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FY24 Annual Comprehensive Financial ReportCITY" KALISPELL CITY OF KALISPELL, MONTANA ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR 2024 July 1, 2023 - June 30, 2024 Prepared by the City of Kalispell Finance Department INTRODUCTORY SECTION CITY OF KALISPELL ANNUAL COMPREHENSIVE FINANCIAL REPORT TABLE OF CONTENTS INTRODUCTORY SECTION Tableof Contents.................................................................................................................................................. 1-2 ACFRLetter of Transmittal................................................................................................................................ 3-6 OrganizationalChart........................................................................................................................................... 7 City Elected and Appointed Officials.................................................................................................................. 8 FINANCIAL SECTION IndependentAuditor's Report.............................................................................................. 10-13 Management's Discussion and Analysis.................................................................................... 14-25 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Position..................................................................................................................... 28 Statementof 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 HealthcareBenefits.............................................................................................................................. 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 — NonmajorProprietary 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 - InternalService Funds........................................................................................... 171 Combining Statement of Cash Flows — Internal Service Funds .................................................... 172 CITY OF KALISPELL ANNUAL COMPREHENSIVE FINANCIAL REPORT TABLE OF CONTENTS 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 - CustodialFunds................................................................................................... 175 STATISTICAL SECTION Financial Trends NetPosition by Component..................................................................................................................... 177 Changesin Net Position........................................................................................................................... 178 FundBalances of Governmental Funds................................................................................................. 179 Changes in Fund Balances, Governmental Funds................................................................................ 180 Revenue Capacity MarketValue of Taxable Property......................................................................................................... 181 Direct and Overlapping Property Tax Rates......................................................................................... 182 PrincipalProperty 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 LegalDebt Margin Information............................................................................................................. 187 Direct and Overlapping Governmental Activities Debt........................................................................ 188 PledgedRevenue Coverage..................................................................................................................... 189 Demographics and Economics Demographic and Economic Statistics................................................................................................... 190 PrincipalEmployers................................................................................................................................ 191 Operating Statistics Full-time Equivalent City Government Employees by Function/Program......................................... 192 OperatingIndicators by Function.......................................................................................................... 193 Capital Assets Statistics by Function/Program..................................................................................... 194 Additional Information TheWater System.................................................................................................................................... 195 TheSewer 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 GovernmentAuditing Standards........................................................................................................... 205-206 Independent Auditor's Report on Compliance for Each Major Program and Report on Internal Control Over Compliance Required by Uniform Guidance............................................................................... 207-209 Schedule of Expenditures of Federal Awards and Notes................................................................................ 210 Notes to the Schedule of Expenditures of Federal Awards............................................................................. 211 Schedule of Findings and Questioned Costs..................................................................................................... 212-216 2 CITY OF KALISPELL January 29, 2025 City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 Telephone (406) 758-7000 Fax - (406) 758-7758 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, 2024, 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, 2024, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial 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 the City's financial statements for the fiscal year ended June 30, 2024, 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 accompanythe 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 statutes 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 carrying out 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 Cityalso 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, otherthan payments from agencyfunds, 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 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 Kalispell, Montana, has experienced significant population growth in recent years. According to the U.S. Census Bureau, the city's population increased from 24,558 in 2020 to an estimated 29,886 byJuly 1, 2023, marking a 21.7% rise over this period. The rapid population increase has outpaced housing development, leading to a tight housing market. In June 2024 the median sale price for a home in Kalispell, Montana, was approximately $530,000. This represents a decrease from the peak median home price of $647,500 observed in June 2022. Homes were on the market for an average of 108 days, up from 57 days the prior year, indicating a potential slowdown in market activity. The disparity between population growth and housing availability has contributed to rising home prices, making affordability a concern for many residents. This trend is consistent with broader patterns observed across Montana, where an influx of new residents has driven up housing demand and prices. Despite these challenges, Kalispell continues to attract businesses across various sectors, including technology and manufacturing, due to its favorable operating environment. Tourism remains a significant economic driver, with attractions like Glacier National Park and nearby ski resorts drawing visitors year- round. 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 S13184, 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 for 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. Acknowledgements The City Administration takes seriously the duty of transparency in governmental operations and accountability to the public. The annual financial report is one of the key documents in keeping the public informed of the City's operations and finances. Thank you for your support and leadership resulting in the City's ability to meet goals and to provide the citizens of Kalispell with quality services. Sincerely, Aimee Cooke Finance Director y MUNICIPAL JUDGE Alison Howard CITY CLERK Aimee Brunckhorst HUMAN RESOURCES Denise Michel CITY OF KALISPELL, MONTANA ORGANIZATIONAL CHART CITIZENS OF KALISPELL CITY COUNCIL MAYOR Mark Johnson WARD I WARD II WARD III WARD IV Karl Gabriel Sam Nunnally Jessica Dahlman Jed Fisher Sandy Carlson Chad Graham Ryan Hunter Sid Daoud CITY MANAGER Doug Russell FINANCE Aimee Cooke PUBLIC WORKS I INFORMATION Susie Turner TECHNOLOGY Erika Billiet PLANNING, PARKS & BUILDING & COMMUNITY RECREATION DEVELOPMENT Chad Fincher Jarod Nygren PUBLIC SAFETY PUBLIC SAFETY LEGAL FIRE POLICE Johnna Preble Daniel Pearce Jordan Venezio CITY OF KALISPELL, MONTANA CITY ELECTED AND APPOINTED OFFICIALS TERM ELECTED OFFICIALS EXPIRES Mayor Mark Johnson 12/2025 Council members: Kari Gabriel Ward I 12/2027 Jessica Dahlman Ward III 12/2025 Sandy Carlson Ward I 12/2026 Ryan Hunter Ward III 12/2027 Sam Nunnally Ward II 12/2027 Sid Daoud Ward IV 12/2027 Chad Graham Ward II 12/2026 Jed Fisher Ward IV 12/2025 APPOINTED CITY OFFICIALS City Manager Doug Russell City Attorney Johnna Preble City Clerk Aimee Brunckhorst Police Chief Jordan Venezio Fire Chief Dan Pearce Finance Director Aimee Cooke Public Works Director Susie Turner Parks Director Chad Fincher Planning, Building, Community Dev. Jarod Nygren Human Resource Director Denise Michel City Treasurer Carrie Jones 8 FINANCIAL SECTION CPAs & BUSINESS ADVISORS Independent Auditor's Report To the 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, 2024, 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, 2024, 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. 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. What inspires you, inspires us. eidebailly.com 10 7001 E. Belleview Ave., Ste. 700 Denver, CO 80237-2733 TF 866.740.4100 T 303.770.5700 F 303.770.7581 EOE 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. 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. is 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 PIERS, MPORS, and FURS, Schedule of Contributions for the Last Ten Fiscal Years for PIERS, 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 the individual budgetary comparison 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. 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. iNa Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 29, 2025 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, 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 January 29, 2025 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, 2024. 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 $270,418,086 (net position). Of this amount, $28,756,950 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. ➢ Total City net position increased by $33,543,772 over the prior fiscal year. Developers contributed $13,651,430 of streets, and over $1,400,000 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 $31,040,576, reflecting an increase of $4,462,273 from the prior year. Of this amount $2,368,793 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 $4,609,562 or 34% of fiscal year 2024 total general fund expenditures. ➢ The City's total debt increased by $13,755,072 during fiscal year 2024. Debt of governmental activities decreased by 10%, largely due to the repayment of several loans in FY24. Business - type activities debt saw a significant increase of 61%, primarily due to new borrowing. The City drew $16,090,305 in State Revolving Fund (SRF) loans for both sewer and water projects, notably increasing SRF debt from $22.9 million to $36.8 million. The largest new borrowing was for the water Upperzone Well & Tank project, with a total of $15,160,813 committed for this project. 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. i!7 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. 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 ill 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. ➢ 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 103-114. 17 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, 2024, the City of Kalispell's assets and deferred outflows or resources exceeded liabilities and deferred inflows or resources by $270,418,086. The largest portion of the City's net position ($202,603,344 or 75%) reflects its net investment in capital assets (e.g., land, buildings, machinery and equipment, infrastructures). The City uses these capital 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: Governmental Business -type Activitie s Activitie s Change Change FY24 FY23 Inc Dec FY24 FY23 Inc Dec Current and Other Assets $ 42,730,592 $ 39,421,209 $ 3,309,383 $ 56,243,915 $ 49,462,957 $ 6,780,958 Capital Assets 104,458,090 94,858,771 $ 9,599,319 140,831,243 112,342,964 28,488,279 Total Assets 147,188,682 134,279,980 12,908,702 197,075,158 161,805,921 35,269,237 Deferred Outflows of Resources 3,678,610 4,816,676 (1,138,066) 323,656 526,719 (203,063) Long-term Liabilities Outstanding $ 20,332,551 $ 21,094,865 $ (762,314) $ 37,611,223 $ 23,776,138 $ 13,835,085 Other Liabilities 11,014,175 11,614,371 (600,196) 4,277,677 2,926,582 1,351,095 Total Liabilities 31,346,726 32,709,236 (1,362,510) 41,888,900 26,702,720 15,186,180 Deferred Inflow of Resources 2,257,996 2,648,285 (390,289) 2,354,398 2,494,741 (140,343 Net Position: Net Investment in Capital Assets 99,031,934 88,825,475 10,206,459 103,571,410 89,445,343 14,126,067 Restricted 26,431,014 22,491,754 3,939,260 12,626,778 12,763,546 (136,768) Unrestricted (8,200,378) (7,578,094) (622,284) 36,957,328 30,926,290 6,031,038 Total net position $ 117,262,570 $ 103,739,135 $ 13,523,435 $153,155,516 $133,135,179 $ 20,020,337 An additional portion of the City's net position ($39,057,792 or 14.5%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($28,756,950) may be used to meet the City's ongoing obligations to citizens and creditors. The Net position of the City increased almost 13% for fiscal year 2024 in comparison to fiscal year 2023 ($270 million compared to $236 million). 18 Changes in Net Position Revenues Program revenues (by major source): Charges for services Operating grants and contributions Capital grants and contributions General revenues (by major source): Property taxes for general purposes Video poker approptionment Miscellaneous Gain (loss) on sale of capital assets Interest/investment earnings State entitlement Gas Tax Unrealized gain (loss) on Investments Transfers - net Total Revenues Program expenses General government Public Safety Public Works Parks and recreation Community development Debt service - interest Miscellaneous Water Sewer Solid Waste Total expenses Excess (deficiency) before special items and transfers Extraordinary item - Contribution to other Gov't Increase (decrease) in net position Net Position - beginning Restatement Net Position - ending Governmental Business -type Activities Activities Change Change FY24 FY23 Inc (Dec) FY24 FY23 Inc (Dec) $ 8,466,353 $ 8,937,848 $ (471,495) $ 20,084,023 $ 18,852,006 $ 1,232,017 7,455,386 3,473,355 3,982,031 47,077 61,459 (14,382) 13,651,430 9,576,378 4,075,052 6,837,591 4,338,411 2,499,180 14,338,867 11,458,918 2,879,949 56,826 58,275 (1,449) 368,915 482,528 (113,613) (22,440) - (22,440) - - - 1,357,287 833,935 523,352 1,952,712 1,185,464 767,248 3,631,373 3,544,415 86,958 0 0 0 1,032,934 1,304,854 (271,920) 0 0 0 149,231 (615,226) 764,457 270,830 (1,116,521) 1,387,351 (4,045,439) (820,691) (3,224,748) 4,045,439 820,691 3,224,748 46,440,723 38,234,589 8,206,134 33,237,672 24,141,510 9,096,162 4,685,456 4,507,930 177,526 15,354,211 14,022,338 1,331,873 7,768,321 6,367,131 1,401,190 3,740,127 3,336,771 403,356 1,239,273 369,085 870,188 249,989 238,044 11,945 454,180 428,202 25,978 3,921,227 3,320,393 600,834 7,822,326 6,787,742 1,034,584 1,473,782 1,243,358 230,424 33,491,557 29,269,501 4,222,056 13,217,335 11,351,493 1,865,842 13,523,434 8,965,088 4,558,346 20,020,337 12,790,017 7,230,320 13,523,434 8,965,088 4,558,346 20,020,337 12,790,017 7,230,320 103,739,135 94,775,116 8,964,019 133,135,179 120,345,162 12,790,017 - (1,069) 1,069 - - - $ 117,262,570 $103,739,135 $ 13,523,434 $153,155,516 $133,135,179 $20,020,337 Governmental Activities. Governmental activities in fiscal year 2024 increased the City's net position by $13,523,434, an increase of $4,554,919 when compared to the prior fiscal year. Overall, revenues of the governmental funds increased by $8,206,134. Expenses increased by $4,225,056. The key elements of the overall net position change were: ➢ Total program revenues increased by $7,563,148, while general revenues increased by ➢ $642,986. ➢ Capital Grants and Contributions (program revenues) were $4,052,612 more than fiscal year 2023, largely due to a higher volume of donated streets received in FY24. ➢ Operating Grants and Contributions (program revenues) were $3,982,031 more than fiscal year 2023, primarily due to multiple ongoing projects funded through the ARPA program. iK ➢ Public Safety's program expenses increased about 9.5% ($1,333,324). This increase can be attributed to the investments in updated safety equipment, higher vehicle replacement costs, and increased personnel expenses, including salary increases. ➢ Public Works program expenses increased about 20% ($1,403,166). This increase can be attributed to higher personnel costs in the street department, increased cost for supplies and materials, and multiple capital purchases. These include a new crack sealer, sander & deicer, and plow for the street department, a vehicle replacement for light maintenance, and increased spending on sidewalk and curb repairs, replacements, and alley paving projects. 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. Expenses and Program Revenues -Governmental Activities for fiscal year 2024 $ 25,000,000 820,000,000 815,000,000 510,000,000 S5,000,OOO so gen gov't pub pub parks/rec con•m safety works dev IN expenses ■ prog rev Revenue by source - Governmental Activities Fiscal Year 2024 ■ Chargesforservices ■ Operating grants/contributions • Capital grants/contributions • Property taxes ■ State entitlement �s Other M Business -type activities. Business -type activities increased the City of Kalispell's net position by $20,020,337. The factors leading to this increase were: ➢ Overall, revenues of the City's business -type activities increased $9,096,162. An increase in charges for services revenue (water and sewer rate increases) of 1,232,017, as well as $2,499,180 in capital grants and contributions in water and sewer. Most of this increase is developers' contributions of infrastructure in water and sewer infrastructure. ➢ Program expenses increased 16% from the prior fiscal year. The increase was mainly attributed to higher personnel costs resulting from salary adjustments. Additionally, operation costs rose alongside heightened demand for services resulting from the city's growth. The following charts help illustrate the information presented above related to business -type activities net position. Expenses and Program Revenues -Business Type Activities Fiscal Year2024 516,000,000 S 14,000,000 512,000,000 $10,000,000 $8,000,000 $6, 000,000 $4, 000,000 $2,000,000 ' so water sewer solid waste ■ expenses ■ prog rev Revenue by Source - Business -Type Activities Fiscal Year 2024 0% ■ Charges for services ■ Operating grants/contributions * Capital grants/contributions ■ Investment/other Earnings Q 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 2024, the City of Kalispell's governmental funds reported combined ending fund balances of $31,040,576, an increase of $4,458,846 in comparison with the prior fiscal year. Approximately 8% of this amount ($2,366,354) constitutes unassigned fund balance, which is available for spending at the City's discretion. The remainder of the fund balance is either nonspendable, restricted, or assigned to indicate that it is 1) not in spendable form ($0), 2) restricted for particular purposes ($26,430,026), or 3) assigned for particular purposes ($2,240,769). MAJOR GOVERNMENTAL FUNDS The General Fund is the chief operating fund of the City of Kalispell. At the end of fiscal year 2024 unassigned fund balance of the general fund was $2,366,354, while total fund balance was $4,607,123. The fund balance decreased by $580,106 during fiscal year 2024. 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 16 percent of total general fund expenditures, while total fund balance represents approximately 34% 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, 2024, the fund balance of this fund was $4,668,336, a $745,335 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: Proprietary Fund Net Position % Of Unrestricted Unrestricted Change in % Change in Net Position Net Position Net Position Net Position Water - major fund $ 14,630,111 40% $ 9,198,699 46% Sewer - major fund $ 21,373,996 58% $ 10,796,309 54% Other - solid waste $ 953,221 3% $ 25,329 0% Total $ 36, 957, 328 100% $ 20, 020, 337 100% 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 2024 was $14,726,304. Actual expenditures for the year were $13,730,755, a favorable variance of $995,549, mostly attributable to salary vacancy savings. Actual revenues of the general fund were $14,055,329, $385,675 more than the budgeted amount of $13,413,963. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At the end of 2024, the City of Kalispell has $245,435,590, 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. 23 CITY OF KALISPELL'S CAPITAL ASSETS (NET OF DEPRECIATION/AMORIZATION)- Land Governmental activities 2024 $ 3,743,166 $ 2023 3,743,166 Business -type activities 2024 $ 354,021 2023 $ 354,021 Total 2024 $ 4,097,187 2023 $ 4,097,187 Buildings 4,413,468 5,005,458 23,999 26,341 4,437,467 5,031,799 Improvements (not buildings) 12,521,015 13,239,425 12,521,015 13,239,425 Machinery and equipment 3,997,358 4,072,866 1,220,923 615,952 5,218,281 4,688,818 Information Technology 291,425 105,453 291,425 105,453 Central Garage 87,245 92,193 87,245 92,193 Infrastructure 79,158,056 68,334,562 79,158,056 68,334,562 Construction in Progress 246,360 268,800 28,692,040 9,215,185 28,938,400 9,483,985 Source of Supply 4,298,925 4,479,296 4,298,925 4,479,296 Pumping Plant 1,625,619 1,706,128 1,625,619 1,706,128 Treatment Plant 14,985,822 15,710,798 14,985,822 15,710,798 Transmission and Distribution 71,316,687 63,560,179 71,316,687 63,560,179 General Plant 889,254 642,756 889,254 642,756 Storm Sewer system 17,423,954 16,032,305 17,423,954 16,032,305 Right to Use - lease $ 16,866 $ 23,886 102,328 106,444 Right to Use - Subscription $ 15,996 $ 31,122 10,010 19,475 Total $ 104,490,951 $ 94,916,931 $ 140,943,582 $ 112,468,880 $ 245,434,533 $ 207,385,811 assets of the City's internal service funds included in governmental activities Major Governmental funds capital asset events during the fiscal year 2024 included the following: ➢ Vehicles and other equipment with a cost basis of $444,596 were added. This included four new police vehicles, 30 Radios for the Fire Department, and a new vehicle for Public Works administrative department. o The street department acquired equipment valued at $146,412, which included a sander/ deicer combo unit, tilt trailer, crack sealer, and plow. o The Parks department purchased equipment costing $67,514, including a Ford pickup, flatbed, and trailer. ➢ Building improvements included a new boiler for Fire Station 61 at a cost of $54,898. ➢ Paved 8 alleys at a total cost of $56,074. Replaced 987', 3 blocks of sidewalks valued at $96,890. ➢ Disposed assets with a cost basis of $97,874. Major Business -type funds capital asset events during the fiscal year 2024 included the following: ➢ Water Meter System Upgrade at a cost of $382,544. ➢ 7,489 linear feet of new water main was installed at a value of $849,545. ➢ 3,619 linear feet of new sanitary sewer main valued at $255,311 was installed and contributed to the City by developers. ➢ 362 Linear feet of Stormwater Quality Treatment Facility project valued at $1,669,389. ➢ 1,683 linear feet of stormwater main replacement and repair valued at $178,632 was installed and contributed to the City be developers. ➢ Disposed fully depreciated assets of the water/sewer department with a cost basis of $39,681. ➢ Purchased two Ford F250 Pickups and a dump truck in the water department. Additional information on capital assets can be found in the notes of the basic financial statements (Note D. Capital Assets pages 59-60). 