$ (125,504)$ (125,504)$ 128,961$ 254,465$ REVENUES Charges for Services Investment and Royalty Earnings Unrealized loss on investments Total revenues 0 EXPENDTIURES Current: Housing and Community Development Personal services Operations and maintenance Capital outlay Total expenditures 0 Excess (deficiency) of revenues over (under) expenditures 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers in 600,000$ 600,000$ 600,000$ -$ -$ -$ -$ -$ Total other financing sources (uses)600,000$ 600,000$ 600,000$ -$ -$ -$ -$ -$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance 260,235$ 260,235$ 529,805$ 269,570$ (125,504)$ (125,504)$ 128,961$ 254,465$ Fund balances - beginning 705,556$ 126,516$ Fund balances - ending 1,235,361$ 255,477$ 2188 2210 Westside TIF Parks-in-Lieu 143 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 2180 2185 Downtown TIF Airport TIF 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES 1,241,175.00$ 1,241,175.00$ 1,242,283.00$ 1,108.00$ -$ -$ -$ -$ 86,000.00 86,000.00 - (86,000.00) - - 167,558.00 167,558.00 694,477.00 694,477.00 685,326.00 (9,151.00) 740,000.00 740,000.00 463,286.00 (276,714.00) 19,000.00 19,000.00 85,024.00 66,024.00 - - 134.00 134.00 4,800.00 4,800.00 30,321.00 25,521.00 - - - - - - (40,314.00) (40,314.00) - - - - Taxes and Assessments Intergovernmental Charges for Services Miscellaneous Investment and Royalty Earnings Unrealized loss on investments Total revenues 2,045,452.00 2,045,452.00 2,002,640.00 (42,812.00) 740,000.00 740,000.00 630,978.00 (109,022.00) 0 EXPENDTIURES Current: Public Safety - - - - 1,643,100.00 1,643,100.00 1,525,467.00 117,633.00 Personal services - - - - 981,149.00 981,149.00 977,161.00 3,988.00 Operations and maintenance - - - - 252,632.00 252,632.00 244,604.00 8,028.00 Culture and Recreation 2,693,056.00 2,693,056.00 2,183,383.00 509,673.00 - - - - Personal services 1,513,062.00 1,513,062.00 1,370,295.00 142,767.00 - - - - Operations and maintenance 783,080.00 783,080.00 532,887.00 250,193.00 - - - - Debt Service 52,914.00 52,914.00 34,225.00 18,689.00 39,319.00 39,319.00 39,103.00 216.00 Debt service - principal 50,585.00 50,585.00 33,385.00 17,200.00 36,947.00 36,947.00 36,947.00 - Debt service - interest and other charges 2,329.00 2,329.00 840.00 1,489.00 2,372.00 2,372.00 2,156.00 216.00 Capital outlay 344,000.00 344,000.00 245,976.00 98,024.00 370,000.00 370,000.00 264,599.00 105,401.00 Total expenditures 2,693,056.00 2,693,056.00 2,183,383.00 509,673.00 1,643,100.00 1,643,100.00 1,525,467.00 117,633.00 0 Excess (deficiency) of revenues over (under) expenditures (647,604.00) (647,604.00) (180,743.00) 466,861.00 (903,100.00) (903,100.00) (894,489.00) 8,611.00 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in 111,000.00 111,000.00 111,000.00 - 890,000.00 890,000.00 890,000.00 - Proceeds from general long term debt 172,000.00 172,000.00 134,605.00 (37,395.00) - - - - Total other financing sources (uses)283,000.00 283,000.00 245,605.00 (37,395.00) 890,000.00 890,000.00 890,000.00 - 0 - - - - - - Net change in fund balance (364,604.00)$ (364,604.00)$ 64,862.00 429,466.00$ (13,100.00)$ (13,100.00)$ (4,489.00) 8,611.00$ Fund balances - beginning 1,468,755.00 42,250.00 Fund balances - ending 1,533,617.00$ 37,761.00$ 2215 2230 Parks Ambulance 144 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 75,000$ 75,000$ 76,464$ 1,464$ 5,800$ 5,800$ 6,163$ 363$ Intergovernmental 3,056$ 3,056$ 3,483$ 427$ - - - - Investment and Royalty Earnings 75$ 75$ 831$ 756$ 30 30 106 76 Total revenues 78,131$ 78,131$ 80,778$ 2,647$ 5,830 5,830 6,269 439 0 EXPENDTIURES Current: Housing and Community Development 20,000$ 20,000$ 16,745$ 3,255$ - - - - Operations and maintenance 20,000$ 20,000$ 16,745$ 3,255$ - - - - Total expenditures 20,000$ 20,000$ 16,745$ 3,255$ - - - - 0 Excess (deficiency) of revenues over (under) expenditures 58,131$ 58,131$ 64,033$ 5,902$ 5,830 5,830 6,269 439 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ - - - Transfers (out)(50,000)$ (50,000)$ (50,000)$ -$ (6,000) (6,000) (6,000) - Total other financing sources (uses)(50,000)$ (50,000)$ (50,000)$ -$ (6,000) (6,000) (6,000) - 0 -$ -$ -$ - - - Net change in fund balance 8,131$ 8,131$ 14,033$ 5,902$ (170) (170) 269 439 Fund balances - beginning 24,440$ 5,182 Fund balances - ending 38,473$ 5,451 2310 2311 Old School Tech TIF Old School Industrial TIF 145 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 2180 2185 Downtown TIF Airport TIF 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) 190,000$ 190,000$ 182,201$ (7,799)$ 1,142,393$ 1,142,393$ 1,135,294$ (7,099)$ -$ -$ 17$ 17$ 27,643$ 27,643$ 28,340$ 697$ 200$ 200$ 1,912$ 1,712$ -$ -$ -$ -$ -$ -$ (3,506)$ (3,506)$ -$ -$ -$ -$ 190,200$ 190,200$ 180,624$ (9,576)$ 1,170,036$ 1,170,036$ 1,163,634$ (6,402)$ REVENUES Taxes and Assessments Intergovernmental Investment and Royalty Earnings Unrealized loss on investments Total revenues 0 EXPENDTIURES Current: Housing and Community Development 201,243$ 201,243$ 64,074$ 137,169$ -$ -$ -$ -$ Personal services 23,261$ 23,261$ 2,664$ 20,597$ -$ -$ -$ -$ Operations and maintenance 177,982$ 177,982$ 61,410$ 116,572$ -$ -$ -$ -$ Total expenditures 201,243$ 201,243$ 64,074$ 137,169$ -$ -$ -$ -$ 0 Excess (deficiency) of revenues over (under) expenditures (11,043)$ (11,043)$ 116,550$ 127,593$ 1,170,036$ 1,170,036$ 1,163,634$ (6,402)$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers (out)-$ -$ -$ -$ (1,211,000)$ (1,211,000)$ (1,201,000)$ 10,000$ Total other financing sources (uses)-$ -$ -$ -$ (1,211,000)$ (1,211,000)$ (1,201,000)$ 10,000$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance (11,043)$ (11,043)$ 116,550$ 127,593$ (40,964)$ (40,964)$ (37,366)$ 3,598$ Fund balances - beginning 27,090$ 55,822$ Fund balances - ending 143,640$ 18,456$ 2312 2372 Rail Park TEDD Health Levy 146 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 2180 2185 Downtown TIF Airport TIF 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES 1,355,000 1,355,000 1,383,402 28,402 270,000 270,000 291,166 21,166 11,500 11,500 74,443 62,943 8,500 8,500 51,219 42,719 - - (77,122) (77,122) - - (57,842) (57,842) Charges for Services Investment and Royalty Earnings Unrealized loss on investments Total revenues 1,366,500 1,366,500 1,380,723 14,223 278,500 278,500 284,543 6,043 0 EXPENDTIURES Current: Public Safety 1,389,284 1,389,284 1,236,140 153,144 1,825,000 1,825,000 15,000 1,810,000 Personal services 868,015 868,015 775,129 92,886 - - - - Operations and maintenance 393,769 393,769 336,642 57,127 15,000 15,000 15,000 - Debt Service - - 1,365 (1,365) 35,000 35,000 - 35,000 Debt service - principal - - - - 28,500 28,500 - 28,500 Debt service - interest and other charges - - 1,365 (1,365) 6,500 6,500 - 6,500 Capital outlay 127,500 127,500 123,004 4,496 1,775,000 1,775,000 - 1,775,000 Total expenditures 1,389,284 1,389,284 1,236,140 153,144 1,825,000 1,825,000 15,000 1,810,000 0 Excess (deficiency) of revenues over (under) expenditures (22,784) (22,784) 144,583 167,367 (1,546,500) (1,546,500) 269,543 1,816,043 0 Net change in fund balance (22,784) (22,784) 144,583 167,367 (1,546,500) (1,546,500) 269,543 1,816,043 Fund balances - beginning 2,813,353 2,035,369 Fund balances - ending 2,957,936 2,304,912 2394 2399 Building Dept Public Safety Impact Fees 147 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 FALSE FALSE 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 437,298$ 437,298$ 439,481$ 2,183$ -$ -$ -$ -$ Licenses and permits -$ -$ -$ -$ - - - - Intergovernmental -$ -$ -$ -$ 1,002,342 1,002,342 1,304,854 302,512 Charges for Services -$ -$ -$ -$ -- - - Fines and Forfeitures -$ -$ -$ -$ -- - - Miscellaneous -$ -$ 85,971$ 85,971$ - - - - Investment and Royalty Earnings 3,000$ 3,000$ 24,431$ 21,431$ 4,500 4,500 43,274 38,774 Unrealized loss on investments -$ -$ (26,292)$ (26,292)$ - - (45,572) (45,572) Total revenues 440,298$ 440,298$ 523,591$ 83,293$ 1,006,842 1,006,842 1,302,556 295,714 0 EXPENDTIURES Current: Public Works -$ -$ -$ -$ - - - - Personal services 114,168$ 114,168$ 114,144$ 24$ - - - - Operations and maintenance 296,006$ 296,006$ 242,798$ 53,208$ 1,423,039 1,423,039 320,036 1,103,003 Capital outlay 70,000$ 70,000$ 70,000$ 141,963 141,963 54,352 87,611 Total expenditures 480,174$ 480,174$ 356,942$ 123,232$ 1,565,002 1,565,002 374,388 1,190,614 0 Excess (deficiency) of revenues over (under) expenditures (39,876)$ (39,876)$ 166,649$ 206,525$ (558,160) (558,160) 928,168 (894,900) 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ - - - Transfers in -$ -$ -$ -$ 70,000 70,000 84,347 14,347 Total other financing sources (uses)-$ -$ -$ -$ 70,000 70,000 84,347 14,347 0 -$ -$ -$ - - - Net change in fund balance (39,876)$ (39,876)$ 166,649$ 206,525$ (488,160) (488,160) 1,012,515 (880,553) Fund balances - beginning 874,583$ 1,657,864 Restatements -$ - Fund balances - beginning restated 874,583$ 1,657,864 Fund balances - ending 1,041,232$ 2,670,379 2400 2420 Light Maintenance Gas Tax - BARSAA 148 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 FALSE FALSE 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 638,111$ 638,111$ 641,570$ 3,459$ -$ -$ -$ -$ Licenses and permits -$ -$ -$ -$ - - - - Intergovernmental 750$ 750$ 3,425$ 2,675$ 253,229 253,229 - (253,229) Charges for Services -$ -$ -$ -$ - - - - Fines and Forfeitures -$ -$ -$ -$ - - - - Miscellaneous -$ -$ 31,737$ 31,737$ - - - - Investment and Royalty Earnings 5,000$ 5,000$ 27,848$ 22,848$ - - - - Unrealized loss on investments -$ -$ (29,798)$ (29,798)$ - - - - Total revenues 643,861$ 643,861$ 674,782$ 30,921$ 253,229 253,229 - (253,229) 0 EXPENDTIURES Current: Culture and Recreation -$ -$ -$ -$ - - - - Personal services 341,690$ 341,690$ 307,734$ 33,956$ - - - - Operations and maintenance 418,704$ 418,704$ 228,609$ 190,095$ - - - - Debt Service -$ Debt service - principal 8,000$ 8,000$ -$ 8,000$ Debt service - interest and other charges 620$ 620$ 455$ 165$ Capital outlay 80,000$ 80,000$ 25,898$ 54,102$ 292,481 292,481 - 292,481 Total expenditures 849,014$ 849,014$ 562,696$ 286,318$ 292,481 292,481 - 292,481 0 Excess (deficiency) of revenues over (under) expenditures (205,153)$ (205,153)$ 112,086$ 317,239$ (39,252) (39,252) - 39,252 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ - - - Transfers in -$ -$ -$ -$ 19,500 19,500 - (19,500) Proceeds from general long term debt 80,000$ 80,000$ -$ (80,000)$ - - - - Total other financing sources (uses)80,000$ 80,000$ -$ -$ 19,500 19,500 - (19,500) 0 -$ -$ -$ - - - Net change in fund balance (125,153)$ (125,153)$ 112,086$ 237,239$ (19,752) (19,752) - 19,752 Fund balances - beginning 1,066,706$ 21,006 Restatements -$ - Fund balances - beginning restated 1,066,706$ 21,006 Fund balances - ending 1,178,792$ 21,006 2600 2825 Urban Forestry MACI 149 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 FALSE FALSE 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments -$ -$ -$ - -$ -$ -$ -$ Licenses and permits -$ -$ -$ - - - - - Intergovernmental -$ -$ -$ - - - - - Charges for Services 51,295$ 51,295$ 53,294$ 1,999 - - - - Fines and Forfeitures -$ -$ -$ - - - - - Miscellaneous -$ -$ -$ - - - - - Investment and Royalty Earnings 2,000$ 2,000$ 6,063$ 4,063 4,000 4,000 7,052 3,052 Unrealized loss on investments -$ -$ (5,259)$ (5,259) - - (7,011) (7,011) Total revenues 53,295$ 53,295$ 54,098$ 803$ 4,000 4,000 41 (3,959) 0 EXPENDTIURES Current: Housing and Community Development -$ -$ -$ -$ - - - - Personal services -$ -$ -$ -$ - - - - Operations and maintenance 107,905$ 107,905$ 2,871$ 105,034$ - - - - Capital outlay -$ -$ -$ -$ - - - - Total expenditures 107,905$ 107,905$ 2,871$ 105,034$ - - - - 0 Excess (deficiency) of revenues over (under) expenditures (54,610)$ (54,610)$ 51,227$ 105,837$ 4,000 4,000 41 (3,959) 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ - - - Transfers in -$ -$ -$ -$ - 1,056,532 1,056,532 - Proceeds from general long term debt -$ -$ Total other financing sources (uses)-$ -$ -$ -$ - 1,056,532 1,056,532 - 0 -$ -$ -$ - - - Net change in fund balance (54,610)$ (54,610)$ 51,227$ 105,837$ 4,000 1,060,532 1,056,573 (3,959) Fund balances - beginning 1,826,980$ (1,030,413) Restatements -$ - Fund balances - beginning restated 1,826,980$ (1,030,413) Fund balances - ending 1,878,207$ 26,160 2800 2886 Community Development Loan Revolving CD Projects 150 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 FALSE 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Investment and Royalty Earnings 39,120$ 39,120$ 7,572$ (31,548) Total revenues 39,120$ 39,120$ 7,572$ (31,548)$ 0 EXPENDTIURES Current: Housing and Community Development -$ -$ -$ -$ Personal services -$ -$ -$ -$ Operations and maintenance 459,500$ 459,500$ 500$ 459,000$ Debt service - principal 28,034$ 28,034$ 28,034$ -$ Debt service - interest and other charges 4,065$ 4,065$ 4,064$ 1$ Capital outlay -$ -$ -$ -$ Total expenditures 491,599$ 491,599$ 32,598$ 459,001$ 0 Excess (deficiency) of revenues over (under) expenditures (452,479)$ (452,479)$ (25,026)$ 427,453$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ Transfers in -$ -$ -$ -$ Proceeds from general long term debt -$ -$ Total other financing sources (uses)-$ -$ -$ -$ 0 -$ -$ -$ Net change in fund balance (452,479)$ (452,479)$ (25,026)$ 427,453$ Fund balances - beginning 791,554$ Restatements -$ Fund balances - beginning restated 791,554$ Fund balances - ending 766,528$ 2887 RD Revolving Loan 151 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 40,000 40,000 3,041 (36,959) 40,371 40,371 42,294 1,923 Total revenues 40,000 40,000 3,041 (36,959) 40,371 40,371 42,294 1,923 0 EXPENDTIURES Current: Public Safety 40,000 40,000 2,655 37,345 106,784 106,784 96,807 9,977 Personal services 10,000 10,000 2,655 7,345 106,784 106,784 96,807 9,977 Operations and maintenance 30,000 30,000 - 30,000 - - - - Total expenditures 40,000 40,000 2,655 37,345 106,784 106,784 96,807 9,977 0 Excess (deficiency) of revenues over (under) expenditures - - 386 386 (66,413) (66,413) (54,513) 11,900 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in - - - - 64,000 64,000 64,000 - Total other financing sources (uses)- - - - 64,000 64,000 64,000 - 0 - - - - - - Net change in fund balance - - 386 386 (2,413) (2,413) 9,487 11,900 Fund balances - beginning 1,153 34,171 Fund balances - ending 1,539 43,658 0 2915 2916 Stonegarden Grant Drug Enforcement Grant 152 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 51,500 51,500 25,377 (26,123) 30,000 30,000 30,000 - Charges for Services 17,000 17,000 12,008 (4,992) - - - - Miscellaneous 9,000 9,000 - (9,000) - - - - Total revenues 77,500 77,500 37,385 (40,115) 30,000 30,000 30,000 - 0 EXPENDTIURES Current: Public Safety 93,446 93,446 52,586 40,860 - - - - Personal services 55,000 55,000 25,051 29,949 - - - - Operations and maintenance 38,446 38,446 28,604 10,911 - - - - Housing and Community Development - - - - 30,000 30,000 30,000 - Operations and maintenance - - - - 30,000 30,000 30,000 - Total expenditures 93,446 93,446 53,655 40,860 30,000 30,000 30,000 - 0 Excess (deficiency) of revenues over (under) expenditures (15,946) (15,946) (16,270)745 - - - - 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in 6,000 6,000 6,000 - - - - - Total other financing sources (uses)6,000 6,000 6,000 - - - - - 0 - - - - - - Net change in fund balance (9,946) (9,946) (10,270)745 - - - - Fund balances - beginning 33,716 - Restatements - Fund balances - beginning restated 33,716 - Fund balances - ending 23,446 - 2919 2945 Law Enforcement Grant Samaritan House Project 153 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental - - - - 2,593 2,593 2,592 (1) Miscellaneous - - 37,293 37,293 - - - - Total revenues - - 37,293 37,293 2,593 2,593 2,592 (1) 0 EXPENDTIURES Current: Housing and Community Development - - - - 30,189 30,189 29,073 1,116 Operations and maintenance - - - - 30,189 30,189 29,073 1,116 Total expenditures - - - - 30,189 30,189 29,073 1,116 0 Excess (deficiency) of revenues over (under) expenditures - - 37,293 37,293 (27,596) (27,596) (26,481) 1,115 0 Net change in fund balance - - 37,293 37,293 (27,596) (27,596) (26,481) 1,115 Fund balances - beginning - 27,596 Fund balances - ending 37,293 1,115 2951 2953 National Opioid Settlement EPA Brownfields Grant 154 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 485,995 485,995 - (485,995) 53,000 53,000 - (53,000) Miscellaneous - - - - - - 1,815 1,815 Total revenues 485,995 485,995 - (485,995) 53,000 53,000 1,815 (51,185) 0 EXPENDTIURES Current: Public Safety - - - - 63,300.00 63,300.00 1,816.00 61,484.00 Operations and maintenance - - - - 5,000 5,000 1,816 3,184 Housing and Community Development 586,495.00 586,495.00 - 586,495.00 - - - - Operations and maintenance 586,495 586,495 - 586,495 - - - - Capital outlay - - - - 58,300 58,300 - 58,300 Total expenditures 586,495 586,495 - 586,495 63,300 63,300 1,816 61,484 0 Excess (deficiency) of revenues over (under) expenditures (100,500) (100,500) - 100,500 (10,300) (10,300) (1) 10,299 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in - - - - 5,300 5,300 - (5,300) Total other financing sources (uses)- - - - 5,300 5,300 - (5,300) 0 - - - - - - Net change in fund balance (100,500)$ (100,500)$ -$ 100,500$ (5,000) (5,000) (1) 4,999 Fund balances - beginning 100,500$ 6,369 Fund balances - ending 100,500$ 6,368 2955 2956 Brownfields Loan Revolving Fire Grants 155 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 0 0 FALSE FALSE 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 37,381$ 37,381$ 21,858$ (15,523) 394,187 397,187 - (397,187) Investment and Royalty Earnings 100$ 100$ 1,018$ 918 - - - - Total revenues 37,481$ 37,481$ 22,876$ (15,523)$ 394,187 397,187 - (397,187) 0 EXPENDTIURES Current: Public Safety -$ -$ -$ -$ - - - - Personal services 5,000$ 5,000$ -$ 5,000$ - - - - Operations and maintenance 50,381$ 50,381$ 34,127$ 16,254$ - - - - Capital outlay -$ -$ -$ -$ 394,187 394,187 - 394,187 Total expenditures 55,381$ 55,381$ 34,127$ 21,254$ - - - - 0 Excess (deficiency) of revenues over (under) expenditures (17,900)$ (17,900)$ (11,251)$ 5,731$ 394,187 397,187 - (397,187) 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ - - - Transfers in -$ -$ -$ -$ - - - - Proceeds from general long term debt -$ -$ Total other financing sources (uses)-$ -$ -$ -$ - - - - 0 -$ -$ -$ - - - Net change in fund balance (17,900)$ (17,900)$ (11,251)$ 5,731$ 394,187 397,187 - (397,187) Fund balances - beginning 43,875$ - Restatements -$ - Fund balances - beginning restated 43,875$ - Fund balances - ending 32,624$ - 2957 2974 Hazmat Grant Airport Grant 156 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2023 0 Total Non-Major Special Revenue Funds 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES 3,894,777$ 3,894,777$ 3,948,001$ 53,224$ -$ -$ -$ 2,508,047$ 2,508,047$ 1,639,217$ (868,830)$ 3,127,772$ 3,127,772$ 3,018,114$ (109,658)$ -$ 28,000$ 28,000$ 241,974$ 213,974$ 118,851$ 118,851$ 316,719$ 197,868$ Taxes and Assessments Licenses and permits Intergovernmental Charges for Services Fines and Forfeitures Miscellaneous Investment and Royalty Earnings Unrealized loss on investments $ (331,277) Total revenues 9,677,447 9,677,447 $ 8,832,748 $ ( 844,699) 0 EXPENDTIURES Current: General Government - - - - Public Safety 2,811,176 2,811,176 2,536,527 274,649 Public Works 2,047,552 2,047,552 706,364 1,341,188 Culture and Recreation 3,056,536 3,056,536 2,440,595 617,011 Housing and Community Development 2,252,571 2,252,571 252,262 2,000,309 Debt service - principal 152,066 152,066 98,366 53,700 Debt service - interest and other charges 15,886 15,886 8,880 7,006 Capital outlay 3,779,135 3,779,135 713,829 3,065,306 Total expenditures 14,114,922 14,114,922 6,756,822 7,359,169 0 Excess (deficiency) of revenues over (under) expenditures (4,437,475) (4,437,475) 2,075,926 (8,204,290) 0 OTHER FINANCING SOURCES (USES) Transfers in 1,765,800 1,765,800 2,811,879 1,046,079 Transfers (out)(1,267,000) (1,267,000) (1,257,000) 10,000 Proceeds from general long term debt 252,000 252,000 134,605 (117,395) Total other financing sources (uses)750,800 750,800 1,689,484 938,684 0 #VALUE!#VALUE!#VALUE! Net change in fund balance 3,765,410 Fund balances - beginning 13,226,530 Restatements Fund balances - beginning restated 13,226,530 Fund balances - ending 16,991,940 (331,277) 157 City of Kalispell Budgetary Comparison Schedule Nonmajor Debt Service Funds For Fiscal Year Ended June 30, 2023 VARIANCE WITH VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES 871,800 871,800 1,217,019 345,219 -$ -$ -$ -$ 243,128 243,128 278,344 35,216 -$ -$ -$ -$ - - - - 1,000$ 1,000$ 5,858$ 4,858$ Taxes and Assessments Intergovernmental Investment and Royalty Earnings Unrealized loss on investments - - - - -$ -$ (5,258)$ (5,258)$ Total revenues 1,114,928 1,114,928 1,495,363 380,435 1,000$ 1,000$ 600$ (400)$ EXPENDITURES Current: Debt Service 367,725.00 367,725.00 367,725.00 - - - - - Debt service - principal 210,000 210,000 210,000 - - - - - Debt service - interest and other charges 157,725 157,725 157,725 - - - - - Total expenditures 367,725 367,725 367,725 - - - - - Excess (deficiency) of revenues over (under) expenditures 747,203 747,203 1,127,638 380,435 1,000 1,000 600 (400) OTHER FINANCING SOURCES (USES)- - - - - - Transfers in - - - - - 376 376 - Transfers (out)(600,000) (600,000) (600,000) - (20,000) 20,000 - (20,000) Total other financing sources (uses)(600,000) (600,000) (600,000) - (20,000) 20,376 376 (20,000) 0 - - - - - - Net change in fund balance 147,203 147,203 527,638 380,435 (19,000) 21,376 976 (20,400) Fund balances - beginning 834,109 224,033 Fund balances - ending 1,361,747 225,009 3188 3500 Westside TIF Debt Service SID Revolving 158 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Debt Service Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 9,495$ 9,495$ 9,160$ (335)$ 220,000$ 220,000$ 199,626$ (20,374)$ Total revenues 9,495$ 9,495$ 9,160$ (335)$ 220,000$ 220,000$ 199,626$ (20,374)$ 0 EXPENDITURES Current: Debt Service 9,406.00 9,406.00 9,272.00 134.00 277,350$ 277,320$ 277,320$ -$ Debt service - principal 7,798 7,798 7,797 1 230,000$ 230,000$ 230,000$ -$ Debt service - interest and other charges 1,608 1,608 1,475 133 47,350$ 47,320$ 47,320$ -$ Total expenditures 9,406 9,406 9,272 134 277,350$ 277,320$ 277,320$ -$ 0 Excess (deficiency) of revenues over (under) expenditures 89 89 (112) (201) (57,350) (57,320) (77,694) (20,374) 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in - - - - 56,000 56,000 56,000 - Transfers (out)- (376) (376) - - - - - Total other financing sources (uses)- (376) (376) - 56,000 56,000 56,000 - 0 - - - - - - Net change in fund balance 89 (287) (488) (201) (1,350) (1,320) (21,694) (20,374) Fund balances - beginning 825 45,107 Fund balances - ending 337 23,413 3600 3644 S & C's SID 344 159 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Debt Service Funds For Fiscal Year Ended June 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 20,000$ 20,000$ 18,982$ (1,018)$ 15,150$ 15,150$ -$ (15,150)$ Total revenues 20,000$ 20,000$ 18,982$ (1,018)$ 15,250$ 15,250$ -$ (15,250)$ 0 EXPENDITURES Current: Debt Service 17,775$ 17,775$ 17,375$ 400$ 23,730$ 23,730$ -$ 23,730$ Debt service - principal 14,000$ 14,000$ 14,000$ -$ -$ -$ -$ -$ Debt service - interest and other charges 3,775$ 3,775$ 3,375$ 400$ 23,730$ 23,730$ -$ 23,730$ Total expenditures 17,775$ 17,775$ 17,375$ 400$ 23,730$ 23,730$ -$ 23,730$ 0 Excess (deficiency) of revenues over (under) expenditures 2,225$ 2,225$ 1,607$ (618)$ (8,480)$ (8,480)$ -$ 8,480$ 0 Net change in fund balance 2,225$ 2,225$ 1,607$ (618)$ (8,480)$ (8,480)$ -$ 8,480$ Fund balances - beginning 