24 Debt At the end of fiscal year 2024, the City of Kalispell had a total long-term debt outstanding of $42,685,987. Of this amount $3,775,000 represents bonds secured solely by specific revenue sources (i.e., revenue bonds). The remainder consists of $37,237,981 outstanding on State Revolving Fund loans for water and sewer infrastructure. There is also $580,433 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 $635,396 of loans for the purchase of other property and equipment ($285,287) and for gap lending ($350,109). CITY OF KALISPELL'S OUTSTANDING DEBT Governmental Business -type Total activities activities 2024 2023 2024 2023 2024 2023 Revenue/Urban Renewal bonds 3,775,000 3,990,000 $ - $ - $ 3,775,000 3,990,000 SRF loans 435,326 463,054 36,802,655 22,897,621 37,237,981 23,360,675 Assessments 580,433 831,738 - - 580,433 831,738 Contract debt/loans 635,396 748,502 457,178 - 1,092,574 748,502 Total $ 5,426,155 $ 6,033,294 $37,259,833 $22,897,621 $42,685,987 $28,930,915 Other obligations for the City of Kalispell include accrued vacation pay and sick leave (compensated absences ($2,473,041), OPEB liability ($2,449,912), pension liability ($14,243,258), lease and SBITA purchase liability ($113,006). 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 61-63). ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The City's elected and appointed officials considered many factors when adopting the fiscal year 2024 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 3.0 percent in June of 2024. W BASIC FINANCIAL STATEMENTS `V GOVERNMENT - WIDE FINANCIAL STATEMENTS 27 City of Kalispell, Montana Statement of Net Position June 30,2024 Government Component Units Governmental Business -type Downtown Activities Activities Total BID Tourism BID ASSETS Current assets: Cash and investments $ 33,190,176 $ 37,004,971 $ 70,195,147 $ 28,133 $ 205,282 Taxes and assessments receivable, net 1,876,079 105,928 1,982,007 6,429 - Accounts receivable 290,672 893,069 1,183,741 - 143,852 Notes, loans, and contracts receivable 2,309,401 - 2,309,401 - - Due from other governments 1,594,000 2,976,349 4,570,349 10,974 - Inventories - 78,611 78,611 - - Due from Other 30,533 1,504 32,037 - - Contracts Receivable 69,613 271,512 341,125 - - Lease/SBITA Receivable - 44,908 44,908 - - Total current assets 39,360,474 41,376,852 80,737,326 45,536 349,134 Noncurrent assets: Restricted cash and investments 3,337,256 12,626,778 15,964,034 - - Capital assets - land 3,743,166 354,021 4,097,187 - - Capital assets - construction in progress 246,360 28,692,040 28,938,400 - 53,720 Capital assets - net of depreciation 100,468,564 111,785,182 212,253,746 - - Lease/SBITA Receivable - 2,127,947 2,127,947 - - Lease/SBITA Right of use asset, net 32,862 112,338 145,200 Total noncurrent assets 107,828,208 155,698,306 263,526,514 53,720 Total Assets 147,188,682 197,075,158 344,263,840 45,536 402,854 DEFERRED OUTFLOWS OF RESOURCES Pensions 2,761,061 263,634 3,024,695 - - OPEB 917,549 60,022 977,571 Total deferred outflows of resources 3,678,610 323,656 4,002,266 LIABILITIES Current liabilities: Accounts payable 638,767 383,983 1,022,750 11,541 19,595 Accrued payables 70,989 - 70,989 - - Accrued payroll 448,294 82,767 531,061 - - Revenues collected in advance 1,347,608 - 1,347,608 - - Operating debt 28,598 - 28,598 - - Capital debt 678,577 2,435,042 3,113,619 - - Compensated absences payable 1,485,549 312,499 1,798,048 - - Due to Contractor - Retainage 163,201 1,048,918 1,212,119 - - Lease/SBITA Purchase 23,193 14,468 37,661 - - Due to P/R Benefit Providers 687,276 - 687,276 - - Deposits payable 5,442,123 5,442,123 Total current liabilities 11,014,175 4,277,677 15,291,852 11,541 19,595 Noncurrent liabilities: Deposits payable 250 573,941 574,191 - - Operating debt 321,511 - 321,511 - - Capital debt 4,747,579 34,824,791 39,572,370 - - Compensated absences payable 526,572 148,421 674,993 - - Total OPEB liability 2,299,378 150,534 2,449,912 - Net pension liability 12,427,592 1,815,666 14,243,258 - - Lease/SBITA Purchase 9,669 97,870 107,539 Total noncurrent liabilities 20,332,551 37,611,223 57,943,774 Total Liabilities 31,346,726 41,888,900 73,235,626 11,541 19,595 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - 6,429 - Pensions 472,779 64,760 537,539 - - OPEB 1,785,217 116,783 1,902,000 - - Leases 2,172,855 2,172,855 Total deferred inflows of resources 2,257,996 2,354,398 4,612,394 6,429 NET POSITION Net investment in capital assets 99,031,934 103,571,410 202,603,344 - - Restricted for: General government 20,313 20,313 - - Public safety 6,052,420 6,052,420 - - Public works 8,205,919 8,205,919 - - Culture R recreation 3,154,175 3,154,175 - - Housing R community development 7,895,490 7,895,490 - Debt service 1,102,697 1,876,780 2,979,477 - - Replacement and depreciation - 749,799 749,799 - - Capital projects - 9,600,199 9,600,199 - Other Purposes - 400,000 400,000 - - Unrestricted (8,200,378) 36,957,328 28,756,950 27,566 383,259 Total net position $ 117,262,570 $ 153,155,516 $ 270,418,,086 $ 27,566 $ 383,259 The notes to the financial statements are an integral part of this statement 28 m §)$§) } ((\{)$\\k\ !!:§::=;e!! }ƒ$leeJfl=` 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 R R N C "a C ^2 N IL N S O N N N Q N C O (n O N CO r E N Y is 3 m > � O O U I- W N 3 (D O OD V (D (D O r 1- O (D r 0 co U) N N co C w N (D O O N, 00 N I- r m O M m N N In N �r" m N m M f6 E v V_ W (14 M In r_ M M cm) p C 3 — N (6 0') cq ~ W LL ON') OM') O c� (R I- 0 In N O V a1 (C 00 In V ' N O a1 I� M N M V N O '� E w N O) m O) O) O (D r V N OM 00 N o0 (D I- M I- M cq O Z` N N j LL F � cq U M M M LQ LQ LQ C U U Q W E Q co In M M V M O In N V J: ER m W In N MNO O W N P- M N N p m LL V (D (D O G) C W M M In O OD 0M m 00 O N O O I- 0O 00 O 0OD r- O OD r o0 (D O) M 1-(O N N �� N N M O o0 00 M I- (\I O 0)(O (O N U) V M (MD V W W W N In 00 00 N V W (D O O OD O OD W co r 00 ' 00 W 00 (MD O N N E M In M In V N 0 co O O In ' ' ' (O N ' M M ' M lL LQ cD 00 co- . rll U) N U) N LO m coO 1-� N N W W In ' M ' ' O N In M (MD 00 M 00 V 00 ' W N N (D V (D (D M M M M (0 fn 0) C 0) Q N j > U) (>o w d O u WC 0 V) E N (6 N E U) U 0) N N ,C -O N LL U) d N U)E O C N C N O Q N O U> n d o m o d = m m d NU) Q (6 U) C d j w O) .� O N d N O OJ '(j C 0) N .O N U N N N S 0) U 0) LL 0 0 y> N U N y y .5.. 0) N N O U N y N �. �. N m �` d 6 �` V Q Z O_ > U d o o 0 0 m' w to = o m m d o � a — a m o N U C N O N 3 -O O (6 W= N O_ O_ S N O 3 0- O K 0) w U) r o E E E D o m o 0 0 U d U m W U d F C S N 3 N w w w (6 `) i N O J o 3 3 N .0. d NO N O r U W d N X U O 0) 0) 0) C O U N O d U U U 0) > 0) 0) O_ O U Q O W 0) 7 0 fn m x U O 7 7 7 0 H 0) H m U U U 7 0) 7 7 0) H 0) H LL 0--a p Q U 0 H Q Z O O O U Z a J U Q Q Q O d' 0 0 0 Z 0 D 2 E~ M R R N C "a C ^2 N IL N S O N N N Q N C O N O N CO r E N Y is 3 m > � O O U m LL c W E c `w 0 0 O r .� E 'w N c E v O E C Z w LL r O F � J: Mo0LOol- n V 0 V (0) O N In V In N N MO O W O_ (0 00 M I- M O M In O r M V L V (C O N I- V In N (\I O LO 0) O (0 co V I- N O M 0 r LO V � LO M In OD I O (0 N COO �M.9 (A I00 IN 1 V (R I- N O M N In V 0 0 0 I-- In V I� lQ 0') In 00 0 (O N � M 0 N N V C 0) E Q O > 0) a) 0 U >` N U cn E .� E E U E d E E w m N U O 0) 5 Q J w 0 w p O Nf U luua--)))' 0 w N U C. Q O U)m U U .N N � Ud 3 3 3 0N 0) j N Nj0(7aaU20 (7a2 2 LL W 7 I N Cl) City of Kalispell Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2024 Total fund balances - governmental funds 31,040,576 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 246,360 Depreciable capital assets (net) 100,089,895 104,079,421 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. 1,876,078 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. 1,028,898 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 (350,109) Capital debt (5,426,156) Compensated absences payable (1,956,592) OPEB liability (2,299,378) Pension liability (12,427,592) (22,459,827) 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 2,761,061 OPEB 917,549 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 (472,779) OPEB (1,785,217) 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. 276,810 Total net position - governmental activities 117,262,570 The notes to the financial statements are an integral part of this statement. 33 v c 7 LL r W E E W O 0 r C W E C N w m > O o LL w U C W � W � � W fn !_ (0(0 0) 00 M 00 (O M In O N O N N N In In r M O M O I- 0 to O V 0 I- 00 O N V V W 0) m V M (A I -' 'IT N'�N(OI� W M W O- W OOIN In O (O N In N I- N N M 0 0 V F (n OrM0W ' 'O ' M (O (000(O 04 � N 00 0 O I N r V N V N W N N 0 M N IIT N M 00 00 In N M r V LO M L00 'IT O O 000 O 1- mil- N W W N (O V N (O W O � V (O M W M V 0 0 00 , (6 00 (6 In O V (O I- N In 00 V 00 W M M 00 N V (0 N 00 M N V N (0 N N 00 7 00 In M 00 00 ' r 00M N'IT ' C2 co V N (0 m � G W N lO N M G N - N - 0 O O I- M. 0 M 0 M 0 M N V M N In N N 70 V V W (00 N m M O I� V' V r- W V I� 00 O LO I� N 'IT 0 02 0) C 01 d m E O_ O U a)> -C N O 0 (6 O O 0) 0) 0) (6 E U i E d E M i 'a)) O O W U N 3 O) w O O C .V U Q Z ,U UUS � 0) 0) cd O N a d = 0 Nnn'a w U 0 a u a U 2 Q Q W (Q 0) M V 00 O N O0 V lLQ O O lU) V O O0 I- M lM V M V V O O N O N lM O ' lM M W N w W cn 7 aNi 6 U) cn E W y U 5 C O N M N O) z a.)Z s= .5� Q O w Z o LL i i N t w 0) 0) 0 0) W N N 0) F N N O 0 a N N M V V M M V M M OMM M V U) LQ U) L (A M O OMM 0) M V (R I- I N O LO ol0ll V V LL LL City of Kalispell 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, 2024 Net change in fund balances - total governmental funds $ 4,462,273 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 $ 883,359 Depreciation expense $ (5,138,037) $ (4,254,678) 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 $ 13,651,430 In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. Governmental funds recognize the proceeds from the sale of these assets: Gain (loss) on the disposal of capital assets $ (22,440) 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 $ (129,121) 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 $ (241,379) 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 $ 683,482 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 Revenues, 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 $ (48,028) Internal service funds are used by management 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. $ 127,643 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. $ (106,193) 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. $ (2,863,101) 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. $ 2,389,981 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: $ (167,268) Capital contributions of infrastructure assets from homeowners are not current financial resources and therefore are not reported in governmental funds. $ 40,833 Change in net position - Statement of Activities $ 13,523,434 The notes to the financial statements are an integral part of this statement. 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. M1. W-N&I 1RCES CES 384,475 2,401,794 78,611 1,504 38,252 44,908 16,579,860 1,634,206 75,381 105,958 20,266,031 40,297,580 2,127,947 64,507,103 81,086,963 73,267 32,846 106,113 165,146 23,234 881,800 94,230 815,030 1,979,440 200,607 17,374,796 43,789 82,419 504,594 18,206,205 20,185,645 17,998 63,907 2,172,855 2,254,760 42,412,973 679,193 1,030,394 A G7n 4 4 4 508,333 498,662 233,260 23,371,537 2,417,416 8,499,775 248,063 8,426,009 70,242,680 109,668 89,943,611 113,315,148 134,450 27,176 161,626 206,924 46,433 1,553,242 145,744 233,888 11,798 2,198,029 373,334 16,992,817 72,861 68,115 925,966 97,870 18,530,963 20,728,992 261 75,893 1,425,455 1,244,922 2,670 1,247,592 2,673,047 55,917 55,917 11,913 13,100 72,525 2,670 100,208 457,178 31,771 385,106 874,055 974,263 33,026 13,736 52,876 - 85,902 13,736 60,370,693 787,744 1,197,587 - 749,799 - 8,569,805 - 400,000 - lf� 070 nnG nG7 nn.1 893,069 2,976,349 78,611 1,504 271,512 44,908 41,376,852 4,051,622 8,575,156 354,021 28,692,040 111,785,182 2,127,947 112,338 155,698,306 197,075,158 263,634 60,022 323,656 383,983 82,767 2,435,042 312,499 1,048,918 14,468 4,277,677 573,941 34,824,791 148,421 150,534 1,815,666 97,870 37,611,223 41,888,900 64,760 116,783 2,172,855 2,354,398 103,571,410 1,876,780 749,799 9,600,199 400,000 G nr-7 OnO ) j �\� : } j ° §, ;:§a[:t ;$ _a.,zt: -� =r!7[ §222]�} 'wl'o, ]` K/§U) K±{0-IQ0 City of Kalispell, Montana Statement of Cash Flows Proprietary Fund For Fiscal Year Ended June 30, 2024 Cash Flows from Operating Activities Cash received from customers Cash received (paid to) miscellaneous sources Cash paid to suppliers of goods and services Cash paid to employees Cash received from deposits Net cash provided (used) by operating activities Cash Flows from Non -Capital and Related Financing Activities: Transfers to other funds Transfers from other funds Intergovernmental revenue received Cash received from Charter Franchise Fees Net cash provided (used) by non -capital and related financing activities Cash Flows from Capital and Related Financing Activities: Principal paid on capital debt Proceeds from capital debt Interest paid on capital debt Acquisition and construction of capital assets Capital Contributions received Cash Received from Contractors-Retainage Cash Received from Impact Fees Net cash provided (used) by non -capital and related financing activities Cash Flows from Investing Activities: Interest on investments Increase (Decrease) in fair value of investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents as of: July 1, 2023 June 30, 2024 Displayed on Statement of Net Position -Proprietary Funds as: Cash and cash equivalents Restricted cash and cash equivalents Total at end of year Reconciliation of operating income to net cash provided by operating activity: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in assessments receivable (Increase) decrease in accounts receivable (Increase) decrease in prepaid items (Increase) decrease in inventories Increase (decrease) in customer deposits Increase (decrease) in accounts payable Increase (decrease) in accrued payables Increase (decrease) in compensated absences payable Increase (decrease) in OPEB liability Increase (decrease) in net pension liability (Increase) decrease in deferred outflows -pension Increase (decrease) in deferred inflows{rension (Increase) decrease in deferred outflows-0PEB Increase (decrease) in deferred inflows-0PEB (Increase) decrease in contracts receivable (Increase) decrease in due from other Net cash provided (used) by operating activities The notes to the financial statements are an integral part of this statement. Governmental Business -type Activities Activities Major Enterprise Funds 5210 5310 Total Nonmajor Enterprise Total Enterprise Internal Service Water Sewer Funds Funds Funds $ 5,906,074 $ 10,652,951 $ 1,472,715 $ 18,031,740 $ 1,345,571 390,730 32,960 159 423,849 (275) (1,262,744) (2,489,713) (611,363) (4,363,820) (912,936) (1,257,499) (2,274,794) (729,466) (4,261,759) (880,893) 75,900 160,000 235,900 3,852,461 6,081,404 132,045 10,065,910 (448,533) - - (40,000) (40,000) - 536,250 3,549,189 - 4,085,439 - - - (1,593) (1,593) 440,000 181,902 536,250 3,549,189 (41,593) 4,043,846 621,902 (881,800) (1,553,242) - (2,435,042) - 14,342,032 1,998,045 457,178 16,797,255 - (263,818) (442,471) (299) (706,588) (1,362) (21,749,207) (9,682,330) (916,881) (32,348,418) (243,635) 4,149,989 3,717,021 - 7,867,010 - 718,198 81,669 - 799,867 - 463,603 1,219,725 1,683,328 (3,221,003) (4,661,583) (460,002) (8,342,588) (244,997) 705,718 1,202,604 44,390 1,952,712 27,426 85,883 174,743 10,204 270,830 4,676 791,601 1,377,347 54,594 2,223,542 32,102 1,959,309 6,346,357 (314,956) 7,990,710 (39,526) 7,586,984 16,908,322 1,050,848 25,546,154 409,669 $ 9,546,293 $ 23,254,679 $ 735,892 $ 33,536,864 $ 370,143 $ 7,912,087 $ 20,837,263 $ 735,892 $ 29,485,242 $ 370,143 1,634,206 2,417,416 4,051,622 $ 9,546,293 $ 23,254,679 $ 735,892 $ 33,536,864 $ 370,143 $ 2,686,480 $ 3,239,511 $ 11,034 $ 5,937,025 $ (524,999) 1,238,906 2,491,818 129,414 3,860,138 59,461 - 8,559 (1,397) 7,162 - (81,463) (64,806) (261) (146,530) - 27,061 36,053 7,385 70,499 10,411 (1,956) - - (1,956) - 75,900 160,000 - 235,900 - (6,063) 17,897 (25,266) (13,432) 16,100 (32,710) (39,729) (16,227) (88,666) (21,172) 13,011 37,245 16,323 66,579 14,077 3,911 3,233 - 7,144 - (166,129) 3,819 (7,533) (169,843) - 79,620 75,747 33,582 188,949 - (31,105) (34,483) (15,009) (80,597) - 7,809 6,305 - 14,114 - (8,272) (6,566) - (14,838) - 23,690 146,801 - 170,491 (16) 23,771 23,771 (2,395) $ 3,852,461 $ 6,081,404 $ 132,045 $ 10,065,910 $ (448,533) 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 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. City of Kalispell, Montana Statement of Changes in Fiduciary Net Position Fiduciary Funds For Fiscal Year Ended June 30, 2024 ADDITIONS KPD Evidence Deposit Bed Tax Collection Total additions DEDUCTIONS Payment to outside entities Total deductions Change in net position Net position - beginning Net position -ending Custodial Funds 569,148 569,148 569,148 569,148 47,196 $ 47,196 The notes to the financial statements are an integral part of this statement. E,N NOTES TO THE FINANCIAL STATEMENTS 43 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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, 2024, and for the year then ended. The more significant accounting policies of the City are described below. Recently Implemented Accounting Pronouncements GASB Statement No. 99, Omnibus 2022. Certain requirements of Statement No. 99 implemented for the fiscal year ending June 30, 2024, amend the guidance related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53. GASB Statement No. 100, Accounting Changes and Error Corrections. This Statement amends GASB Statement No. 62 improving the clarity of the accounting and financial reporting requirements for accounting changes and error corrections, which will result in greater consistency in application in practice. In turn, more understandable, reliable, relevant, consistent, and comparable information will be provided to financial statement users. 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 44 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 from a secondary government. 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 51" 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 261 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. 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. 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. e11 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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. 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 revenue, 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, 2024 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, 2024 distribute public information (Information Technology) to City staff for their respective provisions of services to the City of Kalispell. Eliminations have been madeto 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. eu1 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 71.5% is maintained for the Ambulance fund. This allowance account has been adjusted to $726,499 at June 30, 2024. Ambulance accounts receivable $1,016,021 Times allowance percentage 71.5% @ June 30, 2024 $ 726,499 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, 2024: Water $29,257 Sewer $42,564 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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: Lease Origination Date Interest Rate Lease Term Maturity Date Annual Payment Bullitt 7/1/2021 1.03% 25 years 6/1/2045 $ 32,077 Sprint 7/1/2021 1.03% 25 years 6/1/2045 $ 31,373 Verizon 7/1/2021 1.03% 25 years 12/1/2045 $ 47,384 The City of Kalispell has accrued a receivable for water tower leases. The remaining receivable for these leases was $2,172,855 for the year ended June 30, 2024. Deferred inflows related to these leases were $2,172,855 as of June 30, 2024. Interest revenue recognized on these leases was $65,963 for year ended June 30, 2024. Principle receipts of $44,908 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, 2024. Lease Receivable Lease Receivable For Fiscal Year Ended Beginning Balance Principal Interest Total Ending Balance 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 $ 1,872,192 $ 77,228 $ 55,118 $ 132,346 $ 1,794,964 2031 $ 1,794,964 $ 83,598 $ 52,715 $ 136,313 $ 1,711,366 2032-2045 $ 1,711,366 $ 1,711,366 $ 372,997 $ 2,084,363 $ - Total $ 2,172, 855 $ 786,259 $ 2,959,114 Contracts The following are contracts receivable to the City of Kalispell on June 30, 2024. Source Municipal Court Franchise Fees -Charter (formerly Bresnan) Total Governmental Activities Impact Fees Impact Fees Total Proprietary Funds Total City contracts receivable Amount $ 22,781 $ 46,832 $ 69,613 $ 38,252 $ 233,260 $ 271,512 $ 341,125 62 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 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 government -wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of five years. 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. 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% City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 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 of 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 53 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 a lease payable in the government -wide and/or in the proprietary and fiduciary statement of net position. The City of Kalispell on September 71", 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 At June 30, 2024, the principal and interest requirements to maturity are as follows; Fiscal Year Ended 2025 2026 2027 2028 2029 2030-2038 Totals: Principal Interest Total $ 4,458 $ 3,070 $ 7,528 $ 4,818 $ 2,936 $ 7,754 $ 5,195 $ 2,792 $ 7,987 $ 5,591 $ 2,636 $ 8,227 $ 6,005 $ 2,468 $ 8,473 $ 76,261 $ 12,404 $ 88,665 $ 102,328 $ 26,306 $ 128,634 The City has entered into multiple printer lease agreements with various leasing companies to provide printing equipment for its operations. The term and interest rates varies by lease agreement. Governmental Activities At June 30, 2024, the principal and interest requirements to maturity are as follows; Fiscal Year Ended Principal Interest Total 2025 $ 7,196 $ 534 $ 7,730 2026 $ 6,765 $ 318 $ 7,083 2027 $ 1,713 $ 107 $ 1,820 2028 $ 1,192 $ 23 $ - Total $ 16,866 $ 982 $ 16,633 The total amount of lease assets and related accumulated amortization for the fiscal year end June 30, 2024, are as follows: Intangible right -to -use (RTU) lease assets being amortized: Lease asset -Intangible Total lease assets being amortized Less accumulated amortization for: Lease asset -Intangible Total accumulated amortization Total lease asset value Governmental Business - Activities Type 76,253 126,019 $ 76,253 $ 126,019 (59,387) (23,691) $ (59,387) $ (23,691) $ 16,866 $ 102,328 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 54 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 (see details of lease receivable at Note 2). 