24,232$ - Fund balances - ending 25,839$ -$ 3645 3012 SID 345 GO Bond 160 ctual (Budgetary Basis) City of Kalispell Budgetary Comparison Schedule Nonmajor Debt Service Funds For Fiscal Year Ended June 30, 2023 0 Total Non-Major Debt Service Funds 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES 1,136,445 1,136,445 1,444,787 308,342 243,128 243,128 278,344 35,216 1,100 1,100 5,858 4,758 Taxes and Assessments Intergovernmental Investment and Royalty Earnings Unrealized loss on investments - - (5,258) (5,258) Total revenues 1,380,673 1,380,673 1,723,731 343,058 0 - - - EXPENDITURES - - - Current: Debt Service 695,985 695,955 671,692 24,263 Debt service - principal 461,797 461,797 461,797 - Debt service - interest and other charges 234,188 234,158 209,895 24,263 Total expenditures 695,985 695,955 671,692 24,263 0 Excess (deficiency) of revenues over (under) expenditures 684,688 684,718 1,052,039 367,321 0 OTHER FINANCING SOURCES (USES)- - - Transfers in 56,000 56,376 56,376 - Transfers (out)(620,000) (580,376) (600,376) (20,000) Total other financing sources (uses)(564,000) (524,000) (544,000) (20,000) 0 - - - Total other financing sources (uses), special and extraordinary items (564,000) (524,000) (544,000) (20,000) 0 Net change in fund balance 120,688 160,718 508,039 347,321 Fund balances - beginning 1,128,306 Fund balances - ending 1,636,345 161 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Capital Project Funds For Fiscal Year Ended June 30, 2023 t and Actual (Budgetary Basis) VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) EXPENDITURES Current: Capital outlay 25,000 14,381 14,381 - Total expenditures 25,000 14,381 14,381 - Excess (deficiency) of revenues over (under) expenditures (25,000) (14,381) (14,381) - OTHER FINANCING SOURCES (USES)- - - Proceeds from general long term debt 25,000 25,000 14,381 (10,619) Total other financing sources (uses)25,000 25,000 14,381 (10,619) 0 - - - Net change in fund balance - 10,619 - (10,619) Fund balances - beginning - Fund balances - ending -$ 4290 S & C Construction 162 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Capital Project Funds For Fiscal Year EndedJune 30, 2023 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) EXPENDITURES Current: Capital outlay 760,000 760,000 - 760,000 430,000 430,000 - 430,000 Total expenditures 760,000 760,000 - 760,000 430,000 430,000 - 430,000 0 Excess (deficiency) of revenues over (under) expenditures (760,000) (760,000) - 760,000 (430,000) (430,000) - 430,000 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in 760,000 760,000 - (760,000) 430,000 430,000 - (430,000) Total other financing sources (uses)760,000 760,000 - (760,000) 430,000 430,000 - (430,000) 0 - - - - - - Net change in fund balance -$ -$ - -$ -$ -$ - -$ Fund balances - beginning - - Fund balances - ending -$ -$ Fire Pumper Impound Storage Facility 4150 4170 163 City of Kalispell, Montana Budgetary Comparison Schedule Nonmajor Capital Project Funds For Fiscal Year Ended June 30, 2023 et and Actual (Budgetary Basis) 0 Total Non-Major Capital Project Funds 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) EXPENDITURES - - - Current: Capital outlay 1,215,000 1,204,381 14,381 1,190,000 Total expenditures 1,215,000 1,204,381 14,381 1,190,000 0 Excess (deficiency) of revenues over (under) expenditures (1,215,000) (1,204,381) (14,381) 1,190,000 0 OTHER FINANCING SOURCES (USES)- - - Transfers in 1,190,000 1,190,000 - (1,190,000) Proceeds from general long term debt 25,000 25,000 14,381 (10,619) Total other financing sources (uses)1,215,000 1,215,000 14,381 (1,200,619) 0 - - - Net change in fund balance - 10,619 - (10,619) Fund balances - beginning - Fund balances - ending -$ 164 COMBINING AND INDIVIDUAL FUND STATEMENTS NONMAJOR PROPRIETARY FUNDS SOLID WASTE – Accounts for assessments received and expenses incurred in the operation of the City solid waste department. 165 City of Kalispell, Montana Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2023 Solid Waste ASSETS Current assets Cash and investments $1,624,092 Taxes and assessments receivable, net 38,768 Due from other governments 74,300 Prepaid expenses 7,385 Total current assets 1,744,545 Noncurrent assets Capital assets - net of depreciation 457,455 Lease/SBITA Right of use asset, net 5,195 Total noncurrent assets 462,650 Total assets 2,207,195 - DEFERRED OUTFLOWS OF RESOURCES Pensions 89,499 Total deferred outflows of resources 89,499 - LIABILITIES Current liabilities Accounts payable 37,179 Accrued payroll 29,327 Compensated absences payable 61,375 Lease/SBITA Purchase 2,525 Total current liabilities 130,406 Noncurrent liabilities Compensated absences payable 26,598 Net pension liability 392,639 Lease/SBITA Purchase 2,670 Total noncurrent liabilities 421,907 Total liabilities 552,313 - DEFERRED INFLOWS OF RESOURCES Pensions 28,745 Total deferred inflows of resources 28,745 - NET POSITION Net investment in capital assets 457,455 Unrestricted 1,258,181 Total net position $1,715,636 The notes to the financial statements are an integral part of this statement. 166 City of Kalispell, Montana Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Funds For Fiscal Year Ended June 30, 2023 Solid Waste OPERATING REVENUES Charges for services $1,317,230 Miscellaneous revenues 3,173 On-behalf - pensions 12,153 Total operating revenues 1,332,556 OPERATING EXPENSES Personal services 664,713 Supplies 161,572 Purchased services 94,508 Fixed charges 203,860 Depreciation 118,269 Total operating expenses 1,242,922 Operating income (loss)89,634 NON-OPERATING REVENUES (EXPENSES) Interest revenue 36,252 Debt service interest expense (436) Unrealized gain (loss) on investments (42,067) Total Non-Operating Revenues (Expenses)(6,251) Income (loss) before contributions, transfers, special & extraordinary items 83,383 Transfers (out) (40,000) Change in net position 43,383 Net position - beginning 1,672,253 Net position - ending $1,715,636 The notes to the financial statements are an integral part of this statement. 167 City of Kalispell, Montana Combining Statement of Cash Flows Nonmajor Enterprise Funds For Fiscal Year Ended June 30, 2023 Solid Waste Cash Flows from Operating Activities: Cash received from customers $1,303,721 Cash received from miscellaneous sources 3,173 Cash paid to suppliers of goods and services (438,530) Cash paid to employees (600,722) Net cash provided (used) by operating activities 267,642 Cash Flows from Non-Capital and Related Financing Activities: Transfers to other funds (40,000) Net cash provided (used) by non-capital and related financing activities (40,000) Cash Flows from Capital and Related Financing Activities: Interest paid on capital debt (436) Acquisition and construction of capital assets (2,388) Capital Contributions received (13,162) Net cash provided (used) by capital financing activities (15,986) Cash Flows from Investing Activities: Interest on investments 36,252 Increase (Decrease) in fair value of investments (42,067) Net cash provided (used) by investing activities (5,815) Net increase (decrease) in cash and cash equivalents 205,841 Cash and cash equivalents as of; June 30, 2022 1,418,251 Restatement to cash and cash equivalents (573,244) Restated cash and cash equivalents at June 30, 2022 845,007 June 30, 2023 $1,050,848 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss)$89,634 Adjustments to reconcile operating income to net cash provided (used) by operating activities:Depreciation expense 118,269 Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in assessments receivable (13,509) Increase (decrease) in accounts payable 21,410 Increase (decrease) in accrued payables 6,474 Increase (decrease) in compensated absences payable 18,303 Increase (decrease) in net pension liability 128,654 (Increase) decrease in deferred outflows-pension (18,969) Increase (decrease) in deferred inflows-pension (82,624) Net cash provided (used) by operating activities $267,642 The notes to the financial statements are an integral part of this statement. 168 COMBINING AND INDIVIDUAL FUND STATEMENTS INTERNAL SERVICE FUNDS 169 City of Kalispell Combining Statement of Net Position Internal Service Funds June 30, 2023 1 2 Central Garage Information Technology Total Internal Service Funds ASSETS Current assets Cash and investments $160,614 $597,301 $757,915 Prepaid expenses 3,187 7,224 10,411 Contracts Receivable - 46,816 46,816 Total current assets 163,801 651,341 815,142 Noncurrent assets Capital assets - net of depreciation 89,042 105,453 194,495 Lease/SBITA Right of use asset, net - 28,404 28,404 Total noncurrent assets 89,042 133,857 222,899 Total assets 252,843 785,198 1,038,041 LIABILITIES Current liabilities Accounts payable 8,791 22,178 30,969 Accrued payroll 10,625 25,336 35,961 Compensated absences payable 6,392 20,720 27,112 Lease/SBITA Purchase - 9,217 9,217 Total current liabilities 25,808 77,451 103,259 Noncurrent liabilities Compensated absences payable 2,247 12,093 14,340 Lease/SBITA Purchase - 19,187 19,187 Total noncurrent liabilities 2,247 31,280 33,527 Total liabilities 28,055 108,731 136,786 NET POSITION Net investment in capital assets 89,042 105,453 194,495 Unrestricted 135,746 571,014 706,760 Total net position $224,788 $676,467 $901,255 The notes to the financial statements are an integral part of this statement. 170 City of Kalispell Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds For Fiscal Year Ended June 30, 2023 Central Garage Information Technology OPERATING REVENUES Charges for services $515,000 $629,126 $1,144,126 Miscellaneous revenues 145 300 445 Total operating revenues 515,145 629,426 1,144,571 OPERATING EXPENSES Personal services 222,897 506,630 729,527 Supplies 270,862 217,215 488,077 Purchased services 55,125 474,861 529,986 Fixed charges 25,029 10,201 35,230 Depreciation 13,652 53,530 67,182 Total operating expenses 587,565 1,262,437 1,850,002 Operating income (loss)(72,420) (633,011) (705,431) NON-OPERATING REVENUES (EXPENSES) Licenses/permits revenue - 191,716 191,716 Intergovernmental revenue - 370,000 370,000 Interest revenue 5,279 15,667 20,946 Debt service interest expense - (1,713) (1,713) Unrealized gain (loss) on investments (3,506) (15,775) (19,281) Total Non-Operating Revenues (Expenses)1,773 559,895 561,668 Income (loss) before contributions, transfers, special & extraordinary items (70,647) (73,116) (143,763) Change in net position (70,647) (73,116) (143,763) Net position - beginning 295,435 749,583 1,045,018 Net position - ending $224,788 $676,467 $901,255 The notes to the financial statements are an integral part of this statement. Total Internal Service Funds 171 City of Kalispell, Montana Combining Statement of Cash Flows Internal Service Funds For Fiscal Year Ended June 30, 2023 Central Garage Information Technology Total Internal Service Funds Cash Flows from Operating Activities: Cash received from customers $515,000 $629,126 $1,144,126 Cash received from miscellaneous sources 145 300 445 Cash paid to suppliers of goods and services (348,948) (717,642) (1,066,590) Cash paid to employees (222,885) (494,573) (717,458) Net cash provided (used) by operating activities (56,688) (582,789) (639,477) Cash Flows from Non-Capital and Related Financing Activities: Intergovernmental revenue received - 370,000 370,000 Cash received from Charter Franchise Fees - 191,716 191,716 Net cash provided (used) by non-capital and related financing activities - 561,716 561,716 Cash Flows from Capital and Related Financing Activities: Interest paid on capital debt - (1,713) (1,713) Acquisition and construction of capital assets 1 (27,539) (27,538) Net cash provided (used) by capital financing activities 1 (29,252) (29,251) Cash Flows from Investing Activities: Interest on investments 5,279 15,667 20,946 Increase (Decrease) in fair value of investments (3,506) (15,775) (19,281) Change in Current and Noncurrent portions of notes, loans, and contracts receivable - 1,674 1,674 Cash payments made for new notes, loans, contracts - - - Net cash provided (used) by investing activities 1,773 1,566 3,339 Net increase (decrease) in cash and cash equivalents (54,914) (48,759) (103,673) Cash and cash equivalents as of; June 30, 2022 215,528 646,060 861,588 Restatement to cash and cash equivalents (87,114) (261,132) (348,246) Restated cash and cash equivalents at June 30, 2022 128,414 384,928 513,342 June 30, 2023 $73,500 $ 336,169 $ 409,669 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss)$(72,420) $ (633,011) $ (705,431) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 13,652 53,530 67,182 Landfill closure/postclosure care expense - - - Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in assessments receivable - - - (Increase) decrease in penalty and interest receivable - - - (Increase) decrease in accounts receivable - - - (Increase) decrease in prepaid items - - - (Increase) decrease in inventories - - - Increase (decrease) in customer deposits - - - Increase (decrease) in revenues collected in advance - - - Increase (decrease) in accounts payable 2,068 (15,365) (13,297) Increase (decrease) in accrued payables 1,222 7,708 8,930 Increase (decrease) in judgements payable - - - Increase (decrease) in compensated absences payable (1,210) 4,349 3,139 Increase (decrease) in termination benefits payable - - - Increase (decrease) in OPEB liability - - - Increase (decrease) in net pension liability - - - (Increase) decrease in deferred outflows-pension - - - Increase (decrease) in deferred inflows-pension - - - (Increase) decrease in deferred outflows-OPEB - - - Increase (decrease) in deferred inflows-OPEB - - - Net cash provided (used) by operating activities $(56,688) $ (582,789) $ (639,477) Schedule of non-cash transactions Depreciation 13,652 53,530 67,182 The notes to the financial statements are an integral part of this statement. 172 CUSTODIAL FUNDS The custodial funds of the City of Kalispell are used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds. KPD Evidence This fund is used to manage and track money, or assets seized as evidence in criminal investigations. TBID Custodial This fund accounts for money received for hotel bed tax collections. These funds are held for distribution to TBID. 173 City of Kalispell, Montana Combining Statement of Net Position Fiduciary Funds June 30, 2023 1 2 KPD Evidence Custodial Fund TBID Custodial Fund Total Custodial Funds ASSETS Current assets Cash and investments $47,196 $- $47,196 Total current assets 47,196 - 47,196 LIABILITIES Total noncurrent liabilities - - - Total liabilities - - - NET POSITION 0 Net investment in capital assets - - - Restricted for;- - - Debt service - - - Replacement and depreciation - - - Capital projects - - - Other Purposes - - - Individuals, Organizations, and other governments 47,196 - 47,196 Total net position $47,196 $- $47,196 The notes to the financial statements are an integral part of this statement. 174 City of Kalispell, Montana Combining Statement of Net Position Fiduciary Funds June 30, 2023 KPD Evidence Custodial Fund TBID Custodial Fund Additions Collections of taxes and fees for other entities $- $568,448 $568,448 KPD Evidence Deposit 34,661 - 34,661 Total Additions 34,661 568,448 603,109 Deductions Distribution of taxes and fees - 568,448 568,448 Total Expenses - 568,448 568,448 Net Increse (Decrease) In Fiduciary Net Position 34,661 - 34,661 Net Position, January 1 12,535 - - Net Position, December 31 47,196$ -$ 47,196$ Total Custodial Funds 175 STATISTICAL SECTION This part of the City of Kalispell’s financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosure and required supplementary information says about the government’s overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time Revenue Capacity These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the government’s current level of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. Additional Information This category is intended to present other information the City feels is necessary for its users. Sources: Unless otherwise noted, the information in these schedules is derived from the City of Kalispell annual financial report for the relevant year. Note: The City of Kalispell implemented GASB Statement 34 in fiscal year 2003, therefore the data for prior years are not shown; schedules presenting government-wide information include information beginning in that year. 176 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Governmental activities Net investment in capital assets 71,734,631 71,610,586 70,056,388 69,120,365 72,196,186 82,128,310 71,130,497 70,317,095 82,820,953 88,825,475 Restricted 8,577,197 8,581,135 9,406,621 9,350,293 12,103,683 9,265,932 9,349,779 9,476,546 18,926,543 22,491,754 Unrestricted 7,516,921 617,235 1,612,405 2,881,803 2,389,606 2,634,167 4,131,282 3,615,896 (6,972,378) (7,578,094) Total governmental activities net position 87,828,749$ 80,808,956$ 81,075,414$ 81,352,461$ 86,689,475$ 94,028,409$ 84,611,558$ 83,409,537$ 94,775,119$ 103,739,135$ Business-type activities Net investment in capital assets 58,015,752 59,797,010 60,294,686 60,491,421 61,913,049 70,085,780 75,179,096 77,743,623 82,548,606 89,445,343 Restricted 7,590,734 7,061,197 9,184,782 10,401,661 10,896,926 10,163,238 9,679,072 7,885,626 12,120,363 12,763,546 Unrestricted 8,435,587 7,267,075 9,516,020 12,169,294 14,456,457 15,586,293 19,073,610 24,880,297 25,676,193 30,926,290 Total business-type activities net position 74,042,073$ 74,125,282$ 78,995,488$ 83,062,376$ 87,266,432$ 95,835,311$ 103,931,778$ 110,509,546$ 120,345,162$ 133,135,179$ Primary Government Net investment in capital assets 129,750,383 131,407,596 130,351,074 129,611,786 134,109,235 152,214,090 146,309,593 148,060,718 164,963,380 178,270,818 Restricted 16,167,931 15,642,332 18,591,403 19,751,954 23,000,609 19,429,170 19,028,851 17,362,172 31,046,906 35,255,300 Unrestricted 15,952,508 7,884,310 11,128,425 15,051,097 16,846,063 18,220,460 23,204,892 28,496,193 19,109,995 23,348,196 Total primary government net position 161,870,822$ 154,934,238$ 160,070,902$ 164,414,837$ 173,955,907$ 189,863,720$ 188,543,336$ 193,919,083$ 215,120,281$ 236,874,314$ Un a u d i t e d s t a t i s t i c a l s e c t i o n CITY OF KALISPELL, MONTANA NET POSITION BY COMPONENT Past Ten Fiscal Years 177 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ExpensesGovernmental activities: General government 5,688,135 5,401,242 5,823,767 5,841,775 6,251,409 6,078,813 6,225,773 6,505,134 4,117,979 4,936,132 Public Safety 9,269,827 9,575,487 9,113,674 10,968,010 11,333,862 11,186,487 11,738,977 15,081,467 12,568,054 14,022,338 Public Works 2,573,627 2,773,097 2,581,002 2,660,513 3,341,768 5,778,281 4,432,162 4,191,268 6,257,894 6,367,131 Parks and recreation 2,123,237 2,062,669 2,057,468 2,184,222 2,554,634 2,530,660 2,371,145 2,787,605 2,661,668 3,336,771 Community Development 1,601,170 683,164 928,661 853,455 1,275,659 2,860,796 2,048,260 3,093,846 3,079,481 369,085 Interest 357,857 331,811 286,401 242,110 226,588 381,767 333,593 283,585 262,187 238,044 Total governmental activities expenses 21,613,853$ 20,827,471$ 20,790,974$ 22,750,085$ 24,983,920$ 28,816,804$ 27,149,910$ 31,942,905$ 28,947,263$ 29,269,501$ Business-type activities: Airport 177,751 154,715 154,091 155,876 333,572 - - - - - Water 2,625,046 2,542,119 2,657,816 2,734,979 3,079,040 3,042,213 3,134,112 3,423,908 3,668,564 3,320,393 Sewer 5,114,591 5,077,643 5,204,622 4,955,925 5,482,339 5,812,173 6,341,537 6,253,823 6,895,290 6,787,742 Solid Waste 812,650 816,686 880,679 872,161 1,013,000 994,660 1,047,408 1,008,739 1,194,289 1,243,358 Total business-type activities expenses 8,730,038 8,591,163 8,897,208 8,718,941 9,907,951 9,849,046 10,523,057 10,686,470 11,758,143 11,351,493 Total primary government expenses 30,343,891$ 29,418,634$ 29,688,182$ 31,469,026$ 34,891,871$ 38,665,850$ 37,672,967$ 42,629,375$ 40,705,406$ 40,620,994$ Program RevenuesGovernmental activities: Charges for services: General government 628,729 684,550 892,578 789,167 909,258 810,930 797,202 1,082,008 1,376,830 1,364,907 Public Safety 2,033,870 1,973,898 2,219,795 3,155,476 2,816,588 2,570,838 3,006,814 2,986,568 3,764,023 3,082,696 Public Works 2,172,122 2,463,435 2,672,473 2,885,492 3,155,932 3,470,887 3,203,603 2,854,584 2,898,061 2,980,423 Parks and recreation 752,460 728,165 730,928 716,491 1,334,208 1,283,827 1,049,706 1,349,752 1,375,248 1,456,528 Community Development 283,134 153,431 88,252 66,393 55,664 50,979 64,685 50,894 52,945 53,294 Operating grants and contributions 2,636,321 1,838,425 1,354,890 1,470,485 1,708,661 1,841,137 3,473,490 6,357,875 2,155,425 3,473,355 Capital grants and contributions 1,519,825 3,232,618 942,125 1,544,350 7,512,439 12,331,081 - 1,045,006 13,319,980 9,576,378 Total governmental activities program revenues 10,026,461$ 11,074,522$ 8,901,041$ 10,627,854$ 17,492,750$ 22,359,679$ 11,595,500$ 15,726,687$ 24,942,512$ 21,987,581$ Business-type activities:Charges for services: Airport 78,657 79,091 72,623 74,228 69,656 - - - - - Water 2,985,959 3,018,276 3,535,072 3,891,449 4,346,570 4,241,715 3,874,001 4,633,672 5,263,888 5,541,201 Sewer 4,967,223 5,141,284 5,543,740 7,485,750 7,774,762 8,007,450 7,994,232 10,302,333 12,000,967 11,990,402 Solid Waste 951,676 973,393 988,145 1,005,786 1,021,797 1,048,091 1,076,047 1,096,394 1,117,989 1,320,403 Operating grants and contributions 8,372 27,721 137,048 32,653 31,078 47,478 55,235 222,879 154,155 61,459 Capital grants and contributions 2,137,977 1,098,222 3,338,669 131,626 579,982 6,536,160 5,200,256 799,492 2,360,036 4,338,411 Total business-type activities program revenues 11,129,864 10,337,987 13,615,297 12,621,492 13,823,845 19,880,894 18,199,771 17,054,770 20,897,035 23,251,876 Total primary government program revenues 21,156,325$ 21,412,509$ 22,516,338$ 23,249,346$ 31,316,595$ 42,240,573$ 29,795,271$ 32,781,457$ 45,839,547$ 45,239,457$ Net (Expense) / Revenue Governmental activities (11,587,393) (9,752,949) (11,889,932) (12,122,231) (7,491,170) (6,457,125) (15,554,410) (16,216,218) (4,004,751) (7,281,920) Business-type activities 2,399,826 1,746,824 4,718,089 3,902,551 3,915,894 10,031,848 7,676,714 6,368,300 9,138,892 11,900,383 Total primary government net expense (9,187,567)$ (8,006,125)$ (7,171,843)$ (8,219,680)$ (3,575,276)$ 3,574,723$ (7,877,696)$ (9,847,918)$ 5,134,141$ 4,618,463$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes 8,739,807 7,584,775 8,357,904 8,848,481 8,912,089 9,647,621 10,393,815 10,109,452 10,489,024 11,458,918 Misc.184,781 189,921 111,048 200,015 201,577 99,876 128,414 583,314 634,169 540,803 Investment earnings 48,193 72,531 105,557 159,362 210,835 284,576 262,342 387,748 210,249 833,935 Grants and entitlements not restricted 2,835,264 3,134,703 3,132,559 3,184,831 3,177,113 3,074,926 3,425,997 3,251,245 3,069,588 3,544,415 Gas Tax 364,563 364,622 369,749 371,303 522,832 689,060 835,851 870,890 919,184 1,304,854 Gain (loss) sale of capital assets 11,610 78,497 22,183 (196,262) - 6,500 - - - Unrealized Gain (loss) on investments - - - - - - - - - (615,226) Transfers (218,728) (65,000) 35,000 35,000 - - (8,960,047) - - (820,691) Total governmental activities 11,953,880$ 11,293,162$ 12,190,314$ 12,821,175$ 12,828,184$ 13,796,059$ 6,092,872$ 15,202,649$ 15,322,214$ 16,247,008$ Business-type activities: Investment earnings 83,224 113,963 132,339 227,052 288,162 410,448 412,935 209,468 276,681 1,185,464 Gain (loss) sale of capital assets 46,710 (3,091) - - (2,077,363) - - - Other 2,101 140,616 19,631 - 209,531 - - 400,000 - Unrealized Gain (loss) on investments - - - - - -- - - (1,116,521) Transfers 218,728 