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. 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 with 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, 2024 are as follows: Governmental Business -Type Activities Activities Intangible right -to -use (RTU) subscription assets: 45,423 28,426 Less accumulated amortization (29,427) (18,416) Net subscription assets $ 15,996 $ 10,010 611 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Governmental Activities At June 30, 2024, the subscription principal and interest requirements to maturity are as follows; Fiscal Year Ended Principal Interest Total 2025 $ 16,381 $ 920 $ 17,301 2026 $ - $ - $ - 2027 $ $ $ 2028 $ $ $ 2029 $ $ $ 2030-2038 $ $ $ Total $ 16,381 $ 920 $ 17,301 Business -Type Activities At June 30, 2024, the subscription principal and interest requirements to maturity are Fiscal Year Ended 2025 2026 2027 2028 2029 2030-2038 Totals: 9. Net Position/Fund Balance Principal Interest Total $ 10,678 $ 576 $ 11,254 $ 10,678 $ 576 $ 11,254 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 611 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 onlyto report 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 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 57 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 2024, 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 FY2024 are described below: The 2919 Law Enforcement Grant fund was increased $4,632 for the acceptance for Round Up for Safety grant. The 2958 Hazmat Team Sustainment Grant fund was increased $80,000 for the acceptance of Haz- Mat Team Sustainment award. The 5310 Sewer Enterprise fund increased $55,324. This change was due to the WWTP influent pipe and diversion structure project bid exceeding the budgeted amount. The 5311 Sewer Impact Enterprise fund increased $129,089. This change was also due to the WWTP influent pipe and diversion structure project bid exceeding the budgeted amount. The 6030 Information Technology fund increased $36,900. This change was due to a correction to a data entry error that occurred during the budgeting process. 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. • Level 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, 2024, the carrying amount of the City's deposits in local banks and investments is $86,439,792. 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 reports cash and investments as follows: Unrestricted Restricted Total Governmental activities $33,190,176 $3,337,256 $36,527,432 Business -type activities 37,004,971 12,626,778 49,631,749 Fiduciary funds 47,196 - 47,196 Component unit 233,415 - 233,415 $70, 475, 758 $15, 964, 034 $86, 439, 792 58 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Reconciliation of carrying amount to deposit balances: Governmental Fair Value & Business Measurement < 1 1 -5 Investment Activities Agency BID Total level: Certificates of Deposit $ 496,000 $ 496,000 $ - $ U.S. Treasury Securities 1,750,000 1,750,000 Level 1 U.S. Government Bonds 31,152,381 31,152,381 Level 2 8,500,000 22,652,381 State of Montana - Short Term Investment Pool Account 44,279,972 44,279,972 S & C Bonds - internal 32,432 32,432 Demand deposits 8,445,416 $ 47,196 $ 233,415 8,726,027 Petty Cash 2,980 - - 2,980 - - $ 86,159,181 $ 47,196 $ 233,415 $ 86,439,792 $ 8,500,000 $ 22,652,381 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 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 STIP 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, 2024, was as follows: Receivable Fund Payable Fund Amount Purpose General Fund - Major Governmental Health Levy - Special Revenue 54,516 S/T Loan General Fund - Major Governmental Safe Streets Grant - Special Revenue 71,003 S/T Loan General Fund - Major Governmental SID 344 -Debt Service 7,207 S/T Loan Total - Due To Other Funds (Governmental Funds) $ 132,726 6T] City of Kalispell, Montana Notes to Financial Statements June 30, 2024 C. Transfers The following is an analysis of transfers between funds during Fiscal Year 2024: From To Health Levy - Special Revenue Fund General - Major Governmental Health Levy - Special Revenue Fund Parks - Special Revenue Fund General Fund - Major Governmental Ambulance - Special Revenue General Fund - Major Governmental Drug Enforcement Grant - Special Revenue Fund General Fund - Major Governmental Law Enforcement Grant -Special Revenue Fund CIP - Governmental Water - Enterprise Fund ARPA - Enterprise FUND Water - Enterprise Fund ARPA - Enterprise FUND Sewer - Enterprise Fund Old School Tech TIF - Special Revenue Func SID - 344 - Debt Service Fund Old School Ind TIF - Special Revenue Fund SID - 344 - Debt Service Fund Solid Waste - Enterprise Fund Gas Tax - Special Revenue Fund CD Projects - Special Revenue Fund General - Major Governmental SID Revolving - Debt Service Fund SID - 344 - Debt Service Fund Downtown TIF - Special Revenue Fund Safe Street Grant - Special Revenue Fund Westside TIF - Debt Service Fund Westside TIF - Special Revenue Fund TOTAL D. Capital Assets Capital asset activities for the year ended June 30, 2024 were as follows: Assets Contributed Amount Purpose 1,130,000 Operations 115,000 Operations 850,000 Operations 25,000 Operations 6,000 Operations 4,085,439 Operations 4,016,233 Operations 1,419,064 Operations 50,000 Operations 6,000 Operations 40,000 Operations 6,532 Operations 2,500 Operations 70,000 Operations 3,150,000 Operations $ 14,971,768 In fiscal year 2024, Governmental Activities report contributed assets with a value of $13,692,263. $40,833 of these contributed assets were sidewalks replaced or repaired and paid for by homeowner's directly (not assessed), and developers contributed $13,651,430 of streets to the City. In fiscal year 2024; Business -type Activities report contributed assets with a value of $1,402,294. Developers contributed seven thousand four hundred eighty-nine linear feet (7,489') of water mains, including 21 new fire hydrants valued at $968,350 to the water fund. These 7,489 linear feet of mains were distributed among nine different projects (developments). The Sewer fund received sewer and storm mains. Developers contributed three thousand six hundred nineteen linear feet (3,619') of sewer mains ($255,312), and one thousand six hundred eighty-three linearfeet (1,683') of storm sewer mains ($178,632). These 5,302 linear feet of mains were distributed among seven different projects (developments). Construction in Progress Reductions to construction in progress of governmental activities included $22,440, reflecting the write-off associated with the decision to discontinue the KPD storage facility project. Additions to construction in progress of business -type activities was $22,853,429. This included the lower zone reservoir rehab and roof replacement project ($74,862); replacement of north main well ($2,519,584); continued development of a new well and associated storage ($13,637,388); improvements [s111 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 to lift station #9 ($202,878) and lift station #3 ($4,917,671); Westview well rehabilitation($37,826); design and construction of fermenter for the wastewater treatment plan ($56,093); lift station #36 improvements ($12,676); reconstruction of the WWTP influent pipe and diversion structure ($1,346,718) and the construction phase of a new EQ Basin for the wastewater treatment plant ($47,733). Reductions to construction in progress of business -type activities included, in the sewer (storm) fund, the completion of the water/sewer main replacement project ($1,819,070) as well as the completion of the lift station #10 control panel relocation and upgrade project ($47,102); and in the water fund, the completion of the downtown water/sewer main ARPA project ($967,840). Balance Balance Governmental Activities: July 1, 2023 Additions Contributions Transfers Deductions June 30, 2024 Capital assets not being depreciated: Land $ 3,743,166 $ - $ - $ - $ - $ 3,743,166 Construction in Progress 268,800 - - (22,440) 246,360 Total capital assets not being depreciated 4,011,966 - - - (22,440) 3,989,526 Capital assets being depreciated: Buildings Improvements other than buildings Machinery and equipment General Ambulance Parking Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment General Ambulance Parking Infrastructure Total accumulated depreciation Capital assets being amortorized: Right to use asset Intangible - Subscription Asset Less accumulated amortization - Subscription Total accumulated amortization Total capital assets being depreciated, net Total capital assets being amortorized, net Governmental activities capital assets, net Internal seance funds: Information Technology Less accumulated depreciation - Information Technology Capital Asset being amortorized: Right to use asset - Lease Right to use asset - Subscription Less accumulated amortization - Lease Less accumulated amoritzation - Subscription Central Garage Less accumulated depreciation - Central Garage Internal seance funds assets, net 16, 930, 421 - - 27,155,629 167,030 40,833 16,930,421 27,363,492 11,826,584 658,523 - - (97,874) 12,387,233 601,569 57,807 - - - 659,376 41,046 - - - - 41,046 113,039,204 - 13,651,430 - - 126,690,634 169,594,453 883,359 13,692,263 - (97,874) 184,072,202 (11,924,963) (591,990) (13,916,204) (926,273) (12,516,953) (14,842,477) (7,886,125) (742,794) - - 97,874 (8,531,046) (469,162) (49,044) - - - (518,207) (41,046) - - - - (41,046) (44,704,642) (2,827,936) - - - (47,532,578) (78,942,142) (5,138,037) - - 97,874 (83,982,307) 38,829 - - - - 38,829 (12,226) (12,929) - - - (25,155) 26,603 (12,929) - - - 13,674 90, 652, 311 (4,254,678) 13, 692, 263 - - 100, 089, 895 26,603 (12,929) - - - 13,674 $ 94,690,882 $ (4,267,607) $ 13,692,263 $ - $ (22,440) $ 104,093,095 Balance Balance July 1, 2023 Additions Contributions Transfers Deductions June 30, 2024 $ 582,415 $ 222,186 $ - $ - $ - $ 804,601 (476,962) (36,214) - - - (513,177) 76,253 - - - - $ 76,253 6,594 - - - - $ 6,594 (52,367) (7,020) - - - $ (59,387) (2,076) (2,196) - - - $ (4,272) 336,266 12,232 - - - 348,498 (247,223) (14,030) - - - (261,253) 222,899 $ 174,958 $ - $ - $ - $ 397,856 Governmental activities depreciation was charged to functions/programs of the primary government as follows: Governmental Activities General Government Public Safety Public Works Parks and Recreation Total Governmental Activates Depreciaton Amortization Total $ 3,870,630 12,929 $ 3,883,559 495,937 $ 495,937 27,966 - $ 27,966 743,504 $ 743,504 $ 5,138,037 $ 12,929 $ 5,150,966 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Business -type activities: Balance July 1, 2023 Transfers/ Additions Contributions Construction in Progress Deductions Balance June 30, 2024 Capital assets not being depreciated: $ $ $ $ $ $ Land Water 105,958 - - - - 105,958 Sewer 221,513 - - - - 221,513 Sewer (Storm) 26,550 - - - 26,550 Construction in progress Water 4,964,211 16,269,660 - (967,840) - 20,266,031 Sewer 3,708,413 6,583,769 - (1,866,173) - 8,426,009 Storm 542,561 - - (542,561) - (0) Solid Waste - - - - - - Total capital assets not being depreciated 9,569,206 22,853,429 - (3,376,574) - 29,046,061 Capital assets being depreciated: Water General Plant Source of Supply Transmission and Distribution Pumping Plant Sewer General Plant Transmision and Distribution Storm Sewer System Treatment Plant Equipment Treatment Plant Solid Waste Buildings Machinery and equipment Total capital assets being depreciated Capital assets being amortorized: Right to use asset Intangible - Lease Asset Intangible - Subscription Asset Total capital assets being amortorized Less accumulated depreciation for: Water General Plant Source of Supply Transmision and Distribution Pumping Plant Sewer General Plant Transmision and Distribution Storm Sewer System Treatment Plant Equipment Treatment Plant Solid Waste Buildings Machinery and equipment Total accumulated depreciation Less accumulated amortization for: Right to use assets Intangible - Lease Asset Intangible - Subscription Asset Total accumulated amortizaton Total capital assets being depreciated, net Total capital assets being amortorized, net Business -type activities capital assets, net 1,215,177 340,241 - - - 1,555,418 6,459,325 - - - - 6,459,325 42,045,137 4,170,957 968,350 967,840 - 48,152,284 3,981,044 - - - 3,981,044 1,119,083 - - - (21,181) 1,097,902 50,280,774 1,417,461 255,312 1,866,173 - 53,819,720 23,334,638 1,177,952 178,632 542,561 (18,500) 25,215,283 639,867 - - - - 639,867 42,356,411 58,147 - - - 42,414,558 345,442 - - - - 345,442 2,098,233 914,356 - - - 3,012,589 173,875,131 8,079,114 1,402,294 3,376,574 (39,681) 186,693,432 126,019 - - - - 126,019 28,426 - - - - 28,426 154,445 - - - - 154,445 (980,309) (44,284) - - - (1,024,593) (1,980,029) (180,371) - - - (2,160,400) (13,376,330) (933,742) - - - (14,310,072) (2,274,916) (80,509) - - - (2,355,425) (711,195) (49,459) - 21,181 (739,473) (15,389,402) (955,843) - - - (16,345,245) (7,302,333) (507,496) - - 18,500 (7,791,329) (455,028) (23,704) - - - (478,731) (26,645,613) (944,259) - - - (27,589,872) (319,101) (2,342) - - - (321,443) (1,667,120) (124,548) - - - (1,791,666) (71,101,376) (3,846,557) - - 39,681 (74,908,249) (19,575) (4,116) - - - (23,691) (8,951) (9,465) - - - (18,416) (28,526) (13,581) - - - (42,107) 102,773,755 4,232,557 1,402,294 3,376,574 - 111,785,183 125,919 (13,581) - - - 112,338 $ 112,468,880 $ 27,072,405 $ 1,402,294 $ - $ - $ 140,943,582 Business -type activities depreciation was charged to functions/programs of the primary government as follows: Business -Type Activities Water Sewer Sanitary Treatment Storm Solid Waste Total Buisiness-type Acti,,ites Depreciaton Amortization Total $ 1,238,906 $ 1,238,906 1,005,302 6,971 $ 1,012,273 967,962 - $ 967,962 507,497 4,745 $ 512,242 126,887 1,866 $ 128,753 $ 3,846,554 $ 13,581 $ 3,860,135 [:300a City of Kalispell, Montana Notes to Financial Statements June 30, 2024 E. Long -Term Debt During the year ended June 30, 2024, the following changes occurred in long-term liabilities: Balance Balance July 1, 2023 Additions Reductions June 30, 2024 Governmental Activities: Revenue Bonds $ 3,990,000 $ $ (215,000) $ 3,775,000 State Revolving Fund 463,054 (27,728) 435,326 Assessments 831,738 1,309 (252,614) 580,433 Contract Debt/Loans 748,502 46,719 (159,825) 635,396 Intermediary Program 378,423 - (28,314) 350,109 SBITA Purchase 26,603 3,812 (16,356) 13,674 Compensated Absences" 1,715,213 1,532,849 (1,291,470) 1,956,593 Other postemployment benefits" 2,190,225 109,153 2,300,467 Pensions" 12,705,209 (277,617) 12,427,592 Governmental Activities Sub Total $ 23,048,967 $ 1,693,842 $ (2,268,925) $ 22,474,590 Due within 1 year $ 220,000 28,191 255,619 174,767 28,598 13,674 1,447,162 Internal Service Funds: Lease Purchase $ 23,886 $ $ (7,021) $ 16,866 $ 7,197 SBITA Purchase $ 4,518 $ $ (2,196) $ 2,322 $ 2,322 Compensated Absences $ 41,452 $ 41,188 $ (27,112) $ 55,528 $ 38,387 Internal Service Funds Sub Total $ 69,856 $ 41,188 $ (36,329) $ 74,716 $ 47,906 Government -wide Governmental Activities $ 23,118,823 $ 1,735,030 $ (2,305,254) $ 22,549,307 $ 2,215,917 *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, 2023 Additions Reductions June 30, 2024 1 year Business -type Activities: State Revolving Fund $ 22,897,621 $ 16,090,305 $ (2,185,271) $ 36,802,655 $ 2,353,069 Contract Debt/Loans - 457,178 457,178 81,973 Lease Purchase 106,444 - (4,116) 102,328 4,458 SBITA Purchase 19,475 - (9,465) 10,010 10,010 Compensated Absences 394,341 334,949 (268,369) 460,921 312,499 Other postemployment benefits 143,389 7,144 150,534 - Pensions 1,985,509 - (169,843) 1,815,666 Business -type Activities Total $ 25,546,779 $ 16,889,576 $ (2,637,064) $ 39,799,291 $ 2,762,009 Total City $ 48,665,602 " $ 18,624,606 " $ (4,942,318)" $ 62,348,597 $ 4,977,926 63 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Legal Debt Margin At June 30, 2024, the general obligation debt issued by the City did not exceed its legal debt margin as demonstrated by the following computation: Total assessed value of taxable property (market value-2024) $ 5,408,208,936 General limitation percentage 2.80% General limitation of indebtedness 151,429,850 Outstanding general obligation bonds at June 30 Outstanding loans subject to limitation" Parks Equipment Park Impro\ements Forestry Equipment Public Safety Equipment Street Maintenance Equipment SID Bonds Total debt subject to limit Excess limit over outstanding debt margin C 122,817 10,456 46,719 283,783 171,622 548,000 1,183, 397 $150,246,453 *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 69 (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. Origination Interest Due Principal Annual Balance Purpose Date Rate Term Date Amount Payment June 30, 2024 SID344 6/15/2006 5.10% 20 years 2026 $ 4,520,000 $ 230,000 $ 460,000 SID345 5/15/2014 3.00% 15 years 2029 242,000 varies 88,000 2015 S&C 4/12/2013 3.50% 8 years 2024 9,272 $ 1,159 - 2016 S&C 1/2/2014 3.75% 8 years 2025 9,792 $ 1,224 1,224 2017 S&C 1/2/2015 4.50% 8 years 2026 4,288 $ 536 1,072 2018 S&C 1/4/2016 5.50% 8 years 2027 7,145 $ 893 2,679 2019 S&C 6/30/2016 4.75% 8 years 2028 15,824 $ 1,978 7,912 2020 S&C 1/4/2021 3.25% 8 years 2029 4,046 $ 506 2,528 2021 S&C 1/6/2022 3.25% 8 years 2030 4,165 $ 521 3,124 2022 S&C 1/4/2023 7.50% 8 years 2031 14,380 $ 1,798 12,583 2023 S&C 1/2/2024 8.50% 8 years 2032 1,309 $ 164 1,309 Total Special Assessment Bonds $ 4,832,221 $ 580,433 *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 $23,413 and $25,839, respectively. 64 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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. Issue Interest Purpose Date Rate Governmental Activities: 2018 - West Side TIF 5/29/18 3%-5% Governmental Activities Sub Total Final Bonds Balance Term Maturity Issued June 30, 2024 19 years 1/1/2037 $ 4,960,000 $ 3,775,000 $ 4,960,000 $ 3,775,000 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 twelve (12) loan agreements with the State Revolving Fund (SRF). These obligations are to be repaid from the operating income of the fund. SRF LOANS Interest Amount Outstanding Purpose Origination Rate Term Borrowed June 30, 2024 Governmental Activities: 2017 Streets - 4th Ave E FY18 2.50% 20 years $ 615,098 $ 435,326 Governmental Activities Sub Total $ 615,098 $ 435,326 Business -type Activities: 2013 Sewer - WWTP Digester Lid FY13 3.00% 20 years $ 1,102,748 $ 571,000 2012 Sewer - Hwy 93 S FY13 2.25% 12 years 1,009,000 - 2012 Sewer - WWTP System Improvements FY13 2.25% 15 years 12,827,000 2,921,000 2018 Sewer- Westside Interceptor FY18 2.50% 30 years 12,194,841 10,333,000 2023 Sewer - Liftstation #9 FY23 2.50% 20 years 1,354,432 1,271,432 2024 Sewer - Liftstation #3 Grandview FY24 2.50% 20 years 1,526,735 1,510,735 2012 Water - Sheepherders Well/Storage FY13 2.25% 15 years 1,340,000 305,000 2017 Water - 4th Ave E FY18 2.50% 20 years 1,974,988 1,397,783 2020 Water - Refunding 2004 Bond FY20 2.50% 4 years 365,648 - 2020 Water-4 Mi. Dr. Transmission FY20 2.50% 20 years 2,147,108 1,748,000 2023 Water- Upperzone Well/Tank FY23 2.50% 30 years 15,160,813 14,805,813 2021 Storm Sewer- Regional Facilities FY21 2.50% 20 years 2,152,737 1,888,000 2017 Storm Sewer - 4th Ave E FY18 2.50% 20 years 71,914 50,892 Business -type Activities Sub Total $ 53,227,964 $ 36,802,655 Total SRF Loans $ 53, 843, 062 $ 37, 237, 981 [:1E7 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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, 2024, 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 ($1,358,386 * 0.50 = $679,193). As of June 30, 2024, the debt service reserve account contains $679,193. Maximum P & 1 $ 1,358,386 Total Reserve Requirement $ 679,193 Reserve balance 6/30/24 $ 679,193 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. Water Fund Cash Flow Debt Coverage Water Service Charges $ 5,895,168 Misc. Revenue 390,730 Total Operating Revenue 6,285,898 Less: Operating Expense (excludes depreciation) 2,418,503 Available for Debt Service $ 3,867,395 **Maximum Debt Service $ 1,358,386 Estimated Coverage FY24 285% **includes all water fund borrowings 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, 2024, 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, 2024, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 ($2,395,174 * 0.50 = $1,197,587). As of June 30, 2024, the debt service reserve account contains $1,197,587. Bond reserve dollars are held in both the storm fund ($70,807), and sewer fund ($1,126,780). 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 $ 8,547,972 Total 8,547,972 Less: Operating Expense (excludes depreciation 4,888,037 Available for Debt Service $ 3,659,935 **Maximum Debt Service $ 2,395,174 Estimated Coverage FY24 153% *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, 2024 Governmental Activities BOI: Woodland Playground (Parks 8/23/2019 varies 5 years 2/15/2025 97,772 10,456 BOI:Fire Pumper 3/16/2018 varies 10 years 2/15/2028 467,684 205,606 BOI:Ambulance 1/19/2021 varies 5 years 2/15/2026 189,438 78,177 BOI: Front end Loader (Streets) 11/25/2022 varies 5 years 2/15/2028 212,950 171,622 BOI: Tractor (Parks) 6/2/2023 varies 5 years 8/15/2028 43,000 39,228 BOI: Truck/Mower (KYAC) 6/2/2023 varies 5 years 8/15/2028 12,605 11,544 BOI: Toolcat (Parkline) 6/2/2023 varies 5 years 8/15/2028 79,000 72,045 BOI: Truck w/Dumpbed 6/2/2023 varies 5 years 8/15/2028 46,719 46,719 Sub total BOI loans $ 1,149,168 $ 635,396 USDA: Intermediary Relending Program 10/12/2004 1.00% 30 years 10/12/2034 $ 520,000 $ 228,785 Relending Program 11/27/2006 1.00% 30 years 11/27/2036 257,500 121,324 Sub total USDA Intermediary 777,500 350,109 Total loans/contracted debt - Governmental Activities $ 1,926,668 $ 985,505 BOI - Board of Investments Intercap Loan Program 67 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Loans/Contracted Debt Origination Interest Due Principal Balance Purpose Date Rate Term Date Amount June 30, 2024 Business Type Activities BOI: Solid Waste Truck 2/23/2024 varies 5 years 2/15/2029 457,178 457,178 Total loans/contracted debt - Business Type Activities $ 457,178 $ 457,178 BOI - Board of Investments Intercap Loan Program 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, 2024, were as follows: Govemmental 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 2025 255,619 27,877 174,766 36,535 28,598 3,501 28,191 10,707 220,000 144,475 930,269 2026 254,395 15,155 168,714 26,340 28,884 3,215 28,884 10,000 230,000 137,875 903,462 2027 21,858 2,551 133,381 16,785 29,173 2,926 29,808 9,272 235,000 130,688 611,442 2028 20,966 1,746 137,534 9,116 29,465 2,635 30,732 8,521 245,000 123,050 608,765 2029 22,988 960 21,001 1,208 29,759 2,340 31,657 7,747 250,000 115,087 482,747 2030-2034 4,607 506 - - 153,319 7,176 170,992 26,400 1,405,000 422,225 2,190,225 2035-2039 - - - - 50,911 799 115,061 4,898 1,190,000 93,200 1,454,869 2040-2043 - - - - - - TOTAL $ 580,433 $ 48,795 $ 635,396 $ 89,984 $ 350,109 $ 22,592 $ 435,326 $ 77,545 $ 3,775,000 $ 1,166,600 $ 7,181,779 Business -type Activities: SRF FY LOANS(1)(2) ENDED PRINGPAL INTEREST TOTAL 2025 2,183,809 1,026,769 3,210,578 2026 2,285,117 923,422 3,208,539 2027 2,344,192 868,347 3,212,539 2028 1,275,268 818,134 2,093,402 2029 1,306,344 788,759 2,095,103 2030-2034 6,981,008 3,414,856 10,395,864 2035-2039 6,725,937 2,435,644 9,161,581 2040-2044 6,638,000 1,620,013 8,258,013 2045-2049 5,962,000 822,888 6,784,888 2050-2053 1,100,980 202,750 1,303,730 TOTAL $36,802,655 $12,921,582 $49,724,237 (1) The 2023 sewer fund SRF loan ($1,526,735) 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 $1,598,000. (2) The 2023 water fund SRF loan ($15,160,813) 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. 