65,000 (35,000) (35,000) - - - - 820,691 Total business-type activities 301,952$ 227,774$ 234,864$ 211,683$ 288,162$ (1,457,384)$ 412,935$ 209,468$ 676,681$ 889,634$ Total primary government 12,255,832$ 11,520,936$ 12,425,178$ 13,032,858$ 13,116,346$ 12,338,675$ 6,505,807$ 15,412,117$ 15,998,895$ 17,136,642$ Change in Net Position Governmental activities 366,487 1,540,213 300,382 698,944 5,337,014 7,338,934 (9,461,538) (1,013,569) 11,317,463 8,965,088 Business-type activities 2,701,778 1,974,598 4,952,953 4,114,234 4,204,056 8,574,464 8,089,649 6,577,768 9,815,573 12,790,017 Total primary government 3,068,265$ 3,514,811$ 5,253,335$ 4,813,178$ 9,541,070$ 15,913,398$ (1,371,889)$ $ 5,564,199 $ 21,133,036 $ 21,755,105 CITY OF KALISPELL, MONTANA CHANGES IN NET POSITION Past Ten Fiscal Years Unaudited statistical section 178 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 General Fund Nonspendable 176,550 194,404 217,116 252,213 251,038 1,547,200 1,540,412 1,304,360 1,316,246 - Restricted Assigned 125,448 125,448 225,072 509,620 379,968 830,886 1,746,043 2,059,369 1,414,160 2,961,775 Unassigned 2,107,411 2,946,897 3,242,167 3,381,494 3,881,096 2,810,356 2,507,348 3,228,502 2,699,686 1,065,242 Total general fund 2,409,409$ 3,266,749$ 3,684,355$ 4,143,327$ 4,512,102$ 5,188,442$ 5,793,803$ 6,592,231$ 5,430,092$ 4,027,017$ 11,556$ 13,328$ 38,820$ 32,397$ 19,554$ 13,133$ 18,728$ 18,728$ 18,728$ 1,275,562$ 1,515,312$ 1,908,577$ 2,223,379$ 2,906,400$ 3,077,434$ 3,358,177$ 3,583,498$ 3,904,273$ 1,287,118$ 1,528,640$ 1,947,397$ 2,255,776$ -$ 2,925,954$ 3,090,567$ 3,376,905$ 3,602,226$ 3,923,001$ 1,528,640$ 1,947,397$ 2,255,776$ -$ 2,925,954$ 3,090,567$ 3,376,905$ 3,602,226$ 3,923,001$ All Other Governmental Nonspendable 21,369$ 25,824$ 31,447$ 30,760$ 67,072$ 28,450$ 27,804$ 41,903$ 42,204$ 40,804$ Restricted 7,460,855$ 9,949,913$ 13,167,238$ 14,767,250$ 19,979,102$ 13,739,004$ 15,139,371$ 15,133,820$ 14,637,489$ 18,587,481$ Unassigned (208,707)$ (3,040)$ 39,286$ (175)$ (54,232)$ (1,030,413)$ -$ Reserved Unreserved, reported in: Special revenue funds Total all other governmental funds 7,273,517$ 9,972,697$ 13,237,971$ 14,798,010$ 20,046,174$ 13,767,454$ 15,167,000$ 15,121,491$ 13,649,280$ 18,628,285$ Note: The City of Kalispell implemented the new standards for reporting fund balance, GASB Statement 54, in fiscal year 2011. Restricted Un a u d i t e d s t a t i s t i c a l s e c t i o n Street Maint. (Major) Nonspendable CITY OF KALISPELL, MONTANA FUND BALANCES OF GOVERNMENTAL FUNDS Past Ten Fiscal Years (modified accrual basis of accounting) 179 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Revenues Taxes and assessments 8,735,146 11,275,636 9,324,431 12,456,526 13,518,677 13,633,324 14,293,833 14,922,135 15,368,617 15,310,239 Licenses and permits 423,354 381,045 664,391 1,229,925 1,115,019 746,187 946,567 230,574 227,713 234,758 Intergovernmental 6,405,255 5,406,703 5,743,188 6,314,835 12,269,442 5,883,270 7,639,407 8,472,164 6,685,345 5,892,599 Charges for services 4,386,312 4,630,575 4,935,344 3,006,507 3,022,950 2,887,000 2,863,094 3,818,043 4,725,562 4,193,877 Fines and forfeitures 572,066 538,234 495,347 454,547 443,919 512,889 514,035 495,459 417,159 347,630 Miscellaneous 184,272 188,615 288,652 138,075 116,693 143,271 108,699 452,102 210,015 400,790 Investment earnings 48,193 72,528 105,557 159,363 188,004 261,385 238,482 387,748 181,137 787,612 Unrealized gain (loss) on investments - - - - - - - - - (615,226) Total revenues 20,754,598 22,493,336 21,556,910 23,759,778 30,674,704 24,067,326 26,604,117 28,778,225 27,815,548 26,552,279 Expenditures General government 2,893,332 2,623,226 2,991,835 2,495,710 3,127,703 3,233,558 3,392,162 3,206,238 3,074,246 3,356,870 Public safety 8,755,082 9,115,952 9,540,699 10,873,610 10,644,186 10,719,151 10,879,234 12,123,225 10,897,125 11,466,789 Public works 2,376,067 2,672,152 2,191,012 2,327,678 2,857,261 5,166,350 3,638,526 3,262,769 3,374,911 3,214,514 Parks and recreation 1,664,595 1,608,497 1,550,843 1,714,235 1,986,322 2,092,271 1,941,001 2,196,358 2,226,728 2,461,125 Community development 1,601,170 685,018 923,170 853,455 1,275,659 2,860,796 2,048,260 2,995,286 3,041,410 303,802 Capital outlay 1,201,998 560,750 930,636 1,792,584 11,577,677 1,107,299 926,860 2,790,528 5,755,445 1,425,793 Debt service: Principal 1,264,227 1,330,057 1,880,720 1,294,872 1,787,726 1,324,876 1,341,973 886,012 892,472 634,535 Interest 357,857 331,811 286,401 242,110 226,588 381,767 333,593 283,585 260,849 236,331 Total expenditures 20,114,328 18,927,463 20,295,316 21,594,254 33,483,122 26,886,068 24,501,609 27,744,001 29,523,186 23,101,759 Excess of revenues over (under) expenditures 640,270 3,565,873 1,261,594 2,165,524 (2,808,418) (2,818,742) 2,102,508 1,034,224 (1,707,638) 3,450,520 Other Financing Sources (Uses) Transfers in 1,639,721 2,201,276 2,022,611 1,020,234 4,115,790 992,570 1,005,000 1,115,170 5,250,230 3,958,255 Transfers out (1,639,721) (2,176,276) (1,987,611) (985,234) (4,115,790) (992,570) (1,005,000) (1,115,170) (5,250,230) (4,579,562) Issuance of debt 403,623 124,040 461,833 134,287 6,148,597 104,917 15,824 193,484 4,165 361,936 Sales of capital assets 11,610 93,272 26,513 20,984 37,399 6,500 - - Bond premium - Total other financing sources (uses)403,623 160,650 590,105 195,800 6,169,581 142,316 22,324 193,484 4,165 (259,371) Net change in fund balances 1,043,893 3,726,523 1,851,699 2,361,324 3,361,163 (2,676,426) 2,124,832 1,227,708 (1,703,473) 3,191,149 Debt service as a percentage of noncapital expenditures 7.11%7.90%11.46%7.76%9.20%6.62%7.11%4.69%4.85%4.02% CITY OF KALISPELL, MONTANA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Past Ten Fiscal Years (modified accrual basis of accounting) Unaudited statistical section 180 Fiscal Taxable Year Real Less Total Total Estimated Value as a Ended Taxable Tax Taxable Direct Market Percentage June 30, Value Increment Valuation Tax Rate Value of Market Value 2014 40,798$ 1,464$ 39,334$ 185.10 1,506,125$ 2.61% 2015 41,761$ 2,240$ 39,521$ 187.80 1,587,574$ 2.49% 2016 38,953$ 1,000$ 37,953$ 205.60 2,294,128$ 1.65% 2017 39,229$ 1,211$ 38,018$ 212.70 2,307,546$ 1.65% 2018 42,373$ 1,142$ 41,231$ 206.12 2,561,622$ 1.61% 2019 43,808$ 940$ 42,868$ 205.76 2,638,150$ 1.62% 2020 48,698$ 1,064$ 47,634$ 193.30 2,972,359$ 1.60% 2021 49,672$ 701$ 48,971$ 189.42 3,046,186$ 1.61% 2022 57,135$ 1,921$ 55,214$ 161.10 3,554,590$ 1.55% 2023 59,038$ 2,418$ 56,620$ 165.58 3,676,016$ 1.54% Source: Flathead County and Montana Department of Revenue Note: Reappraised by Montana Department of Revenue every other year CITY OF KALISPELL, MONTANA MARKET VALUE OF TAXABLE PROPERTY Past Ten Fiscal Years (in thousands of dollars) Unaudited statistical section 181 Fiscal General Total Year Obligation Direct Kalispell Ended Basic Health Debt Tax School Community Flathead State June 30,Rate Insurance Service Rate District College County Ed. 2014 154.10 18.50 12.50 185.10 333.68 15.80 124.94 46.00 2015 156.80 18.50 12.50 187.80 332.58 16.90 128.88 46.00 2016 170.10 23.00 12.50 205.60 363.75 18.99 145.03 46.00 2017 174.20 26.00 12.50 212.70 348.07 21.45 148.18 46.00 2018 169.62 24.00 12.50 206.12 432.82 20.16 138.11 46.00 2019 171.26 23.00 11.50 205.76 424.34 20.33 142.07 46.00 2020 161.00 21.30 11.00 193.30 403.70 21.46 137.73 46.00 2021 162.62 22.00 4.80 189.42 404.11 20.53 138.79 46.00 2022 138.10 19.50 3.50 161.10 296.95 18.34 143.67 46.00 2023 145.43 20.15 0.00 165.58 391.54 17.81 133.55 46.00 Source: Flathead County CITY OF KALISPELL, MONTANA DIRECT AND OVERLAPPING PROPERTY TAX RATES Past Ten Fiscal Years (rate per $1000 of assessed value) City of Kalispell Overlapping Rates Unaudited statistical section 182 Percentage Percentage of Total City of Total City Taxable Taxable Taxable TaxableTaxpayerValueRankValueValueRankValue FLATHEAD ELECTRIC COOPERATIVE INC 3,103,663 1 5.26% 1,695,893 2 4.06% NORTHWESTERN CORP TRANSMISSION & DISTRIBUTION 2,714,738 2 4.60%817,220 3 1.96% QWEST/CENTURYLINK INC 1,179,492 3 2.00% 2,090,786 1 5.01% FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC 818,134 4 1.39%607,044 4 1.45% VERIZON WIRELESS 652,244 5 1.10%0.00% TKG MOUNTAIN VIEW PLAZA LLC 426,995 6 0.72% PIG INVESTMENTS LLLP 347,200 7 0.59%518,643 5 1.24% WAL-MART ESTATE BUSINESS TRUST 297,040 8 0.50%0.00% CROWN ENTERPRISES LLC 203,130 9 0.34% NORTHWEST HORIZONS INC 184,502 10 0.31% FIRST INTERSTATE BANK 262,320 10 INLAND WESTERN KALISPELL MOUNTAIN VIEW LLC 378,234 6 WSPGB MALL LLC 320,041 7 STATE OF MONTANA DNRC 309,046 8 BRESNAN COMMUNICATIONS LLD 293,796 9 Total 9,927,139 16.81% 7,293,023 13.72% Total City Taxable Assessed Value 59,038,020$ 41,761,366$ Source: Flathead County GASB, Statement 44 requires the demographic and economic information should indicate the principal property tax payers in the current year and nine years prior for comparison. CITY OF KALISPELL, MONTANA PRINCIPAL PROPERTY TAX PAYERS Current Year, and Nine Years Ago 20142023 Unaudited statistical section 183 Fiscal Year Taxes Levied Collections Ended for the Percentage in Subsequent Percentage June 30, Fiscal Year Amount of Levy Years Amount of Levy 2014 7,551,710 7,357,549 97.43% 111,016 7,468,565 98.90% 2015 7,842,716 7,739,273 98.68% 68,908 7,808,181 99.56% 2016 8,008,737 7,886,063 98.47% 112,049 7,998,112 99.87% 2017 8,344,008 8,178,854 98.02% 154,723 8,333,577 99.87% 2018 8,733,923 8,556,054 97.96% 167,611 8,723,665 99.88% 2019 9,014,140 8,846,037 98.14% 158,354 9,004,391 99.89% 2020 10,296,334 9,592,708 93.17% 395,448 9,988,156 97.01% 2021 10,200,518 9,819,238 96.26% 182,351 10,001,589 98.05% 2022 10,844,979 10,306,732 95.04% 492,285 10,799,017 99.58% 2023 11,200,135 10,769,176 96.15% 336,691 11,105,867 99.16% Source: Flathead County City Manager's Final Adopted Budget CITY OF KALISPELL, MONTANA PROPERTY TAX LEVIES AND COLLECTIONS Past Ten Fiscal Years Fiscal Year of the Levy Total Collections to Date Collected within the Unaudited statistical section 184 Fiscal Year General Special Total Percentage Ended Obligation Notes Revenue Assessment Revenue Notes Primary of Personal Per June 30, Bonds Payable Bonds Bonds Bonds Payable Government Income Capita 2014 3,255,000 2,177,968 1,410,000 3,392,922 15,667,682 172,988 26,076,560 3.23% 1,243.40$ 2015 2,805,000 1,893,621 1,257,000 3,074,242 14,434,000 154,155 23,618,018 2.72% 1,097.59$ 2016 2,350,000 1,401,475 1,098,000 2,761,499 13,341,000 116,192 21,068,166 2.26% 955.39$ 2017 1,885,000 1,204,829 933,500 2,427,060 12,287,096 77,849 18,815,334 1.81% 826.65$ 2018 1,415,000 1,458,992 5,891,760 2,045,507 13,443,771 39,121 24,294,151 2.21% 1,046.62$ 2019 940,000 1,325,573 5,532,498 1,793,229 22,977,473 0 32,568,773 2.73% 1,360.55$ 2020 455,000 1,105,755 5,142,542 1,561,856 23,755,660 0 32,020,813 2.60% 1,303.89$ 2021 230,000 1,105,282 4,916,893 1,315,450 23,922,827 0 31,490,452 2.38% 1,257.15$ 2022 0 924,844 4,690,320 1,069,155 22,857,328 0 29,541,647 2.04% 1,131.43$ 2023 0 1,126,925 4,453,054 831,738 22,897,621 0 29,309,338 1.97% 1,030.21$ Source: City Manager's Recommended Budget City of Kalispell Finance Department Montana Department of Labor and Industry Governmental Activities Business-Type Activities CITY OF KALISPELL, MONTANA RATIOS OF OUTSTANDING DEBT BY TYPE Past Ten Fiscal Years Unaudited statistical section 185 Percentage Fiscal of Actual Year General Special Externally Net Taxable Ended Obligation Assessment Restricted Bonded Value of Per June 30, Bonds Bonds for Repayment Debt Property Capita 2014 3,255,000 3,392,922 172,267 6,475,655 16.5%308.78$ 2015 2,805,000 3,074,242 531,588 5,347,654 13.5%248.52$ 2016 2,350,000 2,761,499 765,985 4,345,514 11.4%197.06$ 2017 1,885,000 2,427,060 637,055 3,675,005 9.7%161.46$ 2018 1,415,000 2,045,507 603,849 2,856,658 6.9%123.07$ 2019 940,000 1,793,229 457,246 2,275,983 5.3%95.08$ 2020 455,000 1,561,856 273,899 1,742,957 3.7%70.97$ 2021 230,000 1,315,450 52,504 1,492,946 3.0%59.60$ 2022 0 1,069,155 0 1,069,155 1.9%40.95$ 2023 0 831,738 0 831,738 1.5%29.24$ Source: City Manager's Recommended Budget Montana Department of Revenue Montana Department of Labor and Industry, Quarterly Census of Employment and Wages (QCEW) Program CITY OF KALISPELL, MONTANA RATIOS OF GENERAL BONDED DEBT OUTSTANDING Past Ten Fiscal Years General Bonded Debt Outstanding Unaudited statistical section 186 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Debt limit*37,653,127 39,689,354 57,353,188 57,688,661 64,040,548 65,953,748 76,154,661 88,864,757 91,900,423 132,320,018 Total net debt applicable to limit (3,233,480) (2,744,859) (2,873,590) (3,045,293) (2,795,518) (2,265,573) (2,617,057) (2,366,055) (1,554,387) (1,327,552) Legal debt margin 34,419,647$ 36,944,495$ 54,479,598$ 54,643,368$ 61,245,030$ 63,688,175$ 73,537,604$ 86,498,702$ 90,346,036$ 130,992,466$ Total net debt applicable to the limit as a percentage of debt limit 8.59% 6.92% 5.01% 5.28% 4.37% 3.44% 3.44% 2.66% 1.69% 1.00% *2.5% of total market value of taxable property Source City Manager's Recommended Budget Montana Department of Revenue CITY OF KALISPELL, MONTANA LEGAL DEBT MARGIN INFORMATION Past Ten Fiscal Years Un a u d i t e d s t a t i s t i c a l s e c t i o n 187 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (1) Debt Overlapping General Obligation Debt: Flathead County 2,915,000 16.83%490,495 Flathead Valley Community College 3,639,996 16.83%612,488 Kalispell High School 28,015,000 33.27%9,320,767 Kalispell Elementary 21,450,000 100.00% 21,450,000 West Valley Elementary 4,390,000 39.02%1,712,870 Subtotal Overlapping Debt 33,586,621 City direct debt 6,411,717 100.00% 6,411,717$ Grand total direct and overlapping debt 39,998,338 Sources: Assessed value data used to estimate applicable percentages was provided by the State of Montana, Department of Revenue. Debt outstanding data was provided by each governmental unit. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Kalispell. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value. CITY OF KALISPELL, MONTANA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT June 30, 2023 Unaudited statistical section 188 Fiscal Year Utility Less: Special Special Ended Service Operating Assessment Assessment June 30, Charges* Expenses** Principal Interest Coverage Billing Collections Principal Interest Coverage 2014 8,289,654 (4,516,282) (1,226,000) (388,108) 2,159,264 456,236 197,682 (324,198) (171,133) (297,649) 2015 8,587,057 (4,370,296) (1,242,000) (369,564) 2,605,197 465,275 1,400,791 (326,526) (163,360) 910,905 2016 9,523,918 (4,769,754) (1,093,000) (342,382) 3,318,782 448,878 404,275 (319,000) (145,808) (60,533) 2017 9,133,285 (4,647,567) (1,117,000) (316,036) 3,052,682 433,302 389,479 (338,739) (132,230) (81,490) 2018 10,154,805 (5,628,376) (1,223,662) (327,688) 2,975,079 427,331 375,435 (385,841) (116,836) (127,242) 2019 10,864,941 (5,768,642) (1,569,738) (507,040) 3,019,521 338,686 281,508 (259,423) (98,577) (76,492) 2020 10,873,469 (6,155,658) (2,207,044) (561,970) 1,948,797 334,157 263,260 (247,198) (87,309) (71,247) 2021 11,769,468 (6,021,058) (1,709,193) (574,747) 3,464,470 326,566 274,178 (250,451) (76,466) (52,739) 2022 13,410,826 (6,512,840) (1,799,734) (591,106) 4,507,146 304,377 286,080 (250,460) (64,183) (28,563) 2023 15,100,920 (5,961,958) (1,899,792) (554,213) 6,684,957 294,583 227,768 (251,797) (51,770) (75,799) *includes other revenues pledged for debt service ** excludes depreciation Source: City of Kalispell Finance Department Special Assessment Bonds CITY OF KALISPELL, MONTANA PLEDGED REVENUE COVERAGE Past Ten Fiscal Years Debt Service Water/Sewer Revenue Bonds Debt Service Unaudited statistical section 189 Per Capita K-12 Annual Calendar Total Wages Personal School Unemployment Year Population (in thousands) Income Enrollment* Rate** 2014 20,972 808,345 38,544 5,812 6.50% 2015 21,518 869,478 40,407 5,828 5.70% 2016 22,052 932,844 42,302 5,859 5.60% 2017 22,761 1,041,543 45,760 5,873 5.10% 2018 23,212 1,098,647 47,331 5,920 4.70% 2019 23,938 1,190,844 49,747 5,921 4.70% 2020 24,558 1,231,166 50,133 5,970 4.90% 2021 25,049 1,321,084 52,740 6,211 2.20% 2022 26,110 1,446,781 55,411 6,193 3.00% 2023 est 28,450 1,490,922 52,405 6,148 3.10% *School District 5 **unadjusted annual (calendar) - October unadjusted (2020) Sources: Kalispell Public Schools Audit Report, enrollment U.S. Census Bureau, population Montana Department of Labor & Industry: Unemployment Rate, Personal Income, Total Wages (Flathead County, City of Kalispell unavailable) CITY OF KALISPELL, MONTANA DEMOGRAPHIC AND ECONOMIC STATISTICS Past Ten Fiscal Years Unaudited statistical section 190 Estimated Estimated # of # of Private Employer Employees Employees Logan Health (Kalispell Regional Hospital)1000+ 1000+ Healthcare Teletech 250-499 500-999 Professional & Tech. Applied Materials (Semitool Inc.)250-499 250-499 Manufacturing Immanuel Lutheran Home 250-499 100-249 Healthcare AON Service Corporation - NFS 250-499 250-499 Insurance Glacier Bank 250-499 250-499 Banking L C Staffing Service 100-249 250-499 Temp. Services Super 1 Foods 250-499 250-499 Grocery Costco 250-499 100-249 Retail Walmart 250-499 250-499 Retail Healthcenter Northwest 250-499 not available Healthcare Sources: Montana Department of Labor & Industry The State of Montana, Department of Labor reports all employers in each county and does not rank them or provide the number of employees as they consider it confidential information. Industry CITY OF KALISPELL, MONTANA PRINCIPAL EMPLOYERS Most current information and Ten Year Prior (2014) 2023 2014 Unaudited statistical section 191 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 General Government Manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Human Resources 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 2.00 2.00 City Clerk 1.23 1.58 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 Media Specialist Finance 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 Attorney 4.67 4.67 4.67 4.67 4.67 4.67 5.67 5.67 5.67 5.67 Court 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 City Hall 1.40 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 Planning & Zoning 4.25 4.25 4.25 4.05 3.95 3.95 3.95 3.15 3.15 3.15 Building 3.95 5.20 5.20 6.75 8.65 8.65 8.65 8.45 8.45 9.45 Information Technology 2.25 2.15 2.55 2.55 2.55 2.55 2.55 5.55 5.55 6.00 Total General Government 27.45 29.00 29.15 30.50 32.30 32.30 33.30 35.30 35.80 37.25 Public Safety Police 44.00 44.00 44.00 46.00 49.75 50.75 50.75 50.75 53.75 54.00 Fire 27.30 23.30 23.30 23.30 23.30 22.90 22.90 21.90 25.90 25.90 Ambulance 6.50 9.50 9.50 9.50 9.50 9.50 9.50 9.50 9.50 9.50 Total Public Safety 77.80 76.80 76.80 78.80 82.55 83.15 83.15 82.15 89.15 89.40 Public Works DPW 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.20 0.25 Garage 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Street Maint 12.25 12.25 12.25 12.25 13.25 13.25 14.25 14.40 14.55 15.75 Sign/signal 2.50 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Light District 0.75 1.25 1.25 1.25 1.25 1.25 1.25 1.40 1.25 1.35 Water 14.90 14.80 14.80 15.30 15.30 15.30 15.30 15.50 15.75 15.95 Sewer 7.00 7.05 7.05 7.55 7.55 7.55 8.05 8.25 8.50 8.65 WWTP 7.55 7.55 7.55 8.55 8.55 8.55 8.55 8.55 8.55 9.65 Storm 6.20 6.20 6.20 6.20 6.20 7.20 7.70 7.85 8.00 8.15 Solid Waste 7.35 7.40 7.40 7.40 7.40 7.40 7.40 7.55 7.45 8.50 Total Public Works 61.75 61.75 61.75 63.75 64.75 65.75 67.75 68.75 69.25 73.25 Parks and Recreation Parks and Recreation 9.45 9.80 9.80 9.80 10.60 10.60 10.80 10.80 11.80 11.80 Forestry 3.20 2.85 1.80 1.80 2.00 3.00 3.80 3.80 3.80 3.80 Total Parks and Recreation 12.65 12.65 11.60 11.60 12.60 13.60 14.60 14.60 15.60 15.60 Community Development UDAG/Comm. Dev.2.00 2.00 2.00 1.75 1.75 2.00 2.00 2.00 2.00 2.00 Airport Airport 0.50 0.50 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total all funds 182.15 182.70 181.80 186.40 193.95 196.80 200.80 202.80 211.80 217.50 Source: City Manager's Recommended Budget CITY OF KALISPELL, MONTANA Full-Time Equivalent City Government Employees by Function/Program Past Ten Fiscal Years Unaudited statistical section 192 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22General Government Resolutions passed 51 41 44 57 58 56 50 53 46 Ordinances passed 12 14 17 15 17 17 26 13 24Payroll claims processed 6063 5956 6169 6473 6351 6008 6351 6619 6522Accounts payable claims processed 6425 6704 6504 6716 6784 6905 6745 6638 6056Receipts processed 10984 10346 11775 13073 12687 11686 10209 9432 11503Conditional use permits granted 4 4 6 5 12 4 5 7 11 Public SafetyCalls for law enforcement service 29706 31419 34626 33186 34467 36459 33578 32952 32745Citations526152335037468049485760478643903623Arrests131615491734140516591660168715111376Calls for fire service 831 697 798 882 796 906 1157 1128 1392Calls for rescue service 2281 2560 2501 2673 2712 2792 2702 2806 3076 Public WorksStreets and alleys maintained (Miles)139 140 140 144 155 160 160 166 168Sidewalk replaced (linear feet)1510 1723 1589 794 1853 1468 1234 1024 2754Alleys paved 7 5 6 6 7 10 13 5 5 Parks Park users (reservations)144937 123633 103438 102533 101493 92161 92161 92161 83520Acres of parks 429.49 429.49 429.49 429.49 429.49 429.49 429.49 429.49 445Recreation participants (rec, sports, youth, swim)43490 41830 35697 35370 35370 42526 40303 40303 48857Miles of trails 7.98 8.10 8.10 8.85 8.85 8.85 8.85 8.85 8.85 Development Services Building permits issued: Residential 270 195 195 222 181 183 216 324 240 Commercial 262 163 137 137 176 86 71 182 91Community Development TIF / TEDD Districts 4 4 4 4 5 5 5 5 5 New development loans 3 1 0 1 2 0 2 0 0 Loans being serviced 21 22 19 20 10 9 12 12 9 AirportMonthly tie down fees (average)3 0 0 0 0 0 0 0 0Monthly commercial fees (average)7 7 6 6 4 0 0 0 0 WaterAverage daily consumption (millions of gallons)2.79 2.96 3.13 2.96 2.33 2.33 3.23 3.57 2.33Number of customers 7641 7675 7785 7907 8083 8263 8363 8579 8856 Sewer Average daily wastewater treated (millions of gallons)2.7 2.7 2.5 2.7 2.8 2.7 2.4 2.6 2.9 Solid WasteRefuse collected (tons per day)24.1 25.0 26.0 26.9 27.1 27.7 28.5 30.1 30.9 Source: City of Kalispell - updated as available CITY OF KALISPELL, MONTANA OPERATING INDICATORS BY FUNCTION Past Ten Fiscal Years Unaudited statistical section 193 CITY OF KALISPELL, MONTANA Capital Asset Statistics by Function/Program Past Ten Fiscal Years FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Police Stations 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Patrol Units (Cars)11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 12.00 Patrol Units (Motorcycles)2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Fire Stations 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Fire Trucks 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Ambulances 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 3.00 Water Mains (Miles)128.00 128.00 129.50 129.75 130.05 137.50 143.00 144.00 152.23 Wastewater Sanitary Mains (Miles)131.00 131.00 131.00 131.00 131.60 138.80 141.00 151.00 145.28 Storm Mains (Miles)53.00 53.50 53.50 53.50 53.75 66.80 68.00 68.50 41.86 Lift Stations 41.00 41.00 41.00 41.00 41.00 41.00 43.00 43.00 41.00 Solid Waste Collection Vehicles 8.00 8.00 8.00 8.00 8.00 6.00 6.00 8.00 8.00 Other Vehicles 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Source: City of Kalispell Unaudited statistical section 194 CITY OF KALISPELL, MONTANA THE WATER SYSTEM Past Four Fiscal Years % of % of % of % of Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2019/20 Fiscal Year 2020/21 Fiscal Year 2021/22 Fiscal Year 2022/23 2019/20 Water 2020/21 Water 2021/22 Water 2022/23 Water Type of Water Revenues Water Revenues