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 68 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 (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, 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 $2,010,634. 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, 2024 (REPORTING DATE), JUNE 30, 2023 (MEASUREMENT DATE) n 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, 2023, measurement date for the 2024 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, 2024. 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 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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). 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 benefitand 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: rill City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 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; 0 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; 0 10 years or more, but less than 30 years of membership service: 1.785% of HAC per year of service credit; 0 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 r`i City of Kalispell, Montana Notes to Financial Statements June 30, 2024 (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. 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. Fiscal Year 2024 Member Hred < 07/0 1/ 11 7.900% "red > 07/0 1/ 11 7.900% State & Universities Employer 9.170% Local Government Employer 9.070% State 0.100% School Districts Employer State 8.800% 0.370% 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% 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 r`a City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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. Effective July 1, 2013, employers are required to make contributions on working retirees' compensation. Member contributions for working retirees are not required. 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. Non -Employer Contributions: 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 $34,979,900. 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, 2023, is on an actuarial valuation performed by the Plan's actuary as of June 30, 2023. 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, 2023, and 2022, 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 $9,103,735 and the employer's proportionate share was 0.373050 percent. 73 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Changes in actuarial assumptions and methods: There have been no changes to the assumptions or other inputs that affected the measurement of the TPL since the previous measurement date. 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, 2023, the employer recognized a Pension Expense of $1,072,575 for its proportionate share of the Plan's pension expense. The employer also recognized grant revenue of $236,045 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, 2023, the employer reported its proportionate share of the Plan's deferred outflows of resources and deferred inflows of resources from the following sources: Deferred Outflows of Deferred I Resources Resources Expected vs. Actual Experience $362,586 $0 Projected Investment Earnings vs. Actual 23,098 0 Investment Earnings Changes in Assumptions 0 324,708 Changes in Proportion and Differences 125,599 0 Between Employer Contributions and Proportionate Share of Contributions Employer Contributions Subsequent to the Measurement Date 810,577 Total $1,321,860 $324,708 74 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Other amounts reported as deferred outflows and inflows of resources related to pensions are recognized in the employer's pension expense as follows: Recognition of Deferred Outflows and Deferred Inflows in For the Measurement Year future years as an increase or (decrease) to Pension Expense ended June 30: 0. Actuarial Assumptions: The total pension liability as of June 30, 2023, was determined on the results of an actuarial valuation date of June 30, 2023, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: Investment Return (net of pension plan investment expense, 7.30% including inflation General Wage Growth * 3.50% *includes Inflation at 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 3.0% • Members hired between July 1, 2007 & June 30, 2013 1.5% • Members hired on or after July 1, 2013 • For each year PERS is funded at or above 90% 1.5% • 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 ears or more 0 Mortality: • Active Participants PUB-2010 General Amount Weighted Employer Mortality projected to 2021 for males and females. Projected generationally using MP-2021. PUB-2010 General Amount Weighted Disabled • Disabled Retirees Retiree Mortality table, projected to 2021, set forward one year for both males and females. PUB-2010 General Amount Weighted Contingent Survivor Mortality projected to 2021 with ages set • Contingent Survivors forward one year for males and females. Projected generationally using MP-2021. PUB-2010 General Amount Weighted Healthy Retiree Mortality table projected to 2021, with ages set forward one year and adjusted 104% for • Healthy Retirees males and 103% for females. Projected generationally using MP-2021. V& City of Kalispell, Montana Notes to Financial Statements June 30, 2024 The actuarial assumptions and methods utilized in the June 30, 2023 valuation, were developed in the five-year experience study for the period ending 2021. However, the current long-term rate of return is based on analysis in the experience study, without consideration for the administrative expenses analysis shown in the experience study. 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 2127. 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, 2023, is based on analysis in the experience study report dated May 2, 2022 without consideration for the administrative expense analysis shown in the experience study. 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. 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% rV City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 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, 2023, 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 348 employers that have participants in the PERS-DCRP totaled $1,409,309. 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/annual reportsl/annualreports. MUNICIPAL POLICE OFFICERS' RETIRMENT SYSTEM GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2024 (REPORTING DATE), JUNE 30, 2023 (MEASURMENT DATE) 77 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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, 2023 measurement date for the 2024 reporting. If an employer's fiscal year end is after June 301", the employer will not use the measurements shown in this report but will need to wait for the measurement date as of June 30, 2024. 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). 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 78 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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. 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 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. rol City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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. 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, 2023, is on an actuarial valuation performed by the Plan's actuary as of June 30, 2023. 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, 2023, and 2022, 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 80 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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 $3,253,260 and the employer's proportionate share was 1.4032 percent. Changes in actuarial assumptions and methods: There have been no changes to the actuarial assumptions or other inputs that affected the measurement of the TPL since the previous measurement date. 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, 2023 measurement date, the employer recognized its proportionate share of the Plan's pension expense of 502,432. The employer also recognized grant revenue of $1,131,993 for the support provided by the State of Montana for its proportionate share of the pension expense associated with the employer. 81 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Recognition of Deferred Inflows and Outflows:: At June 30, 2023, the employer reported its proportionate share of the Plan's deferred outflows of resources and deferred inflows of resources from the following sources: Deferred As of measurement date Resources Resources Expected vs. Actual Experience $42,541 $6,878 Projected Investment Earnings vs. Actual 45,669 0 Investment Earnings Changes in Assumptions 97,648 42,415 Changes in Proportion and Differences Between Employer Contributions and Proportionate Share 0 161,600 of Contributions Employer Contributions Subsequent to the $445,815 Measurement Date Total $631,673 $210,893 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Recognition of Deferred Outflows and Deferred Inflows in For the Measurement Year future years as an increase or (decrease) to Pension Expense ended June 30: Actuarial Assumptions: The total pension liability as of June 30, 2023, was determined by an actuarial valuation date of June 30, 2023, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: 82 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 Investment Return (net of pension plan investment expense, 7.30% including inflation) General Wage Growth * 3.50% *includes Inflation at 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 3.0% • Requires 12 full months of retirement before GABA will be made 2. Minimum Benefit Adjustment (non-GABA) The minimum benefit provided should not be less • Benefit for a retired member or member's survivor and member did than 50% of the monthly compensation paid to a not elect GABA 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 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 Mortalitv continued: generationally using MP-2021. PUB-2010 Safety Amount Weighted Disabled • Disabled Retiree Retiree mortality table projected to 2021, set forward 1 year for males. PUB-2010 Safety Amount Weighted Contingent • Contingent Survivor Survivor Mortality projected to 2021, set forward one year for males. Projected generationally_ using MP-2021. The actuarial assumptions and methods utilized in the June 30, 2023 valuation, were developed in the five-year experience study for the period ending June 30, 2021. However, the current long-term rate of return is based on analysis in the experience study, without consideration for the administrative expenses analysis shown in the experience study. 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 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. 83 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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, 2023 is based on analysis in the experience study report dated May 2, 2022, without consideration for the administrative expense analysis shown in the experience study. 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. 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% 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. As of measurement date 1.0% Decrease (6.30%) Current Discount Rate 1.0% Increase (8.30%) CITY OF KALISPELUs $5,020,414 $3,253,260 1 Net Pension Liability 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 84 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 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/annual reportsl/annualreports. FIREFIGHTERS' UNIFIED RETIREMENT SYSTEM GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2024 (REPORTING DATE), JUNE 30, 2023 (MEASURMENT DATE) n 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, 2023 measurement date for the 2024 reporting. If an employer's fiscal year end is after June 301", the employer will not use the measurements shown in this report but will need to wait for the measurement date as of June 30, 2024. 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). 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 85 City of Kalispell, Montana Notes to Financial Statements June 30, 2024 (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: 0 20 years of membership service, regardless of age 0 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 afterJuly 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; 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. M1 City of Kalispell, Montana Notes to Financial statements June 30, 2024 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 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, 2023, is on an actuarial valuation performed by the Plan's actuary as of June 30, 2023. 87 City of Kalispell, Montana Notes to Financial statements June 30, 2024 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, 2023, and 2022, 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 $1,886,263 and the employer's proportionate share was 1.2493 percent. Changes in actuarial assumptions and methods: There have been no changes to the actuarial assumptions or other inputs that affected the measurement of the TPL since the previous measurement date. 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. At June 30, 2023 measurement date, the employer recognized its proportionate share of the Plan's pension expense of $435,627. The employer also recognized grant revenue of $1,069,020 for the support provided by the State of Montana for its proportionate share of the pension expense that is associated with the employer. 88 City of Kalispell, Montana Notes to Financial statements June 30, 2024 Recognition of Deferred Inflows and Outflows:: At June 30, 2023, the employer reported its proportionate share of the Plan's deferred outflows of resources and deferred inflows of resources from the following sources: Deferred Outflows of Deferred Inflows of As of measurement date Resources Resources Expected vs. Actual Experience $174,530 $1,939 Projected Investment Earnings vs. Actual 49,567 0 Investment Earnings Changes in Assumptions 403,374 0 Changes in Proportion and Differences Between 36,820 0 Employer Contributions and Proportionate Share of Contributions Employer Contributions Subsequent to the $406,870 Measurement Date Total $1,071,161 $1,939 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: For the Measurement Year ended June 30: Recognition of Deferred Outflows and Deferred Inflows in future years as an increase or (decrease) to Pension Expense Thereafter 89 City of Kalispell, Montana Notes to Financial statements June 30, 2024 Actuarial Assumptions: The total pension liability as of June 30, 2023, was determined by an actuarial valuation date of June 30, 2023, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: Investment Return (net of pension plan investment expense, 7.30% including inflation General Wage Growth * 3.50% *includes Inflation at 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 3.0% • Requires 12 full months of retirement before GABA will be made 2. Minimum Benefit Adjustment (non-GABA) The minimum benefit provided should be less than • Members with 10 or more years of membership service and member 50% of the current base compensation of a newly did not elect GABA 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 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 Mortalitv continued: generationally using MP-2021. PUB-2010 Safety Amount Weighted Contingent • Contingent Survivors Survivor Mortality Table projected to 2021,with ages set forward one year for males. Projected generationally using MP-2021. PUB-2010 Safety Amount Weighted Disabled • Disabled Retirees Retiree Mortality Table projected to 2021, set forward one year for males. The actuarial assumptions and methods utilized in the June 30, 2023 valuation, were developed in the five-year experience study for the period ending June 30, 2021. However, the current long-term rate of return is based on analysis in the experience study, without consideration for the administrative expense analysis shown in the experience study. 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. 0111 City of Kalispell, Montana Notes to Financial statements June 30, 2024 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, 2023, is based on analysis in the experience study report dated May 2, 2022, without consideration for the administrative expense analysis shown in the experience study. 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. 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% Sensitivity of the proportionate share of the net pension liability to changes in the discount rote: 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. CITY OFKALISPELL's $3,440,116 $1,886,263 $646,084 Net Pension Liability 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 011 City of Kalispell, Montana Notes to Financial statements June 30, 2024 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/annual reportsl/annualreports. G. Postemployment Health Insurance Benefits (OPEB) Plan Description. In fiscal year 2024, 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 oil City of Kalispell, Montana Notes to Financial statements June 30, 2024 go" basis and does not plan to fund this liability since it has paid the full amount due each month. OPEB Liabilities, OPEB Expenses, and Deferred Outflows of Resources Related to OPEB. The City's total other post -employment benefit (OPEB) liability of $2,449,911 as of June 30, 2024, was determined by an actuarial valuation as of that date. Actuarial assumptions and other inputs. The total OPEB liability in the June 30, 2024 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 4.11 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, 2024. 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, 2024 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. Total OPEB Liability OPEB Liability at June 30,2023 $ 2,333,613 Changes for the year: Service cost $ 150,319 Interest $ 95,911 Difference between expected and actual experience $ (134,050) Changes in assumptions $ 4,118 Change of benefit terms $ - OPEB Liability at June 30,2024 $2,449,911 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. 1 % Decrease Discount Rate 1 % Increase (3.11%) (4.11%) (5.11%) Total OPEB Liability $ 2,666,365 $ 2,449,911 $ 2,253,693 ON City of Kalispell, Montana Notes to Financial statements June 30, 2024 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. 1 % Decrease Trend Rate 1 % Increase (1.5%) (2.5%) (3.5%) Total OPEB Liability $ 2,190,701 $ 2,449,911 $2,752,727 For the year ended June 30, 2024, the City reported deferred inflows and deferred outflows of resources related to OPEB from the following sources: Deferred Inflows Deferred Outflows of Resources of Resources Differences between expected and actual experience $ 686,146 $ 113,963 Changes in assumptions or other inputs $ 1,215,855 $ 863,609 Total $ 1,902,001 $ 977,572 Amounts reported as deferred outflows/deferred outflows of resources related to OPEB as of June 30, 2024 will be recognized in OPEB expense as follows: Fiscal Year Ending June 30: 2025 2026 2027 2028 2029 Thereafter Aj Expense Amount $ (16,468) $ (16,468) $ (16,468) $ (16,468) $ (16,468) $ (31,124) 0L! City of Kalispell, Montana Notes to Financial statements June 30, 2024 H. Amounts Due From Other Governments On June 30, 2024, the amounts due from other governments consisted of the following: General Fund Amount Due from: Flathead County -Taxes $ 496,050 State of Montana -Video Gaming Fees $ 350 U.S. Treasury $ 421 Sub Total $ 496,821 Special Revenue Funds Amount Due from: Flathead County -Taxes $ 564,730 Flathead County -EMS Levy $ - US Dept of Trans - Safe Street Grant $ 211,952 U.S. DOJ $ 1,896 State of Montana - HMEP Grant Hazmat $ 615 State of Montana - Hazmat $ 3,387 MDOT / BARSAA $ 81.303 Sub Total $ 863,883 I. Restricted Cash/Investments Debt Service Funds Amount Due from: Flathead County -Taxes $ 233,298 Total Governmental Funds $ 1,594,002 Enterprise Funds Amount Due from: Flathead County -Impact Fees $ 1,955 Flathead County -Taxes $ 211,941 DNRC / ARPA $ 240,268 DNRC / WRF-SRF Funding $ 2,522,155 Total Business -type Funds $ 2,976,319 Total City of Kalispell $ 4,570,321 The following restricted cash/investments were held as of June 30, 2024. 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. RESTRICTED CASH: Business -type Activities Water Bond Reserve Plant Investment/Impact Fees (1) Sewer Operating Reserve (2) Bond Reserve Plant Investment/Impact Fees (sanitary) (1) Plant Investment/Impact Fees (treatment plant) (1) Plant Investment/Impact Fees (storm) (1) Treatment Plant Replacement (3) Total business -type activities restricted cash/investments Governmental Activities Impact Fees Public Safety Growth related Capital (1) Urban Forestry Developers (4) Debt Service Westside TIF Bond Reserve Debt Service SID 345 Bond Reserve Debt Service Revolving Fund - SID 344 Bond Reserve Debt Service Revolving Fund - SID 345 Bond Reserve Total governmental activities restricted cash/investments Total restricted cash/investments July 1, 2023 Additions Subtractions June 30, 2024 $ 273,703 $ 405,490 $ - 679,193 1,120,742 594,533 (684,881) 1,030,394 400,000 - 400,000 1,113,254 84,333 1,197,587 4,255,766 909,237 (1,053,054) 4,111,949 2,998,525 547,262 (1,105,753) 2,440,034 1,808,254 350,957 (141,389) 2,017,822 726,476 503,368 (480,045) 749,799 12, 696, 720 3,395,180 (3,465,122) 12, 626, 778 2,291,033 275,139 (3,084) 2,563,086 145,080 - (3,712) 141,368 480,011 480,011 11,172 11,172 130,742 (1,225) 129,517 12,100 - 12,100 3,070,138 275,139 (8,021) 3,337,256 $ 15,766,858 $ 3,670,319 $ (3,473,143) $ 15,964,034 0161 City of Kalispell, Montana Notes to Financial statements June 30, 2024 (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. 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. Oil City of Kalispell, Montana Notes to Financial statements June 30, 2024 K. 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. L. 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 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 damage. 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. 0yA City of Kalispell, Montana Notes to Financial statements June 30, 2024 M. 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. N. Receivables Taxes/Assessments Receivable The following funds had taxes and/or assessments receivable at June 30, 2024. FUND Source General - Major Governmental Taxes Downtown TIF Taxes Westside TIF Taxes Parks Taxes Old School "Tech" TIF Taxes Old School "Ind" TIF Taxes Rail Park TEDD Taxes Health Levy Taxes Light Maintenance District Assessments Street Maintenance - Major Governmenta Assessments Urban Forestry Assessments Westside TIF debt service Taxes SID 344 Assessments SID 345 Assessments S & C's Assessments Sewer - Major Business -type Solid waste Accounts Receivable Total Governmental Funds Assessments Assessments Total Business -type Funds Total City Amount $ 313,189 45,651 1,369 53,427 55,702 61,974 6,415 38,621 24,202 139,031 31,401 36,132 958,783 76,643 33,539 $ 1,876,079 65,763 40,165 105,928 $ 1.982.007 At June 30, 2024, the Ambulance fund had accounts receivable deferred net of $289,522. Total net accounts receivable of the Ambulance fund is $276,810. The difference is the result of $12,712 being receivable, and therefore recognized as revenue, prior to the Ambulance fund conversion from a proprietary fund to a special revenue fund. or-] City of Kalispell, Montana Notes to Financial statements June 30, 2024 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 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, 2024, is $103,871, and $695,657, 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 From - % To CD Loan RevDhAng 2006 5.00 Distinctive Countertops 2017 3.00 Norm's News 2015 3.00 Wheatons 2002 1.00 Hampstead Partners' 2002 4.51 Hampstead Partners' 2002 1.00 Hampstead Partners - Interest Portion' 2002 4.51 Hampstead Partners - Interest Portion' RD Loan RevDhAng 2006 6.50 Distinctive Countertops 2020 3.00 PKM, LLC (NW DRYWALL) Westside TIF 2020 3.00 PKM, LLC (NW DRYWALL) Total Oo\,emmental Funds 'Long Term Loans Receivable - Matures 2032 Ong. Amt. Balance Purpose 288,619 - Jobs 33,765 - Jobs 46,991 4,500 Jobs 480,000 480,000 Low Income Housing 400,000 400,000 Low Income Housing - 103,871 Low Income Housing - 695,657 Low Income Housing 175,000 - Small Business 250,000 208,358 Small Business 500,000 416,715 Redevelopment $ 2,174,375 $ 2,309,401 OR City of Kalispell, Montana Notes to Financial statements June 30, 2024 O. 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, 2024, amounted to $2,734,637. P. 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. Nonspendable - not in spendable form Long-term recievables Prepaids Total nonspendable Restricted General Government -Health Insurance Public Safety - Opioid Public Safety-admin. Public Safety -EMS Public Safety -Building Inspection Public Safety -Fire capital improvements Public Safety -Police capital improvements Public Safety -Police equip. Public Safety -Police personnel Public Safety -Fire equip. Public Safety -Fire personnel Public Works -Street cleanning and Maint. Public Works -Street Lights Public Works -roads and streets Public Works -transportation infrastructure Culture and Recreation -Park improvements Culture and Recreation -Equipment Culture and Recreation -Programs Culture and Recreation -trees and maintenance Community Development- Rail Park Tedd Community Development -Downtown TIF Community Development -Old School Station Community Development -South Kalispell TIF Community Development-Westside TIF Community Development -Revolving loan funds Community Development - Grants Debt Service-SID Debt Service -Old School improvements Debt Service -The Willows improvements Debt Service-S & C warrants Debt Service -Core area improvements Total restricted Assigned Capital Equipment Parking Miscellaneous Total assigned Unassigned Total fund balances American Other Total General Street Rescue Governmental Governmental Fund Maint. Plan Act Funds Funds 20,313 20,313 61,999 61,999 7,599 7,599 189,550 189,550 3,129,768 3,129,768 2,328,364 2,328,364 234,713 234,713 19,555 19,555 50,501 50,501 6,403 6,403 23,968 23,968 4,668,336 21,006 4,689,342 - 1,088,779 1,088,779 1,512,488 1,512,488 917,749 917,749 323,895 323,895 1,582,765 1,582,765 1,247,515 1,247,515 286,436 286,436 986,396 986,396 65,784 65,784 3,854,948 3,854,948 2,631,926 2,631,926 70,000 70,000 232,653 232,653 108 108 27,800 27,800 442 442 841,694 841,694 4,668,336 21,765,117 26,433,453 23,542 23,542 2,217,227 2,217,227 2,240,769 2,240,769 2,366,354 2,366,354 4,607,123 4,668,336 21,765,117 31,040,576 iN11f, City of Kalispell, Montana Notes to Financial statements June 30, 2024 Q. Subsequent Events WWTP Fermenter Rehabilitation Protect The City Council approved the rehabilitation of the existing WWTP fermenter. The project's construction cost will be funded through a $1,000,000 ARPA Grant and a $2.2 million State Revolving Fund (SRF) Loan. Lower Zone Storage Tank 1 Replacement Protect The City Council approved the replacement of Lower Zone Storage Tank 1. This project involves replacing the wooden -roofed, 1.7-million-gallon tank located at the Buffalo Hill Golf Course Complex in Kalispell. Funding includes $3 million from the water fund and a $6.7 million State Revolving Fund (SRF) loan. R. Commitments 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, 2024, the City had incurred $3,462,988 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 for the project is $19,107,012. For the year ended June 30, 2024, the City had incurred $16,476,324 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 (WW-M-01 & WW-EX-09). The Professional Services and Construction commitments for the project are $6,348,452.97. For the year ended June 30, 2024, the City had incurred $5,312,425 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 (WW-LS-01). The Professional Services and Construction commitments for the project are $1,483,007. For the year ended June 30, 2024, the City had incurred $1,214,819 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 Wastewater Treatment Plant Main and Headworks Structure (WWTP-Misc 12) Project. The contract commitment for the project is $1,727,905. For the year ended June 30, 2024, the City had incurred $1,346,718 towards the project, which is reported as construction in progress in the Statement of Net Position. In 2018, the City entered into a contract for professional services for the Wastewater Treatment Plant Biosolids Alternate Disposal (WWTP-BDD 2) Plan. The management plan was to investigate alternate means of disposing of the City's biosolids. Implementation of the project was put on hold when it appeared the County would be building a biosolids composting facility. The County re- allocated their funds and opted not to move forward with the composting project. The City's City of Kalispell, Montana Notes to Financial statements June 30, 2024 consultant is currently working on the PER, which will look at alternative options for biosolids handling, treatment, and disposal. For the year ended June 30, 2024, the City had incurred $8,111 towards the management plan, which is reported as construction in progress in the Statement of Net Position. The City is rehabilitating components of the Westside Well and evaluating the potential of upsizing the well. The project is being completed in-house. The total project budget is $140,000. For the year ended June 30, 2024, the City had incurred $37,826 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 Lift Station #36 Improvements and Conveyance Project (WW-LS-06). The project is expected to go out to bid in October 2024. Total project costs are estimated at $3,856,000. For the year ended June 30, 2024, the City had incurred $12,676 towards the project, which is reported as construction in progress in the Statement of Net Position `11YA REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS WIN City of Kalispell, Montana Required Supplementary Information June 30, 2024 SCHEDULE OF TOTAL LIABILITY AND RELATED RATIOS OTHER POSTEMPLOYMENT BENEFITS June 30, 2024 2017 2018 2019 2020 2021 2022 2023 2024 Total OPEB Liability Service cost $ 332,296 $ 298,579 $ 227,903 $ 253,580 $ 326,193 $ 208,761 $ 149,521 $ 150,319 Interest $ 7,695 $ 137,494 $ 135,435 $ 76,055 $ 72,682 $ 157,217 $ 124,257 $ 95,911 Difference between expected and actual experience $ 13,222 $ (137,426) $ (736,800) $ (98,937) $ (235,464) $ (48,744) $ 148,753 $ (134,050) Changes in assumptions $ 1,013,936 $ (253,167) $ (798,142) $ 244,123 $ 346,504 $ (1,152,520) $ 378,221 $ 4,118 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) $ 116,298 Total OPEB liability -beginning (restated) $ 2,546,180 $ 2,546,180 $ 3,985,329 $ 2,813,725 $ 3,288,546 $ 3,798,461 $ 3,008,655 $ 2,333,613 Total OPEB liability -ending $ 3,985,329 $ 2,591,660 $ 2,813,725 $ 3,288,546 $ 3,798,461 $ 2,963,175 $ 2,333,613 $ 2,449,911 Covered -employee payroll $10,456,215 $10,748,989 $ 11,430,605 $ 11,794,098 $ 12,822,159 $ 13,270,935 $15,925,614 $16,483,010 Total OPEB liability as a percentage of covered - employee payroll 38.1 % 24.1 % 24.6% 27.9% 29.6% 22.3% 14.7% 14.9% Notes to Schedule: Changes of assumptions and other inputs Discount rate 3.13% 3.45% 3.36% 2.66% 2.18% 4.09% 4.13% 4.11% Medical trend 4.50% 4.50% 3.50% 3.50% 3.20% 3.20% 2.50% 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 City of Kalispell SCHEDULE OF CONTRIBUTIONS OTHER POSTEMPLOYMENT BENEFITS June 30, 2024 2017 2018 2019 2020 2021 2022 2023 2024 Contractually required contribution $ $ $ $ $ $ $ $ Contributions in relation to the contractually required contribution $ $ $ $ $ $ $ $ Contribution deficiency (excess) $ $ $ $ $ $ $ $ City'scovered-employee payroll $ 10,456,215 $ 10,748,989 $ 11,430,605 $ 11,794,098 $ 12,822,159 $13,270,935 $15,925,614 $16,483,010 Contributions as a percentage of covered - employee payroll 0% 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 104 N W O d � o C E E a �o o = C c Gcc1 i N C o QEco N G1 � Y Q o U) GJ O _0 T 3 D Q aa) E iJ ry W •� U a .O 4J a M \O O o O 69 V9 69 V N a o N \O 01 l� M O r 01 01 00 O 69 69 69 \O l� M 00 O N CA l� V 00 M � M M � O 69 69 69 00 00 M \O M enV ti 00 N O M V1 o0 \O ti 00 x V) o V3 s9 o a 0 x t- oc o0 0 0 � O cr', V 00 � O M M M M p 69 A 69 M O O O 00 00 l� V) \O l� M 01 M `O N M l� M O � 69 N 01 69 V1 69 00 N 0 r 0` 00 � O o0 0 N O 0 69 N V 69 oc O m oc 00 V1 M 00 CN o0 O O N O O 69 o0 69 \n 69 00 00 00 00 00 00 V M 00 [ O 69 69 69 o en ti o 0 o0 N a1 O 69 69 69 � y ; � �E Como 22� �mC) \ 2 ;= k / oc ) CL o % U) > A j A;Q 3D J 2 / �� .§ � k 7 ® 7 \ oc / \ \ \ rq » 7 � J 2 7 3 & 0 oc® 0 � � \ \ f oc ® ® & E E / $ 7 7 / z o z o a / 2 2 $ 7 7 7 � / / \ / oc ® ® & ƒ / ® ® $ ® ® g g / a \ \ � 2 2 0 \ CA \ � 0 0 / \ a \ \ oc _ \ \ \ \ { .{ W 5 5 * 2 5® 7 : § ® § 5 ® § § § § § \ \ § e \ . U/ City of Kalispell, Montana Required Supplementary Information June 30, 2024 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 a lump -sum payment. 4) 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 Actuarially determined contributions are determined on the valuation date payable in the fiscal year beginning immediately following the valuation date. The following actuarial assumptions and methods were used to determine contribution rates reported for fiscal year ending June 30, 2023, which were based on the results of the June 30, 2022 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.30%, net of pension plan investment and administrative expenses *Includes inflation at 2.75% Merit salary increase 0%to 4.80% Asset valuation method Four-year smoothed market Actuarial cost method Entry age Normal Amortization method Level percentage of payroll, open Remaining amortization period 30 years City of Kalispell, Montana Required Supplementary Information June 30, 2024 Mortality • Active Participants PUB-2010 General Amount Weighted Employee Mortality projected to 2021 for males and females. Projected generationally using MP-2021. • Disabled Retirees PUB-2010 General Amount Weighted Disabled Retiree mortalitytable, projected to 2021, set forward one yearfor both males and females. PUB-2010 General Amount Weighted Contingent Survivor Mortality • Contingent Survivors projected to 2021 with ages set forward one yearfor males and females. Projected generationally using MP-2021. PUB-2010 General Amount Weighted Healthy Retiree Mortality Table projected to 2021, with ages set forward one year and adjusted 104%for • Health Retirees males and 103%forfemales. Projected generationally using MP-2021. 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. 0 m �E �o �0 C � O i N � mC) N � � O y E co CL C Y Q 7 O D U) U � S ry ER Ps CC . rl 69 69 69 69 _ 00 M ~ N 69 V 69 69 N 69 ~ r— M O N 00 o0 N 69 ul 69 00 69 N 69 M 00 01 00 N \O V1 01 00 M �h' O v1 01 00 M 00 N 69 V) 69 00 69 N 69 W) W) 00 l ~ ll� ll� V) 00 r vi 11 O 00 O Ci CA V) Elo 00 Elo Elo o0 N O 00 M V N r— 00 V1 N V1 ,�ti O O 00 � M 69 'V 69 01 69 N 69 ,Nti O 001 a1 00 00 00 69 69 69 00 o 0 C oNo � N M 00 N 69 V) 69 00 69 N 69 M 0 0 ti _ DDoc l0 vi N t o0 CAV9 O_ N 69 69 cNn N o0 O �t 00 O M W) O N tiN Vl 00 00 M 69 \O 69 01 69 N 69 F7 F O cz `z O O p P-i N O U N cz O O cz cz N CG Wo Z W a Ci E� 44 P., 44 PLI a U P, [-, i ; 2 k q § ®ut �E ƒ )2 � )�{ 2 \ /// k / )_L§ 2 0 ®U) J � 2 ■ /D 2 2 � ry � \ \ _/ y y ® \ 3 rltIt\ / / ® ® Q k k k \ � � ƒ y 2 « / 2 2 ƒ $ 9 9 / k k 4�lq k \ / J / \ / / 00 CA ƒ \ \ \ � / � � \ \ ƒ \ / / 7 7 / 0 § ) 2 m \ - 5 3 City of Kalispell, Montana Required Supplementary Information June 30, 2024 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; and o are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar 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 through their 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 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 member's 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 INS City of Kalispell, Montana Required Supplementary Information June 30, 2024 * 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. 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 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. 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 Actuarially determined contributions are determined on the valuation date payable in the fiscal year beginning immediately following the valuation date. The following actuarial assumptions and methods were used to determine contribution rates reported for fiscal year ending June 30, 2023, which were based on the results of the June 30, 2022 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.30%, net of pension plan investments and administrative expenses *Includes inflation at 2.75% Merit salary increases 1%to 6.40% Asset valuation method Four-year smoothed market Actuarial cost method Entry Age Normal Amortization method Level percentage of pay, open Mortality • Active Participants PUB-2010 Safety Amount Weighted Employee Mortality projected to 2021 for males and females. Projected generationally using MP-2021. • Healthy Retiree PUB-2010 Safety Amount Weighted Healthy Retiree mortality table projected to 2021 set forward one yearfor males and adjusted 105%for males, and 100%forfemales. Projected generationally using MP-2021. PUB-2010 Safety Amount Weighted Disabled Retiree mortality table projected to 2021, set forward one yearfor males. • Disabled Retiree PUB-2010 Safety Amount Weighted Contingent Survivor Mortality projected to 2021, set forward one yearfor males. Projected • Contingent Survivor generationally using MP-2021. 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. INVA O (0 E � o o c E O i N O O O y E co Q� Y Q� o' U) « _0 U ,P a y V1 l� M 00 N V1 \O 01 M CF' M V1 V1 oc l� l� 69 M 69 Ct 69 69 o oc � 00 o 0 � V1 M M V1 00 C) O _ 69 to 69 �t 69 69 o V) N o 0 OC 0 M 00 � 69 M 69 V1 69 69 o0 O o0 V1 V W) � V l� 69 M 69 V 69 N 69 o oc W) o 0 op V1 N oc 01 CF' N M l� M M O 01 N o0 o0 M l� o0 N O 69 M 69 "t 69 N 69 \O en m N o M N V OC 69 69 69 69 00 -r M \O l� N l� \O M oc a, o oc � � oc M CF' 00 N OC 69 N 69 M 69 N 69 V1 O V1 M_ 0 oc 00 V1 a N o0 M M M ~ OC 69 69 69 69 c M M O O o 0 0 O N � oc 00 00 N 01 \O l� o0 69 69 69 69 ,r cz cz cz W o�J¢ WP via E� W P� W w cz ; 2 \ E /® 22� �m04 N 2\ k\ / §°■ U� .� gym )CL / o� /U) 2 2 3D J k ƒ /f{ � k & & ® a m � f \ % \ k ® ® & \ \ \ J ® ® & It / / $06 \ 9 9 C rq rq \ bo� & % % _ _ CA / / 2 P 3 m m / rq / » / rq rq CA / / J \ \ 9 9 q Q Q % J 9 9 / \ \ \ / m m / \ \ \ 0 y � / \ { / \ . \ \ u \ \ o \ { � § \ @\ { � 5 .{ j \ \ \ \ 0 0 0 0 0 / / City of Kalispell, Montana Required Supplementary Information June 30, 2024 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 the calendar 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 through their 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 480 or 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 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 member's 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 "P City of Kalispell, Montana Required Supplementary Information June 30, 2024 * 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. 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 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. 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 Actuarially determined contributions are determined on the valuation date payable in the fiscal year beginning immediately following the valuation date. The following actuarial assumptions and methods were used to determine contribution rates reported for fiscal year ending June 30, 2023, which were based on the results of the June 30, 2022 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.30%, net of pension plan investments and administrative expenses *Includes inflation at 2.75% Merit salary increases 1%to 6.40% Asset valuation method Four-year smoothed market Actuarial cost method Entry Age Normal Amortization method Level percentage of payroll, open IN12, afl I ,VV..l,VVV 11 1 ,VV..l,VVV %P I ,1 dG,"FdV 11 $ 279,000 $ 279,000 $ 447,298 $ $ 3,530,710 $ 3,530,710 $ 3,562,163 $ $ 1,152,253 $ 1,152,253 $ 1,163,828 $ $ 485,000 $ 485,000 $ 383,131 $ $ 57,000 $ 57,000 $ 118,242 $ ings $ 225,000 $ 225,000 $ 585,273 $ vestments $ - $ - $ 42,941 $ $ 13,413,963 $ 13,413,963 $ 14,055,329 $ E 2,660,038 2,660,038 2,581,242 ;e 687,845 687,845 522,247 9,176,628 9,176,628 8,643,176 ;e 1,032,325 1,032,325 937,293 33,927 33,927 33,668 ;e 66,894 66,894 38,213 ;e 21,600 21,600 21,600 relopment 14,054 14,054 13,362 ;e 6,400 6,400 3,783 502,765 502,765 454,180 70,791 70,791 48,291 other charges 27,537 27,537 14,111 425,500 425,500 417,150 revenues over (under) expenditures ',ES (USES) �s (uses) Vet change in fund balance Cements are an integral part of this statement. 14,726,304 14,726,304 13,728,316 S (1,312,341) (1,312,341) 327,013 1,i 1,400,000 (960,000) 1,400,000 (960,000) 1,136,532 (; (881,000) 440,000 440,000 255,532 (872,341) (872,341) 582,545 1" 4,027,017 4,609,562 REVENUES Taxes and Assessments Charges for Services Miscellaneous Investment and Royalty Earnings Net Increase (decrease) in Investments Total revenues City of Kalispell Budgetary Comparison Schedule Major Special Revenue Funds For Fiscal Year Ended June 30, 2024 2500 Street Maintenance VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) $ 2,981,000 2,981,000 3,068,860 87,860 5,000 5,000 20,090 15,090 500 500 11,305 10,805 25,000 25,000 153,754 128,754 24,659 24,659 3,011,500 3,011,500 3,278,668 267,168 EXPENDTIURES Current: Public Works Personal services 1,593,158 1,593,158 1,498,652 94,506 Operations and maintenance 1,230,099 1,230,099 792,704 437,395 Debt Service Debt service -principal 69,057 69,057 69,056 1 Debt service - interest and other charges 23,651 23,651 23,130 521 Capital outlay 220,100 220,100 149,791 70,309 Total expenditures 3,136,065 3,136,065 2,533,333 602,732 Excess (deficiency) of revenues over (under) expenditures (124,565) (124,565) 745,335 869,900 OTHER FINANCING SOURCES (USES) Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balances - beginning Fund balances - ending The notes to the financial statements are an integral part of this statement. (33,000) (33,000) 33,000 (33,000) (33,000) 33,000 $ (157,565) (157,565) 745,335 902,900 3,923,001 4,668,336 "f City of Kalispell, Montana Budgetary Comparison Schedule For Fiscal Year Ended June 30, 2024 4393 American Recovery Act Grant VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental $ $ $ 4,085,439 $ 4,085,439 Total Revenues 4,085,439 4,085,439 EXPENDTIURES Current: Capital Outlay 5,433,047 5,433,047 5,433,047 Total Expenditures 5,433,047 5,433,047 5,433,047 Excess (deficiency) of revenues over (under) expenditures (5,433,047) (5,433,047) 4,085,439 (1,347,608) OTHER FINANCING SOURCES (USES) Transfers in Transfers (out) Total other financing sources (uses) Net change in fund balanc( Fund balances - beginning Restatements Fund balances - beginning restated Fund balances -endinc (4,085,439) (4,085,439) (4,085,439) (4,085,439) (5,433,047 (5,433,047 (5,433,047 The notes to the financial statements are an integral part of this statement. ffR City of Kalispell, Montana Required Supplementary Information June 30, 2024 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 amounts 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 legas level of budgetary control. 3011el:1111F_1Iffi7y_11 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. IFU SUPPLEMENTAL INFORMATION IN 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 health insurance premium increases. Building Department — Accounts for all activity of enforcing the building regulations adopted by the City. Public Safety 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 Urban 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. 4 Mile Drive Path Project - Accounts for grant monies received for the completion of a pathway along the north side of Four Mile Drive. 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 Projects - 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, DUI) — 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 revenues and expenditures related to respond and remedy hazmat calls of the City Fire Department. OPIOID Settlement - Accounts for monies received from a settlement holding the nation's three major pharmaceutical distributors accountable for fueling the opioid epidemic and harm it has caused. Funds are allocated to programs that will help address the ongoing opioid crisis through treatment, education, and prevention efforts. 123 Airport Grant - Accounts for the grant funding received for expenditures related to support upgrades to the Airport runway lighting and security (fencing). Safe Streets Grant — Accounts for the grant monies received for revenues and expenditures related to a planning study for the Downtown Corridor. 