Water Revenues Water Revenues User Business Charges 2,875,645$ Charges 3,410,757$ Charges 3,891,151$ Charges 4,619,300$ Logan Health (KRMC) Hospital 56,850$ 1.98% 87,244$ 2.56% 81,793$ 2.10% 76,652$ 1.66% Red Lion Hotel Hotel 15,426$ 0.54% 12,993$ 0.38% 12,594$ 0.32% 15,402$ 0.33% John Peschel/Valley Linen Cleaner 11,645$ 0.40% 11,849$ 0.35% 14,603$ 0.38% 15,844$ 0.34% Logan Health North Hospital na na na 12,941$ 0.28% Hilton Hotel 9,345$ 0.32% 9,909$ 0.29% 10,679$ 0.27% 9,577$ 0.21% Sems Car Wash Car Wash na na na 10,349$ 0.22% The Summit Athletic Club 14,123$ 0.49% 9,582$ 0.28% 14,440$ 0.37% 11,305$ 0.24% Heritage Place Nursing Home 22,841$ 0.79% 23,023$ 0.68% 22,674$ 0.58% 22,040$ 0.48% Devin Khoury Commercial na na na na na na 10,094$ 0.22% Pro Clean Car Wash Car Wash 9,791$ 0.34% 8,747$ 0.26% 10,119$ 0.26% 9,009$ 0.20% Holiday Inn Express Hotel na na na na na na 8,833$ 0.19% Total 140,021$ 4.87% 163,347$ 4.79% 166,902$ 4.29% 202,046$ 4% 2020 2021 2022 2023 Type of Customer Residential 624,711 740,239 449,259 395,762 Commercial 556,796 563,375 595,963 405,427 Total 1,181,507 1,303,614 1,045,222 801,189 Total direct rate 5.59$ 5.95$ 7.30$ 8.02$ per 1000 gallons Fiscal Year Ended June 30, in city out of city in city out of city in city out of city in city out of city 2020 7.50$ 9.38$ 2.43$ 3.04$ 7.50$ 9.38$ 1.55$ 1.94$ 2021 8.25$ 10.31$ 2.33$ 2.91$ 8.25$ 10.31$ 2.33$ 2.91$ 2022 9.99$ 12.49$ 2.99$ 3.74$ 9.99$ 12.49$ 2.99$ 3.74$ 2023 10.99$ 13.74$ 3.27$ 4.09$ 10.99$ 13.74$ 3.27$ 4.09$ Sources: City of Kalispell Some custormers pay to install a separate irrigation City of Kalispell, Resolutions 4798/4799/5491 meter and are then billed actual meter readings for their irrigation use. The City also bills customers a "sprinkling" rate based off of an average usage in the "winter months" deduction. Monthly Base Rate Rate per 1000 Rate Gallons Monthly Major Water System Users Water Sold by Customer Type Water Rates Gallons Water Irrigation (sprinkling) Base Rate per 1000 Unaudited statistical section195 CITY OF KALISPELL, MONTANA THE SEWER SYSTEM Past Four Fiscal Years 2020 2021 2022 2023 Type of Customer Residential 391,342 437,675 445,326 395,709 Commercial 494,274 496,260 510,803 567,790 Total 885,616 933,935 956,129 963,499 Total direct rate 7.44$ 9.86$ 12.54$ 13.41$ per 1000 gallons Fiscal Year Ended June 30, in city out of city in city out of city Evergreen**Evergreen** 2020 8.44$ 10.55 4.78$ 5.98$ 10,670.00$ 2.20$ 2021 11.19$ 13.99 6.34$ 7.93$ 15,079.00$ 2.96$ 2022 14.22$ 17.78 8.06$ 10.08$ 17,707.14$ 3.27$ 2023 15.21$ 19.01 8.62$ 10.78$ 18,888.86$ 3.38$ Sources: City of Kalispell City of Kalispell, Resolutions 4798/4799/5491 **Evergreen has its own collections system and only uses the City's sewage treatment plant, which results in a reduced charge. The City bills the district, which in turn bills the users within the district. Sewer Sold by Customer Type Sewer Rates Sewer - Evergreen Rate Gallons Rate Gallons Flathead County Water & Sewer District #1 Monthly Rate per Monthly Rate per Base 1000 Base 1000 Unaudited statistical section196 Fiscal Base Incremental Total Base Incremental Total Year Value Value Value Value Value Value 2022/23 7,932,918$ 1,692,963$ 9,625,881$ 1,665,094$ 300,539$ 1,965,633$ 2021/22 7,932,918$ 1,220,447$ 9,153,365$ 1,665,094$ 312,587$ 1,977,681$ 2020/21 7,932,918$ 316,833$ 8,249,751$ 1,665,094$ 34,523$ 1,699,617$ 2019/20 7,932,918$ 610,039$ 8,542,957$ 2018/19 7,932,918$ 75,444$ 8,008,362$ 2017/18 7,932,918$ 278,291$ 8,211,209$ 2016/17 7,932,918$ 399,951$ 8,332,869$ Fiscal Base Incremental Total Base Incremental Total Year Value Value Value Value Value Value 2022/23 390$ 132,270$ 132,660$ 126$ 18,225$ 18,351$ 2021/22 390$ 121,498$ 121,888$ 126$ 15,382$ 15,508$ 2020/21 390$ 92,647$ 93,037$ 126$ 14,840$ 14,966$ 2019/20 390$ 89,170$ 89,560$ 126$ 14,841$ 14,967$ 2018/19 390$ 88,448$ 88,838$ 126$ 15,782$ 15,908$ 2017/18 390$ 106,887$ 107,277$ 126$ 18,751$ 18,877$ 2016/17 390$ 94,851$ 95,241$ 126$ 20,764$ 20,890$ Fiscal Base Incremental Total Year Value Value Value 2022/23 7,057$ 274,154$ 281,211$ 2021/22 7,057$ 251,894$ 258,951$ 2020/21 7,057$ 242,333$ 249,390$ 2019/20 7,057$ -$ 5,409$ 2018/19 7,057$ 541$ 7,598$ 2017/18 7,057$ 619$ 7,676$ Source: Based on information provided by Flathead County and the Montana Department of Revenue Note: Property is assessed by the State Department of Revenue every two years. (expires January 1, 2037) Westside Tax Increment District (Kalispell C) City of Kalispell, Montana Tax Increment District Taxable Valuation Detail Past Seven Fiscal Years (Kalispell H) (expires January 1, 2020)(expires January 1, 2020) Downtown TIF (expires January 1, 2035) Old School Station, Technology Old School Station, Industrial Glacier Rail Park TEDD (expires January 1, 2032) (Kalispell G) Unaudited statistical section 197 Incremental District's Incremental Assessed/Market Taxable Value of Taxable Taxable Value as Fiscal Value of Property in Property in the Value of City Taxable Value Percentage of City's Year the Westside TIF Westside TIF Westside TIF (excludes Incremental Value)Taxable Value 2022/23 520,574,317$ 9,625,881$ 1,692,963$ 56,619,869$ 2.99% 2021/22 495,020,325$ 9,153,365$ 1,220,447$ 55,213,209$ 2.21% 2020/21 446,152,253$ 8,249,751$ 316,833$ 48,971,275$ 0.65% 2019/20 462,009,037$ 8,542,957$ 610,039$ 48,088,400$ 1.27% 2018/19 448,463,121$ 8,292,481$ 75,444$ 42,868,315$ 0.18% 2017/18 430,387,494$ 8,153,865$ 278,291$ 41,231,226$ 0.67% 2016/17 420,898,376$ 8,268,210$ 399,951$ 38,018,010$ 1.05% 2015/16 393,088,367$ 6,520,032$ -$ 37,952,794$ 0.00% 2014/15 340,553,479$ 9,129,813$ 1,219,018$ 39,521,550$ 3.08% 2013/14 315,211,210$ 8,324,668$ 394,482$ 39,334,849$ 1.00% Source: Based on information provided by Flathead County and the Montana Department of Revenue Note: Property is assessed by the State Department of Revenue every two years. Westside TIF (Kalispell C) City of Kalispell, Montana Westside Tax Increment District Comparison to City Taxable Value Past Seven Fiscal Years (expires January 1, 2038) Unaudited statistical section 198 % of % of % of TIF District TIF District TIF District 2019/20 Taxable 2020/21 Taxable 2021/22 Taxable 2022/23 Type of Taxable Value Taxable Value Taxable Value Taxable Taxpayer Business Value 8,542,957$ Value 8,249,751$ Value 9,153,365$ Value Centurylink Telecommunications 961,073$ 11.25%760,122$ 9.21%852,531$ 10.33%851,573 Flathead Electric Coop Utility 515,795$ 6.04%517,557$ 6.27%482,733$ 5.85%513,071 WSPGB Mall LLC Mall 216,116$ 2.53%157,025$ 1.90%159,167$ 1.93%159,167 Stoneriver National Flood Services Insurance 157,324$ 1.84%156,762$ 1.90%171,563$ 2.08%171,563 First Interstate Bank Financial Services 177,021$ 2.07%154,579$ 1.87%155,177$ 1.88%155,177 Northwestern Energy Utility 151,661$ 1.78%153,357$ 1.86%148,097$ 1.80%158,356 Spring Creek Development LLC Lodging 137,214$ 1.61%133,596$ 1.62%152,967$ 1.85%152,967 Kalispell Ventures LLC Assisted Living 117,028$ 1.37%115,751$ 1.40%108,386$ 1.31%108,386 Galleria LLC Mulit Family 97,666$ 1.18%92,553 Smiths Food & Drug Food and Drug 87,732$ 1.06%87,732 Super 1 Food and Drug 107,083$ 1.30%87,359$ 1.06%87,359 Total 2,433,232$ 28.48%2,255,832$ 27.34%2,503,378$ 30.34%2,537,904$ Debt Service Coverage for the Westside TIF 2018/19 2019/20 2020/21 2021/22 2022/23 Westside Tax Increment Revenue available for debt service 357,028$ 705,082$ 507,082$ 1,139,658$ 1,495,362$ Average Annual Debt Service(1)375,700$ 375,700$ 377,695$ 377,695$ 377,695$ Debt Service Coverage 0.95 1.88 1.34 3.02 3.96 (1) Average annual debt service on the outstanding Westside TIF Bonds is equal to $6,043,125/16 per the debt schedule in the Official Statement. Trends in Tax Increment Fiscal Base Incremental Total Tax Increment Entitlement Total Tax Bonds Maximum Annual Year Value Value Taxable Value Revenue Share Revenue Increment Outstanding Debt Service Coverage 23 7,932,918$ 1,692,963$ 9,625,881$ 1,217,018$ 278,344$ 1,495,362$ 3,990,000$ 377,695$ 3.96 22 7,932,918$ 1,220,447$ 9,153,365$ 863,580$ 276,078$ 1,139,658$ 4,200,000$ 377,695$ 3.02 21 7,932,918$ 316,833$ 8,249,751$ 263,955$ 243,128$ 507,083$ 4,405,000$ 377,695$ 1.34 20 7,932,918$ 610,039$ 8,542,957$ 461,954$ 243,128$ 705,082$ 4,600,000$ 375,700$ 1.88 19 7,932,918$ 75,444$ 8,008,362$ 95,850$ 243,128$ 338,978$ 4,790,000$ 375,700$ 0.90 City of Kalispell, Montana Westside TIF Operating Data Last Three Fiscal Years Un a u d i t e d s t a t i s t i c a l s e c t i o n Trends in Value City of Kalispell, Montana Principal Property Tax Payers in Westside TIF Last Three Fiscal Years 199 CITY OF KALISPELL, MONTANA Special Improvement Districts Operating Data June 30, 2023 Original Maturity Bonds Cash Assessments Delinquent Bond Issue Amount Date Outstanding Balance Outstanding Assessments 1 SID 344 4,520,000$ 6/30/2026 690,000$ 3,971$ 1,110,933$ 511,415$ 2 SID 345 242,000$ 6/30/2029 102,000$ 24,801$ 91,968$ -$ TOTAL 4,762,000$ 792,000$ 28,772$ 1,202,901$ 511,415$ Revolving Fund Principal Cash Amount Assessment Total Annual Fiscal Year Ended June 30, Balance of Debt Billing Collections 2014 281,562$ 3,392,922$ 456,236$ 187,565$ 2015 283,466$ 3,074,240$ 465,275$ 616,527$ 2016 285,488$ 2,761,499$ 448,878$ 396,747$ 2017 288,807$ 2,427,060$ 433,302$ 379,258$ 2018 292,053$ 2,045,507$ 417,768$ 365,721$ 2019 296,996$ 1,793,229$ 329,721$ 272,959$ 2020 221,196$ 1,518,000$ 324,327$ 253,437$ 2021 222,826$ 1,409,000$ 294,763$ 248,302$ 2022 224,033$ 1,036,000$ 283,220$ 238,621$ Last Ten Fiscal Years Outstanding SIDs Revolving Fund Balance and Bonds Secured Thereby - SIDs Billing and Collections unaudited statistical section 200 2018/19 2019/20 2020/21 2021/22 2022/23 Direct Debt Per Capita 355.03 44.74 302.31 - - Direct and Estimated Overlapping Debt Per Capita 2,394.40 1,816.79 2,313.02 - - Direct Debt to the City's Assessed/Market Valuation 0.32%0.04%0.25%0.00%0.00% Direct and Estimated Overlapping Debt to the City's Assessed/Market Valuation 2.17%1.50%1.90%0.00%0.00% Direct Debt to the City's Taxable Valuation (excluding incremental values)19.40%2.26%15.46%0.00%0.00% Direct and Estimated Overlapping Debt to the City's Taxable Valuation (excluding incremental values)130.83%91.64%118.31%0.00%0.00% City's Assessed/Market Valuation Per Capita 110,208 121,000 121,609 - - City's Taxable Valuation Per Capita (excluding incremental values)1,830 1,783 1,955 - - City of Kalispell, Montana General Obligation Debt Ratios Last Five Fiscal Years unaudited statistical section201 Westside TIF Operating Data Fiscal Base Incremental Total Tax Increment Entitlement Total Tax Bonds Maximum Annual Year Value Value Taxable Value Revenue Share Revenue Increment Outstanding Debt Service Coverage 2022/23 7932918 1692963 9,625,881$ 1,217,018$ 278,344$ 1,495,362$ 3,990,000$ 368,375$ 4.06 2021/22 7932918 1220447 9,153,365$ 863,580$ 276,078$ 1,139,658$ 4,200,000$ 368,375$ 3.09 2020/21 7932918 316833 8,249,751$ 263,955$ 243,128$ 507,083$ 4,405,000$ 368,375$ 1.38 2019/20 7932918 610039 8,542,957$ 461,954$ 243,128$ 705,082$ 4,600,000$ 368,375$ 1.91 2018/19 7932918 75444 8,008,362$ 95,850$ 243,128$ 338,978$ 4,790,000$ 368,375$ 0.92 2017/18 7932918 278921 8,211,839$ 286,901$ 243,128$ 530,029$ 4,960,000$ 368,375$ 1.44 2016/17 7932918 399951 8,332,869$ 285,343$ 243,128$ 528,471$ 433,500$ 368,375$ 1.43 2015/16 7932918 0 6,663,338$ 38,884$ 245,678$ 284,562$ 448,000$ 368,375$ 0.77 Un a u d i t e d s t a t i s t i c a l s e c t i o n City of Kalispell, Montana Westside TIF Operating Data Last Five Fiscal Years Trends in Value Trends in Tax Increment 202 SINGLE AUDIT SECTION REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AS REQUIRED BY U.S. OFFICE OF MANAGEMENT AND BUDGET UNIFORM GUIDANCE, AUDITS OF STATE AND 9iIW.