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, 2024 Downtown TIF Airport TIF Westside TIF Parks -in -Lieu Parks ASSETS Current assets Cash and investments $ 930,108 $ - $ 3,485,423 $ 323,895 $ 1,615,863 Taxes and assessments receivable, net 45,651 - 1,369 - 53,427 Accounts receivable - - - - - Notes, loans, and contracts receivable - - 416,715 - - Due from other governments 57,119 - - - 78,214 Due from Other 25,830 Total current assets 1,032,878 3,903,507 323,895 1,773,334 Noncurrent assets Restricted cash and investments - - - - - Lease/SBITA Right of use asset, net Total noncurrent assets Total assets 1,032,878 3,903,507 323,895 1,773,334 LIABILITIES Current liabilities Accounts payable - - 46,608 - 68,506 Accrued payables - - - - - Accrued payroll 832 - 582 - 68,636 Due to other funds - - - - - Lease/SBITA Purchase Total current liabilities 832 47,190 137,142 Noncurrent liabilities Lease/SBITA Purchase Total noncurrent liabilities Total liabilities 832 47,190 137,142 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue 45,650 - 1,369 - 53,427 Ambulance Revenue Total deferred inflows of resources 45,650 1,369 53,427 FUND BALANCES Restricted for: General government - - - - - Public safety - - - - - Public works - - - - - Culture R recreation - - - 323,895 1,582,765 Housing R community development 986,396 - 3,854,948 - - Unassigned Total Fund Balance $ 986,396 $ $ 3,854,948 $ 323,895 $ 1,582,765 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 1,032,878 $ $ 3,903,507 $ 323,895 $ 1,773,334 The notes to the financial statements are an integral part of this statement. ` 1. City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2024 Old School Old School Technology Industrial Rail Park Health Ambulance TIF TIF TEDD Levy ASSETS Current assets Cash and investments $ 217,894 $ 60,115 $ 4,499 $ 235,089 $ - Taxes and assessments receivable, net - 55,702 61,974 6,415 38,621 Accounts receivable, net 289,522 - - - - Notes, loans, and contracts receivable - - - - - Due from other governments - 1,108 62 72,886 74,829 Due from Other 132 Total current assets 507,548 116,925 66,535 314,390 113,450 Noncurrent assets Restricted cash and investments - - - - - Lease/SBITA Right of use asset, net Total noncurrent assets Total assets 507,548 116,925 66,535 314,390 113,450 LIABILITIES Current liabilities Accounts payable 15,649 - - 21,372 - Accrued payables - - - - - Accrued payroll 25,539 - - 167 - Due to other funds - - - - 54,516 Lease/SBITA Purchase Total current liabilities 41,188 21,539 54,516 Noncurrent liabilities Lease/SBITA Purchase Total noncurrent liabilities Total liabilities 41,188 21,539 54,516 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - 55,702 61,974 6,415 38,621 Ambulance Revenue 276,810 Total deferred inflows of resources 276,810 55,702 61,974 6,415 38,621 FUND BALANCES Restricted for: General government - - - - 20,313 Public safety 189,550 - - - - Public works - - - - - Culture & recreation - - - - - Housing & community development - 61,223 4,561 286,436 - Unassigned Total Fund Balance $ 189,550 $ 61,223 $ 4,561 $ 286,436 $ 20,313 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 507,548 $ 116,925 $ 66,535 $ 314,390 $ 113,450 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2024 Public Safety Light GasTaz- Building Dept Impact Fees Maintenance BarSAA Urban Forestry ASSETS Current assets Cash and investments $ 3,152,111 $ 7,588 $ 1,099,035 $ 2,241,419 $ 1,082,927 Taxes and assessments receivable, net - - 24,202 - 31,401 Accounts receivable - - - - - Notes, loans, and contracts receivable - - - - - Due from other governments - - 29,387 81,303 44,192 Due from Other 128 Total current assets 3,152,239 7,588 1,152,624 2,322,722 1,158,520 Noncurrent assets Restricted cash and investments - 2,563,088 - - 141,368 Lease/SBITA Right of use asset, net 8,359 2,786 Total noncurrent assets 8,359 2,563,088 144,154 Total assets 3,160,598 2,570,676 1,152,624 2,322,722 1,302,674 LIABILITIES Current liabilities Accounts payable 4,401 - 39,824 14,939 13,106 Accrued payables - - - - - Accrued payroll 18,070 - 2,258 - 7,866 Due to other funds - - - - - Lease/SBITA Purchase 8,359 2,786 Total current liabilities 30,830 42,082 14,939 23,758 Total liabilities 30,830 42,082 14,939 23,758 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - 24,202 - 31,401 Ambulance Revenue Total deferred inflows of resources 24,202 31,401 FUND BALANCES Restricted for: General government - - - - - Public safety 3,129,768 2,570,676 - - Public works - - 1,085,352 2,307,783 - Culture 8 recreation - - - - 1,247,515 Housing 8 community development Total Fund Balance $ 3,129,768 $ 2,570,676 $ 1,086,340 $ 2,307,783 $ 1,247,515 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 3,160,598 $ 2,570,676 $ 1,152,624 $ 2,322,722 $ 1,302,674 The notes to the financial statements are an integral part ofthis statement ` IZA City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2024 Community 4 Mile Drive Development RD Revolving MACI Project Loan Revolving CD Projects Loan ASSETS Current assets Cash and investments $ 21,006 $ 122,454 $ 75,480 $ 29,693 $ 532,492 Taxes and assessments receivable, net - - - - - Accounts receivable - - - - - Notes, loans, and contracts receivable - - 1,684,328 - 208,358 Due from other governments - - - - - Due from Other Total current assets 21,006 122,454 1, 759,808 29,693 740,856 Noncurrent assets Restricted cash and investments - - - - - Lease/SBITA Right of use asset, net Total noncurrent assets Total assets 21,006 122,454 1, 759,808 29,693 740,856 LIABILITIES Current liabilities Accounts payable - - - - - Accrued payables - - 40 - - Accrued payroll - - - - - Due to other funds - - - - - Lease/SBITA Purchase Total current liabilities 40 Noncurrent liabilities Lease/SBITA Purchase Total noncurrent liabilities Total liabilities - - 40 - - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue Ambulance Revenue Total deferred inflows of resources FUND BALANCES Restricted for: General government - - - - Public safety - - - - Public works 21,006 122,454 - - - Culture & recreation - - - - - Housing & community development - - 1,759,768 29,693 740,850 Unassigned Total Fund Balance $ 21,006 $ 122,454 $ 1,759,768 $ 29,693 $ 740,850 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 21,006 $ 122,454 $ 1,759,808 $ 29,693 $ 740,850 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, 2024 Drug Law EPA Stonegarden Enforcement Enforcement National Opioid Brownfields Grant Grant DUI Grant Grant Settlement Grant ASSETS Current assets Cash and investments $ 1,539 $ 48,796 $ 300 $ 17,716 $ 61,999 $ 1,115 Taxes and assessments receivable, net - - - - - - Accounts receivable - - - - - - Notes, loans, and contracts receivable - - - - - - Due from other governments - - - 1,896 - - Due from Other Total current assets 1,539 48,796 300 19,612 61,999 1,115 Noncurrent assets Restricted cash and investments - - - - - - Lease/SBITA Right of use asset, net Total noncurrent assets Total assets 1,539 48,796 300 19,612 61,999 1,115 LIABILITIES Current liabilities Accounts payable - - - - - - Accrued payables - - - - - - Accrued payroll - 134 - 57 - - Due to other funds - - - - - - Lease/SBITA Purchase Total current liabilities 134 57 Total liabilities - 134 - 57 - - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue Ambulance Revenue Total deferred inflows of resources FUND BALANCES Restricted for: General government - - - - - Public safety 1,539 48,662 300 19,555 61,999 Public works - - - - - - Culture 8 recreation - - - - - - Housing 8 community development 1,115 Total Fund Balance $ 1,539 $ 48,662 $ 300 $ 19,555 $ 61,999 $ 1,115 Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 1,539 $ 48,796 $ 300 $ 19,612 $ 61,999 $ 1,115 The notes to the financial statements are an integral part ofthis statement 129 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2024 Brovmfields Loan Safe Streets Revolving Fire Grants H-mat Grants Grant ASSETS Current assets Cash and investments $ 100,500 $ 6,403 $ 19,966 $ - $ Taxes and assessments receivable, net - - - - Accounts receivable - - - - Notes, loans, and contracts receivable - - - - Due from other governments - - 4,002 211,952 Due from Other Total current assets 100,500 6,403 23,968 211,952 Noncurrent assets Restricted cash and investments - - - - Lea se/SBITA Right of use asset, net Total noncurrent assets Total assets 100,500 6,403 23,968 211,952 LIABILITIES Current liabilities Accounts payable - - - - Accrued payables - - - 70,949 Accrued payroll - - - - Due to other funds - - - 71,003 Lease/SBITA Purchase Total current liabilities 141,952 Total liabilities 141,952 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - - Ambulance Revenue - - - - Total deferred inflows of resources - - - - FUND BALANCES Restricted for: General government - - - - Public safety - 6,403 23,968 Public works - - - - Culture 8 recreation - - - - Housing 8 community development 100,500 70,000 Total Fund Balance $ 100,500 $ 6,403 $ 23,968 $ 70,000 $ Total Liabilities, Deferred Inflow of Resources and Fund Balance $ 100,500 $ 6,403 $ 23,968 $ 211,952 $ The notes to the financial statements are an integral part ofthis statement Total Nonmajor Special Revenue Airport Grant Funds $ 15,495,425 318,762 289,522 2,309,401 656,950 26,090 19,096,150 2,704,456 11,145 2,715,601 21,811,751 224,405 70,989 124,141 125,519 11,145 556,199 556,199 M 20,313 6,052,420 3,536,595 3,154,175 7,895,490 130 L O .� a) Ln 'IT Il- CF) 00 CF) O 'IT O O O O O 'IT (C V N O (14 CO 00 00 'IT r C i> N � CD co ONO CO( CO r o a) N - N r N Ln CO CO N Z r r N LL O c f!3 LO 00 c'M O r N N cM M G (O (. N r r Ln r CO ti (M CF) r r r r 0 (n r cM 00 Ln r 00 OF) 00 OF) M ' ti c'M O00 Ln ~ CO CO N D7 D7 O H3 N V r 00 O ('M O N O N 00 Ln ' Nt ' ' 'T �S M N ('M cM cM C CO CM CO ('M Il- r � r CM Ln Q • � O ' ' O CO CO CO fn Or O� r O� r r N N P: O ti CM N CO co r CM Ln r 00 r r O r r O (. N 00 .V r 0 i-> a) (O CM CO co Ln N Il- O) O 00 O 00 � Il- n N r N co Nt Nt 00 d � O') II_ 'IT N ti CO CO ti ti O� O Ln O r M M i i � � CEO CEO CO CO O O O 00 00 ' N N N P ti ~ ti ti 00 00 O O O. O.) O. O.) O.) co co co co co 'IT ' 'IT 'IT Ln Ln cM cM CM CM w co co CO CO co co a) N W U � ai cn M > cn a) a) Il- ti O CO CO � O O r r r N r r N H} H} O O co 00 00 'IT N N O co co co O O d') r r O CO D7 ffl ffl � � N 'IT 'IT co 613� 613� co co co Ln Ln Ln CO CO CO co co co N N N 'IT 'IT co N (O (O 00 r r � 00 00 00 a) a) cn O 70 V- C: cB =5 Q LL 70 cu 0= O cv a) Cf) 0= U � =5 (B 0 a) a) cv Of Cf) 0 m City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2024 Total Nonmajor S & C Total Capital Governmental Construction Fire Pumper Project Funds Funds ASSETS Current assets Cash and investments $ $ $ $ 15,739,670 Taxes and assessments receivable, net 1,423,859 Accounts receivable 289,522 Notes, loans, and contracts receivable 2,309,401 Due from other funds - Due from other governments 890,248 Prepaid expenses - Due from Other 26,090 Contracts Receivable - Total current assets Noncurrent 20,678,790 assets Restricted cash and investments 3,337,256 Total noncurrent assets 3,337,256 Total assets 24,016,046 LIABILITIES Current liabilities Accounts payable 224,844 Accrued payables 70,989 Accrued payroll 124,141 Due to other funds 132,726 Revenues collected in advance - Due to Contractor - Retainage Due to P/R Benefit Providers Deposits Payable - Total current liabilities Nnncurrent 552,700 It - Deposits Payable - Total noncurrent liabilities - Total liabilities 552,700 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue 1,423,858 Ambulance Revenue 276,810 Total deferred inflows of resources 1,700,668 FUND BALANCES Restricted for: General government 20,313 Public safety 6,052,420 Public works 3,537,583 Culture & recreation 3,154,175 Housing & community development 7,895,490 Conservation of natural resources - Debt service 1,102,697 Total Fund Balance $ $ $ $ 21,762,678 1 otal Liabilities, Ueterred Inflow of Nesources and rund Balance $ $ $ $ 24,016,046 The notes to the financial statements are an integral part of this statement. City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2024 Downtown TIF Airport TIF Westside TIF Parks -in -Lieu Parks REVENUES Taxes and assessments $ 644,385 $ $ $ $ 1,396,829 Intergovernmental 6,392 - Charges for services - 54,000 696,427 Miscellaneous - - 28,924 Investment earnings 24,971 89,111 12,717 48,216 Net increase (decrease) on investments 2,551 5,102 1,701 9,779 Total revenues 678,299 94,213 68,418 2,180,175 EXPENDITURES Current: General government - - - - Public safety Public works Public health - Culture and recreation - - 2,206,755 Housing and community development 68,958 624,626 - Conservation of natural resources - - Intemal services 184,954 Miscellaneous - - Debt service - principal 32,329 Debt service -interest and other charges 6,943 Capital outlay - - Total expenditures 68,958 184,954 624,626 2,246,027 Excess (deficiency) of revenues over (under) expenditures 609,341 (184,954) (530,413) 68,418 (65,852) OTHER FINANCING SOURCES (USES) Transfers in - 3,150,000 - 115,000 Transfers (out) (70,000) - - Proceeds from general long term debt Total other financing sources (uses) (70,000) 3,150,000 115,000 Net change in fund balance 539,341 (184,954) 2,619,587 68,418 49,148 Fund balances- beginning 447,055 184,954 1,235,361 255,477 1,533,617 Restatements Fund balances- beginning restated 447,055 184,954 1,235,361 255,477 1,533,617 Fund balances - ending $ 986,396 $ - $ 3,854,948 $ 323,895 $ 1,582,765 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, 2024 Old School Old School Ambulance Technology TIF Industrial TIF Rail Park TEDD Health Levy REVENUES Taxes and assessments $ - $ 82,738 $ 4,936 $ 187,693 $ 1,220,664 Intergovernmental 316,543 4,063 - 49 26,193 Charges for services 444,956 - - - - Miscellaneous 450 - - - Investment earnings - 1,965 174 7,173 Net Increase (decrease) on investments 850 Total revenues 761,949 88,766 5,110 195,765 1,246,857 EXPENDITURES Current: General government - - - - - Public safety 1,358,349 - - - - Public works - - - - - Public health - - - - - Culture and recreation - - - - - Housing and community development - 16,016 - 52,969 - Conservation of natural resources - - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal 37,877 - - - - Debt service - interest and other charges 6,127 - - - - Capital outlay 57,807 - - - - Total expenditures 1,460,160 16,016 - 52,969 - Excess (deficiency) of revenues over (under) expenditures (698,211) 72,750 5,110 142,796 1,246,857 OTHER FINANCING SOURCES (USES) Transfers in 850,000 - - - - Transfers (out) - (50,000) (6,000) - (1,245,000) Proceeds from general long term debt Total other financing sources (uses) 850,000 (50,000) (6,000) (1,245,000) Net change in fund balance 151,789 22,750 (890) 142,796 1,857 Fund balances - beginning 37,761 38,473 5,451 143,640 18,456 Restatements Fund balances - beginning restated 37,761 38,473 5,451 143,640 18,456 Fund balances - ending $ 189,550 $ 61,223 $ 4,561 $ 286,436 $ 20,313 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 For Fiscal Year Ended June 30, 2024 Public Safety Light Gas Tax - Building Dept Impact Fees Maintenance BarSAA Urban Forestry REVENUES Taxes and assessments $ - $ - $ 451,437 $ - $ 662,920 Intergovernmental - - - 1,032,934 20,850 Charges for services 1,248,659 173,044 - - - Miscellaneous - - 25,885 - 7,018 Investment earnings 115,686 93,690 38,997 78,050 43,879 Internal services 18,707 14,030 6,377 11,054 7,228 Total revenues 1,383,052 280,764 522,696 1,122,038 741,895 EXPENDITURES Current: Public safety 1,210,285 15,000 - - Public works - - 395,244 1,417,190 - Culture and recreation - - - - 651,456 Housing and community development - - - - - Debt service -principal - - - - - Debt service - interest and other charges 935 - - - 921 Capital outlay - - 82,344 107,444 67,514 Total expenditures 1,211,220 15,000 477,588 1,524,634 719,891 Excess (deficiency) of revenues over (under) expenditures 171,832 265,764 45,108 (402,596) 22,004 OTHER FINANCING SOURCES (USES) Transfers in - - - 40,000 - Transfers (out) - - - - - Proceeds from general long term debt 46,719 Total other financing sources (uses) 40,000 46,719 Net change in fund balance 171,832 265,764 45,108 (362,596) 68,723 Fund balances - beginning 2,957,936 2,304,912 1,041,232 2,670,379 1,178,792 Fund balances - ending $ 3,129,768 $ 2,570,676 $ 1,086,340 $ 2,307,783 $ 1,247,515 The notes to the financial statements are an integral part of this statement City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2024 Community 4 Mile Drive Development RD Revolving MACI Project Loan Revolving CD Projects Loan (2) REVENUES Taxes and assessments $ - S - $ - $ - $ - Intergovernmental - - - - - Charges for services - - 55,262 - - Miscellaneous - 122,454 - - - Investment earnings - - 7,916 8,364 7,396 Net Increase (decrease) on investments - - 1,275 1,701 - Total revenues - 122,454 64,453 10,065 7,396 EXPENDITURES Current: General government - - - - - Public safety - - - - - Public works - - - - - Public health - - - - - Culture and recreation - - - - - Housing and community development - - 182,892 - 975 Conservation of natural resources - - - - - Internal services - - - - - Miscellaneous - - - - - Debt service - principal - - - - 28,315 Debt service - interest and other charges - - - - 3,784 Capital outlay - - - - - Total expenditures 182,892 33,074 Excess (deficiency) of revenues over (under) expenditures 122,454 (118,439) 10,065 (25,678) OTHER FINANCING SOURCES (USES) Transfers in - - - - - Transfers (out) - - - (6,532) - Proceeds from general long term debt Total other financing sources (uses) (6,532) Net change in fund balance - 122,454 (118,439) 3,533 (25,678) Fund balances - beginning 21,006 - 1,878,207 26,160 766,528 Restatements Fund balances - beginning restated 21,00E 1,878,207 26,160 766,528 Fund balances - ending $ 21,006 $ 122,454 $ 1,759,768 $ 29,693 $ 740,850 The notes to the financial statements are an integral part of this statement 11911.1 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2024 Drug Law Stonegarden Enforcement Enforcement National Opioid Grant Grant DUI Grant Grant Settlement REVENUES Taxes and assessments S - S - $ - $ - $ - Intergovernmental - 7,948 16,318 13,452 - Chargesforservices - - - 13,927 - Miscellaneous - - - 4,516 71,993 I nvestment earnings - - - - - Net Increase (decrease) on investments - Total revenues - 7,948 16,318 31,895 71,993 EXPENDITURES Current: General government - - Public safety - 27,944 Public works - - Public health - - Culture and recreation - - Housing and community development - - Conservation of natural resources - - Internal services - - Miscellaneous - - Debtservice -principal - - Debt service - interest and other charges - - Capital outlay - - Total expenditures 27,944 Excess (deficiency) of revenues over (under) expenditures (19,996) OTHER FINANCING SOURCES (USES) Transfers in - 25,000 Transfers (out) - - Proceeds from general long term debt Total other financing sources (uses) 25,000 Net change in fund balance - 5,004 Fund balances - beginning 1,539 43,658 Restatements Fund balances - beginning restated 1,539 43,658 Fund balances - ending $ 1,539 $ 48,662 $ The notes to the financial statements are an integral part of this statement 16,018 41,786 47,287 300 (9,891) 24,706 6,000 6,000 300 (3,891) 24,706 - 23,446 37,293 300 $ 19,555 $ 61,999 WIN City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2024 EPA Brownfields Total Nonmajor Brownfields Loan Hemet Safe Streets Special Revenues Grant Revolving Fire Grants Grants Grant Funds REVENUES Taxes and assessments $ - $ - $ - $ - $ - $ 4,651,602 Intergovernmental - 2,560 - 27,881 261,952 1,737,135 Charges for services - - - - - 2,686,275 Miscellaneous - - 9,500 - - 270,740 Investment earnings - - - 1,061 - 579,366 Internal services 80,355 Total revenues - 2,560 9,500 28,942 261,952 10,005,473 EXPENDITURES Current: Public safety - - 9,465 37,598 - 2,763,732 Public works - - - - - 1,997,388 Culture and recreation - - - - - 2,858,211 Housing and community development - 2,560 - - 261,952 1,210,948 Debt service -principal - - - - - 98,521 Debt service - interest and other charges - - - - - 18,710 Capital outlay 315,109 Total expenditures 2,560 9,465 37,598 261,952 9,262,619 Excess (deficiency) of revenues over (under) expenditures 35 (8,656) 742,854 OTHER FINANCING SOURCES (USES) Transfers in - - - - 70,000 4,256,000 Transfers (out) - - - - - (1,377,532) Proceeds from general long term debt 46,719 Total other financing sources (uses) 70,000 2,925,187 Net change in fund balance - - 35 (8,656) 70,000 3,668,041 Fund balances - beginning 1,115 100,500 6,368 32,624 16,991,940 Fund balances - ending $ 1,115 $ 100,500 $ 6,403 $ 23,968 $ 70,000 $ 20,659,981 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 Debt Service Funds For Fiscal Year Ended June 30, 2024 Westside TIF Total Nonmajor Debt Debt Service SID Revolving S & C's SID 344 SID 345 Service Funds REVENUES Taxes and assessments $ 2,718,028 $ - $ 11,425 $ 183,785 $ 18,916 $ 2,932,154 Intergovemmental 278,344 - - - - 278,344 Investment eamings - 8,868 - - - 8,868 Net Increase (decrease) on investements 1,276 1,276 Total revenues 2,996,372 10, 144 11,425 183,785 18,916 3,220,642 EXPENDITURES Current: Debt service -principal 215,000 - 8,614 230,000 14,000 467,614 Debt service -interest and other charges 151,425 2,706 35,590 2,955 192,676 Total expenditures 366,425 11,320 265,590 16,955 660,290 Excess (deficiency) of revenues over (under) expenditures 2,629,947 10,144 105 (81,805) 1,961 2,560,352 OTHER FINANCING SOURCES (USES) Transfers in - - - 58,500 - 58,500 Transfers (out) (3,150,000) (2,500) - - - (3,152,500) Total other financing sources (uses) (3,150,000) (2,500) 58,500 (3,094,000) Net change in fund balance (520,053) 7,644 105 (23,305) 1,961 (533,648) Fund balances - beginning 1,361,747 225,009 337 23,413 25,839 1,636,345 Fund balances - ending $ 841,694 $ 232,653 $ 442 $ 108 $ 27,800 $ 1,102,697 The notes to the financial statements are an integral part of this statement. 139 e) in investments city development )I and other charges of revenues over (under) expenditures ;OURCES (USES) I long term debt sources (uses) balance ling 9 Jal statements are an integral part of this statement. 1,309 - 1,309 1,309 - 1,309 (1,309) - (1,309) 1,309 - - 1,309 - - BUDGETARY COMPARISON SCHEDULE - NONMAJOR FUNDS `E N N 7 � R = d = r- U) � ^2 ro N LL W N N o R co,o � N >Z R } M YO Q = OU U � O IL LL U rn E v r- O m Z = H � � 0 p �LU LULU LU (, L p > > zm>a aQow > J U) Q ~ � Z H 0 U O Q Q U) J Q Z Z LL O Q p LU H J w Q Q Z D o coQ� O U3 Lu �Lu O 7 O O 5 w Lu p > > CO O) N N V N LU H Z m U Q Q Q 0 W a z � z > L (n J V CO N N W H Q CO CO Z 00 Q � Q J U co o co cam+) o r�i Z z LL O Q p LU o LU W J (D Q m O m _- CO O U3 � v v rn rn rn ' V V V V V V V V V V V V O CO � CO O O CO CO [O O O) v v w o N O COO CEO CO cN0 ow v o ' o v o 0 cN0 ow v o ' O V O O N M � 7 N U � O 9 � i a s Lu y � o ) 7 � ) to y U U L.0 ) U p 0 Z r O O C - ) > U ^w Z L N N Z 0 U U C LL m Lu O 9 9 = m ~ a a F- � O i LL N w H 7 � R = N N C O c Ll ~ W N N R N a N Q R} M N N 0 Q Y H r- U O U) LL � LL U rn E c O m Z ~ W > "u 0 ; U co ~ < co Q Q O u � z a a Q Q � U < Z � u O Q 0 W LU _ W < 0 co m 0 c = H ~ W "u L o Lu > ; U C ~ CO< Q J 0 C Q z a E > 'L J � Q F Q < U < Z � u O Q 0 W W 0 c L m Q o � o � o o � � V N 'n N C7 O O Ln U3 o W 9 W C V C C X R W R a o c c w E '• � w � a 0 y j Q 0 ? n R O y U tl c c w W O O N 0 VI N Z c d D c c C y O V% '0 9 O U c O .O 'O aZi a s w H °� E E wo c u Z O -o x � Lu 0 a w Z L Ln Ln (n m rn aLU 7 N E U O l7 0 .O 0 O .0 O o •' a:w O R R Z O) c H Z :: O (6 O 0 m H Ln a to O a s �U-z w000=a0U w 0~ Li Li W N 7 � R = W C y 7 a ^2 c W W N y W NO � R R N Q R } M Y U Q U) � O U) LL � U rn E LL v r- O m Z S FLU o v (7 w w wp > > z zCoU5< g Q O w > w 0 0 J Un O) V H < U O h V Q Q O O U) J O ~ Z o Z � w O Q p o w o w Q O (7 Z p � co CO 0 U3 w w N m 0) p > > H z m � Q Q Q O W � z a z > w U) N O J H M O Q Z ~O U � Q Q �n oc000 �oc+�oo J O O O 7 Un Q N ~ Z - 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W V c f6 X W o c `w w R a c w 'o 0) a c R LU U C 111 ` Z C ` y o C c O VI c_ R O V% U '0 U '6 c " O 9 °' E c c+ c:i Z 0) W e a w O W E (n to ` fn U O W 'Z X W Z !A !A 0)`o R_ 7 Y a R .2 y Q .� Z` O C C W O N O 0 O O '� O 9 a:w O Z O) N Z :: U)CO m H 0 a to O R R a s w m N w l.� a a w a O' LU a w F- 0 LLLL \z /( \//§ /let i#}G /} < §22 « /( _]m] )§\am - <E 04 �\ ()0 co20#2� LU /t� : U ELL : 33 \ 5 \ } 2 § r ]I II I w =I= 0 \ / \\k \ _§ a [ // CL fw [/ § 3 :\ ) §0 In } �� )� §\\0 LU LLLL to !6 W H 7 � R y� LL ^2 O > W C.,N R N _ W Q Q R >- M N E •V R Y U Q- H � ` LL r O O LL U a E = c CO Z Z i i CC co v v co CO CO ' CO O) c0 N N M M C7 N rfl aM ll co co r� r� co co 0 rn w co co co Ufl 0 W �o c W CL x W W � c R R rn O `W � c 0 O w a 'o c w c s C R a R V - 6 W T O yl W c W ` U V W Z s s C C s � O 01 0)'0 O W Cw 0 U O W K W In In In O .- ` 7 Y m W u u u C C C = m E O _ 0 (6 W 0 0 •' Z 0 0 o m R R R a Was w N w .0 w w c w- — X` 9 d 0 m x w>> O' w U a O w LL a LL LL 9 LO =A=Wk E§\am 32J|B 2[R»6 u \0 z _o#2k Q 0�� kE �z ,essments ntal wvices I Royalty Earnings as cues ;reation immunity Development principal iterest Jitures iciency) of revenues over expenditures ;ING SOURCES (USES) general long term debt financing sources (uses) Net change in fund balance - beginning - beginning restated - ending ACTUAL ORIGINAL FINAL AMOUNTS $ 4,976,797 $ 4,976,797 $ 4,651,602 $ $ 3,595,773 $ 3,595,773 $ 1,737,135 $ $ 3,067,728 $ 3,067,728 $ 2,686,275 $ $ 74,297 $ 74,297 $ 270,740 $ $ 154,121 $ 154,121 $ 579,366 $ $ - $ - $ 80,355 $ $ 11,868,716 $ 11,868,716 $ 10,005,473 $ 3,243,840 3,243,840 2,763,732 3,171,769 3,171,769 1,997,388 3,509,538 3,509,538 2,858,211 7,660,746 7,660,746 1,210,948 175,013 175,013 98,521 24,676 24,676 18,710 3,650,797 3,650,797 315,109 21,436,379 21,436,379 9,262,619 (9,567,663) (9,567,663) 742,854 5,219,170 5,219,170 4,256,000 (1,571,000) (1,571,000) (1,377,532) - - 46,719 3,648,170 3,648,170 2,925,187 3,668,041 16,991,940 16,991,940 20,659,981 w R y � R U y LL O C U r ^2 O > W O N N R N N R co N O y Q S} M w w Y U H m > O IL O +� N rE LL U rn 0 =z° m U Z 0 W 0 a N CW7 W Lu > r C rn r cNo 0 > H Z m � Q Q Q 0 W � z a z co cov v oo v rnm (n co v v o o v o �n 00 Q Q i o 0 0 0 0 0 O O O J (n Q N N ~ Z_ Z � W O Q 0 W LU o 0 0 0 0 0 W O � Q O O O O O O 0 Z D O N O N co O U3 U3 N N N O O N H LU O O W LU N N N O O N Lj 0 > > W Z m U5 Q Q Q 0 W o c+� r� ovv rn o0 0 �co U) c0 o O O O O O O J Q I� O O N N CO V 0 N N N M M O Q Q ov v o�n �n rn o0 ov v oNN oo co N (n Q N M O O Z Z c+i rS rS v v z � O 0 W H O V V O N N O O c0 W O Q �' in rn o o O 0 Z CO N O N cCOo M O O V co(D c M M V O U3 U3 N N a Q � o U Y � N a o o Ln (6 � a c w � o _ L > W LU U W -0a o O Z Q.� n N a s w to a a U o o w N Q o r 0)a E c m R Im U U U R N z j> U O 0 Z N N O X LL m m m Z N a� ) c~ Z :-: N rn rn H W rn O I -- 9 9 W X > > W I� 9 9 a w w Lu x a s ~ c c O' W U000 0 li LL 0) LO w R y � R U LL y C 10 y O O C V a O > W o N N 16 N w R co w N Q � } M Y U H a O IL O r y E LL U r- 7 Z 00 = H ~ W 'u L (D Lu > U 7 ~ < Z co0 C Q J O u � z a D u O Q w LU w O < ❑ C m o c O O O CO O O O O O O M C7 CO CO � N N 00o co 0 o rn rn o 0 N N v co O �n c0 N v coo c+� c0 N 0 a Q � o U o N a > o LU n (6 � a N N N O O W U U w Q T uoi y X Z Q a o o c� L Z O R WLL H Z Z 0 N~ chi W mo Z rn Z in O 9 9 w x W U)9 9 W Wa. m~ H a s c c H O' X a9i ❑❑ W U 0 0 LL li O §Aw �§'f- W COW - f£- -° 23§)� »�#L LL u - ]z � mo wmo \ \ \\ 2 <� § __ F- §.) { { � Z x - - )� §\\�� zz ) = H ~ W 0 ; U 7 ~ < Z m 0 Q J O < z a L Q F H Q 2 O [O CO CO O O CO O O O O CO V V O [O V CO O c0 O O O O N C7 V M V M M V V O [O V CO O c0 O O O O N N C CO M o cow w �c+io w coov v v I� O) N [O CO O) V CO CO N 'n N O CO O) CO O) M V E 0 T !6 0 m a X N o- N a I U N o 6 a U Q � 9 � a o L m � r c W 0 N U O U w -o o ow o Z rn _ m 7 c a� N (6 VI aR. Q '° Z w w �R, H a R N o U O Z" O U U w N n (6 > H Z Z 0 Z N N U X LL w wmo m O m m Z U) m N . H Z :-: N U) U) U)9 W U) U) O 9 9 W X o 0 o w 9 W m m~ a s Lu c X � w 0 0 Fm c c O' w U 0 O LL li N w LoLu U ~ m co Q Q O z a > 'L u _ LU � w L oLu > U 7 ~ m Q Q O z a > w w H r R v c w R m LL c V) — a t7 Q 2 0 W N o O N U Q Q Q R N Cl) NN Y U R O y V U ` LL C6 y:9 0 8 R LL Cl) _ U E � v c z m'z° O a 0 w LU w O 0 co m a H w 9 �, � a � E t W � R U a 0 o c H c z N c _ Mw U E `w QO L z N o LL a R = N O Wow F- a O M k / / 2 k 2 7 £ 0a $ � co" kkC�R � E o- cu�§Lk o o " »]' 2 U 2 [ m 2 22 77 22 3 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. `W City of Kalispell, Montana Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2024 Solid Waste ASSETS Current assets Cash and cash equivalents $ 735,892 Investments 573,244 Taxes and assessments receivable, net 40,165 Accounts receivable 261 Due from other governments 75,893 Total current assets 1,425,455 Restricted cash and cash equivalents - Restricted investments Advances to other funds - Investment in joint ventures - Notes, loans and contracts receivable - Capital assets - land - Capital assets - construction in progress - Capital assets - net of depreciation 1,244,922 Lease/SBITA Right of use asset, net 2,781 Total noncurrent assets 1,247,703 Total assets 2,673,158 DEFERRED OUTFLOWS OF RESOURCES Pensions 55,917 Total deferred outflows of resources 55,917 LIABILITIES Current liabilities Accounts payable 13,012 Accrued payroll 13,100 Compensated absences payable 72,525 Lease/SBITA Purchase 2,670 Total current liabilities 101,307 Noncurrent liabilities Compensated absences payable 31,771 Net pension liability 385,106 Total noncurrent liabilities 874,055 Total liabilities 975,362 DEFERRED INFLOWS OF RESOURCES Pensions 13,736 Notes and Loans receivables - Total deferred inflows of resources 13,736 NET POSITION Net investment in capital assets 787,744 Unrestricted 952,233 Total net position $ 1,739,977 The notes to the financial statements are an integral part of this statement. f[:V City of Kalispell, Montana Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Funds For Fiscal Year Ended June 30, 2024 Solid Waste OPERATING REVENUES Charges for services $ 1,474,373 Miscellaneous revenues 159 On -behalf - pensions 9,985 Total operating revenues 1,484,517 OPERATING EXPENSES Personal services 750,587 Supplies 166,173 Purchased services 178,996 Fixed charges 248,313 Depreciation 130,402 Total operating expenses 1,474,471 Operating income (loss) 10,046 NON -OPERATING REVENUES (EXPENSES) Interest revenue 44,390 Debt service interest expense (299) Unrealized Gain(Loss) on investments 10,204 Total Non -Operating Revenues (Expenses) 54,295 Income (loss) before contributions, transfers, special & extraordinary items 64,341 Transfers (out) (40,000) Change in net position 24,341 Net position - beginning 1,715,636 Net position - ending $ 1,739,977 The notes to the financial statements are an integral part of this statement. KIM City of Kalispell, Montana Combining Statement of Cash Flows Nonmajor Enterprise Funds For Fiscal Year Ended June 30, 2024 Solid Waste Cash Flows from Operating Activities: Cash received from customers $ 1,472,715 Cash received from miscellaneous sources 159 Cash paid to suppliers of goods and services (611,363) Cash paid to employees (729,466) Net cash provided (used) by operating activities 132,045 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 (41,593) Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt 457,178 Interest paid on capital debt (299) Acquisition and construction of capital assets (916,881) Net cash provided (used) by capital financing activities (460,002) Cash Flows from Investing Activities: Interest on investments 44,390 Increase (Decrease) in fair value of investments 10,204 Net cash provided (used) by investing activities 54,594 Net increase (decrease) in cash and cash equivalents (314,956) Cash and cash equivalents as of; July 1, 2023 1,050,848 June 30, 2024 $ 735,892 Displayed on Combining Statement of Net Position-Nonmajor Enterprise Funds as: Cash and cash equivalents $ 735,892 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in assessments receivable (Increase) decrease in accounts receivable (Increase) decrease in prepaid items Increase (decrease) in accounts payable Increase (decrease) in accrued payables Increase (decrease) in compensated absences payable Increase (decrease) in net pension liability (Increase) decrease in deferred outflows -pension Increase (decrease) in deferred inflows -pension Net cash provided (used) by operating activities The notes to the financial statements are an integral part of this statement. 11,034 129,414 (1,397) (261) 7,385 (25,266) (16,227) 16,323 (7,533) 33,582 (15,009) $ 132,045 fi[:t? COMBINING AND INDIVIDUAL FUND STATEMENTS INTERNAL SERVICE FUNDS `1 City of Kalispell, Montana Combining Statement of Net Position Internal Service Funds June 30, 2024 Information Total Internal Service Central Garage Technology Funds ASSETS Current assets Cash and investments $ 150,907 $ 567,482 $ 718,389 Due from Other - 2,395 2,395 Contracts Receivable - 46,832 46,832 Total current assets 150,907 616,709 767,616 Noncurrent assets Capital assets - net of depreciation 87,244 291,425 378,669 Lease/SBITA Right of use asset, net - 19,188 19,188 Total noncurrent assets 87,244 310,613 397,857 Total assets 238,151 927,322 1,165,473 LIABILITIES Current liabilities Accounts payable 27,830 19,239 47,069 Accrued payroll 4,259 10,530 14,789 Compensated absences payable 12,058 26,329 38,387 Lease/SBITA Purchase - 9,519 9,519 Total current liabilities 44,147 65,617 109,764 Noncurrent liabilities Compensated absences payable 2,963 14,179 17,142 Lease/SBITA Purchase - 9,669 9,669 Total noncurrent liabilities 2,963 23,848 26,811 Total liabilities 47,110 89,465 136,575 NET POSITION Net investment in capital assets 87,244 291,425 378,669 Unrestricted 103,797 546,432 650,229 Total net position $ 191,041 $ 837,857 $ 1,028,898 The notes to the financial statements are an integral part of this statement. iwN: (D I- OD N OD r (D U r O m O (O I- M O m N a) V V r 0)O V In I- N M M M co m In W In � N � C � C 7 C LL (6 O H MM r V r- O O M W�N N N V N V (O V V O 0 N- 00 M N O N O� V V OD E I- � (O - V N OD O U �� (n M O M In In N N cm) V O) V In OD LQ G ((C ODO O LO V O) d) d) N O N OD V O I- W (O N (O O V ca U (O (O N N (O m d U N O (D N (D � O V M ((D O I- 7 V W V N �-' V N O N N (O OD O O I- (O N M m O V M co I co VO M Iln N ((O V O I V Lo G ' W W M M d d d W W OD NO MI IMI �Ico -I I -I I-m (n d r r OM m M d) N iz m U O_ N � N N O) N w N N W N O a N w o W E N U)) s fn W N N N N O) > O N 3 In N O W 3 C N `) p 7 O) Q N > O) O) N N .� 2 y O C O) Z O) N> Z V) E i O O Q O C C Wq X Q N != C Q O) 0NC� O) C E O ZO Qm O ).� at Z Ea ) C ON OC ~ O ) .O � O C > O_rn d °oat -C N N as tN U p W IL) LLJU) d7 ZOOU O) C H NO O) O) d U a s fn d lL O J D Z Z 0 0 Z City of Kalispell, Montana Combining Statement of Cash Flows Internal Service Funds For Fiscal Year Ended June 30, 2024 (Cash Flows from Operating Activities: Cash received from customers Cash received (paid to) miscellaneous sources Cash paid to suppliers of goods and services Cash paid to employees Net cash provided (used) by operating activities Cash Flows from Non -Capital and Related Financing Activities: Intergovernmental revenue received Cash received from Charter Franchise Fees Net cash provided (used) by non -capital and related financing activities Cash Flows from Capital and Related Financing Activities: Interest paid on capital debt Acquisition and construction of capital assets Net cash provided (used) by capital financing activities Cash Flows from Investing Activities: Interest on investments Increase (Decrease) in fair value of investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents as of; July 1, 2023 June 30, 2024 Displayed on Combining Statement of Net Position -Internal Service Funds as: Cash and cash equivalents Total at end of year Reconciliation of operating income to net cash provided by operating activity: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in prepaid items Increase (decrease) in accounts payable Increase (decrease) in accrued payables Increase (decrease) in compensated absences payable (Increase) decrease in contracts receivable (Increase) decrease in due from other Net cash provided (used) by operating activities Schedule of non -cash transactions Depreciation The notes to the financial statements are an integral part of this statement. Information Total Internal Central Garage Technology Service Funds $ 619,133 726,438 1,345,571 400 (675) (275) (351,233) (561,703) (912,936) (272,579) (608,314) (880,893) (4,279) (444,254) (448,533) 440,000 440,000 181,902 181,902 621,902 621,902 (1,362) (1,362) (12,232) (231,403) (243,635) (12,232) (232,765) (244,997) 5,954 21,472 27,426 850 3,826 4,676 6,804 25,298 32,102 (9,707) (29,819) (39,526) 73,500 336,169 409,669 63,793 306, 550 370,143 63,793 306,350 370,143 63,793 306, 550 370,143 (40,551) (484,448) (524,999) 14,030 45,431 59,461 3,187 7,224 10,411 19,039 (2,939) 16,100 (6,366) (14,806) (21,172) 6,382 7,695 14,077 (16) (16) (2,395) (2,395) $ (4,279) (444,254) (448,533) 14,030 45,431 59,461 fvf: 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 ' Vi{AiVI11VI1i VI IY� Fiduciary Funds June 30, 2024 TBID KPD Evidence Custodial Total Custodial Custodial Fund Fund 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 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. Urnr MMY OldIUMU t yr ivi Position Fiduciary Funds June 30, 2024 Additions Collections of taxes and fees for other entities KPD Evidence Deposit Total Additions Deductions Distribution of taxes and fees Total Expenses Net Increase (Decrease) In Fiduciary Net Position Net Position - beginning Net Position - ending KPD Evidence (;ustnriial TBID Custodial Fund 569,148 569,148 569,148 569,448 47,196 - $ 47,196 - Total Custodial Funds 569,148 569,148 569,148 569,448 47,196 47,196 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. IWAII 00 00� r 'IT 'IT N 0 r N �n l— N W n 'IT O W M H O N c, oc 10 7 M IO c, O O Q\ N� ti N EA lA N N Q\ r M I- V rO N V rC�� M f� Vi V N N M N 00 N M c, N O M Vi M ~ EA !A 17 C� N N N O � � Qcl\ r- n N N OO 10 00 ID, 00 ti EA EA �n 10 10 10 IC N M V I O �n 00 M N N C1 10 10 'T n C1i OC 00 00 O 10 10 G1 N OID, M M r r 7 0 0 r W l� 00 ~ EA !A l� Q\ N 00 10 O O O\ c,0, C, oc V D\ V 7 Vi Q\ M 'O Q\ M l� W ~ EA !A a O E M O O O M cl� O 00 M O1 a �O I: Q. oc- V oc c, O 10 M N 0010 W M N N N NID, W 00 Q G 10 M 10 V1 ID, 10 ID, M C� OO O V N Vl O cl 7 M 7 M O 10 N� O O ✓' W M 10 10 10 Q. O 10 Q. O 00 00 -, Q. Q\ 00 V 1 N O O V O W ✓' V] wr�w l� W 00 M M .� .� .� 7 V' V I —I � � Q. O �O � G1 r 00 a, � Q. � � N O M ID,Q\ N -� O O N M Q\ Q\ 10 U H 00 .� in 7 1O E N O M �O V -� 7 0000 �O �O �O �O N �n V V W O O V �O O N -� N O O, -� O ID, l� W 10 ~ EA !A 10 �n �n `O O I� vl N 'O N O � M M- N� 8 n O -� O W � M 0 r [� v� I� N V 10 10 O �O �n �O O � G c � � N O V W N •--� 00 O Q. n V •--� in l� 00 V r M ~ EA 69 C C O O C N O N O N Vl w N N N N N O V V � ) .Q C U > U > U a1 E j C j C a"C C E C E E E N O C > U ; ` U- > U > > U v E> S u 2 u C7 u E E EZtY7 rn a,ZtY7Ea �ZlY7 a > a1 'in a1 E a1 O O O O Unaudited statistical section CITY OF KALISPELL, MONTANA CHANGES IN NET POSITION Past Ten Fiscal Years 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Expenses Governmental activities: General government 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 5,139,636 Public Safety 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 15,355,662 Public Works 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 7,770,297 Parks and recreation 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 3,740,127 Community Development 683,164 928,661 853,455 1,275,659 2,860,796 2,048,260 3,093,846 3,079,481 369,085 1,239,273 Interest 331,811 286,401 242,110 226,588 381,767 333,593 283,585 262,187 238,044 249,989 Total governmental activities expenses $ 20,827,470 $ 20,790,974 $ 22,750,086 $ 24,983,920 $ 28,816,804 $ 27,149,910 $ 31,942,905 $ 28,947,263 $ 29,269,501 $ 33,4943984 Business -type activities: Airport 154,715 154,091 155,876 333,572 - - - - - - Water 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 3,922,215 Sewer 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 7,826,279 Solid Waste 816,686 880,679 872,161 1,013,000 994,660 1,047,408 1,008,739 1,194,289 1,243,358 1,474,770 Total business -type activities expenses 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 13,223,264 Total primary government expenses $ 29,418,633 $ 29,688,182 $ 31,469,027 $ 34,891,871 $ 38,665,850 $ 37,672,967 $ 42,629,375 $ 40,705,406 $ 40,620,994 $ 46,718,248 Program Revenues Governmental activities: Charges for services: General government 684,550 892,578 789,167 909,258 810,930 797,202 1,082,008 1,376,830 1,364,907 1,155,820 Public Safety 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 2,752,974 Public Works 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 3,088,950 Parks and recreation 728,165 730,928 716,491 1,334,208 1,283,827 1,049,706 1,349,752 1,375,248 1,456,528 1,413,347 Community Development 153,431 88,252 66,393 55,664 50,979 64,685 50,894 52,945 53,294 55,262 Operating grants and contributions 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 7,455,386 Capital grants and contributions 3,232,618 942,125 1,544,350 7,512,439 12,331,081 1,045,006 13,319,980 9,576,378 13,628,990 Total governmental activities program revenues $ 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 $ 29,550,729 Business -type activities: Charges for services: Airport 79,091 72,623 74,228 69,656 - - - - - - Water 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 6,794,409 Sewer 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 11,815,082 Solid Waste 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 1,474,532 Operating grants and contributions 27,721 137,048 32,653 31,078 47,478 55,235 222,879 154,155 61,459 47,077 Capital grants and contributions 1,098,222 3,338,669 131,626 579,982 6,536,160 5,200,256 799,492 2,360,036 4,338,411 6,837,591 Total business -type activities program revenues 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 26.968,691 Total primary government program revenues $ 21,412,509 $ 22,516,338 $ 23.:49.346 $ 31,316,595 $ 42,240,573 $ 29.795.271 $ 32,781.45- $ 45.839,547 $ 45,239.45- $ 56,519,420 Net (Expense)/Revenue Governmental activities (9,752,949) (11,889,933) (12,122,231) (7,491,170) (6,457,125) (15,554,410) (16,216,218) (4,004,751) (7,281,920) (3,944,255) Business -type activities 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 13.745.427 Total primary government net expense $ (8.006.125) $ (7.171.844) $ (8.219.680) $ (3,575,276) $ 3.574723 $ (7,877,696) $ (9.847918) $ 5,134,141 $ 4,618.463 $ 9-801-17- General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes 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 14,338,867 Misc. 189,921 111,048 200,015 201,577 99,876 128,414 583,314 634,169 540,803 1,000,009 Investment earnings 72,531 105,557 159,362 210,835 284,576 262,342 387,748 210,249 833,935 1,357,287 Grants and entitlements not restricted 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 3,631,373 Gas Tax 364,622 369,749 371,303 522,832 689,060 835,851 870,890 919,184 1,304,854 1,032,934 Gain (loss) sale of capital assets 11,610 78,497 22,183 (196,262) - 6,500 - - - - Unrealized Gain (loss) on investments - - - - - - - - (615,226) 149,231 Transfers (65,000) 35,000 35,000 (8,960,047) (820,691) (4,045,439) Total governmental activities $ 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 $ 17,464,262 Business -type activities: Investment earnings 113,963 132,339 227,052 288,162 410,448 412,935 209,468 276,681 1,185,464 1,952,712 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) 270,830 Transfers 65,000 (35,000) (35,000) 820,691 4,045,439 Total business -type activities $ 227,774 $ 234.864 $ 211.683 $ 288,162 $ (1,457384) $ 412.935 $ 209.468 $ 676,681 $ 889.634 $ 6.268.981 Total primary government $ 11,520,936 $ 12.425.1-8 $ 13.032.858 $ 13,116,346 $ 12,338.6-5 $ 6505-807 $ 15.412.117 $ 15,998,895 $ 17.136.642 $ 23.733.243 Change in Net Position Governmental activities 1,540,213 300,381 698,944 5,337,014 7,338,934 (9.461 538) (1,013,569) 11,317,463 8,965,088 13,520,007 Business -type activities 1.974.598 4.952.913 4.114.234 4,204,056 8.574.464 8.089,649 6.577.768 9.815.573 12,790,017 20.014.40E Total primary government $ 3.514.811 $ 5253334 $ 4.813.1-8 $ 9,541,070 $ 15913.398 $ (1371.889) $ 5,564,199 $ 21.133.036 $ 21,755,105 $ 33.534.415 Unaudited statistical section 178 �o v C` n � V V N N n O N N f C` f M � V N � � p G1 C N N N � V O G1 f M M V V G1 O N O ul f p M O f N ti N n O � v N �r V M 00 00 V O � C p N M O o� N N� p N ul N n N p N N f N 'r V � C O V C � � O M M M G1 V 7 7 N EA EA EA EA EA EA EA Q\ Q\ Q\ ul EA EA EA EA EA EA EA EA EA EA EA EA EA EA C` G1 G1 G1 � N M M M M M M Vl EA EA EA EA EA EA EA O O O EA EA EA EA EA EA EA V 0 7 7 O V O N N N M N N N N N C` O O N M U1 Vl O C` M N Ul Vl M �O N N N V EA EA EA EA EA EA N C` G1 G1 7 M � V N N M EA EA EA EA EA EA EA M Vl W Ul � M EA EA EA EA EA EA O O N LL N 7 N m N C (n C ; 'N N C N C N Z tY Q D cn Z tY C � � N U) Unaudited st: cz 9 CITY OF KALISPELL, MONTANA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Past Ten Fiscal Years (modified accrual basis of accounting) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenues Taxes and assessments 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 18,405,069 Licenses and permits 381,045 664,391 1,229,925 1,115,019 746,187 946,567 230,574 227,713 234,758 447,298 Intergovernmental 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 9,663,081 Charges for services 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 3,870,193 Fines and forfeitures 538,234 495,347 454,547 443,919 512,889 514,035 495,459 417,159 347,630 383,131 Miscellaneous 188,615 288,652 138,075 116,693 143,271 108,699 452,102 210,015 400,790 400,287 I nvestment earnings 72,528 105,557 159,363 188,004 261,385 238,482 387,748 181,137 787,612 1,327,261 Unrealized gain (loss) on investments (615,226) 149,231 Total revenues 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 34,645,551 Expenditures General government 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 3,557,669 Public safety 9,115,952 9,540,699 10,873,610 10,644,186 10,719,151 10,879,234 12,123,225 10,897,125 11,467,720 12,345,652 Public works 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 4,362,601 Parks and recreation 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 2,879,811 Community development 685,018 923,170 853,455 1,275,659 2,860,796 2,048,260 2,995,286 3,041,410 303,802 1,228,093 Capital outlay 560,750 930,636 1,792,584 11,577,677 1,107,299 926,860 2,790,528 5,755,445 1,425,793 883,359 Debt service: Principal 1,330,057 1,880,720 1,294,872 1,787,726 1,324,876 1,341,973 886,012 892,472 634,535 683,482 Interest 331,811 286,401 242,110 226,588 381,767 333,593 283,585 260,849 236,331 248,627 Total expenditures 18,927,463 20,295,316 21,594,254 33,483,122 26,886,068 24,501,609 27,744,001 29,523,186 23,100,690 26,189,294 Excess of revenues over (under) expenditures 3,565,873 1,261,594 2,165,524 (2,808,418) (2,818,742) 2,102,508 1,034,224 (1,707,638) 3,451,589 8,456,257 Other Financing Sources (Uses) Transfers in 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 5,451,032 Transfers out (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) (9,496,471) Issuance of debt 124,040 461,833 134,287 6,148,597 104,917 15,824 193,484 4,165 361,936 48,028 Sales of capital assets 11,610 93,272 26,513 20,984 37,399 6,500 - - - Bond premium Total other financing sources (uses) 160,650 590,105 195,800 6,169,581 142,316 22,324 193,484 4,165 (259,371) (3,997,411) Net change in fund balances 3,726,523 1,851,699 2,361,324 3,361,163 (2,676,426) 2,124,832 1,227,708 (1,703,473) 3,192,218 4,458,846 Debt service as a percentage of noncapital expenditures 729o0 10.31o, 8.13% 9.20% 6.62% 7.11% 4.69% 4.85% 4.02% 3.68% Unaudited statistical section 180 CITY OF KALISPELL, MONTANA MARKET VALUE OF TAXABLE PROPERTY Past Ten Fiscal Years (in thousands of dollars) 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 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% 2024 $ 83,477 $ 2,331 $ 81,146 197.69 $ 5,408,209 1.50% Source: Flathead County and Montana Department of Revenue Note: Reappraised by Montana Department of Revenue every other year Unaudited statistical section `Ei 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 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. 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 0.00 165.58 397.96 17.81 133.55 46.00 2024 120.60 16.15 0.00 136.75 326.14 12.77 143.86 38.90 Source: Flathead County Unaudited statistical section liBy, CITY OF KALISPELL, MONTANA PRINCIPAL PROPERTY TAX PAYERS Current Year, and Nine Years Ago 2024 2015 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Taxpayer Value Rank Value Value Rank Value FLATHEAD ELECTRIC COOPERATIVE INC 3,408,697 1 4.08% 1,763,130 2 4.53% NORTHWESTERN CORP TRANSMISSION & DISTRIBUTION 2,815,735 2 3.37% 855,986 3 2.20% QWEST/CENTURYLINK INC 1,179,492 3 1.41% 2,032,381 1 5.22% FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC 916,234 4 1.10% 505,452 4 1.30% VERIZON WIRELESS 698,452 5 0.84% 0.00% TKG MOUNTAIN VIEW PLAZA LLC 456,254 6 0.55% PIG INVESTMENTS LLLP 359,857 7 0.43% 0.00% WAL-MART ESTATE BUSINESS TRUST 304,285 8 0.36% 352,534 7 0.91% CROWN ENTERPRISES LLC 215,862 9 0.26% 266,937 9 0.69% NORTHWEST HORIZONS INC 185,692 10 0.22% 249,997 10 0.64% FIRST INTERSTATE BANK INLAND WESTERN KALISPELL MOUNTAIN VIEW LLC 374,458 5 WSPGB MALL LLC 320,041 7 STATE OF MONTANA DNRC 297,053 8 BRESNAN COMMUNICATIONS LLD 371,620 6 Total 10,540,560 12.63% 7,389,589 15.47% Total City Taxable Assessed Value $ 83,476,794 $ 38,953,059 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. Unaudited statistical section 183 UI U cn U 0 Tl OHa' FLi 70 L U > N O �LCo O U i� LL 0 M CO N 7 N C � LU 7 0 0 0 0 0 0 0 0 0 0 a1 a1 a1 a1 a1 � � a1 a1 � — N I— W) — \O 01 l— l— M O a1 M N O o0 O a1 O� l— l— 00 00 01 01 O O — O 0 0 0 0 0 0 0 0 0 0 o0 l— N 11O W) I-O It O 01 It oc l— l— o0 o0 o0 01 01 O O O O l� l� 01 � N N oo t m t �O O O O 't O 't M — 01 O O 01 o0 O M l— O N N 00 N M l o0 00 00 01 O O O— O LO CO I- W O O N CO � r N N N N N O O O O O O O O O O N N N N N N N N N N c Z5 0 U 70 CB N L cB LL N U L 0 VJ 70 D m 70 N 0- 0 70 Q c ii N CB C CB O O M (O O (O O U) M O O N M— (O N M LO (O N O M O '�T M N_ _ U) 69 69 69 69 69 69 69 69 69 69 U cd o 0 0 0 0 0 0 0 0 0 G U M N N M (O O (O 1' M O O N 'I• O M O (O Lf) N O 00 M N N N N N N N N N O S" l 00 \O 't— M M N l- 00 l- U — 11O M W) l- — W) M 01 O --� M --� l� 00 l0 M O 7� 00 00 00 O" [� a > U V1 N 00 o 0 0 0 0 Z .5 U Ri � M N M N M M N N 1p M No�o�o��oo�n • � "C N � O V'� N 00 � --i M M U > N 't 01 O O O O O UO o,�N NN � o U N N N N N N N N N N 7 0) � � � C m E Q) tf M L 70 Cl co 0 J E a� E U O C O co U LL E co Q Q Q Y co O _ O U U � ai U 7 O U) C O cn N M U Ln U) 7 M C D LO N U) U)— U)— O M (O O LO O (O U) O M r- (O M cY W— (O U)W N O N— O N N U u (O � Cl) Cl) — O O PO Q a Q z� "C It It W) OMO V�i M O Ocn M M 1p 00 N l O w U U azw It CL W)r-��ItN� 70 O Z w Q w � c c _ C7 m a, c 5, O M O O CL Un 70 >�Ecn= O l 11O N It 01 � Ol—'tO l—W) M 00 LU N J Q M N N N W) E O O �j O C C U fn L L U �' 7�1 .O o000 O O O O O O O _cn i Q Q T � O 0 0 0 0 0 0 O �n O O) L] C) 2 � • O �n oo � C (B (B (B -�ga T C C +O O U 73 73 o M W) \O l— 00 01 N M It ai U L .