-1 IKeiIT1 a OW! 105 1 W!I [.y:11 11l[i]e,Iola] II I 203 Federal Awards Reports in Accordance with the Uniform Guidance June 30, 2023 City of Kalispell, Montana eidebailly.com 204 City of Kalispell Table of Contents Year Ended June 30, 2023 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance .. ................................................................................................................................................................................... 3 Schedule of Expenditures of Federal Awards ............................................................................................................ 6 Notes to Schedule of Expenditures of Federal Awards ............................................................................................. 7 Schedule of Findings and Questioned Costs Section I – Summary of Auditor’s Results .............................................................................................................. 8 Section II – Financial Statement Findings .............................................................................................................. 9 Section III – Federal Award Findings and Questioned Costs ................................................................................ 11 Summary Schedule of Prior Audit Findings .............................................................................................................. 12 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 ............... 1 .................................................................................................................................................... 205 What inspires you, inspires us. | eidebailly.com 7001 E. Belleview Ave., Ste. 700 | Denver, CO 80237-2733 | TF 866.740.4100 | T 303.770.5700 | F 303.770.7581 | EOE 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 The City Council City of Kalispell, Montana We have audited, 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 (Government Auditing Standards), the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Kalispell, Montana (the City) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated March 28, 2024. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing 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 City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item 2023-001 that we consider to be a material weakness. 206 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from 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 financial statements. 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. City’s Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Findings and Questioned Costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Denver, Colorado March 28, 2024 207 What inspires you, inspires us. | eidebailly.com 7001 E. Belleview Ave., Ste. 700 | Denver, CO 80237-2733 | TF 866.740.4100 | T 303.770.5700 | F 303.770.7581 | EOE Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance The City Council City of Kalispell, Montana Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the City of Kalispell, Montana’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above. 208 Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City‘s federal programs. Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: •Exercise professional judgment and maintain professional skepticism throughout the audit. •Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. •Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s ’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. 209 Report on Internal Control over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Denver, Colorado March 28, 2024 210 City of Kalispell Schedule of Expenditures of Federal Awards Year Ended June 30, 2023 Federal Financial Pass-through EntityAssistance Listing Identifying Number Expenditures U.S. Department of Transportation:Passed through State Department of Transportation:Highway Safety Cluster - National Priority Safety Programs 20.616 107278 8,967$ Total U.S. Department of Transportation 8,967 U.S. Department of JusticeDirect Assistance:Bulletproof Vest Partnership Program 16.607 N/A 4,350 Direct Assistance:Edward Byrne Memorial Justice Assistance Grant Program 16.738 2019-DJ-BX-0310 12,060 Passed through Flathead County:Edward Byrne Memorial Justice Assistance Grant Program 16.738 11-G01-91260 26,314 Subtotal Edward Byrne Memorial Justice Assistance Grant Program 38,374 Total U.S. Department of Justice 42,724 U.S. Department of Homeland SecurityPassed through Flathead County:Homeland Security Grant Program 97.067 N/A 2,655 Total U.S. Department of Homeland Security 2,655 U.S. Environmental Protection AgencyDirect Assistance:Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative Agreements 66.818 BF-97863001 2,592 Passed through State of Montana Department of Natural Resources and Conservation:State Clean Water Revolving Fund Cluster - A Loan - 100% Federally Funded 66.458 N/A 375,000 State Clean Water Revolving Fund Cluster - B Loan - 83.3% Federally Funded 66.458 N/A 508,122 Subtotal State Clean Water Revolving Fund 883,122 Total U.S. Environmental Protection Agency 885,714 Executive Office of the PresidentPassed through State of MT Board of Crime Control:High Intensity Drug Trafficking Areas Program 95.001 G11RM0035A, G12R, G13R 15,980 Total Exectuvie Office of the President 15,980 U.S. Department of the TreasuryDirect Assistance:COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 661,307 Passed through State of Montana:COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 3,066,691 Subtotal COVID-19 Coronavirus State and Local Fiscal Recovery Funds 3,727,998 Total U.S. Department of the Treasury 3,727,998 Total Federal Financial Assistance 4,684,038$ Federal Grantor/Pass-throughGrantor/Program or Cluster Title 211 City of Kalispell Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2023 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of the City of Kalispell under programs of the federal government for the year ended June 30, 2023. The information this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. Note 2 - Summary of Significant Accounting Policies Expenditures reported in the Schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. Note 3 - Indirect Cost Rate The City has not elected to use the 10% de minimis indirect cost rate. 212 City of Kalispell Schedule of Findings and Questioned Costs Year Ended June 30, 2023 Section I – Summary of Auditor’s Results FINANCIAL STATEMENTS Type of auditors' report issued Unmodified Internal control over financial reporting:Material weaknesses identified YesSignificant deficiencies identified not consideredto be material weaknesses None reported Noncompliance material to financial statements noted?No FEDERAL AWARDS Internal control over major program:Material weaknesses identified NoSignificant deficiencies identified not consideredto be material weaknesses None reported Type of auditor's report issued on compliancefor major programs:Unmodified Any audit findings disclosed that are required to be reported inaccordance with Uniform Guidance 2 CFR 200.516(a)?No Identification of major programs: Federal Financial Asssistance Listing Coronavirus State and Local Fiscal Recovery Funds 21.027Clean Water State Revolving Fund Cluster 66.458 Dollar threshold used to distinguish between Type Aand Type B programs:$750,000 Auditee qualified as low-risk auditee?No Name of Federal Program or Cluster 213 City of Kalispell Schedule of Findings and Questioned Costs Year Ended June 30, 2023 Section II – Financial Statement Findings 2023-001 Financial Reporting and Account Balance Reconciliations Material Weakness in Internal Controls over Financial Reporting Criteria: Management is responsible for the fair presentation of the financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) and for establishing and maintaining an effective system of internal control over financial reporting. A good system of internal control contemplates an adequate system for recording and processing adjusting journal entries significant to the financial statements. Condition: During the course of our engagement, we proposed material audit adjustments to the City of Kalispell’s (the City) recorded account balances in the areas of cash and investments and related unrealized losses, which if not recorded, would have resulted in a material misstatement of the City’s financial statements. Material audit adjustments were also proposed for the Tourism Business Improvement District (TBID), a discretely presented component unit of the City, in the areas of fixed assets and accounts receivable, resulting in a restatement. We also noted the City does not have a formal process to document review and approval over manual journal entries. Adjusting journal entries for the City are as follows: General Fund – Unrealized Loss $177,030 Street Maintenance Fund – Unrealized Loss $146,286 Water Fund – Unrealized Loss $101,661 Sewer Fund – Unrealized Loss $354,062 Non-Major Governmental Funds – Unrealized Loss $357,569 Non-Major Enterprise Funds – Unrealized Loss $42,067 General Fund – Cash and Investments $177,030 Street Maintenance Fund – Cash and Investments $146,286 Water Fund – Cash and Investments $101,661 Sewer Fund – Cash and Investments $354,062 Non-Major Governmental Funds – Cash and Investments $357,569 Non-Major Enterprise Funds – Cash and Investments $42,067 To record unrealized loss on investments for the fiscal year 214 City of Kalispell Schedule of Findings and Questioned Costs Year Ended June 30, 2023 Adjusting journal entries for TBID are as follows: TBID – Accounts Receivable $146,286 TBID – Unrestricted Net Assets $146,286 To record a receivable for TBID hotel collections as of fiscal year-end TBID – Unrestricted Net Assets $46,348 TBID – Accumulated Depreciation $46,348 To record accumulated depreciation related to TBID fixed assets In addition to the above journal entries, we also identified several errors related to prepaid expenses and deferred inflows of resources related to leases that resulted in uncorrected misstatements as follows: •Prepaid expenses were overstated by $140,444 as of fiscal year-end. •Deferred inflows of resources relating to leases were overstated by $129,865. Of this, $94,464 was applicable to the prior year. Cause: The City’s internal controls were not sufficient to prevent or detect and correct the account balances reported on the financial statements as of June 30, 2023. Investment balances were not appropriately valued at fiscal year-end resulting in a lack of recognition of the unrealized loss amounts. Additionally, the City collects hotel room tax fees on behalf on the Tourism Business Improvement District and remits them to TBID on a quarterly basis. As of fiscal year-end, TBID had not recorded the related accounts receivable amount. TBID also did not appropriately record accumulated depreciation on fixed assets as of fiscal year- end. Effect: Material audit adjustments were recorded to the financial statements. Recommendation: We recommend the City enhance internal controls and procedures to ensure the proper analysis and reconciliation of account balances reported on the financial statements after the fiscal year-end close. Views of Responsible Officials: Management agrees with the finding. 215 City of Kalispell Schedule of Findings and Questioned Costs Year Ended June 30, 2023 Section III – Federal Award Findings and Questioned Costs No current year findings reported. 216 City of Kalispell Summary Schedule of Prior Audit Findings Year Ended June 30, 2023 Summarized below is the current status of all audit findings reported in the prior year audit’s schedule of audit findings and questioned costs. Finding No.Program Name/Description CFDA No. Compliance Requirement Status of Corrective Action 2022-001 Late Audit Submission N/A N/A Implemented 217