�. w °'W �--� �--� �--� �--� — OOOOO00000 7 0 NNNNNNNNNN c O U N (6 U N 6 co 76 (6 c D — > ] \ \ \ § \ \ \ ] ` °Gm \ \ ® } - \ ) \ d ^ \ ^ ° § \ \ \ E{ f f $ | Unaudited statistical _a CITY OF KALISPELL, MONTANA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT June 30, 2024 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (1) Debt Overlapping General Obligation Debt: Flathead County 2,545,000 16.83% 428,237 Flathead Valley Community College 2,624,996 16.83% 441,698 Kalispell High School 23,091,845 33.27% 7,682,803 Kalispell Elementary 18,487,300 100.00% 18,487,300 West Valley Elementary 4,055,000 39.02% 1,582,162 Subtotal Overlapping Debt 28,622,199 City direct debt 5,776,265 100.00% S 5,776,265 Grand total direct and overlapping debt 34,398,464 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. Unaudited statistical section 188 M O N l� 01 M 01 00 O O Oc I- 01 - - - - - - - rq - y M 00 N 00 V') M't r- 00 00 l- 11O V') — — — — — — U On c- r O M o0 O l Q O m '� \p 01 --� N -,t N 01 w) n O l� 00 Itt --i � � � - "O 01 00 V') 01 l O O - N y N M 00 W) W) W) W) W) M N N N N N N Ste" Q 1p 00 M 00 � l� � O 1p 00 U M M M M V'� V'� V'� V'� V'� l� •� U � � N U N M l� M 01 l� 01 01 01 V'� L PLO r-i r-i r-i nj r-i r-i r-i nj CD O \p l� �O N 00 00 O 00 O Q" ,byyA N iii •� N l� V� M �O �O O 00 01 V� ccs a s•, ,r-." O 01 It OC 00 V') N IO IO Ic N N 7 . Ic a)a) CL tn U 00 01 00 01 00 tn r--', .U. O 01 N M 00 N M X U] v� v) — 00 00 U O O o U N N N N N N N N N N C N E L Q Q N U c LL Q Y 0 _>1 U ai U 7 O U) CITY OF KALISPELL, MONTANA DEMOGRAPHIC AND ECONOMIC STATISTICS Past Ten Fiscal Years Per Capita K-12 Annual Calendar Total Wages Personal School Unemployment Year Population (in thousands) Income Enrollment* Rate** 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% 2024 31,540 1,990,048 63,096 8,671 3.40% `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) Unaudited statistical section 190 CITY OF KALISPELL, MONTANA PRINCIPAL EMPLOYERS Most current information and Ten Year Prior (2015) 2024 2015 Estimated Estimated # of # of Private Employer Employees Employees Industry 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 Superl 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. Unaudited statistical section IiR1 CITY OF KALISPELL, MONTANA Full -Time Equivalent City Government Employees by Function/Program Past Ten Fiscal Years FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 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 2.00 2.00 2.00 City Clerk 1.58 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 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 5.67 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 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 Planning & Zoning 4.25 4.25 4.05 3.95 3.95 3.95 3.15 3.15 3.15 3.75 Building 5.20 5.20 6.75 8.65 8.65 8.65 8.45 8.45 9.45 9.65 Information Technology 2.15 2.55 2.55 2.55 2.55 2.55 5.55 5.55 6.00 6.00 Total General Government 29.00 29.15 30.50 32.30 32.30 33.30 35.30 35.80 37.25 38.05 Public Safety Emergency Levy Fund 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23.00 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 89.15 112.40 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 16.75 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 16.20 Sewer 7.00 7.05 7.05 7.55 7.55 7.55 8.05 8.25 8.50 8.90 WWTP 7.55 7.55 7.55 8.55 8.55 8.55 8.55 8.55 8.55 9.90 Storm 6.20 6.20 6.20 6.20 6.20 7.20 7.70 7.85 8.00 8.40 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 75.25 Parks and Recreation Parks and Recreation 9.45 9.80 9.80 9.80 10.60 10.60 10.80 10.80 11.80 13.70 Forestry 3.20 2.85 1.80 1.80 2.00 3.00 3.80 3.80 3.80 3.90 Total Parks and Recreation 12.65 12.65 11.60 11.60 12.60 13.60 14.60 14.60 15.60 17.60 Community Development LIDAG/Comm. Dev. 2.00 2.00 2.00 1.75 1.75 2.00 2.00 2.00 2.00 1.20 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 183.70 182.85 183.15 188.20 193.95 197.80 202.80 203.30 213.25 244.50 Source: City Manager's Recommended Budget Unaudited statistical section IiRy, CITY OF KALISPELL, MONTANA OPERATING INDICATORS BY FUNCTION Past Ten Fiscal Years FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 General Government Resolutions passed 41 44 57 58 56 50 53 46 62 54 Ordinances passed 14 17 15 17 17 26 13 24 29 10 Payroll claims processed 5956 6169 6473 6351 6008 6351 6619 6522 6900 6467 Accounts payable claims processed 6704 6504 6716 6784 6905 6745 6638 6056 6466 6499 Receipts processed 10346 11775 13073 12687 11686 10209 9432 11503 12576 13320 Conditional use permits granted 4 6 5 12 4 5 7 11 6 2 Public Safety Calls for law enforcement service 31419 34626 33186 34467 36459 33578 32952 32745 36767 37242 Citations 5233 5037 4680 4948 5760 4786 4390 3623 2647 1633 Arrests 1549 1734 1405 1659 1660 1687 1511 1376 1320 955 Calls for fire service 697 798 882 796 906 1157 1128 1392 1228 1408 Calls for rescue service 2560 2501 2673 2712 2792 2702 2806 3076 3184 3228 Public Works Streets and alleys maintained (Miles) 140 140 144 155 160 160 166 168 166 170 Sidewalk replaced (linear feet) 1723 1589 794 1853 1468 1234 1024 2754 1172 987 Alleys paved 5 6 6 7 10 13 5 5 4 8 Parks Park users (reservations) 123633 103438 102533 101493 92161 92161 92161 83520 96003 97727 Acres of parks 429.49 429.49 429.49 429.49 429.49 429.49 429.49 445 467 467 Recreation participants (rec, sports, youth, swim) 41830 35697 35370 35370 42526 40303 40303 48857 46028 47153 Miles of trails 8.10 8.10 8.85 8.85 8.85 8.85 8.85 8.85 11.02 11.02 Development Services Building permits issued: Residential 195 195 222 181 183 216 324 240 127 176 Commercial 163 137 137 176 86 71 182 91 82 66 Community Development TIF/TEDDDistricts 4 4 4 5 5 5 5 5 5 5 New development loans 1 0 1 2 0 2 0 0 0 0 Loans being serviced 22 19 20 10 9 12 12 9 6 6 Airport Monthly tie down fees (average) 0 0 0 0 0 0 0 0 0 0 Monthly commercial fees (average) 7 6 6 4 0 0 0 0 0 0 Water Average daily consumption (millions of gallons) 2.96 3.13 2.96 2.33 2.33 3.23 3.57 2.33 3.57 4.1 Number of customers 7675 7785 7907 8083 8263 8363 8579 8856 8856 9148 Sewer Average daily wastewater treated (millions of gall 2.7 2.5 2.7 2.8 2.7 2.4 2.6 2.9 2.8 2.8 Solid Waste Refuse collected (tons per day) 25.0 26.0 26.9 27.1 27.7 28.5 30.1 30.9 43 56 Source: City of Kalispell - updated as available Unaudited statistical section 193 CITY OF KALISPELL, MONTANA Capital Asset Statistics by Function/Program Past Ten Fiscal Years FY15 FY16 FY17 FY18 FY19 7720 F721 7722 7723 FY24 Police Stations 1.00 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 12.00 12.00 12.00 Patrol Units (Motorcycles) 2.00 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 2.00 Fire Trucks 4.00 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 3.00 3.00 3.00 Water Mains (Miles) 128.00 129.50 129.75 130.05 137.50 143.00 144.00 152.23 152.23 186.30 Wastewater Sanitary Mains (Miles) 131.00 131.00 131.00 131.60 138.80 141.00 151.00 145.28 145.28 145.30 Storm Mains (Miles) 53.50 53.50 53.50 53.75 66.80 68.00 68.50 41.86 41.86 90.60 Lift Stations 41.00 41.00 41.00 41.00 41.00 43.00 43.00 41.00 41.00 60.00 Solid Waste Collection Vehicles 8.00 8.00 8.00 8.00 6.00 6.00 8.00 8.00 8.00 8.00 Other Vehicles 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Source: City of Kalispell Unaudited statistical section 194 CITY OF KALISPELL, MONTANA THE WATER SYSTEM Past Four Fiscal Years Major Water System Users % of % of % of % of Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2020/21 Fiscal Year 2021/22 Fiscal Year 2022/23 Fiscal Year 2023/24 2020/21 Water 2021/22 Water 2022/23 Water 2023/24 Water Type of Water Revenues Water Revenues Water Revenues Water Revenues User Business Charges $ 3,410,757 Charges $ 3,891,151 Charges $ 4,619,300 Charges $ 5,851,334 4463 Logan Health (KRMC) Hospital $ 87,244 2.56 % $ 81,793 2.10 % $ 76,652 1.66 % $ 98,341 1.68 % 4934 Red Lion Hotel Hotel $ 12,993 0.38 % $ 12,594 0.32 % $ 15,402 0.33 % $ 18,323 0.31 % 33959 John Peschel/Valley Linen Cleaner $ 11,849 0.35 % $ 14,603 0.38 % $ 15,844 0.34 % $ 12,997 0.22 % 31659 Logan Health North Hospital na � na na $ 12,941 0.28 % $ 24,767 0.42 % 40020 Hilton Hotel $ 9,909 0.29 % $ 10,679 0.27 % $ 9,577 0.21 % $ 13,286 0.23 % 36996 Sems Car Wash Car Wash na � na na $ 10,349 0.22 % $ 13,109 0.22 % 9600 The Summit Athletic Club $ 9,582 0.28 % $ 14,440 0.37 % $ 11,305 0.24 % $ 16,164 0.28 % 52300 Heritage Place Nursing Home $ 23,023 0.68 % $ 22,674 0.58 % $ 22,040 0.48 % $ 26,285 0.45 % 46290 Devin Khoury Commercial na na na na $ 10,094 0.22 % $ 7,810 0.13 % 9032 Pro Clean Car Wash Car Wash $ 8,747 0.26 % $ 10,119 0.26 % $ 9,009 0.20 % $ 10,194 0.17 % 36287 Holiday Inn Express Hotel na na na na $ 8,833 0.19% $ 11,523 0.20% Total $ 163,347 4.79 % $ 166,902 4.29% $ 202,046 4% $ 252,798 4.32 % Water Sold by Customer Type 2021 2022 2023 2024 Type of Customer Residential 740,239 449,259 395,762 294,503 Commercial 563,375 595,963 405,427 376,261 Total 1,303,614 1,045,222 801,189 670,764 Total direct rate $ 5.95 $ 7.30 $ 8.02 $ 9.20 per 1000 gallons Water Rates Fiscal Water Irrigation (sprinkling) Year Monthly Rate per Monthly Rate per Ended Base 1000 Base 1000 June 30 Rate Gallons Rate Gallons in city out of city in city out of city in city out of city in city out of city 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 2024 $ 14.54 $ 18.18 $ 4.32 $ 5.40 $ 14.54 $ 18.18 $ 4.32 $ 5.40 Sources: City of Kalispell Some custormers pay to install a separate irrigation 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. Unaudited Y09cal section CITY OF KALISPELL, MONTANA THE SEWER SYSTEM Past Four Fiscal Years Sewer Sold by Customer Type 2021 2022 2023 2024 Type of Customer Residential 437,675 445,326 395,709 387,624 Commercial 496,260 510,803 567,790 526,962 Total 933,935 956,129 963,499 914,586 Total direct rate $ 9.86 $ 12.54 $ 13.41 $ 14.54 per 1000 gallons Sewer Rates Flathead County Water & Sewer District #1 Fiscal Sewer - Evergreen Year Monthly Rate per Monthly Rate per Ended Base 1000 Base 1000 June 30, Rate Gallons Rate Gallons in city out of city in city out of city Evergreen" Evergreen" 2021 $ 11.19 13.99 $ 6.34 $ 7.93 $ 15,079.00 $ 2.96 2022 $ 12.65 15.81 $ 7.17 $ 8.96 $ 16,339.14 $ 3.27 2023 $ 14.22 17.78 $ 8.06 $ 10.08 $ 17,707.14 $ 3.27 2024 $ 15.21 19.01 $ 8.62 $ 10.78 $ 18,888.86 $ 3.48 Sources: City of Kalispell "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. Unaudited statistical section 196 fU l" N D co (0 , U J co Y M 00 D (fl O O J LO I- m J (D Il- O) J O) O) (fl (0 D F � (0 O iUiUifq � O f N D O - M Y M 00 N = J L() (() (() C r L - O N_ 4- .2 N (p (0 Mp 0- 7 J M M n C (U fU oY� O N aEi U > U X i Ui Ui Ui O fU f J O O O J LO LO LO JOOO J O O O fU N - 7 (0 [n iUiUifq f 3 00 (D lC) m (D CD(D M J 00 M� O) M N 00 M -N(f) "rV OM(MO f - (0 � N ((1 0 N M (fl — O O) 00 00 00 00 00 (Dcu �fU 7 F i Ui Ui Ui Ui Ui Ui Ui Ui > (A f J Cl) I- M O) V O O J (D V M M� O (() p J O) V 00 O V N O) J� N O I-� 0) (D .-. N (p r O N M fU J N 2 Q 7 > � (p N C � Y � 3 U)U) fq U) U) U) fq fq p N E L — D O) O) O) O) O) O) O) O) -O J N N N N N N N N O J M M M M M M M M fU D O) O) O) O) O) O) O) O) (Oq 7 m > ifgfgU-)U4U4U-,646q f O M� O J N N N N (0 N fU N\ O Q Wz (O � ,I N N N j„L } J 0 0 0 0 0 0 0 0 J N N N N N N N N ( D 00 (D I- 00 I- O D l() CD (D (D CD I- m J M L() O) O) O) OO 00 (A �2 � � � 00 O J � N i U) fq U-) U-) U-) U-) U-) J (f ) N O O N V N 00 V V 00 (() (fl � N M 00 00 � 1- P- fA m 00 O J � N 3 fra fra fra fra fra fra fra J O O O O O O O J N N N N N N N C O U y D C N U O rn LD C N fU =o E O m Q � - 0 00 P- 0 00 1- J O 00 M O M V (fl .--- O O) 00 (D d' r- l() O) O O) N E Q (0 J N Cl) O) 00 1- LO M l() O 00 00 (A l() T C - (A 00 00 O O) M 00 L() V (0 O - Cl) N N N (0 7 O 2 i O cu F > > N C D (0 N > > (U 3 U) U) U) U) U) U) U) U) ER U) U) U) U) U) j of O 0 U - C)00 1- CD 00 I- Q N O) V V M O) Y I- mV I- V 00 l() J N V (fl — V M 00 Q M 00 lC O) M O 00 M U') (9 (0 (U J N N to 00 (fl V O)0000 O O) LLJ F O N (0 V N M LO O E -mcq - _ fU T M N N N ..�-'C (0 (0 y fU 7 O- d N > Q ca C CU fU — (u cu 3 U) U) U) U) U) U) U) N U) U) U) U) U) U) U) O (U U (0 — L :E- J 0 0 0 0 0 0 0 N I- I- I- I- I- I- I- C >, D M M M M M M M J M M M M M M CO m M LO LO LO LO LO CD CD CD CD CD CD C)— U Q -O 1- r— r— r— r— r— r, (0 (U EN (uD CU m (2)> (o c O N_ - T iUiUifgU)UiUiUi UiUifgfgfqUiUi Oq CO p Y M N O (A 00 M N O O) 00 d fU J N N N N— U (0 N N N N N 1 N O 00 I� (O } M N O! 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Q9, Q9, Q9, Q9, Q9, V9� 00 M r— M O - - 00 N (O (O 1- M M O LO - 00 M O B 00 O N O' O E N O (O O LO 00 O O = (0 N M (0N M N M C= p -00 L N u N X to � ~ > (0 LO r— LO O N M 00 00 00 (O In In 00 (O = M = (O O U-N 00 M r� O V 00 N O 00 (O N�r—LnMONNMoo00q N M�� O LO O N N N (6 O (q N L N N L M > >, 72 M O O 00 00 00 00 00 O O 00 N If co :E N V) (6 Q- N x O rnwLn(or-- (or—rn0 N> NU- O= 0') M N 0')r— (O r- Y O 00 00 N O=;:t M M N (6 N p In N= M M M r— CO CO M CL p = O CO O O (O CO O CO In O (p N 00 O E M 00 O LO N a) d N N L N CO O O M O L N LO LO N (O 1- M N O = p>r—LnLnN��MMM � � N L - M N 0 M CO r— (O In N � � m >-M N N 0 0 jL CO r— (O LO M O O O O O O O O O O O N N N N N N N N N N N E > > � N U O N N L E LL Q- � N N 0.5 (6 U) O N 0- 0 E N O N V) V) O VCL L C m p ^L LL U L O O (n Z 00 rn O N N O c X t0 LL H > � H N � U N X \ N H U N c ; O LL_ H H N � U N X N F O N c X t0 LL H > O H N Z U N X N F U O V ? r O N N N o N > 0 a d X F N N N ry N X \ a 3 H i o T N N V - J a` 0 0 0 0 0 0 0 0 0 M O O C � N N M (MO an d O 0 N M C N N N N 0 0 0 0 0 0 0 0 0 D7 N M O N r• � r• (n0 (rf M O O O C O N CN') C M N r v N Nm O C) c� M O O C — N H H H H H H M N M 0 N m m � Ci (NO Y U N O r N CN') N r C N � F e e e e e F/ t 10 N N N N (Y « � N � J N % N N O N c O 0 U � d d � U m N � >N Unaudited statistical section 158 D7 D7 O M r• M M � N lclclclc Q 2 r• r• r• r• E Nr r r r M M M M % X � N � � M N3 M N3 O O O O O « r D N d O M N3 M N3 N N N M N � ~ % 0 N c M N3 M N3 OE M M O Uc6 c6 16 V N c t L W F f/7 M N3 M N3 N O O O N E O O N m UO r• c, c, c > r N O N N M N3 M N3 C0 Co 0 N N N N r• « 0 N V F (O N X � D7 D7 O m ua F» F» F» (O r M M 07 N m N (O N M N ; N t0 — > c N N3 N3 N3 N3 N N N N M M M M r• r• r• r• N � CO % CITY OF KALISPLLL, MONTANA Special Improvement Districts Operating Data June 30, 2024 Outstanding SIDs Original Maturity Bonds Cash Assessments Delinquent Bond Issue Amount Date Outstanding Balance Outstanding Assessments 1 SID 344 $ 4,520,000 6/30/2026 $ 460,000 $ - $ 1,151,808 $ 552,289 2 SID 345 $ 242,000 6/30/2029 $ 88,000 $ 27,130 $ 76,640 $ - TOTAL $ 4,762,000 $ 548,000 $ 27,130 $ 1,228,448 $ 552,289 Revolving Fund Balance and Bonds Secured Thereby - SIDs Billing and Collections Last Ten Fiscal Years Revolving Fund Principal Cash Amount Assessment Total Annual Fiscal Year Ended June 30, Balance of Debt Billing Collections 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 2023 $ 225,009 $ 778,000 $ 261,104 $ 218,367 unaudited statistical section 200 N N U bq 7� +� a� o 0 0 0 0 0 0 0 Lf) 0 O (O M M O O ' Ay Q a z� E co 0 It It V) 00 M l� 1p V'� � M O pQ 't l W) l 't 01 \O '� O j w M M 1p o0 N l- - O m o W CY a Q) Z w 110 cu ry a _ U oc W) W) 01 01 01 O 00 N 00 r-- >, " 't N =3 ca � oz Q w a) w Hw m�CU' O =� N o' O"o rq o O �n � 01 � O N V'� V'� V'� 00 M 'a C L O Q) Q) Q U O-1 N O V'� N M M p Q O \O CA 't 01 \O \O oc c 0 W J, Q m M N N N E p p N O C C E E V o 0 0 0 n cu c Q T G' bA 0 v'i O v'i vi O O O O O O �n O �n O �� Q) 0 0 ... O oo ,—, cB c0 c0 N N �--� ,� N c0 C C 7 G 2 CY T C C += O O U 2 75 7� o � M V) 1p l- 00 01 N M 't ai U L w - �--� �--� �--� �--� OOOOO00000 7 0 NNNNNNNNNN cB r- C i � � N O — } — N � Q U a 0 iL Ln LL (q ~ > N � O J C) >m H 7 C C Q E 7 E X m 75 X H O H C N E N LU c N E N U c X H (6 O H C N N U C 0) in m CO (O 0') 00 N 'IT CO I- O O co O"T"T r- 00 'IT co — O — = O LO LO LO LO LO LO LO LO LO M M M M M M M M M 00 00 00 00 00 00 00 00 00 co co co co co co co co co I M co co co co co co co co (f3 (f3 (f3 (f3 o" o" o" Uf , Uf , O cc::))cc::))cc::))cc::))O O O O • O O O O O O O O O C C C O O O O Lr O O O LOCD O O M 00 I r— O O O O O co M"T i I O N E (C� rn'IT 'IT I I (f3 (f3 (f3 (f3 E, H3 (A Uf , Uf , N N 00 M N 00 O N I-- co LO 00 00 I-- N co M M (O C C 0 C Lr I co LO O� LO 00 O 00 IT O O CO O O CO CO N CO i M V' — LO r-- CO LO LO N ;IN 'IT 'IT 00 00 00 00 00 00 00 00 00 (O M M M M M L IIoll oll oll oll oll oll oll oll oll I N S 00 LO LO LO 'IT 00 1 0 0 LO 0 0 00 O co 00 00 I- M M= L Co L 00 (O (O (O O CO CO CO N 00 N'T N N ' N � UF, Uf , Uf , (f3 (A (A (A (A (A i 000 00 (o LO LO co co (o co i N 00 M I� O M 00 00 M I� LO M O N 00 N M I�NLO 'T 'TO co co (O N Lr O N M (O i ER EA EA EA E� E!3 EA EA EA 00 M Il- M O O co co 'IT co co M O B 00 CD 0 N CD co CDLO 00 O i 00 OLo (O M (O N M 00 00 00 00 00 00 00 00 00 I N N N N N N N N N i M M M M M M M M M O O O O O O O O O M N 0 0 00 I� co I CO N O M 00 I-- co LO N N N CND O O O O O N N N N N N N N N 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 III ►:1WD3NaOWNIuINONI :�:I1.111.1$10a0lla]011 M.las1►IrAll110162 R Now Federal Awards Reports in Accordance with the Uniform Guidance June 30, 2024 City of Kalispell, Montana EideBailly. eidebailly.com 204 ua„��........umn,��"" CPAs & BUSINESS ADVISORS 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, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated January 29, 2025. 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. Asignificant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. What inspires you, inspires us. eidebailly.com 205 7001 E. Belleview Ave., Ste. 700 Denver, CO 80237-2733 TF 866.740.4100 T 303.770.5700 F 303.770.7581 EOE 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. 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 January 29, 2025 04IN CPAs & BUSINESS ADVISORS 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 Supplementthat could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2024. 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, 2024. 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. 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. What inspires you, inspires us. eidebailly.com 207 7001 E. Belleview Ave., Ste. 700 Denver, CO 80237-2733 TF 866.740.4100 T 303.770.5700 F 303.770.7581 EOE 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. 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. Amaterial 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. 041Ri 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. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 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, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated January 29, 2025, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is 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 auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Denver, Colorado January 29, 2025 OR City of Kalispell Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 Federal Grantor/Pass-through Federal Financial Pass -through Entity Grantor/Program or Cluster Title Assistance 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 $ 2,931 Highway Safety Cluster - State and Community Highway Safety 20.600 6,991 Subtotal Highway Safety Cluster 9,922 Repeat Offenders for Driving while Intoxicated (DWI) 20.608 9,327 Federal Highway Administration 20.939 693JJ32340172 211,952 Total U.S. Department of Transportation 231,201 U.S. Department of Justice Direct Assistance: Bulletproof Vest Partnership Program 16.607 N/A 10,523 Passed through Flathead County: Edward Byrne Memorial Justice Assistance Grant Program 16.738 11-G01-91260 5,777 Subtotal Edward Byrne Memorial Justice Assistance Grant Program 5,777 Total U.S. Department of Justice 16,300 U.S. Environmental Protection Agency Direct Assistance: Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative Agreements 66.818 BF-97863001 2,560 Passed through State of Montana Department of Natural Resources and Conservation: Clean Water State Revolving fund (CWSRF) Cluster 66.458 N/A 1,776,022 Drinking Water State Revolving Fund (DWSRF) Cluster 66.468 N/A 14,051,356 Subtotal State Clean Water Revolving Fund 15,827,378 Total U.S. Environmental Protection Agency 15,829,938 Executive Office of the President Passed through State of MT Board of Crime Control: High Intensity Drug Trafficking Areas Program 95.001 G11RM0035A, G12R, G13R 2,172 Total Exectuvie Office of the President 2,172 U.S. Department of the Treasury Direct Assistance: COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 4,085,439 Passed through State of Montana: American Rescue Plan Act (ARPA) 21.027 N/A 5,487,585 Subtotal COVID-19 Coronavirus State and Local Fiscal Recovery Funds 9,573,024 Total U.S. Department of the Treasury 9,573,024 Total Federal Financial Assistance $ 25,652,635 See Notes to Schedule of Expenditures of Federal Awards 210 City of Kalispell Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 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, 2024. 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. pas City of Kalispell Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Section I — Summary of Auditor's Results FINANCIAL STATEMENTS Type of auditors' report issued Internal control over financial reporting: Material weaknesses identified Significant deficiencies identified not considered to be material weaknesses Noncompliance material to financial statements noted? FEDERAL AWARDS Internal control over major program: Material weaknesses identified Significant deficiencies identified not considered to be material weaknesses Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516(a)? Identification of major programs: Name of Federal Program or Cluster American Rescue Plan Act (ARPA) Drinking Water State Revolving Fund Cluster Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low -risk auditee? Unmodified No None reported No No None reported Unmodified No Federal Financial Asssistance Listing 21.027 66.468 $750,000 01VA City of Kalispell Schedule of Findings and Questioned Costs Section II — Financial Statement Findings No current year findings reported. Year Ended June 30, 2024 f►AR City of Kalispell Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Section III — Federal Award Findings and Questioned Costs No current year findings reported. P&e! City of Kalispell Summary Schedule of Prior Audit Findings Year Ended June 30, 2024 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 2023-001 Internal Control Deficiencies N/A N/A Implemented 01R